Memorandum submitted by ITV
SUMMARY
1. The ITV Network welcomes this opportunity
to respond to the request by the Select Committee to submit evidence
to its inquiry on the Funding of the BBC. We represent the interests
of the seven ITV companies which own the 15 regional independent
television licences making up the ITV Network. ITV is the largest
commercial broadcasting network in the UK, with 61.6 per cent
share of TV advertising revenue, and 38.8 per cent share of the
peak-time audience.
2. The Report by the Panel on the Future Funding
of the BBC is a considered and useful contribution to the debate
on the role and public purposes of the BBC in the digital era.
ITV supports the Panel's view that the licence fee will, for the
foreseeable future, remain important for the retention of the
BBC's particular public service ethos and to the broadcasting
ecology as a whole. It enables the BBC to be different, by concentrating
on audience reach (reaching as many different viewers as possible),
rather than audience share (maximising the size of the audience),
like commercial broadcasters.
3. However, the Panel believes that the
BBC cannot properly fulfil its responsibilities in the new broadcasting
era without additional funding. ITV does not support this view,
and we certainly do not believe the BBC has produced a strong
case for re-opening the existing licence fee settlement.
4. Over the last few years, the BBC has
embarked upon an ambitious and costly programme of expansion into
new services. With some prioritisation of its activities, the
BBC should be well able to provide core public services and a
reasonable digital offering on existing licence fee income of
over £2 billion, supplemented by income from Worldwide, and
ongoing efficiency savings. The BBC is, according to the 1998-99
Annual Report, in a healthy financial position, with a Group surplus
of £64 million and a cash balance of £235 million, mainly
from the sale of the transmission business in 1997. This supports
the Panel's assertion that "there is no imminent danger of
the BBC becoming a peripheral player in the UK marketplace"[1].
5. In contrast to the commercial television
sector, the licence fee gives the BBC security of income to plan
the funding of its existing channels and new digital ones. The
below-inflation rise of the next two years has been carefully
counterbalanced by the above-inflation rises of the first years
of the settlement[2]
and the transmission sell-off. As late as 1996, in evidence to
the Select Committee, the BBC considered this adequate to fund
their digital plans.
6. We believe the Panel is right to reject
commercial revenue options (advertising, sponsorship and subscription)
as being "profoundly damaging"[3]
to the broadcasting ecology and a threat to the distinctiveness
of the BBC's programme offering. Allowing advertising on the BBC
would reduce the revenues of broadcasters in the commercial sector
and therefore the level of resource which is currently invested
in programme production.
7. We also share the concern of other commercial
operators that the proposed digital licence fee is not a sensible
funding option. Experience to date with box and subscription offers
also shows that the market is extremely price-sensitive. A report
just published by the economic consultancy, NERA[4],
suggests that the introduction of a digital licence supplement
would have a significant adverse impact on take-up and delay analogue
switch-over by approximately three years beyond the Government's
current target dates.
8. The Panel itself has rejected an across-the-board
increase in the licence fee. However, if the Government ultimately
decides, as a result of this consultation process, that the BBC
does need additional funding, ITV believes that this would be
the least worst option. This should not happen during the current
licence fee settlement, and any additional funds raised in this
way must be clearly ring-fenced for new digital services. The
BBC should not be allowed to use this money to bolster performance
of its existing analogue television and radio services.
9. ITV strongly endorses the recommendations
from the Panel to improve the accountability, transparency and
governance of the BBC. We believe these are long overdue and should
be introduced as soon as possible. The BBC represents considerable
value for money in that it can be used by the public in many different
ways (from broadcasting to online services). Nevertheless, it
spends over £2 billion of public money with little independent
or external oversight of this expenditure. The Panel is right
to conclude that this situation needs to be addressed if the public's
confidence in the operations of the BBC and support for the licence
fee is to be sustained. Secondly, if the BBC is to continue to
expand its commercial activities to increase its revenue for public
service programming—as we believe it should—it must
take early steps to address the concerns of the commercial sector
about unfair competition.
