House of Commons - Foreign Affairs

Select Committee on Foreign Affairs Third Report

2 Public Diplomacy

3. Public diplomacy was defined in 2003 by the then Public Diplomacy Strategy Board (PDSB)[4] as "work which aims at influencing in a positive way, including through the creation of relationships and partnerships, the perceptions of individuals and organisations overseas about the UK and their engagement with the UK, in support of HMG's overseas objectives."[5] The BBC World Service and the British Council are the two principal government-funded bodies involved in public diplomacy activity. In 2004-05, they received £225 million[6] and £172 million[7] of grant-in-aid respectively. The Foreign Office's PD expenditure in 2004-05 (excluding British Council, World Service or Chevening scholarship funding) was around £165 million.[8] The total UK grant-funded PD expenditure in 2005-06 is £617 million.[9]

Wilton review of public diplomacy

4. During the last Parliament, our predecessor Committee took a close interest in the Wilton review of public diplomacy which followed the 2002 spending round.[10] The Wilton review, named after the Foreign Office official who headed it, concluded that PD activity was uncoordinated and recommended the introduction of "an overarching public diplomacy strategy" be introduced to improve the direction of the Government's public diplomacy work by those partners involved in delivery.[11] It also found that there was no real effort made to measure the overall effectiveness of the United Kingdom's PD activity. It concluded that a single system for monitoring perceptions of the United Kingdom overseas was required.

5. In line with the review's findings, a new Public Diplomacy Strategy Board was established in 2002 "to improve the cohesion, effectiveness and impact of the overall UK public diplomacy effort."[12] Our predecessors considered this "a welcome development in ensuring a consistency of approach and ambition among all those involved in the promotion of the United Kingdom's interests and image overseas."[13] More recently, Lord Kinnock told us that improved co-ordination between public diplomacy partners and improved measurements of outputs were things that the British Council "strongly favoured".[14]

Lord Carter's review of public diplomacy

6. In December 2004, following the 2004 comprehensive spending review, the Foreign Secretary again agreed with the Treasury to a review of public diplomacy. He invited Lord Carter of Coles to conduct the review and to report his findings by the end of summer 2005.[15] We questioned Lord Carter why a further a review was necessary only two years after the last. He explained that he had been asked to assess whether further alignment of interests among public diplomacy partners was necessary.[16]

The terms of reference for the Carter review were as follows:

To examine the effectiveness of current Public Diplomacy (PD) activities in delivering outcomes which contribute to the achievement of HMG objectives;
To take stock of progress in implementing the Wilton Review (2002) through the work of the PD Strategy Board;
To consider the scope for improving PD activities, both in London and overseas, to maximise their effectiveness and value for money;
And to that end to consider the scope for increased joint PD activity and enhanced co-ordination taking account of experience with the PD Campaigns Fund and the PD Challenge Fund; and
To make recommendations as appropriate.

7. Lord Carter's report, Public Diplomacy Review, was finally published on 14 December 2005.[17] We asked Lord Carter why his review was delayed from its original publication.[18] He told us that in "dealing with some very powerful players with very strong positions and very clear views … Trying to get agreement was not the easiest thing all the time."[19] On the manner in which the review was conducted, Lord Kinnock commented, it was "a democratic process and democracy almost invariably takes longer than the alternative…"[20]

8. Overall, Lord Carter found that the United Kingdom's public diplomacy efforts had improved since the Wilton review, but that more still needed to be done.[21] The review concluded that "public diplomacy partners must be able to demonstrate a greater sense of urgency and more evidence of responding and shifting resources according to priorities and changing circumstances."[22] Likewise, it found that the FCO needed to take the lead in setting a clear and focussed strategy.[23] The review commented that "there was a sense that the FCO was not always able to exercise a degree of influence commensurate with [its] level of accountability."[24] When the Foreign Secretary presented us with the review's findings he noted that Lord Carter had recommended that "future decisions on the funding of public diplomacy take into account [the FCO's] success in implementing [his] recommendations."[25] In December 2005, the Foreign Secretary told us that he would write again with details of how the Government would implement the review's recommendations once decisions had been taken. We look forward to receiving the Foreign Secretary's further letter.

9. We questioned Lord Carter on his conclusions. He emphasised to us that it was not a case of the FCO gaining more control over the BBC World Service and the British Council, but there being a need for better coordination of public diplomacy resources.[26] On parliamentary accountability, he said that he wanted to be "clearer on the hard wiring" which runs from the Foreign Secretary to the British Council and BBC World Service as he believed some of these linkages historically were not as clear as they needed to be.[27] We examine below some of Lord Carter's key findings and recommendations in relation to the BBC World Service and the British Council. First, we consider some of the wider issues.

