Rosamund McCarthy: Local newspapers set up as charities would help us with reform of the press

Giving local newspapers charitable status would help to promote communities and be in the public interest, says our columnist

Rosamund McCarthy
Rosamund McCarthy

The summer's news was dominated by the phone hacking scandal. But the third sector, apart from the work of English Pen and Index on Censorship to promote freedom of expression, including their ground-breaking work on libel reform, seemed to sit aside from the drama. The sector has a long history of publishing, including charity magazines, student union newspapers and prison radio, and no one would seriously question their journalistic integrity. This is precisely why, on the key issues of ownership and funding of the media, civil society's voice should be heard.

The Levenson Inquiry, which will investigate the ethics of the press, has been asked to recommend a more effective regulatory regime to support the freedom and plurality of the media. I am helping the Committee on Media Reform to submit evidence to the inquiry on new structural and funding models, particularly for local newspapers. One option is for consortia of local newspapers to be established as charities or community interest companies. I am a great fan of local newspapers. When I lived in a rural area, the local newspaper was a lifeline, an anchor and a community talking point. This view is not contentious. Both the Prime Minister and Labour politicians have said such papers are integral to community life. My colleague Andrew Phillips has battled away to persuade the Charity Commission that local newspapers can be registered as charities, and it has now accepted the principle.

Despite the benefits of regional and local newspapers, digital media and falls in advertising revenue have closed or threatened to close more than half of them. To create a sustainable funding model, my recommendation would be for Big Society Capital, using one of the many social finance intermediaries, such as CAF Venturesome, Nesta or the Social Investment Business, to invest in a consortium of charity or CIC newspapers through loans payable out of profits. As community assets, local newspapers would be much more sustainable. If they were charities, they would receive tax breaks and could tap into volunteers, community giving and the opening up of membership to all residents.

Alan Rusbridger, editor of The Guardian, has written eloquently about the revolution in which readers and journalists co-create or co-produce the news. Mutualising the governance of newspapers would mirror the mutualisation of the production of the news. Leveraging investment from Big Society Capital would strengthen local communities, building citizenship and civic participation, and would diversify media ownership - the ultimate safeguard against unaccountable commercial monopolies.

If we want newspapers to promote communities and act in the public interest, we must embrace innovative structural and funding solutions.

Rosamund McCarthy writes in a personal capacity.

Rosamund McCarthy is a partner in law firm Bates Wells & Braithwaite

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