APPENDIX 15
Memorandum submitted by Equity
INTRODUCTION
1. Equity is the performers' trade union
representing 37,000 actors, singers, dancers, variety artists
and other performers and related professions. We welcome the opportunity
of submitting our views to the final Report of the Panel chaired
by Gavyn Davies. The BBC is rightly seen as a major player in
the world television market, with considerable success in exporting
UK radio and television programmes worldwide. This success is
in no small part due to the high-quality, diverse original content
produced by the BBC. Equity members have made a major contribution
to the production of this content.
2. In our submission to the Davies Panel,
we stressed that any discussion about the future funding of the
BBC must include consideration of what the BBC should provide
in terms of programming and its wider role within society. In
this context, it is worth rehearsing the reasons why the BBC exists
as a public service broadcaster:
— The BBC has a key cultural role within
the UK.
— It provides, original, diverse, high-quality
programming setting standards for others to follow.
— It protects against the risks of
a media monopoly.
— It has a key role in bridging the
gap between the information-rich and the information-poor, as
more quality programmes are drawn to subscription channels.
3. Without the BBC, this country's cultural
and creative landscape would be dramatically altered for the worse.
We endorse the Government's support for the Public Service Broadcasting
(PSB) remit undertaken by the BBC as manifested in the UK signing
up to the 1997 Amsterdam Protocol on public service broadcasting.
The protocol gives PSB a special place in Europe.
4. In what follows, we have confined our
remarks to those recommendations within the Davies Report that
have particular relevance to Equity.
THE LICENCE
FEE
5. The BBC exports many of its programmes
worldwide. As a result the BBC is a key component of the UK's
creative industries, rightly being championed by the Government
we are concerned that the BBC's commitment to developing new services
could prejudice the delivery of its core programming and Public
Service duties. Although the licence fee cannot be argued to be
the most equitable means of funding the BBC, we are not convinced
of any alternative means of funding the latter. We fully support
the Report's rejection of advertising. But, we should like to
reiterate our concern that there should be no countenancing of
advertising limited to the BBC's digital channels, as this would
set a precedent, which would be difficult to resist at every subsequent
funding crisis.
6. We further welcome the Report's rejection
of other forms of funding such as subscription, sponsorship and
a combined system of public and commercial funding. Therefore,
we endorse the Panel's view that the licence fee in some form
should continue to fund the BBC until 2006.
7. In discussing funding, it is essential
to discuss what the funding is used for. In this context, we would
question the large amount of public money currently being devoted
to digital services that very few licence fee payers are watching
let alone having access to. We should like to re-iterate the concerns
we expressed in our submission to the Davies Panel. We believe
any expansion of new services would have two effects: firstly,
erode the legitimacy of the BBC using licence fee revenue to fund
what would be perceived as overtly "commercial" activities.
And second, and most importantly, threaten the quality of mainstream,
free-to-air broadcasting. Viewers and performers want money being
spent on programming free-to-air and not on new services of marginal
interest to the public, quite apart from money spent on overly
complex bureaucratic and management structures.
8. We feel that limited development in existing
new services such as BBC OnLine might be merited and defendable
as being funded by the licence fee. Otherwise, Equity strongly
believes that the BBC must continue to do what it does best—concentrate
its resources on fulfilling its public service broadcasting remit.
In particular, it must give absolute priority to the making of
high quality programme material, not least drama and light entertainment,
for its two main network channels BBC1 and BBC2, as well as its
national and local radio network. It is quite clear from the evidence
assembled so far that the vast majority of viewers will continue
to look to those channels, whether delivered by analogue or digital
means, for their information, entertainment and education.
9. This would be in line with the Panel's
own view when it argues that "the BBC will have to prioritise
its activities in the digital world and not seek automatically
to expand into every new area of activity" (p20). We believe
such an approach is a better strategy for the BBC than investing
its limited resources, however, they are raised, in a frantic
endeavour to keep up with every technologically possible but financially
highly risky development of new services. In any case the proposed
level for the digital licence fee that has been suggested (£24
a year) will not enable the BBC to undertake all of its plans
in the future.
