Community Radio funding rules updated

The results of the Government’s community radio consultation are out, changing the way community radio stations can fund themselves.

Under the planned changes, all community radio stations will all be able to raise at least £15,000 in income from commercial sources before the 50% rule kick in.

The changes are as follows:

• For all community radio stations to be able to raise annual income to a maximum level of £15,000 from advertising and/or sponsorship before application of any other current rule (i.e. 50% of annual income from advertising and/or sponsorship applies).

• For small community radio stations operating in the same locality of a small commercial station (where the commercial station takes no benefit under the Digital Economy Act 2010) to now take income from advertising and/or sponsorship to a maximum level of £15,000.

• For small community radio stations operating in a same locality of a small commercial station (where the commercial station or group of stations receives a benefit under the Digital Economy Act 2010 i.e. shares local or programmes costs) then the community radio station will take income from advertising and/or sponsorship at a maxmium of £15,000 and, as determined by Ofcom, an additional level of annual income of up to 50% from advertising and/or sponsorship.

Ed Vaizey, Minister for the Digital Economy, says: “After careful consideration of all the responses to the consultation, we have concluded that we should proceed with the proposals to relax restrictions on advertising and sponsorship for community radio, in certain circumstances, and give a power to Ofcom to extend licence duration for community radio stations for a third five year term where satisfied a station meets set obligations.

Ofcom will now have the power to extend a licence for community radio stations for a further term of up to 5 years, where it is satisfied the community radio station continues to meet its licencing conditions.

Ed continues: “We have taken account of the points raised by commercial radio stations and will retain some restrictions for community stations operating in local markets where there is a smaller independently-run commercial station.”

Welcoming the news Dom Chambers, Chair of Community Media Association, said: “Community radio has proved itself a powerful medium that drives positive social change by impacting on participants, communities and audiences – the Government really get that.

“The Community Radio Order has provided a supportive framework for community radio to bed into the local broadcasting landscape. The changes to relax the rules around commercial revenue and allow for a further five-year licence renewal will be particularly welcome by sector. I hope the changes will also trigger the sector to grow and fulfill it’s potential working with Government.”

Under the current rules in the Community Radio Order 2004, most community radio stations can only raise 50 per cent of their income from commercial sources, with 19 stations not allowed to make any money from advertising at all as they compete in the same market as small commercial radio stations.

The Government is making these changes following a public consultation last year. Those community radio stations operating in areas covered by small independently operated commercial stations will only be allowed to raise any further income above new the £15,000 limit where the commercial station has taken advantage of the Digital Economy Act to share premises. However, some protections will remain to safeguard independently owned commercial stations in smaller markets.

The regulations that amend the Community Radio Order have been drafted and will be laid in Parliament later this month.

The Department for Culture, Media and Sport consultation, which closed in April last year, set out policy proposals to relax current financial restrictions on community radio, whilst not altering community radio’s ‘unique role in terms of supporting localness and community engagement’.

Ed Vaizey continues: “Community radio stations are at the heart of the localities they serve. They provide an important relevant service alongside the BBC and commercial radio. These changes will make sure that community radio stations can raise the funding they need to remain viable and can continue to provide a valuable community focused service.”

Posted on Thursday, January 22nd, 2015 at 11:20 am by RadioToday UK

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