The Minister of Culture recommends dropping the privatization of Channel 4 | Channel 4

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Britain’s culture secretary has recommended the government abandon its plans to privatize Channel 4, according to a leaked letter suggesting ministers will instead pay the broadcaster to move jobs out of London.

Michelle Donnellan outlines her plans to backtrack in a document sent to the Prime Minister, Rishi Sunak, which indicates there is little desire to privatize the broadcaster among MPs.

She said she has “concluded that pursuing a sale at this point is not the right decision and there are better ways to secure C4C.” [Channel 4 Corporation] Sustainability and sustainability of the independent production sector.

Donnellan said Channel 4’s role in supporting the independent production sector “will be severely disrupted by the sale at a time when economic growth and stability are our priorities”.

The proposal to take the broadcaster out of the public domain was announced under Donnellan’s predecessor, Nadine Dorries, who spearheaded the move during Boris Johnson’s premiership.

There have been repeated suggestions – including from some Tory MPs – that the privatization plan was a politically motivated attack on Channel 4 as part of a series of “culture war” policies targeting the media under Johnson’s leadership.

Channel 4 is state-owned but commercially funded, largely through advertising. Unlike other broadcasters such as ITV, Channel 4 is required to reinvest its profits into making distinctive programmes. It’s also banned from making its own shows, which means it relies on a network of independent companies to put on shows.

Instead of selling the channel, Donnellan suggests allowing Channel 4 to run more in-house shows and borrow more money from the Treasury as this would give it “flexibility to make some of its own content and diversify its revenue more effectively”. However, this technical change may raise concerns among production companies that they may lose out.

The culture secretary also said Channel 4 had committed to relocating 600 staff from the capital – raising the possibility that the broadcaster might choose to sell its central London headquarters, which is valued at up to £100m.

Other proposals include asking the Channel 4 panel to chart a clearer path to long-term sustainability in a world beyond traditional television. Similar to other broadcasters, Channel 4 is struggling with a long-term decline in television viewership and still relies heavily on television advertising for its income. Years of privatization wrangling have drained resources and preoccupied senior executives.

Lucy Powell, the shadow culture secretary, said discussing privatization was “a complete waste of everyone’s time”.

“Our broadcasting and creative industries are the leading ones in the world, but this government has held them back in the last year by the total distraction of the privatization of Channel 4,” she said.

John McVay, chief executive of independent producers union Pact, said: “The government made the right decision to hit the pause button on the Channel 4 privatization. It was always a solution to look for a problem that wasn’t there.”

When the government last year announced plans to privatize the channel, it said it was so the broadcaster could better survive in a media landscape dominated by the likes of Netflix and Amazon. But Channel 4 has always insisted it can be financially sustainable on its own.

A spokesperson for the Department for Digital, Culture, Media and Sport (DCMS) said: “We do not comment on speculation. The DCMS Secretary of State has made it clear that we are again looking at the feasibility study of selling Channel 4. We will announce more about our plans in due course.”

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