Select Committee on Foreign Affairs Minutes of Evidence

Examination of Witnesses (Questions 81 - 99)



Mr Rowlands

  81. Welcome. May I say that if The British Council has a close working relationship with this Committee the World Service has no less. We have followed and tried to monitor the activities of the World Service with the same vigour and same enthusiasm. I hope we can maintain that tradition today. Were you sitting in on the exchanges with The British Council?

  (Mr Byford) Yes, I was.

  82. In a way my first question follows up a bit of a line we were pursuing with The British Council. You say in your submission that your analysis is that power is shifting away from governments to business elites. Is this going to be a shift in the whole audience the BBC World Service is trying to reach? Is it going to reach business elites or is it going to reach people?
  (Mr Byford) It may have been saying that in relation to business programming, but we certainly do not want in terms of audience only to get business elites. We actually make it clear, as I think I have done with the Committee before, that we do not just look at the audience as one homogeneous whole. We break the audience into certain groups, whether it is opinion formers and decision makers, whether it is people who are aspiring to a world view and wanting to come through the World Service to connect with that global perspective, the information poor, as you were discussing with The British Council, are obviously a critical audience for the World Service and will remain so and crisis audiences in areas of major conflict where we shall be wanting to reach everybody who is affected by that crisis. There is nothing in this which in any way dilutes the importance of all those groups, it just means we must recognise that we will reach them through different delivery methods.

  83. Do you have a central objective of reaching out to the poorest who can afford to hear you?
  (Mr Byford) Yes. What we have done over the last few years is recognise firstly that audiences should be—not are but should be—segmented and also that there are different broadcasting market bases across the world. Of course the United States is a very different place to Afghanistan in terms of technical delivery and audience needs. We say that in the most developed areas of the world—the United States would be an example, western Europe, Australia—we do not stop people listening to it but the target audience group is opinion formers and decision makers. In many areas of the world, across the developing world, of course we target that group but also those who are aspiring to be connected with other parts of the world and come to that through the World Service. In an area like Afghanistan, Nigeria, Rwanda, we would be not just wanting those groups, but also we would be wanting the information poor as well. In an area of crisis you are wanting to reach everybody.

  84. In our last exchange with The British Council we ended with partnership. May I just pursue this with you? You have created working partnerships with The British Council. How new is this? Have you tended to work in parallel or have you always had partnerships?
  (Mr Byford) The relationship with The British Council has been a long one. What has changed in the last year has been that we have signed a Memorandum of Understanding between The British Council and ourselves on the back of David Green and myself joining the Council and the World Service respectively. We thought that it was important to have some coherence about our relationship. It was not establishing one for the first time. It was just bringing coherence to it. The BBC World Service and The British Council are working on more than 30 projects—once we had assessed that relationship. We have a Memorandum of Understanding which means that Mr Green and myself meet every six months to discuss current projects, to discuss future potential possibilities and for our teams to have an intranet site. That means between The British Council and the World Service, at any given moment, they can click on and see which projects we are working on together, who is involved in them, what the aim is and their timespan.

  85. Are you saying that this new Memorandum of Understanding was just codifying what was already informally being done over a period of time or does it give a new dimension to the working partnership between you and The British Council?
  (Mr Byford) I hope it does both. Its first driver is to make sure that we both know what we are doing together. Secondly, you would rightly be troubled and I would be too, if you asked whether we and The British Council ever meet, ever talk about potential projects, have any understanding of what we are doing together. This is what that Memorandum of Understanding brought: the importance of us coming together at least twice a year with our teams to discuss what we are doing today.

  86. You quoted China as a pilot scheme in one instance but you say there are 30 such other joint projects.
  (Mr Byford) Yes.

  87. Give me a flavour of some of the others.
  (Mr Byford) There is one called "football nation" I know which is bringing together the importance of soccer as a world sport which connects different communities together through us both working together. There is the CELLS project with China. There is drama and play writing, things like that, a number of projects, some last for a long time, some for a short time.

  Mr Rowlands: Sir John has been following with equal vigour your funding arrangements.

Sir John Stanley

  88. May I make a small preliminary point which is not without significance as far as the way the Committee operates? We do try to be user friendly, not least to members of the public and others who take our submissions. You may like to consider an alternative colour presentation which does not have the effect of blanking out all the key lines in your submissions to the FAC when they are photocopied. May I just leave that thought with you?
  (Mr Byford) May I apologise for that? However, I would say that we submitted colour. We would have been aware, had it got to a photostat, that that was what happened. We shall do a different version for the public which they can clearly see.

