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Channel 4 has avoided privatisation after the government approved a package of sustainability measures drawn up by culture secretary Michelle Donelan.

In a letter sent this week to prime minister Rishi Sunak, obtained by LBC's News Agents podcast, Donelan said she has “concluded that pursuing a sale at this point is not the right direction”.

She said the independent production would be “very disrupted by a sale at a time when growth and economic stability are our priorities”.

The plan has now been confirmed by Donelan, who described C4 as "a British success story and a linchpin of our booming creative industries," adding: "After reviewing the business case and engaging with the relevant sectors I have decided that Channel 4 should not be sold."

The announcement has bolstered C4's executive team after a period of uncertainty.

“I am personally delighted that we will be able to do more, making positive change for the people that others don’t fight for," declared chief executive Alex Mahon.

"We will move faster, invest more, take more risks, break down barriers and push boundaries; getting up to do that every day is an utter privilege for those of us lucky enough to work at C4.”

In-house production

Crucially, Donelan wants to relax C4’s ‘publisher-broadcaster’ restriction and allow it to make some of its own programmes – but stresses that this must go hand-in-hand with an increase in its independent production quota from its current 25% of output.

She vows that the government will work with indies “to consider what steps are necessary to ensure that C4’s important role in driving investment in the sector – especially in the newst, smallest and most innovative producers – is safeguarded.”

This could include specific protections for the smallest producers and Donelan is not ruling out increasing C4’s borrowing limit beyond its current £200m if necessary.

In a statement, C4 said: "We welcome the Government's commitment to engage closely with the independent production sector about the potential impact of this proposal, and we await further detail. We will contribute constructively to these discussions."

it also reiterated its commitment to double its invest in training arm 4Skills. "We are determined to make it true that neither where you live nor what your parents do are barriers to a career in our extraordinary industry," it stated.

The package would also require C4’s board to have a new statutory to promote the long-term sustainability and success of the broadcaster.

The government said last September that it was reviewing the business case for a C4 sale and Donelan is urging Sunak to clear the proposals to be formally announced as soon as possible.

Pact chief John McVay praised the move.

"The government has made the right decision to hit the stop button on Channel 4 privatisation,” he said.

“It was always a solution in search of a problem that didn't exist.”

Read the leaked letter here

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