Channel 4’s been established as a public service broadcaster, and… it’s in receipt of public money.
The Secretary of State for Digital, Culture, Media and Sport, Nadine Dorries, told a select committee hearing at the House of Commons that Channel 4 was “in receipt of public money”. On another occasion during the same hearing she said it was “in receipt of taxpayers’ money”.
This is misleading—and potentially not true depending on your understanding of what it means to be “in receipt” of such money.
The Treasury itself classifies Channel 4 as a “self financing public corporation”. In order to meet this definition, a public corporation “must trade profitably and not require subsidies or other financial support from its parent department”.
Who owns Channel 4?
Channel 4 is a publicly owned ‘public corporation’, which entirely funds itself through commercial activities, mainly advertising. Indeed, the most recent year’s figures show that the channel generated a pre-tax surplus.
In a tweet following the hearing, Ms Dorries elaborated on her comments by saying: “C4 borrowings sit on the Gov balance sheet. Gov has no money of its own, it’s tax payer derived. This is part of the debate re privatisation decision/ future sustainability.”
C4 borrowings sit on the Gov balance sheet. Gov has no money of its own, it’s tax payer derived. This is part of the debate re privatisation decision/ future sustainability. https://t.co/502ECFf1SA
— Nadine Dorries (@NadineDorries) November 23, 2021
It’s true that Channel 4’s borrowing counts as government borrowing. However, we can find no evidence of the government ever having to cover the channel’s debts. A plan to divert some money from the BBC licence fee to Channel 4 was scrapped in 2008.
Channel 4 also pays tax to the government, so it may even be a net contributor to the public purse.
And we have said, the Treasury does not consider the government’s relationship with Channel 4 to be a form of “financial support”.
Ms Dorries did not mention borrowing when challenged
Following Ms Dorries’ remarks at the hearing, one of the committee members, Damian Green MP, said: “But Channel 4’s not like the BBC. It’s not in receipt of licence fee money. It makes its money from commercial operations.”
In her response, she did not mention Channel 4’s borrowing arrangements.
Later, in another exchange, Mr Green said: “The point about Channel 4 is that it is a commercial operation that does not receive licensing money and does not get taxpayer money, as it were. It makes its money from advertising.
Ms Dorries then replied: “What I meant was public money.” To which Mr Green responded: “Yes, money from the public rather than public spending.”
Full Fact asked the Department of Digital, Culture, Media and Sport to clarify what Ms Dorries meant, but it made no further comment.