BBC will take the lead to encourage local reporting and re-invigorate democracy

A new charity launched by the BBC will fund local news reporting in a bid to rejuvenate regional journalism and make the media more democratic.

The new organisation, to be called the Local Democracy Foundation, will be funded by local businesses, internet companies and institutions. Local journalists will report on council meetings and also cover crime stories and other news that used to be the mainstay of local newspapers.

BBC director general, Tony Hall, said the flow of information essential for democracy is drying up.

He said he had held talks with tech companies and the government about the scheme, although he insisted the foundation would be independent of the state.

“My goal is to mobilise a powerful coalition behind the creation of a Local Democracy Foundation,” he said. “And, together, to do all we can reverse the damage that has been done to local democracy in recent years and bring about a sea change in local public interest journalism.”

Last week the Cairncross Review – an independent report into the future of the British media industry by Dame Frances Cairncross - said that local news coverage could disappear unless the government provides direct financial support.

It said many local newspapers which are vital to a “functioning democracy” are owned by “debt-laden publishers which have cut investment and sacked hundreds of journalists in an effort to maintain profit margins.”

Dame Cairncross said: “The cost of investigative journalism is great and rarely seems to pay for itself … given the evidence of a market failure in the supply of public-interest news, public intervention may be the only remedy.”

Facebook recently announced £4.5m funding to create 80 local reporting jobs in the UK while Google gives grants to news organisations.

Both social media giants have been blamed by the newspaper industry for taking over their advertising revenue, leading to the closure of many local titles.