House of Commons - Culture, Media and Sport

Select Committee on Culture, Media and Sport First Special Report

Appendix 1

MEMORANDUM BY THE CHAIRMAN OF THE COMMITTEE

1. This memorandum has been prepared in response to the recommendation of the Liaison Committee in its First Report of Session 1999-2000 that all appropriate select committees should assess progress on "live" recommendations and criticisms and report before the rise of the House for the Christmas 2000 recess.[7] The Culture, Media and Sport Committee has considered and approved the contents of this memorandum.

2. This document begins with some general reflections upon the Committee's work in scrutinising the Department for Culture, Media and Sport, including an assessment of the impact of the Committee's two Reports which considered the Department's own role. The Committee's remaining Reports are then reviewed in four thematic sections—on culture and heritage, on media, on sport and on the Millennium. The paper concludes with some overall remarks about Government responses and responsiveness.

3. The Committee has requested and received several memoranda from the Department for Culture, Media and Sport up-dating us on developments relating to "live" recommendations. We have also obtained memoranda from the Heritage Lottery Fund, the Arts Council of England and Sport England. All of these memoranda are being published at the same time as this document.

II. SCRUTINISING THE DEPARTMENT FOR CULTURE, MEDIA AND SPORT

Approach to scrutiny

4. The Committee's approach to its work since its establishment in July 1997 has to some extent reflected the nature of the Department for Culture, Media and Sport. It is one of the smallest Departments of State, but it sponsors more non-departmental public bodies than other Ministries. About 95 per cent of the Department's programme expenditure is spent by quangos.[8] The Department has a great range and diversity of policy responsibilities. The Committee's scrutiny has reflected the Department's range of policy responsibilities, the importance of its quangos and the limited expenditure and administrative responsibilities of the Department itself.

Objectives and Performance of the Department for Culture, Media and Sport

5. The Committee's Fifth Report of Session 1997-98 on Objectives and Performance of the Department for Culture, Media and Sport provided an opportunity to assess the Department's work taken as a whole nearly a year after the Committee's appointment. The Report highlighted five main concerns about the Department's work to that point:

the apparent insufficient priority which was given to tourism in the Department's approach;

the need to tackle under-funding of many sectors within the Department's responsibility;

the importance of closer co-operation with the Department for Education and Employment on sporting matters;

the need for unification of Ministerial responsibility for broadcasting and film and for a more coherent approach to communications issues across Government; and

the overwhelming case against the valuation of non-operational heritage assets for the purposes of Resource Accounting and Budgeting.[9]

6. Since then, there have been some signs of progress with regard to each of these concerns. The Government's response in July 1998 disputed the Committee's contention about the priority given to tourism; a new tourism strategy was subsequently published in February 1999; the Department's new memorandum summarises efforts to ensure implementation of the new strategy.[10] The Government's response argued that the Committee's concerns about underfunding were responded to as part of the subsequent Comprehensive Spending Review.[11] The Department's new memorandum states that relations between the Department for Culture, Media and Sport and the Department for Education and Employment on sporting issues "have improved enormously" in recent times, a welcome vindication of the Committee's earlier recommendation on this point.[12] Ministerial responsibility for film and broadcasting was brought together following the Committee's Report.[13]

7. The Government's reply to this Report was one of the better responses which the Committee received. A number of the Committee's original concerns have been the subject of subsequent action, although it is not clear whether or not in direct response to the Report. On the final issue of the valuation of non-operational heritage assets, the Government's response was non-committal.[14] The new memorandum indicates that the Committee's recommendation has been implemented, with relevant non-operational heritage assets exempt from valuation as part of Resource Accounting.[15]

The Department for Culture, Media and Sport and its Quangos

8. In the Summer of 1999 the Committee renewed its examination of the Department's role in a Report on The Department for Culture, Media and Sport and its Quangos. The Report made recommendations on the following issues:

the role of Funding Agreements and the need for greater transparency of relationships between the Department and its quangos;

the role of the Department's new Quality, Efficiency and Standards Team (Quest);

the speed and method of appointments to quangos;

the role and funding of the English Tourism Council and the British Tourist Authority;

the need for a more strategic approach to the heritage through means of a Heritage Forum; and

the case for a National Cultural Consortium as a national counterpart to the Department's new regional structures.[16]

