APPENDIX 1
LETTER TO THE CHAIRMAN OF THE COMMITTEE
FROM THE SECRETARY OF STATE FOR CULTURE, MEDIA AND SPORT
I am responding to your Committee's Ninth Report
for 1999-2000 on the Report and Accounts of the BBC for 1999-2000.
The Report makes a number of recommendations on BBC
strategy and on issues of transparency, which I found most interesting.
These are matters for the BBC and I am sure the Corporation will
give them full consideration. As the Committee will know however,
in a number of public statements, I have shared the view you take
about the importance of the nature of BBC One and Two, and the
balance between them. I hope the BBC will take note of what the
Committee has said.
You have also reiterated a recommendation made in
your December 1999 Report on The Funding of the BBC that
the £5 premium payable on the Quarterly Budget Scheme (QBS)
television licence should be abolished. May I first of all acknowledge
the error in the Department's response to the Committee's earlier
recommendation: as your present Report points out, the instalments
under the QBS are not payable wholly in arrears, since the first
instalment is paid on the date the licence is issued. I apologise
for this error.
Your Report also correctly points out that the Government
is responsible for the legislation underpinning the QBS. However,
the BBC is responsible for the administration of all the television
licence payment schemes and the Government, in introducing or
changing the structure of any such schemes, needs to take account
of their practicality and their implications for the BBC, as well
as the needs of licence payers. The important aim must be to ensure
that a fair and open choice is available to the public.
The £5 premium on the QBS reflects the fact
that nine months of the licence fee are paid in arrears under
the scheme. As explained in our response to the Committee's previous
Report, we understand from the BBC that all those who use the
scheme have been informed of the alternative annual and monthly
payment options, for which no premium is payable. Despite this,
the QBS remains popular, with over three million members. The
availability of the scheme adds to customer choice for licence
payers.
The Government is therefore not persuaded of the
need to abolish the £5 premium on the QBS. To do so without
adjusting the timing of payments under the scheme, so as to bring
them into line with the other instalment options, which are operated
in such a way as to be revenue neutral to both the BBC and licence
payers, could prompt a drift from other schemes to the QBS, which
would have significant cashflow implications for the BBC.
The Committee recommends that a leaflet explaining
all budget schemes and making clear their financial implications
be made available at all Post Offices. The BBC as Licensing Authority
is responsible for the production of literature and other publicity
on easy payment methods. However, the Government accepts the importance
of ensuring that QBS members are kept fully informed of the alternative
payment options. I understand that the BBC propose to introduce
for one year, from 1 January 2001, an amendment to the renewal
letters sent to each member of the QBS scheme. The letters will
highlight the £5 premium for paying by QBS and will offer
the opportunity to transfer at the time of renewal to either of
the other two direct debit schemes. I welcome this proposal from
the BBC, and will watch carefully to see what its impact is. Active
promotion by the BBC of the annual and monthly direct debit schemes
as alternatives will enable licence payers to make an informed
choice whether or not they wish to remain on the QBS.
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