Whitehall In 'Combat' Over Channel 4 Sell-Off

Whitehall officials are "locked in hand-to-hand combat" with executives at Channel 4 over Government preparations to privatise the state-owned commercial broadcaster.

Sky News understands that Channel 4 is being accused of obstructing requests for information about its finances which ministers and civil servants require to draw up detailed plans for a sale of the company.

A Whitehall source described the broadcaster's attitude as "unhelpful" and "self-defeating" on Wednesday, underlining growing tensions over the potential privatisation.

"There is basically hand-to-hand combat taking place as Channel 4 tries to dismiss demands for all sorts of information," the source added.

The news comes ahead of the Chancellor's autumn statement and spending review later on Wednesday, which Whitehall sources are sceptical will contain substantive new information about the privatisation of Channel 4.

Both Lord Burns, Channel 4's outgoing chairman, and David Abraham, its chief executive, publicly oppose the move, arguing that it will damage Britain's broadcasting diversity for little financial gain.

“It’s very difficult to see what the financial benefit is for the government, whereas it is possible to see some of the harm that could be created for the whole creative sector in the UK,” Lord Burns said in an interview with The Guardian this month.

A sale of Channel 4 could raise more than £1bn, with rival broadcasters and private equity groups already drawing up plans to bid for the company, whose best-known programmes include Hollyoaks and Made in Chelsea.

Lord Burns was effectively ousted by ministers several weeks ago when they vetoed an attempt by the media regulator Ofcom - which has oversight of the appointment - to retain him for an additional year.

Ofcom, the media regulator, had recommended that Lord Burns be granted an extension when his term expires in less than four months' time, but that argument was rejected by ministers who are keen to explore a sale of Channel 4.

In September, a confidential document was photographed outlining preparations for a formal review by the Government of Channel 4's status as a not-for-profit public service broadcaster (PSB).

Lord Burns had been keen to examine the possibility of turning Channel 4 into a mutual or charitable trust which retained its PSB remit.

Channel 4 and Ofcom are now discussing a move for Mark Price, Lord Burns' deputy, to take over as the organisation's acting chairman at the end of January.

The role of permanent chairman was advertised recently with a remit to "guide the organisation through a period of substantial change in the sector".

Mr Price, who is standing down as the boss of Waitrose, has openly pitched for the role.

The private document sent during the autumn to John Whittingdale, the Culture Secretary, and Sajid Javid, the Business Secretary, referred to work "to examine the options for extracting greater public value from the Channel 4 Corporation, focusing on privatisation options in particular".

One official with knowledge of the document's contents said that it outlined alternatives including privatising Channel 4 with or without the restrictions of its PSB remit, and pursuing the charitable trust idea.

During the last parliament, plans to sell Channel 4 were raised by Conservative ministers but were abandoned after Sir Vince Cable, the Liberal Democrat business secretary, blocked the move.

A Channel 4 spokesperson said: “We are engaging constructively with Government and responding to their request for information.”

The Department for Culture, Media and Sport declined to comment.