10. Whilst some of the reforms suggested
by the Panel could be introduced immediately, it is proposed to
leave more fundamental changes (public purposes, programme remit,
and governance) until Charter review in 2006. ITV believes this
is too late. Digital technology is revolutionising the television
marketplace and changes are being introduced at breakneck speed.
There needs to be a fundamental reassessment of the roles of all
the public service terrestrial broadcasters, and it makes no sense
to consider the future of the BBC in isolation from the rest of
the industry in which it plays a key part. The BBC's future role,
remit and governance should therefore be considered as part of
the next Broadcasting Bill, which the Secretary of State has indicated
will be introduced soon after the next election.
THE LEVEL
OF FUNDING
REQUIRED
11. In Chapter 1 of the Report, the Panel
recommends that an inflation-linked settlement should not be adopted,
because it would "effectively freeze the BBC out of the digital
world"[5].
However, instead of the more than 50 per cent rise in spending
by 2006 proposed by the BBC, the Panel opts for around a third
of this, with a revenue increase of around £150-200 million
a year between 2002-06 (around 2-2.5 per cent real growth per
annum).
12. Although we welcome the Panel's approach
of "sufficiency without excess"[6],
ITV does not agree with its overall conclusion that, without additional
external funding being made available to the BBC, the future viability
of public service broadcasting in the digital age will be fundamentally
undermined.
13. The BBC is not the only broadcaster
able to provide public service broadcasting services. A number
of commercial broadcasters are developing, or have developed,
high-quality public service digital channels offering educational,
factual, drama and news programming.
14. Secondly, an analysis of the 1998-99
Report & Accounts would suggest that the BBC is adequately
funded to retain its benchmark public service role as well as
provide a reasonable number of digital services. Indeed, as recently
as 1996, the BBC's senior management told the Select Committee
that it would have sufficient funds to meet its digital aspirations[7].
In 1998-99, the BBC received, in addition to licence fee revenue
of over £2 billion, a cash return from BBC Worldwide of £81
million. Licence fee evasion fell, and the continued efficiency
drive delivered savings of £105 million. The BBC also had
a cash balance of £235 million—built up mainly from
the sale of the transmission business in 1997—assigned to
it to invest in the transfer to digital and so far unspent[8].
In addition, most forecasts suggest that there will be growth
of about 200,000 households per year which will give a real income
rise of about 1 per cent above the rate of inflation over the
next decade.
15. The Panel rightly challenges the BBC's
full services vision: "we are not convinced that the benefits
would be worth the extra cost. . . we should fund the minimum
BBC services necessary . . ."[9].
However, it has accepted that the BBC should occupy niche markets
(offering dedicated channels, such as news, children's), and that
these services should be publicly-funded, whilst admitting that
it has not had the time to develop a vision of what it is the
BBC should provide. We believe that granting the BBC additional
funds to develop its digital services without first engaging the
public in a serious debate about the role of the BBC in the digital
age will simply encourage further BBC expansionism and deliver
poor value for money to the licence payer.
16. The Panel recognises that the BBC's
finances will remain in relatively good shape for the foreseeable
future, especially vis-a"-vis its main competitor, ITV. The
comparison between ITV and BBC revenues from 1993 to date shows
the BBC has enjoyed a much steeper growth in revenue than ITV
(BBC 35.6 per cent to ITV 27.23 per cent). The BBC also enjoys,
through the licence fee, stability of income which is unlike the
commercial sector where revenue is subject to the vagaries of
the market. Whilst the overall revenue of the commercial sector
is set to grow faster than that of the BBC, this "will be
spread over a dramatically increased number of channels, so that
the BBC's revenue per broadcasting hour will remain relatively
high".[10]
This is why we believe there is no reason to find additional revenue
sources for the BBC.
17. The Panel also comments on rising staff
and talent costs. Whilst it acknowledges the burden of this cost
inflation on BBC resources, it argues that the BBC should seek
to keep down such costs by refusing to enter into excessively
expensive bidding wars. The Panel claims that it is not clear
whether the BBC "needs a particular share of industry revenues
in order to maintain high levels of audience share and reach"[11].
