Conclusions and recommendations
2017 Charter Review process
1. We
agree with Lord Burns, the former Government's adviser on the
last Charter Review, that even with the timing of the general
election, preparatory work for 2017 Charter Review should start
as soon as possible. Consideration of the future of the BBC is
too important to rush. The BBC Trust must demonstrate a readiness
and willingness to ensure that a full and frank debate takes place
on all aspects of the BBC as part of Charter Review including
through its own engagement with licence fee payers on all the
fundamental issues concerning the BBC. (Paragraph 25)
2. The
process for agreeing the future shape, funding and constitution
of the BBC must be as thorough, open and democratic as possible.
For this to happen, we recommend that the Government seek cross-party
support for establishing an independent review panel now on the
2017 Charter, along the same lines as the previous Burns' model,
led by a figure similar to Lord Burns, so that the vital preparatory
work and research to inform Charter Review can begin without further
delay. Our principal conclusions and recommendations in this report
set out a basis for the terms of inquiry for the independent panel.
(Paragraph 26)
3. As
with the previous Charter Review, the Government must ensure that
the public and other stakeholders are fully consulted and able
to put across their views on the future of the BBC. We expect
sufficient time to be allocated for this and for the development
of, and consultation on, Green and White Papers, and for parliamentary
scrutiny on these and any draft future Charter and Framework Agreements.
If there is insufficient time to undertake this properly before
the current Charter expires another option would be to grant a
supplementary Charter extending the current Charter for an appropriate
period in which to complete the review process. (Paragraph 27)
Public purposes
4. We
recommend that the independent panel and formal Charter Review
consult on the BBC's current public purposes and purpose remits
set out for them, to determine whether and how they might be revised
and to examine their effectiveness in measuring the BBC's public
value. We believe a critical review of the purpose remits, and
consultation and research on BBC performance, including on people's
willingness to pay for BBC services, could help clarify the BBC's
core purposes and suggest strategic and funding priorities. (Paragraph
44)
5. Given
the BBC's vital contribution to training and development of talent
and skills in the UK's creative media industries and in journalism,
we believe this function should be reflected in the BBC's core
public purposes. Similarly, we believe that the success of a future
public BBC will depend on its ability and willingness to collaborate
and work in partnership with others at all levels to maximise
its public value and that of others. The necessity for collaborative
engagement should be enshrined in the BBC's public purposes. (Paragraph
49)
BBC Three
6. It
is difficult to see how BBC Three could be judged a success after
more than a decade and expenditure of more than a billion pounds
of licence payers' money, given the minority of the target audience
reached. We believe it is right that the BBC Executive is considering
alternative ways to reach BBC Three's target audience and recommend
that all BBC services be evaluated in terms of most effective
delivery and value for money. (Paragraph 57)
BBC World Service
7. We
are concerned that combining the role of the BBC deputy director
of news with that of the director of the World Service will dilute
the influence and the independent voice of the World Service within
the BBC, as the Service will no longer have a leader dedicated
solely to developing and representing its interests. Given its
new funding and oversight arrangements, we fear the importance
of the World Service could be diminished. The extent to which
the World Service's needs will be met from within the BBC must
be monitored very carefully in the new Parliament. At a time when
countries like Russia and China are significantly increasing their
investment in global media outlets, including services aimed at
the UK, we believe that the World Service has an increasingly
important role in what is a global information war. (Paragraph
62)
Serving all audiences
8. While
we welcome the BBC's success in shifting spend out of London during
the current Charter period through its move to Salford and through
the concentration on "Centres of excellence", it is
evident that some areas of the country have received a disproportionately
small return of the licence fee which has meant they have missed
out on economic activity. Although we accept the BBC cannot have
a significant physical presence in all regions of the country,
it must develop a more equitable commissioning and business strategy
that fosters cultural variety and spreads its activity, as far
as possible, across the country. (Paragraph 68)
9. We
believe it is crucial for the BBC and other broadcasters to broaden
the range of voices and backgrounds at commissioning level as
well as on screen and in other areas of broadcasting. (Paragraph
72)
10. Without
the BBC's supply of UK-originated content and programmes for children,
many younger people would have to rely largely on a diet of acquired
US television programmes, as the BBC is pretty much by itself
in the provision of UK-originated children's output. This content
plays a vital part of children's early learning experience and
understanding of their cultural identity. Children's content must
remain a core and priority PSB genre for the BBC beyond 2016.
