Publication - Independent report

Scotland's News - towards a sustainable future for public interest journalism: report

Independent report produced by the short-life Public Interest Journalism Working Group outlining their recommendations to the Scottish Government on developing a sustainable future for public interest journalism in Scotland.

Scotland's News - towards a sustainable future for public interest journalism: report
Recommendations

Recommendations

1. Scottish public interest journalism institute

The working group recommends that the Scottish Government should work with stakeholders to establish a new "Scottish Public Interest Journalism Institute" – a high-profile independent body that draws on a wide range of resources to develop public interest journalism for Scotland, co-ordinating new and existing initiatives and strategically administering grant funding to support a diverse, pluralistic and sustainable Scottish public interest media sector.

There is no shortage of goodwill towards quality news journalism, particularly at a local level, or of concern about its potential loss. Many solutions have been suggested, such as in the 2012 Better Journalism in the Digital Age report commissioned by the Carnegie Trust from former BBC Scotland head of news Blair Jenkins, which proposed new funding from civil organisations for journalism innovation.[28]

Several schemes from both commercial companies and charities have emerged, including the Nesta Future News pilot fund.[29] However, the working group recognised that applications to these schemes can be burdensome, and small or new publishers might not be fully aware of what support and advice is available. Many grant schemes are short-lived and fail to offer sustained strategic support.

Facebook has been running its Community News Project in conjunction with the National Council for the Training of Journalists (NCTJ) and regional publishers for two years and has an extensive network of media partnerships around the world, particularly in the USA.[30] Google has established its News Initiative to work with publishers worldwide, with a global budget of $1 billion over three years. In Wales, the Independent Community News Network receives Welsh Government funding. [31]

There are examples of press institutes around the world, such as the American Press Institute, the Norwegian Institute of Journalism, and the Institute Français de Presse (IFP) in France, and non-national organisations like the Thomson Foundation and the Reuters Institute.[32] Functions vary, but as most pre-date the digital revolution and its financial implications, they tend to concentrate on journalism education rather than the sustainability of publishing itself.

More recent work on sustainable news publishing and community-embedded journalism has been carried out by the European Journalism Centre, the Dutch Journalism Fund, the American Journalism Project, the New Jersey Civic Information Consortium and others.[33]

In the UK, Dame Frances Cairncross was commissioned by the Department for Digital, Culture, Media and Sport (DCMS) to explore the sustainability of public interest news. In 2019, the Cairncross Review recommended the establishment of a statutory Institute for Public Interest News (IPIN), modelled on funding bodies such as Arts Council England and Creative Scotland, that would allocate a subsidy for public interest news with a focus on local news and innovation.[34] The UK Government rejected this recommendation, but welcomed other non-statutory initiatives, including the Public Interest News Foundation (PINF), a charity which has similar aims to IPIN's, but is entirely independent of the state.[35]

The working group believes that there is an exciting opportunity for Scotland to learn from the experience of other countries. We can create an independent, world-leading body, that combines the democratic legitimacy of bodies such as the Dutch Journalism Fund with the independence of bodies such as the American Journalism Project in the United States or the Judith Nielsen Institute in Australia.

Established on a non-statutory basis, and provisionally called the Scottish Public Interest Journalism Institute (SPIJI), the new body's governance should reflect good practice as set out in the Scottish Governance Code for the Third Sector. Its board should include members from different parts of the media sector and should reflect Scottish society in its demographic make-up.[36]

It is important that the Institute's independence from government is established from the outset. It is therefore recommended that the working group creates a small appointments panel to select the first chair and board, although Scottish Government assistance in marketing the post and co-ordinating applications may be necessary. The appointment process should be designed to create a level playing field for applicants.

The Institute's remit would cover fundraising, research, grantmaking, training; diversity and media literacy, as follows:

1. Fundraising

The Institute would seek funding and partnerships to advance public interest journalism in Scotland, with a view to becoming self-funding within three to five years through the development of relationships with philanthropic foundations, civil society organisations and technology companies, among others.

2. Research

The Institute would commission research to establish the information needs of geographic and demographic communities across Scotland and how these needs are being met by the news publishing industry. It would use this research to inform its grantmaking programme.

The Institute would also monitor trends in the Scottish media landscape that affect the provision of public interest journalism and that may have a relevance beyond Scotland; and provide an ongoing forum for debate about journalism, open democracy and accountability in Scotland.