These views, combined with the Panel's assessment of the BBC's
revenue position vis-a"-vis other broadcasters, reinforce
our assessment that the BBC does not need additional funding.
18. The BBC argued in its evidence to the
Panel that any delay in granting additional funds to the Corporation
would mean it losing any possible "first mover" advantage
in the digital world. ITV believes that the digital offerings
that are already available from the BBC mean that there is no
likelihood of it being excluded or marginalised. In fact, we believe
that the BBC's desire to expand into virtually every area of digital
development runs the risk of distorting competition in this nascent
market, undermining commercial investment and thereby damaging
the general offering to the consumer in the long run. The BBC
should offer licence fee funded services which have genuine public
service value and which cannot be provided by the market on a
commercial basis.
19. Thus, we agree with the Panel that the
BBC needs to "prioritise its activities in the digital world
and not seek automatically to expand into every new area of activity"[12].
In this vein, we welcome the Panel's proposals that the BBC should
be required to test new proposals against clear, publicly-agreed
and measurable criteria, and submit them to a rigorous new consultation
process.
THE FUNDING
OPTIONS
20. Chapter 2 discusses a number of ways
to increase the BBC's funding, including commercial sources of
revenue (advertising, sponsorship, subscription), an increase
in the licence fee, and the digital licence fee.
21. ITV welcomes the Panel's support for
the licence fee as the best method of funding the BBC and its
conclusions that it remains the most effective way of enabling
the BBC to play a distinctive role as the core public service
broadcaster and of sustaining the UK's unique broadcasting ecology.
Advertising/sponsorship
22. We support the Panel's conclusions about
the impact of commercial sources of funding on the BBC and other
broadcasters. Although advertising and sponsorship would generate
significant extra funds for the BBC, the Panel acknowledges that
there would be a significant loss of income for commercial broadcasters.
Research prepared for ITV by the Billett Consultancy suggested
that two minutes of advertising per hour on the BBC in peaktime
would earn the Corporation £327 million and result in a £296
million drop in revenue for commercial channels. The loss of ITV's
share of £296 million would make it difficult for ITV to
sustain its current level of programme investment and compete
for high-cost events like the Champions' League.
23. Noting the precedent of other European
countries, where public service broadcasters rely on mixed funding,
the Panel acknowledges that this has resulted in ratings wars,
falling audiences, reduced revenues, impact on programme quality,
and complaints to Brussels about the legitimacy of public funding.
Although the Panel believes there is scope for money to be raised
from commercial website activities, it has also vetoed advertising
on the BBC's new public services because of "seepage"
to the BBC's mainstream services.
24. As a commercial broadcaster with public
service obligations, ITV clearly believes that advertising and
some high quality public service programmes are not mutually exclusive.
However, we do agree with the Panel that the introduction of advertising
would place the BBC under the same commercial pressures as ITV
and other broadcasters, thus compromising its particular public
service ethos. The unique funding of the licence fee enables it
to offer a genuine alternative to that which is offered by the
market. Even part-funding by advertising or sponsorship would
jeopardise this valuable and unique position.
25. We also welcome the Panel's rejection
of other options, including sponsorship, subscription and direct
funding by Government. The Panel points out, rightly in our view,
that each of these forms of supplementary funding "could
change fundamentally the purpose and nature of the BBC's public
services".[13]
Digital licence fee
26. The proposed digital licence fee is
also an unacceptable option. The Panel argues that this proposal
is firmly in the tradition of previous technological changes in
the UK. However, in the case of the switch from radio to TV and
from black and white to colour, the BBC's services were the core
of the improved offering for which people were being asked to
pay. In the case of digital, it is clear that most of those people
currently making the switch are doing so in order to subscribe
to additional commercial services.
