The future of the BBC World Service
The purpose
of this report
1. On Tuesday 1 April 2014, responsibility for funding
the BBC World Service will transfer from the Foreign and Commonwealth
Office (FCO) to the BBC. Taxpayer funding in the form of FCO Grant
in Aid will cease, and the main burden of the cost of the World
Service will be met from the BBC Licence Fee. No increase in the
Licence Fee has been agreed to offset this new demand on resources.
2. We have had serious reservations about the transfer
from the outset. In April 2011, we deemed the risks so severe
that we recommended that no transfer should take place until satisfactory
safeguards had been put in place to prevent long-term erosion
of the World Service's funding and of Parliament's right to oversee
its work. This report summarises concerns which we expressed then
and in subsequent reports and which have, if anything, become
more marked with the passage of time.[1]
We also take into account recent oral evidence from Peter Horrocks,
Director of BBC Global News and the de facto head of the
World Service; from James Harding, who is Director of BBC News
and the person responsible for representing the World Service's
interests on the BBC Executive Board; and from Lord Williams of
Baglan, International Trustee at the BBC Trust. Footnote references
to oral evidence are to evidence taken on 11 February 2014 from
Mr Horrocks or on 24 March 2014 from Mr Harding and Lord Williams,
unless we have indicated otherwise.
BBC World Service funding
3. In our report on The Implications of Cuts to
the BBC World Service, published in April 2011, we said that:
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 ... 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.[2]
4. On 1 April 2014, the BBC Trust assumes responsibility
for approving the budget of the World Service. In doing so, it
must have regard to the need to provide sufficient funding for
the delivery of the World Service as defined in its Operating
Licence,[3] and to the
interests of licence fee payers.[4]
In June 2013, the Trust announced that the budget for the World
Service for 2014-15 would be £245 million (up from £238.5
million in Government Grant in Aid in 2013-14). We have strongly
welcomed the increase.[5]
5. No budget has yet been announced for years beyond
2014-15. Mr Horrocks, Director of BBC Global News, was optimistic
that funding levels for the World Service beyond 2014-15 would
not fall, at least in cash terms.[6]
We invited Mr Harding, Director of News at the BBC, to comment
on future funding for the BBC World Service. Although he could
not tell us exactly when an announcement of precise figures would
be made, he gave an assurance that the budget for 2014-15 would
be maintained until the end of the current BBC licence fee period
(2016-17);[7] and, in addition,
funds would be sought to invest in future innovation, over and
above the £245 million. When we asked whether he could assure
us that the 2014-15 budget of £245 million would be a minimum
until the end of the licence fee period and perhaps beyond, he
replied "Yes".[8]
6. We note that this undertaking is being made at
a time when the financial environment is tough. In October 2011,
the BBC announced plans to achieve £700 million in savings—or
20 per cent of its total budget—over the four-year period
from 2013-14 to 2016-17. Just over £60 million of annual
savings were to come from the News and English Regions division.
Mr Harding has announced the closure of 75 posts across News and
English Regions and has warned that "we will need to find
further substantial savings over the following two years".[9]
7. We welcome the undertaking by the Director
of News at the BBC to maintain the budget for the World Service
up until the end of the current licence fee period, and his assurance
that the next two years of funding will use the 2014-15 budget
as a baseline. We urge the BBC to announce detailed funding allocations
for 2015-16 and 2016-17 as soon as possible, to enable not just
the World Service but also other divisions of the BBC to plan
over the longer term.
Governance
8. In our 2011 report on The Implications of Cuts
to the BBC World Service, we were concerned about arrangements
for future governance of the BBC World Service, consequential
upon the funding transfer. We proposed that the following steps
be taken to protect the interests of the World Service:
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.[10]
Our recommendations on governance, both in 2011 and
since,[11] have been
founded on our doubts that the distinct interests of the BBC World
Service can be fully represented at the BBC's Executive Board
by a member who holds a wide range of responsibilities, encompassing
not just the BBC World Service but also other elements of the
Global News division (which includes the commercially-funded BBC
World News), the BBC's news and current affairs services in the
UK, and services in the English regions.[12]
Mr Horrocks, the Director of Global News, does not sit on the
BBC's Executive Board; nor does he now sit on the Management Board,
which is responsible for "managing pan-BBC issues delegated
to it from the Executive Board".[13]
BBC Trust
9. In reply to our concerns, the Government and the
BBC accepted the case for a member of the BBC Trust to have specific
responsibility for overseeing the BBC's international services,
and Lord Williams took up the post of International Trustee and
Chair of the Trust's International Services Committee on 1 December
2011.
