Conclusions and recommendations
1. We
share the assessments of the observations made by commentators,
institutions, statesmen and the Government: the World Service
is a "jewel in the crown" which promotes British values
across the globe and has a reputation exceeded by none. In an
era dominated by the media and the internet its influence becomes
increasingly relevant. (Paragraph 14)
2. We conclude that
the BBC World Service has suffered a disproportionate reduction
in its future Grant-in-Aid under the Spending Review settlement,
by comparison with that of the 'core FCO': allowing for inflation,
16% as against 10% across the four years 2010-11 to 2014-15. Furthermore,
we note that this has to be seen in the context of the long-term
trend whereby FCO spending as a whole has been eroded in relation
to that on other areas of government. We consider that the relatively
small monetary savings to be achieved through this 16% reduction
in spending on the World Service are disproportionate to the World
Service's actual worth to the UK. The value of the World Service
in promoting the UK across the globe, by providing a widely respected
and trusted news service in combination with high-quality journalism,
continues far to outweigh the relatively small cost of the service.
(Paragraph 15)
3. In the current
economic climate, there are very few bodies in the public sector
whose value to the nation is so great that their income should
be wholly ring-fenced from spending cuts. The Government has decided
that spending on two institutions, the National Health Service
and the Department for International Development, should be so
protected. We believe that the BBC World Service, the costs of
which amount to a tiny fraction of those of the NHS and DFID,
should be likewise safeguarded against cuts. The recent dramatic
events in North Africa and the Middle East have shown that the
"soft power" wielded through the World Service is likely
to bring even more benefits to the UK in the future than it has
in the past, and that to proceed with the planned cuts to the
World Service would be a false economy. We therefore recommend
that the decision to reduce World Service spending by 16% during
the SR2010 period should be reversed, and resources made available
for it to continue its operations at roughly the 2010-11 level
of staffing and output. (Paragraph 16)
4. As we have made
clear, we do not think there should be any cuts to the World Service.
If, notwithstanding our recommendation, the Service's funding
is reduced, it will be important that cuts are imposed in such
a way as to minimise the damage done. In the following sections
of this Report, we consider how World Service management has decided
to implement the Government's imposed 16% reduction in spending,
and express concern about some of the decisions taken. (Paragraph
17)
5. We conclude that
the announced loss of 650 out of 2,400 jobs in the World Service
represents 27% of the total workforce, and that this level of
job loss is disproportionate to the 16% cut in World Service funding
under the Spending Review settlement. (Paragraph 25)
6. We welcome the
Foreign Secretary's assurance to the House that World Service
journalists who lose their jobs will not be compelled to return
to a country where they may face persecution or be placed in physical
danger. We conclude that it is important that this assurance is
honoured. We recommend that, in its response to this Report, the
World Service update us on the continuing status of those individuals
whose residence in this country depends on their employment with
the World Service. (Paragraph 30)
7. We conclude that
the proposed closure of the BBC Hindi shortwave service is a matter
of deep concern. The decision to offer the service a limited and
temporary reprieve, contingent on alternative commercial sources
of funding being found, offers only partial reassurance. We note
that India is a major rising economic power and that the Government
has professed its wish to improve bilateral relations as a priority.
We further note that the estimated savings from reducing World
Service operations in India, at £680,000, are small in relation
to the nearly 11 million listeners that will be lost. While we
welcome the temporary reprieve of the BBC Hindi shortwave service
while alternative funding models are explored, and we recognise
that the service's audience is likely to continue to fall as a
long-term trend, we recommend that the World Service re-examine
the limited "temporary" reprieve and commit itself to
longer-term support for an unreduced BBC Hindi shortwave service.
(Paragraph 39)
8. We conclude that
the decision to close BBC China's short-wave output in Mandarin
does not meet the criteria for service closures set out by the
BBC and the Foreign Secretary, particularly the criterion regarding
the "strategic importance of the countries they serve and
the need of their populations for independent, impartial news".
The shift from short-wave to online services in China will leave
World Service transmissions vulnerable to action taken by the
Chinese government to suppress or block internet traffic. Although
the number of shortwave listeners may be in gradual decline, the
underlying strength of shortwave transmission remains that it
is much harder to turn off, block or criminalise compared to online
provision. We recommend that the World Service should commit itself
to longer-term support for an unreduced BBC China short-wave service
in Mandarin. (Paragraph 45)
9. We conclude that
it is unfortunate that the World Service has announced 60 job
losses in its BBC Arabic Service, just as North Africa and the
Middle East look likely to play an even greater role in foreign
affairs, and as events are occurring which call for the provision
within this region of high-quality, objective journalism and news
coverage. As with the closures to the Chinese and Hindi services,
we do not see how this change meets the agreed criteria, particularly
those concerning the strategic importance of the countries they
serve and the impact of BBC services in those markets. (Paragraph
49)
10. While we accept
that the World Service could not have anticipated these events,
we conclude that they require a reconsideration of the announced
changes. We note that the 'core FCO' has responded to recent events
in the Arab world by diverting considerable resources to the region,
and we recommend that the World Service re-order its priorities
along the same lines. The World Service should commit itself to
providing enhanced resources to BBC Arabic as required by the
recent and continuing political developments in the region. (Paragraph
50)
11. We note the discrepancy
between the relatively small amounts of money needed to avoid
the most damaging cuts to the World Service—those to BBC
China Mandarin, BBC Hindi and BBC Arabic—and the scale of
the Department for International Development Spending Review settlement.