And the Institute would liaise with Audit Scotland to produce an annual report on the impact of Scottish Government advertising and marketing spending on public interest journalism, to ensure that public spending is administered impartially and with the sustainability of public interest journalism in mind.

3. Grantmaking

The Institute would administer grant funding and donations for public interest journalism projects and publications, with a focus on consistent, long-term funding that allows growing and pioneering news initiatives to get off the ground; invests in new approaches and models of journalism; and meets the needs identified through the Institute's research programme. The Institute would set funding criteria, subject to consultation with stakeholders, that reflect the overall aim of ensuring a news media economy that is diverse, inclusive, plural, independent and sustainable.

The Institute would also support and collaborate on new media infrastructure to support the start-up, back-office and running of community news organisations in order to reduce barriers to entry and enable community journalism to thrive for the public benefit.

And the Institute would look to support the cost of community-led buyouts of legacy local newspaper titles.

4. Training, advice and support

The Institute would oversee and support training and access to public interest journalism skills development, liaising with Education Scotland, Skills Development Scotland, the NCTJ, NUJ, universities and colleges, the BBC and publishers, as well as other journalism initiatives such as ICNN, the People's Newsroom Initiative and PINF, to develop collaborative programmes for journalism students, working trainees and other emerging journalists.

The Institute would also work with the NCTJ, NUJ and publishers to develop an effective continuous professional development programme for all levels, including management and HR training for people entering promoted posts with responsibility for other staff members. Such programmes could be applicable beyond Scotland and develop potential revenue streams as well as enhance Scottish journalism's long-established international reputation.

And the Institute would provide business and training advice for publishers and liaise with Scottish Enterprise and the Business Gateway network to operate a signposting service to identify resources, particularly for new publishers and community organisations.

5. Diversity

The Institute would support and upskill marginalised communities wishing to establish their own trusted news and information sources, in order to ensure a level playing field for their entry into the sector.

The Institute would also encourage people from backgrounds typically under-represented in journalism to enter the profession and remain in it, continue to monitor barriers for entry to journalism for these groups and look at measures to mitigate these, and collaborate with key initiatives that are working to diversify Scotland's media landscape and amplify the voices of typically under-represented groups.

6. Media literacy

The Institute would co-ordinate and promote media literacy for all ages to improve public knowledge about sourcing trustworthy information and on how journalism is produced, and also work with Education Scotland and development education centres in Scotland to develop materials to raise awareness among young people of the importance of public interest journalism in combating disinformation and develop strong media education generally.

The working group recommends that, in order to avoid delay, and to signal its commitment to public interest journalism, the Scottish Government should provide initial funding to put the Institute on firm foundations.

For comparison, the New Zealand Government has provided NZ $55 million to fund public interest journalism over the next three years. Adjusting for population size, the equivalent expenditure in Scotland would be £31 million over three years.[37] We do not believe that the Institute should be dependent on public funding. Therefore, we recommend that the Scottish Government provides less than one-third of this amount, or £3 million per year, for the first three years of the Institute's existence. This level of commitment would give the Institute the capacity to raise matching funds from other sources, with the aim of becoming self-funding in the long term.

This does not mean that the Institute would not accept government funds for specific purposes. In fact, the independence of the Institute means it would be able to provide the necessary distance between government grants and the journalism provider in receipt of funding. It is envisaged that the SPIJI would be able to qualify for charitable status.

Although the institute would be free to decide how it would be run and where it would be based, a partnership could be sought with a Scottish university, similar to Cardiff University's Centre for Community Journalism (of which the Independent Community News Network is a part), the Centre for Investigative Journalism at Goldsmiths (University of London) or the Reuters Institute at Oxford University. This would provide access to accommodation, administrative support and marketing services, as well as the immediate establishment of a recognised reputable brand association. This could also assist in developing further partnerships with philanthropic funders and accessing other funding streams.

Although no regulatory role is envisaged, such an institute would be free to comment on any matters concerning public interest news, in line with its charitable purpose. Its founding principles would include the upholding of freedom of expression as well as the enhancement and protection of public accountability and open democracy through journalism in the public interest.

2. Charitable status

The working group recommends that the Scottish Government and OSCR, the Scottish charity regulator, should take steps to enable non-profit public interest news providers to register as charities; and the Scottish Government should also create an alternative legal status, with similar tax benefits to charitable status, for other non-profit public interest news providers.

Charitable status offers an attractive package of benefits: tax breaks; easier access to grants and donations; and reputational advantages. However, charitable status also imposes constraints on news providers, particularly in compromising the freedom to take a stance on contested issues.

