House of Commons - Culture, Media and Sport Committee

Future for local and regional media - Culture, Media and Sport Committee Contents

Written evidence submitted by the National Union of Journalists

The NUJ represents 38,000 journalists working in all sectors of the media.

We have very serious concerns about the future of local media and believe that government action is required to ensure it thrives the future. This submission gives extensive evidence about the cutbacks in local journalism and how they are impacting on the ability of our members to do their jobs effectively. It includes first-hand reports from journalists dealing with cutbacks as well as concrete examples of how communities are losing out on quality local news.

The concerns highlighted here are shared by our members across the industry, as well as by leading journalism commentators and academics.

The NUJ believes public assistance is valid and necessary to support journalism not to prop up a failing business model. Assistance is necessary in certain circumstances to help the industry move towards a more public service oriented industry with a range of ownership and business models and a diversity and plurality of voices. We do not believe unconditional assistance should be provided to an industry which is operating on a business model that is unsustainable.

Media ownership rules

Cross-media ownership rules should be reformed to take in to account the increasingly multimedia nature of many newsrooms and media organisations.

However, such a move does not negate the need for enforceable regulation of media ownership which is crucial to maintaining the diversity of voices and plurality of media at a local and national level which is vital to the democratic process and providing competition in local news markets.

There should be a stronger public interest test, including a specific requirement to establish whether a merger will impact adversely on newsgathering—a position advocated by the House of Lords Communications Committee.

We do not believe newspaper media ownership regulations should be relaxed to allow greater concentration of local and regional newspaper ownership. Consolidation of newspaper groups has been a major factor in reducing resources for newsgathering. Further consolidation would accelerate the trend which saw Newsquest, for example, cut 2,000 jobs in three years.

Maintaining and improving plurality should be a key priority for any action to support the local media.

We also have a number of concerns about the impact on plurality of proposals for the BBC to share resources with ITV, or possibly other organisations in the future.

Future funding models

We are opposed to the use of licence fee funding to support commercial media organisations. New funding sources must be found. We believe that the use of regulatory assets such as spectrum should be maximised to support public service broadcasters and levies and tax breaks considered as alternative methods of raising revenues.

We believe that ITV continues to be best placed to offer a commercial alternative to the BBC. However, we would support the idea of a Scottish pilot of the independent news consortia idea, as recently outlined by Ofcom. Any such moves would need to take account of existing ITV/STV/UTV employees' employment rights.

Taking a broader view of the local media, a variety of incentives to invest in quality journalism could be developed, including:

— Tax breaks for local media who meet clearly defined public purposes.

— Giving individuals annual tax credits for their spend on daily newspapers which meet criteria around original journalism.

— Eliminate postal rates for current affairs/news periodicals that garner less than 20% of their revenue from advertising.

— Provide tax credits for online subscriptions.

— An expansion of funding for public and community broadcasting at a local level with a requirement that the majority of the funds are used directly for original journalism.

— The strategic use of central and local government advertising.

We believe that the way in which content aggregators, such as Google, who do not pay for the content on which they make money, needs to be examined.

An assessment should also be made of how central and local government, plus regional development authorities and other bodies, could support the startup of new local media organisations.

Other issues

We believe that there is a role for local authority publications, particularly where public interest objectives cannot be effectively met through existing media. We also believe that action should be taken by the government to support journalistic training, with a particular focus on improving access to the profession for people from socio-economic groups that are currently underrepresented.

In addition to this submission, the NUJ requests that it be invited to give oral evidence to the committee on this important inquiry.

EXECUTIVE SUMMARY

We welcome the opportunity to submit evidence on behalf of 38,000 members working in all sectors of the media to this vital and timely inquiry.

Central to the NUJ's submission is the need to support quality journalism in the public interest. There can be great debate about platforms, business models, regulations and technologies but central to this debate must be the need to maintain and grow the availability of quality journalism across a range of providers.

THE IMPACT ON LOCAL MEDIA OF RECENT AND FUTURE DEVELOPMENTS IN DIGITAL CONVERGENCE, MEDIA TECHNOLOGY AND CHANGING CONSUMER BEHAVIOUR

It is often said not much happens in Milton Keynes which is just as well because as the NUJ's workplace representative said, if it did, they would not have the staff to cover it.

"With fewer staff…there is simply too much to do. Trips out of the office are a rarity. Most of the team…are resigned to the fact that their job is to sit obediently and churn, churn, churn. One of the most gut-wrenching things is that there's no time to train the trainees, so they think this is what journalists do - sit at desks, sifting through press releases, making hurried phone calls, churning out, making do".

Milton Keynes Citizen

Since Karen wrote that in 2008 the situation facing local media has got worse. ITV have cut almost 1000 jobs, ITV local and regional news has suffered substantial cuts—in some cases output has been halved—hundreds of editorial jobs have been cut at the BBC and thousands lost across regional and local newspapers.

In the past 12 months alone the NUJ has documented more than 1,500 job losses in newspapers, including Manchester, Norwich, Bolton, Leicester, Derby, Reading, Cambridge, Northampton, Belfast, Bournemouth, York, Glasgow, London, Newcastle, Liverpool and in virtually every town and city in the UK.

There is without doubt a crisis in local media—but the explanations of many media owners for the state they find themselves in today are too simplistic and seek to divert attention from the failure of the business model which is killing journalism at a local level.

In the 1980s and 1990s — an era of massive media profits and a loosening of media ownership laws —we saw enormous consolidation of media companies, increasing profitability and increased rewards for shareholders until a high point around 2005.

"Shareholders are always our top priority. The 29% dividend increase in July brought to $1.60 our annualized rate of return per share. It was the 39th increase since Gannett became a public company…. We remain committed to returning more value to shareholders."

in the Gannett 2007 Annual Report. Gannett own Newsquest one of the

UK's largest regional newspaper publishers.

