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Training and Education
21. Mr. David Kidney (Stafford): What plans he has for increasing work-based training and education for young people in the armed forces. [109422]
The Minister for the Armed Forces (Mr. John Spellar): All three services are actively involved in a range of projects designed to improve access to training and education at the workplace, as follow-on work to our learning forces initiative. That involves considerable and widespread investment in interactive learning facilities and in computers with internet access. However, those measures are not targeted specifically at young people; they are aimed at all members of the armed forces.
Mr. Kidney: I thank my hon. Friend for that answer. Has he held any discussions with his ministerial colleagues at the Department for Education and Employment about the proposed new connection service? Will he ensure that the education and training benefits of a career in the armed forces will be fairly presented to those young people who avail themselves of that service?
Mr. Spellar: I am pleased to say that we are co-operating very well with the Department for Education and Employment, not only in this area but also very much in the area of craft apprenticeships within our establishment. We certainly believe that, as a result of this and other initiatives, the armed forces provide an excellent career for young people, and we hope that the Department for Education and Employment and education authorities throughout the country will help to get that message across.
BBC (Funding Review)
3.30 pm
The Secretary of State for Culture, Media and Sport (Mr. Chris Smith): With permission, Madam Speaker, I should like to make a statement setting out the Government's decisions on the future funding of the BBC.
I should say at the outset that, together with my right hon. Friend the Leader of the House, I gave the most careful consideration to the Opposition's formal request for a delay in the making of this statement until tomorrow. However, because of the intense speculation that there has been over the past few days and because of the commercially sensitive nature of some of the information that I have to give, I thought that it was important to come to the House at the very earliest opportunity.
The future funding of the BBC is a matter that has generated considerable interest, because the BBC is an institution which is central to the United Kingdom's view of itself and of the world.
I want to leave the House in no doubt about the Government's commitment to public service broadcasting and to retaining the BBC at its heart. The BBC is the UK's most important cultural institution, and we have a duty to ensure that it can continue to play a central role in the nation's life. Specifically, the BBC should provide a strong and distinctive schedule of benchmark quality programmes on all its services and should drive the take-up of new digital and on-line services. A strong BBC is crucial in ensuring that everyone can have access to information, news, education and current affairs, using efficient modern methods, so that we can build a society for the 21st century on the solid foundations set down for us in the 20th.
We welcome the fact that the BBC's main priorities for the next seven years are: improving established services; expanding education work; developing interactive services; and devolution in national and regional broadcasting. We particularly welcome the BBC's intention to re-establish BBC 1 as the corporation's flagship, its commitment to education--in particular learning support for schools and for lifelong learning--and the exploitation of new learning possibilities opened up by interactivity. We also welcome the BBC's plans for enhancing services in Scotland, Wales and Northern Ireland, together with a greater regional emphasis within England.
It is to enable the BBC to deliver these priorities that I am prepared to offer it more support. We shall be keeping the BBC's implementation of these plans closely under review, and ensuring that it keeps the commitments that it makes in return for that additional support. The BBC must understand the basis of our decision and continue to satisfy Parliament that it can and will deliver.
I want to leave the House in no doubt that to achieve this vision and to improve its services, the BBC needs to raise its game; it must become even more cost-effective and quality conscious. That is why we are not going to allow the BBC the massive injection of funds that it has sought from the licence fee--an increase reaching more than £700 million a year by 2006. We are setting it a number of challenges, in terms of sources of finance and in operations.
In our consideration of these issues, we have been enormously assisted by the work of the independent review panel into the future funding of the BBC chaired
by Gavyn Davies, which reported last summer. We asked the panel to examine options for providing the BBC with additional funding, assuming that the licence fee remains the principal source of revenue during the current charter period. The panel was also requested to consider the arrangements under which the BBC achieves a proper balance between its public and commercial services, and the concessionary scheme for pensioners. Broadly speaking, I am today accepting the panel's analysis although not, in every respect, the detailed solutions that it proposed.
The report was published in July 1999 for public consultation, and more than 2,000 responses were received. In reaching our decisions, we have taken account of them. I shall shortly place a summary of responses in the Library of the House, and--provided respondents have given permission--the representations by organisations will shortly be made available by my Department's information centre. I have also paid close attention to the report of the Select Committee on Culture, Media and Sport and, now that I have taken the decisions on the way forward, I will publish the Government's response to it as quickly as possible.
I should also mention that the Chairman of the Select Committee, my right hon. Friend the Member for Manchester, Gorton (Mr. Kaufman), has apologised to me for the fact that a hospital appointment prevents him from being with us this afternoon.
Today, I am also placing in the Library of the House the report of the independent consultants, Pannell Kerr Forster, entitled "Review of the BBC's Financial Projections", which provided a key input into my decisions on finance, together with my Department's chief economist's analysis and a copy of my letter to the chairman of the BBC, which will set out the detail of this settlement.
I shall now deal with the Government's decisions under four headings--finance, programming, transparency and licence fee concessions. They provide a balanced package of measures, which I hope can be widely welcomed.
We accept the judgment of the Davies panel that our vision for the BBC cannot be realised within the existing funding framework. We agree with the panel that, without the BBC's provision of high-quality free-to-air digital services, the penetration of digital television could end up being capped at around 50 to 60 per cent. of the population. The first place to look for new funding should be self-help by the BBC; new licence fee funding should be secondary. We are therefore providing for an increase in licence fee funding that will raise on average around £200 million per year between now and 2006. In addition, however, we are challenging the BBC to help itself by increased efficiency savings, and raising more revenue from its subsidiaries, to the tune of £490 million by 2006-07, over and above the £600 million which it itself estimated.