Without charitable status, it is much harder for publications serving small markets, or providing certain specialist forms of public interest journalism, to build a viable future. Charitable status for these publications would make a significant contribution to developing a diverse and sustainable media landscape in which all audiences can be served.

The Cairncross Review called on the UK Government to amend the 2011 Charities Act to include the non-profit provision of public interest news as a charitable purpose. Whilst the response from the Charity Commission (which regulates charities in England and Wales) spelt out the conditions under which a journalistic enterprise could be considered charitable, it did not result in the requested legislation.[38]

Charity law is a devolved matter, and therefore Scotland does not need to be bound by the position of the UK Government or the Charity Commission. As it happens, public interest news meets several criteria in the Charities Test laid out in the Charities and Trustee Investment (Scotland) Act 2005, such as advancing citizenship and civic responsibility.[39] The Public Benefit Journalism Research Centre (PBJRC), which is itself a charity, told the working group that it should be relatively straightforward to update Scottish charity law.[40] PBJRC advised us that OSCR, the Scottish charity regulator, could develop a Scottish interpretation of the citizenship purpose under which certain types of news providers could register as charities by demonstrating how they advance citizenship; or that OSCR could recognise public interest journalism as charitable by analogy to one of the other purposes in the 2005 Act, such as education, health or the advancement of heritage or culture.

PBJRC pointed out that these options do not require any change to the law; they simply require OSCR to interpret the law robustly. However, if the Scottish Government wanted to take a proactive approach, it could legislate to expressly confirm public benefit journalism as a charitable purpose.

We are grateful to PBJRC for this advice, and we urge the Scottish Government and OSCR to take forward these recommendations. We understand that, in order to recognise public interest journalism as charitable, OSCR will need a sound definition of public interest journalism. We set out our working definition at the start of this report. This definition is also intended to inform other stakeholders in their support for relevant news providers.

The working group does not believe that all public interest news providers could or should register as charities. Some public interest news providers are commercial enterprises, and some enjoy their freedom to take a stance on contested issues. These news providers should still benefit from the other forms of support set out in this report. Charitable status should be an option for some public interest news providers, but not a requirement for all.

In addition, the working group calls on the Scottish Government to create a new legal status for public interest news providers that operate on a non-profit basis and have demonstrably high standards of journalism, but do not wish to register as charities, perhaps because they wish to take a stance on contested issues. Such a status would have comparable tax benefits to charitable status, and would enable public interest news organisations to attract grants and donations, but would not impose the same obligations as charitable status.

The working group hopes that SPIJI itself would be granted charitable status, like the London-based Public Interest News Foundation.[41]

3. Media literacy

The working group recommends that the Scottish Government should embed media literacy in the school curriculum, and launch a voucher scheme for young people aged 15-19 to access public interest journalism free of charge.

Concern about an increasingly confused media landscape and the rise of so-called "fake news" have been raised in many countries.[42] This problem needs to be tackled carefully to avoid damaging trust in all media.

If enacted, Chapter 8 of the Online Safety Bill will place a duty on Ofcom to promote media literacy.[43] The UK Government has also published a media literacy strategy for England and Wales.[44] As media literacy is a devolved matter, the Scottish Government should work with Ofcom and public interest news providers to develop a bespoke media literacy strategy for Scotland, with an awareness campaign aimed at all ages, and with elements embedded in the school curriculum.

The foundation of a strong future culture of understanding and identifying trustworthy information sources will lie in a sustained programme for young people. This will help them make informed choices and to prepare them for a future in which they will inevitably be media consumers of one kind or another. As set out above, SPIJI would expect to play a major role in coordinating media literacy initiatives in schools and elsewhere.

Using news publications as an educational resource is not new and there are good examples elsewhere, such as the Newspapers in Education scheme in California.[45] However, making access free and easy, through a voucher scheme, would benefit a wide range of subjects and encourage engaged citizenship in its fullest sense. This should be accompanied by a marketing campaign to raise awareness of both the scheme and the issue, and encourage parental participation.

A good example of how such a scheme can be applied and extended can be found at the Florida-based Poynter Institute's MediaWise project.[46]

4. Community ownership

The working group recommends that the Scottish Government should examine the feasibility of introducing provisions like those in the 2003 Land Reform (Scotland) Act, to give community groups the scope to take over a local news publication that is otherwise in danger of closing.