From then on changing public consumption habits started to affect the profitability of companies. No longer could they achieve 30-40% profit ratios as many local media companies had for many years. Instead of adjusting their business model or accepting lower levels of profitability they borrowed money to fuel further consolidation, set about implementing further job cuts in largely non-editorial areas in order to maintain profit levels far in excess of that achieved in most UK industries. As the change in consumer habits

Trinity Mirror

Trinity Mirror's latest annual report shows that profits for 2008 were £145.2 million, of which the regionals division contributed £68.2 million. The operating profit margin total for all business operations was 16.66%. Shareholders received a dividend payout of 3.2p per share. Chief Executive Sly Bailey received more than £1,000,000 in salary and pension contributions—the equivalent of around 50 journalists. The company has recently closed its Liverpool print site which "has significantly reduced investment requirements going forward and also frees up a prime city centre property for disposal by the end of 2009". Sly Bailey says she believes the company will be profitable in 2009 and 2010 and beyond.

Between 1999 and 2007 editorial and production staff were cut by 31%. As a result 84% of staff believe their workload has increased.

accelerated the failure to invest huge profits in quality new media content was cruelly exposed as companies rushed to try to compete with new players who failed to provide news but were taking advertising. Companies such as Newsquest, one of the largest regional newspaper publishers, owned by US media giant Gannett, largely fuelled its move to new media by asking staff to volunteer for extra hours or as Press Gazette reported "the online challenge is being met by forcing already over-worked trainees to work evenings and weekends for no extra cash".

Despite the claims by media organisations to have invested in a transition to web operations, an NUJ survey, conducted in 2007, showed that 65.6% of workplaces had recruited no additional staff to work on the company's web operations and that 64.3% believed existing staff workloads had increased as a result of the transition to online publishing. This inevitably raised fears about the quality of the work being produced and the ability to be able to cover such a broad range of stories in as much depth.

In March this year, the Press Complaints Commission identified a decline in the standard of online journalism and expressed concerns about the impact of cutbacks on accuracy. The outgoing chairman Sir Christopher Meyer said: "We've noticed some wobble in standards in areas of online reporting where it's clear the pressures of time and the 24-hour news cycle may have lead people to put up stories which haven't been thoroughly vetted."

The onset of recession, coupled with massive debt (Johnston Press is saddled with net debts of around £477 million) and the continuing structural changes affecting the industry have hit media companies hard. Channel 3 companies claim their public service obligations, despite the fact they have been severely reduced in the past two years, now cost more than the value of their licence.

Mired in debt and facing falling profits, the managers of corporate media firms seek to right the sinking ship by cutting costs, leading remaining readers, viewers, listeners to ask why they are bothering to pay for publications that are pale shadows of themselves.

The media industry is fundamentally profitable but the business model is killing quality journalism. (Appendix A sets out the profits and financial rewards reaped by current media owners).

The recession or the internet did not cause the crisis in journalism. The economic situation and internet have greatly accentuated and accelerated a process that can be traced back to the 1970s, when corporate ownership and consolidation of newspapers took off. It was then that new corporate owners started demanding bigger returns and managers, to satisfy such demands, responded by cutting journalists and undermining journalism.

Like other critics, Williams rightly points to the fact that the conglomerates were failing well before the arrival of the recession. The underlying problems of local newspapers will not be solved by the further underwriting of publishers who were responsible for those failings.

http://www.guardian.co.uk/media/greenslade/2009/apr/02/downturn-local-newspapers

Roy Greenslade:

On decisions by the leaders of the big regional press companies:

But, overall, they performed just as they were obliged by the ruthless logic of an economic system that demands ever-increasing profits. To do that, they kept a close eye on "costs", ensuring that the staffing of mechanical jobs involved in newspaper production were pared to the bone. There was little fat to cut by the time, about five years or so ago, that revenue began to fall away, as the rivers of gold (aka classified ads) flowed towards internet sites the papers did not own. Yet the insistent demands of the market meant that profits must be maintained.

So who could be cut next? The answer, sadly, was journalists. I ought to say right away that not all journalists were productive. There probably was a need for greater efficiency.

But the net result of the cuts was a diminution of journalism, a gradual and inexorable move away from the kind of coverage that informed the admittedly declining audiences about what was happening in their towns and cities. I am not exaggerating. Several editors and at least one very highly-placed executive—all of whom wish to remain anonymous—have told me that the routine reporting of courts and councils have been in decline for a least a decade.

All of them also blame the nature of corporate newspaper ownership. Gone were the owners and executives who really cared about what their newspapers published.

Evening Standard, 1 April 2009
http://www.thisislondon.co.uk/standardbusiness/article-23669660-details/Answer+to
+economic+crisis+in+newspapers+is+not+more+consolidation/article.do

public service oriented industry with a range of ownership and business models and a diversity and plurality of voices. We do not believe unconditional assistance should be provided to an industry which is operating on a business model that is unsustainable.

We should be careful before rushing to provide any public assistance to those who helped bring about the crisis they are facing. It is them who paid too much for titles to fuel consolidation. It is them who cut journalists—thereby helping accelerate a decline in viewers, listeners and readers. It is they who failed to reinvest the billions of pounds which have been handed to shareholders across the world and which are lost to local economies. It is they who decided to give away expensive online content for free in order to try to secure a larger market share.

Decisions about the future should be taken on the basis of the whole business cycle not just its low point.

Public assistance should consider the interests of local communities not just the media companies. Public assistance should be conditional. Conditions should seek to ensure assistance directly benefits local journalism rather than shareholders.

THE IMPACT OF NEWSPAPER CLOSURES ON INDEPENDENT LOCAL JOURNALISM AND ACCESS TO LOCAL INFORMATION

Around 60 local newspapers have closed in the past twelve months. The Long Eaton Advertiser, owned by Trinity Mirror (profits last year £145.2 million) was closed not because the people of Long Eaton don't want news about their community, but because of "difficult trading conditions".

