Examination of Witnesses (Questions 60-79)
13 JULY 2004
Mr Michael Grade, Dame Pauline Neville-Jones and
Professor Fabian Monds
Q60 Michael Fabricant: Given that the
governors are making great strides in the direction and have certainly
changed their attitude towards the NAO considerably in the last
12 months, do you envisage a time when the BBC might make great
strides towards Ofcom?
Mr Grade: It is important that,
where we have a common interest we have as much shared ground
and common agreed territory in terms of programme guidelines and
so on. Ofcom is a regulator. The governors of the BBC are part
regulators, but they are governors and the governors of the BBC
are the stewards of the public interest, which includes guarding
the independence of the BBC. Secondly, we are the stewards of
the licence fee receipts. Ofcom has no responsibility for anybody's
money; they are straightforwardly a regulator. That is where the
roles differ; the definitions are very, very separate. I would
resist and so far as I know Ofcom do not have any ambitions to
take over the governance of the BBC. We have a good working relationship
which is in its early days. It is my intention as chairman—and
I have had this conversation with my counterpart at Ofcom and
he is very much in agreement with me—that we work together
harmoniously in the interests of the viewers and listeners. I
think the territory is well defined, the differences are very,
very clear and we have our respective roles.
Q61 Derek Wyatt: Could I ask you to turn
to pages 56 and 57? I note that with BBC World Service you say
in the second column that you lost £16.5 million.
Mr Grade: Forgive me; it is not
the BBC World Service but BBC World.
Q62 Derek Wyatt: Sorry, BBC World. We
had a lunch recently with ITV where we talked about how Britain
was looked at from the overseas perspective. Given the losses
there and given that it is important we have the best British
window overseas, would you be opposed to a joint venture, that
the BBC had BBC World, but actually it had the best programming
from Channel Four or from ITV as a joint thing so that we have
the best of British?
Mr Grade: There are two separate
issues there. One is the finances of BBC World and the second
is whether we can use it as a shop window using other people's
programmes as well. On the first point, we have to worry about
these losses and reach a decision point sooner rather than later
on a solution, either a commercial solution or some other kind
of funding solution. It is very, very high on the agenda presently.
In respect of where we get the best programmes from, I do not
have a problem. So far as I know, the other broadcasters in the
UK who create their own content very jealously guard their ability
to exploit those programmes for the highest commercial return.
If there are programmes which do not have an international market,
as the market will not support them, but they are worth putting
in a shop window, I would have no objection to that at all.
Q63 Derek Wyatt: May I ask you to turn
to pages 78 and 79? I am just looking at the Community Channel.
The Community Channel seems to be a very Reithian idea. I am just
wondering where the BBC stands on community radio? Community radio
is something the BBC does not seem to want to endorse and yet
it seems to me to be right at the core of where our communities
are. Could you explain why community radio and community television
are not something you think the BBC should be involved in?
Mr Grade: I would have to say
that is not a subject I have spent much of my first seven weeks
studying. There are possibly two answers. One is that the BBC
is accused of wanting to be in everything and there is a limit
to the priorities we can meet. Secondly, I believe I am right
in saying that in commercial radio there are licences in the private
sector for community radio which are quite keenly taken up. I
may be wrong on that, but that is my impression.
Q64 Derek Wyatt: This Committee actually
raised the subject of community radio about three or four years
ago. If there are really good community radio stations which cannot
be commercially exploited, cannot attract, do you see the logic
of groups of people saying that if the BBC does not want to do
this, let us have 5% of the licence fee so that at least we can
develop something which is actually in the community.
Mr Grade: I should like to look
at this. I am not on top of this subject at all yet. There is
a role for the BBC more and more clearly to move closer to communities
through online, through DAB radio broadcasting which will free
up spectrum and I have no doubt that there are plans somewhere
in the corporation for expanding into community radio, but they
have not reached me yet. I will make it my business to find out.
Professor Monds: The governors
did take an interest in this topic and have continued to take
an interest. The BBC's policy at a local level is to be helpful
and co-operate with community radio stations. That is a policy
of partnership but it is does not go as far as a financial commitment.
Clearly there is a lot of local knowledge and local support which
can be offered.
Q65 Derek Wyatt: If BBC Worldwide were
either floated or sold or there were a management buyout, whatever
the solutions were, how would you go about evaluating what its
worth is?
Mr Grade: Take independent financial
advice.
Q66 Alan Keen: What are your views on
the difference between providing archive material, as soon as
we can get to that point, free to individuals who are licence
fee payers and selling it on to other people who will exploit
it financially?
Mr Grade: This is a very complex
question and deals with issues of the rights of those who created
the programme, those who do not work for the BBC, writers, performers,
directors and so on, the commercial view of what further exploitation
beyond the BBC is worth for those programmes and we will take
a different view on every programme. What will drive the policy
is to make as much of the archive available through whatever platform
the consumer, the viewers and listeners, find convenient at the
lowest possible point and if it costs us nothing, then we will
pass it on for nothing.
Q67 Alan Keen: I feel I own the archive
as a licence fee payer.
Mr Grade: Yes; I agree.
Q68 Alan Keen: I want it to be free to
individuals like me who have paid for it through the licence fee,
but also I want it exploited as far as possible.
Mr Grade: I agree, but if I make
that programme available to you free, where I could have made
several million pounds selling that programme in the open market,
you would equally be cross with me.
Q69 Alan Keen: I would; yes. That is
why it is complex, I understand that.
Mr Grade: Yes.
Q70 Alan Keen: We hear criticism frequently
from the BBC's competitors about what I would call competitive
scheduling and sometimes it is frustrating for me. As regulators
of the BBC, how would you view this?
