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    Channel 4 'not looking for public money'

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    28th July 2010

    The chairman of Channel 4 has told MPs that he is focused on ensuring the company does not become dependent on government funding.

    Appearing before the culture, media and sport committee today, Lord Burns said his ambition is to make a success of the company with "what we have rather than seeking implict types of subsidy".

    "We have to make a success of it within the framework set out by parliament," he said.

    Lord Burns said the company has been "enormously successful" in getting through "one of the most severe downturns we have ever seen" in advertising revenue.

    They managed to break even by reducing internal and programme costs.

    Philip Davies (Con, Shipley) said previous C4 executives "were looking for subsidies" and asked about the proposed top-slicing of the licence fee.

    Lord Burns said if a fund to support certain types of public service broadcasting was created, "we may bid for funds, but I do not want to argue that we need government money to survive".

    "There is no better way to make people doubt the worthiness of what you are doing than ask for public funds," he added.

    C4 will have to earn the vast majority of its income through the marketplace, he told the committee.

    "Better to set your mind to that plan on that basis and not have an ongoing hope that something is going to come to your rescue."

    C4's chief executive David Abraham said the channel has fostered a marketplace in the independent producton sector and the "great virtue in independence as part of our remit is to look at things in a different way ".

    Independence from government "underpins the creative strength of the company", he added. He also said that C4 is spending "considerably less on content" than a few years ago.

    Lousie Bagshawe (Con, Corby) asked about the "£100m funding gap" that had been floated by previous C4 executives.

    Lord Burns said there was a clear sense of a much larger implicit subsidy when there were only three terrestrial channels, but that would not continue in the digital world.

    "In that sense a gap was appearing," he told the committee.

    His main task is to ensure C4 "live within our means and do our best to generate commercial earnings required to provide outstanding TV".

    Paul Farrelly (Lab, Newcastle under Lyme) said the "gap" was important in the debate about top-slicing and asked if C4 would take licence fee money if offered.

    Lord Burns said he would have to be satisfied that bidding would be open, competitive and transparent way and not in a way where the broadcaster would be dependent on government funds.

    He said it is important for C4 to remain in competition with the BBC in public service broadcasting.

    Farrelly asked what enquiries he has made of the coalition government's thinking on the privatisation of C4 since his arrival in January.

    Lord Burns said he has "not been going around asking people" but from statements that have been made by government "there has been no indication of any intention of wanting to privatise".

    On executive pay, Lord Burns said the broadcaster "must be able to hire the people we need and to commission the programmes we need".

    "We have no ambition to pay more than is necessary," he said.

    Some of the large salaries at C4 "reflect a period of huge competition ... we are in the process of reducing senior salaries in response to the economic situation".

    "I would expect that the days of the very high salaries are gone ... but the commerical reality of life is many will be paid considerably more than prime minister."

    David Cairns (Lab, Inverclyde) asked about the level of production outside London.

    Abrahams said he is committed to regional production and is "hugely impressed" by the broadcaster's traditional pushing of big creative decisions into the regions .

    He said C4 'hunts out talent' across the country for its film and drama output, creating stars such as James McAvoy as a result.

    Alan Keen (Lab, Feltham and Heston) asked Lord Burns, a former permanent secretary to the Treasury, about future economic prospects for the broadcaster and the country.

    Lords Burns said the "huge drop in output at the height of the crisis" is now picking up in a slightly uneven fashion.

    "It is possible it will be a relatively slow pickup compared to other cycles, but real pressures remain within the banking system and the demands now being made for increased capital - that is all going to put some restraint in the economy."

    Farrelly asked if cost-cutting at C4 will affect the public service remit on news and current affairs.

    Abraham said he regards news as the "epicentre of our public service remit" and he is committed to its work.

    "It provides an important element of plurality and its distinctive journalism is really important for this country," he told the committee.

    "It has had to bear some of the pressure in the cost cutting pressure," he added.

    The investigative documentary series Dispatches is being asked to focus on "volume versus impact".

    Abrahams said news and current affairs will be "front and centre" when budgets are increased.

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