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Cost of council newspaper soars by £400,000

A council budget report has revealed that its controversial in-house newspaper is costing local taxpayers nearly £400,000 more than expected.

Tower Hamlets Borough Council in East London claims its publication East End Life only costs taxpayers £118,000 a year or 2.3p per issue, with the rest of the 1.56m a year cost met from advertising.

But a report shown to councillors last week has revealed that the paper, dubbed a “propaganda sheet” by critics has suffered a £396,000 shortfall in advertising revenue due to the credit crunch.

The Labour-run council has agreed to bail it out – but East London Advertiser editor Malcolm Starbrook has repeated his calls for the publication to be scrapped

He told HTFP: “The bail out makes a mockery of the council’s claim that its propaganda sheet operates on an almost break-even budget.

“In the past the council has stated that each copy costs every Tower Hamlets tax payer a mere 2p: we know that is wrong.

“Our figures show that at best the cost is 25p per reader and comes out of the council taxes of one of London’s most under-privileged communities. The council has recently raised its distribution levels and now finds its ad budget is tumbling. The individual cost per copy is rising at the same time.

“When the town hall’s budgets are being squeezed in education, health and social services, the financial lifeline thrown to East End Life, which exists purely to promote a one-party political agenda, is appalling.”

A previous investigation by the Advertiser showed that public-sector organisations paid a total of £980,000 to advertise in East End Life, making the true cost to the public purse £1.1 million a year.

An alternative budget put forward by Tory councillor Tim Archer earlier in the year suggested the council could save £670,000 or 1pc off the average council tax, by scrapping the paper and taking out advertising with the Advertiser instead.


rob (16/09/2009 15:58:45)
Why should the council advertise in local papers? There a God-given right for newspaper ad desks to be the first port of call for any advert. Fair enough the true cost of the paper is an extra £396k, but the advertising spend by the council should not be added on to this cost to suit the thrust of the story. Maybe if local newspapers hadn’t been so bothered by their 25% profit margins and had cared about talent and inward investment they would be better placed to offer a viable alternative to council subsidised free sheets. Newspapers really need to take a long hard look at themselves and how they’ve behaved to see the crux of their problems.

Ken W (17/09/2009 10:31:45)
Simple solution: do a deal with the Advertiser for a 4-page insert, artwork supplied, every week. This could include a full page of ads. If more ad space is needed, buy it ROP at an agreed rate.
Then the council should do a bulk deal to buy, say, 3,000 copies a week to distribute at schools, council offices etc.
In today’s climate the Advertiser should fall over backwards to get a long-term no-risk deal like that. It would be the nearest thing to free money Archant has ever seen. Cost to LBTH: say £4-£4.5k a week for the space (not paying ratecard). Assume 2 reporters, editor, 2 shifts freelance sub and some pix. Total for the year, change from £450k, plus any extra ad space. Good value? Maybe we should ask the National Audit Office.

Derek Meakin (18/09/2009 13:20:39)
What a can of worms I opened up when I started Britain’s first local authority newspapers in the 1970s! Until I read this story I never realised how a council newspaper could be such a drain on local rates. The newspapers I published on behalf of councils didn’t cost them a penny. It all began in 1973 when I happened to spot a two-line story in News in Brief in the Manchester Evening News saying that Bolton Council was thinking of starting a newspaper for ratepayers. At that time we were only a few months away from the Reorganisation of Local Government, which was to result in thousands of urban district councils and rural district councils being swallowed up by giant, all-embracing local authorities. The problem facing the new council bosses was how to make hitherto self-contained communities feel comfortable as part of a much larger body. Would a newspaper help to bring them all together? I determined it would, went to Bolton and persuaded them to let me run a newspaper on their behalf, financed entirely by advertising. The result was Bolton News, followed shortly afterwards by Stockport Civic Review. They were so successful that I started a company called Civic Publications Ltd and went on to sell the idea to other councils, first across the Pennines in Leeds and Bradford, then venturing further south to Nottingham and Lincoln. Some were so highly rated that they won national awards. They were real newspapers, not advertising giveaways, and we were proud to produce papers that proved to have a unifying influence on communities that had until then been completely separate entities. I had a strict editorial policy of banning politics from our columns, and we could never have been called a ‘propaganda sheet’, which I see critics have dubbed Tower Hamlets’ East End Life. Only one local authority – Labour-controlled Wakefield – unsuccessfully tried to dictate what we could cover. Since then, of course, councils have set up large and extremely costly PR departments and once-free civic newspapers have become an ever-growing item on council budgets. Money seems to be flowing like water, so much so that according to your story Tower Hamlets Borough Council is claiming that its newspaper is costing ratepayers ONLY £118,000 a year. What a sorry story, and all so unnecessary.