Rival publishers have defended Newsquest after the regional news giant was accused by the National Union of Journalists of failing to pass taxpayer funding for Local Democracy Reporters to its employees.
Earlier this month the NUJ published the results of a Freedom of Information request that showed a more than £10,000 gap between what the BBC was paying Newsquest for each of its Local Democracy Reporters (LDR) and what those LDRs were receiving as a salary.
But the managing director of London news publisher Social Spider, which employs two LDRs, told Press Gazette it is wrong to suggest any of the scheme’s contract holders derive a profit from hosting the service.
Meanwhile Reach, the local news giant that employs more LDRs than any other publisher, said its competitor’s explanation for where the money went “does make sense”.
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Press Gazette has also compared the workings of the LDR scheme to Meta’s grant-funded reporter programme, the Community News Project, which is run by the NCTJ.
[Read more: Newsquest urged to pass on more of BBC funding to £24k per year Local Democracy Reporters]
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What is the Local Democracy Reporting Service and how it is funded?
The Local Democracy Reporting Service is an effort to fill gaps in the UK’s regional public service reporting. Under the current contracts, 18 media companies employ 165 LDRs to cover patches across the UK, producing stories that are distributed for free to the BBC and more than 1,000 other news titles around the country.
The BBC pays those contract-holders some £37,700 a year per LDR employed outside London, or around £40,000 for those in London – a sum intended to cover all the costs associated with their employment.
The BBC also stipulates that LDRs outside London should be paid at least £24,000 (or £26,200 inside London) -– a level the public broadcaster said was chosen to ensure “there is no scope or incentive for the supplier to retain unused funding through paying lower salaries”.
The NUJ challenged Newsquest earlier this month on that gap between funding and salaries after LDRs with the company were given a 1.5% pay rise earlier this year, arguing more of the BBC money should be passed along to reporters.
Newsquest responded that the money was taken up by internal business costs but did not specify how it is spent. A spokesperson for the Gannett-owned company said: “We entirely reject this flawed assessment which completely fails to take into account National Insurance, Employer Tax, Employer Pension contribution, the LDR bonus scheme, laptop and technology provision, licences and all the other real costs of hiring and supporting LDRs in our local newsrooms.”
The NUJ dismissed Newsquest’s defence, saying the digital bonus scheme is “virtually impossible… to trigger due to its high targets” and that electronic equipment is often recycled within the business.
‘Not a very rounded picture of the situation regarding costs’
David Floyd, the managing director of community interest company Social Spider, has now told Press Gazette that the NUJ’s allegations did not “give a very rounded picture of the situation regarding costs”.
Social Spider publishes five London community newspapers: the Waltham Forest Echo, Tottenham Community Press, Enfield Dispatch, EC1 Echo and Barnet Post. Floyd said that without the substantial additional funding on top of each LDR’s salary, Social Spider “would not be able to afford to deliver the contracts”.
He explained that LDR contracts were not intended to be itemised grants but instead as tenders to provide a service.
“If the BBC was operating the scheme as a grant funder they might say: ‘You have the wages, then you have £5,000 for line management costs and £3,000 for office rent and £2,000 for recruitment and £1,000 for laptops and £500 for phones and £200 for office furniture, etc.
“But because it’s a contract, not a grant, what they’re saying is: ‘This is the fee allocated to the service and this is what you’re expected to do for that.’”
The biggest indirect cost was not facilities or laptops, he said, but line management.
“In our case, this literally involved us adding an additional working day per week to each editorial role to cover the line management responsibilities of managing an LDR.”
Floyd said managers edit each LDR story published through the scheme’s platform, as well as carrying out all the other duties involved in managing an employee. In his company’s case, he estimated line management costs alone covered more than half of the gap between an LDR’s salary and their total contracted cost.
He added: “As a publisher that believes in the principles of the LDR scheme, we have many concerns about the way that corporate publishers deliver some of the contracts – particularly around sending LDRs out to do tangentially relevant, click-friendly vox pops rather than attending council meetings.
“But the idea that publishers who are genuinely trying to deliver the service that the contract requires in good faith are making a big profit (or, in fact, any profit) is not correct.”
