‘Cairncross was 18 months ago and local journalism needs proper help now’

Newsquest CEO Henry Faure Walker says the Government must urgently support local journalism otherwise more local papers will be lost at a time when we need them most.

Henry Faure Walker

Speaking at a Westminster Media Forum conference on the future of news following the Cairncross review, News Media Association vice chairman Mr Faure Walker said: “It’s great that the Government has recognised something needs to be done, but they commissioned the Cairncross report over 18 months ago, and frankly local journalism needs proper help now.”

He added: “Local journalism is a huge public good, and DCMS and Government need to get out of the slow lane and be bold — otherwise our local communities, the fabric of our society, will deteriorate just at a time when we as a nation need them most.”

Mr Faure Walker pointed to work Governments overseas are doing to support local journalism such as Canada’s £70million per annum fund to support local journalism and Denmark’s six-year fund which provided £44million for local journalism last year.

He added: “In the UK a one-off grant of £2m into a Future News Fund — for a country that is the founding father of the free press — dare I say it — looks a little light by comparison. It certainly looks light compared to the £1 billion tax credits that go to other creative industries — why does a local museum get support but not local journalism?”

In the first session chaired by Lord Black of Brentwood, the conference also heard from Dame Frances Cairncross who gave a presentation outlining the key findings and recommendations of her report.

Asked by Lord Black how she saw the work progressing after the election, Dame Frances acknowledged that the Government had been slow to act on the report but she was hopeful the next Government would move things forward.

She said the issue of the tech giants’ relationship with the news media industry would depend upon the next administration in the United States and their appetite to “deal with them.”

Mr Faure Walker’s full speech was as follows:

“Local newspapers are the glue that binds communities. They play an essential role in local democracy and local civic life”.

I can’t put is as eloquently as that, but I do want to emphasise how important local journalism is to society.

Good local journalism holds power to account, it calls out unfairness and abuses of power that affect a local community. Just having a local newspaper there can act as a restraint on these behaviours.

And there’s now been a number of academic studies showing how areas that have lost their local newspaper also experience a decline in community engagement and things like voter turnout. For example, Gao Pengjie’s study into the impact of newspaper closures on public finance in the U.S. which showed how local Government spending ballooned when there was no longer a local newspaper present to scrutinise them.

At Newsquest, our news brands — all editorially independent — publish a lot of local stories — every day of the week — most of these simply report on local life as it happens, but reporting on the rich tapestry of local life in itself is a glue that binds communities.

And amongst that rich tapestry of local reporting, there are always and often hugely important individual stories or campaigns — many of which feed the national press.

Take for example the Impartial Reporter (a local title we own in Eniskillen) where early this year a local man bravely walked into its office to tell a reporter how as a 12 year old boy he had been sexually abused by a group of men in the town. At his request, we published his story and the paper subsequently received a deluge of letters and emails from others in the community who had also been abused. Supported by our legal team, this led to the reporter investigating more than 50 allegations of historic sex abuse of school children — and it is now the subject of a major investigation by the Northern Ireland Police Service.

Every week there are many examples that show how important a role the local paper plays. For instance, campaigns by the Barrow Mail to tackle the fact that their town has the third highest male suicide rate in the country. Or the Evening Times in Glasgow which successfully campaigned for all local authorities in Scotland to roll-out mandatory CPR training to school pupils. Or the South Wales Argus which fought for and won more funding for a special needs support service for blind and deaf children.

Our job is how we can make this local journalism — this huge public good — sustainable. And much of the advertising revenue that historically funded local journalism is now in the pockets of the large tech platforms.

And the revenue decline in print newspapers have been particularly aggressive. Advertising revenues for regional news media have more than halved in the last 10 years. 20 years ago local newspapers represented c. 25% of UK advertising spend; they now represent less than 2.5%.

And the duopoly of Google and Facebook have taken the spoils. Credit to them one might say — hugely successful businesses that have built up extremely high market shares. And Google not only owns the wold’s largest ad platforms (Google Search, You Tube, Google Display) but they also control the market place where advertising is bought and sold — the supply side, the buyer side and the auction side. And of course they also have huge advantages in mobile and data through Android. Oh, and they also have Google maps. And now they’ll even know your heart rate through their acquisition of FitBit. Incredible really. Enough to give you (and the competition authorities) high blood pressure.