9. There have been positive responses to some of these recommendations: efforts have been

made to speed up appointments to quangos; Funding Agreements for the English Tourism Council and the British Tourist Authority have been revised in line with our recommendations;

a National Forum has been created to bring together the Department's quangos.[17]

10. However, in other respects, the Government's response to our Report has been less positive. The Committee made the case for a new heritage strategy.[18] The Government reply made no specific mention of this recommendation in its response to the Report which was received by the Committee on 19 October 1999. On 18 November 1999, even before the Committee had published that response, the Government announced in a non-parliamentary forum that it would undertake a review of policies relating to the historic environment. No attempt was made to inform the Committee of this announcement or to relate it to the Committee's recommendation on the very same matter. After I wrote about this matter to the Minister for the Arts, communication from the Department on this subject has somewhat improved.

11. As for other recommendations in this Report, we recommended that, where Funding Agreements between the Department and its quangos were revised, this be announced by way of parliamentary answers which explained the changes and the reasons for them.[19] The Government accepted this recommendation.[20] We viewed this as a "live" recommendation and asked for an update from the Department accordingly. The Government's new memorandum is silent on the matter. Similarly, we recommended that all reports from Quest be published without amendment by Ministers or officials of the Department.[21] The Government responded as follows:

"The presumption is the reports will be published as presented to the Secretary of State. However, the reviews carried out by Quest will cover a wide range of issues and there may be occasions when reports will contain material which is commercially sensitive or should not be published for other reasons."

We asked the Department "whether reports from Quest have so far been published as sent to the Secretary of State". Again, the Department's memorandum makes no reference to this request. The Government has also failed to explain the role played by the monitoring of the performance of quangos against interim targets in Funding Agreements in the outcome of this year's Comprehensive Spending Review despite our specific request that it do so.[22]

III. CULTURE AND HERITAGE

The Royal Opera House

12. The Committee's first inquiry of the Parliament was into the Royal Opera House. Our Report published in early December 1997 described fundamental failings in the management of the Royal Opera House and in the supervision of grants of public funds to it by the Arts Council of England exposed during the temporary closure of the Royal Opera House's Covent Garden home for re-development. We recommended that the then Board should dissolve itself and that the then Chief Executive should resign. We also made recommendations relating to access, ticket pricing and educational work.[23] Although the Chairman of the Board resigned following our Report, the Secretary of State for Culture, Media and Sport did not assume the direct responsibility for the crisis management of the Royal Opera House which we had advocated. Accordingly, we invited him to give evidence to us on 21 January 1998. The Government's response was received the day before that hearing, outlining efforts to reconstitute the Board and reform its corporate structure. We published the response and the further oral evidence received

from the Secretary of State without comment.[24]

13. The Committee further considered developments when it examined Sir Richard Eyre on the outcome of his review of the future of lyric theatre in London. Sir Richard Eyre's analysis of the Royal Opera House's flaws meshed with our own and we published a Report in July 1998 which supported the approach of the Eyre Review and stated that "action in five areas which we have identified—a culture of accessibility not exclusivity, a commitment to education, a mind-set in management attuned to the realities of the national subsidised arts companies of this country, management accounts which attract a sense of ownership and, above all, a business plan for the re-opened Covent Garden which reflects all of these themes—must precede any commitment to increased subsidy".[25] The Government in its response agreed "that any guarantee of increased subsidy must be contingent on these elements".[26]

14. The Arts Council of England has now submitted a memorandum which describes developments since our Reports. The Arts Council claims that progress has been made in improving access to the Royal Opera House, that enhanced importance has been attached to educational initiatives and that financial control has been improved.[27]

