Draft Local Digital Television Programme Services (Amendment) Order 2024

The Committee consisted of the following Members:

Chair: Graham Stringer

† Al-Hassan, Sadik (North Somerset) (Lab)

† Bhatti, Saqib (Meriden and Solihull East) (Con)

Caliskan, Nesil (Barking) (Lab)

† Collinge, Lizzi (Morecambe and Lunesdale) (Lab)

† Foxcroft, Vicky (Lord Commissioner of His Majesty's Treasury)

† Franklin, Zöe (Guildford) (LD)

† German, Gill (Clwyd North) (Lab)

† Hayes, Tom (Bournemouth East) (Lab)

† Hoare, Simon (North Dorset) (Con)

† Morello, Edward (West Dorset) (LD)

† Naismith, Connor (Crewe and Nantwich) (Lab)

† Patrick, Matthew (Wirral West) (Lab)

† Peacock, Stephanie (Parliamentary Under-Secretary of State for Culture, Media and Sport)

† Robertson, Joe (Isle of Wight East) (Con)

† Stafford, Gregory (Farnham and Bordon) (Con)

† Stewart, Elaine (Ayr, Carrick and Cumnock) (Lab)

† Swallow, Peter (Bracknell) (Lab)

Guy Mathers, Kay Gammie, Committee Clerks

† attended the Committee

The following also attended, pursuant to Standing Order No. 118(2):

Logan, Seamus (Aberdeenshire North and Moray East) (SNP)

Whittingdale, Sir John (Maldon) (Con)

Third Delegated Legislation Committee

[Graham Stringer in the Chair]

Draft Local Digital Television Programme Services (Amendment) Order 2024

09:25:00

I beg to move, That the Committee has considered the draft Local Digital Television Programme Services (Amendment) Order 2024. It is a pleasure to open the debate under your chairship, Mr Stringer. I am pleased to speak to the order, which was laid before the House in draft on 5 November. In just over 10 years since the first service launched, local television continues to provide local content, including news and current affairs, to audiences across the UK, and in so doing to complement our national public service broadcasters. From Sheffield Live and Leeds TV, both of which broadcast in areas neighbouring my Barnsley constituency, to London Live, which broadcasts just a few miles up the road in Kensington, and NVTV in Belfast, there are now 34 local TV services broadcasting across the UK. I was pleased to meet members of the Local TV Network and Comux last month and hear more about their services and the work they do. Both organisations also sit on the Future of TV Distribution stakeholder forum, which I am pleased to chair. These services bring social and economic benefits to the areas they serve through the making and showing of programmes that reflect the interests of their local communities, but more than that, in a television sector that is all too often centred around London and the south-east, local TV provides a training ground for those looking to embark on a career in the sector. One service, KMTV, has developed a partnership with the University of Kent to train journalism students, while another, Notts TV, has seen former trainees build on that experience and go on to work in the national media. There are 11 services based in the north of England, five based in Scotland, three in Wales and one in Northern Ireland. All 34 of those services are carried on the local TV multiplex, which enables them to be broadcast on digital terrestrial television, also known as Freeview. The multiplex is operated by Comux UK, which is co-owned by the local TV services themselves. The multiplex plays a central role in the local TV ecosystem by providing subsidised carriages for all the local services. The local TV sector has not been without its challenges. Some services have struggled to maintain consistent audience numbers and to develop stable revenues from advertising. Last year, the TV advertising market in the UK experienced its biggest decline since the 2008-09 financial crisis. Although all commercially funded broadcasters have been affected, local TV services have been particularly impacted as they have smaller audiences than their national counterparts. The previous Government made a commitment to extend the local TV multiplex until 2034 and to consult on the options for the renewal or relicensing of the licences for the 34 local TV services. That consultation ran from June to September last year and received responses from existing licence holders, media and telecoms companies, and members of the public. In the consultation, the then Government outlined their preferred approach of a light touch renewal process for the multiplex licence, led by Ofcom, and the conditional renewal of the licences for all 34 local TV services, subject to Ofcom’s assessment of their performance to date and their plans for the next licence period. Respondents to the consultation were broadly supportive of this approach. Some respondents, particularly current licence holders, raised concerns about the burden this approach may have on licensees. They also emphasised the importance of the renewal process being completed swiftly in order to provide certainty to both the sector and its commercial partners. My Department has taken those responses into account in the drafting of this order, and worked closely with the independent regulator, Ofcom, which will administer the renewals process, to refine its provisions. A previous version of this order was laid in draft before Parliament on 7 May 2024, but was withdrawn due to the general election. The subsequent delay to the order coming into force meant that Ofcom would not have had the time necessary to conclude the renewals process and, in the event that any of the licences were not renewed, to conduct a competitive relicensing process. The updated order therefore includes additional powers for Ofcom to extend local TV licences, with the consent of current licence holders, by a period of 12 months. The extension will ensure that Ofcom is able to complete the renewals process at least 12 months before the extended licences would otherwise expire. The order has been considered by the Joint Committee on Statutory Instruments and the Secondary Legislation Scrutiny Committee, which raised no concerns. The Government believe that the approach set out at consultation and provided for by the order gives the sector the best chance for long-term success and sustainability by balancing the certainty and stability of a streamlined renewals process with a proportionate degree of regulatory oversight, which will be provided by Ofcom. The Government recognise the importance of local media, including local TV. Our vision is of a thriving sector that continues to play an invaluable role by reporting on the issues that matter to communities, and keeping communities informed about local issues and decision making that affects them. The renewal of local TV licences is an important step on that journey, and I commend the draft order to the Committee.

