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Community Radio Licences

Volume 576: debated on Friday 28 February 2014

Motion made, and Question proposed, That this House do now adjourn.—(Greg Hands.)

First, Madam Deputy Speaker, may I say what a great pleasure and privilege it is to have you in the Chair for this debate today? I believe it is the first time I have made a full speech with you in the Chair, and it is a great honour to see you in your place.

I am very grateful for the opportunity to raise the issue of the MKFM radio station in my constituency and the difficulties it is having in obtaining a permanent FM broadcasting licence from Ofcom. Before I move on to the specifics of the issue, I will set out MKFM’s role in the provision of radio stations in the Milton Keynes area. Milton Keynes, like anywhere else in the country, has access to all the national radio stations. I believe that radio is becoming an increasingly important medium in transmitting news, entertainment and thought-provoking programmes. I personally probably spend more time listening to the radio these days than watching television. Whether I am listening to the “Today” programme or my favourite John Suchet Classic FM programme, it is a great source of information and pleasure.

In addition to the national stations, Milton Keynes is fortunate to have two local radio stations—BBC Three Counties Radio and Heart, which happens to be based in Milton Keynes. These provide a valuable local service, but there is a gap in the market for a specific Milton Keynes radio station. BBC Three Counties and Heart do a very good job reporting local news, stories and campaigns, and they engage enormously with the local community. For example, when my hon. Friend the Member for Milton Keynes North (Mark Lancaster) and I organised a jobs fair last year, Heart was able to help by advertising it on its station and providing other practical support at the fair. BBC Three Counties regularly has me on to talk about particular local stories, and it does a very good job representing the local area.

However, because of the trends in radio broadcasting, neither of those stations is specifically for Milton Keynes. Cost pressures and other commercial issues mean that they have to cover a wider area than just Milton Keynes. Heart used to be called Horizon, and initially it was just for the Milton Keynes area, but now it includes the surrounding counties. The same goes for BBC Three Counties. As its name suggests, it has never been just for the Milton Keynes area, but it used to have a specific Milton Keynes news output. In changes made a couple of years ago, the specific Milton Keynes service was lost, and the station is now broadcast throughout the three counties.

I do not in any way wish to diminish the importance of those stations and the role they play in Milton Keynes, but I do believe there is room, in addition to the national and local stations, for a very specific Milton Keynes-focused radio station, and that is where MKFM comes in. It has been broadcasting since 2011. It is on the internet—online—all the time. On a number of occasions, it has been able to broadcast on FM for one-month segments, but it has not yet been able to acquire a permanent licence. It also broadcasts on DAB, but that is a problem as well; I will turn to that in a moment.

In the two or three years for which MKFM has been broadcasting, it has quickly built up an impressive reputation as a real champion of the local community. In a new town such as Milton Keynes, where we do not have as long a history of an established community as other places, it is particularly important to have local champions like a community radio station to give support to all the different activities, events and campaigns that go on in the area. During the relatively short time the station has been broadcasting, it has received great testimonials from local organisations. I have letters from the citizens advice bureaux, the Milton Keynes Dons sports and education trust, the food bank, Milton Keynes council and local charities, such as the Henry Allen Appeal and Hope for Hollie. They all greatly endorse MKFM’s role in championing their causes and its engagement with the local community.

When I go out and about in my constituency to all the sports events, summer carnivals and charity appeals—you name it—MKFM is there, not just reporting what is happening, but giving a bit of pizzazz and excitement to the particular event. It is becoming a cherished addition to the local community in Milton Keynes.

The problem with not being on FM is that the station is restricted in who it can broadcast to. It has had five one-month trials on an FM frequency under the Ofcom procedures and that has been enormously successful, but just when it gets traction in building up an expanded listenership, the trial comes to an end and it is not able to sustain it.

As I have said, the station is now broadcasting on DAB, which is an important step forward, but it is not ideal. It has a cost implication. I am told by MKFM that the transmission cost is in the region of £50,000 a year, which is a significant sum for a community radio station to bear. Moreover, not everyone has a DAB radio. According to the figures I have—the Minister may have more up-to-date and accurate figures—only about 50% of the population have access to a DAB radio. The Minister may recall a debate last year in which a number of colleagues, who were very keen to get the names of their local stations on the record and for them to be broadcast on FM, had concerns about the digital switchover process, but that is a matter for another day.

