A journalists’ union is calling for a government-sponsored inquiry into council newspapers to be widened to examine their impact on the local press.

Culture and media secretary Ben Bradshaw announced the Audit Commssion inquiry last month as part of the government’s Digital Britain report.

The report stated that the increasing role of local authorities in taking paid advertising to support information sheets was having an “adverse impact” on local newspapers.

It added: “The government is therefore inviting the Audit Commission to undertake a specific inquiry into the prevalence of this practice and if restraints should be placed on local authority activity in this field.”

However it has now emerged that although the Commission will look at whether council newspapers achieve value-for-money for local taxpayers, it will not examine their impact on the local press.

In a meeting with the Chartered Institute of Journalists, the Commission’s chairman, Steve Bundred, said it did not have any expertise in that area.

Mr Bundred told the Institute: “The Commission is the champion of value for money in local public spending, and regulator of local public services. We plan to carry out research that examines the value achieved by council spending on communicating with the public and allows us to spread good practice and make recommendations about improving value for money in this area.

“This research would include council newsletters and newspapers, income derived from these newspapers, and spending on recruitment advertising.

“The Commission’s role and expertise do not lend themselves to examining the health of local newspapers or isolating the impacts of specific local authority practices on commercial bodies.

“This element of Digital Britain invitation appears better suited to regulators with a specific competition remit.”

Dominic Cooper, general secretary of the CIoJ, said the inquiry did not go far enough.

“Although Digital Britain has encouraged an assessment to determine the value-for-council taxpayers’ money of these publications, this is only part of the equation. What effect these publications have on democracy is just as important as how much taxpayer’s money they waste,” he said.

“We have seen how they have affected the performance of traditional local newspapers – leaving the public without independent scrutiny of local authority actions.

“We welcome the inquiry because we believe it will show the exceptionally poor value for money that taxpayers get – only last week a council publication in Cornwall closed after 11 months at a cost of £700,000 to taxpayers. But unless their overall effects are studied the question still remains: What price democracy?”