I remind members of the Committee, and other Members, that if they wish to catch my eye they must bob, as we do in the Chamber. I call the Opposition spokesperson, Saqib Bhatti.

09:31:00

It is a pleasure to serve under your chairmanship, Mr Stringer, and to see the work of the previous Government come to fruition. The Minister is right: we should be proud of our local TV services, and we should not underestimate their importance to our local communities. As Members will be aware, and as the Minister set out, licences for a local TV multiplex for all 34 local TV services are due to expire on 25 November 2025. In April 2022, the previous Government published their broadcasting White Paper, which outlined the ambition to make changes to the local TV licensing regime. The changes, which will be implemented through this statutory instrument, will enable the extension of a local TV multiplex licence until 2034, and make it subject to the same conditions that apply to national digital terrestrial television multiplexes. A consultation run under the previous Government for 14 weeks from 7 June 2023 on options for the renewal or relicensing of individual local television services received numerous responses, including from current licence holders, media and telecommunications companies, and members of the public. Overall the responses were supportive of the proposed approach. His Majesty’s official Opposition support this SI, which implements the necessary changes proposed by the last Government. The existing regime for local TV does not allow Ofcom to renew licences for the local TV multiplex or individual local TV services. The SI will enable Ofcom to run a renewal process that provides scrutiny but is not burdensome. I hope the Minister agrees that that balance is key in this endeavour, because for small and micro-businesses a lengthy and costly process will be problematic. Without the SI, Ofcom would be required to launch and run a new licensing round for the local TV multiplex and individual services, which risks putting a disproportionate burden on those businesses without any tangible policy benefits. I hope that this approach provides stability for local TV services over the next licence period. I am of course concerned that the disastrous Budget set out earlier this year is already affecting business confidence. Will the Minister provide detail on how the Government will support collaboration and investment in the sector? How are the Government supporting local TV services to overcome some of the challenges they face, including to their financial sustainability? I shall be grateful if the Minister, in answer to a point raised in the other place, gives details of the steps the Government are taking to ensure open competition in future licensing rounds. More broadly, I am sure we all agree on the importance of local TV services and the significant economic and social benefits they bring to viewers across the UK. The previous Government published their vision and ambition for the sector, outlined in the White Paper. We are yet to see any new proposal from the Government, but we have been promised a local media strategy. Will the Minister inform the Committee when that will be published, and say whether it is being developed with industry input?

09:34:00

It is a pleasure to serve under your chairmanship, Mr Stringer. The Liberal Democrats support this statutory instrument, but I wish to put on the record how grateful I am for the wonderful services that That’s TV Surrey and other local TV services provide. It is such an important service for residents, as it gives them the hyperlocal news and current affairs that are so often missed by other broadcasters. That’s TV Surrey wanted me to highlight two things to enhance the statutory instrument, and to ask Ofcom to consider as it starts implementation. First, it wants Ofcom to be very clear about what the renewal process will look like. TV companies are aware that, in an ever-changing financial climate, it will be a challenge to present a business case that lasts 10 years, so they would appreciate clarity as soon as possible. That would prevent the process from becoming unduly burdensome and potentially damaging to the local TV operators that this statutory instruments seeks to preserve. I completely agree with That’s TV Surrey on the second point, which is that, as many of us will be aware, local TV services benefit from electronic programme guide prominence on Freeview, regulated by Ofcom, but there is no guarantee of either carriage or prominence on the digital apps that are being planned by local TV operators. The request from That’s TV Surrey is therefore that the Government work with the industry to secure a pathway for local TV to launch apps on internet-connected television sets, so that residents across the country can continue to see their local TV services and access local TV feeds.

