Consultation outcome

Government response to the consultation on analogue community radio licensing

Updated 10 December 2024

Introduction

The previous government consulted on whether to amend current legislation to allow Ofcom to renew analogue community radio licences that are approaching expiry at the end of 2025.

Following the issuing of the first full community radio licences in 2005, the community radio sector has grown to be a vital part of the UK radio landscape. There are now more than 300 analogue (AM / FM) services, with DAB (via small-scale DAB or SSBAB) providing further opportunity for more stations to broadcast to localities across the UK. Ofcom has recently reported on the progress made in establishing small-scale DAB and the growing number of community stations broadcasting on digital radio,

Community radio’s core principles are what distinguishes it from commercial radio: community radio stations are not-for-profit organisations and provide social gain to the communities they serve. The direct connection to communities has enabled the sector to grow to become a unique and important part of the UK’s radio landscape. This is a model that the government remains committed to supporting and helping to develop in the medium and long-term.

As documented in the Digital Radio and Audio Review, the UK’s radio sector and listening habits are continuing to evolve as new means of accessing music and audio content develop. As listeners move away from AM / FM towards digital – including digital radio (DAB and DAB+) and over the internet – there is opportunity for community radio stations to further develop their services and grow their networks and listenership. Many community radio stations have taken advantage of this shift, advancing their SSDAB services and online presence.

However, analogue broadcasting continues to represent the vast majority of community radio listening, and is likely to continue to do so over the coming years as small-scale DAB continues to develop. The Digital Radio and Audio Review, published in October 2021, concluded that FM radio services would be needed in the UK until at least 2030. It is probable that smaller community radio stations will need to stay on analogue networks for a period after that until such time as the vast majority of listeners have migrated from analogue radio.

Under the current legislation relating to community radio, licences will begin to expire from October 2025. As such, there is a clear need to review the legislative framework to ensure that community stations and Ofcom – which is responsible for managing the licences – have clarity about the future of community radio licences for the next 10 years.

Up to this point, community radio licences have been issued for 5 year periods, as documented in the Broadcasting Act 1990 and the Community Radio Order 2004. Subsequent Amendment orders in 2010, 2015 and 2019 allowed stations to extend their licences for further 5 year periods. As 2025 approaches, there is a need to decide on the best licensing option for community radio stations to ensure stability, whilst also allowing stations to develop their services. The previous government sought views on whether licences should be extended again, and if so, for how long.

The formal consultation ran from 8 November 2023 to 31 January 2024. Relevant community and commercial radio stakeholders were invited to partake in the consultation. Full details of industry stakeholder respondents to the consultation can be found at Annex A.

The consultation sought views on whether the government should make provisions to allow analogue community radio licences to be renewed for a further period, and if so, what the length of this period should be. Specifically, the consultation requested views on the following 3 options:

Option 1 - Do nothing: Make no change to the legislation, but instead to allow licences to expire and be readvertised by Ofcom in accordance with the legislation as it currently stands.

Option 2 - Allow the extension of licences for a further 5 year period, or a fixed period longer than 5 years without condition.

Option 3 - Allow the extension of licences in perpetuity as is the case for community digital sound programme (C-DSP) licences (noting that current legislation allows for termination of these licences with 2 years’ notice, if this is considered appropriate as part of any future digital switchover).

As part of this consultation process, views were also sought on the current restrictions on the capacity of community radio stations to raise money through advertising and sponsorship.

Since 2015, community radio stations have been able to raise £15,000 per year from commercial sources. For stations operating in the locality of a small commercial station, where that commercial station has not taken advantage of provisions introduced into the Broadcasting Act 1990 by the Digital Economy Act 2010 relating to where they can produce ‘locally-made’ programming, this is an absolute restriction.

Stations whose local commercial service has taken advantage of those provisions are allowed to take an additional level of income from advertising / sponsorship (potentially up to 50% of their annual income above the £15,000 base). Stations with no such local competition can raise 50% of their annual revenue above £15,000 via commercial avenues.

