The innovation foundation responsible for delivering the £2million Future News Pilot Fund under the government’s Cairncross Review has released a report at the end of its pilot period.
Nesta’s report sets out four main policy recommendations covering finance, sustainability, local democracy and diversity.
One of the recommendations backs the push for the Treasury to launch a financial rescue package to extend the 100 per cent business rates holiday to news publishers for at least one year.
The report also provides case studies on the 20 recipients of the Fund, including community-led media co-operative The Bristol Cable, industry access organisation PressPad and slow news start-up Tortoise.
The report summarises:
In 2019 Nesta was asked by the Department for Culture Media and Sport (DCMS) to design and deliver a £2 million Future News Pilot Fund (the Fund).
With partners Bethnal Green Ventures and a wider team of experts in design thinking, prototyping and media innovation, Nesta awarded 20 grants to innovators across England who ran four-month prototypes to diversify and expand readership and find new routes to financial sustainability.
This report explores the innovation emerging in the field and we draw five conclusions from the Fund:
- Access to high quality, independent news and information reinforces our democratic landscape, and it is vital that it is sustained.
- There are many promising ideas, but to sustain public interest news we now need long term public investment into innovation in the news ecosystem.
- The #BlackLivesMatter movement that exploded in the aftermath of the George Floyd killing has revealed the need to address diversity in many institutions and industries.
- Innovation has never been more necessary to create sustainable revenue models.
- We need more coalitions of funders who will support the goals above.
To reinforce the public interest news ecosystem Nesta says they have set out clear policy recommendations:
Launch a financial rescue package
- Her Majesty’s Treasury (HMT) should immediately extend the 100 per cent business rates holiday to news publishers and maintain it for a period of at least one year.
- HMT should explore whether other financial holidays are feasible, such as the continuation of VAT zero rating for online payments, waiving PAYE and/or NI contributions, and/or pension recovery plan deferrals.
- HMT should ensure that accredited news organisations have access to low-interest lines of credit to prevent insolvency in Q3 and Q4 of 2020.
A financially sustainable future
- DCMS should establish an Institute for Public Interest News (IPIN) in Q1 2021, as recommended by the Cairncross Review. The IPIN’s core strategic objective should be to ensure the future provision of public interest news. Funding should target local, not-for-profit news organisations with governance structures that guarantee editorial independence. The IPIN could also sponsor cutting-edge research that brings together stakeholders from government, academia, industry and charities.
- One way that the IPIN could be financed is through the imposition of a 2 per cent levy on the UK revenues of companies with a significant share of online search or social networking markets.
- The Charity Commission (CC) should widen the scope of news organisations which can be permitted to register as charities under the law of England and Wales. In order to meet registration requirements, public interest news organisations would need to meet set criteria, as outlined by the Public Benefit Journalism Research Centre (PBJRC) in its submissions to the House of Lords Inquiry into the Future of Journalism. DCMS, CC and PBJRC should work together to chart a way forward.
- HMT should create a new scheme to provide financial support to small and medium enterprises working at the cutting-edge of journalism. Modelled on the Coronavirus Future Fund, it would issue convertible loans between £125,000 to £5 million to innovative news and news-adjacent organisations that are facing financing difficulties.
Investing in local democracy
- DCMS should pilot a matched fund for cooperative journalism.
- In this pilot, all adults in a given community would receive a voucher to spend on local, not-for-profit public interest news. This funding would be matched by charitable foundations and/or local businesses. The cost of the experiment would therefore be a function of the price of the voucher and the community’s population, within a limit agreed upon by the matched pool.
Investing in Diversity of Voice and Representation
- DCMS should establish a scheme, analogous to Entrepreneur First, that aims to support early stage innovation in the news media ecosystem. The goal of this scheme would be to help an ambitious and diverse cohort of individuals and organisations to turn promising ideas into sustainable ventures. This ‘Media Entrepreneur First’ (MEF) scheme would foster innovation by helping participants to develop their professional networks, refine their proposals in conjunction with industry experts, and bid for VC funding from a consortium of private and public sector backers. DCMS should engage with Entrepreneur First and others to scope this idea in more detail.
- To ensure that the scheme does not discriminate against those who do not have the means to financially support themselves, all MEF participants should be provided with a stipend for the duration of the scheme. Entrepreneur First provides £2,000 per month in London for the three month ‘Form’ stage, which then culminates in bids for longer-term startup VC funding.
- To ensure that the scheme supports a truly diverse cohort, we recommend that, at the very minimum, the application process is CV and name blind and designed to strip out all opportunities for bias.4 Places on the scheme should be allocated based primarily on the quality of responses to application questions. Consideration could also be given to how positive discrimination could be used to ensure that the cohort is representative of the diversity of the UK in terms of race, gender, class and geography
The report can be read in full here.