The Long Eaton Advertiser was a victim of the current business model for local news. Trinity Mirror cut back on staff. Fewer reporters were required to do more work. Stories went uncovered. Support for the paper fell as a result. Printing was transferred to Tamworth. The paper began to lose its identity. It moved its office out of the town. A cycle of decline fed off itself.

In these circumstances companies should be forced to divest of the title and allow the local community to put together a consortium—an independent trust — involving the staff, local business, community organisations, the local authority to take over running the title.

The problem with most local newspapers—in both their print and web forms—is the lack of unique, meaningful content. Readers are deserting the local press in their tens of thousands because the decline in the service being offered has become an unstoppable descent: circulations and revenues fall while online growth stalls so quality is cut leading to further sales and revenue falls leading to further cutbacks.

But The Long Eaton Advertiser is for now rare. It is not so much newspaper closures——but the gutting of newspapers editorial staff which is having the biggest impact on local journalism and citizens' access to information and which unless it is reversed will lead to more closures.

Around 20-25% of staff have been cut from local newspapers in the last twelve months. Northcliffe recently announced 1000 job cuts, Trinity Mirror 1200.

Roy Greenslade has noted that "the public are already losing out: important court cases are not being covered, councils are not being held to account, journalists are spending their days rewriting PR material".

Paul Potts, chief executive of the Press Association, said recently that judges had been complaining to him that "important trials were going unreported because newspapers have cut back on their number of journalists".

Cardiff University produced a report in 2008 which included a study of how PR-originated material often wins greater mainstream coverage than more newsworthy original stories. The research concluded that the study "suggests not only that dependence on PR is shaping news values, but that it is keeping more newsworthy material out of the news." This is a direct result of the reductions in the numbers of journalists and newsgatherers.

Statistics provided by Cardiff University as part of an earlier report show that 92% of local media journalists surveyed claim they now use more PR copy in stories than they used to and 80% said they use the wires more often.

In his book Flat Earth News, Nick Davies analyses the work of local newspaper reporters. In one typical example he surveys a journalist who does 48 stories in a week, speaks to 26 people, sees only four face to face and only spends three out of 45.5 hours outside the office.

As Nick Davies says: "This is churnalism".

Our own surveys of members have shown a decline in the numbers of journalists regularly covering court or local councils, with some members reporting that even in major cities a journalist only attends the local council for the most important debates. The number of specialist political correspondents has declined. There are now fewer specialist crime, court, health and education correspondents working in local newspapers.

Sheffield Newspapers now has just nine news reporters, compared to around 30 ten years ago.

A journalist in Birmingham reported: "There is increased use of Press Association copy, even for local events (which was unheard of a couple of years ago). There is now copying/rewriting from national newspapers/radio/TV and fewer original investigations. There is less checking of facts, we just take everything at face value."

Five day a week titles such as the Reading (Evening) Post are now to be published twice-weekly. Fewer editions mean late or breaking news will be lost or localised content is cut. Hundreds of pages of editorial coverage have been lost every week. Job cuts among

Pete Lazenby, union representative, Yorkshire Post:

Johnston Press is the newspaper equivalent of HBOS and Northern Rock. The company's debts are now ten times the size of its share value. This situation exists because management handed out hundreds of millions of pounds in bonuses and dividends to directors and shareholders while at the same time borrowing hundreds of millions of pounds for an over-ambitious acquisition programme. Its chief executive Tim Bowdler pocketed millions in bonuses, pay and pension despite overseeing this appalling financial situation. The company is now demanding that we pay for its mismanagement with our jobs. The ballot result is indicative of the strength of feeling at our papers. We hope it sends a message to management. We hope it will also encourage other Johnston Press offices to take action. But this isn't just about jobs. It is about the quality of our newspapers. Standards are falling because of continual cuts in budgets and staffing levels. Our papers are suffering a spiral of falling circulations, more cuts, more lost readers. We are proud of our papers—some of us have worked for our publications for decades, serving our communities and spearheading campaigns. We are appealing to our readers for support.

specialists mean there will be a loss of expertise. For example the papers in Newcastle lost their Rugby correspondent, in Gloucester they lost their health correspondent, in Liverpool their Parliamentary correspondent. The story is the same across large parts of the newspaper industry.

Birmingham Post and Mail, plus associated titles:

— 16 offices 10 years ago, down to four today

— Around 230 journalists five years ago, today it's about 160.

— Seven courts/crime specialists and nine business specialists 10 years ago, today just three and six respectively.

— The following specialists have all now been lost: transport, home affairs, showbiz correspondent, industrial correspondent, community affairs editor, cricket correspondent, non-league football correspondent and three chief reporters.

At many centres, news desks, sub-editors and journalists are being moved to centralised locations, often dozens of miles away from the communities served by the titles. It means the people making key decisions about what to cover and how to report it are being taken by people who may have very limited knowledge of the local area.

All this damages the ability of papers and websites to bring the social benefits of a vibrant media to their local communities.

It is not just newspapers but public service journalism which is under threat.

Budget cuts at ITV, job cuts at the BBC, financial pressures on ITN's news budget are all having an impact.

Under the new set-up, ITV has no bureau in Dorset. The whole county is covered by one correspondent working from home. Similarly, there is no bureau in Wiltshire, with the whole county being covered by one reporter working from home.

The cutbacks across the West/Westcountry region illustrate changes taking place across the ITV networks. Regions that were, to much fanfare, divided up into separate more local programmes, were a short period later axed, returning to large regions. Viewers in the Border region now get their news from Newcastle.

In local radio news hubs have severely reduced the numbers of journalists covering local areas. For example, until a recent reorganisation, listeners to 2BR in Burnley were served by three local journalists, Silk FM in Macclesfield had two journalists, Dune FM employed two local journalists and Dee 106 in Chester had one journalist based in the town. Now all listeners to these stations get their "local" news from a hub in Burnley which employs just four journalists, half the original level of staffing. Three of the four stations now get their local news from a centre at least an hour's drive away from the towns they serve.

