"Digital Britain" and the Regional Press

The government's multi-faceted Digital Britain report, released Wednesday, contains a number of components with a direct effect on the regional press, HoldtheFrontPage.co.uk reports.

In addition to declining industry requests to relax merger rules, as described in a companion report from the Office of Fair Trading and highlighted here yesterday, the government has:

* Ordered an inquiry into council-funded newspapers and their effect on the local press. The Digital Britain report says it would be counter to the public interest should a loss of paid-for advertising to local authority publications make community papers unviable.

Ministers have asked the Audit Commission, the local spending watchdog, to conduct the inquiry. It will consider whether curbs should be placed on local authorities competing for advertising revenue with the local press.

* Promised consultation on use of a portion of the BBC licence fee to support alternative local and regional media outlets. The report said the money, approximately 3.5pc of the fee or around £130m, will be "channelled through other organisations, primarily for news."

If given the green light, the scheme would begin in 2013, when the switchover from the analogue to digital signal is complete. Newspaper groups are among the organisations expected to benefit.

"The result could be a greater investment in journalism, newsgathering and multimedia distribution and syndication than today, enhancing the quality of news," the report says.

However, the BBC Trust opposes "top-slicing," which its chairman, Sir Michael Lyons, said would "damage BBC output, reduce accountability and compromise independence.

"The licence fee must not become a slush fund to be dipped into at will, leading to spiralling demands on licence fee payers to help fund the political or commercial concerns of the day," he said.