The government has decided to push ahead with plans to privatize Channel 4.
Ministers have concluded, following a consultation, that while the broadcaster is “currently performing well” its public ownership is “holding it back in the face of a rapidly-changing and competitive media landscape”, a government source said.
A spokesperson for Channel 4 said it was “disappointed” with the decision but would “continue to engage” with the government on the process to “ensure that Channel 4 continues to play its unique part in Britain’s creative ecology and national life”.
The government has been pushed the idea of privatizing Channel 4 in recent months and the government source said it was now “expected to pursue a sale”.
It will be part of a package of reforms to public sector broadcasting expected to be outlined in the Queen’s Speech next month.
The broadcaster is state-owned but receives no public funding, with more than 90% of its revenue coming from adverts.
The government source said: “C4 is a great business with a strong brand built around it being creative, innovative and distinctive but a change of ownership will remove its straitjacket, giving C4 the freedom to innovate and grow so it can flourish and thrive long into the future and support the whole of the UK creative industries.”
But Labour’s shadow culture secretary Lucy Powell said: “Selling off Channel 4, which doesn’t cost the tax-payer a penny anyway, to what is likely to be a foreign company, is cultural vandalism.”
According to the government source, ministers will seek to reinvest the proceeds of the sale in independent production and on “levelling up wider creative skills in priority parts of the country”.
Channel 4 will remain a public service broadcaster and the government will ensure it “continues to make an important social, economic and cultural contribution to the UK” including a commitment to prime time news.
Ministers are understood to believe that in order to compete with the increasing power of US streaming giants such as Netflix, it must have more freedom to borrow money or raise private sector capital to be able to invest.
Channel 4 said: “With over 60,000 submissions to the Government’s public consultation, it is disappointing that today’s announcement has been made without formally recognizing the significant public interest concerns which have been raised.
“The proposal to privatize Channel 4 will require a lengthy legislative process and political debate.
“We will of course continue to engage with DCMS [department for digital, culture, media and sport]government and parliament, and do everything we can to ensure that Channel 4 continues to play its unique part in Britain’s creative ecology and national life.”