10. The Trust will set the overall strategic direction
for the World Service and will approve the budget proposed by
the BBC Executive. The Operating Licence published by the Trust
sets out the remit, objectives and framework by which the Trust
will assess the World Service's performance each year. The Trust
will agree with the Foreign Secretary the languages in which the
World Service is to be provided, and any proposal to start a new
language service or to cease a service will require the agreement
of both the Trust and the Foreign Secretary.[14]
BBC Executive
11. In response to our arguments on representation
of the BBC World Service on the BBC Executive, the Government
said that the make-up of the Executive Board of the BBC was a
matter for the BBC, and the BBC has twice rejected our arguments.
The first time, in June 2013, it said merely that "the whole
of the Executive Board, which includes the Director of News, is
accountable to the Trust for delivering the strategy of the World
Service".[15] The
second time, in February 2014, it said that
the World Service is championed at the highest
levels of the BBC and is represented on the Executive Board by
the Director of News and Current Affairs ... This collective commitment
to the World Service should be measured by what we promise to
deliver-growth in World Service audiences, a better, richer news
service for both global and UK audiences, and a sustained reputation
for the BBC as the most trusted news provider in the world-rather
than by representation on the Board or management committees.[16]
12. Since we received that response, it has been
announced that the World Service Board (which takes operational
decisions on the World Service's output and on allocation of resources)
will cease to exist, and decisions regarding World Service operations
will in future be made by the News Group Board. Mr Harding told
us that the News Group Board was formed of representatives from
across the news division, including those responsible for newsgathering
across the BBC, for the newsroom (with oversight of all news bulletins),
and for political programming.[17]
He also told us that there were no plans to dispense with the
post of Director of the World Service.[18]
13. We discussed with Mr Harding and with Lord Williams
the representation of the World Service's interests at Board level.
Lord Williams did not accept that a lack of representation at
Executive Board level meant that the World Service was not protected,
and Mr Harding stressed that the Executive Board had been scaled
down in order to make it a more effective decision-making body.
He argued that the World Service did have a voice at the 'top
table'—his own—and that to provide separate representation
specifically for the World Service would generate claims for similar
treatment from other parts of the BBC. He strongly favoured integration
of the World Service within the BBC, saying that the "worst
outcome" for the World Service would be for it to be considered
as an "adjunct to the BBC" or a "ghetto".[19]
14. The move to licence fee funding for the BBC World
Service is likely to increase the challenges from inside and outside
the BBC to the level of resources allotted to the World Service.
Strains within the BBC are already evident. The BBC Executive
has agreed to submit a proposal to the BBC Trust to close BBC
Three as a television channel in autumn 2015 and to replace it
with an online service. In an interview on Radio 5 Live on 6 March,
Danny Cohen, the BBC's Director of Television, said that the requirement
for the BBC to fund the £245 million World Service from the
licence fee had contributed to the need to move BBC Three online.[20]
15. We expect that the integration of the World Service
within the BBC will in due course encourage the public and the
media to be more searching in questioning the value of the World
Service in relation to parts of the BBC's domestic services. When
giving evidence to us in November 2011, Lord Patten, Chairman
of the Trust, cited evidence from polls which suggested that the
British public gave the World Service "a high rating"
and that it recognised the World Service's role in "explaining
this country to the world, and the reverse". He accepted,
though, that to build on that perception would "need argument"
and would occasionally mean "taking on some of the more popular
tabloids".[21]
Conclusion on governance
16. We have clear differences with the BBC on
governance of the World Service. We respect the arguments made
by the Director of News in defence of the new arrangements, but
it remains to be seen whether they will indeed safeguard the distinct
nature of the World Service. We regret that the BBC has moved
from a position where the Director of the World Service was a
very senior person within the organisation to one where the World
Service has no direct voice on the Executive Board or the Management
Board, and where the Director is just one of many competing voices
on the News Group Board which will take decisions on how the World
Service should meet its objectives and targets under the Operating
Licence. We do not depart from the reservations which we have
expressed in the past about the transfer of funding responsibility
and the consequential changes in governance, and we recommend
that the BBC should at least allow for direct representation of
the World Service at the Management Board—and preferably
the Executive Board—on a temporary basis, for five years,
while the new funding arrangements for the World Service settle.