  89. On the financial side, may I deal first of all with the operating costs side and then with the capital side. On the figures which are in your submission to us, it shows over the next three-year period 2001-02 to 2003-04 that on the operating side you made a bid for £54 million, of which you received £35 million, in other words you have come away with two thirds of what you asked for. If you had had the whole of your bid on the operating side, how would the additional £19 million have been spent? In other words, what are you not being able to do that you would have been able to do if you had got the whole of your operating bid?
  (Mr Byford) That is right, of the total bid we got 78 per cent but in operating terms we got about 65 per cent of it. Where were the shortfalls as against the bid? Firstly in online. Although we say that we want to spend just over £11 to £11.5 million by that third year, actually in the first original bid I think I am right in saying that was taken to £15 million. Secondly, in content terms, we say that we shall be focusing on the Balkans. We would have been wanting to do more in Indonesia and Iran. In FM we would actually have spent more on FM expansion than we are putting in the bid now, because there is a shortfall. We would have spent a bit more on business programming and in capital terms we got all we required but re-phased.

  90. I shall come to the capital side in a moment, if I may. Would I be right in summarising that the increased resource you have got on the operating side is overwhelmingly going to strengthen your online services and particularly in the language you refer to in page 9 of your submission?
  (Mr Byford) It would be right to say that the operating is focused on three key areas: firstly, online development in major languages and all our audio being available on the internet; secondly, FM expansion, although in pecuniary terms that is lower, it is still a very important initiative for us; then a number of content initiatives. One other shortfall we would have had from the original bid was that we were keen to increase our regionalisation of our programming, versioning across the world. We have done quite a lot of that in the last two or three years; we wanted to pursue that harder but the shortfall in the money means we cannot do that at a level we originally hoped.

  91. On the capital side you come away with a full 100 per cent of your capital bid: you bid for £29 million and you got it. Well done you. That is going overwhelmingly on this very big capital investment programme in your transmitters in Cyprus and Singapore, which hopefully will produce a fairly dramatic improvement in audibility in the Middle East and the Far East. Welcoming that, does that mean in terms of your relative priorities that areas like Latin America and Africa are very, very much second priorities? In particular, those of us who in the last Parliament went to South America will have seared on our memories the accounts we received from one British Ambassador of the way in which he was only able to access your short wave by going into his bathroom, standing on his lavatory seat and holding his radio up aloft in his arms. Does it mean that is going to be the only way our ambassadors in Latin American countries are going to be able to hear BBC World Service for the foreseeable future? Is that the implication of what we are being told here?
  (Mr Byford) No, not at all.

  92. Good.
  (Mr Byford) Firstly, in the capital programme, because the Cyprus and Singapore transmitters are up for renewal within the timetable of our overall capital programme and within this spending review programme, that is why they have generated new capital investment for digital capable short-wave transmission. It is important that while stressing much of the focus of it is about online and FM expansion, there is an awful lot of investment going into enhancing short-wave audibility. On the specifics of Africa and South America, Africa will, for many years to come, be a short-wave broadcasting proposition for the World Service, but not only short wave. It is really important that I understand this and all my team understand this. In Nigeria, for instance, if we were only a short-wave broadcaster, we would be in real trouble. We must be on FM in the major conurbations whether it is Lagos, Abuja, Port Harcourt, Kano. We have to be on FM as markets deregulate and more and more stations are available on FM. For us to say we will only be short wave would mean a serious decline in audience. Meanwhile in the major rural areas of Nigeria, to say we will only be an FM broadcaster, would be literally throwing away millions of listeners. We are going to be a short-wave broadcaster there, but also expanding our FM in major conurbations and for certain groups even in Africa the internet will be important but that will be small there. I have just come back from Argentina and Brazil so I know at first hand the problems with audibility in South America. The key for success for the World Service in South America is to enhance our FM and rebroadcasting partnerships in both Brazil and Argentina. The fact that in Buenos Aires we are on FM in English and in Spanish is a key to success, because short wave is very poor there. In Brazil we have rebroadcasting partnerships in terms of radio, but we are also pursuing internet partnerships hard now so that people can access the BBC's service both in Portuguese and in English in medium-wave quality sound minimum, if not FM quality sound on the internet. That should be our delivery strategy for there.

