The Foreign Affairs Committee invited the BBC to
respond to its recent report, The Implications of Cuts to the
BBC World Service.
The Corporation welcomes the Committee's strong support
for the BBC World Service and the benefits it brings in promoting
British values and providing a widely respected and trusted news
service around the world.
The Committee raises some important issues regarding
the level of funding provided to the World Service. The cuts being
made to the World Service are a consequence of last autumn's spending
review and the BBC regrets the scale and pace of cuts that have
It is of course for the Government and Parliament
to decide the priorities for public spending. If, in the light
of the Committee's report, the Government is prepared to reconsider
the level of funding available to World Service, the BBC will
be very pleased to engage with them in further discussion. Notwithstanding
this, our immediate priority is to minimise the impact of the
spending review settlement on services valued by audiences around
the world. We are exploring ways to mitigate the impact of the
cuts on the World Service's strategically most important services;
for instance, the BBC-wide pensions fund has recently been revalued
and this may create some greater financial flexibility for the
World Service. The BBC is urgently exploring the implications
of this. However any resulting benefits would be small relative
to the overall funding challenge the World Service faces.
The BBC is fully committed to the long-term future
of the World Service. The new Chairman and Director-General have
both stated it is their aim to reinvest in the World Service when
responsibility for funding transfers to the licence fee in 2014.
Our response addresses the Committee's conclusions
and recommendations under the three categories of issues raised:
funding, operational matters, and future governance.
The funding of the BBC World Service is currently
covered by grant-in-aid from the FCO; from 1 April 2014, the funding
for the World Service will transfer to the licence fee.
The BBC has developed a framework to deliver the
World Service within the constraints of the funding available
until 2014. This has involved difficult decisions and has resulted
in the BBC having to close and reduce services that it would have
preferred not to have done. To mitigate the impact, the BBC has
made available up to £20 million of licence fee funds to
help meet the restructuring costs within the World Service over
the next few years.
If any additional funding over and above the spending
review settlement were to be made available to the World Service,
then the BBC would be pleased to discuss with Government how that
could best be used to mitigate the impact of the cuts and to provide
sustainable new investments.
The Committee also raised the issue of commercial
activity. The World Service already has a small commercial income
stream, and has been set a target by the Government as part of
the spending review to increase this by £3m per annum. We
have started exploring how this target could be achieved, and
the potential impacts on the services that are provided through
the World Service. Under the BBC's governance arrangements a proposal
to significantly increase the commercialisation of the World Service
would require approval from the BBC Trust, and potentially the
Under the current governance and constitutional arrangements
pertaining to the World Service, the Government provides grant-in-aid
funding through the FCO and, notwithstanding the consent required
for the opening and closing of complete World Service language
services, the World Service is operationally and editorially independent.
Within this context we have set out below our response to some
of the operational concerns raised by the Committee.
Decisions to open and close complete language services
as a result of the reduction in funding for the World Service
under the spending review were, as required, jointly agreed by
the BBC Trust, the Corporation's governing body, and the Foreign
Within the resources available, the BBC must determine
how services are managed and programming distributed in the context
of an overall strategy for the World Service approved by the BBC's
Executive Board and the BBC Trust. In restructuring the World
Service following the spending review, decisions were based on
three criteria: strategic importance, impact and cost-effectiveness.
With regard to the specific services about which
the Committee raised concerns:
The BBC remains committed to providing news to India
but to secure its long term relevance needs to respond to rapid
and significant changes in the media market. TV is now the key
medium for news, and is already in six in ten households. FM deregulation
has led to a steep decline in shortwave listening, despite the
ban on news from any provider except the state broadcaster (All
India Radio). Mobile phones are now ubiquitous in India, with
0.5 billion subscribers, and internet availability continues to
grow. These changes have created commercial opportunities which
have drawn a plethora of new competitors meeting the Indian preference
for localised content.
This is the background which has seen the BBC Hindi
audience in India decline by almost half in only three years,
from 17.8m weekly listeners in 2008 to 9.7m in 2010still
significant in numerical terms, but representing only 1.3% reach
among Hindi-speaking adults. As shortwave listening continues
to decline in India, it is to be expected that the BBC shortwave
audience will decline further.
As the Committee has noted, the BBC has announced
the retention of one hour of Hindi shortwave for one year, in
response to audience concern, and while it explores whether sustainable
commercial funding can be found for the longer term. The BBC has
noted the Committee's recommendation regarding longer term support
for an unreduced service. The original decision to cease Hindi
short wave broadcasting was a difficult choice and sooner than
we would have liked, however one that we believed was necessary
given the resources available at the time. The BBC is examining
whether any further retention is possible within the funding constraints.
The Chinese authorities are dedicated to limiting
the impact of foreign media in China. While it is true that online
services are vulnerable to action by the authorities, BBC Mandarin
radio transmissions have been very successfully jammed by the
Chinese authorities for decades.
While the strategic importance of China is clear,
the impact of BBC Mandarin radio was extremely low, with 0.6m
listeners in a country of 1.34 billion. This partly reflects the
continuous jamming, but in any case short wave listening is now
a marginal activity in most of China. Within the reduced funding
available it was judged no longer sufficiently cost effective
to retain, as to have done so would have required further cuts
to other services which make a more significant impact upon the
countries they serve.
Arabic was the World Service's first vernacular language
service, and the World Service has been broadcasting continuously
in the language since 1938.