The Heritage Lottery Fund

15. In February 1999 the Committee published a Report on the Heritage Lottery Fund, the quango which distributes funds for one of the five original National Lottery Good Causes. The Report concluded that the Fund had already had a considerable, positive impact. We made recommendations on the following themes:

the need for sustained investment in heritage bodies funded by the taxpayer, including the National Heritage Memorial Fund;

the need for greater emphasis on social and economic benefits and support for deprived areas in assessment of applications by the Heritage Lottery Fund;

the need for greater transparency and clarity in the procedures of the Heritage Lottery Fund; and

the need for future appointments to make the Trustees more representative of the United Kingdom as a whole.[28]

16. This Report received one of the most positive responses to any Report from the Committee, most of the recommendations having been made to the Heritage Lottery Fund itself rather than the Department for Culture, Media and Sport. Almost all our conclusions and recommendations were accepted in principle and the Heritage Lottery Fund produced a timetable for introducing the new procedures required to give effect to our recommendations.[29] The new memorandum submitted by the Heritage Lottery Fund indicates that significant progress has been made in implementing a number of the Committee's recommendations and that the Fund remains alert to the Committee's original views and concerns.[30]

HMS Cavalier and the preservation of historic ships

17. The Committee's decision to examine the work of the Heritage Lottery Fund arose in part from our earlier consideration of the case of HMS Cavalier, Britain's last surviving World War Two destroyer. We were deeply concerned that Cavalier's future was in jeopardy and convinced that she could and should be saved. In a Report in February 1998 we recommended early action by the Government and funding bodies to ensure her survival.[31] The Government's response in early May 1998 acknowledged the central importance of finding a permanent home for HMS Cavalier.[32] Following our Report, a Trust was formed to acquire HMS Cavalier and ensure her long-term conservation at Chatham Historic Dockyard. The National Heritage Memorial Fund subsequently agreed a grant to make her purchase and preservation possible. We examined these developments in a further Report published in February 1999.[33] We have subsequently maintained our interest in this project, visiting HMS Cavalier in her new and permanent home at Chatham on 8 February 2000. Both the Government and those closely involved with the ship's preservation have referred to the pivotal role of the Committee's original Report in ensuring Cavalier's survival.[34]

18. Our examination of this case highlighted the urgent need for a national policy to ensure that funding for ship preservation was effectively targeted.[35] The Government initially undertook in May 1998 to "give consideration to establishing a definitive policy on historic ships".[36] In our Report of February 1999 we regretted the Government's wish to devolve such policy responsibility to the Heritage Lottery Fund.[37] The Government's response on this issue was inconclusive.[38] We have now sought and received a further memorandum from the Department for Culture, Media and Sport which states that it expects to receive a final list of historic vessels of pre-eminent significance shortly and that this will inform its policy position. The Government undertakes to keep us informed of progress.[39]

The Performing Right Society

19. In the Summer of 1999 the Committee conducted a short inquiry into the proposal of the Performing Right Society to abolish its Classical Music Subsidy. We did so in response to requests for such an inquiry from the Shadow Secretary of State for Culture, Media and Sport and a former Minister for the Arts. While the evidence we received highlighted the strong case and need for public subsidy of classical music, the Committee accepted the rationale for the abolition of the Classical Music Subsidy and did not make any recommendations for Government.[40] Accordingly, no Government response has been sought or received.

Public Libraries

20. Earlier this year the Committee held its first inquiry into Public Libraries. The Report published in May supported the Government's efforts to put flesh on the bones of the requirement of the Public Libraries and Museums Act 1964 to provide a "comprehensive and efficient" library service by means of new library standards. The Committee made a number of recommendations about what should be included in the final library standards, including the following:

clearer guidance for local authorities on library opening hours;

more effective assessment of issues relating to library location and closures;

more specific guidance on the promotion of social inclusion; and

new standards relating to charging and fine income.

In addition, the Committee recommended that a specific National Lottery Fund should have responsibility for libraries.[41] The Government's response in July 2000 was positive in tone, but provisional in nature. It was supportive of many of the Committee's conclusions and recommendations and indicated that these would be taken fully into account in finalising library standards. The final version of these standards was to be published "later this year".[42] We have now been informed by the Department that publication of the final public library standards document "is not now likely until the end of the year".[43] The Committee will examine that document to assess the impact of our Report.