10. In its submission to the Davies Panel
Equity said that "We are not convinced of the case for a
separate Licence Fee on digital television, as this would be likely
to impede take-up of the new technology". We recognise that
there is a countervailing argument, as expressed in the Davies
Report, that a digital licence fee would be more equitable as
only those people actually consuming this technology would be
paying an additional licence fee. Hence, these people would shoulder
the initial costs of developing the BBC's digital services with
the digital supplement disappearing over time.
11. However, on balance we feel that a better
approach would be to enhance the existing analogue licence fee
so that there is not an impediment to digital take-up. In this
context, on balance we would favour the second option advocated
by the Davies Report. This would sustain the BBC's existing levels
of output and a reasonable investment in its digital future.
THE ISSUE
OF PRIVATISATION
12. Equity strongly believes that the Panel's
proposals concerning the total privatisation of BBC Resources
and partial privatisation of BBC Worldwide are ill-thought out.
Such moves, if implemented would, we believe, have an irreversible
and damaging effect on the BBC as a public service broadcaster
and destabilise the UK's broadcasting ecology. We lay out our
specific concerns in relation to each of these two proposals below.
BBC Resources
13. Equity believes that the proposed privatisation
of BBC resources would result in a deterioration of the quality
of programme making, which would not be in the interest of performers,
other creative contributors, or most crucially the audiences.
As p100 of the Davies Report itself acknowledges BBC Resources
is the "BBC's important craft base and therefore its creative
capacity must not be undermined. And it is essential that any
sale does not detract from the BBC's role as the UK's primary
investor in core broadcast skills".
14. The importance of BBC Resources is shown
in comparison to the independent sector. All the evidence to date
is that the independent sector has failed woefully to invest in
the training of future generations of creative contributors. Furthermore,
the BBC, as the major producer of programmes in the UK has set
standards to which others should aspire. We cannot see how a privatised
BBC Resources could still continue to provide the high-quality
benchmark in programme making skills. It is implicit that the
health of the whole UK broadcasting industry would be compromised
and that the BBC's own digital aspiration would hardly be enhanced.
15. A further problem, if BBC Resources
were to be privatised, is that the BBC would have to buy-in facilities
from the private sector in order to make the programmes to fulfil
its Public Service remit. With no internal craft base to fall
back on, the BBC would have to use licence fee money to pay whatever
the market dictated for the use of technical resources. Such problems
do not seem to have been given consideration by the Panel.
16. Even if one were to accept the Davies
Reports' projection for the amount of money released from the
proceeds of privatisation (£230 million for BBC Resources),
this money would represent only 8.7 per cent of the BBC's income
proposed by the Report for the period 2001-02 to 2006-07 (p 84).
The Report, however, seems to be suggesting privatisation not
as a way of funding digitalisation, but as a way of the BBC realising
its assets. We believe that the privatisation cannot be justified
in terms of any short-term financial advantage, compared to the
damage it would do to the BBC in its role as a publisher-broadcaster.
BBC Worldwide
17. Just as worrying is the Panel's proposal
for the partial privatisation of BBC Worldwide. It appears that
short term financial gain is taking precedence over the long term
interests of the BBC and its ability to continue to reinvest,
the entire proceeds from the exploitation of programme material
back into new production. It seems to us totally unjustified that
the BBC's programme archive, that was built up with licence fee
payers money, should be sold off to private interests, who will
gain income from programming that they had not invested in, in
the first place. Furthermore, licence fee payers would no longer
receive as large a return on programming that had only been made
possible by licence fee money in the first place.
18. It seems unclear why the Panel should
suggest the partial privatisation of BBC Worldwide, considering
the latter's success in recent years with an increase in programme
distribution, a two-third increase in cash flow from BBC Worldwide
back to the BBC over the last two years.