The BBC will need to be able to continue to innovate and develop
new media and distribution strategies for children as the audience
for traditional linear television programmes continues to decline
over the next few years. We commend the BBC for the quality and
provision of its content for children over the current Charter
period. (Paragraph 77)
Savings and efficiency
11. The
BBC's achievement of cumulative savings of £1.1 billion since
2007 is commendable given the relatively small negative impact
they have had on audiences' appreciation and on reach of its services.
Whilst efficiencies of this magnitude may have been challenging
for them to accomplish, especially on the back of earlier initiatives,
the fact that the BBC achieved the savings demonstrates it was
right that the Corporation faced a tight spending settlement in
2010, notwithstanding the criticisms of the way that settlement
was conducted. (Paragraph 83)
12. The
BBC still has £400 million of savings to make by 2017. Given
that the likely opportunities for further productivity gains must
be diminishing, the BBC will need to be bold and upfront in presenting
the options for cuts to services or output which would allow it
to stay on track for the savings target, while still meeting its
public purposes and audience expectations. (Paragraph 84)
BBC performance
13. We
believe that the BBC has done well in the current Charter period,
in light of increased choice and competition, in terms of overall
reach and audience consumption and appreciation, but it has also
had a few notable failures and underperformance in certain areas
which the BBC has not always been ready to acknowledge until well
after the fact. Over the course of the Charter period, in their
annual reports, in our view, the BBC Trust and the BBC Executive
have often tended to highlight favourable performance figures
over the less favourable, burying the latter in lengthy narratives,
or supplementary documents online, which has not facilitated an
easy scrutiny of where the BBC had been doing well and where it
had been less successful. In the remaining part of the current
Charter, the BBC should aim to be a better, more transparent,
self-critic. It should not be deterred from summarising and publishing
the least favourable performance figures alongside those where
it is doing well. We recommend that the independent panel, and
the Charter Review process itself, must appraise the BBC's current
performance measures and manner of reporting in order to determine
whether changes should be made in the future to ensure the BBC
presents a more balanced picture of its results. (Paragraph 85)
Partnerships
14. We
welcome the fact that Lord Hall has made partnerships one of his
key ambitions over the next few years. We believe the BBC and
its audiences have gained greatly from the Corporation working
with others during the present Charter period. In order to ensure
maximum public value, the BBC must be required to harness such
joint working arrangements wherever it can appropriately do so
if it is to continue to benefit from the privilege of public funding.
Increasing its partnership potential should be a core purpose
of the BBC. (Paragraph 112)
Scope and scale
15. While
it is the case that the BBC's purposes and funding will determine
some parameters for the BBC's scope and scale, it is also the
Framework Agreement between the BBC and the Secretary of State
and the interpretations and decisions taken by the Trust and any
successor oversight body that affect these. In practice the level
of the funding will be the main lever in preventing the BBC overreaching
its remit as set out in the Framework Agreement. (Paragraph 113)
16. The
BBC's audience share of television, comprising about a third of
all UK television viewing, although it has fallen over the last
couple of decades, continues to demonstrate the BBC's central
presence in the life of the country. (Paragraph 114)
17. We
consider that the BBC Trust's view that it is difficult to put
a stop to any significant parts of BBC activity, citing the support
shown by the audiences to individual services, is questionable.
