A committee of peers has called for a fund to be set up to encourage investigative journalism – paid for by fines against newspapers that breach the Editor’s Code.

In a report published today, the House of Lords communications committee warns that investigative journalism is now “the exception rather than the rule” in some areas of the local press.

It wants to see a system whereby any fines introduced for breaches of the Editor’s Code of Practice under a new beefed-up form of self-regulation will be paid into a fund to support investigative journalism.

The cash would be distributed by a independent regulatory body such as Ofcom or a reformed Press Complaints Commission.

The report warned that economic pressuers were cerating a “serious threat” to investigative journalism and hence to democratic accountability in local areas.

“Investigative journalism is especially resource intensive, requires long-term investment with no guaranteed return, involves some risk of litigation, and often does not deliver large reader or audience figures,” it states.

“It is therefore particularly vulnerable to economic pressures. This is especially evident at a local level and we have heard evidence that long-term investigations into local issues which require staff commitment and involve legal risk are no longer pursued as often as they were in the past

“The threat to local media is also having a profound effect on national newspapers and broadcasters as local news outlets no longer provide a large training ground for the nationals and the ability for nationals to source stories from local news outlets—either post publication or pre-publication by sourcing stories from local ‘stringers’—has significantly diminished.”

The report also questioned the role of free newspapers, suggesting some of them were damaging rival titles without delivering much in the way of public interest journalism.

“Paid-for local and national newspapers have also had to compete seriously with rival, free daily newspapers such as the Metro and the Evening Standard and from local council newspapers which are circulated free of charge to residents in many local areas,” it states.

“We have heard evidence that there are some local free newspapers such as the Camden New Journal which provide useful information and expose issues in the public interest which are unlikely to be investigated by other titles. These appear to be the exception rather than the rule.

“Other free local publications, however, have been accused of putting economic pressure on local newspaper advertising revenues without delivering much if any public interest journalism.”

Committee chairman Lord Inglewood said: “Investigative journalism plays a vital role in the UK’s system of democratic governance and accountability.

“However, its role and practices have received unprecedented scrutiny over recent months and it faces a number of profound economic, legal and regulatory challenges.

“News organisations, regulators and relevant legal bodies therefore need to make sure, as changes and new measures are introduced, that these are not rooted in the past but seek to enable responsible investigative journalism to flourish in the future.

“We are encouraged, nonetheless, by the number of new funding and organisational initiatives that have started to materialise as a means of promoting investigative journalism, and believe it is vital that measures are taken to support and foster further initiatives which are independent of public subsidies or state support.”