A new definition of public diplomacy

10. The Carter review proposed a new definition for public diplomacy which picks up on the Public Diplomacy Strategy Board's definition originally formulated in 2003 which made a linkage between public diplomacy work and government goals. However, Lord Carter recommended that public diplomacy should no longer be defined simply in terms of creating positive perceptions but intended it should be defined as:

work aiming to inform and engage individuals and organisations overseas, in order to improve understanding of and influence for the United Kingdom in a manner consistent with governmental medium and long term goals[28]

He stipulated that this definition must be understood "within the context of the continuing guarantee of complete editorial independence for the BBC World Service and day-to-day operational independence for the British Council."[29] We realise that such independence is held dear by both the BBC World Service and the British Council. The British Council has explained that its arm's length relationship with government is the primary factor which allows it to "stay open for business at times when official channels may be constrained by political considerations."[30] Similarly, Nigel Chapman, director of the BBC World Service, told us that "Nothing must be allowed to happen in any public diplomacy strategy … which undermines the editorial independence of the World Service."[31]

11. The importance of the BBC World Service's and the British Council's independence is also understood clearly by Government. Lord Triesman, Parliamentary Under-Secretary of State at the Foreign and Commonwealth Office, commenting on the FCO's relationship with the World Service and the Council, told the House of Lords' Select Committee on the Review of the BBC Charter, "they have to have a real sense of independence, because if they do not have that people do not trust them and it is critical that they are trusted."[32]

12. However, in its report, the Lords Committee is highly critical of Lord Carter's new definition of public diplomacy with its explicit linkage of public diplomacy work to government goals. It describes the definition as being "neither convincing nor compatible with the BBC's well established independent role."[33] The Committee continues:

…if the BBC World Service were to carry a by-line stating 'Working in a manner consistent with governmental medium and long term goals' then its international credibility would be fatally undermined.[34]

13. During the preparation of Lord Carter's report, Sir Andrew Burns, International Governor at the BBC, wrote to Lord Carter and touched upon the review's new definition of public diplomacy. He wrote, "We view this definition in the light of your report's stance on the World Service's editorial independence as essentially being about the where and the how of broadcasting rather than the what. The latter of course remains a matter of editorial judgement."[35]

14. We do not entirely share the Lords Committee's anxiety over the new public diplomacy definition. It does not follow that just because a broad strategic direction set for the BBC World Service and the British Council is consistent with governmental medium and long-term goals that the editorial independence or operational management of these organisations is compromised. We examine below in sections on the British Council (paragraphs 30-44) and the BBC World Service (paragraphs 45-56) some of the institutional arrangements in place which, if maintained, should protect their independence and provide for their accountability to Parliament.

15. We conclude that while it is appropriate for arm's-length bodies to follow a public diplomacy strategy in line with government medium- and long-term goals, given that funding is provided through grant-in-aid, this must be counterbalanced by institutional safeguards to preserve the day-to-day and short-term editorial and operational independence of the BBC World Service and the British Council respectively.

A new public diplomacy strategy

16. The range and diversity of function and activity of the various partners historically active in public diplomacy have made it difficult to formulate one coherent strategy suitable to all. Lord Carter found that there remains "a gap for a comprehensive mid-term plan (3-5 years) … based on the FCO's Strategic Priorities."[36] We agree with him that the new strategy needs to include "clear and measurable objectives for public diplomacy, details of target audiences and geographical priorities" if it is to be fit for purpose.[37]

17. In November 2005 Lord Triesman told the Lords Committee that the public diplomacy partners needed to face a general strategic direction "that is useful to the United Kingdom, because they are heavily dependent upon public finance and we [the Government] are answerable in Parliament, and should be."[38] We agree.

18. We recommend that the Government's public diplomacy strategy be aligned with the FCO's strategic global priorities. We conclude that the strategy should both provide direction to the public diplomacy organisations and be informed by their individual contributions.