As small local publications lost classified advertising, found display advertising volumes and yields dropping, and hard copy sales declining, many titles became unviable and only survived through consolidation, mergers of different editions, staff reductions and office closures. Some titles found themselves with no full-time journalists physically working in the communities represented in the mastheads.

The group recognises that, rather than see local titles wither and die like the Nairnshire Telegraph, communities should, in some circumstances, be enabled to mount a bid to take over an ailing publication to preserve the service.

Such a process was successfully undertaken in Langholm in 2016, when the owners of the Eskdale & Liddesdale Advertiser, Cumbrian Newspapers, had decided to close the title until agreeing to let a community company, led by an experienced and successful local businessman, take over.[47]

The working group recognises that it would be inappropriate to force proprietors to dispose of assets at a lower price than they could otherwise achieve, but believes that conditions for community take-overs and staff buy-outs could be improved to make these options more viable. Measures set out in this report, including charitable status for non-profit news providers, the availability of government grants, and targeted business advice through the SPIJI, could make this a much less daunting process for a community which might lack the same high-level business expertise that was at the heart of the Langholm buy-out.

It should be emphasised that public interest news includes not only the scrutiny of local administration and judicial processes, but also the wide-ranging coverage of social, sporting and cultural events, which are essential in maintaining community life, citizenship and civic responsibility.

5. Public sector advertising and marketing scrutiny

The working group recommends that Audit Scotland, in partnership with SPIJI, should conduct an annual audit of advertising and marketing investment by the Scottish Government and public bodies, to include a measurement of the impact of this expenditure on the health of the Scottish news publishing landscape; and the Scottish Government should invest no less than 25 per cent of its central advertising and marketing budget with public interest news providers.

The Scottish Government is a significant marketing and advertising investor in all forms of media, directly spending up to £4 million a year pre-Covid on its campaigns. Government records show that from 2014 to 2018 there was a steady decline in Scottish Government advertising investment in news publishing, from £417,500 in 2014-15 to £85,172 in 2017-18, just 3.4% of total expenditure.[48] Although there was a rise in 2018-19 to £178,785, this still only represented 4.5% of the total. A significant increase in 2019-20 to £434,318 (10.8%) is perhaps explained by the start of Covid-related public health messaging.

At the same time, investment in direct online marketing (for example, via Google and Facebook and their associated platforms), has dramatically increased and is consistently well ahead of television as the biggest beneficiary. In 2014-15, TV accounted for £1,945,057 compared to £732,646 online, but by 2019-20 that had switched to £1,333.734 online and £1,036,000 on TV. Between 2013-14 and 2019-20, commercial radio has only twice fallen below £500,000, with a high point of £801,451 in 2014-15.

It is not immediately apparent why investment in news publishing has fallen at a time when online audiences for news are growing rapidly. However, the data shows not only how Scottish Government spending increasingly favours online platforms, but also how unpredictable this advertising and marketing investment in news publishing has been.

It was not within the working group's resources or remit to interrogate these spending decisions, but there is enough evidence to identify inconsistency and a lack of clarity. That is why the working group is calling for an independent audit of Scottish Government spending in this area, to ensure that spending is effectively and fairly distributed, and that the Scottish Government's audience delivery expectations are met.

Such an audit, conducted by Audit Scotland with expert advice from SPIJI, would facilitate a more transparent dialogue between the Scottish Government, its agencies and news publishers. The audit should include not only direct Scottish Government expenditure, but also other publicly funded marketing by arm's length agencies such as Scottish Enterprise and VisitScotland, and public notice investment by local authorities (see Recommendation 6, below).

As the Coronavirus pandemic spread in March 2020 and lockdown was introduced, commercial advertising collapsed and news publishers faced an existential crisis. At the same time, the growth of digital audiences accelerated.[49]

Globally, government responses to appeals for emergency financial relief varied, some doing very little and others making generous provisions. The Danish Government's media support scheme was estimated to be worth between €18 million and €24 million; a similar investment in Sweden was worth approximately €20 million; and the Portuguese Government invested €15 million in press advertising.[50] In the UK, an initial package of advertising spending worth £35 million was approved by the Department of Digital, Culture Media and Sport, a small proportion of which came to Scottish titles, and VAT on sales and subscriptions of electronic publications was abolished.[51]

At the end of April 2020, the Scottish Government approved an additional package of press advertising investment worth £3.4 million over the following year, divided between national, regional, local and community publications.[52] This commitment allowed publishers to base their budgets on accurate forecasts. Combined with UK Government advertising and the business rates relief approved by the Scottish Parliament in May 2020, it meant that the Scottish news publishing sector was the best supported in the UK. Although two small titles suspended printing temporarily, no significant title ceased publication permanently.[53]

The pandemic experience illustrates the benefits of guaranteed revenue to publishers of all sizes, but the evidence above shows how hard it has been for news publishers to predict how much public marketing investment will be made available to them.

