How much longer can this local TV farce go on for before it's put out of its misery?
Presumably for as long as OfCom licences / CoMux contracts persist.
What should happen?
There's a case for a holistic investigation into localism/regionalism across all British media, perhaps a Royal Commission. Without wishing to pre-empt such a thing, perhaps tax concessions for local media (zero-rating local sales etc..) could be offset by means of taxing offshore consumer digital (Facebook, Google, Amazon, Netflix etc...).
Otherwise, well local press will go the way of local radio.
Local television was a worthy experiment, but only that. It didn't work, probably because the model was wrong. So, yes a need for re-appraisal.