The centralisation of news into these hubs not only removes journalists many miles from the communities they serve but, as this sector is one with a traditionally high turnover, it means that in many cases, local news could be produced by people who have never visited the towns they serve.

Case Study: impact of ITV's cutbacks on newsgathering in its merged West/Westcountry region

Facilities before regions were merged Impact of the merger

Plymouth—main site Shut—replaced with small bureau staffed by one correspondent, two reporters

Penzance bureau Shut

Weymouth bureau Shut

Barnstaple bureau Shut—replaced by one reporter working from home

Taunton bureau Shut—replaced by one correspondent, one reporter working from home

Gloucester bureau Shut—replaced by one correspondent working from home

Exeter bureau Remains—staffing cut to one correspondent, one reporter

Truro bureau Remains—staffing cut to one correspondent, one reporter

THE DESIRABILITY OF CHANGES TO THE REGULATORY FRAMEWORK FOR PRINT AND ELECTRONIC LOCAL MEDIA, INCLUDING CROSSMEDIA OWNERSHIP AND MERGER REGULATIONS

Between 1995 and 2007 £7.3 billion was spent on mergers and acquisitions of newspapers. In 1996, ownership of one-third of all regional newspapers changed hands. In the last six months of 2005, Johnston Press spent more than £500 million buying local papers. As a result of all this activity there has been a marked consolidation of newspaper ownership—from 200 companies in 1992 to 87 by 2005 (of which 38 owned just a single newspaper). Today there are just four companies who control over 70% of the market.

Coventry Newspapers

Five years ago the company had offices in Coventry, Nuneaton, Rugby, Leamington, Hinckley and Bedworth. Today only the Coventry and Hinckley offices remain.

The company, which employed around 90 journalists 10 years ago, now has less than half that number on its books—around 40. Many of these cutbacks have been in production roles, with large parts of editorial work now done at Trinity Mirror's news factory at Fort Dunlop in Birmingham. This means papers and websites are being produced miles away from their target audiences.

However, newsgathering has also been hit. The last ten years has seen the following decline in journalists: from eight photographers to four (50%); from six sports journalists to four (33%); from 16 news reporters to 11 (31%).

What does this mean? One member commented: We don't do fire calls before the night shift goes off any more. That means we don't talk to the people who actually dealt with the night incidents. We only have one reporter in on Saturdays now. We used to have four.

We only have four photographers. We used to have eight.

We don't have someone routinely in both courts anymore.

We have the city divided into reporting patches but we don't have enough general reporters to

Chris Bullivant's OFT submission:

Their zeal for mergers is no secret…but they have hidden their true motives behind a spurious argument that the current rules negates their ability to turn the threat of digital media to their print businesses into an opportunity. Newspaper publishers had, and indeed in many ways, still have the ability to be the number one choice for the public on the web. They have just not gone about it very well, as evidenced by the Fish4 failure.

And backed it with the implicit threat that there will be hundreds of closures and thousands of job losses unless they are allowed to consolidate their position. The reality is that all of these large groups built themselves on a sea of debt which has become unrepayable… Their answer to their impatient backers is: "Don't worry—we'll get the government to change the rules so that the four of us can carve the market up profitably again.

Those that want to get out, get out clean, those who remain clean up the marketplace."

Is it really the job of the government in a free market to allow the creation of even greater monopolies to save these companies from their own bad business judgement?

In commercial radio just four companies have an almost 80% share of the market. The case for such consolidation was then, as now, that it would offer the prospect of substantial economies of scale and cost efficient operation.

Instead the impact of consolidation on local newspapers and local radio has been a narrowing of the range and diversity of editorial voices and massive job cuts, sometimes driven by creating regional hubs/newsrooms, subbing pools covering a number of titles.

As the Campaign for Press and Broadcasting Freedom submission to the OFT states: "Centralising production in regional hubs also leads to the closure of local offices and removes journalists from their communities, further undermining what should be the unique selling point of a local paper—genuine local news".

The NUJ believes that:

— Cross-media ownership rules should be reformed to take in to account the increasingly multimedia nature of many newsrooms and media organisations.

— However, such a move does not negate the need for enforceable regulation of media ownership which is crucial to maintaining the diver sity of voices and plurality of media at a local and national level which is vital to the democratic process and providing competition in local news markets.

— There should be a stronger public interest test including a specific requirement to establish whether a merger will impact adversely on newsgathering—a position advocated by the House of Lords Communications Committee.

— We do not believe newspaper media ownership regulations should be relaxed to allow greater concentration of local and regional newspaper ownership. Consolidation of newspaper groups has been a major factor in reducing resources for newsgathering.

Further consolidation would accelerate the trend which saw Newsquest, for example, cut 2000 jobs in three years. Newspaper publisher Chris Bullivant said in his evidence to the OFT review of media mergers: "If merger and consolidation is allowed in to two big groups, they will have an even greater stranglehold on the marketplace…and the ability to charge advertisers what they like and dish up whatever quality of journalism to readers they feel is adequate".

Ownership of the media should be considered separately from ownership of other assets.

In 2001 the Government published a consultation paper on media ownership which stated that "a healthy democracy depends on the culture of dissent and argument, which would inevitably be diminished if there were only a limited number of providers of news". The previous Conservative Government said: "A free and diverse media are an indispensable part of the democratic process…"

The Competition Commission in its evidence to the House of Lords Committee on Communications's consideration of Ownership of the News (URL) stated: "Media mergers in particular may raise plurality concerns because they might concentrate newspaper and other media ownership in too few hands, to the detriment of the quality of journalism and broadcasting".

The Committee's report concludes that: "We do not accept that the increase of news sources invalidates the case for special treatment of the media through ownership regulation. We believe that there is still a danger that if media ownership becomes too concentrated the diversity of voices available could be diminished".

Media companies argue they have internal safeguards to protect against any detrimental impact of consolidation of ownership. We disagree. The House of Lords Committee which concluded: "We do not believe that an internal company structure can be an adequate substitute for competition law and statutory regulation in ensuring that no single voice becomes too powerful. We are clear that regulation to ensure plurality of media ownership is still relevant and necessary".