The purpose of these restrictions was both to help protect the essential character of community radio as not-for-profit organisations that provide social gain and ensure impacts on local commercial radio from the development of community radio were minimised. The restrictions were also designed to encourage community radio stations to build their local presence and strengthen their connections with their listenership.

However, Ofcom advises that just 5 community radio stations remain subject to the absolute restriction of being able to raise just £15,000 per year. Similarly, there was some evidence that the 50% rule – even with the relaxation of the limits in 2015 – has limited the scope of community radio stations to grow and develop, particularly in locations where community radio stations are operating that do not play host to commercial radio services.

The consultation therefore sought views on whether the existing provisions relating to advertising remain appropriate and whether protections were still needed for smaller commercial stations whose coverage overlaps with that of a community radio service.

The response to the first proposal, related to the renewal of community radio licences, was strongly in favour of increasing licensing renewal timelines. Community radio stations were generally in favour of increasing the licensing period by 5 years, a longer fixed period such as 10 years, or in perpetuity, with strongest support for a further 10 year extension. This approach was favourable to community radio stations as it was seen to give them more time to develop and grow within their communities.

However, although fewer in numbers in terms of respondents, most commercial radio stations advocated for the readvertising of licences. This suggestion was largely based on the argument that the readvertising of licences would encourage new entrants into the community radio space and result in greater adherence to programming commitments. With these comments in mind, the government believes the most appropriate approach is a 10 year extension for all licences.

As regards to the proposed relaxation of restrictions placed on community radio’s capacity to generate revenue through advertising and sponsorship, responses from community radio stations generally favoured a relaxation of restrictions with most respondents, including the Community Media Association and UK Community Radio Network arguing for a complete lifting of advertising restrictions.

However, again fewer in numbers in terms of respondents, commercial radio stations argued that advertising restrictions should remain unchanged. Radiocentre proposed that any change to advertising restrictions should be approached with caution, in order to ensure that proper safeguards were put in place to protect smaller commercial radio stations that may be operating in the same regions as community radio stations.

Given the generally strong support expressed for the relaxation of advertising restrictions, the government therefore proposes to amend the Community Radio Order 2004 to remove all restrictions placed on community radio stations in relation to advertising and sponsorship.

However, the government remains concerned about the potential impacts of this change on small independent stations and where there is currently a £15,000 restriction in place. We have noted carefully representations made by the Community Media Association and UK Community Radio Network as well as those from commercial stations including from stations affected. Having considered this carefully, we have decided to retain limits for these community stations and review this after 2028 but, in recognition of the impact of the restrictions, we will lift the threshold to £30,000 per year with effect from April 2025.

Summary of responses received

The consultation had 44 responses. We are grateful to everyone who took the time to respond and share their experience, views and suggestions. All valid responses were considered in the development of policy and this government response.

Responses received were attributable to members of the public, Members of Parliament, current community radio licence-holders, and industry bodies. A list of industry respondents is presented in Annex A.

Feedback on option 1

Option 1 - Do nothing: Make no change to the legislation, but instead to allow licences to expire and be readvertised by Ofcom in accordance with the legislation as it currently stands.

Whilst a significant majority of respondents did not support this option, some respondents – mostly from commercial radio – put forward arguments in favour allowing licences to expire after their final renewal and for the expiring licences to be readvertised by Ofcom and awarded after a competition.

Specifically, respondents argued that:

• There remains a significant audience for analogue (AM / FM) stations. As such, the readvertising of community radio licences is an obvious and effective way of encouraging new entrants into the space as readvertising the licences would invite a wide range of expressions of interest. It was also suggested that a fast-track renewal could be put in place if there were no other interested parties. In its response, the Voice of the Viewer and Listener (VLV) observed that: ‘Due to limited FM spectrum available for community radio, we understand that unless licensees choose to terminate their licence or it expires, new entrants to the sector are effectively barred from entry which results in less competition, fewer fresh ideas and less innovation.’

