The future operations of BBC Monitoring Contents

2BBC Monitoring: its work, funding and governance

What BBC Monitoring does

4.BBC Monitoring was established in 1939 to listen in on World War II propaganda broadcasts on behalf of the Government. Nowadays BBC Monitoring translates and analyses news and information from freely available media sources in 100 different languages and covering 150 countries around the world, including TV and radio broadcasts, the press and social media.2 Its output, which consists of both verbatim translations and analytic or thematic briefings, feeds into BBC news services and is available to the UK Government3 and other public authorities, and to others on a commercial basis.4

5.BBC Monitoring has a US counterpart, now under the wing of the CIA and known as Open Source Enterprise, which has a presence alongside BBC Monitoring at its premises at Caversham Park, near Reading.5 The two organisations have an arrangement by which each covers separate, complementary geographical regions, and the two share information.6 The FCO told us that the split between BBC Monitoring and Open Source Enterprise output was roughly 25%/75%.7

6.BBC Monitoring currently has 320 staff, about half based at Caversham Park and half at offices overseas, including offices in Russia, Ukraine, Georgia, Armenia, Uzbekistan, Kenya, India and Afghanistan. BBC Monitoring will also begin new operations from existing BBC bases in Istanbul and Jerusalem.8

Funding

7.Until 2013, the bulk of the funding for BBC Monitoring came from “stakeholders” in Government: the FCO, the Ministry of Defence and the Cabinet Office. Up until 2006/07, these were individual funding streams. We note that in June 2004, the then Permanent Under-Secretary at the Foreign and Commonwealth Office, Sir Michael Jay, wrote to the then Foreign Affairs Committee to say that the Foreign Office contributed £7 million per annum to BBC Monitoring’s funding, which represented 33% of its overall stakeholder funding.9

8.In 2006/07 these individual funding streams were consolidated into a ring-fenced grant channelled via the Cabinet Office. That grant appeared in BBC Monitoring Annual Reports as “stakeholder income”: it formed by far the greater part of BBC Monitoring’s income and was complemented by small amounts from commercial sales of BBC Monitoring products initially created for stakeholders. Other sources of funding included bank interest, income generated from staff (e.g. through the staff restaurant) and income from BBC Monitoring’s US equivalent, then known as Open Source Center. Figures for BBC Monitoring income for years from 2006/07 to 2010/11 are as follows:10

£m

2006/07

2007/08

2008/09

2009/10

2010/11

Total income

28.3

28.3

28.7

28.9

26.7

Stakeholder income

24.6

24.6

24.6

25.0

23.5

Commercial income

1.3

1.3

1.5

1.5

1.3

Other income

2.4

2.3

2.6

2.4

1.9

9.The element of commercial income has continued to be small and has not met targets in recent years. The Financial Review section of BBC Monitoring’s 2009–10 Annual Report summed up the position on commercial income in this way:

The potential for BBC Monitoring products in the commercial market is not saturated, but there is not a vast untapped market that could be realised through more effective marketing. As a niche service, there is potential for incremental increase in penetration in core markets of ‘need to know’ users in other governments, NGOs and academic bodies, via third-party vendors such as Lexis Nexis and Factiva and in a relatively small number of large companies. However, revenues would likely fall in line with any future reduction in output so reducing the net contribution to BBC Monitoring’s bottom line. If this were to occur beyond a certain position then sales and marketing would be no longer be viable.11

10.As a consequence of the agreement reached between the Government and the BBC at the time of the 2010 Spending Review, responsibility for funding the BBC World Service and BBC Monitoring was transferred from the Government to the BBC. As we noted in our First Report of Session 2015–16, on The FCO and the 2015 Spending Review, the headline figure for the reduction imposed on the Foreign and Commonwealth Office for the four-year period ending in March 2015 was 24%. But once the transfer of funding for the BBC World Service was taken into account, the real savings imposed on the operational part of the FCO were just 10%.12 The motivation for the transfer was largely presentational, to present an apparent cut in public expenditure whilst in reality transferring responsibility for the provision of the services from the taxpayer to the licence fee payer. In the case of BBC Monitoring, that transfer took effect from 1 April 2013.13

11.The BBC supplied the following figures for total annual expenditure for BBC Monitoring in each year from 2006/07 to 2016/17:14

£m

2006
/07

2007
/08

2008
/09

2009
/10

2010
/11

2011
/12

2012
/13

2013
/14

2014
/15

2015
/16

2016
/17

Total expenditure

29

27

26

26

26

27

24

25

26

27

29

The BBC broke down the £29 million figure for total expenditure in 2016–17 and provided a projection for 2017–18, as follows:15

£m

2016–17

2017–18

Operating costs (staff costs, expenses, travel costs)

13

9

Corporate costs: HR, finance and pensions

3

3

Support for international bureaux, shared across BBC News

1

1

Technology and workplace (IT systems, buildings, satellites)

6

6

Capital spending (principally the change programme, overhauling delivery and production systems)

6

1

Total

29

20

12.Operating costs are therefore set to fall from £13 million to £9 million (rounded figures). The BBC, however, initially told us that “alongside a reduction in capital spending following the completion of the change programme below, total operating costs for BBC Monitoring are budgeted to be £20m in 2017/18”.16 This statement implied a redefinition of operating costs to include support, capital and other costs which had previously been accounted for separately. We found that redefinition misleading, and in a subsequent written memorandum, the BBC clarified the position by confirming that BBC Monitoring’s “direct” operational budget would fall from £13.5 million to £9.4 million.17

Governance

13.While BBC Monitoring received Government funding—before the move to funding from the BBC Licence Fee in 2013—governance at strategic level was carried out through the Stakeholder Board, on which the Cabinet Office and agencies, the Ministry of Defence, the Foreign and Commonwealth Office and the BBC World Service were represented. A Memorandum of Understanding set out agreed requirements and priorities, including a process for commissioning and decommissioning products and services. Priorities were agreed between stakeholders and BBC Monitoring in consultation with BBC Monitoring’s US counterpart, Open Source Center.18 Operational responsibility lay with the BBC and its Global News Division.