Mr Grade: Having been part of
the private sector of broadcasting for a number of years at various
points in my career, we were quite fond of trying to win politically
what we could not win commercially on a number of occasions and
we would stir up a bit of a fuss because the BBC was doing rather
well and we would accuse the BBC of dumbing down, we would get
a few headlines, we would ask why they put this programme against
that programme when there was no commercial need to do it and
so on. We would cry "Foul" and by and large get nowhere,
which is exactly what the outcome should be. It must be left to
the broadcasters. Competition by and large is pretty good for
the viewers and listeners and the same people who might complain
about what you have just complained about, or expressed a view,
are the same people who will be complaining and saying there are
too many repeats on television, which is the opportunity they
get to see the programmes which were scheduled against each other.
I think with the number of platforms available now the scheduling
arguments are really old arguments because of the availability
of platforms and the number of lives that programmes have.
Q71 Alan Keen: I was not complaining;
I was accepting it as a good thing. What is the strategy for capital
expenditure? I am talking about premises and moving premises.
We are all pleased the BBC is staying in Broadcasting House, but
do you have ideas about trying to save money by moving to less
expensive areas for instance?
Mr Grade: I am always interested
in ideas for saving money and, if I may say so, more interested
now than ever. This is going to be a recurring theme as it has
been for the last 10 years or so inside the BBC: how can we save
money? I have been through the property plan for the BBC with
the finance director; it was one of the first things I did when
I arrived. It seemed to me to be rational and sensible. Even if
I disagreed with it, it would be very expensive to unpick it now,
but I do actually agree with it. What is going to be interesting
over the next few years is that the tide is running out of London
and into the regions and nations of the UK and the BBC has an
enormous role to play in seeing how far we can replace the federal
system of ITV which is now consolidated in London not far from
here. There is a big role to play and there will be property implications
for that. The BBC is not in the property business, it is in the
core business of collecting the licence fee and returning it to
our listeners and viewers in the best possible programmes. We
have to manage property efficiently, but there is going to be
quite a number of bits of rethinking on property as our shift
out of London begins to take effect.
Q72 Mr Doran: My first question is on
the role of the governors in this new age of proactivity. I raised
the issue of the independence and the specific example of the
codes of practice which have been published by Ofcom and which
are currently being negotiated. I am interested to know just how
the governors see their role in a situation like that. For example—and
I know this is a hypothetical question—if the independent
producers approached the governors and said they were not happy
about the way things were going, what would the role of the governors
be in this new situation?
Mr Grade: Immediately take it
very seriously and ask why they had not gone to Ofcom. That would
be the first question. Ofcom are in the end the police for that
particular quota. Nevertheless, if it were brought to our attention
that there was a complaint, formal or informal, from the independent
sector, I would regard it as the duty of the governors immediately
to investigate it.
Q73 Mr Doran: So you do not see the governors
as the first port of call.
Mr Grade: No and I do not think
the independent producers would either. The independent producers
are quite aware of the fact that they have a complaints procedure
to go through Ofcom.
Q74 Mr Doran: What mechanism are the
governors likely to put in place just to be aware of what is going
on in situations like this?
Mr Grade: There are compliance
items on the governors' agenda at their monthly meeting. We keep
track of them on a monthly basis.
Q75 Mr Doran: So would it be reported
to you that Ofcom had set a deadline of 31 March and that deadline
had not been met?
Mr Grade: Yes, it would have been;
it was before my time, but it would have been.
Q76 Mr Doran: So you would be aware of
the issue.
Mr Grade: Yes.
Q77 Mr Doran: If you chose, you could
have intervened.
Mr Grade: Yes; I certainly could.
Since there was no animosity in that decision, there was no antagonism
and it was a sensible decision made in the interests of reaching
a sensible agreement and all parties were moving forward with
good will.
Q78 Mr Doran: I am just interested to
know what the mechanism is there. That is what I am concerned
with. Moving on to another area and a totally parochial matter.
We get an excellent service in Scotland from BBC Scotland and
congratulations for that. I was a little bit troubled recently
about the football contract for the broadcasting of football in
Scotland which was won by BBC Radio. I know this is a big issue
and most Saturdays I listen in to Radio Scotland and their programme,
which is an excellent programme. I always had the option, if it
was not covering a match in which I was interested, to switch
to the local commercial radio. Radio Scotland has managed to secure
an exclusive programme which virtually wipes out premier league
football in Scotland from the local companies. Is that the sort
of thing the BBC should be doing? There is less diversity, less
choice now because I am forced to listen to Radio Scotland and
presumably BBC paid more for an exclusive contract than they would
have done for the contract which they had before.
Mr Grade: I do not know the detail.
I would be concerned in principle if the BBC's intervention in
any rights meant a dilution of choice for the viewers and listeners.
I think that is a matter which would be well taken up with the
management.
Q79 Chris Bryant: Many congratulations
on the change of style and tone in this year's annual report.
I note on pages 25 and 13 you refer to the issue of quality and
audience perceptions. On page 25 you say " . . . audience
perceptions that the quality of BBC Television is declining are
worrying, and we need to do more to understand this better".
Then on page 13 you say you are going to work out " . . .
whether the perceived decline in quality relates to the BBC in
particular or broadcasting in general". This just sounds
a little bit like last year's complaint which was that you noted
not enough Asian viewers were watching and listening to the BBC
so you needed to understand Asian audiences better and to find
out whether it was really their problem rather than yours. I just
wonder whether you are doing the same here.
Mr Grade: We live in an age where
the border between perception and reality is quite often very
blurred. If we are going to require specific action from management
in a particular area, we have a duty to inform ourselves as to
where the perception ends and the reality begins. We can help
ourselves in that regard by ensuring that is not a process for
delay and prevarication, that when we decide to look at something,
we will reach a conclusion and a policy decision very quickly,
but it needs to be evidence-based.
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