• There was some concern that automatic renewal of licences could extend the broadcasting period for some community stations, resulting in a weakening of commitments to providing social gain. Better Media observed one such risk associated with extended renewals: ‘Community radio stations operating for such an extended period may no longer align with their original social gain commitments, or with the needs of their intended audience. It is essential to recognise that the needs and dynamics of specified communities will evolve and change over such extended periods.’

• One online commercial station argued that if advertising limits were to be lifted, all community radio licences should be automatically readvertised to enable new entrants to compete for them.

Feedback on options 2 and 3

Option 2 - Allow the extension of licences for a further 5 year period, or a fixed period longer than 5 years without condition.

Option 3 - Allow the extension of licences in perpetuity as is the case for community digital sound programme (C-DSP) licences (noting that current legislation allows for termination of these licences with 2 years’ notice, if this is considered appropriate as part of any future digital switchover).

The majority view from community radio stations and from the Community Media Association and UK Community Radio Network was strongly supportive of the renewal of community radio licences. The main arguments from respondents included:

• Community radio stations have already invested significant resources (both financially and in terms of volunteer time) to build and develop stations to ensure they provide a unique service to their communities. In their joint submission, the Community Media Association and UK Community Radio Network noted: ‘There is overwhelming support for allowing stations to continue past their current limit of 20 years, in that time stations have invested a significant amount of resources, funding, & volunteer time to develop and build their stations, all of which means they are quite often an integral part of the community they serve.’ The readvertising of community radio licences was therefore seen to undermine this community-focused work and leave stations in an unstable position.

• Taking steps to reapply for licences would inevitably involve significant costs and resourcing being diverted from programming and digital service development to the application process. As one respondent stated: ‘At the very least a licence re-application process for existing stations would divert precious human and potentially financial resources away from station’s primary objective of serving their target communities, as well as burdening Ofcom with much unnecessary administration.’

• The readvertising of licences could give rise to disruption in the provision of services from community radio, with the worst case scenario being that services are disrupted to the point of no service being provided at all. As observed by one comment included in the Community Media Association and UK Community Radio Network’s joint response: ‘Preserving the status quo is good for the community. People know what to expect from their community station and it would be a loss if stations were to close or face disruption from a re-advertisement process. Also consider the infrastructure – existing stations often have agreements based on contacts and trust for things like transmitter sites.’

In response to the specific proposal that licences be extended for 5 years, respondents were not generally attracted to this timeframe. Specifically, it was argued that:

• An additional 5 year licence renewal period would not give stations the security to be able to make long-term plans nor guarantee their development. It was argued that over the past 20 years, community radio stations – both individually and collectively – had proven their value and should not have to go through a licence renewal process every 5 years. Longer time periods were therefore looked upon more favourably.

• However, a smaller number of respondents spoke favourably of the 5 year licence renewal proposal, highlighting the potential need for analogue stations to service other community groups in the future. Such groups saw the shorter, 5 years licence as providing a way of potentially encouraging new entrants into the space.

Respondents favoured the proposal that licences be extended for periods longer than 5 years, such as for 10 years. The main arguments for this proposal included the following points:

• Given the view from many community radio stations that the current system of renewing licences every 5 years was no longer fit for purpose, a 10 year licence was looked upon most favourably for the level of stability it could provide.

• A 10 year licence extension would grant community radio stations the time and space to be able to develop their offerings, and further embed themselves within their communities.

• For others who advocated for extended renewal of licences of this kind, it was suggested that community radio stations should come under some form of review to ensure that they were still meeting the expectations of community radio and delivering on their commitments (i.e. serving the community).

• Other suggestions by advocates of longer-term licences included the recommendation that opportunities for new entrants into the community radio sector should be created. This suggestion hoped to ensure that the renewal of longer-terms licences would not discourage new entrants from entering the space.

• Radiocentre advised that the interests of small commercial radio stations should also be considered. By retaining appropriate safeguards in localities where community and smaller commercial radio stations operate in close proximity, the interests of both parties can be protected and safeguarded for the future.