It continues: "Neither the public interest considerations for newspaper mergers nor those for broadcasting and cross-media mergers include any requirement to establish that a merger will not adversely affect professional newsgathering and investigative journalism. This is a significant omission given the evidence which showed that it is the expensive job of news gathering that is suffering the most…there is no evidence that the economies of scale that consolidation brings necessarily lead to investment in news gathering". Indeed the contrary is the case.

The report recommends not only strengthening the public interest considerations but "that the public interest considerations for newspaper mergers and broadcasting and cross-media mergers are amended to refer specifically to a need to establish whether a merger will impact adversely on news gathering".

Dominic Ponsford, Editor, Press Gazette

I'm deeply suspicious of the big regional newspaper players' calls to do away with regulation.

Former Johnston Press chairman Roger Parry told me last month that there was no case in editorial terms for saying that regional press mergers will harm plurality of coverage.

He said: "Every piece of evidence demonstrates that local editors remain locally autonomous."

Yet just the next day it emerged that the longserving group editors of his company's Eastbourne and Hastings-based local newspaper groups had both been sacked to be replaced by a group managing director from another part of the country.

The fear that the big regional newspaper groups aren't the best custodians of local journalism comes from the fact that even in the boom years they cut editorial costs to the bone in pursuit of ever higher profit margins of 30% plus.

Many believe that private owners who are more committed to journalism and their local communities—and who are willing to invest while taking out sustainable profits—would be a better bet.

It may be that it takes companies with the clout of Trinity Mirror and Johnston Press to make the investment needed to create new multimedia newsrooms—as they are doing in places like Birmingham and Preston.

But I hope that Burnham and the Office of Fair Trading ensure they protect smaller independent local news players when they reform press merger and competition rules.

The big regional newspaper groups are used to playing hardball when it comes to competition—and it would be a tragedy if they were allowed to squash the many new local news start-ups which are bound to follow as a result of their current retreat from many communities.

http://blogs.pressgazette.co.uk/editor/2009/04/30/burnham-do-not-let-big-regional-news-players-squash-competition/

"Consolidation has been bad for diversity and quality"

Both Ofcom and Ministers should have the right to trigger and initiate such a public interest test—seeking evidence from industry unions as well as employers about the likely impact.

Any amendment to the media merger regime should have the public interest as a primary consideration with the ability to put enforceable conditions in respect of investment in newsgathering and the production of original journalism on any merger.

In the case of companies such as Guardian Media Group in Greater Manchester their ownership of dozens of titles in a regional monopoly has resulted in them closing a number of offices in local communities and centralising all staff in their Manchester head office. MPs and others have complained at the impact that will have on newsgathering. The same company has closed offices in Esher and Aldershot, transferring those journalists whose jobs haven't been cut to Guildford.

Add to that list dozens of other companies busy centralising production and newsgathering and you have a vision of what will happen on a greater scale with further consolidation.

The Bury Times, which has been based in the town for more than 150 years has now been predominantly moved to Bolton, with just one journalist left in the town on a rota basis. Just weeks after this change was announced, it was decided to move production of the paper even further away to Blackburn.

In Macclesfield the newspaper now comes from Manchester and the local radio from Burnley.

Newsquest's Malvern Gazette has been moved from Malvern town centre to be produced in Worcester. The Burton Mail has closed three weekly offices and production of Northcliffe's Tamworth Herald is now done in Stoke, a move that came at the same time as cuts in reporters and a slashing of the company's Stokebased photographers by a third.

Swaffham in Norfolk is losing the office of its local paper under plans that would see a reporter occasionally setting up shop in the local caf

. These plans fail to recognise the value of having journalists in the town —so they're there when news breaks and have the contacts to really know what's going on.

The same group, Archant, has closed offices in Halesworth, Stowmarket, Harleston and Woodbridge. This isn't about saving the cost of remote offices, it is about cutting back on journalists—the latter two of these "offices" consisted of journalists working from home. It means all content covering these areas is now produced from Ipswich.

In South Wales Trinity Mirror has closed its offices in Aberdare, Ebbw Vale and Neath. It has suggested that reporters could occasionally visit the town and base themselves in the premises of other organisations, but to date even this proposal has yet to be enacted, so the towns have to be covered from elsewhere.

One impact of consolidation has been creating regional clusters and moving print of newspapers from local sites to larger regional operations. The consequence of this according to the Campaign for Press and Broadcasting Freedom "for newspaper deadlines is that evening papers like the Yorkshire Evening Post are prepared for publication the day before with only a few last minute changes possible".

Professor Roy Greenslade

They are compelled to do whatever is possible to generate profits, even if it means reducing competition and instituting cuts that reduce the quantity and quality of their papers.

For journalists—and, most importantly, for the public—this could be disastrous. It does threaten democracy. Information will not reach the people. Local power will not be held to account.

The paradox is that this is the very argument advanced by publishers as they lobby government. There is a black irony in watching them close papers and cutting editorial staffs to the bone at their existing titles while shedding tears for "the public."

Why should we believe that a merger between, say, Trinity Mirror and Johnston Press will solve the problem. It would allow a reduction in printing plants. There may well be further economies of scale. It may well, for a time at least, boost profits and help to reverse the stock price decline.

But it is very doubtful if it will sort out the colossal debts and the problems of funding pension schemes. It will most certainly not lead to the rehiring of journalists. It will not improve the public service element of papers.

Are we to believe that larger companies formed for the express purpose of making profits will invest more in journalism? That they will suddenly say to editors, hire more people, get them out into the streets, into the courts and into council meetings?

http://www.guardian.co.uk/media/greenslade/2009/mar/27/local-newspapers-trinity-mirror

Andrew Grant Adamson, journalism academic:

The failed approach to business which got them into this mess well before more recent financial problems, was based on mergers and acquisitions. Corporate mergers seldom benefit customers, staff or shareholders: often the people with most to gain are the lawyers, accountants and investment bankers who can make the deal look pretty on paper… The best hope for the future here is more diverse ownership of local papers.