09:35:00

It is a pleasure to serve under your chairmanship, Mr Stringer. I am, in general, a supporter of local TV. That used to be somewhat more controversial that it is today. Local TV was invented by my right hon. Friend the Member for Godalming and Ash (Jeremy Hunt) when he was the Secretary of State. His mantra at the time was, “Why should Birmingham, Alabama have a TV station and not Birmingham, England?” That point was widely recognised, but in the subsequent 10 years local TV has struggled. Local TV has the advantage of EPG prominence— the No. 5 slot in most parts of the country—and has survived mainly by combining local television news and content with cheap programming, from which it derives advertising revenue. That is a difficult balance to strike, and some stations have been more successful than others. I have to say that London Live has perhaps not been as successful as some others; if hon. Members happen to watch it, they will see an awful lot of ’60s comedy shows, if that is their taste, and not a huge amount of local content. As we come to the issue of the licence for the next 10 years, I ask the Minister to indicate to Ofcom the importance of local content. If local TV is to be of value, it needs to provide content that people want to see that is about their own community but is not available on regional TV stations. Coming from Essex, I can say that it is deeply frustrating that the local TV provided by ITV or BBC tells me what is happening in Cambridgeshire or Norwich, which is not of huge interest to my constituents. Local TV therefore has a real role to play. One of the consequences of local TV stations’ difficulties is that there has been a huge amount of consolidation over the past 10 years. To my mind, however, the most important thing is not ownership, but content, so Ofcom, which has the job of laying down the licence conditions, needs to make it clear that that is the priority and focus, particularly in the area of news. As both my hon. Friend the Member for Meriden and Solihull East and the hon. Member for Guildford said, the task of drawing up a business plan to cover 10 years is challenging, so I hope that Ofcom will give guidance on how it expects television stations to set out business plans for a decade ahead. That brings me to another important point, which the hon. Member for Guildford raised. The Minister and I recall—I am sure with great pleasure—our exchanges during the passage of the Media Act 2024 in the last Parliament. In relation to public service broadcasting, the prime purpose of the Act was to give prominence to public service broadcasting stations on digital platforms. They had the guarantee of the first few slots on the EPG, but as we moved to a world where people access television by various different means, there was real concern that they would no longer be guaranteed that prominence, which would result in a drop in viewers and so perhaps less advertising revenue for the commercial stations and less prominence for the BBC. The Government, with the support of the Opposition at the time, addressed that by giving prominence to the public service broadcasters. The Minister may remember that, slightly unusually, having first been the Minister responsible for the Bill, I then moved an amendment to it on Report that would have given prominence to local TV stations. Part of the problem is that, as I understand it, the Act does not allow Ofcom to come back and designate other stations outside the main PSBs as requiring prominence. If the transition to a digital world continues at its current pace, more and more people will access TV through the internet and no longer through Freeview, and there is not the guarantee of prominence for local TV. Local TV made it very clear that it needed prominence. Unfortunately, I was unable to persuade the Government to accept my amendment, and so it is not in the Media Act. I would be grateful if the Minister looked at that, because the answer at the time was, “Local TV does not have apps, so you cannot give it prominence.” It was a question of chicken and egg, because the providers of local TV said, “If you give us prominence, we will develop the app.” I believe that the app is under development. While I welcome the statutory instrument today to allow the extension of licences for a further 10 years, it needs to be combined with prominence. I hope that the Minister will address that.

09:41:00

It is a pleasure to serve under your chairmanship, Mr Stringer. Although I am not a member of the Committee, I have been asked to speak on behalf of the five stations in Scotland. I must declare that I have no commercial interest in this matter other than that sometimes these stations seek interviews from me, as I am sure they do from other MPs. It is critical to avoid this process becoming unduly burdensome and damaging to local operators. If I heard the Minister correctly, she said that there would be a 12-month extension prior to the 10-year contract. If that is the case, it is very welcome. These local TV services deliver local news bulletins that provide a real voice for their communities. As everyone in the room probably knows, people are getting their news from very many different sources these days, and not just the mainstream platforms. As was expected at the time of the original licensing process, 10 years ago, these news bulletins are often funded by advertising revenues secured in non-news entertainment programming shown by the services. The aim should be for Ofcom to use this renewal process to protect the viability of local news and minimise the risk of these services becoming unviable in the new licensing period. The Government should work with the industry to secure a pathway for local TV to launch their apps on internet-connected TV platforms.