The BBC must make the most effective use of licence fee payers'
money and should not be trying to do everything itself. The BBC
needs to be able to make bigger, braver decisions on its strategy
and inevitably must do less in some areas. Similarly, we challenge
the BBC's justification for doing all that it currently does in
order to provide "something for everyone". (Paragraph
115)
18. It
is not incompatible for the BBC to provide "something for
everyone" across its output whilst also reducing provision
in areas that are over-served or where the public service characteristics
of its output are marginal, or where others are better placed
to deliver excellence and better value for money. The BBC has
been given a privileged position and substantial public funding
to serve under-served and under-represented audiences, as well
as mass audiences, with content not created for commercial gain,
allowing it to take risks and be distinctive, challenging, original
and innovative. (Paragraph 116)
BBC One +1 proposal
19. We
do not find that the BBC has made a convincing case for launching
a BBC One +1 service. Whilst we appreciate how such channels can
be of particular value to commercial broadcasters, in bolstering
audience share and generating advertising revenue through the
additional viewing, we do not believe in the BBC's case such a
channel would represent public service value given the potential
adverse impact on competitors and the availability of most BBC
content on the iPlayer shortly after its initial airing. If the
BBC no longer requires the scarce digital terrestrial spectrum
it was granted and has used in the evenings for BBC Three, then
it should be obliged to give this valuable public resource up
for alternative, public value use. (Paragraph 118)
Measuring public value
20. The
BBC is a powerful player in broadcasting and, given the broad
scope of its public purposes and resources, there is a constant
danger that it will, by accident or design, swamp smaller rivals
and inhibit their ability to grow and develop. It therefore needs
some boundaries, to ensure that the market overall is working
to the public good and the licence fee payer is getting best value
for money. To this end, we welcome the current Charter's introduction
of service licences and public value tests and support their continuance.
However, given the infrequency of service reviews and high thresholds
for initiating public value tests, we believe that the body responsible
for overseeing the BBC should be more willing to react to reasonable
calls to test whether existing BBC services are fulfilling their
public purposes and service remits. We recommend an additional
means be developed to trigger public value and market impact tests
where there is prima facie evidence of the BBC crowding out others'
endeavours and having an adverse market impact. We believe the
independent panel and Charter Review process should consider this
as part of the review. (Paragraph 128)
21. Under
any new governance arrangements we believe that Ofcom should continue
to provide market impact assessments that inform the public value
tests, which would be undertaken by the body holding the BBC Executive
to account for its public value. Ofcom should also be invited
to give advice in areas where the BBC's market impact should be
considered even where it does not involve a formal public value
test. (Paragraph 129)
Production
22. Whilst
we welcome the concept of removing the BBC's in-house production
guarantees and opening up the majority of BBC commissioning to
competition, it is important that commissioning decisions are
not simply made on the basis of cost but also on quality. Clearly
there would be a benefit to licence fee payers in the BBC producing
content for others on a commercial basis given the financial return
it could make. However, we believe there is a risk that such commercial
motives could over time distract BBC producers from their principal
role in meeting the BBC's public purposes. The BBC must remember
the concerns expressed and previous overreach of BBC Worldwide.
It must not allow commercial gain to trump the BBC's main purpose
as a public service broadcaster. (Paragraph 152)
23. We
are sceptical of the suggestion that the BBC should become solely
a publisher-broadcaster and retreat from producing any content
itself. Given the BBC's long successful tradition of making high-quality
television programmes, it should continue to produce content itself
where its output is distinctive from the market and where it makes
economic sense to do so. In future, when the BBC is commissioning
content it will have to give careful consideration to the value
of long-term ownership of intellectual property, as well as initial
production costs. Where particular types of content can be provided
by the market more easily and cheaply, and have less long-term
value, the BBC must be willing to withdraw from these areas.
(Paragraph 153)
24. If
BBC production is opened further and the BBC were to be permitted
to compete for commissions from other broadcasters then it must
be able to demonstrate a transparency of costs and a fairness
in its commissioning decisions and processes with robust safeguards
against licence fee revenue cross-subsidising BBC's commercial
supply activity. This will not be easily achieved. (Paragraph
154)
25. In
taking on production work for others, BBC Production would become
one of the largest production companies trading in the UK market.
As such, the Government would need to consider what impact its
commercial endeavours would have on smaller and medium-sized production
companies operating in the UK market and consider what, if any,
bearing this should have on any review of the terms of trade and
other legislation in respect of independent content production.