For community radio stations that were most concerned about the potential burdens that expiring / readvertised licences could place on them, the option of in perpetuity licences was most favourable. Specifically, it was argued by some that:

• The granting of licences with no end date would allow community radio stations to focus on delivering key commitments and serving their communities. For community radio stations servicing small, distinct communities, such as Raidió Fáilte in Belfast, Northern Ireland, in perpetuity licences would allow stations to further develop their voices and roles within the community. It also would create opportunities for long-term investment.

• However, those who did not support the idea of in perpetuity licences argued that they would close off any possibility of new entrants from coming into the space.

• It was also suggested that in perpetuity licences may diminish the level of scrutiny placed on community radio stations in terms of fulfilling and maintaining the essential qualities of community radio (i.e. being not-for-profit and providing social gain).

• Finally, given the ever-evolving nature of community radio and indeed the radio industry more broadly, licences extended in perpetuity may run into difficulty in years to come if there is a formal switchover from analogue to digital in the mid 2030s causing licences to be restructured or revoked.

Feedback on the proposal to relax advertising restrictions

Responses received from community radio stations on the proposed relaxation of restrictions related to advertising and sponsorship for community radio stations were generally in favour of relaxing restrictions. One community station in the North of England commented: ‘The advertising revenue provisions for community radio are out of date and no longer needed to protect small independent commercial stations. As there is no need for such a limit, it should be removed.’ Another observed: ‘The Commercial Radio landscape has changed significantly since these restrictions were implemented with very few standalone commercial stations. Moreover for the vast majority of Community Radio stations their annual turnover is minuscule compared to commercial operators with no significant crossover of the advertising clients of a community radio and commercial radio station. At the minimum the £15,000 allowance should be increased in line with inflation. However we are supportive of all limits being removed…’

The consultation responses highlighted a range of views on the restrictions and the implications of their potential removal:

• For many, the removal of all restrictions relating to the amount of revenue community radio stations can make from advertising and sponsorship would have a positive impact on stations by reducing the administrative burden placed on them and increasing their capacity to generate more money to support and sustain their channels. One community radio station in the South of England drew attention to the impact on long term sustainability: ‘The current limit is unrealistic and is making it ever more difficult to maintain a radio station.’

• Some community radio stations highlighted that the current £15,000 threshold was outdated, and that if the requirements were retained, the threshold should at the very least be increased to fall in line with inflation.

• Other respondents offered suggestions as to the number that the current threshold should be increased to, for example £25,000 or £30,000. In most cases, however, where a new upper limit was not suggested, respondents welcomed a blanket relaxation of limits more generally.

• While considering the impact of relaxing restrictions of this kind, commercial radio respondents and some community radio respondents advocated for the need to consider additional safeguards to help protect the essential qualities of community radio and also to protect the interests of smaller commercial radio stations that might operate within the same local regions.

• A smaller number of respondents – mostly from commercial radio – were against the blanket relaxation of restrictions in order to protect the interests of smaller commercial radio stations. They argued that the retention of the current safeguards was an essential means of securing a fair and competitive market while protecting the unique interests of commercial and community radio.

• While acknowledging the case for relaxation of restrictions, Radiocentre thought that care needed to be taken to avoid negative impacts on smaller commercial stations. Radiocentre advocated for community radio stations to be required to keep a ‘public file’ to drive accountability and transparency. This file would ‘...contain all relevant contact information, the Key Commitments for programming, and the most recent annual report submitted covering the delivery of these commitments.’

• Some other respondents noted that community radio stations that wished to broaden their commercial opportunities in terms of funding and monetisation of content should be granted the option to transition to a commercial radio licence, rather than reforming current community radio advertising restrictions across the board.

Other feedback

The interests of small-scale DAB multiplex operators were also raised within the consultation: Multiplex operator Niocast advocated for a 5 year licence renewal to avoid the unnecessary distraction of having to reapply for licences. However, Niocast argued that renewals should be linked to commitments to take carriage on small-scale DAB multiplexes.

Some respondents raised wider concerns about this consultation process: Better Media highlighted that DCMS had not commissioned independent research as part of the consultation, and suggested that the proposed measures were heavily influenced by large-scale commercial industry bodies and lacked citizen engagement.