09:43:00

It is a pleasure to conclude the debate. I am grateful for the contributions that all Members have made. It is clear that both sides of the House want to see the local TV sector thrive long into the future, and continue to provide valuable news and current affairs content that meets the needs and interests of those living and working in the communities they serve. A number of issues have been raised in the debate, which I will take in turn. First, the shadow Minister rightly talked about balance, which the Government and I agree with. In my opening remarks, I acknowledged that the majority of the work was carried out under the previous Government. In terms of the process and timescale, which was raised by a number of Members, we will work with Ofcom on any open competition and any future licences. That is incredibly important. In response to the issue raised by the hon. Member for Aberdeenshire North and Moray East on the 12-month extension, that is the key change from the previous statutory instrument laid on 7 May. TV operators can apply for it if they would like it, and that will make sure there is enough time for the process to take place. We agree on the need for a proportionate process for renewal and will continue to impress this upon Ofcom in discussions. There were also questions about our wider support for the sector and the local media strategy. The Secretary of State has announced plans to develop a local media strategy in recognition of the importance of this vital sector. We are working across Government as we develop this strategy, because our vision is of a thriving sector that continues to play an invaluable role by reporting on the issues that matter to communities and keeping them informed about the decision making that is relevant to them. The right hon. Member for Maldon and others asked about the ability of local TV services to make genuinely local content that meets the needs of local audiences. We recognise that sustainable funding of genuinely local content is not without its challenges, but that requirement is central to local TV and the audience it serves, so it is appropriate to consider it as part of the renewal process. Before renewing a licence, Ofcom will need to be satisfied that an applicant can comply with the conditions set out in their licence renewal, which in the case of local TV services will include specific and enforceable local programming commitments. The Liberal Democrat spokesperson, the hon. Member for Guildford, and the right hon. Member for Maldon and others raised concerns about local TV services not receiving prominence for their on-demand apps as part of the new online prominence regime established in the Media Act. I recall spending many happy hours in Committee with the right hon. Gentleman debating the then Media Bill. I am familiar with his, as he describes it, rather unusual amendment. It is a shame that it was not a Government amendment. At present, local TV services do not have on-demand apps; as a result, and as the right hon. Gentleman will appreciate, it is difficult to have confidence that such an app would provide significant quantities of public service content which would be put front and centre. Those are the two requirements, as Members will know, of the new prominence regime. None the less, we are aware of the concerns raised by the sector that apps that might be developed in future or are currently being developed would not have the potential to be included in the new online prominence regime, and we are committed to keeping that under review. As I outlined in my opening remarks, we are very aware of the changing nature of television distribution. That is why I am chairing a forum to discuss and explore those issues in further detail. Earlier this year, Ofcom published a statement following a monitoring exercise and set out in further detail about how it will assess whether a service is meeting its commitments. The conditional renewal of the 34 licences provided for by this order will ensure a proportionate level of regulatory oversight that an automatic renewal process would not. An automatic renewal process would lead only to a period of post-renewal uncertainty, so we think we are doing the right thing in the way that the SI has been constructed and laid. As I said earlier, it will be Ofcom that administers the renewal process. To ensure that licence holders understand what is required of them, Ofcom published a statement last month outlining how it will run the renewal process and what applicants will need to do to have their licences extended and renewed. This has ensured that local licence holders have sufficient time to familiarise themselves with the requirements and can begin preparing their applications before the legislation comes into force. Renewing the local TV licences will ensure that local TV services receive the same regulatory benefits that they have received since 2013. Services will continue to receive access to and prominence on Freeview as well as on regulated electronic programme guides for simulcast satellite, cable and internet-delivered TV services. It will also mean that local TV is able to continue to make its important contribution by providing pathways for the next generation of journalists and broadcasters to take their first steps in the television industry up and down the country. This is particularly important in a sector where, despite some positive progress in recent years, opportunities are still disproportionately concentrated in London and the south-east. My right hon. Friend the Secretary of State for Culture, Media and Sport has made one of her top priorities increasing opportunities in the creative industries across the whole of the UK, including in the TV sector, and we recognise the role that local TV can play in helping to achieve that. I am grateful to Members for their contributions and the interest they have shown in the continued provision of local television across the UK. Question put and agreed to.

09:49:00