(Paragraph 155)
26. We
recommend that the terms of trade should be reviewed as part of
the Charter Review process. Among other things, consideration
must be given as to how the terms of trade might have to change
in respect of the BBC if it became a commercial provider of content
to others. As the terms of trade apply to all PSBs, Ofcom should
have a lead role in this review. However, any changes to the terms
of trade must not introduce any unintended consequences. For example,
limiting the retention of rights to content to only smaller production
companies could create incentives for broadcasters to deal with
larger producers where preferential terms could be applied. (Paragraph
156)
Local TV
27. In
the last two years, Ofcom has awarded 30 licences for local TV
services and 15 stations have gone live. So far these services
do not appear to have had any significant impact among audiences
nor have they made a meaningful contribution to the provision
of local news and content and as such their viability remains
in doubt. (Paragraph 165)
Local and regional media
28. We
believe there must be a more symbiotic relationship between local
media and the BBC, where each benefits from the other. The BBC
as the dominant partner must always be mindful of the effect of
its activities on regional media groups and their ability to turn
a profit, given the greater certainty resulting from its publicly-funded
position. The BBC Trust's conclusions from its 2013 review of
BBC Online, where it called on the BBC management to make sites
more local, demonstrated a disregard for the health of local journalism.
(Paragraph 171)
29. Whilst
the BBC appears to make the right gestures in supporting local
and regional media organisations in the run-up to Charter Reviews,
we believe more definite commitments in respect of its interactions
with the press must be codified into any future Charter framework.
(Paragraph 172)
30. The
BBC must not expect to receive others' news content without providing
something in return. We are attracted by the idea of exchanges
of content and information, where the BBC local websites link
to the source of local material they have used, and in return
the BBC allows others to use its content and embed BBC clips on
their sites, where these would be of local interest, under a licence
agreement. There need not be a financial transaction. However,
we also see the case for the BBC outsourcing the supply of some
local content on a commercial basis, where there is an ongoing
requirement for such material, and it is a more cost-effective
way of meeting this need. We recommend this be ensured by extending
the BBC's independent production quota to cover local news. (Paragraph
173)
BBC Worldwide
31. There
are major benefits from the BBC undertaking commercial activities
as the profits generated by the exploitation of the BBC's intellectual
property can be reinvested in the BBC's public services, to the
benefit of licence fee payers. However, BBC Worldwide's activities
must not risk jeopardising the reputation of the BBC or be allowed
to have an adverse impact on its commercial competitors. We continue
to believe that the approach of BBC's commercial activities should
be limited to those closely linked to its programmes and its public
service remit. (Paragraph 180)
32. There
is a potential risk that BBC dependence on returns from BBC Worldwide
to fund UK public service content, as a co-producer of new content
or through dividends to bolster the finance of the BBC's PSB operations,
could lead to UK PSB content focused more on global commercial
appeal and return rather than primarily aimed at serving domestic
audiences in the first instance. We believe that investing in
public service content for UK audiences must remain the priority
for BBC Worldwide beyond 2016. (Paragraph 181)
33. BBC
Worldwide has an important role in marketing the BBC brand and
the UK's creativity overseas, even if its financial contribution
to domestic PSB remains reasonably modest. We recommend that the
independent panel and Charter Review process consider whether
changes are needed to existing oversight provisions in the Charter
and Framework Agreement for BBC Worldwide and for the BBC's other
commercial activities. (Paragraph 182)
Research and development
34. It
is vital that BBC works in partnership when developing technology
and broadcasting platforms, through joint ventures such as Freeview
and Freesat, and through working with standards organisations
and equipment manufacturers to sustain and improve the availability
of its services. Wherever possible the BBC must turn to the market
for its technology needs rather than attempting to do things itself
if it is to avoid future costly mistakes, as was the case with
the Digital Media Initiative. Where solutions are not available
to meet the BBC's future needs, then it should take the lead in
developing new solutions but in conjunction with others so that
the BBC's counterparts contribute and to ensure their needs may
also be met. (Paragraph 189)
35. We
recommend that the BBC's sixth public purpose on communications
technologies should be retained, but the means to achieve it should
be clarified. The remit and priorities of the purpose should be
revised and updated. They should, for instance, strengthen the
requirement on the BBC to look first to the market for technology
solutions and to ensure any development it undertakes is done
in partnership with others, but where the market is not yet delivering
innovation, the BBC should be required to take a leading role
in pushing development in line with people's expectations. (Paragraph
190)
Funding
36. There
currently appears to be no better alternative for funding the
BBC in the near term other than a hypothecated tax or the licence
fee. However, the principle of the licence fee in its current
form is becoming harder and harder to sustain given changes in
communications and media technology and services, and changing
audience needs and behaviours. Given this is the case, we do not
see a long-term future for the licence fee in its current form.
