Channel Four gets more cash

Government to Abolish Channel 4's Funding Formula

The "funding formula" was set up as a safety net for Channel 4: if its share of advertising fell below 14 per cent, it would get a subsidy from ITV. If it got more than 14 per cent, IT would pay ITV. Channel 4's done much better than expected and this year paid £87 million to its larger commercial rival.

Culture Secretary wants more British-made programmes

The channel's chief executive, Michael Jackson, said he was thrilled by the decision, which would give it an extra £25 million for programmes in 1999 and a further 75 million the year after. It wants to spend the money on new programmes from Britain and Europe, with particular emphasis on British films.

Ratings-grabbing American imports like Cheers and Roseanne helped propel Channel 4 to its current success, but Mr Smith said it should focus more on British programming.

"Channel 4 has perhaps lost a little bit of the edge that they had at the outset in recent years," said the Culture Secretary.

Mr Smith added: "I obviously have no intention of prohibiting anything, but I hope that this new setting of the formula will enable us to facilitate a bolder and more British approach from Channel 4."

Mr Jackson said Channel 4 was committed to spending the money saved from the formula on commissioning more original British programmes and feature films and on training.

"I am pleased that this settlement will enable us to proceed wholeheartedly with our plans for new digital services."

For the ITV Association, chairman Leslie Hill welcomed the decision to retain the Channel 4 funding formula, although at a reduced level, for another year.

"This decision will mitigate the financial impact on the ITV companies by providing a smoother transition to 1999, which is the earliest opportunity at which they can renew their licences," said Mr Hill.

He added: "The Government's proposal to tighten Channel 4's programming requirements will be good for British television and its viewers."