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More funding needed for ITV regional news, warns Ofcom

ITV's regional news services could be losing as much as £64m a year by 2012 as competition from digital rivals renders current business models unsustainable, the media watchdog said yesterday.

Ofcom came out in support of plans for independent consortiums to provide the content. And although the response to a government consultation refused to back the controversial plan to fund the consortiums through a chunk of the BBC licence fee, Ofcom does say that money will need to be found from somewhere.

"The costs of the Channel 3 licences to provide ITV television programmes across the UK will outweigh the benefits by 2012," the Ofcom analysis says. "New funding will be required if regional news on Channel 3 is to be maintained."

The private consortiums which could be asked to bid for regional news contracts could include television producers, broadcasting companies or newspaper groups. At this stage there is no shortage of media companies looking at the plan. Pilot schemes are scheduled to go ahead next year.

The proposal was published in the Government's Digital Britain report in June, with the suggestion that funding of up to £130m a year be "top-sliced" from the licence fee. An annual pot of £130m has been ringfenced from the licence fee for a number of years already, to help pay for digital switchover. But the BBC is vehemently opposed to the plan to keep the same amount aside to pay for ITV's local news programming.