Memorandum from the BBC Trust
The BBC exists to serve all audience groups. It needs to be more responsive to local needs and properly reflect the UK, its nations, regions and communities, across a range of platforms and genres. The BBC Trust is clear that the BBC must serve local and regional audiences well. This is a key component in both the BBC's Public Purposes and the Audience Councils for England, Northern Ireland, Scotland and Wales, who advise the BBC Trust on the views and needs of audiences in the nations and regions.
The Trust also recognises that it is vital for there to be provision of local and regional news and non-news programming beyond the BBC. This is why the BBC is currently engaged in discussions with a range of partners about a proposal that would enable the provision on news beyond the BBC, using the BBC's existing facilities to enable the provision of editorially distinct news from a range of parties.
The Committee has set out a detailed and wide-ranging inquiry into the future for local and regional media. The majority of the questions posed are rightly for the BBC Executive to respond to; their full submission follows this short submission from the BBC Trust.
In this short covering document we set out the framework in which the BBC Executive is operating, looking at the priorities of audiences, the reasoning behind the Trust's recent Local Video Public Value Test conclusions, and our ongoing challenge to the Executive.
What do audiences want from the BBC?
In 2007 the Trust carried out research examining audience priorities, and their views on the BBC's performance. This research included information on the BBC's local, regional and national services:
Sustaining Citizenship and Civil Society
Regarded by licence fee payers as one of the most important purposes, BBC performance is considered to be strong. Those within the devolved nations of the UK consider that it could do more to help them understand constitutional affairs. Audiences also have concerns about the way devolution is reflected in network news coverage.
Representing the UK, its Nations, Regions and Communities
In meeting its obligations, the BBC should provide a range of output to meet the needs of different audience groups. It remains an important part of the BBC remit with considerable performance gaps. The perception of under-performance is common to all age and socio-economic groups but this masks regional and demographic differences..
The Local Video PVT
In response to the performance gaps indentified by the Trust, the Executive proposed a Local Video service, which was the subject of a PVT. However, in its final conclusion the Trust was not satisfied that any likely adverse impact on the market was justified by the likely public value of the local video proposal.
Whilst local video had potential to deliver some public value it did not represent the most efficient use of licence fee funds, especially given access issues for non-broadband users and limited reach to key audience groups. We note, in particular, the low appeal to broadband users of a local video news offering that did not extend to listings, reviews and general entertainment (excluded due to the higher potential for market impact). We also recognised the negative market impact that might result from BBC expansion at a local level at a time when some commercial providers face a degree of structural and cyclical pressure.
The BBC exists to serve all audience groups. It needs to be more responsive to local needs and properly reflect the UK, its nations, regions and communities, across a range of platforms and genres. Our decision did not, therefore, imply a lack of commitment to improving local provision and meeting deficiencies or 'gaps' in respect of the BBC's public purpose to represent the UK, its nations, regions and communities.
In the Trust's view a series of smaller, targeted interventions, that take account of current BBC regional provision and are focused particularly on improving the quality and depth of its television offering, could increase public value and contribute to the relevant public purposes. We recognise that these targeted interventions may differ depending on the circumstances of each of the nations and English regions. There could also be scope, through meaningful partnerships, for the BBC to contribute more widely to existing regional news providers and potential new entrants.
The Trust therefore invited the Executive to return in 2009 with new proposals designed to close or narrow the purpose gap and improve nations and regions provision. These are currently under consideration by the Trust. The proposed £68 million investment in local video has been 'ring-fenced'. Whilst available for nations and regions, it is not restricted to this area and may be used by the Executive for other purposes, subject to Trust approval.
Potential for contestable funding of Regional News
The question of contestable funding is for the Government, but the source of that funding and the governance would require careful consideration. The Trust would only support proposals that did not compromise the BBC's independence or its ability to continue to deliver its public services for licence fee payers.
