Privatising Channel 4 would cost the UK economy £2bn and see thousands of jobs lost around the country, a new report claims.
A new independent report from professional services giant EY shows the impact a change to Channel 4’s ownership could have on both the UK’s economy and the broadcaster’s support for jobs across the whole of the UK in the next 10 years.
Channel 4 officially opened its new Leeds headquarters just this week and the new economic analysis shows that the UK’s regional economy could be disproportionately impacted by privatisation.
The report finds that a £2bn contribution could be transferred from the creative economies outside of London, to a new private owner of Channel 4.
The data is published as a Government consultation on taking Channel 4 into private ownership draws to a close, with the deadline set for Tuesday September 14. Of the reported £2bn reduction from Channel 4’s supply chain contribution to the creative economy, around £1bn would be from outside London, a circa 40 per cent decline on the regional supply chain.
One extract of the report said: “Given Channel 4’s current level of spend with external producers outside London, privatising Channel 4 and removing the publisher-broadcaster model could have a disproportionate impact on the wider creative economy in the Nations and Regions.
“Our analysis suggests that the present value of GVA generated by Channel 4 in the Nations and Regions in its supply chain over a ten-year period could be 37 per cent lower if Channel 4 is privatised and the publisher-broadcaster model is removed, compared to Channel 4’s current model (£1.8bn vs. £2.8bn), due to a shift in commissioning spend towards in-house productions.”
Furthermore, the number of jobs supported by Channel 4 through its supply chain in the regions is also estimated to decline by around 35 per cent, equivilant to 1,250 fewer jobs.
The EY report adds: “Our analysis illustrates the policy choices relating to Channel 4’s remit and model and, in particular, the impact of policy choices on Channel 4’s role as a stimulus to the wider creative economy, particularly in the Nations and Regions.”
An EY report published earlier this year found Channel 4 generated £274m of GVA in the UK Nations & Regions and supports nearly 3,000 jobs outside London.
The report is published as Tracy Brabin, Mayor of West Yorkshire, made another appeal for the consultation to find in favour of keeping Channel 4 in public ownership.
She said: “With Channel 4 opening its brand-new HQ right here in Leeds earlier this week, we are already seeing vast economic benefits and the broadcaster’s commitment to regions outside of the South East. Relocation to Yorkshire has also seen wider benefits with vital investment brought into our region and an ecosystem of new creative businesses developing. EY’s report shows that this type of regional economy could be “disproportionately impacted” by a privatised Channel 4.”
A DCMS spokesperson said: “We welcome the report’s findings on how a change in ownership could make Channel 4 stronger. However it makes a number of unevidenced assumptions about the choices a potential buyer might make. Ministers are clear that Channel 4’s PSB remit, its ability to make distinctive content and its work with independent producers are precisely the strengths they’d expect any buyer to nurture and develop through new investment.”