  93. An issue we have pursued over a long period in this Committee relates to the BBC and concerns your fellow organisation BBC World TV. In our various reports we have expressed great dismay at the way in which BBC World TV was knocked off the satellite by the Murdoch organisation, particularly as far as its broadcasts into China were concerned. We have read recent reports that BBC World TV has actually now managed to get back into the satellites over China. Can you confirm that is the case? Can you give us any information as to how that negotiation with the Chinese authorities is going?
  (Mr Byford) Yes, I can confirm in part what you said. Firstly, obviously you understand this, I do not have direct responsibility for BBC World because it is a commercial proposition. However, in the marketplace it is extremely important for World Service, our online operations and World, to be operating effectively together. I visited China in January of last year, where I pursued with the authorities there the ability for BBC World to have a licence in hotels, guesthouses, exactly the same as CNN enjoyed. That was taken up further by Rupert Gavin, the Chief Executive of Worldwide and the Managing Director of BBC World, Patrick Cross. About two months ago we learnt that a licence has been granted for BBC World. That is good news.

  Sir John Stanley: Perhaps we might have an update from BBC World TV on that area.

Mr Rowlands

  94. Could you provide us with an update?
  (Mr Byford) Absolutely; yes.

  95. I do not know whether it was the first occasion when you came before our Committee but it was a rather bruising time when the argument on the whole issue of the identity of the BBC World Service was raging.
  (Mr Byford) I remember it well.

  Mr Rowlands: We should like to pursue those issues.

Dr Starkey

  96. I want to talk about efficiency savings which are proposed to be quite considerable. How much of those efficiency savings will come from frontline journalism and how much from management overheads?
  (Mr Byford) Firstly, the whole strategy based on that document you have seen in the past and today is that rising costs, which obviously the World Service like any organisation faces, should be as much as possible met by efficiency savings internally. We want to continue a programme of efficiency, thereby any investments we do win in spending reviews can be put as much as possible into investments for the future. The efficiency savings programme is on average around 2.5 per cent savings per year. It is complemented by certain strategic savings initiatives such as reduction in short wave in the most developed parts of the world. Let me stress to you that that is not Africa but it is in those areas where we shall not need the level of short wave that we have today and therefore we can re-invest that money into developments for the future. How much of it is in frontline journalism and how much of it is in management? The level of management costs in the World Service, as someone who has worked in many areas of the BBC, are low. The overall level of monies invested outside of content and delivery in the World Service is 11 per cent and we have committed ourselves to taking that down to 10 per cent. Compared to the wider BBC that is a very, very impressive figure. In efficiency savings, what we are trying to do is make what we do in the way we work, in the way we operate, more effective and efficient. We do not want to damage our outputs, we do not want to dilute quality and we do not want to dilute our frontline presence. On the other hand what we must do as well is concentrate and focus on finding more efficient ways of producing our material, eradicating waste wherever possible. I give you one example. We have 43 language services, we have done a very detailed benchmarking exercise, which you would expect, of all language services to look at tiers of management. Where we can streamline and where there can be greater consistency, we should do it.

  97. Can you answer the actual question on how much the savings are going to be made in frontline journalism?
  (Mr Byford) I do not have a precise figure on actual frontline savings in journalism. The whole premise is that we would not be doing that, we would be looking at our operations and seeing where we could find those efficiency savings which make us as effective as we are now and more effective for the future because we are then utilising those savings for developments.

  98. What percentage of your total budget is spent on frontline journalism anyway, to give us a feel?
  (Mr Byford) I would say the vast majority. Taking away delivery, transmission, from the budget, then of the total content the World Service is very much a people organisation. The vast, vast majority of its monies goes in people, whether they are at Bush House or whether they are across the world helping support production of the programming. That is where the vast majority of people are and that is where the investment goes.
  (Mr Hind) May I illustrate that? The five regions the World Service operate with our language services spend around £51 million a year in editorial production costs and in news programming and non-news programming in English we spend about £48 million a year, so very, very significant proportions of the overall World Service budget flow directly into programme making. The key point, just to add to what Mr Byford has said about efficiency savings, is where one can find ways, for instance, of more effectively rostering staff, reducing the cost, then we do that and it does not mean there is less productive effort going in, it just means the resources are used in a more efficient way.

  99. I wanted to move on to take up some of the issues raised by the trade unions. I imagine you have seen a copy of the submission?
  (Mr Byford) Yes, I have.

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