Such moves have only been possible because of control of the local newspaper market. Allowing further consolidation will do nothing to address the problem. It will only make things worse.

The view of one NUJ member in Yorkshire, who has worked in local newspapers for the last 20 years, throughout many restructures and takeovers: "It is essential that further mergers are not allowed: they are the reason present owners have arrived at this situation and do not serve either readers or advertisers, creating an effective local monopoly, with diminution of editorial quality and high advertising costs to satisfy shareholder demand for ever-increasing profits."

In the East Midlands Northcliffe, which campaigns under the heading "at the heart of all things local", has moved production of its Derby and Leicester papers to Nottingham, meaning people making some key editorial decisions are no longer based in the towns.

Justin Williams, assistant editor with the Telegraph group on his personal blog talks about the result of consolidation at his former employer Kent Messenger Group:

The result? A giant in regional publishing has been enfeebled—its circulations decimated, its multi-million pound press plant to be closed and printing outsourced, its website confused and filled with the dirge that plasters its printed pages and, tragically, the laying off of nearly 40% of its workforce. Major population centres like Canterbury are now "served" by a handful of young journalists on distant industrial estates while city centre sites, earmarked for housing development, lie windblown, empty and credit crunched".

THE EXTENT OF PLURALITY REQUIRED IN LOCAL MEDIA MARKETS

We have already highlighted why plurality of news providers is important. Any action to support local media, should include consideration of how it can encourage a variety of voices.

Plurality should be maximised through a combination of different models—commercial ownership, public ownership, mutual ownership, staff ownership, cooperative ownership, for profit and not-for-profit ownership.

Regional Development Agencies could be charged with investigating how they can help promote greater media plurality through investment incentives in local areas poorly served by competing media. Start-up grants, subsidised technology or training grants, subsidised office space and other creative solutions could help to grow new media driven by journalists themselves on a variety of platforms—online radio, broadband TV, print and online.

Independent Trusts should be established or endowments for journalism introduced—which could help fund local journalists to carry out investigations which otherwise would not be funded and could then be published in a variety of outlets including local newspapers and new publishing ventures.

All support for such initiatives should be driven by the concept of news as a public good—that it has broad social benefits.

HOW TO FUND QUALITY LOCAL JOURNALISM

A number of different funding models have been suggested for the broadcasting, print and online sectors.

We would be opposed to the principle that any move towards Local News Consortia should be funded from any element of the licence fee. Such a process does nothing to increase the resources available to public service providers and would weaken the BBC at the expense of other providers. We have previously characterised such an approach as robbing Peter to pay Paul. Any new funding model should have as a key requirement to increase the total level of resources available.

This means in broadcasting terms the better use of regulatory assets such as:

— Access to digital terrestrial spectrum, especially in respect of greater provision of HD services.

— Expanding the capacity of digital terrestrial spectrum capacity.

— Increasing advertising minutage allowances.

— Electronic Programme Guide prominence—estimated to be worth £30million.

— Reserved use of cleared spectrum for PSB purposes.

It also means serious consideration must be given to levies as an option. Despite being one of Ofcom's four possible funding mechanisms no serious modelling has been done by Ofcom or the Government on this option.

Alongside our sister union Bectu and IPPR we have undertaken research in to the possibilities of levies helping to bridge a funding gap. Our full report, Mind the Funding Gap, can be found at http://www.nuj.org.uk/innerPagenuj.html?docid=1212

Levies are used in 30 European countries and are popular with the public as a means of providing publicly important services. A one per cent levy on pay TV operators such as Sky and Virgin Media could bring in around £70 million a year. A similar fee imposed on the country's five major mobile operators could generate £208 million a year. Making Google meet its full tax liability in Britain would boost the pot by a further £100 million.

Such sums could save many local newspapers and websites from closing down, could stop the destruction of local and regional news on ITV and could help new media start ups to plug the gaping holes in public service provision—all without the taxpayer having to stump up any more cash and without having to raid the licence fee.

In her evidence to the House of Lords Select Committee on Communications in April 2009 Dr Carole Tongue, former MEP and Chair of the UK Coalition for Cultural Diversity called for consideration of either a levy under which all non-public service broadcasters, including video-on-demand operators, should be asked to contribute towards the production of public service original content or an industrial levy under the Audiovisual Media Services Directive.

In addition to investigating the role a levy could play, greater use of tax breaks should also be considered. Tax credits could be given to those companies, across any platform, against clear criteria of delivering public purposes, providing public service content of a certain quality. Such credits would reduce costs and enable greater investment.

INCENTIVES FOR INVESTMENT IN LOCAL CONTENT

If we are to save, build and sustain local journalism an immediate journalism economic stimulus package is needed.

There are those who argue any public subsidy for journalism would undermine media freedom. Such arguments hold no weight. Our founders never thought that freedom of the press would only belong to those who could afford a press. They would have been horrified at the idea that if rich people determine there is not sufficient commercial value in news that communities should be deprived of quality information and quality journalism.

There has long been public subsidy for media—tax breaks, special postage rates, exemptions from VAT and so on. Several European governments are experimenting with ways to support news gathering. In France the government has launched a programme where every French citizen on their 18th birthday will be given a year's free subscription to a newspaper of their choice, with the hope it both stimulates newspaper readership and encourages newspapers to improve to win a share of this lucrative market. In Sweden the government set up an independent body to allocate subsidies to newspapers on the basis of circulation and revenue data.

Case study: Camden New Journal

The success of the Camden New Journal shows that it is possible to set up independent profitable local media. The free paper developed out of a paid-for Camden Journal that was closed by its owners in the early 80s. Two journalists working at the paper bought the title for £1.