MKFM is absolutely convinced that in order for it to fulfil its potential it needs a permanent FM licence. I understand that the process is not simple or straightforward. The spectrum does not have an abundance of spare slots that can just be handed out to anyone. In advance of this debate I received a very useful briefing from Ofcom in which it explained the technical reasons why the spectrum is crowded, that it can award new licences only in particular circumstances, and that it does not want to cause interference to other stations. I understand all that and accept that Ofcom has a relatively limited budget to process applications for new licences.

MKFM’s situation, however, is particularly problematic, because Ofcom’s timetable to allocate new licences to such stations has changed. MKFM’s business plan and strategy were based on a timetable published in 2011, which was in place until last December. In that timetable, the south-east of England, in which Milton Keynes falls, was the last of seven areas from which applications would be invited in the first half of this year. Last year, however, the timetable changed and now nine blocks of applications have to be considered, the south-east being the ninth. The timetable has also been pushed back to the second half of this year. The reason for that was twofold: first, a decision was made to include applications from community radio stations in Guernsey, and secondly, applications were invited for stations wishing to broadcast on the AM band.

The six-month delay is likely to be compounded by growing evidence that it is taking longer for licences to be assessed and approved. In the first and second tranches of the timetable, it took an average of three to four months from an application being received to a decision being made, but the third and fourth tranches are now taking nearly a year. Given those two factors, MKFM’s bid will be one to two years later than it anticipated, which will cause it significant difficulties for its business strategy.

Why was it necessary to put Guernsey in front of the south-east of England in the timetable? I have absolutely nothing against Guernsey. I am sure that it is a lovely place. I have not yet had the opportunity to visit it, but I hope to do so one day. The Bailiwick of Guernsey has a population of 66,000 and is already served by two dedicated local radio stations—the BBC station and the commercial Island FM. I am sure that they are excellent stations that provide very good local coverage, but I am not sure why there is a pressing demand for community radio stations in addition to the two island-wide ones. Milton Keynes has a population of 250,000, and we do not have a dedicated community radio station with a permanent FM licence. Will the Minister comment on why there was a sudden change in priorities? Why have applications for AM broadcasting been considered ahead of the assessment of bids for the south-east of England? I would appreciate some feedback on why that has happened.

I appreciate the constraints under which Ofcom has to operate, and neither I nor MKFM want to moan about this problem; I sought this debate to try to secure the Minister’s consideration of some potential solutions. I would be grateful if he took them away and used his good offices to discuss them with Ofcom.

The first suggestion is simply to restore the south-east’s position in the original timetable. There may be perfectly good reasons why that cannot happen, but if so, they are not apparent either to me or to MKFM. The second possibility is to consider all the remaining regions for FM licence applications—including the west midlands, the east midlands, the east of England and the south-east—as one bloc, and to identify which parts of that larger area have the greatest need for community radio licences.

If the argument against that option is that Ofcom does not have the financial or organisational capacity to assess a much larger geographic region, I would make a third suggestion—that Milton Keynes is moved out of the south-east region, where there is already considerable congestion on the airwaves, to the midlands and east of England bloc. I wish I had an audiovisual display to show a map of the south-east of England. Milton Keynes is right up in the top north-west corner of the curious south-east region, which swoops right down past London to include the Isle of Wight and round to Kent and the Isle of Thanet.

It has always been incongruous that Milton Keynes is part of the south-east when we naturally look to Northamptonshire and Bedfordshire as our main economic partners. Indeed, such a change is happening in other areas of public and commercial life. For the boundaries of the local enterprise partnership, Milton Keynes is partners with Northamptonshire, Bedfordshire and surrounding areas. Many of the reconfigurations in the NHS have made Milton Keynes look north and east, rather than to the rest of the south-east. I am sure that it would be relatively simple to transfer Milton Keynes to the midlands and east of England bloc from the south-east, where there are great pressures on the existing spectrum.

Finally, if that option is not practical and the primary obstacle is Ofcom’s organisational and financial capacity to consider Milton Keynes more quickly, MKFM has suggested that it would be willing to pay a premium application fee, perhaps in the region of £10,000. If it and other stations in a similar situation did that, it might allow Ofcom to take on additional staff to assess the applications in a more timely fashion.

I hope that the Minister will give those problems and possible solutions serious consideration. MKFM has quickly established itself as a cherished community radio station. It complements BBC Three Counties, Heart and the national broadcasters. It is a huge asset in the Milton Keynes area and I would be hugely disappointed if its ambition to broadcast permanently on an FM frequency was further thwarted.

