Examination of witnesses (Questions 100
- 119)
THURSDAY 13 JULY 2000
SIR CHRISTOPHER
BLAND, DAME
PAULINE NEVILLE-JONES,
MR GREG
DYKE, MR
MARK THOMPSON
and MR JOHN
SMITH
100. This is a big part of it though, is it
not?
(Dame Neville-Jones) No, I do not think it is. I would
have said the really important thing that the Governors are going
to consider is whether the programmes are good, distinctive programmes.
Certainly they consider value for money and efficiency of management
but actually it is the programmes that count.
(Mr Dyke) I was earning considerably more money in
the previous job I did. No one in my situation would go to the
BBC for money. I agree with you entirely. Making people redundant
is extremely unpleasant. We keep sending out notes saying that
it is not the fault of the people who are going. The BBC has a
very generous redundancy scheme, quite rightly, to make sure that
it enables people to leave with comfort, which it ought to do.
In the end, we are spending public money. In the end, we are collecting
licence fees. It is easy not to deal with redundancies; it does
not affect your profit and loss account or any of those sorts
of things. In the end, it must be the obligation of the organisation
to maximise the amount of money that it receives from the public
to be spent on the services it then delivers back to the public.
101. That is a good way of putting it but I
see people constantly—I was in the banking world before
this—come in and in four or five years, having exhausted
that, they disappear. You will probably stay there for a long
time. Can I move on to my next question—
(Mr Dyke) Can I just comment. I do not think you can
compare it to a commercial organisation because there is no bottom
line. What you are doing is spending the money on the service
you deliver. It is not going off to enrich the chief executive
or the shareholders of the board or anybody else. Any money you
save you are spending on the service.
102. I just know it is very hard for people
in your profession to go out there and find another job. It is
not easy in your profession. Can I move on to the Davies Report.
The Davies Report recommended that the National Audit Office actually
look at your accounts and you have refused, why?
(Sir Christopher Bland) In the end it is for Parliament
to decide but, first of all, at the moment the NAO is not organised
to carry out an audit of the scale and complexity and with an
international dimension of the BBC's. Our accounts are audited.
103. I know that.
(Sir Christopher Bland) They are audited, in our opinion,
to a very high standard and my question really comes back to do
we want two audits? That would be double accounting, that would
be a waste, I think, of licence fee payers' money. Do we want
to replace KPMG or whoever does our audit with the NAO and is
that the best organisation to carry out an audit of this kind?
We felt no.
(Mr Smith) Can I add, Chairman, of course in the decision
about the licence fee, and included within it, there was an expectation
that a firm of auditors would be appointed to review our accountability
and transparency. Indeed, Pannell Kerr Forster have been appointed
by the Secretary of State and are right now looking at our accounts,
our transparency and the processes that lead to the Annual Report.
Of course we will take on board any suggestions that they have
for improving the way we do it.
104. Yes. That is not the NAO though.
(Mr Smith) No. The Secretary of State chose Pannell
Kerr Forster.
105. On page 55, for instance, you said—it
is only a little paragraph—"As part of our commitment
to openness . . ." and then ". . . we have published
separate reports, including audited financial statements"
and so you have but the National Audit Office has not gone through
those. I think they might find more savings or whatever but that
is up to you, is it not, as an organisation? I know you were asked
this question at one of the conferences actually and you categorically
said no, you did not want the National Audit Office to audit the
accounts, probably because you were paying so much for the auditors
you have. Can I ask another one. You acknowledge in your Annual
Report the licence fee settlement will enable the BBC to "...
plan for the long term future". Does this mean you can give
an undertaking that the BBC will not go back to the Government
now until after 2006 to talk about the licence fee at all? The
public are interested in this.
(Sir Christopher Bland) Absolutely.
106. They want it to stay.
(Sir Christopher Bland) Absolutely.
107. Absolutely. 2006, categorically?
(Sir Christopher Bland) Yes.