Public Diplomacy Strategy and Performance Management Board

19. Lord Carter found that public diplomacy efforts could be more effective with stronger leadership and clearer objectives.[39] The original Public Diplomacy Strategy Board (PDSB) established in November 2002 has been chaired by Sir Michael Jay, as the Permanent Under-Secretary, and has included representatives from the FCO, the BBC World Service (in an observer capacity), the British Council, the Department for Culture, Media and Sport (DCMS), the Department for International Development (DFID), UK Trade and Investment (UKTI), VisitBritain, the devolved administrations and the private sector.[40] Lord Carter recommended instead a new, smaller Public Diplomacy Strategy Board be formed, to be called the Public Diplomacy Strategy and Performance Management Board, comprising only the primary FCO-funded public diplomacy institutions.[41] The new board would be responsible for agreeing a public diplomacy strategy and for performance measurement, management and monitoring of overall activity. Lord Carter saw the new board's role as directing and tracking PD resources, deciding which countries should be priorities and how resources should be channelled within them, and, through performance management, checking whether PD objectives were being met. However, he stressed that the way an activity was done or operated, and editorial judgments in the case of the BBC, should be for the British Council and the World Service to determine independently.[42]

20. The review's proposal to reduce the size of the existing Public Diplomacy Strategy Board appears to us very sensible especially in the light of Lord Carter's recommendation that the other members of the previous board are retained as an advisory panel. However, it is apparent that not all PD partners are wholly satisfied with the new arrangement. While VisitBritain supports Lord Carter's recommendation for a smaller strategy board, it believed that the new panel should do much more than offer advice to the main board.[43] Similarly, DCMS believed that the panel would need teeth to make things happen.[44]

21. In January 2006, the PDSB endorsed Lord Carter's recommendations for a new Public Diplomacy Strategy and Performance Management Board and for an advisory panel, though it would seem that the exact name and function of the panel are yet to be resolved.[45] The PDSB further agreed that there should be a close working relationship between the new board and the advisory panel with a joint meeting being held once a year.One of the virtues of the original board was that it provided a forum for exchange of ideas and information.[46] We believe it will be important for the new Public Diplomacy Strategy and Performance Management Board to establish good links with the new advisory panel and to consider its advice carefully, as this may be the only opportunity for some of the minor partners to make an input on thinking.

22. Lord Carter recommended that the new Public Diplomacy Strategy and Performance Management Board should be chaired by an FCO Minister, accountable to Parliament, supported by a "strong independent vice chair who could challenge and help give direction to public diplomacy efforts," and who has suitable authority to make an impact.[47] The board would also comprise representatives from the FCO, the British Council and the BBC World Service, and, in addition, a further independent member "to advise on process, performance measurement and evaluation."[48] The World Service would attend the board as an observer only, in recognition of its independent status.

23. The World Service sitting with observer status on the new board was patently a 'red-line' issue for the BBC and a matter that appears to have been challenged by the review team. In a letter to Lord Carter, Sir Andrew Burns wrote:

My colleagues were pleased that you felt able to reflect our concern that nothing in your conclusions should undermine the editorial independence of the World Service. Its effectiveness over the past 70 years had been founded in its reputation for impartiality and editorial independence, and I know you recognise that is why we have been so concerned to ensure that we do nothing to endanger that situation. That is why we believe that Observer status is the correct outcome for the World Service in relation to the new Public Diplomacy Board. Whilst of course the World Service will bring its experience to the table and be accountable for its performance against agreements with the FCO, it would not be in anyone's best interests for the World Service to be making decisions about the government's wider public policy aims.[49]

24. The British Council wrote to us to say that it believed the board being chaired by an FCO Minister should give it a higher profile for public diplomacy inside Whitehall. The Council did not, however, believe that the board should "duplicate or take over the functions of oversight or parliamentary accountability."[50]

25. The new arrangement for chairmanship of the Public Diplomacy Board is another matter with which the Lords Committee [on the Review of the BBC Charter] took issue. Its report concluded, "We do not believe it is appropriate for a member of the BBC World Service to serve either as a member or as an observer on a board chaired by an FCO minister under the proposed [Carter review] definition of public diplomacy… The independence of the BBC World Service could be compromised by the closeness of the relationship proposed by Lord Carter's review."[51]

26. We do not share the Lords Committee's concern over an FCO minister taking the chair of the PD board, given the World Service's observer status. Lord Carter explained that as an observer the World Service would "share and discuss" ideas but not be "in any way bound by the board."[52] We concur with this approach.