14.The transfer of responsibility for funding BBC Monitoring from the Cabinet Office to the BBC in 2013 was formalised in an Amendment in September 201119 to the 2006 Agreement between the Government and the BBC underlying the BBC Royal Charter. A detailed “Scheme” was drawn up to govern the specification, management, operation and funding of the services to be provided by the BBC. While the Scheme guarantees a level of service from BBC Monitoring, it does not guarantee a defined budget to support that service:20 that is a matter for the BBC, which retains full editorial and managerial independence.

15.The Scheme requires BBC Monitoring to provide services which demonstrate global coverage, are timely and sufficient in volume, “surgeable”,21 flexible and confidential. Unpublished annexes to the Scheme define “Core Services” by priority and list countries by priority. The Scheme was signed off by the then Foreign Secretary on behalf of the Government.

16.On 18 October 2016, the House agreed to a new Agreement between the Government and the BBC, to complement the new BBC Charter which will run until 31 December 2027. Paragraph 42 of the new Agreement relates to BBC Monitoring and states that the BBC will be responsible for approving the high-level strategy for BBC Monitoring and for the budget for its core services.22 The Scheme agreed between the BBC and the Government, which sits below the agreement and which defines the services to be provided by BBC Monitoring (described in paragraphs 14 and 15 above), expires on 31 December 2016. A new Scheme is being negotiated by the Government and the BBC and is expected to be in place for 1 January 2017. The BBC told us that negotiations involve discussion on the “core services” that BBC Monitoring will provide and will cover future requirements, regional priorities and review cycles.23 Sara Beck, Director of BBC Monitoring, told us that the BBC was “undertaking to broadly maintain the volume and the quality of the core services”.24

How BBC Monitoring is changing

17.The BBC stressed to us that BBC Monitoring had to adapt. A “massive” increase in sources, arising largely from the growth in social media, meant that no amount of resources would allow BBC Monitoring to conduct exhaustive coverage of open-source media around the world: it had to become much more focused.25 BBC Monitoring had invested £10 million in new technology, to change the service it could deliver and to select, present and deliver key sources to users. Total investment in the change programme would be £13 million.26 Mr Deane, Head of Knowledge Management at the FCO, told us that a new BBC Monitoring portal would give FCO officials an ability to “interrogate” e-mail alerts from BBC Monitoring and that their ability to use the data would increase significantly as a result of the new technology.27

18.The roles of BBC Monitoring staff are also changing. The BBC told us that digital working would be “a driving force to the future success of BBC Monitoring, giving the ability to include data, stills, graphics and video, where relevant, as part of the core offering to consumers”.28 It sees its staff as “digital journalists” and spoke of the need for them to be “confident and fluent in handling the different formats and platforms” and to be “able to scan and source digital media.29

Value of BBC Monitoring

19.No-one, in evidence to us, questioned the value of BBC Monitoring’s work. Michelle Stanistreet, representing the NUJ, argued that it was “more strategically important than ever” given the pace of global developments and widespread instability;30 and she believed that both the UK and the US found the arrangement by which BBC Monitoring and Open Source Enterprise shared information to be “incredibly valuable”.31 Mr Deane told us that BBC Monitoring data was particularly important in areas where the FCO was not strongly represented or where its coverage of local media was low: he cited the Middle East, the former Soviet Union and north and east Africa as examples.32 He understood that BBC Monitoring was similarly important to the Ministry of Defence and the intelligence services.33 We note that when the Secretary of State for Defence was recently invited to confirm that the service provided by BBC Monitoring to open-source intelligence was of vital interest to the Ministry of Defence, he did so readily and without qualification.34


2 See memorandum from the BBC, paragraph 1

3 Mr Robert Deane, Head of Knowledge Management at the FCO, told us that BBC Monitoring was one of a number of sources of information available to FCO officials. For instance, desk officers could arrange to receive an e-mail feed of alerts on selected topics. See Mr Deane, 112

4 See memorandum from the NUJ for examples of commercial users

5 70 Open Source Enterprise employees work at Caversham Park: see memorandum from the FCO.

6 Ms Stanistreet Q4

8 See memorandum from the BBC, paragraph 14, and Ms Unsworth Q 100

9 Foreign and Commonwealth Office Annual Report 2003–2004, Eighth Report from the Foreign Affairs Committee, Session 2003–04, HC 745, paragraph 166

10 Source: Annual reports of BBC Monitoring, supplied to the Committee but not published.

11 BBC Monitoring Annual Report 2009–10 (not published)

14 See memorandum from the BBC, paragraph 5

16 See memorandum from the BBC, paragraph 9

18 BBC Monitoring Annual Report 2009/10 (not published)

20 Ms Beck Q 77

21 Defined in the Scheme as “an ability to meet short term surges in demand for monitoring and output against Priority 1 countries, and to use reasonable endeavours to meet such surges against Priority 2 countries”.

23 See memorandum from the BBC, paragraph 19

25 Ms Unsworth Q 28; also Ms Stanistreet Q6 and memorandum from the BBC, paragraph 10

26 Ms Unsworth Q 28 and Ms Beck 63

28 See memorandum from the BBC, paragraph 15

29 Sara Beck Q 58




28 October 2016