Cultural Property: Return and Illicit Trade

21. Our most recent Report on cultural issues examined museum and public policy towards the illicit trade in cultural property and claims for return in certain other circumstances. Among the recommendations of the Report were the following:

the Government ought to establish a national database of stolen and illegally exported cultural property under national police control;

a criminal offence relating to trading in cultural property illegally exported or stolen abroad ought to be created;

the United Kingdom ought to accede to the 1995 UNIDROIT Convention; and

the Government ought to consult on the terms of legislation to permit national museums and galleries to return human remains and cultural property wrongfully taken during the period 1933 to 1945 and not subsequently returned.

22. The Government has now sent us an encouraging initial response which accepts this last recommendation.[44] We expect a further response shortly and will examine that document with great interest.

IV. MEDIA

The Multi-Media Revolution

23. One of the most important Reports by the Committee examined the impact on broadcasting and electronic media of new technology and the regulatory implications of that impact. The Committee argued that digital technology, the Internet and broadband communications would require a transformation in public policy. We recommended:

the announcement of an early target date for analogue switch-off;

the creation of a separate Department of Communications;

the introduction of early legislation to create a new regulatory framework; and

the establishment of a new Communications Regulation Commission with oversight of all broadcasters, including the BBC.[45]

24. In the initial Government response submitted to us, it was not possible to identify a single substantive recommendation which was accepted by the Government. For this reason, we declined to publish the reply, which was subsequently issued by the Government in a slightly modified form.[46] The Government's Communications White Paper published on 12 December proposes the establishment of a new unified regulator (OFCOM).[47] We will conduct an inquiry into aspects of the White Paper in the New Year.

Scrutiny of the BBC and its funding

25. We have devoted much time to the scrutiny of the BBC, whose annual income from the licence fee is more than twice the total budget of the Department for Culture, Media and Sport. The BBC had itself proposed that we examine its annual report and accounts as a means of improving its accountability. We have produced two Reports on these documents for 1997-98 and for 1999-2000.[48] In the Autumn of 1999 we conducted a more extensive inquiry into The Funding of the BBC.[49] The main themes emerging from these inquiries on which we have made recommendations have been as follows:

the BBC has to become more transparent in the manner in which it presents financial and other information to the public;

the BBC should be more ambitious in its targets for future commercial income;

the BBC has yet to establish a successful track record in the development of new digital channels and accordingly has failed to make the case for significant increased funding;

the BBC needs to maintain or enhance the investment in and standard of its core television and radio services; and

the current arrangements for the accountability and regulation of the BBC are not sustainable until 2006 and, accordingly, the BBC's future independent regulation should be tackled in the forthcoming Communications White Paper.

26. These Reports have received responses from both the BBC and the Government.[50] The Government's responses have generally been limited in nature, in some measure because of the BBC's independence. The Government accepted our recommendations against the privatisation of BBC Resources and the part-privatisation of BBC Worldwide. It also rejected the proposed digital licence supplement which the Committee firmly opposed.[51] While the Government continues to reject a Committee recommendation that the £5 premium payable on the Quarterly Budget Scheme for paying the television licence fee be abolished, it has acknowledged that its defence of the scheme in an earlier reply contained misleading information.[52] It is likely that the Committee will renew its consideration of some of these issues in the New Year in the context of our inquiry into aspects of the Communications White Paper.

The ITC and the regulation of news scheduling on ITV

27. In the Autumn of 1998 the Committee conducted a short inquiry into ITV's proposals to abolish News at Ten. We recommended that the Independent Television Commission reject ITV's application to change its news schedules and that the Government should review all statutory requirements relating to scheduling in the light of the changing broadcasting environment.[53] The Government response indicated that it intended to review the regulation of scheduling before amending the current Broadcasting Acts.[54] The Committee has subsequently reviewed the consequences of the ITC's decision to permit the abolition of News at Ten, found that the news audience on ITV has fallen dramatically and recommended that the ITC require ITV to reinstate News at Ten.[55] The more recent Report did not require a Government response.