FOREWORD AND SUMMARY
The BBC is subject to periodic review courtesy of
the need to renew its Royal Charter and associated Agreement with
the Secretary of State. Charter review and renewal provides the
opportunity for all interested parties to examine all aspects
of the Corporation and its performance and for the Department
for Culture, Media and Sport to develop proposals for the BBC's
next mandate. The current Charter review is the most significant
for a long time; perhaps since 1927 when the first Royal Charter
was granted. This is for two reasons.
First, within the next ten years Britain is expected
to "go digital". The analogue TV signal will be switched
off and the country will enter a brave new world of abundant spectrum
with great potential for increased viewing choice. In addition
to the quantitative leap that this represents, there is also the
qualitative dimension of new routes and devices for receiving
content; increased control over where, when and how that content
is viewed or heard; and new capacity for tailoring content and
interactivity between broadcaster and viewer. In addition to digital
switchover affecting patterns of media consumption, Ofcom asserts
it as "inescapable" that the return expected, in terms
of public service broadcasting, from the commercial broadcasting
sector will reduce significantly over the next decade with the
BBC and Channel 4 left to pick up the burden.
Secondly, there is a strong perception, and some
evidence, that the constitution of the BBC is unworkable and out-of-date
in the light of developments such as: evolving governance elsewhere
in both public and private sectors; economic and technological
developments in the wider broadcasting ecology; changing audience,
and licence fee payers' expectations; devolution; the establishment
of Ofcom; and the findings of the recent Hutton inquiry. It is
unarguable that the BBC governance has evolved extremely slowly
over the years with the Corporation itself citing significant
innovation only in 1972—separate meetings of the Governors
and the executive—and 1997 when the Governors' precise functions
and duties were set out in the Charter for the first time, 70
years after establishment. What is clear is that the BBC Governors'
dual role, as simultaneous champions and regulators of the Corporation,
is, as the Secretary of State told us: "unsustainable".
Accordingly the Committee has identified four key
inter-linked issues and one over-arching question, that must be
tackled head-on. The over-arching question is whether, in the
light of the potential upheaval surrounding digital switchover,
the BBC requires a charter for change, or a strategy for stability?
The key issues we believe must be settled are:
- The BBC's scope and remit and
the extent to which these need explicit refocusing to clarify
the Corporation's public service remit, and proper inter-relationship
with other broadcasters, or whether its own Charter-inspired initiatives
are enough.
- The level of the financial
settlement and the prospect of an alternative to the licence fee
(a good way of funding a national broadcaster but a very bad way
of taxing people); if not, then what flexibility exists to be
less regressive with those on low incomes and less aggressive
with those who have no licence (especially when they have no television).
- Increasing the accountability of the BBC: in
terms of responsiveness to licence fee payers; in terms of ex
post openness and transparency with external bodies—such
as this Committee—on performance against objectives and
value for money granted via the licence fee; and in terms of ex
ante challenge with regard to commercial activities.
- Dealing with the BBC's creaking constitution:
separating governance from regulation, judge from jury, champion
from challenger; as well as the case for switching from a Royal
Charter to a modern statute.
The status quo is not an option and the test is a
crucial one for the Department and indeed the Government as a
whole. Our work and recommendations are aimed at assisting with
the development of proposals that will take a strong and properly
independent BBC into the future as far as that future can be seen.
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