19. If the proposed partial privatisation
of BBC Worldwide were to go ahead it would destabilise the highly
successful and stable agreements that Equity has with the BBC
for overseas sales and other exploitation of programme material.
In determining the performers' share of sales, Equity has always
been conscious of the fact that the balance of the BBC's proceeds
are reinvested in new production and new work for performers rather
than being paid to private share-holders. Therefore, if partial
privatisation occurred Equity would have to revisit the collective
agreement arrangements that it has built up with the BBC. In this
context, we are concerned at the ramifications of the Panels'
recommendation that after the partial sell-off "BBC should
make programmes, formats and rights available to BBC Worldwide
at market prices" (p34).
20. An obvious threat from the partial privatisation
would be dilution of the BBC brand and the ability to market programmes
to a global market, as the BBC would not have sole control of
the manner it can exploit its programming. The selling off of
a large commercial asset for a short-term financial gain would
reduce the BBC's abilities to exploit its archival material and
hence income streams for that material. Losing such a large share
of BBC Worldwide to commercial interests outside the BBC's control
would also seem to make it difficult for the BBC to fulfil the
Panel's hope that the Corporation could "ensure that BBC
Worldwide's aims are consistent with the objectives of the BBC"
(p34).
21. Finally, the Panel's recommendation
would seem to be at odds with the DCMS's own moves to improve
UK television exports as highlighted in the report "Building
a Global Audience". As the latter made clear, BBC programmes,
as marketed through BBC Worldwide, have proved successful in a
number of export markets.
ACCOUNTABILITY
22. We agree with the Panel in its argument
that there should be "a clearer definition of the BBC's public
service obligations in a way that can easily be translated into
performance criteria for assessment" (p35). We should hope
that in the run up to the Charter renewal in 2006 there should
be a full and clear debate as to what these criteria might be.
23. We further agree with the Panel's recommendation
that the BBC "needs to become more transparent and accountable
to the public". In this context, we accept that there could
be a role, as suggested by the Panel for the Office of Fair Trading
or the National Audit Office to review the BBC's compliance with
its fair-trading policy commitment and the transparency of its
financial report. However, as we have argued above, we do not
believe that this should involve the break-up of the BBC through
privatisation.
THE FUTURE
OF THE
BBC AND PUBLIC
SERVICE BROADCASTING
24. The future of the BBC cannot be seen
in isolation from discussions about the future funding of the
BBC. As we have argued above, we believe that the BBC has a key
role as the lead public service broadcaster in the UK. Furthermore,
to guarantee this role, we believe that the BBC should be funded
by the licence fee for the second half of the present charter
and beyond 2006. We endorse the Panel's support for public service
broadcasting (PSB) and the BBC as our lead public service broadcaster
as expressed in several places in the Report.
— "We do believe that PSB, however
defined, can play an important role in the competitive and complex
broadcasting environment of the multi-channel, digital future.
There is good reason to suppose the market, left to itself, will
not provide the broadcasting which our society wishes to foster"
(p137).
— "Free-to-air broadcast programming,
as provided by the BBC, has a claim to remain a focal point for
a shared and diverse culture and the quality benchmark for UK
broadcasting" (p138).
— "Rather than removing the case
for public service broadcasting, there is a possibility that digital
technology may even increase the need for such a broadcaster"
(p208).
— "Public policy in the broadcasting
industry requires a positive force that would: act as a counterweight
to the private concentration of ownership; provide a centre of
excellence which both makes and broadcasts programmes; be large
enough to influence the market and so act as the guarantor of
quality; (and) widen choice both now and in the future by complementing
the market through the pursuit of public service purposes"
(p207). (Equity would argue that the BBC is the existing body
which clearly fulfils these aims).
25. In conclusion, Equity concurs with the
Panel over the long-term sustainability of the licence fee as
a means of guaranteeing public service values: "Whether the
licence fee is sustainable beyond 2006 will depend among other
things on the BBC's own performance, not only the quality of its
programmes, but the maintenance of its ethos and the accountability
of its management" (p145).
October 1999
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