27. In 2004, when our predecessor Committee took evidence from the BBC World Service, it explored in some detail the World Service's observer status on the board. At that time Nigel Chapman, director of the BBC World Service, confirmed that he was satisfied that the BBC's independence was maintained and he implied that the BBC's presence on the board was mutually advantageous.[53] Nigel Chapman said:

From my objective [with] observer status, there is a 'joined-upness' going on now which was not possible before. There is some deep thought going on about exactly where limited resources should be spent and in which countries. From my understanding of the way media is being used, we can add perspective to that discussion.[54]

He went on to say:

One of the things the Public Diplomacy Strategy Board does need to think very hard about is how it can make the maximum impact with limited resources. To make the maximum impact, you need to understand how media is used in certain countries. You have to understand whether it is worth investing in radio promotion campaigns, in television or a mixture of both, in print and understand how people use media. I think that is a perspective we can bring and we share our audience research, which throws up all these different forces and trends, with the group and I think that is helpful and valuable.[55]

28. On balance, we support Lord Carter's proposal for a new, more focused Public Diplomacy Strategy and Performance Management Board. This smaller board should make it easier to formulate strategy. We agree that an FCO minister chairing the board should raise its profile and ensure accountability to Parliament. Nonetheless, the special position of the BBC World Service and the British Council needs to be recognised and respected.

29. We conclude that it is appropriate for an FCO Minister to chair the new Public Diplomacy Strategy and Performance Management Board and to be accountable to Parliament for its decisions. However, this must not be allowed to compromise the BBC World Service's editorial independence or the British Council's operational independence. We support the Carter review's proposal for the establishment of an advisory panel and recommend that the new board maintain good links with the panel's membership.

British Council and public diplomacy

30. As one of the main contributors to public diplomacy the British Council told us that it was committed to continued improvements in the United Kingdom's public diplomacy efforts. In its memorandum it states, "Our objective is to ensure maximum synergy, clarity of roles, and increased impact for public diplomacy on the one hand, while ensuring that the reach of the British Council and its ability to continue to generate trust among its partners, customers and users is nurtured."[56]

FCO RELATIONSHIP WITH THE BRITISH COUNCIL

31. We received from the British Council a copy of its submission to the Carter review.[57] In it the Council emphasised persuasively the importance of the perception by its partners and clients, both international and domestic, of its independent status. It saw this as "a pragmatic recognition [by its partners] of the need for a different type of engagement from traditional diplomacy."[58]

32. Lord Carter recognised and accepted the importance and significance of the Council's operational independence from Government. Nonetheless, the extent to which the Foreign Office is in practice able to exercise effective oversight over the Council is questioned, as is the degree of autonomy the Council is given. The review says:

While respecting the arm's length relationship, this [accountability] must be reflected in the arrangements for oversight and powers to scrutinise the Council, and must be taken into account when considering the appropriate distance at which the Council should operate from Government.[59]

In evidence before us Lord Carter drew attention to the significance of the Council's "arm's length position."[60] He told us that the Council's status as a non-departmental public body gave it the necessary distance to operate at "difficult times in certain countries" and he went on to say that there would be no benefit in removing the Council's status.[61]

33. The British Council has stressed forcefully that its international reputation and standing derive in part from its remove and separation from government.[62] As we have previously noted, the Council's relative distance from government creates a dynamic which broadens the range of people and partners with whom it is able to engage. During oral evidence Lord Kinnock referred to the Council's relationship to government as being "independence with alliance" and considered this characteristic was of "direct value to the United Kingdom."[63]

34. Lord Kinnock told us that "any shift in direction or attempted micromanagement would not achieve objectives of efficiency or sustain the essential characteristic of the British Council."[64] We concur with Lord Kinnock's view. We conclude that any changes made to the arrangement for oversight of the British Council must not jeopardise its operational independence and effectiveness.

GOVERNANCE OF THE BRITISH COUNCIL

35. The present rules for appointment of members to the British Council's board of trustees are given in its royal charter.[65] Currently, the Council's board appoints its own members with the exception of two: the positions of chair and vice-chair are nominated by the Secretary of State. The Carter review asked whether allowing the Foreign Secretary to appoint all the Council's board members would help "demonstrate transparency and accountability."[66] It said such a step could "lay down a helpful marker about autonomy and arm's length."[67] Conversely, it went on to say it should "not lead to a politicisation" of the board's membership and should not "give any undue influence to the FCO."[68] We note that the board members of several other non-departmental public bodies including the Westminster Foundation for Democracy are already appointed by the Secretary of State.

36. During oral evidence Lord Carter suggested that what is required on the board are individuals who might be more challenging. He believed that different mechanisms for appointing some of its membership might achieve this aim.[69] We agree, and believe that this objective could be achieved by increasing the number of board members appointed by the Foreign Secretary. Allowing the board itself to continue to appoint half of its membership would, in our opinion, preserve the Council's independence. Lord Carter concluded that the FCO and the British Council should together establish whatever arrangements would offer the greatest deal of transparency and accountability, with the advice of the Commissioner for Public Appointments and the Charities Commission being sought.[70] We look forward to learning of the outcome of discussions between the British Council and the Government on this point.