There’s been a lot of discussion today about innovation.

Of course a sustainable future will be built with innovations. But if I had a pound for every time someone told me their silver bullet solution for saving local news, I’d have a lot of pounds and no silver bullets. Future sustainability will be built on a range of different solutions — but there is no one silver bullet.

There is a huge amount of innovation already going on in local news. You heard from Adam and the Bristol Cable. At Newsquest, we are using gamification to develop a citizen journalist platform, we have launched a data journalism unit, using AI to create content, automated page building tech, running six different pay wall experiments — to name just a few.

BUT where we are having most revenue success is in our non-content innovations: we have a very fast growing digital marketing services and analytics platform for SMEs — LOCALiQ. Launched 18 months ago, it’s becoming a really good business but it does not need nor have an association with local journalism.

And even in our core online publishing business — local news websites — it may become increasingly hard to justify investment in say a local health reporter — covering really important community health concerns — when there are other content areas that will drive more audience and a higher advertising return.

New journalist based business models will still run into the challenge that Google and Facebook hoover up much of the digital ad revenue — Enders estimate that up to 90% of the growth in digital advertising goes to these two. And if paid content is the model, they face a challenge of British consumers having the lowest propensity in any developed country to want to pay for online news.

I’m not being defeatist — innovations will underpin a sustainable model — but they will take time.

Scale helps sustain local journalism — at Newsquest we have the advantage of economies of scale — it gives more runway for the digital business to get traction — it means news brands can leverage a very efficient publishing infrastructure (printing, digital platforms, training, back office, legal support) to keep them running and keep local journalism going.

But scale does not keep the wolf from the door for ever. At Newsquest I think we have the highest digital advertising revenue take in the industry — almost 40% of our ad revenue is now from digital — and I believe we have one of the most efficient publishing infrastructures. But even then — some of our titles are not going to make it in the next couple of years.

As Dame Cairncross said in her report: “With luck, investment in innovation should help publishers, and local ones in particular develop viable business models online. But this will take time. In the short term, there is an immediate need to plug the gap at the local level to ensure public institutions are sufficiently held to account.”

So time is running out. It’s great that the Government has recognised something needs to be done, but they commissioned the Cairncross report over 18 months ago, and frankly local journalism needs proper help now.

And there is a lot that Governments outside of the UK are now doing to support local journalism:

In Canada, they have a £70m per annum fund in place to support local journalism over the next five years.

In Denmark, they have a six year fund which last year provided £44m of support for journalism.

And other countries are doing similar either through direct Government support or tax reliefs.

In the UK a one-off grant of £2m into a Future News Fund — for a country that is the founding father of the free press — dare I say it — looks a little light by comparison. It certainly looks light compared to the £1 billion tax credits that go to other creative industries — why does a local museum get support but not local journalism?

Of course, we should be supporting new innovations; but in the medium term these will not come close to replacing the editorially independent and vast amount of impactful journalism still produced by publishers across the UK. It’s important that any new initiatives work with and leverage the existing publishing infrastructure, the audiences, the expertise, training, legal support, apprenticeship schemes that already exist in news rooms across the country.

The BBC Local Democracy Reporter scheme is proving to be a really successful model that Cairncross recommended be expanded — a recommendation but still no action. 150 Local Government reporters nested in local newsrooms across the UK doing really important journalism that otherwise would not get done. I’m encouraged by the BBC’s announcement last week about expanding the Local News Partnership but it needs funding and Government must use their influence here.

I don’t believe in the need for long term support nor am I suggesting they support publishing companies. I am saying they should support local journalism and local public interest reporters for the next three to five years and work with the industry in delivering this. Local journalism is a huge public good, and DCMS and Government need to get out of the slow lane and be bold — otherwise our local communities, the fabric of our society, will deteriorate just at a time when we as a nation need them most.”

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