I am not sure that I can welcome you to the Chair, Madam Deputy Speaker, in as fulsome a fashion as my hon. Friend the Member for Milton Keynes South (Iain Stewart). I confess that I do not know whether this is the first time that I have made a full speech in front of you, but I know that I have appeared in the Chamber when you have been in the Chair. I echo what he said about it being a great honour and privilege to debate in front of you. It is my understanding that you own a digital radio. That is a subject to which I may turn my attention during my remarks.

I thank my hon. Friend the Member for Milton Keynes South for bringing this important issue to the attention of the House. He began by talking about his radio habits and revealed a penchant for Radio 4 and Classic FM, which I share. I am a strong supporter of Classic FM. I take a busman’s holiday view that we spend so much time in this House debating the news and politics that it is nice to switch off, so I have taken to listening to Classic FM and the Chris Evans breakfast show on Radio 2 instead of listening to Radio 5 Live and Radio 4, which is my usual habit.

My hon. Friend brought to our attention the important radio station, MKFM. I confess that I have not yet listened to it, but I have visited its website. It certainly looks like an incredibly impressive operation. Indeed, this debate is flagged up as the No. 1 news issue on its website at the moment. I have no doubt that, after this debate, my hon. Friend will be a frequent, if not more frequent, guest on that important radio station.

My remarks may appear to be somewhat facetious, but I completely echo what my hon. Friend said: I, too, am a fan of radio. In this digital age, when one’s attention is diverted to so many different ways of accessing content and to so many new types of content, it is my belief, and the evidence shows this, that the medium of radio is as popular as, if not more popular than, it ever was. I am therefore a strong supporter of the measures that we are undertaking to continue to promote radio.

One of those measures is to support digital radio. My hon. Friend was right to recall the debate in this House at the end of last year. We have not yet announced a date for switchover or even made an in-principle decision on when we might switch over to digital radio. However, we do not want to lose the momentum towards digital radio that has been built up by putting in place the infrastructure, encouraging people to buy digital radios and encouraging people to convert their cars to digital radio, which is becoming ever easier and cheaper to do. That will help a station such as MKFM, which is broadcasting on digital radio, as my hon. Friend pointed out. Milton Keynes tends to be ahead of the trend and its rate of digital radio ownership is ahead of the national average, probably beaten only by places such as London.

It is important to stress that digital radio remains an increasingly important part of the radio mix. Another important element of the radio mix, which we could perhaps say is at the other end of the spectrum, is community radio. The framework for community radio was set up in 2004 by the last Government. In my view, it has been an astounding success. Community radio is run by not-for-profit organisations that provide a social gain to the communities they serve. It provides original, distinctive and—crucially—local output, and relies on a huge amount of effort and support, with stations receiving an average of around 214 volunteering hours every week. They are supported by the Community Media Association, which does a fantastic job of representing the sector and providing information and advice to stations and prospective start-ups. Community radio has shown that it can deliver wider social objectives, connect communities together, and give a real focus for local engagement. It does not surprise me that in a community the size of Milton Keynes, there should be a great deal of pressure to see the community radio station MKFM launch as soon as possible. The value of the sector is not just in its listening share or reach, but in the lives it touches and often changes for the better.

The recent connect:transmit project is a good example of how community radio comes together to support skills and training for young people. It was funded by the Paul Hamlyn Foundation and co-ordinated by Radio Regen, a charity supporting the community radio sector. It worked with four community radio stations: Shmu FM in Aberdeen, BCB in Bradford, Future Radio in Norwich, and Preston FM.

I hope that my hon. Friend and the rest of the House will agree that community radio has grown and established itself as part of the UK’s diverse and vibrant radio ecology. As has been mentioned, a number of community radio stations are reporting problems and struggling to remain viable, with some stations reporting a decline in income and difficulties in accessing funding. That is supported by Ofcom’s market analysis, which shows that community radio stations have consistently operated on very small margins. For example, in each of the last four years, the average expenditure of the sector has been greater than the average income.

