OFT has 'no control' over council newspapers » Local Government » 24dash.com

There are gaps in controls over councils setting up their own newspapers, industry executives admitted today.

Regulators currently have no power to step in when authorities spread political messages in their local publications, MPs were told.

In evidence to the Commons culture, media and sport committee, John Fingleton, chief executive of the Office of Fair Trading (OFT), and Ed Richards, chief executive of Ofcom, said their organisations did not cover the area and that it would be down to Parliament to decide what to do.

The committee has previously been told of the problems facing local newspapers and the impact of loss of advertising revenue as part of its inquiry into the future for local and regional media.

Asked who would have be able to look at concerns over "political propaganda" where only the viewpoint of the ruling councillors is expressed, Mr Richards said: "The answer to the question is nobody.

"We have no remit on that. The OFT has no remit on that. I think it is a lacuna.

"If there is a serious issue in respect of (a) use of tax payers' money and (b) the consequences for independent journalism in any given locality, I think it's something Parliament has to decide what it wants to do about it."

Mr Fingleton said it would be necessary to explore whether local authorities were setting up publications because it was an "efficient" way of reaching the population or because of a "darker" motive.

There could be a problem in terms of "harm to the democratic process" by propaganda, he said but added: "That is not a competition issue."

Of potential advertising impact he said: "We would have to look at whether readers are harmed or advertisers are harmed.

"It seems here the harm is to competitors."

Mr Richards also told the committee there was no external ruling on the distinction between advertising and editorial in local press unlike television where issues such as product placement were regulated.

"There is in broadcast," he said. "I am not aware of one in the newspaper or freesheet arena at all. I think that is completely unregulated.

"In broadcasting we have rules about separation of advertising and editorial.

"Those are UK laws and European laws and are well understood and tested."

The BBC, meanwhile, ruled out charging for its online content, saying it was part of the licence fee.

Asked if the corporation had any plans to make people pay extra, deputy director-general Mark Byford told the MPs: "No. Obviously we understand and appreciate the fundamental debate around business models and potential charging but the BBC recognises that it's enshrined in the charter ... we would say it is a fundamental public purpose for the BBC to be providing news and information.

"The licence fee payer pays the £142.50. Through that fee they get free access on radio, television and to our online materials."

Mr Byford also defended the decision to screen Strictly Come Dancing on a Saturday night, partially overlapping with ITV's X Factor.

He denied it was an attempt to "deprive" ITV of advertising revenue and said X Factor was on both Saturday and Sunday evenings whereas Strictly Come Dancing was no longer on a Sunday.

"ITV is getting absolute record audiences for the X Factor - 15 million on a Sunday, 14-15 million on a Saturday.

"There seems no evidence that anything Strictly Come Dancing is doing on a Saturday evening damages that."

He added: "On a Saturday evening the BBC has to service licence payers with the programming that they expect.

"There is a major family drama, Merlin, early evening.

"We have contractual obligations on Match of the Day with the Premier League later in the evening.

"Between those two we also schedule Strictly Come Dancing and Casualty.

"This is not the first year where there has been a time overlap between Strictly Come Dancing and X Factor. This has happened over the years."