108. Good. Can I turn now to radio. I do not
think anybody has touched on radio yet. Radio 3 has had a marked
turndown in the reach figure, as you call it, in one year from
1999 to 2000. Why is this and what are you going to do to improve
that?
(Sir Christopher Bland) Mark?
(Mr Thompson) I am not very responsible for radio
and I can only give you a general impression rather than detailed
figures.
109. Is nobody here from radio at all?
(Sir Christopher Bland) No. We were restricted in
our numbers, Chairman, quite rightly, and by your chairs, so we
do not have a representative.
(Mr Thompson) I can say that the RAJAR figures both
for share and reach are less stable than the equivalent, the BARB
figures for television. They do move from quarter to quarter,
from each quarterly RAJAR figure significant in most service.
Radio 3's relatively low share figures, the instability there,
may partly be a character of the recording system rather than
the true figure for the movement of people using the service.
(Sir Christopher Bland) We were quite encouraged,
Chairman, by the overall performance of radio which actually showed,
taking all our services together, a rise in share at a time of
increasing and extremely tough commercial competition. We went
back, I think, to a 51 per cent share which in good markets going
up is quite an achievement.
110. That is okay for radio as a whole.
(Sir Christopher Bland) Yes.
111. But this particular one was a huge drop
for Radio 3. There must have been a reason. You can say commercial
radio was against it but it is against all radio stations.
(Sir Christopher Bland) Yes.
112. Why Radio 3?
(Sir Christopher Bland) I think I would like to take
a look at that and come back to you. I would like to analyse that
in detail.
113. If you could, please.
(Sir Christopher Bland) I am not sure I know the answer,
in fact I am sure I do not.
114. Maybe Mr Dyke has not been in that department.
(Mr Dyke) I have been there. I cannot tell you in
detail. We can certainly look at it. Jennie Abramsky, if she was
here, could tell you, I have no doubt, in some length.
(Mr Thompson) My viewpoint as a listener, only as
a listener of Radio 3, is editorially it has had an extremely
good year. I thought its programming at many points in the year,
particularly over the Millennium, was quite exceptional. I think
editorially it is in very good shape at the moment.
115. How much did you pay for the rights to
screen the FA Cup Final?
(Mr Dyke) We bid jointly with Sky and we had a confidentiality
agreement between us that neither of us would disclose what was
bid. Therefore, I am afraid I am unable to tell you. I can tell
you that it was considerably less than it would have cost us to
win the recorded rights for the Premier League.
116. When your auditors go in, that figure will
appear somewhere?
(Sir Christopher Bland) Yes.
117. Does it appear in the accounts anywhere?
(Sir Christopher Bland) No.
118. I cannot see it.
(Sir Christopher Bland) No.
119. That is in a global figure, a hidden figure?
(Sir Christopher Bland) Yes.
(Mr Smith) Within the total spend on sport.
(Sir Christopher Bland) I think that is right. These
are bidding wars. The commercial confidence needs to be respected
but the Governors are extremely conscious of the need to look
at spending on sport in particular in terms of value for money.
What we look at in particular is cost per viewer—or listener
if it is radio—hour, compared with other genres of sport
and compared with other genres in general. Sport is a great divider.
There are those who are passionate about it and there is about
half the audience who do not like it at all. The BBC needs to
keep a balance between those two sections of our licence fee payers'
interest. Just to expand though on Greg's comment. The cost per
viewer hour, we estimate that the cost per viewer hour of the
FA Cup package will be about the same as our present cost for
the FA highlights.
(Mr Dyke) Premier League.
(Sir Christopher Bland) Sorry, Premier League highlights.
So it looks in value for money terms a pretty respectable price,
a price we can justify. We paid £20 million last time for
the highlights. We bid, taking a deep breath, £40 million
and lost to a bid of £60 million that we would have had to
raise to £67-68 million to get the rights. We were way, way
behind and even at £40 million we could just about justify
it in terms of cost per viewer hour, anything more we would have
said no to.
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