The BBC has been paying hundreds of thousands of pounds of licence fee payers’ money a year to a TV company that produces often unusable local news content and that insiders say was established solely to obtain subsidies from the public broadcaster.

The government’s ambitious plan for “Local TV”, introduced in 2011 by then–culture secretary Jeremy Hunt, was supposed to bring forward a new era of local news, with the BBC mandated to hand over financial support for the launch of 30 city-specific TV stations around the UK.

For each story the local stations submitted, the BBC would pay them £147.50, whether it ran them or not, and the companies were set quotas of 85 stories per month for each area.

The money from the BBC was used to build a network of TV stations around the country, which were all required to air an hour of local news content each day.



At the time, critics warned the policy was ill-thought-through and little more than an attempt to dilute the BBC’s economic power by rerouting its public funding.

The company that has benefited most from Hunt’s initiative is That’s TV. Founded by a businessperson called Daniel Cass, it has become by far the biggest player in the field, scooping up 14 of the local broadcast licences with potential total earnings, via the BBC, of over £3 million of public money.

According to interviews with multiple former employees and company insiders, BuzzFeed News can reveal:



That’s TV stations were geared almost entirely towards meeting the BBC’s subsidy quotas so that the company could continue receiving the public money.

The stations have attracted embarrassingly low ratings, with several getting fewer than 30 viewers on average across an entire day.

Licence rules set by the UK broadcast regulator Ofcom require the stations to produce at least an hour of news content per day, but That’s TV has got round this by running two almost identical news bulletins back to back, and filling the rest of the schedule with old films.

The company successfully applied to Ofcom 14 times in the last few years to relax the amount of local content its stations were required to show. In one instance this involved cutting the 35.5 hours of local programming a week to just 7.5.

The company uses tiny teams of one or two young, under-trained staff working on zero-hours, minimum-wage contracts at each station to produce 85 stories a month to hit the BBC quota and keep the subsidies coming in. One station brought in media studies students to help it achieve the numbers.

“The company is funded by the BBC,” a former senior That’s TV employee told BuzzFeed News. “You look across each channel, there’s two journalists, and sometimes just one, who have to send 200-odd stories to the BBC every three months.

“You'd end up producing content, rather than news, and we’d send to the BBC all these pointless PR pieces because there was just nothing else you could do.”

“The BBC, I think, is not fully aware of what’s going on… It’s a scam. Ofcom is letting them do this.”

In April, Ofcom finally acknowledged that Hunt’s headline-grabbing programme had failed in its mission to create a sustainable nationwide network of TV stations.

The broadcast regulator called for a halt to handing out any more licences, acknowledging that Britain’s local stations had struggled to gain financial viability, with viewers lodging complaints to Ofcom and the stations being reportedly “ridiculed” for what was being shown.

That’s TV will continue to hold its current licences and has reportedly picked up five new ones in Scotland following the closure of STV2.



Conservative MP Ed Vaizey, who was the minister for culture, communications, and creative industries in Hunt’s department when Local TV was launched, said the BuzzFeed News evidence on That’s TV showed that the programme had “tried and failed” and should be shut down.