(Paragraph 212)
37. We
believe that the forthcoming round of Charter Review should not
rush profound changes such as the abolition of the licence fee
model but the BBC must prepare for the possibility of a change
in the 2020s. We recommend that as a minimum the licence fee must
be amended to cover catch-up television as soon as possible. (Paragraph
213)
38. We
conclude that a degree of subscription could be a possibility
in the future if the BBC moved to a more personalised service
and this could be in accordance with Lord Hall's vision for personalisation
of BBC content consumption. However, careful thought would need
to be given as to what content should remain universally available
and free-to-air, and how this should be funded, protected from
inappropriate influence and delivered to the public. (Paragraph
214)
39. We
recommend that the independent panel and Charter Review process
ensure there is robust comprehensive research, taking into account
generational differences, of people's attitudes towards the licence
fee and their willingness to pay for BBC and public service broadcasting
more widely, and in particular their openness to the idea of subscribing
for certain services. (Paragraph 215)
Decriminalisation
40. We
note the Government's review, which is looking at the possibility
of the decriminalisation of non-payment of the licence fee. Our
view is that criminal penalties for the non-payment of the licence
fee and the way enforcement is carried out is anachronistic and
out of proportion with the responses to non-payment for other
services. We believe there is a strong case for making non-payment
a civil matter pursued through the civil courts in the same way
as non-payment of Council Tax, parking fines and utility bills.
We also acknowledge the possibility, based on the evidence presented
and international experience, that decriminalisation could lead
to an increase in evasion and potentially, therefore, a reduction
in the BBC's income. Below, we discuss two possible ways this
could be addressed. In paragraphs 228 to 233 we discuss Germany's
recent transition from an appliance based "licence fee"
to a household broadcasting levy. This has made household investigations
unnecessary. And in paragraphs 237 to 244 we discuss the potential
for introducing conditional access technologies, which would obviate
the need for criminal penalties. (Paragraph 224)
Alternative model for funding
41. The
German model of a broadcasting levy on all households is our preferred
alternative to the TV licence. Such a levy on all households would
obviate the need to identify evaders and would be a fairer way
of ensuring those people who use only BBC radio and online services
contribute to their costs. A broadcasting levy which applied to
all households regardless of whether or not householders watched
live television would help support the use of a small proportion
of the revenue raised for funding public service content and services
by others, enhancing plurality. (Paragraph 232)
42. We
recommend that the independent panel and Charter Review process
should investigate the advantages and disadvantages of a household
broadcasting levy as an alternative to the licence fee and on
how the broadcasting levy could be made more affordable for low
income groups in the UK. We also believe that the new Finnish
system, of a hypothecated tax specifically for broadcasting, based
on an individual's income, although still its infancy, would still
be worth consideration during Charter Review. (Paragraph 233)
Collection costs
43. We
recommend that the independent panel and Charter Review look at
what options might be available for sharing collection costs of
the licence fee or a broadcasting levy with local authorities
or utility providers. (Paragraph 236)
Conditional access
44. We
believe that conditional access offers opportunities to ensure
that only those households who have paid a licence fee or its
equivalent would be able to access BBC or television services.