27. On page 83 of its Report, the Panel
states: "Surely, those who are prepared to devote a higher
proportion of their income to digital television should also pay
for the enhancements offered by the BBC". But the real point
is that it is unfair to ask those people to pay twice over for
their move to digital. They are choosing to pay for the commercial
offering, as well as additional technology costs, but, as the
Panel points out, the regressive nature of the licence fee means
they will have no choice over whether or not to pay more for new
BBC services.
28. There is also the threat to digital
take-up that will result from the introduction of an additional
financial hurdle. The decision taken earlier this year by ONdigital
and BSkyB to give away free set-top boxes came in response to
an acceptance that financial barriers to entry were slowing uptake.
In ITV's view, the introduction of a digital licence fee supplement
is likely to have an adverse effect on digital take-up. This has
been confirmed by the NERA Report recently published, to which
we referred in paragraph 7 above. We are particularly concerned
that the supplement will, as the Panel itself observes, "be
proportionately a larger disincentive to poor people than to the
better off"[14].
This is also at odds with the Government's position on social
inclusion and potentially could exclude from digital a section
of the population on cost grounds.
Increase in licence fee
29. The Panel rejects an increase in the
licence fee, because it considers it would be unfair that licence
payers should fund additional services for owners of digital
receivers. Secondly, it doubts that there would be political support
for the significant increases which, they claim, would be required.
30. In principle, ITV shares these concerns.
The acceptability of the licence fee as a method of funding relies
on widespread public consensus about the BBC. People need to believe
they are getting something unique which is also value for money.
Recent polls by the Guardian and the Panel itself raise questions
about the level of support for the licence fee. This can only
erode further if substantial increases are made to the licence
fee for services received by the few.
31. However, if the outcome of this consultation
is a decision by the Government to grant the BBC additional funding,
we consider that an increase in the licence fee would be the least
worst way of doing it. But we do not believe that the current
licence setlement should be changed, and so any new funding should
only commence after 2002. Secondly, it is crucial that any additional
resource be clearly ring-fenced for new digital services. The
BBC should not be permitted to acquire additional public financing
to bolster performance of its main terrestrial channels, which
are already well funded.
32. We are concerned at the fact that in
its bid for resources, the BBC failed to specify to the Panel
what more than half of the new money (£400 million) would
be spent on.[15]
It is crucial that any additional money given to the BBC be ring-fenced
for the new services on which the expenditure has been justified.
THE SALE
OF BBC WORLDWIDE
AND BBC RESOURCES
33. The Panel concludes in its Report that
the BBC is right to exploit its assets commercially, but that
it could do so more effectively than it does at present. It therefore
proposed that 49 per cent of Worldwide and the whole of Resources
be sold off.
34. ITV supports moves to allow the BBC
to do more to exploit its assets and generate more income from
its programmes. Worldwide currently constitutes an extensive mixture
of different businesses and joint venture partnerships. It is
using its profitable activities (publishing and programme distribution)
to subsidise a substantial number of loss-making projects, in
particular its new channels which made losses of £20 million
in 1997-98 and £16.4 million in 1999[16].
We believe that changes to the current structure could improve
cash flow to the BBC. However, we are not convinced that the proposal
to sell off 49 per cent of Worldwide will achieve the objective
the Panel seeks. We believe that a minority stake would be insufficient
to provide the private sector with the necessary influence and
control to be able to drive forward a more commercially-successful
strategy.
35. If the sale does go ahead, ITV agrees
that the injection of new private sector skills and money should
take place at holding company level, if it is to have the desired
effect.
36. An alternative option might be to split
Worldwide into a number of smaller businesses that can be sold
off individually. This would enable each commercial business to
enter into private partnerships, which would mean that third parties
bear the risk and there would be no cross-subsidy from the licence
fee for loss-making ventures.