Ofcom’s communications market report of 2013 showed that the percentage share of income generated by community radio stations from grants fell from 45% in 2008 to 29% in 2012. That figure is likely to fall still further, although it is partly offset by a slight increase in the overall value of on-air advertising and sponsorship revenue, which increased in 2012 from 26% to 29%. It is important to make such points because I want to bring the attention of the House to the consultation that we launched a couple of weeks ago on 13 February. It is a wide-ranging consultation on the funding rules that apply to community radio, because we want to consider how we can relax some of the rules and restrictions on how community radio is funded. It is a consultation that the community radio community has long called for. We think that restrictions are still needed to preserve the distinctive characteristics of community radio and ensure that small commercial radio stations are not adversely affected. The consultation will close on 23 April, and will enable us to assess the extent to which rules can be relaxed to give community radio more scope to raise funding, and to help the sector’s long-term sustainability.

Although there are challenges to community radio, I am encouraged by high levels of demand for community radio licences across many parts of the country. I fully understand my hon. Friend’s desire for his constituency radio station, MKFM, to establish itself as a local community radio station. The regulatory framework was set out in the Community Radio Order 2004, and lists the powers under which Ofcom can license community radio stations. That gets to the nub of what my hon. Friend wishes to discuss.

Detailed implementation of licensing is the responsibility of Ofcom, and in developing its approach to licensing and regulating the sector—including the current licensing round, which is the subject of concern to my hon. Friend and MKFM—Ofcom has consulted a range of stakeholders, including the Community Media Association. Ofcom has decided to invite applications for licences on a region-by-region basis, to co-ordinate the approach in a fair and consistent way, and to give prospective applicants time to develop strong and sustainable proposals. Within that framework, the licensing process is applicant-led, and the applicant identifies where they wish to set up their station. Ofcom does not decide the locations or target communities to be served by stations, but it does advise on areas where there are already existing stations, or where sufficient frequencies may not be available.

The decisions are complicated and need to take account of the various requirements in the legislation. Ofcom has to consider four things. First, it has to assess the application and establish whether the frequency is available. Secondly, it needs to look at the different proposals, which may have different objectives, and there may be many proposals for particular areas which need to be co-ordinated. Thirdly, it needs to assess the plans to see whether the proposed service meets the characteristics set out by the legislation in terms of social gain and the likelihood that the plans are likely to be viable. Finally, it needs to assess the impact on local commercial radio and, if necessary, place restrictions on the amount of commercial revenue that the community radio station may generate.

The difficulty at the moment, which affects MKFM, is the high level of demand and competing applications. This is frustrating for stations that are on air already and want to acquire a community radio licence to strengthen their community engagement and grow their listenership. They want to move more quickly. The suggestion made by my hon. Friend is that we should adopt a demand-led process which might lead to some applicants in some areas getting on air sooner, but it would lead to a piecemeal approach that would slow progress overall as decisions were made in an unco-ordinated way.

The way in which Ofcom manages the process overall strikes the right balance between the operational challenges of managing the complexities associated with licensing and its stated aim to license a community radio station for every community that wants one. In fact, since the legislation was passed, 276 community radio licences have been awarded.

The current timetable was announced in April 2011 and invited applications on a region-by-region basis, starting with Wales and the south-west, then Northern Ireland in March 2012 and then four English regions, one every six months. Licences for each region are then awarded in batches on a rolling basis, allowing the complex spectrum planning and frequency planning to be managed together. If the number of applications received for any region is high, consideration of all applications can take longer than anticipated, as was the case in autumn 2013, so that Ofcom had little choice but to revise its timetable for inviting community radio applications in its current round.

In mid-October, for example, Ofcom received 38 applications from locations in west and south Yorkshire, Humberside and the north-west of England. That was far more than it had anticipated, and therefore in fairness to all potential applicants from other regions, Ofcom revised its timetable in order to give itself time to process those applications before moving on to other regions. That is the cause of the frustration that MKFM is experiencing. I do not want to dampen its enthusiasm and I shall take on board some of the points that my hon. Friend made. I am not ready to fast-track licences for people who are prepared to pay more, because that would still involve a lack of co-ordination. At the moment, the process is fair with a very low licence fee for anyone who wants to run a community radio station, although I want to look at whether we can speed the process up.

I thank my hon. Friend for bringing this issue to my attention, and I suggest that I discuss this with Ofcom to see if we can find a way to move the process forward. I also wish to invite him and MKFM to a meeting in my Department, should they wish to take advantage of that offer. He has brought several suggestions to my attention, although I do not think that moving Milton Keynes out of the south-east is either in my gift or would be a practical way of taking forward MKFM’s application. I hope to discuss that further with him when we meet.

Question put and agreed to.

House adjourned.