On the suggestion of diverting any digital underspend, switchover is still in the early stages so it is not possible to take a confident view on the potential sums involved and there would be a number of potential calls on the money. It is important to remember that licence fee payers give us their money in good faith, believing it will be spent on BBC services and content. To suddenly tell them mid-way through the settlement that their money is being siphoned off, as some have suggested it should be, would be more than an act of bad faith, it would be tantamount to breaking a contract.
We know what the public would like to happen to any surplus. Ofcom's own research shows this clearly. They'd like their money back. As far as the Trust is concerned, returning any surplus to licence fee payers is the benchmark against which any other proposal should be judged.
Funding stability is important to the BBC's creative and editorial independence. It is a unique privilege which carries big responsibilities to deliver high quality programmes and services and to play a leading role in digital switchover. As the public face the reality of a recession, the BBC has an even greater responsibility to demonstrate to them that the 39p a day it receives from every licence fee payer is working hard and being spent to deliver something of real value to them.
The BBC is committed to delivering more for less, and has been set tough efficiency targets by the BBC Trust that it must achieve over the licence fee settlement. These amount to 15% by 2012/2013, equalling £1.9 billion over the period, and will be achieved without jeopardising the programmes and services that audiences love.
More widely, the constitution of the BBC is a matter for Government, but the Charter delivers stability and independence for the BBC which is in the interests of licence fee payers; principles that should not be compromised. The public has clearly rejected the idea of stronger direct control of the BBC by Parliament.
The BBC also faces new demands because of the recession. It has a vital role to play supporting other parts of the industry. Now more than ever, the public will look to the BBC for the kind of programmes, including drama and factual, which others simply aren't making. We are now engaged in a series of partnership initiatives which will help other broadcasters and programme makers.
The BBC has already signed an agreement with ITV proposing sharing facilities for regional news in England and Wales. The potential is there for ITV to cut its costs significantly - and, more to the point as far as audiences are concerned, the proposals could keep ITV's endangered regional news services on the air. This sharing of facilities could in principle extend to other providers, including independently funded regional news consortia.
On behalf of licence fee payers, the Trust will continue to ensure that the BBC serves all audiences, lives within its means and, through partnerships, brings the benefits of public investment to the whole broadcasting sector
The Executive in its response sets out its current thinking on the BBC's role in local and regional broadcasting, not only with respect to the Trust's decision on the PVT but also the current broader policy debate.
The Trust remains keen to see new proposals from the Executive to tackle the purpose gaps which remain, and is encouraged by the progress being made.
In its Local Video PVT findings, it made clear that any new proposals would be considered by the Trust and subject to the appropriate approval mechanisms.
Aside from this, we also recognise that there are things the BBC can do to help ensure that audiences continue to benefit from a diverse range of PSB - both from the BBC and beyond. We remain of the view that a partnership approach holds the best potential to create the new value needed to fulfil this ambition.
It is equally important to recognise that, while the BBC can make a contribution this must not be at the expense of its existing and highly valued public services. We welcome the Secretary of State's recognition that the BBC needs to maintain strength and stability at the core. As such, it is important that any proposed partnerships do not transfer value out of the BBC, as this would compromise the BBC's ability to deliver on its mandated public purposes. Instead, partnership proposals should create new value and so enhance the delivery of public service broadcasting without compromising the independence of the BBC which is so vital.
 BBC Trust Purpose Remit research, 2007
 Spanning news, entertainment and factual content
 It is among the largest for any of the BBC's public purposes. The provision of a range of output to meet the needs of the nations, regions and communities was also identified as an area for improvement, BBC Trust purpose remit research, 2007
 Looking at the overall UK picture, for
1)The BBC helps me feel more involved in my community
2)The BBC caters for my area and my community
The biggest purpose gaps are for under-45 C2DE groups. In 'Delivering Creative Future', the Executive also emphasised the importance of better purpose delivery to C2DE audiences and of lower perceptions, among this group, of BBC value more generally.