37. Whether or not the sale of BBC Worldwide
goes ahead, the key issue is how to achieve clear and adequate
separation and transparency between the BBC's public and commercial
activities. In ITV's original submission to the Panel, we questioned
the validity—without external scrutiny—of the BBC
Rights Agency's internal market testing procedures of the programmes
it sells to BBC Worldwide. Since BBC Worldwide effectively has
the right of first refusal on a majority of BBC programmes, and
the BBC's Rights Agency only sporadically market-tests the price
of programmes, it is unclear how the Rights Agency knows it is
receiving a proper market price. The concerns about cross-subsidy
that this raises can only be addressed by greater regulatory scrutiny
and/or by making the programmes available on the open market so
that competitors could bid for programmes alongside BBC Worldwide.
38. ITV has no specific objections as regards
the sale of BBC Resources, but we concur with the Panel's concern
that "realising the value of Resources' assets will require
detailed work, as the BBC's important craftbase and therefore
its creative capacity must not be undermined"[17].
39. We agree with the Panel that any monies
raised through the partial sell-off of Worldwide and the total
sell-off of Resources should be retained by the BBC for capital
purposes, not revenue expenditure.
REFORM OF
REGULATORY STRUCTURE—THE
LEVEL PLAYING
FIELD
40. ITV believes that the proposals contained
in Chapter 3 of the Panel's Report represent a real step forward
in the debate about the BBC's future role. As we have already
stated, the continuing validity of the licence fee depends on
public confidence in, and support for the BBC. The fact that,
according to the BBC's own Report and Accounts, only 34 per cent
of people think the BBC is open and accountable should surely
be of real concern.
41. The Panel's Report contains some constructive
and wide-ranging proposals to introduce greater transparency and
regulatory scrutiny of the BBC. It suggests that some initiatives,
such as the reviews by the OFT and National Audit Office, should
take place immediately. But other, more fundamental reforms, such
as changes to the BBC's programme remit, a wide-ranging evaluation
of what new services it should offer, a permanent ongoing role
for the National Audit Office, and changes to BBC governance,
are left to the next review of the Charter in 2006.
42. In ITV's view, this is far too late.
if the BBC is to retain public confidence and support in the much
more competitive and consumer-driven environment of digital multi-channel
television, these changes are crucial and needed immediately.
How else can politicians and the public—as well as the BBC's
commercial competitors—be sure that the licence fee is being
spent appropriately, in ways that best be fit a public service
remit, and that it is not pitched unreasonably high? We can think
of no other organisation in existence today which benefits from
considerable public funding but is still self regulated, with
no measurable remit.
43. It may be the case that some of the
reforms proposed—particularly as regards the governance
of the BBC and the programme remit—require primary legislation,
and hence the delay until Charter review. However, it is inconsistent,
illogical and potentially harmful that the regulatory regime for
the BBC is out of step with that of commercial televison. The
next Bill will consider the future of public service broadcasting
as a whole, and it makes no sense to evaluate the commercial public
service broadcasting sector without the BBC. The next Bill will
also address the future of regulators in a converging world. Again,
it makes little sense to do so without considering the role of
the Board of Governors as part of the regulatory mix.
Governance
44. The Panel expresses concern that "the
Governors are serviced by a secretariat which is part of the staff
of the BBC, and which therefore has to reconcile dual loyalty
to its management and to the Governors". It points out that
this self-regulatory structure "is in sharp contrast to the
arrangements that apply in commercial television"[18].
ITV supports this view. The lack of clear blue water between the
regulators (the Governors) and the regulated (the broadcasting
services) means that the Governors' decisions are not seen to
be as impartial as those of an external regulator. The Panel suggests
there are a number of ways in which this situation can be addressed
at Charter review, either by assigning BBC governance to an independent
regulator or by at least giving the Governors an independent secretariat.
Whilst the former solution probably does need to be introduced
via primary legislation there is no reason why the latter, less
radical solution could not be introduced with immediate effect.
Programme remit
45. The Panel says that "there is a
strong case that the BBC, because of its privileged position,
should have a tighter remit than other broadcasters."[19].