Asked to expand on how the BBC calculates salary and funding levels for each LDR contract, a spokesperson for the corporation said: “We have clear processes in place to make sure all Local Democracy Reporters are paid at least a minimum specified amount. The BBC provides all suppliers the same level of funding per filled LDR post, no matter the size of the publishing company.”
Press Gazette approached the NUJ for a response to Floyd’s argument but did not hear back before publication. In a subsequently supplied comment, the union’s Northern and Midlands senior organiser Chris Morley said: “Newsquest is the outlier when it comes to the employment of LDRs in that with its huge economies of scale, it generally pays the minimum or close to it when it can clearly – as the NUJ has demonstrated – pay more just from within the scheme itself to its hard-working journalists desperately trying to cope with the cost of living emergency.
“Other publishers have commented about how they operate the scheme and its funding mechanism, but we know each business is different and any comparison between a company of 1,500 employees and one of less than 20 with contrasting profiles of LDRs employed in London and outside the capital is unlikely to be of much use.
“There is a simple way for Newsquest to justify the £10,000+ BBC licence fee cash it banks above the normal major employment costs of salary, employer National Insurance and pension contributions and that is to set out the accounting assumptions made for each LDR role.
“It hides behind commercial confidentiality for not doing so, but the facts suggest that other publishers can do more for their LDRs so why can’t Newsquest? The most productive way forward would be for Newsquest to value its LDRs and raise their pay above the paltry 1.5% imposed in April.”
How does Reach handle the Local Democracy Reporting Scheme?
Reach, the UK’s largest local news publisher as well as the biggest employer of LDRs, pays the BBC-funded reporters substantially more than Newsquest does. Non-trainees at the company, who make up the majority of its 77 LDRs, receive minimum annual pay of £31,200 outside London and £34,840 inside.
A Reach spokesperson told Press Gazette: “All in all, it does make sense that the allegedly missing £10k [per reporter at Newsquest] could be being used to cover the costs associated with employing an LDR.”
The company has in some cases employed staff specifically to manage LDRs. Currently, it has a business-wide head of the LDR project as well as a local democracy editor at My London overseeing the title’s nine LDRs.
The spokesperson added: “We’re a company which invests tens of millions of pounds every year on local journalism, and feel we have the infrastructure in place to support the LDR scheme and want it to succeed.
“Anyone who sees it as a subsidy for any of the partners who host an LDR doesn’t have a full grasp of how journalism works, or basic business understanding – or is ignoring those realities wilfully.”
How does funding for Meta’s Community News Project reporters compare?
While the Local Democracy Reporting Service is a tendered scheme, Meta’s Community News Project is based on grants by the Facebook and Instagram owner that are coordinated by the journalism training body, the NCTJ.
Like the LDR scheme, the Community News Project funds reporting roles in underserved communities.
NCTJ chief executive Joanne Forbes told Press Gazette that the grant payments it disburses “contribute to the costs of our publisher partners employing, equipping, training and qualifying trainee community reporters”.
At the end of June, there were 23 publishers receiving grant payments for 106 trainee reporters.
The maximum funding for each role in the project is £51,000 for a period typically lasting 22 months, which roughly breaks down as £2,300 a month or £27,800 a year. However, unlike the LDR scheme that pays publishers the same amount per role with London weighting as the only variable factor, publishers can be paid different amounts for their community reporters.
Forbes said the amount awarded “is based on evidence of actual spend on employment (salaries), equipment (IT) and reimbursement of training costs paid to external providers”.
For reporters on the scheme who train for their NQJ senior exams, their employer may claim up to £46,400 for salary plus £3,000 for training costs. For those training for their NCTJ diploma, the maximum salary contribution is £43,200 and maximum training costs are £6,200. The employers may also claim up to £1,600 for equipment.
Press Gazette has heard from one Community News Project reporter who said their salary was £22,000, but it is unclear how much money their employer was awarded to sustain that role.
Forbes said: “The NCTJ does not get directly involved in employment matters and publishers make their own business decisions about salaries, equipment and training providers. Grant payments are a contribution to costs and traineeships are typically for 22 months.”
After the publication of this article,
This article was updated the day after publication to clarify that the maximum Meta Community News Project funding of £51,000 is typically for a 22-month period, and so cannot be directly compared against annual LDR funding. It was updated again three weeks later to incorporate comment latterly offered by the NUJ.
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