37. We recommend that the Foreign Secretary should appoint half the British Council's board members, including the chair and vice-chair. We conclude that this should increase accountability to Parliament whilst guaranteeing the Council's separation from Government and ensuring that a wider group of interests are represented on it. All appointments made by the Foreign Secretary should continue to be made in a manner consistent with the Commissioner for Public Appointments code of practice for ministerial appointments to NDPBs and our Committee will, of course, be able to scrutinise all appointments made.

38. Lord Carter also raised the question of whether the FCO Permanent Under-Secretary being the principal accounting officer of the British Council and sitting ex officio on the British Council's board created a potential conflict of interest. The Carter review stated, "[the Permanent Under-Secretary's] role as a Board member may remove the layer of scrutiny he is afforded by his position as accounting officer."[71] Should the Permanent Under-Secretary's position as principal accounting officer preclude him from sitting on the Council's board, then we see no reason why he could not be represented on it by another member of the FCO's senior management team. We recommend that in order to avoid any perception of a conflict of interest arising from the position of the Permanent Under-Secretary as principal accounting officer of the British Council and his membership of its board, the Foreign Office should be represented on the British Council's board by another member of the FCO's board of management.

39. We asked the British Council to describe its accountability to the British public.[72] In response, Sir David Green wrote to us detailing very thoroughly the mechanisms of departmental and parliamentary scrutiny that are in place.[73] The Council's relationship with the Foreign Office is regulated by a memorandum of understanding which makes clear that the Foreign Secretary is answerable to Parliament for the policies, operations and performance of the British Council. Under this agreement, the Council is obliged to consult the Foreign Office over its annual corporate three-year plan. The Council must also ensure that its strategic objectives and priorities are compatible with the policies and priorities of the Foreign Office and provide output measures which show how the Council's work contributes to the FCO's own objectives. The memorandum sets out the mechanisms for communication between the director-general of the Council and senior officials at the FCO.

40. Lord Carter asked whether the current arrangements in place for dialogue between the FCO and the British Council are effective.[74] Presently, the Council and FCO hold quarterly business meetings to discuss performance and agree targets and hold an annual ministerial meeting. The Carter review argued that the effectiveness of these meetings relied to some degree on the relationship between the two parties and the understanding of their respective roles and responsibilities.[75] This of course is true for any contractual relationship.

41. In relation to Parliament, the Permanent Under-Secretary and the director-general, as accounting officers for the British Council, may be summoned to give evidence before the Public Accounts Committee, while they or members of the Council's board may be called upon to appear before any other relevant parliamentary committee, principally before this Committee. When we discussed accountability of the British Council and the BBC World Service with Sir Michael Jay, he emphasised that ministers must be able to demonstrate to Parliament that the money spent on non-departmental public bodies was spent consistently with government objectives.[76] We agree.

42. Lord Carter recommended that "the FCO and Council should together develop proposals for an appropriate degree of oversight [of the Council's operation], and for how the FCO-British Council dialogue might better operate in practice."[77] He went on to say that these proposals should be developed in time for agreement by FCO ministers by April 2006.

43. We asked Lord Carter why he had not signalled a more definite proposal for a way forward for the relationship between the two organisations. Lord Carter told us that his aim had been to publish a report that was widely supported by those it concerned.[78] However, revealingly, on this particular issue, he told us that rather than delay publication any longer he had had to leave it to both parties to forge subsequently an agreement for a new model for dialogue and oversight.[79] Lord Carter went on to explain that he believed that this dialogue should be on issues such as which countries should feature as priorities for the Council, and on which public diplomacy channels should be used to reach into particular countries. He also thought that there should be discussions on the effectiveness of public diplomacy activity in the light of evaluation.[80]

44. We recommend that the FCO, in the light of Lord Carter's review on public diplomacy, describe what changes it believes are necessary in relation to its oversight of the British Council as well as any changes it proposes to make to enhance its mechanisms of dialogue with the Council. We further recommend that the FCO indicate how these changes would be likely to affect the British Council's operational independence and the perceptions of its partners and clients of its distance from Government.