The role of the Foreign and Commonwealth
Office
17. The FCO's responsibility for funding the BBC
World Service, while respecting its editorial independence, has
allowed it to exercise discreet influence. Mr Harding described
the past arrangement as "quite a subtle contract", but
he believed that the move to licence fee funding, by removing
any sense that the World Service might be run by the FCO, would
"probably only enhance respect" for the World Service.[22]
18. The FCO is already demonstrating a greater detachment
from the World Service. In its response to our recommendations
on protection of the World Service's interests through change
in governance structures at the BBC, the FCO avoided making any
substantive comment. Instead it made a general statement of support
for the World Service and concluded: "It is for the BBC to
comment on internal management structures and processes".[23]
The FCO has also consistently deferred to the World Service on
whether to establish a Korean Service, despite the potential value
of such a service in helping to open up North Korea to external
influence.[24] The World
Service does not propose to go ahead with a Korean Service at
this stage, as it is not convinced that such a Service would be
cost-effective.[25]
19. The FCO's reluctance to be seen to influence
the World Service is understandable, but we believe that it would
not be in the interests of the UK for the BBC to lose sight of
the priorities of the FCO, which relies upon the World Service
as an instrument of 'soft power'. The Chairman of the BBC
Trust will meet the Foreign Secretary annually to discuss the
performance of the World Service.[26]
We asked the Foreign Secretary whether he would "hold
the BBC's feet to the fire" in protecting the interests of
the World Service, and he replied: "I will always do that".[27]
We also note that, although there is no express provision
under the new Agreement between the BBC and the Government for
quarterly meetings between the FCO and the BBC World Service at
Director level,[28] Lord
Williams was confident that meetings in future would "probably
be as regular as they have been in the past".[29]
20. This Committee has in the past challenged the
FCO on cuts to the FCO's grant funding for the World Service,
and we have succeeded in reversing some of those cuts. With the
transfer of funding responsibility from the FCO and the consequent
loss of direct accountability of Government to Parliament for
that funding, we will no longer have the same leverage on behalf
of the World Service, although we recognise that the Culture,
Media and Sport Committee will have an active role in scrutiny
of the BBC as a whole.
21. We will continue to speak up for the BBC World
Service and its role in projecting the values and interests of
the UK across the world. We urge the Foreign Secretary to do the
same. We are encouraged to hear that frequent contact between
the BBC and the FCO is likely to continue. We were pleased to
hear the Foreign Secretary say that he would always "hold
the BBC's feet to the fire" in protecting the interests of
the World Service. We urge him and his successors to honour that
commitment.
1 The Implications of Cuts to the BBC World Service,
Sixth Report of Session 2010-11, HC 849, http://www.publications.parliament.uk/pa/cm201011/cmselect/cmfaff/849/84902.htm;
Departmental Annual Report 2010-11, Eleventh Report of
Session 2010-12, HC 1618, http://www.publications.parliament.uk/pa/cm201012/cmselect/cmfaff/1618/161802.htm;
FCO performance and finances 2011-12, Fifth Report of Session
2012-13, HC 690, http://www.publications.parliament.uk/pa/cm201213/cmselect/cmfaff/690/69002.htm;
FCO performance and finances 2012-13, Sixth Report of Session
2013-14, HC 696, http://www.publications.parliament.uk/pa/cm201314/cmselect/cmfaff/696/69602.htm Back
2
Paragraph 80, Sixth Report from the Committee, Session 2010-12,
http://www.publications.parliament.uk/pa/cm201011/cmselect/cmfaff/849/84902.htm Back
3
The Operating Licence defines the characteristics of the BBC World
Service and sets out how the World Service contributes to the
BBC's public purposes. The Trust issued an Operating Licence on
30 January 2014. Back
4
