However, the Channel 4 Annual Report, published by the committee today (14 December), welcomed Channel 4’s new remit and self-reliant model, as defined in the Digital Economy Act.
The report said the remuneration package of former chief executive Andy Duncan was "unacceptably high". Duncan received a total of £1.481m in 2009, including £731,000 in lieu of notice
The basic salary of David Abraham, who became Channel 4 chief executive on 4 May 2010, is £490,000, with a maximum performance-related bonus of 50% of basic salary.
The committee said while it "deplores a decision process that previously inflated the remuneration packages to indefensible levels, it welcomes signs that Channel 4 is now taking steps to adjust senior remuneration downwards".
The report also recommended the government reviewed Channel 4’s governance arrangements, to determine whether they were "fit for purpose", as it was not convinced Channel 4 was "sufficiently accountable for its output outside its core channel".
The report concluded that the Digital Economy Act set out sensible primary functions for Channel 4 but that as aligning its portfolio with those functions would not be easy, it was essential there was "adequate external scrutiny" of the process.
In response, a Channel 4 spokesman said: "We note the committee’s comments on the external accountability arrangements, but remain confident the enhanced framework set out in the Digital Economy Act, coupled with the duties on the Channel 4 board, is appropriate."
Channel 4’s audience-grabbing show, ‘Big Brother’, will not return next year and the committee said it was "encouraged" by the decision to replace it "with a more balanced and diverse schedule".
However, the committee said it did not underestimate the size of the challenge facing Channel 4 to achieve this, while holding on to ratings, and it would pay close attention next year to Channel 4’s assessment of how successful these efforts had been.
The report urged Channel 4 to increase the proportion of UK-originated commissioning from the nations and regions, and proposed a 15% medium-term target for network spend on originated programming coming from the nations.
The committee also raised concerns that by including Channel 4 in Schedule 7 of the recent Public Bodies Bill, the government would be allowed to privatise Channel 4 simply through introducing secondary legislation.
The report said: "We call on the government to explain why Channel 4 is included in Schedule 7 of the Public Bodies Bill and – unless there is good reason – to remove it."
A spokeswoman for Channel 4 said: "Channel 4 welcomes the House of Commons Culture, Media and Sport committee’s report, and in, particular the call to remove Channel 4 from Schedule 7 of the Public Bodies Bill and the support of our redefined remit as enshrined in the Digital Economy Act.
"We will now digest the committee’s report in full."