The World Service remains committed to the Arabic-speaking
world, and has responded to the increased significance of that
part of the world in recent years by diverting resources into
further broadcasts as well as requesting additional funds from
the Government. BBC Arabic radio broadcast 24 hours a day for
the first time on 11 September 2001. BBC Arabic television, which
now reaches 13.5 million viewers each week, was set up on a 12
hour basis in 2008 by cutting other language services, and was
taken 24 hours in 2009 with additional Grant-in-Aida move
that was strongly supported by the Committee.
The World Service has responded to more recent events
by diverting considerable newsgathering resources to the region
and creating new programmes to enable audiences across the region
to interact and discuss common issues. The World Service has also
submitted some project proposals to the Arab Partnership Programme
Fund set up by the FCO recently in response to the 'Arab Spring',
though should these proposals be funded, these would not provide
a direct replacement for programming or transmission cuts necessitated
by the spending review.
BBC Arabic remains the World Service's best-funded
language service. Protecting it entirely from the spending review
cuts would have required either the complete closure of several
other services or much deeper cuts to other ongoing services.
Consequently there has been some reduction in transmission hours
on short wave and medium wave, and a reduction in the number of
hours of live news on both radio and television may be unavoidable.
However, the World Service is continually assessing the situation
in the light of unfolding events.
The level of post closures set out by the World Service
in January 2011 was a direct consequence of the reduction in funding
in the spending review, and the decisions to change the mix of
services to respond to the financial constraints. It is important
to note that the 16% cut in funding required significantly greater
cuts in services, because of the additional impact of the BBC-wide
pension deficit and the lack of funding in the original settlement
There are large restructuring costs associated with
implementing such significant change. As such, the Trust and the
Executive Boardwith the consent of DCMS to amend the BBC's
Agreement to allow thisagreed to a one-off contribution
of up to £20m from the licence fee to partially fund restructuring
costs at the World Service. There was also further assistance
from the FCO via a one-off payment of £3m to support restructuring
The reduction in the size of the World Service workforce
is expected to be less than 27%. The figure of 650, as quoted
in the Committee's report, represents the estimated number of
existing posts to be proposed for closure, not the number of job
losses. Some posts are already vacant and some new posts are being
created as departments are re-structured and new investments made.
The number of compulsory redundancies is expected
to be still less, as the World Service has sought volunteers,
and staff in closing posts are being given priority to fill both
vacant and newly-created posts. The BBC is doing its best to minimise
the impact upon staff.
The BBC is grateful for the assurances offered by
the Foreign Secretary with regard to staff who may have to return
to their home countries after working for the World Service. However
the World Service is still in the process of identifying which
individual members of staff will unfortunately face redundancy.
Over the next few months the picture should become clearer, at
which point we will seek the support of relevant government agencies
to minimise the impact upon such staff.
The decision to transfer funding responsibility for
the World Service from the FCO grant-in-aid to the licence fee
from April 2014 was taken by the Government with the BBC's agreement.
The BBC believes that a number of strategic and financial benefits
will arise from the arrangement and is working to implement the
changes, as described in the BBC's evidence to the Committee's
inquiry. Some of these benefits are:
Firstly, while the BBC has always had editorial control
of the World Service, there is now an increased clarity about
the World Service's independence. There can now be no doubt in
the minds of overseas audiences that the services providedfunded
directly by the British public through the licence feeare
Secondly, there is scope for further cost-effectiveness
when two newsrooms join together at Broadcasting House.
Thirdly, licence fee payers may gain greater awareness
of the availability of services from the World Service within
the UK, for instance World Service English via DAB and digital
TV and many of the foreign language radio and television programmes
online. Through these means licence fee payers will be able to
access a deeper range of international news from the BBC.
Fourthly, and most importantly, the new arrangements
will provide greater financial stability and certainty for the
World Service. The World Service has only ever known its funding
two to three years ahead, and in recent years has suffered additional
budget cuts, outside of formal Government spending reviews. Licence
fee funding arrangements allow the BBC to plan over longer periods
than is presently the case for the World Service, and furthermore
the Chairman and Director-General have stated that it is their
aim to increase funding for the World Service once it is funded
from the licence fee.
The formal accountability for spending of the licence
fee is to the BBC Trust, and this will be the case for the World
Service when it is funded through this mechanism. Though the World
Service has some additional responsibilities to account for its
current grant-in-aid funding, it has always been an integral part
of the BBC, and its activities, strategies and finances have always
been overseen by the BBC's Executive Board and ultimately the
The BBC, including the World Service, has always
been willing to answer questions from, and give evidence to, the
UK's Parliaments and Assemblies, and will continue to do so when
the World Service's funding transfers to the licence fee. We would
wish to continue to have a strong working relationship with the
Foreign Affairs Select Committee.
The BBC has already reached in-principle agreement
with the Foreign Secretary and the DCMS regarding the future governance
of the World Service, the detail of which will be published in
an amending agreement to the formal BBC Framework Agreement between
the Government and the Corporation.
Lord Patten has also agreed to look at the governance
of the BBC as he starts his term as the Chairman of the BBC Trust.
This review will look, inter alia, at whether the governance arrangements
for the BBC's international serviceincluding the World
Serviceare appropriate given the new funding arrangements.
The Chairman is in discussion with the Secretary of State for
Culture, Media, Olympics and Sport about whether the current vacancy
on the BBC Trust could be filled by a person who would have a
specific duty to oversee the BBC's strategy for its international
services, which includes the World Service.
The World Service will continue to be represented
on the BBC's Executive Board by the BBC's Director of News, who
has formal responsibility within the BBC for all news output,
both domestic and international, including the World Service.
16 May 2011