A regional publisher has renewed calls for a “substantial expansion” of public interest journalism schemes such as those being funded by the BBC and Facebook.
Newsquest directors have used the company’s annual report to make the plea, saying the scale of such initiatives are “currently limited”, while adding the trading environment for regional newspapers remains “very challenging” at present.
A review led by Dame Frances Cairncross, pictured, into the future of news provision in the UK recommended in February that the BBC local democracy reporting scheme be expanded, as well as the establishment of a publicly funded Institute for Public Interest News.
As revealed by HTFP earlier this year, a group of regional publishers including Newsquest had called for 1,500 new public interest journalism roles to be created in a submission to the review, saying it would enable all of the UK’s 800 councils and 400 courts to be covered, as well as other public bodies such as health trusts.
Newsquest’s annual report states: “The trading environment for regional newspapers, particularly free newspapers, remains very challenging as audiences and advertising move to digital solutions while the costs of production and distribution are rising. During the year the company closed 16 free newspapers that were no longer viable.
“In addition to these structural factors causing declining revenue in newspapers, the disruption created by the introduction of GDPR and ‘Brexit’ related uncertainty impacted revenues. At the same time costs increased year on year; newsprint price rises, higher auto enrolment pension contributions and the full year impact of the apprenticeship levy adversely impacted results.
“The directors were pleased that local journalism has started to benefit in 2018 from Local Democracy Reporters (LDR) funded by the BBC, and the initiative by Facebook to fund the training of some journalists has started in 2019. However, the directors note the scale of these initiatives (c. 5pc of editorial resource) is currently limited.
“The Cairncross Review has brought an increased focus on the position of the industry and the importance of local journalism to local democracy and local communities. Our view is that a substantial expansion of an LDR type scheme and inclusion of the public interest benefits of newspaper advertising when selecting medias for public sector advertising offer the best value for money solutions to society.”
Newsquest’s annual accounts showed the company made a post-tax profit of £94m in 2018, with the results including a £69.7m non-cash pension credit from pension plan amendments and £15.8m additional revenues generated from acquisitions.
During the year it had acquired the CN Group, expanded its magazine portfolio and launched a Sunday edition of pro-Scottish independence daily The Nation.
The company also “expanded significantly” into digital marketing services, adding that “the rapid pace of growth of this revenue is very encouraging”.
But the report adds: “Despite the success of the efforts to develop the business set out above, the declines in print revenues outweigh the growth in digital revenues. The directors anticipate that this will be the case in the immediate future, necessitating continuing robust cost control and re-engineering of the business. The strong cash generation of the business provides adequate resources to keep restructuring the business and developing new products.”
In response to the report, the National Union of Journalists has warned that calls for the expansion of public interest journalism schemes should not be used “artificially prop up” commercial companies.
Chris Morley, NUJ Newsquest group chapel coordinator, said: “The LDR scheme has been proved to be a success because of the professionalism and dynamism of the reporters who do the old fashioned graft in holding local authorities to account.
“Our members doing these jobs in the main enjoy the work the scheme requires of them but have reported local difficulties in the use they are sometimes put to and lack of support they get.
“With Newsquest’s track record of savage cost-cutting and threat of more to come, we sincerely hope the call for an expansion of the LDR scheme and future cost-cutting are not in any way related.”
HTFP has approached Newsquest for further comment.