That figure presents the BBC with a higher target than that envisaged by the Davies panel and is in line with the conclusions of the independent analysis of BBC finances that I commissioned. It means that we are demanding, over the period of this settlement, that the BBC generates more than £1 billion from self-help. As envisaged by the Davies panel, a proportion of the proceeds should be reinvested in commercial businesses.
We will leave it to the BBC how it meets the challenge, but we are leaving the BBC in no doubt that we expect it to achieve the figures set out here by efficiency savings, partnerships, joint ventures, reductions in bureaucracy and other means. We believe that the licence fee settlement, together with self-help, should yield enough to ensure that the BBC enhances established services and develops a significant foothold in the digital world.
There has been considerable debate on the method of raising additional funding for the BBC. The review panel put forward the alternatives of a digital licence fee set at £24, which would "fade away" as the normal licence fee rose to meet it, or an increase in the general licence fee payable by all. I have decided not to adopt the new mechanism of a digital supplement payable only by those households with digital television. Although I accept that there are good arguments for such a solution, on balance I believe that the benefits of the increased funding will be available to all through improvements in the BBC core services, and, in the case of educational programming, also through schools. Furthermore, it is my view that switch-over to digital will take place this decade, so the time has now come to recognise that digital television will soon be the norm.
Following my announcement in September, it is now clear that digital switch-over can happen sooner than was envisaged by the Davies panel. Against my belief that digital television brings benefits to all, it would be wrong to signal that it is something special and only for the few. I am therefore going for the general licence fee option, and an increase of 1.5 per cent. over the retail prices index in each year starting in April this year. That means an increase of 3p per week above inflation each year. On 1 April this year, the licence fee will therefore rise by £3. It also means that for each pound that the BBC receives from the licence fee, it is expected to generate almost the equivalent through self-help. I shall shortly be laying regulations before the House in relation to the licence fee from 1 April.
The Davies panel proposed a package of reforms in the areas of transparency, fair trading and accountability. We support the thrust of the panel's recommendations. In particular, we intend to open up the process by which I approve new BBC proposals, and we shall also make the BBC's commitment to fair trading more transparent.
We are making it clear that we do not expect the licence fee to fund strands of the market, such as dedicated film and sport channels, to which the distinctive role of public service broadcasting has little extra to offer. More generally, we shall institute new procedures for the introduction of new services. That will include an opportunity for public consultation before I reach decisions on proposed new services.
We also propose to carry out a programme of reviews of all the current BBC digital services--News 24, Choice, Knowledge and Parliament--to ensure that services are achieving what the BBC assured me they would achieve when I approved them. We propose that a priority for such scrutiny should be News 24.
We shall open the BBC to more external scrutiny. It has, hitherto, been too much the judge and jury in its own cause. I am requiring independent scrutinies of the BBC's fair trading policies and its financial reporting, and I shall
publish both scrutiny reports. In addition, I shall expect the BBC to have its regular fair trading and financial audits carried out by different auditors in future. The fair trading auditor's full report on compliance and risk will in future be published by the BBC.
I shall also appoint independent consultants to carry out periodic examinations of the systems and controls in place to ensure fair trading and of the nature and extent of financial systems in place. Those reports will also be published. All those scrutiny and audit reports will, of course, be available for consideration and questioning by the Select Committee. Finally, we shall also be reviewing the public service role and governance of the BBC in the forthcoming broadcasting and communications White Paper.
That means in essence: a review of the governance of the BBC in the forthcoming White Paper; clear separation of BBC fair trading and financial audits; regular measurement of the BBC's performance against its promises on all new services; independent scrutiny of the BBC's financial and fair trading systems and controls; and regular reviews of progress in achieving efficiency savings and commercial targets.
On concessions, we have already gone beyond the Davies panel's recommendation on assistance for pensioners with the announcement of free licences for the over-75s. I can now announce that we expect the scheme to start on 1 November, subject to parliamentary approval of the necessary legislation. From 1 April, those who will be over 75 on 1 November, or who will turn 75 after that date but before their licence would expire, will be able to buy a short-term licence, lasting till 1 November. From 1 November, refunds will be available in respect of licences already paid for. I have also asked that the BBC will take steps to ensure that all those reaching their75th birthday know that they are entitled to a free licence, and how to apply.
We accept the Davies panel's other recommendations for achieving fairness, and we shall therefore ensure that there is a half-price television licence for blind people from April this year; that subtitling of programmes is further developed; and that the cash easy entry easy- payment scheme is simplified and made more equitable.
There remains the issue of what to do about the accommodation for residential care concessionary scheme, which is the main focus of current concessions. Although the majority of the current beneficiaries are over 75 and will receive free licences, about 130,000 pensioners and mentally and physically disabled people will be left in the scheme. Notwithstanding the drop in the number of people benefiting from the scheme, we propose to keep the existing arrangements for concessionary licences. Therefore, on concessions we are: introducing free television licences for the over-75s from 1 November; introducing half-price television licences for blind people from 1 April; setting new targets for subtitling for new BBC digital services; simplifying and making more equitable one of the key easy-payment schemes; and retaining the current accommodation for residential care concessionary scheme.
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