We accept that under the terms of the International Development
Act 2002, DFID is not able to fund substantial parts of World
Service activity directly, because that activity cannot be directly
demonstrated to contribute to poverty reduction. However, we conclude
that some of the activity of the World Service does contribute
to the wider aims of DFID and it would therefore be appropriate
to consider how an additional small element of the DFID budget
might be spent on specific activities and projects of the World
Service which are consistent with the terms of the International
Development Act. Our figures show that just 0.35% of DFID's budget
would be enough to compensate for the Government's planned cuts
to the World Service. We conclude that there is no reason why
such a transfer should not be made if the political will to carry
it out is present. (Paragraph 62)
12. While we note
that the opportunity for expanding commercial activity is much
greater for the British Council than the BBC World Service, we
recommend that the World Service, in its response to this Report,
provide us with a detailed memorandum setting out the extent to
which there is realistic scope for it to increase turnover from
its commercial arms such as advertising on its websites and to
work more closely with private sector firms in host countries,
and indicating how it proposes to exploit any such opportunities
to raise revenue. (Paragraph 65)
13. The decision to
transfer funding responsibility for the BBC World Service from
the FCO to the BBC will have major long-term ramifications for
the future of the World Service. We were told that the BBC carried
out "modelling" of a transfer of funding during summer
2010, because such a decision was, according to the Director-General,
"in the air" during the run-up to the Spending Review.
We recommend that, in its response to this Report, the Government
should clarify exactly when and by whom such a transfer was first
mooted in discussions between the Government and the BBC, who
initiated those discussions, and to what extent the BBC's "modelling"
work and internal discussions about a transfer carried out prior
to October 2010 were encouraged by the Government. We note that
following this preliminary work by the BBC, discussions between
Ministers and the BBC about a funding transfer did not take place
until nine days before the formal announcement of the change on
20 October 2010, and the agreement of the Foreign Secretary was
secured only 48 hours before. We conclude that taking this decision
in such a short space of time cannot have allowed the FCO to consider
the full range of options and implications. We further conclude
that the decision was essentially financial, taken at very short
notice, with the full agreement of BBC top management. (Paragraph
75)
14. We do not believe
that the decision to transfer funding responsibility for the World
Service from the FCO to the BBC will make the World Service's
funding more secure. We are concerned that, despite the mechanisms
and procedures we have been assured will be put in place, this
decision could lead to long-term pressure on the World Service
budget, with the risk of a gradual diversion of resources from
the World Service to fund other BBC activities. The freezing of
the BBC licence fee for six years from October 2010 may increase
the temptation for BBC senior management to "raid" World
Service funding. In addition, the BBC may be vulnerable to media
campaigns confronting the British public with a choice between,
for instance, BBC spending on popular light-entertainment programmes
and spending on news services in foreign languages in remote parts
of the world. There is also a risk that Parliament's current ability
to oversee the work of the World Service, in particular through
select committee scrutiny, may be weakened under the proposed
new arrangements. We therefore recommend that no transfer of funding
responsibility for the World Service from the direct FCO Grant-in-Aid
to the BBC should take place until satisfactory safeguards have
been put in place to prevent any risk of long-term erosion of
the World Service's funding and of Parliament's right to oversee
its work. (Paragraph 80)
15. The FCO has attempted
to reassure us about governance arrangements after the proposed
transfer of funding, by arguing that "the terms of the relationship
[will] remain unaffected, other than in the sense of who holds
the purse strings". Unfortunately, whoever holds the purse
strings exercises a great deal of power. It is not difficult to
imagine a situation some years in the future in which the BBC
Trust might present the Foreign Secretary of the day with a fait
accompli, along the lines of, "You can have a Russian service
or you can have an Arabic service, but you can't have both because
we are not prepared to fund both". We therefore conclude
that a formal concordat should be drawn up between the Government
and the BBC Trust, to make detailed provision for future funding
and governance arrangements for the World Service. We recommend
that this concordat give the Foreign Secretary not only the final
decision over service closures, but also the right to stipulate
minimum levels of service provision which the BBC will have a
formal responsibility to fund. (Paragraph 81)
16. In the event that
the proposed transfer of funding in April 2014 goes ahead, then,
in view of the Foreign Secretary's retained oversight responsibilities
for the World Service, we intend to continue after that date,
in conjunction with our colleagues on the Culture, Media and Sport
Committee, to monitor the funding, policies and performance of
the World Service, its links with the FCO, and its role as an
important projector of the UK's influence and 'soft power'. (Paragraph
82)
17. We further recommend
that, if the transfer of funding takes place, the Foreign Secretary
ensure that the World Service is adequately represented at the
top levels of BBC management; and in particular that the Director
of the World Service should have a place ex officio on the new
Executive Board of the BBC, and that the International Trustee
of the BBC Board of Governors should be given the specific responsibility
of representing the interests of the World Service. (Paragraph
83)
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