The Report rightly highlights the current illogical situation,
whereby the commercially-funded ITV companies are more strictly
regulated in terms of positive programme commitments per programme
genre than the publicly-funded BBC. It proposes that the CORA
principles (community, opportunity, responsibility and accountability)
set out by Julian Le Grand and Bill New in "Public Purposes
in Broadcasting: Funding the BBC" would lend themselves well
to a number of distinct programme genres, and that this would
be a good starting point for the introduction of assessable performance
criteria. ITV supports this as one possible approach. However,
as stated in paragraph 6 above, we believe that the BBC's programme
remit should be considered in the context of the wider evaluation
of public service broadcasting at the time of the next Broadcasting
Bill, rather than at Charter review in 2006.
Review of new services
46. The Panel's proposals to improve oversight
and transparency in relation to the BBC's decisions to launch
new public services funded by the licence fee are also crucial
if the public and the commercial sector are to have confidence
in, and endorse the BBC's strategy. However, we believe the process
needs to be even more rigorous. The Panel has rightly argued that
the BBC should be more accountable in terms of the new services
it offers. Its public consultations (including the latest one—"The
BBC: 2000 and beyond") are undertaken by the BBC itself in
such a way as to elicit the answers it wants. The BBC does not
explain how much each new service will cost, how it will be funded,
or what trade-offs it is making with spending on core services.
People offered "more" will always say "yes",
if at zero cost. There is also no third party regulatory oversight
of the consultation or the evaluation of responses. The responses
are not made publicly available, which means that, at the moment,
the BBC is able to filter views, as it does in the three-page
document at the end of "The BBC: 2000 and beyond". This
is not transparent and means that there is no independent test
of public attitudes towards the BBC's proposals.
47. The Panel has gone some way towards
addressing this with its proposal that all applications for new
BBC public services should be published in full, and that adequate
time should be allocated for a comprehensive public debate before
the Secretary of State (or an independent regulator) reaches a
decision. However, we consider that a full review of the BBC's
new services (those recently launched, as well as future proposals)
should be implemented immediately, rather than waiting for Charter
review. By then, the BBC will have already spent a significant
sum of money on its new digital services and it will be very much
harder to close down any services that are deemed not to meet
any clear public purpose.
48. The consultation process needs to be
structured differently, as follows:
(i) A review procedure by a third party needs
to be built into the consultation process to enable independent
evaluation of the consultation document and of the responses to
it.
(ii) As part of the review, the BBC should
be required to cost its proposals within its known budget constraints.
This would give respondents and those overseeing the review a
better idea of what the BBC's spending priorities are, and whether
they are a reasonable use of public money.
(iii) Responses to the consultation should
be made publicly available, in the same manner as those to ITC
consultations.
(iv) Each proposal should be assessed in
terms of its effect on the private sector.
(v) Each proposal should be considered against
set criteria which measure its PSB value and in the context of
the service it provides to the British licence payer.
(vi) Final approval for projects should be
given by the Secretary of State.
(vii) There should be a regular review by
the DCMS of the services at periodic intervals and as part of
the Charter renewal process.
49. In evaluating the BBC's proposals for
new licence fee funded services, there needs to be publicly-agreed
criteria against which they can be judged. In our original response
to the Panel, we suggested that each licence fee funded service
should serve some or all of the following public purposes:
(i) Provide a universally-accessible service;
(ii) Schedule programmes and services that
the market does not otherwise provide;
(iii) Innovate, rather than emulate commercial
competitors;
(iv) Nurture new writing and acting talent;
(vi) Schedule landmarks of distinctiveness;
and
(vii) Offer something for everyone at least
some of the week.
Fair trading and accountability
50. The Panel's proposal that the Office
of Fair Trading should carry out a review of the adequacy of the
BBC's Fair Trading Commitment and Commercial Policy Guidelines
is welcome. So is the proposal that, in addition to ongoing financial
audits post Charter review, the National Audit Office should carry
out two separate reviews over the next twelve months of the BBC's
compliance with fair trading policy and the transparency of its
financial accounting. We believe that the NAO should also be given
responsibility for conducting the follow-up to the 1996 review
carried out by Braxton Associates.