The group therefore recommends that an agreed minimum of the Scottish Government advertising and marketing budgets (not including public notices) should be spent with producers of public interest journalism, to contribute to more solid financial projections on which publishers can base their forecasts and business plans.

A study conducted by Research and Analysis of Media (RAM) on one of the Scottish Government's Covid-related campaigns proved that the press was more than capable of delivering the Scottish Government's messaging goals, so such a guarantee would be fair payment for the effective delivery of government communication with groups which can be harder to reach by digital means, particularly the elderly and those living beyond the conurbations. News publishers strongly argue that government advertising is a two-way value exchange.

Ensuring public advertising and marketing investment contributes positively to Scotland's social capital, whilst helping to prevent a democratic deficit, aligns with Scottish Government procurement policy, as stated in the Scottish Model of Procurement:

Looking at outcomes not outputs, it uses the power of public spend to deliver genuine public value beyond simply cost and /or quality in purchasing. The Value for Money triangle sums up the Scottish Model of Procurement; it is not just about cost and quality, but about the best balance of cost, quality and sustainability.[54]

This is further developed in the statutory guidance for the Procurement Reform (Scotland) Act 2014:

Smart use of procurement can play a key role in building a more prosperous and fairer Scotland by: promoting jobs and growth; encouraging innovation; boosting training, apprenticeship and employment opportunities; and helping businesses, particularly small and medium sized enterprises (SMEs), third sector bodies, and supported businesses to compete effectively for contracts.[55]

If 25% of the Scottish Government marketing budget were spent on public interest news publishing, it would represent a fair reflection of audience reach, help sustain the number of Scottish journalism jobs and recognise the vital contribution that quality journalism makes to public accountability, democracy and debate.[56]

The group recognises that buying press advertising is more complex than programmatic online, commercial television and radio, where the number of organisations is very small, but complexity should not be a reason to favour other media. As with the emergency pandemic advertising investment programme, it is important that community publications are included in media plans.

6. Improved and expanded public notice services

The working group recommends that Audit Scotland, in partnership with SPIJI, should conduct an annual audit of public notices; and that the Scottish Government should improve the accessibility of public notices and strengthen the ties with public interest journalism, and issue best practice guidelines for local authorities and other public bodies to ensure that they promote public notices to those who have an interest in the information.

Easy access to information about decisions directly affecting communities is an essential part of local accountability. Without reliable knowledge about proposed changes, citizens cannot engage effectively with decisions affecting their lives until it is too late.

A report for the Department for Digital, Culture, Media and Sport warned that local press decline was reducing scrutiny of democratic functions but that news provision and consumption improved participation in local democracy, with electoral turnout increasing by 0.37% for every percentage point growth in a local newspaper's circulation.

Democracies can only function effectively where the public has access to enough information to make informed decisions in civic life. Therefore, the presence of journalism in civil society is vital to its functioning. Scenarios in which there is a reduction of news capacity are likely to be damaging, and the absence of journalism potentially catastrophic.[57]

Most planning applications, road changes and licence applications will not make front page news, but their impact on localities can be considerable and a statutory obligation to publicise such information in local newspapers remains, although volumes and revenues have dropped steadily. Concerns have been raised for many years, but without much success.[58]

The Scottish Government has a comprehensive agreement with a supplier for the next three years, and government job ads still appear in news publications, but this should not prevent a reassessment of the way public information is disseminated.[59]

Public notice information is vital for open democracy and accountability, locally and nationally, and it is essential that the information is sign-posted, accessible to all affected, and available through high-profile media relevant to the subject matter. Public bodies should make use of local publications, national publications and online news publications to best target their information and ensure that communities are able to access important public notices without having to hunt for the information.

With a total annual public bodies' procurement spend of £93.5 million in Scotland on marketing and media services, there should be ample scope to improve investment in news publishing, as with Scottish Government marketing (see above).[60]

The 2014 Procurement Act requires Scottish public bodies to include community benefit requirements in all regulated procurements with an estimated value of £4 million or more.[61] Individual bookings in news publications would fall well below this threshold. The working group therefore recommends that a community benefit requirement for the availability of all public information notices should be reinforced.