Government response

We have fully considered all of the consultation responses.

Extension of licences

In terms of option 1 (the do-nothing option), we acknowledge that readvertising community radio licences may stimulate new entry into the market in some areas and may also incentivise some incumbent stations to reaffirm their commitments to the communities that they serve in terms of providing social gain.

We are doubtful however, about whether there remains a significant audience on analogue for new community radio stations to target given the rapid decline of FM listening and according to Rajar that only 27% of all radio listening (and less than 20% of commercial radio listening) is now via FM. The Digital Radio and Audio Review, published in October 2021, projected that AM / FM listening would fall to between 12–14% by 2030. However, we do acknowledge that there would be some interest in new groups bidding for these community radio licences at least in some cases – for example more in rural or remote areas where there are fewer services or more limited DAB coverage.

The main disadvantage of readvertising the licences – as set out by the majority of community radio respondents – is the imposition of significant costs and administrative burdens on current licence-holders that are already dealing with limited resources. The majority of community stations have a single employed station manager and depend on volunteer networks to fill all other roles. The process of developing and submitting proposals to Ofcom would add to the burdens of these stations. We note also that there was no meaningful desire from the consultation responses for licences to be readvertised.

As regards option 2 (allowing licences to be renewed for an additional 5 or fixed period longer than 5 years, such as 10 years), the responses that we received outlined a number of important and highly relevant benefits of licence renewal to community radio stations, including giving stations the long-term security to plan and develop services, as well as avoiding placing administrative burdens on stations.

In previous licence renewals, the duration for renewal was an additional 5 years, which was seen as a period that would provide certainty to the industry while minimising disruption. However, the community radio stations involved in this consultation highlighted renewing for a period longer than 5 years would be more favourable in order to provide security and guarantee services to their communities. There was also some support for option 3, perpetual licences, but the majority of support from the community radio sector was for a 10 year extension.

The renewing of licences in this way – for longer periods, such as 10 years – was however not supported by commercial radio stations that responded to the consultation. They advocated for the readvertising of licences, or a continuation of the current model of 5 year licence renewals and saw a 10 years renewal or perpetual licence as potentially impacting on essential qualities of community radio as a result of a lack of scrutiny and accountability.

As regards to this tension between the interests of community radio stations advocating for longer licence renewal periods and the interests of commercial radio stations that generally would prefer either shorter renewal periods or readvertising of licences entirely, DCMS recognises the need to protect the valued opinions and interests of both parties.

Taking account of these comments, the government believes the most appropriate approach is a 10 year extension for all licences. While the 5 year licence renewal model has provided an effective means of licence renewal over the past 20 years, a longer licence extension would provide greater security and stability for community radio at a time where the industry is constantly evolving. It would provide security and consistency for individual community radio stations in terms of their capacity to develop content, attract revenue and embed themselves within their communities.

We do not believe the change will have a significant impact on new entrants: small-scale DAB has been rolled out to 59 areas across the UK and there is capacity for new stations to develop on digital radio and via online platforms such as smart speakers – which account for 15% of radio listening and are already an important platform for community radio.

For these reasons, we propose to proceed with making provisions for all licences to be renewed for an additional 10 years.

Relaxation of advertising and sponsorship restrictions

Responses to the proposal of relaxing advertising and sponsorship restrictions were varied and presented a clear difference of opinion between the interests of community radio and commercial radio: community radio stations and industry bodies were largely in favour of relaxing advertising restrictions, while many commercial radio stations were wary of removing the limitations that (in large part) work to distinguish commercial radio from community radio.

Three other major points arose from the consultation that we have reflected on:

1. The interests of small commercial radio stations – particularly those that operate in regions where there is a community radio station – must be given careful consideration in order to ensure that their ability to create content and drive revenue from advertising is not undermined by the relaxation of advertising restrictions for community radio.

2. The current upper limit on community radio’s capacity to generate revenue through advertising of £15,000 has not been adjusted since the Community Radio (Amendment) Order in 2015. As such, the limit has fallen out of line with current levels of inflation and is impeding community radio stations from generating the revenue that they need to sustain their channels.