The paper won start-up funding in the form of a government-guaranteed £50,000 bank loan under the auspices of the then Co-operative Development Agency, which helped draw up a business plan. It also received £100,000 from the London Development Agency set up by Ken Livingstone's Greater London Council.

In four years the paper was able to pay back both loans. Eric Gordon, who has been running the paper since it launched in 1982 says the paper has been profitable ever since: "We've never had to borrow any more money. You can manage if you make a net margin of 10%, to invest." He is now divesting himself of the paper's ownership in favour of a community trust.

The question then is what type of assistance could be given. Among the many options are:

— Tax breaks for local media who meet clearly defined public purposes.

— Giving individuals annual tax credits for their spend on daily newspapers which meet criteria around original journalism.

— Eliminate postal rates for current affairs/news periodicals that garner less than 20% of their revenue from advertising.

— Provide tax credits for online subscriptions.

— An expansion of funding for public and community broadcasting at a local level with a requirement that the majority of the funds are used directly for original journalism.

— The strategic use of central and local government advertising.

All recipients of major public subsidy would be required to make available content free online to help build a more engaged and informed citizenry.

Such a stimulus package could help sustain a vibrant press, it could help stimulate new media and help save the jobs/provide work for hundreds of journalists losing their jobs, saving their skills and experience and preventing their unemployment adding to the calls on the public purse through benefits.

To ensure that any public money is used for the public good—or any relaxation of regulation is for the benefit of our communities not private businesses and shareholders—clear and enforceable conditions, accompanied by sanctions, need to be applied to any government support.

These could include:

— Requirements to invest a specified proportion of profits into editorial resources.

— Requirements over staffing ratios.

— Caps on directors' pay.

— Ratios for originally produced content or commitments on the maintenance of titles/offices/pagination/editions.

— Procedures that require companies to make the economic case when looking to cut jobs.

— Respect for core labour rights, collective bargaining and the right to decent work.

— Obligations to monitor the health and safety of workers,particularly in relation to workplace stress.

Finally, consideration must be given to how support can be given to new start-up organisations that could deliver quality local media. Such an approach could work (see case study below) and there is already precedent for public/private cooperation in this field, such as with Kent TV.

THE ROLE AND EFFECT OF SEARCH ENGINES AND ONLINE CONTENT AGGREGATORS ON LOCAL MEDIA

Google News and Yahoo! News attract large numbers of visitors and consequently are hugely profitable. Google's revenues from its British operations last year were £1.25 billion. However, according to the Guardian it paid only £600,000 in corporation tax in this country, diverting the rest of its British revenues through Ireland in order to reduce its tax liability by almost £100 million.

One of the biggest beneficiaries of the structural change affecting media companies has been Google. By aggregating content from other broadcasters, newspaper and magazine publishers, the world's most popular search engine is also able to secure for itself a dominant position in the advertising market. It recently announced a 9% rise in profits, despite the effects of the recession. In 2008 Google overtook ITV for the first time as the largest advertising medium in the UK.

The problem is that Google itself doesn't actually produce any content—it just lives off the work of others. And that work has to be paid for. However, given that there are fewer adverts for the content producers to fight over then there is less money to pay creators and so media companies axe journalists, photographers and editors.

The long term impact is accelerating the decline of existing media and acting as a barrier to new entrants who rely on advertising, leading to fewer jobs and a narrowing of the range of media at a local level.

Of course the fault lies not just with Google's parasitic model—news owners have failed to invest in their online operations in a way that could replace declining advertising revenues in traditional media. When the times were good directors chose to return money to shareholders rather than invest in the editorial staff and resources necessary to produce top quality online news services.

Who will tell you what the local councils are up to in future? Not Google. Who will cover the magistrates' courts, the inquests, the local crime, the speech days? Not Google

The Sun

THE OPPORTUNITIES AND IMPLICATIONS OF BBC PARTNERSHIPS WITH LOCAL MEDIA

The NUJ has a number of concerns about the way in which partnerships between the BBC and other media operators could damage plurality and undermine quality journalism. Any moves in this direction must ensure that editorial integrity of different operators is not damaged—that the news agenda does not become merged by default. The current proposals are said to include the idea of regular morning news meetings, which would seem to indicate a danger of a single news agenda being set.

The availability of footage is clearly crucial in determining what is covered, and therefore where footage is shared, it is likely that difference between bulletins will be reduced. There are also a number of practical aspects that must be addressed. Some of these issues, such as space requirements, could be dealt with through local negotiations, but broader issues, such as systems for booking crews have wider implications for editorial integrity and the quality of the finished journalistic product.

THE FUTURE OF LOCAL RADIO AND TV NEWS

The NUJ believes firmly that the BBC should remain the cornerstone of public service broadcasting in the UK—and it alone should be in receipt of the licence fee—but that there should also be public service provision and funding beyond the BBC.

It is our view that ITV's scale, reach and infrastructure make it best placed to provide news across the nations and regions separate from the BBC.

However, if alternative models are considered, a number of key questions would need to be addressed. STV has volunteered to participate in a pilot programme of the news consortia idea that has been suggested by Ofcom. The NUJ would very much welcome the opportunity to be involved in the establishment of any such pilot programme.

Where competitive funding is considered as a method for filling agreed time slots on the Channel 3 network, it would be necessary to ensure that competitive bidding does not drive down quality. Our experience with ITN is that the value of the contract has been consistently eroded and underbid thereby leading to cuts, which are undermining the company's ability to maintain quality.

Quality of provision will inevitably suffer in a situation where providers are being expected to outbid each other in relation to their "efficient" delivery of a service. Such an approach is likely to see the development of a tick-box mentality, with providers looking to drive costs down to the bare minimum that would enable them to meet any specific obligations that are laid down. This would do nothing to maintain or improve quality. Evidence from other sectors shows that quality of service tends to suffer where bidders are expected to compete in this way.

Whilst it is important to ensure mechanisms are in place to ensure that public funding and/or subsidy is spent efficiently, a competitive funding model for the provision of core public service television objectives could drive down quality and see an erosion of commitment to long-term public interest goals. Cost must not be the only criteria on which bids are assessed—in fact it should not even be the most important criteria. Quality must come first.

