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The ‘Regulatory Funding Company’ – further proof that the big press companies learned nothing from Leveson

by Brian Cathcart

The people behind IPSO, the big newspaper companies’ PCC retread, have announced the initial membership of a body called the Regulatory Finance Company (RFC), the Guardian has reported.

This is further evidence of their determination to reject independent, effective self-regulation on the lines recommended by the Leveson Report, endorsed by Parliament in the Royal Charter and favoured by the overwhelming majority of their own readers.

The RFC is the new PressBoF: just as the PCC is being recycled under another name, so is the powerful committee of newspaper executives who pull the strings. Like PressBoF the RFC will have sweeping powers*, notably determining the funding of IPSO, but also over IPSO appointments, investigations, regulations, voting, sanctions, arbitration and the Code of Practice.

And predictably the people who will wield this power are all, according to the Guardian, senior press industry executives – making a mockery of the idea that IPSO is independent of the industry. They are also all white men, offering further proof of the manner in which the upper reaches of this industry are insulated from modern society.

IPSO’s backers insist in their advertisements that it will deliver all the key elements Lord Justice Leveson called for in his report. So what did Leveson have to say about the role of a body such as PressBoF?

His Report declared unequivocally (p1761-2): ‘In my opinion there is no need for such a body to exist at all.’

The independence of the regulator was vital, he stressed, if the public was to have fair and impartial treatment, but ‘the power of PressBoF in relation to appointments, the Code Committee and the funding of the PCC means that the PCC is far from being an independent body’. (P1572)*

When, during the Inquiry, PressBoF proposed changes to the PCC system, it suggested a body almost identical to itself and to today’s RFC, called the Independent Funding Board (IFB). Here is Leveson’s verdict on that:

‘The powers of the IFB, which run throughout this proposal, undermine claims to independence of the regulatory system. . . Removing the IFB from decisions relating to appointments, the code, the regulations and sanctions would go a long way towards enhancing the independence of the proposed system.’

In short, Leveson left no doubt that there is no place in a fair, independent and effective press self-regulation system for a body with the powers and composition of the Regulatory Funding Company, or PressBoF, or the IFB.

In proceeding with the RFC, therefore, and in making these reported appointments, the Murdoch press, the Mail and the other big newspaper companies are once again raising two fingers to the rest of society. They are not sorry for all the wrongdoing that made the Leveson Inquiry necessary, and they expect go on behaving as they did before.

* The RFC’s powers:

–  A veto over any changes to the IPSO regulations (IPSO Contract, Clause 7.1)

–  A veto over any changes to the Code – variations to the Editors’ Code ‘must first be approved by the Directors [of the RFC]’ (RFC Articles 10.11)

–  A veto over the arbitration service (IPSO Contract, Clause 5.4.3)

–  Control of the voting arrangements of its members (IPSO Contract, Clause 6.1)

–  Control of the fund that makes possible investigations, and of payments to it (IPSO Contract, Clause 10)

–  Control of the financial sanctions guidance which determines the scale of fines, in consultation with the IPSO Board (IPSO Contract, Clause 1.1)

–  It oversees the Editors’ Code Committee, a subcommittee of the RFC and not IPSO (RFC Articles 2.2)

–  It (and not IPSO) determines the pay of members of the Complaints Committee (IPSO Articles 27,9)

– It (and not IPSO) determines the pay of the ‘independent’ members of the Appointment Panel (IPSO Articles 26.8)

This is not to mention the less overt powers of the RFC, which will mirror those of PressBoF over the PCC, as described to the Leveson Inquiry.

Here is Lord Grade, a PCC commissioner:

…the fact that PressBoF controls the purse strings leaves them in the position where – which they either do or they don’t abuse – I don’t have enough experience yet, but it leaves them in the position where they can have a huge influence on the constitution and the running of the organisation. I don’t think that’s healthy.’ (P1520)

And here is Professor Roy Greenslade of the Guardian: :

‘That is the reason I have often referred to the Commission being subject to “string pulling” by its paymasters, the Press Board of Finance (PressBoF). This has been wrongly taken to mean that I was suggesting PressBoF members, or people acting for them, made interventions in individual cases. As far as I’m aware, that never happened, and that indeed was my point: it did not need to happen. The PCC’s chairmen and directors could not be other than aware of the vulnerability of the Commission and of their own positions when attempting to hold their own paymasters to account (and I am deliberately choosing to use a phrase borrowed from the journalistic lexicon about “holding power to account”). They were regulating, or seeming to regulate, the people on whose very existence they depended.’ (P1521)

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