The BBC is to launch a dedicated Scottish television channel with a new hour-long news programme after a major review of its output and spending in Scotland.

Tony Hall, the BBC’s director general, told the corporation’s staff in Glasgow on Wednesday morning that spending on new drama and factual programming made in Scotland would increase by £20m.

The new channel will go on air UK-wide in the autumn of 2018 with a budget of about £30m – a sum similar to that spent on BBC4, replacing the Scottish programmes currently shown on BBC2.

Lorna Gordon (@bbclornag)

BBC DG Tony Hall says #BBCScotland channel will reflect how Scotland is changing politically, culturally and creatively #scottishnine

February 22, 2017

It will be shown between 7pm and midnight, and include a nightly Scottish-led hour-long news and current affairs programme at 9pm. Hall said the channel would lead to 80 new jobs based in Scotland.

BBC Scotland has spent more than a year developing a Newshour-type programme to replace the Six O’Clock News on BBC1, commissioning a series of pilot shows using different formats, in the belief it would soon see a “Scottish Six” aired every night.

There were reports at the weekend that the Scottish Six proposal had been killed off by Hall and other BBC executives in London, with commentators and the National Union of Journalists furious there would be no substantial new investment in Scottish current affairs programming.

The substantial reforms follow intense debate about the quality and range of BBC programming and spending in Scotland. Only about 55% of the £320m raised from Scottish licence fee payers is spent in Scotland, the lowest proportion among the four nations of the UK.

While the BBC dithered about the Scottish Six proposal, its main rival STV announced plans for a new Scottish, UK and international news programme which will air on its digital STV 2 channel at 7pm from next month – 18 months earlier than BBC Scotland’s new 9pm.

Nicola Sturgeon, Scotland’s first minister, and her culture secretary, Fiona Hyslop, welcomed the added investment, which will increase overall BBC spending within Scotland to about £250m once the process is complete.

Nicola Sturgeon (@NicolaSturgeon)

1/3 Lots to welcome in today's @bbcpress announcement. @scotgov has long argued for new BBC Scotland channel. Vital that it is funded well.

February 22, 2017

Sturgeon had called for a dedicated Scottish channel and a second BBC radio service in her Alternative MacTaggart lecture, chaired by the Guardian’s editor in chief Kath Viner, at the Edinburgh international TV festival in 2015.

But Hyslop and Sturgeon questioned whether the £30m budget for the Scottish channel would be enough. In 2009, a study by the Scottish broadcasting commission set up by the previous first minister, Alex Salmond, had found a distinct channel would need £75m.

Hyslop said: “While the increased investment in both journalism and wider production in Scotland is long overdue, this is a very positive development. [It is] vital that the new BBC Scotland channel has complete commission and editorial independence, and is provided with the funding needed to match ambition.”

Despite Scottish National party MPs concentrating on the proposed Scottish Six, Hyslop has instead pressed for a far wider package of investment. She said Hall’s announcement still did not match the higher proportional sums spent by the BBC in Wales and Northern Ireland.

BBC sources said devoting 70% of Scottish licence fee income on Scottish production meant that in effect, Scottish viewers were now getting £2bn worth of overall BBC output for just £70m a year from their remaining licence fee contribution.

The new investment package is subject to final approval from Ofcom and the BBC’s new unitary board, but Hall said the additional programming and spending was necessary.

In a statement, Hall said: “I said at the beginning of the year that the BBC needed to be more creative and distinctive. The BBC is Britain’s broadcaster, but we also need to do more for each nation just as we are doing more for Britain globally.

“We know that viewers in Scotland love BBC television, but we also know that they want us to better reflect their lives and better reflect modern Scotland. It is vital that we get this right. The best way of achieving that is a dedicated channel for Scotland.

Hall told BBC staff in Glasgow it was the largest investment in Scotland for more than 20 years.

“The additional investment in Scottish drama and factual programming rightly recognises both the need to do more across our output and the huge pool of talent available in Scotland. We do make great programmes here, such as Shetland, Britain’s Ancient Capital – Secrets of Orkney, Two Doors Down and the brilliant Still Game – but we do need to do more.”

BBC executives have admitted that the corporation has failed to keep pace with devolution across the UK, or reflect the different political systems now operating in different nations and regions.

Hall announced on Tuesday there would be a 50% increase in spending in Wales, up by £8.5m, to improve its English-language programming, and its digital output.

Paul Holleran, Scottish organiser for the National Union of Journalists, said the 80 extra jobs and a further 20 newposts to provide news for Scottish local newspapers, was largely due to vigorous lobbying by BBC executives in Scotland, Wales and Northern Ireland to persuade their bosses in London to decentralise far more programme-making and broadcasting.

He said the new 9pm news programme meant Scottish viewers would have the UK’s Six O’Clock News in full, as well as the 10pm bulletin and Newsnight. “This looks to be genuine investment and genuine original material, which will be welcome by all the unions.”