51. The BBC has expressed considerable concern
about the proposed role of the National Audit Office and the Public
Accounts Committee. It has suggested that financial scrutiny by
these bodies could open the door to questioning about the BBC's
editorial judgements, thus undermining the BBC's independence
from Government. We believe this would not be the case. Firstly,
like the Select Committe on Culture, Media and Sport, to which
the BBC already reports, the PAC is answerable to Parliament and
not to the Government. Secondly, the role of the NAO and PAC could
be clearly ring-fenced. Indeed, David Davis, the Chairman of the
PAC, has stated in his letter to Gavyn Davies that this would
be the case.[20]
". . . Such improved public scrutiny would not cut across
the proper independence of the BBC. The examinations focus only
on administrative efficiency, and on proper financial management
and accounting. They do not question policy objectives . . .".
David Davis cites work on the BBC World Service and the Arts Council
to demonstrate that there is no interference on matters of editorial
and artistic judgement.
52. ITV welcomes the recommendation that
the BBC use a separate commercial audit firm for fair trading
purposes from that which carries out the financial audit, and
that the Governors publish this report as part of the Annual Report.
53. ITV also supports the recommendation
that the BBC publish a quarterly complaints bulletin on fair trading
and transparency.
CONCLUSION
54. ITV wishes to see the BBC playing a
key role in the digital future and thus welcomes the broad thrust
of the Panel's Report. It is important that the BBC is funded
sufficiently to be the benchmark for broadcasting in the digital
era. However, ITV does not endorse the Panel's view that the BBC
is in imminent danger of being sidelined without additional public
funding.
55. The fundamental problem that arises
with guaranteed public funding is that the public has no effective
choice in the services the BBC is providing, and so there is no
downward pressure on resources. This is why we propose that there
should be a public debate and an agreed consensus about what the
BBC's public purposes should be in the digital era and what services
it should therefore provide on the public purse.
56. If the Government concludes, as a result
of this consultation, that more resource is necessary, an increase
in the general licence fee is the least worst option. However,
it must be clearly ring-fenced to new digital PSB services, and
only commence after the end of the current licence period in 2002.
57. We urge the Government to bring forward
the Panel's key recommendations on the governance, acountability
and public purposes of the BBC to the next Broadcasting Bill.
It is no longer acceptable that the BBC, which plays such a central
role in the British broadcasting ecology, should be regulated
through the Charter and in isolation from other broadcasters.
November 1999
1 p56 Davies Report on the Future Funding of the BBC. Back
2
The licence fee formula from 1997-2002 holds increases for the
five years as a whole to RPI minus 0.05 per cent. This year it
has risen by RPI +0.5 per cent. In 2000-01, it is set to rise
by RPI ¸1 per cent, and in 2001-02, by RPI ¸2.5 per
cent. Back
3
p21 Davies Report. Back
4
"The Impact of a Digital Licence Fee on the Take-Up of Digital
Television", NERA Report prepared on behalf of a group of
commercial broadcasters, cable operators and manufacturers, including
ITV. Back
5
p58 Davies Report. Back
6
Chapter 1 Heading, Davies Report. Back
7
National Heritage Select Committee Report: The BBC and the Future
of Broadcasting, HC 147, 1996-97. Back
8
Annual Report & Accounts 1998-99. Back
9
p38 Davies Report. Back
10
p56 Davies Report. Back
11
p51 Davies Report. Back
12
p20 Davies Report. Back
13
p68 Davies Report. Back
14
p80 Davies Report. Back
15
"In total, the specific proposals by the BBC amounted to
a spend of some £300 million per annum by 2006. This obviously
implies that the remaining £400 million per annum on new
services would be spent in a manner to be detemined at a later
date". Davies Report p41. Back
16
Report and Accounts, BBC Worldwide 1998-99, p. 34-35. Back
17
p100 Davies Report. Back
18
p146 Davies Report. Back
19
p140 Davies Report. Back
20
p198-199, Annex 7 Davies Report. Back
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