Tracking public notice spending is difficult because of the number of categories, authorities and regulations involved. An annual, publicly available audit of the spending, availability, effectiveness and awareness of public notices is badly needed, not least to understand how public money is being used. Such measurements are part of the current service level agreement with the Scottish Government's suppliers, so the principle is already established, but there is no single resource.

Public notice availability in Scotland has become increasingly reliant on the TellmeScotland portal and an effectiveness/return-on-investment analysis should be conducted for comparison.[62]

7. Big tech

The working group recommends that the Scottish Government should work with the UK Government to ensure that the new Digital Markets Unit enables public interest news providers of all shapes and sizes to thrive in the digital economy; and the Scottish Government should encourage big tech companies to support the establishment of SPIJI.

The rapid emergence of digital technology giants, particularly Facebook, Amazon, Apple, Netflix and Google – the so-called FAANG ─ has transformed the way people lead their lives, and in particular how they engage with the media.

This year's TV licensing annual review showed that the number of people paying the licence fee had fallen from 25.5 million to 24.8 million – £11 million less for the BBC to spend.[63] Last year, Google and Facebook took 67.8% of the UK digital advertising market.[64] Whilst that share is predicted to fall, it will probably go to other overseas tech firms, particularly Amazon, which saw its share of the US digital advertising market increase this year from 7.8% to 10.3%, earning it £15.73 billion.

The News Media Association has raised concerns with Ofcom that search engine algorithms give unfair preference to some news articles over others, and that the sharing of news content on social media results in "brand flattening", where users do not realise that they are reading stories from particular news publications, and therefore are not incentivised to visit or subscribe to those publications.

There are particular challenges facing small public interest news providers in the digital economy. For example, a share of advertising revenue on YouTube is not available to news providers until they have a specific number of followers and watch hours on the platform. Similarly, there are a number of audience revenue tools such as "stars" on Facebook that are not available to organisations with small audiences.

Following the Furman and Cairncross reviews, the UK Government agreed to set up a Digital Markets Unit within the Competitions and Markets Authority to tackle the growing lack of competition and transparency in digital markets. This year, the DMU began work on a code of conduct to govern the relationship between news publishers and digital intermediaries.[65] However, its work will remain largely academic until the UK Parliament passes legislation to give the DMU oversight and intervention powers. The Scottish Government should work closely with the UK Government to ensure that public interest news providers of all shapes and sizes are enabled to thrive in the digital economy.

Big tech companies such as Google and Facebook are major donors to public interest news. Even in a re-regulated media market, there will continue to be challenges facing public interest news providers in Scotland, as set out in this report. To demonstrate their genuine commitment to community cohesion and democratic participation in Scotland, these companies should also put their hands in their pockets to support the establishment of SPIJI. In particular, their financial support could help SPIJI underwrite community-led buyouts of legacy local newspapers, as set out in section 4 (above).

8. Business advertising tax incentives

The Scottish Government should engage with the UK Government to create tax incentives for businesses to advertise with public interest news providers.

As the economy recovers from the pandemic, businesses urgently need to invest in advertising in order to rebuild their markets. At the same time, public interest news providers need to regain their lost advertising revenue.

A targeted tax credit for business advertising in public interest news would kill two birds with one stone. It would help British businesses stretch their advertising budgets further, whilst simultaneously driving investment in UK-based public interest news providers. This would support public interest news; help fragile businesses – in particular, small and medium enterprises (SMEs); and stimulate economic wellbeing.

UK media companies, including news publishers, submitted a detailed White Paper on a business advertising tax credit to the UK Treasury in March 2020. The White Paper showed that increased economic activity and additional tax revenue would far outweigh the cost of the tax credit, and that the Treasury could benefit by up to £5.9 billion in net additional tax revenues from a 30% credit.

An advertising tax credit would support businesses of all sizes, but it would have particular benefit for SMEs, which were badly hit by the lockdown, but which benefit disproportionately from advertising – typically generating £8 for every £1 spent. The Advertising Association's think tank Credos has produced a significant body of research to demonstrate the wider economic benefits of advertising investment.[66]

Unfortunately, the proposals were not included in this year's budget. The working group believes that the Scottish Government should actively support proposals for a targeted business advertising tax credit, and should engage with the UK Treasury to secure delivery.


Contact

Email: India.Divers@gov.scot