BBC World Service and public diplomacy

45. In March 2004, in its Green Paper[81] on the review of the BBC's royal charter the Government affirmed that "the World Service should remain a government-funded arm of the BBC, providing high quality, impartial international news to audiences who might otherwise not receive it."[82] This comment highlights the unique position of the World Service in effectively having two masters. While the FCO is its sponsoring department, the World Service is also a constituent part of the BBC. The Foreign Secretary is responsible for agreeing the Service's objectives, performance measures and target audiences, while the director-general and board of governors of the BBC are responsible for the Service in terms of editorial policy and standards, managerial competence and the delivery of a value for money service.[83] This role will be taken over by the BBC's new trust and executive board.[84]

46. This year the BBC World Service told us that it had "consolidated [its] position as the best known and most respected voice in international broadcasting."[85] In the context of public diplomacy the World Service's contribution is clearly very different from that of others. As Lord Carter implied, public diplomacy is not the World Service's primary objective but its reputation for providing trustworthy impartial news gains it international respect and indeed "public diplomacy gains for the country associated with the brand."[86] This is the Service's opinion too. Nigel Chapman, director of the BBC World Service, told us that he saw the World Service's contribution as a "great asset to Britain" as it reflects well on Britain owing to "the values it evinces in the way it covers journalism."[87] He went on to describe the Service's editorial independence as the force that enables it to gain dividends for the United Kingdom.

47. We discussed with Mr Chapman the World Service's approach to strategic planning, which he said was based on a broadcasting logic.

People try and paint [the World Service's strategy] as a foreign policy initiative. I am a broadcaster. I understand broadcasting. I know what we need to do to have impact in markets. I know what the mix should be between television, radio and new media. That is where I come from. Therefore, when I decide to close a service or open a new one that is the logic on which I am basing the argument, if you like, because I know how people consume and use information in modern times[88]

48. In evidence to the Lords Committee [on Review of the BBC Charter], Richard Sambrook, director of the BBC's Global News Division, spoke of the way the relationship between the FCO and World Service is insulated against political interference of its editorial output. He said:

…in the ways we are structured and the way we operate, there is a separation and a Chinese wall between the daily editorial decisions and those people having debates and discussion and regular meetings with the Foreign Office. I think that is something that has existed across the BBC for many years and is rather effective insulation …against the kind of pressure that you are talking about.[89]

49. The Lords Committee asked the BBC whether it was the FCO or the World Service which normally took the initiative over strategy of the Service, for example over the setting up of new services. Mr Sambrook said that in his experience it was always the World Service which approached the FCO.[90] He went on to say:

I take the view we [the BBC] are best equipped to go to the FCO and say we understand the problems of the market place, …therefore we on balance think it is better to invest money here…[91]

50. The Lords Committee believed that "under no circumstances" should the BBC World Service "be allowed to be treated or seen as a 'tool' of public diplomacy or of government goals.[92] We take a different view. The Lords Committee concluded that "Everything should be done to protect the editorial independence on which [the World Service's] reputation depends."[93]

51. We agree entirely with Lord Carter's explicit recognition of the importance of the World Service's editorial and managerial independence.[94] We consider that the World Service's worldwide reputation brings considerable public diplomacy gains for the United Kingdom. We conclude that Lord Carter's review was right to recognise the BBC World Service's unique contribution to the United Kingdom's public diplomacy as a world class international broadcaster and to understand the significance of its editorial independence to its reputation and ability to deliver an unbiased trustworthy news service. We conclude that making decisions on priority markets and new investment in a manner consistent with governmental medium- and long-term goals, in consultation with the Foreign Office, need not be detrimental to the BBC World Service's editorial impartiality. When funding is being provided through grant-in-aid it is right that the Government should have a say in where, by which means and to whom future services are directed.

RESPONSIVENESS TO CHANGE

52. It has been apparent for some time that, in order to enable it to remain a relevant broadcaster in the Arab world, the BBC World Service needed to launch its own Arabic television service.[95] In the 2004 spending review, following discussions with the FCO, the World Service submitted a bid to the Treasury for additional funds specifically for an Arabic television service.[96] Ultimately, although the Treasury supported the concept, it did not grant the extra funds requested, but instead asked the World Service to develop a new business case for the television service from its 2004 spending review allocation.[97]

53. The Carter review remarked that although this move by the BBC World Service was a demonstration of its ability to respond to changing circumstances, it had "lagged behind" its competitors in terms of allocating resources.[98] However, Lord Triesman appearing before the Lords Committee said:

One of the things which I hope the BBC itself will continue to do, and arguably could have done a little earlier if they were realistic about it, is continue to review its output and ensure that it is using the resources that it has as effectively as it should. I am not, in that, hinting at other language closures, the plan we have got needs to bed down and we have got to be confident that it is working but, rather than encourage anybody's thinking, including the BBC, that the first recourse will be to go back and knock on the Chancellor's door, I think there is a key recourse, which is to make sure that, as they were, I believe, they are using all the resources they can, we have in that a sum just under £250 million next year, that they are using every penny of that wisely.[99]