Introducing a means of authorising access to television services
would solve the criminalisation issue associated with non-payment
of the television licence. However, as there would be significant
costs attached with the widespread introduction of conditional
access technology, the Government would need to decide over what
timescale it should be introduced. (Paragraph 243)
45. The
independent panel and Charter Review should consider the desirability
and feasibility of the BBC using conditional access to ensure
its television services are available only to licence fee payers
and authorised users in future. We recommend that Ofcom's advice
is sought on current availability of conditional access technology
and devices, market adoption trends and potential timescale for
widespread adoption. Ofcom could also advise on the implications
of requiring manufacturers to include conditional access technology
in all receiving devices from a future date. (Paragraph 244)
46. We
recommend the BBC should look at the practicality of introducing
controls for authorising access to the iPlayer as soon as is possible,
as has been suggested by Lord Burns. (Paragraph 245)
Setting the level of funding
47. We
believe that the current means of setting the licence fee is unsatisfactory.
The 2010 settlement demonstrated that the BBC's independence can
be compromised by negotiations with the government of the day
that lack transparency and public consultation. Irrespective of
any Government pressure, the BBC Trust breached its Charter duties
and often-stated commitments to reflect the interests of licence
fee payers first and foremost, in agreeing the settlement in the
manner it did. (Paragraph 255)
48. No
future licence fee negotiations must be conducted in the way of
the 2010 settlement: the process must be open and transparent,
licence fee payers must be consulted and Parliament should have
an opportunity to debate the level of funding being set and any
significant changes to funding responsibilities. We recommend
that the independent panel and Charter Review process consider
the appropriate length of licence fee settlements and the period
in which they should be reviewed and changes made. (Paragraph
256)
Sharing the licence fee
49. Although
there is nothing that states the licence fee revenue is the sole
preserve of the BBC, we find the case for the licence fee as a
source of funding for rural broadband and BBC Monitoring unconvincing.
(Paragraph 267)
50. It
was wholly wrong that 2010 licence fee settlement, which permitted
the licence fee revenue to be used for new purposes, was not subject
to any public or parliamentary consultation. We recommend that
income from the licence fee (or the broadcasting levy) be used
only for the purpose of broadcasting or the production of public
service content on television, radio and online. As a result,
we believe that the Government must be prepared to remedy any
existing spending commitments agreed in 2010 so that those not
deemed appropriate for funding through the licence fee are met
by other means such as general taxation. (Paragraph 268)
51. The
BBC should be the principal recipient of the licence fee (or broadcasting
levy) but a small proportion should be made available for other
public service content priorities such as supporting local and
regional journalism, and children's broadcasting. We recommend
that the independent panel and Charter Review consider how such
contestable funds might operate and what types of public service
areas they might support. (Paragraph 269)
Governance, regulation and accountability
52. We
believe that the establishment in the 2007 Charter of an oversight
and regulatory Trust within the BBC has led to it being too close
to the BBC Executive and it being seen on many occasions as being
far too protective of the BBC as an institution, rather than acting
as an effective and objective regulator and advocate of the licence
fee payer and wider public interest. Incidents like its handling
of the Savile affair, oversight of the Digital Media Initiative,
and its representation of licence fee payers in the 2010 settlement
have demonstrated that the BBC Trust has not lived up to its name
and we believe it was a mistake not to accept Lord Burns' independent
panel's recommendation at the time of the last Charter renewal
for fully independent external oversight of the BBC. We believe
that the BBC Trust should be abolished and new arrangements made
for both the regulation of the BBC and for the BBC to be held
accountable to licence fee payers. (Paragraph 293)
53. We
recommend that the BBC should have a unitary board with a non-executive
Chair, on which the Director General and executive and non-executive
directors sit, where the Board has complete responsibility for
the BBC's corporate governance and operations. The Board should
comprise a majority of non-executive members. (Paragraph 318)
54. We
recommend that the non-executive Chair of the BBC Board be known
as the BBC Chairman. The Board should have the power to hire and
fire the Director General in line with the advice of a nomination
committee of the BBC Board. (Paragraph 319)
55. We
believe that a Public Service Broadcasting Commission should take
on the role of scrutinising the BBC's strategic plan, assessing
its overall performance, making recommendations to the BBC in
line with its assessments, and advising Government and Parliament
on the BBC's and other PSB funding requirements. (Paragraph 320)
56. We
recommend that the non-executive Chairman of the Board be appointed
under the same process that currently operates for the Chairman
of the BBC Trust. That is to say a process led by Government,
overseen by the Commissioner for Public Appointments and subject
to a pre-appointment hearing of our Committee. A similar process
should be run for the Chair of the Public Service Broadcasting
Commission. (Paragraph 321)
57. The
Public Service Broadcasting Commission will need to engender a
much more direct and meaningful engagement with licence fee/broadcasting
levy payers than its predecessor on BBC services and PSB more
generally including through web technologies and social media.