Agreement between Her Majesty's Secretary of State for Culture,
Olympics, Media and Sport and the British Broadcasting Corporation,
Command Paper 8170, September 2011, https://www.gov.uk/government/uploads/system/uploads/attachment_data/file/78441/Ammended-BBCAgreement-Cm8170-SEPT2011.pdf. Back
5
FCO performance and finances 2012-13, Sixth Report from
the Committee, Session 2013-14, HC 696, paragraph 76, http://www.publications.parliament.uk/pa/cm201314/cmselect/cmfaff/696/69602.htm Back
6
Q 2 and 3 Back
7
The current BBC Charter runs until December 2016 and the licence
fee as currently set (£145.50) will fund the BBC's spending
until the end of the 2016-17 financial year. Back
8
Q 40 to 42; Q 50 Back
9
Press Gazette 19 September 2013, http://www.pressgazette.co.uk/harding-announces-75-bbc-news-job-go-possible-compulsory-redundancies-and-more-cuts-come
Back
10
Paragraph 83, Sixth Report from the Committee, Session 2010-12,
http://www.publications.parliament.uk/pa/cm201011/cmselect/cmfaff/849/84902.htm Back
11
Departmental Annual Report 2010-11, Eleventh Report of
Session 2010-12, HC 1618, http://www.publications.parliament.uk/pa/cm201012/cmselect/cmfaff/1618/161802.htm;
FCO performance and finances 2011-12, Fifth Report of Session
2012-13, HC 690, http://www.publications.parliament.uk/pa/cm201213/cmselect/cmfaff/690/69002.htm;
FCO performance and finances 2012-13, Sixth Report of Session
2013-14, HC 696, http://www.publications.parliament.uk/pa/cm201314/cmselect/cmfaff/696/69602.htm Back
12
See Fifth Report from the Committee, FCO performance and finances
2011-12, HC 690, paragraph 82, http://www.publications.parliament.uk/pa/cm201213/cmselect/cmfaff/690/69002.htm Back
13
http://www.bbc.co.uk/aboutthebbc/insidethebbc/managementstructure/bbcstructure/management_board.html.
Mr Horrocks told us last year that he used to sit on the BBC Direction
Group, which was "in effect the equivalent of the Management
Board" but that he had ceased to do so after a decision by
the then Director-General, George Entwistle, to reduce the number
of people who sat on the Group "to make it a more effective,
smaller decision-making body". Q 25, evidence given on 5
November 2013, HC 696. Back
14
Q 60. See Clause 64A(6), Agreement between Her Majesty's Secretary
of State for Culture, Olympics, Media and Sport and the British
Broadcasting Corporation, Command Paper 8170, September 2011,
https://www.gov.uk/government/uploads/system/uploads/attachment_data/file/78441/Ammended-BBCAgreement-Cm8170-SEPT2011.pdf. Back
15
Committee's First Special Report of Session 2012-13: Responses
from the British Council and the BBC to the Committee's Fifth
Report, on FCO performance and finances 2011-12, http://www.publications.parliament.uk/pa/cm201314/cmselect/cmfaff/381/38102.htm. Back
16
Second Special Report from the Committee, Session 2013-14, HC
1196. Back
17
Q 71 Back
18
Q 70 Back
19
Q 63 Back
20
http://www.telegraph.co.uk/culture/tvandradio/10681687/BBC-Four-at-risk-of-being-scrapped.html Back
21
Q 112, evidence taken on 22 November 2011, HC 1618, http://www.publications.parliament.uk/pa/cm201012/cmselect/cmfaff/1618/111122.htm Back
22
Q 60 Back
23
Government Response to the Committee's Sixth Report of Session
2013-14, on FCO performance and finances 2012-13, published
as Command Paper 8797, https://www.gov.uk/government/uploads/system/uploads/attachment_data/file/287941/37679_Cm_8797.pdf Back
24
See for instance response by the Deputy Prime Minister HC Deb
12 March 2014 col 316, http://www.publications.parliament.uk/pa/cm201314/cmhansrd/cm140312/debtext/140312-0001.htm#14031257000019,
(clarification in HC Deb 19 March 2014 col 629W, http://www.publications.parliament.uk/pa/cm201314/cmhansrd/cm140319/text/140319w0002.htm#14031981000053) Back
25
Q 19, evidence given by Mr Horrocks on 5 November 2013, HC 696,
http://data.parliament.uk/writtenevidence/WrittenEvidence.svc/EvidenceHtml/3450 Back
26
Q 59 Back
27
Q 51, evidence given on 18 March 2014, HC 1150, http://data.parliament.uk/writtenevidence/WrittenEvidence.svc/EvidencePdf/7747 Back
28
https://www.gov.uk/government/uploads/system/uploads/attachment_data/file/78441/Ammended-BBCAgreement-Cm8170-SEPT2011.pdf Back
29
Q 59 Back
|