54. Nigel Chapman did not accept that it was due to the BBC World Service's tardiness that its decision to reprioritise and redirect funds into the Arabic television service was not made earlier. He said it was case of priorities.[100] The BBC World Service could have found much of the funding for Arabic television from its 2002 and 2004 spending review settlements but the opportunity cost would have been that other improvements would not have been affordable: for example, investment in radio distribution, in marketing and in new media services.[101]

55. We consider that the BBC World Service could have moved faster to conduct a review of its language portfolio. We do, however, commend the Service in the formulation of a reprioritisation programme which will see reinvestment of up to 20 per cent of its total budget by 2008 and the achievement of its ambition to create an Arabic-language television satellite station from 2007, albeit initially a 12-hour service.[102] We recommend that the BBC World Service, together with the Foreign Office, carry out regular reviews of its services to ensure that resources are being utilised to achieve a maximum impact, with overall audience figures increased through appropriate reinvestment of resources into new media opportunities. We consider the World Service's plans for an Arabic television service in greater detail in a later section of the report [paragraphs 130-151].

GOVERNANCE OF THE WORLD SERVICE

56. On governance and accountability, Lord Carter found the mechanisms in place between the Foreign Office and the BBC World Service to be "fairly effective" in terms of the dialogue between the BBC World Service and the FCO and the public service agreement framework that is in place.[103] Furthermore, the Carter review concluded that the World Service is held to account well by the BBC's board of governors for reach, quality, impact and value for money of its services. The review considered whether the World Service would be better served by the BBC with a dedicated board of international governors, but it concluded that this "could create an unnecessary additional layer of bureaucracy and run the risk of creating a divide between core BBC activity and the BBC World Service.[104] We agree with Lord Carter that there remain considerable advantages for the BBC World Service remaining structurally bound into the overall BBC operation.

Financial independence and stability

57. Lord Carter identified that the Foreign Office does not link the British Council's or World Service's performance with future funding. This was considered unusual, as other government departments have "greater power to allocate funding within an overall budget dependent on the achievement of goals."[105] On this point Sir Andrew Burns, BBC international governor, wrote to Lord Carter.

We [at the BBC] continue to believe that the perception of genuine editorial independence is underpinned by medium term financial certainty. Of course, we fully recognise that changes in funding and issues such as ring fencing remain within the gift of Ministers as you have outlined, and that they may wish to look for more radical options in the future. For our part, the Governors continue to believe financial certainty is an essential factor in the ultimate effectiveness of the World Service. However, in the short term, the key point I should make is that we are committed as a board to working with the new public diplomacy arrangements in order to make them a success.[106]

58. The Carter review also considered removing the 'ring-fence' around the World Service's and British Council's funding "in order to facilitate improved public diplomacy efforts," but concluded that a better approach was to make "an attempt to improve matters through improved collective arrangements."[107] Our predecessor Committee strongly advocated and defended the retention of ring-fenced funding for both organisations. It concluded that "the ring-fencing of the BBC World Service and British Council's budgets is vital for the operational effectiveness of both bodies."[108] We agree. We conclude that the ring-fenced funding for the BBC World Service and the British Council should remain in place.

Public Diplomacy Campaign Fund and Public Diplomacy Challenge Fund

59. Following the Wilton review, the FCO redirected monies from all centrally produced public diplomacy output into two discrete funds exclusively for PD activity: the Public Diplomacy Campaign Fund and the Public Diplomacy Challenge Fund. The effectiveness and value for money given by these funds were examined by Lord Carter.

60. The Public Diplomacy Campaign Fund is funded primarily by the FCO and the British Council. Its purpose is to fund major initiatives in countries that the Public Diplomacy Strategy Board identifies as "top priorities". Its introduction was meant to foster joined-up working among public diplomacy partners. During the last Parliament, our predecessor Committee examined the "Think UK" campaign, the first major campaign to be supported from the Fund. The campaign had sought to raise the profile of Britain's cultural, scientific and commercial links to China. At that time the Committee signalled its approval of the evaluation exercise that had been undertaken following the completion of this campaign in order that lessons could be learned for future ones.[109] Nevertheless, despite the consideration and attention given to the Council's experience from that campaign, it is disappointing to learn from the Carter review that a year later similar problems and concerns arose in the 'Crossroads for Ideas Campaign',[110] another large campaign funded from the Campaign Fund. However, the recurrence of problems could in part be due to the fact that the planning for one would have been concurrent with the operation of the other.