3. As is the case with the renewal of licences, we are keen not to place any additional administrative burden on community radio stations that are already dealing with limited resources (both in terms of volunteer time and financially). As such, the move to relaxing advertising restrictions would also work to reduce the administrative time spent on reporting and managing advertising activities.

The consultation responses provide clear evidence that the current advertising and sponsorship restrictions constrain many community stations from being able to develop their services and limit their ability to develop on DAB or online where, increasingly, audiences are tuning in. Since 2015, there has been considerable consolidation in commercial radio and the number of independent stations has fallen as smaller groups have been absorbed by larger groups.

Given the support expressed for the relaxation of advertising restrictions from community stations in the consultation, allied to the potential benefits both in terms of potential revenue streams for community stations and in terms of reducing burdens on stations and Ofcom (e.g. the need for stations to report on their revenues their annual return to Ofcom), the government proposes to amend the Community Radio Order 2004 to remove all restrictions placed on community radio stations in relation to advertising and sponsorship.

However, the government is sensitive to the points raised by Radiocentre concerning the potential impacts of this change on small independent commercial radio stations where there is currently a £15,000 maximum limit on the amount of advertising and sponsorship they can raise. We have noted carefully representations made by the Community Media Association and UK Community Radio Network as well as those from commercial stations including from stations affected. Having considered this matter carefully, we have decided to retain limits for community stations whose coverage area overlaps with that of a small independent commercial station. In recognition of the impact of the restrictions on the affected stations, we will lift the threshold to £30,000 per year with effect from April 2025.

Next steps

Subject to the necessary approvals, the government will now proceed to draft and lay the Community Radio Order 2025 in order to:

1. Allow community radio licences to be renewed for an additional 10 year period.

2. Relax advertising and sponsorship restrictions related to community radio, with protections written into the legislation to protect commercial radio stations operating in the same regions as community radio stations.

If you have any further comments about the consultation process or this Response, please contact us via the following:

FAO Community Radio Analogue Licensing Consultation
Media and Creative Industries Directorate
DCMS 
4th Floor, 100 Parliament Street 
London
SW1A 2BQ

Annex A: Industry stakeholder respondents

103 The Eye

Better Media

Blue Sky Radio

Buckinghamshire Media

Chiltern Voice

Community Media Association & UK Community Radio Network (joint response)

Cotswold Group

Gateway 97.8

GenX

GTFM

Hitmix

Hospital Broadcasting Association

Leicester Community Radio

Maxxwave

Media, Communication and Cultural Studies Association (MeCCSA)

Mix 92.6

MônFM

Niocast

Oldham Community Broadcasting

Pure West Radio

Radio Exe

Radio Leyland

Radio Plus

Radio Sherborne

Radiocentre

Raidió Fáilte

River Radio

Rutland & Stamford Sound

Seahaven FM

Stafford FM

Sunrise FM

This is the Coast Ltd

Viamux

VLV

WCRN Cymru

Winchester Radio

YorkMix

As noted above, a number of additional responses were received from individuals. All valid responses were considered in the development of policy and this government response.

Annex B: Consultation questions

Question 1: Do you favour allowing all community radio licences held for 20 years to expire, and if so, why? 

Question 2: What would be the probable impact on individual stations and the wider community radio sector if licences were allowed to expire and be readvertised in accordance with the existing legislation? We would be interested in the potential benefits in terms of encouraging new entrants to the sector, and what would be the cost and other impacts for community radio in rebidding for licences?

Question 3: What would be the likely impact on the community radio sector of a further 5 year or 10 year extension of licences?

Question 4: What would be the likely impact on the community radio sector of allowing licences to be extended in perpetuity - mirroring the position for digital sound programme (DSP) service licences and community digital sound programme (C-DSP) service licences?

Question 5: Should the current restrictions on community radio stations’ ability to raise revenue through advertising and sponsorship be removed? If so, is there a need for any safeguards?