Any such approach must therefore have safeguards in place to ensure that quality is the number one consideration when assessing potential suppliers. It is important governance mechanisms are robust enough to ensure those in receipt of public subsidy/funding are accountable and that there are clear enforcement mechanisms to enable regulators to ensure that in return for such subsidy public service purposes are met.

A number of clear administrative and regulatory safeguards would need to be put in place in advance of any changes. Specific slots on the Channel 3 network would need to be agreed and set in stone in advance, along with clear definitions of what constitutes quality local news. Minimum health and safety standards must be put in place, as must requirements concerning the terms and conditions of journalists employed,including a requirement to recognise the relevant unions.

If any moves in this direction were to be made, it would be essential to ensure that existing employees of Channel 3 news providers (ITV, STV, UTV) would have the right to be transferred to the new provider under the TUPE transfer of undertakings rules, which govern employment rights in these situations.

THE APPROPRIATENESS AND EFFECTIVENESS OF PRINT AND ELECTRONIC PUBLISHING INITIATIVES UNDERTAKEN DIRECTLY BY PUBLIC SECTOR BODIES AT THE LOCAL LEVEL

There has been a significant growth in media produced by public sector bodies in recent years to provide information to residents/citizens in a wider variety of formats. There is concern where this is seen to compete directly with local media, in particular where it competes for commercial advertising.

The growth in such media is largely the result of two issues—a greater appreciation in general of the need to get across information to those who fund public bodies and the failure of local newspapers to meet their public service obligations and/or their withdrawal from certain parts of local communities. For example, Johnston Press has now withdrawn from delivering newspapers to certain parts of Leeds because of a combination of factors—the population demographics do not match the needs of advertisers and sales are too low in those areas to justify the cost.

In those circumstances public sector bodies still have a duty to provide information to citizens and they can contribute to the diversity of voices available to citizens.

According to the LGA only 2% of councils produce weekly publications, the majority are monthly or less regular. In these circumstances guidelines should be drawn up to minimise competition for advertising and to ensure councils use their advertising budgets to ensure citizens get value for money—which almost certainly means a mix of newspaper and radio advertising as well as through their own publishing outlets.

OPPORTUNITIES FOR ONLINE AND ULTRA-LOCAL MEDIA SERVICES

Last year regional press companies argued against BBC involvement in local video because they said it would stop them investing. Then, with the potential competition seen off, they pushed on with massive cost cutting programmes that are resulting in journalists' jobs being slashed and the quality of local media damaged. Between the BBC Local decision and January this year, the NUJ has identified more than 700 editorial job cuts across the regional press. We believe the decision around BBC Local should be reviewed.

There is a role that could be played by regional development authorities, local government or other such bodies in providing the financial support and expertise in establishing professional ultra-local news services. Whilst some attempts have been made, to date, most such projects have suffered from having insufficient start-up capital to fund the business through its crucial first few years (see incentives section above).

Any such services need a professional element to them if they are to perform the important social and democratic functions we currently expect of our local media. Not only does professional journalism brings with it appropriate ethics and standards, it also brings a consistency—ensuring that any individual outlet is not dependent on the time specific individuals are able to give up for the project.

TRAINING

There is a strong lobby for government support for the training of journalists. The NUJ would welcome such support but is adamant any assistance should seek to achieve other public purposes. Support for training could make a significant contribution towards improving access to the journalistic profession. It could help to support other government initiatives such as the work of the Panel on Fair Access to the Professions chaired by Alan Milburn MP.

A 2002 survey by the Journalism Training Forum is widely quoted when examining the training and background of people entering journalism and is still the largest ever independent study on the topic.

It found that:

— New entrants to the industry came overwhelmingly from middle class families, with more than two-thirds coming from homes where the main wage earner worked in a professional or senior managerial occupation.

— Under 10% of new entrants came from a working-class background, with just 3% coming from homes headed by semi—or unskilled workers.

— Just 4% of journalists came from ethnic minority backgrounds.

— 98% of all journalists had a degree or postgraduate degree level qualification—the exceptions being older journalists who had been in the profession for a long time.

— Almost half had postgraduate qualifications, mostly in journalism.

The existing training and recruitment processes in the industry create barriers that prevent many people from gaining access to journalism as a career. Journalism is about people, and the profession should therefore strive to reflect the society on which it reports. Any action with regards to training needs to consider how it can help tackle the inequalities in the current system.

WALES, SCOTLAND AND NORTHERN IRELAND

The special nature of Scotland, Wales and Northern Ireland means that consideration should be given to how any action to support local media will impact on these parts of the UK. Not only do they have specific cultural identities and differing media environments to the English regions. They also have devolved institutions that must be held to account.

This submission should therefore be read in conjunction with our submissions and evidence given to other Westminster committees and the Scottish Parliament, Welsh Assembly and Northern Ireland Assembly regarding the role of local news in these nations. Further information can be supplied on request.

FREELANCES

Whilst much of this submission has focused on staff job cuts freelance journalists are suffering as much, if not more, from the crisis facing local media.

The NUJ's Disappearing Freelance Work report published in January 2009 cites cuts in freelance work at the Yorkshire Post, Scottish and Universal Newspapers, the Western Mail and South Wales Echo, South Wales Argus, The Press in York, the Northern Echo in Darlington, the Bristol Evening Post and Western Morning News.

Freelances provide an important resource for the local newspaper industry—particularly those who are specialists or have strong local contacts but they have suffered from the same arbitrary cost-cutting as staff journalists. Photographers in particular have been hard hit by this false economy. In some places we have recorded instances of management edicts that photographic jobs can only be booked between certain hours (despite the fact that by its very nature news doesn't always work to a particular timetable) in order to save money.

The full Disappearing Freelance Work report is available at http://www.nuj.org.uk/getfile.php?id=689