Beyond 2016, we would expect the PSBC to commission research on
viewers' and listeners' attitudes, willingness to pay, and for
greater independent and critical assessment of the BBC's services
than has happened before. (Paragraph 322)
58. We
recommend that as an ultimate sanction, the PSBC should have at
its disposal a backstop power where it could recommend withholding
some funding from the BBC in cases where there was a persistent
disregard for the views of licence fee (broadcasting levy) payers
as represented through PSBC recommendations on BBC services and
activities. We consider the PSBC would have influence over the
BBC by virtue of its role in advising on the level of the BBC's
future funding requirement as well as through managing a contestable
fund for certain PSB content and genres. The independent panel
should consider the design and scale of an appropriate sanction
mechanism. (Paragraph 323)
59. We
recognise that very careful consideration must be given in the
Charter Review process as to where some of the functions of the
unitary BBC Board and the external regulator/public interest oversight
body best sit. We recommend that the independent panel consider
which elements of BBC oversight and governance should be exclusively
in the unitary board and which ones must be transferred to the
external, oversight body in its role of providing independent
scrutiny of the BBC. (Paragraph 324)
Ensuring value for money
60. We
recommend that the BBC Charter and Framework Agreement are amended
to allow the NAO to have statutory access to the BBC accounts.
Clearly, if the BBC Trust is no longer in existence the process
for publishing the NAO reports on the BBC will need to be revised.
We see no strong reason why the NAO should not adopt the same
publishing regime for the BBC as it has in place for its reports
on Government departments and agencies. (Paragraph 330)
Regulation of content
61. We
recommend that Ofcom become the final arbiter of complaints over
BBC content including matters concerning impartiality and accuracy,
but that complaints should be considered by the BBC in the first
instance. Ofcom should be given additional resources for taking
on this role which are commensurate with the responsibility and
estimated workload. We believe this transfer of responsibility
will, if anything, strengthen the independence of the BBC, and
also make the complaints process simpler, and appear more transparent
and fair. (Paragraph 337)
S4C
62. We
recommend that the Trust's current oversight of S4C's licence
fee funding passes to the Public Service Broadcasting Commission
in 2017 should the majority of S4C's income continue to come through
the licence fee (or a new broadcasting levy). It will be important
that S4C remains independent operationally and managerially over
its affairs and editorially over its content. (Paragraph 340)
Constitution and reviews
63. Parliament
must have an increased role in scrutinising the BBC's Agreement
with the Secretary of State, and any amendments to it, and in
scrutinising the draft Charter itself. This should conclude with
a debate on the draft Charter and Agreement on the Floor of the
House. (Paragraph 345)
64. We
believe that the BBC Royal Charter has stood the test of time
and that it remains the best constitutional arrangement for establishing
the BBC. We conclude that a ten-year Charter would provide the
BBC with the security it requires, and certainty for the wider
broadcasting, media and communications and technology sectors.
If full consultation and consideration can be given before the
expiry of the current Charter, we recommend that the BBC be granted
a further ten-year Charter, with a mid-term review of the Framework
Agreement with Government or, alternatively, at any time, when
substantial amendments are made to this document. (Paragraph
347)
65. Should
there be insufficient time to complete a comprehensive review
of the BBC before the present Charter's expiry, or to implement
the Committee's recommendations on governance, we recommend that
the BBC is granted a short supplementary Charter of no more than
a two-year period enabling the full review to take place and to
implement detailed plans to replace the Trust. (Paragraph 348)
66. We
recommend that the Public Service Broadcasting Commission is established
as a statutory body rather than having a parallel charter to that
of the BBC. (Paragraph 349)
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