61. More generally, Lord Carter casts doubt over whether campaigns run in this way "deliver a good return on investment in terms of effort and resources."[111] In 2004, in respect of the "Think UK" campaign, Sir David Green, director-general of the British Council, told our predecessors that evaluation had not shown that there had been a significant change in perceptions within China as to the creativity and the innovation of the UK, which had been the purpose of the campaign.[112] Similarly, the Carter review stated that "While we support the principle of co-ordinated activity in support of government objectives, we do not feel that campaigns of initiatives as they are currently planned and delivered are the most effective way of achieving this."[113]

62. The Public Diplomacy Challenge Fund enables FCO Posts overseas to undertake "imaginative and innovative" public diplomacy activity in support of their local public diplomacy objectives and FCO strategic priorities.[114] The Challenge Fund supports individual Post, country or regional projects, generated by Posts themselves. In 2004-05 some 70 projects were supported from the fund with a total spend of nearly £2.3million.[115] Lord Carter commented that with the fund being open to all Posts worldwide there is no strategic link to priority locations. However, we recognise that this may well be a deliberate feature of the fund as there will be instances where Posts, especially smaller ones, which are not in priority countries, will be able to demonstrate a reasonable case for monies for a project in line with departmental objectives. We note that Lord Carter recommended that the FCO re-assesses the impact of the Campaign Fund and the Challenge Fund in light of a new Public Diplomacy Strategy. We recommend that in its response to our Report the Foreign Office outline how it plans to assess the impact of the Public Diplomacy Campaign Fund and the Public Diplomacy Challenge Fund and what plans or modifications it has in mind for them.

Public diplomacy measurement and evaluation

63. Lord Carter's review raised the importance of monitoring and evaluation of public diplomacy activity vis-à-vis effective accountability of PD expenditure. It found that there was no standardised system in place.[116] Consequently, the review recommended the establishment of a central unit within the FCO for this purpose so that information could be made available to the Public Diplomacy Strategy and Performance Management Board.[117] It proposed that a survey of between 10-30 core countries be completed annually to attempt to identify moves in impact and influence in public diplomacy.[118] In addition, there would be continuous monitoring of specific PD-related initiatives.[119]

64. Lord Carter told us part of designing performance measurements systems for public diplomacy activity was to allow a dialogue on PD performance that "is based less on assertion and more on fact."[120] The British Council broadly supports the review's proposals and believes that the new evaluation system should be "light touch" in its nature and focus on PD impact.[121] The Council also stresses that common PD performance indicators should be compatible with existing evaluation systems run by public diplomacy bodies and believes that these common measurements should complement its own scorecard survey and the FCO's heads of mission survey which are currently in use.

65. In line with Lord Carter's proposals for enhanced measurement and monitoring of public diplomacy we believe it would be useful for this Committee to see how the BBC World Service's and the British Council's resources are allocated on a geographical basis. We recommend that in its response to this Report the Foreign Office provide us with a breakdown of how the BBC World Service and British Council allocate their resources in the financial year 2005-06. In the case of the British Council we recommend that data be given on a country-by-country and on a regional basis, and in the case of the BBC World Service by country, by language service and by region. We further recommend that in future the Foreign Office furnish this Committee with such data on an annual basis.

4 The definition agreed by the original Public Diplomacy Strategy Board (PSDB) Back

5 Public Diplomacy Strategy Board, Terms of Reference, as agreed in 2002, available at www.fco.gov.uk Back

6 see: BBC Annual Review 2004/05, Financial Statements, p 37, available at www.bbc.co.uk/worldservice Back

7 see: British Council, Making a world of difference, Annual Report and accounts 2005-05, December 2005, p 65, available at www.britishcouncil.org Back

8 Public Diplomacy Review, 15 December 2005, p 17, para 51.4 Back

9 See: Ev 42 Back

10 Changing Perceptions - Review of Public Diplomacy, March 2002, available at www.fco.gov.uk Back

11 Ibid, p 4, recommendation 14 Back

12 Public Diplomacy Strategy Board, Terms of Reference, as agreed in 2002, see www.fco.gov.uk Back

13 Foreign Affairs Committee, Twelfth Report of Session 2002-03, Foreign and Commonwealth Office Annual Report 2003, HC 859, para 17 Back

14 Q 15 Back

15 Foreign Affairs Committee, Written and oral evidence, Foreign and Commonwealth Office Annual Report 2004-05, Session 2004-05, HC 436, Ev 40 Back