20.The BBC anticipates a £4 million reduction in funding to meet BBC Monitoring’s direct operational costs in the next financial year. It told us that this reflected “a reduction in licence fee funding for BBC Monitoring of £2.5m per annum, plus a residual shortfall in commercial income since the transfer from Government funding”.
21.The BBC’s response to this funding gap has been to draw up a plan for restructuring BBC Monitoring. This is entitled The Future of BBC Monitoring and was issued in July 2016. It proposes that:
The BBC pointed out that it might want to go ahead with “quite a lot of the reorganisation” even if there is to be no cut in funding, as it believes that “it suits the modern world”. The NUJ acknowledges that the proposed new structure is simpler and both brings BBC Monitoring’s job titles and descriptions into line with the rest of the BBC and attempts to deal with pay grading issues.
22.The BBC’s proposals need to be seen in context: they are the latest in a succession of cutbacks to BBC Monitoring’s staff and capacity. A briefing by the NUJ in July this year pointed out that there had been a large downsizing at BBC Monitoring in 2004. Core stakeholder funding via the Cabinet Office fell from £24.6 million in 2009/10 to £20.2 million in 2012/13, which led BBC Monitoring to reduce its service and restructure its workforce, with a net loss of 54 jobs. When Peter Horrocks gave evidence to our predecessors in March 2011 in his capacity as Director of the BBC World Service, he was asked how he would characterise the future prospects of BBC Monitoring. He replied: “Within the licence fee, I am sure that the BBC will be supportive of it, but it will be at a deteriorated, lower level of provision than was the case before the recently announced cuts”. BBC Monitoring’s Finance Director noted in his 2010/11 Annual Review that BBC Monitoring had made efficiency savings of 8% per annum since 2000/01 and that funding pressures were “now resulting in cuts to capability”.
23.We asked the BBC what alternatives there were to the proposed restructuring plan. One option would be to “salami-slice” each unit within BBC Monitoring, applying an equal reduction in budgets and resources across the organisation. The BBC rejects that option: Sara Beck, the Director of BBC Monitoring, told us that it would make the service “untenable”. The BBC had instead chosen to aim for what it saw as a more efficient working structure, with management taking “a bigger hit”.
24.Another option might be to increase income from commercial sales of BBC Monitoring products. That however seems unrealistic, given that a shortfall in commercial income has contributed to the current funding difficulties. Ms Unsworth told us that the BBC Monitoring product was “in a difficult environment in which to fully commercialise”, and we note the statement in the Financial Review section of BBC Monitoring’s 2009–10 Annual Report that “there is not a vast untapped market that could be realised through more effective marketing”. In BBC Monitoring’s 2010–11 Annual Report, the then Finance Director noted that commercial income was “down against original budget and prior year by c. 13%” and that “this was largely due to the UK and global recession: another factor is that as BBC Monitoring reduces its product offer as a result of savings, so there is less to sell commercially”.
25.A third option would be to protect BBC Monitoring from the BBC’s wider savings programme. We are not in a position to assess the scope for retrenchment across different units of the BBC, but we did ask witnesses whether BBC Monitoring was being asked to accept a reduction in funding which was disproportionate. The BBC told us that BBC News would be making £80 million worth of savings over the next four years and that although cuts elsewhere in the organisation had yet to be announced, the reduction in the BBC Monitoring budget would be proportionate to those in other parts of the BBC.
26.A fourth option would be to reinstate Government funding. In discussions with the Government on the BBC’s restructuring plan for BBC Monitoring, the BBC anticipated that the Government might not be happy with what was being proposed, and it asked the Government whether it would once again provide funding for BBC Monitoring. The Government declined to do so. We discuss this option in more detail at paragraphs 34 to 36.
27.A restructuring plan that entailed the loss of 20% of budget and 30% of staff would be traumatic for any organisation. Nearly 100 skilled employees would lose their jobs under the plan, and a wealth of experience would be lost to BBC Monitoring. Michelle Stanistreet, the NUJ General Secretary, told us that because of the scale of the budget cuts, it was hard to think of any structure which would permit BBC Monitoring to carry on doing its work to the same scope and standard.
28.Others took a more optimistic view. Mr Deane, Head of Knowledge Management at the FCO, was satisfied that the FCO’s interests would be safeguarded under the negotiation process led by the Cabinet Office. The BBC accepted that the service would reduce and that there would be an impact on the breadth of the service which BBC Monitoring could provide in future: for example, there would be less coverage of the southern Caucasus from the Tbilisi office. It maintains, however, that it would be able to provide a core service that would actually meet the needs of its key users and be viable, and would in many ways be better than what has been offered previously.
29.We question whether the Government’s needs will indeed be met under the restructuring plan. The FCO should be the eyes and ears of the UK abroad, picking up signals and undercurrents which help to indicate where the tide is flowing; spotting where threats to the UK’s security and other interests may surface; and helping to form policy on how the UK should handle those threats. The FCO’s record in this respect has had its blemishes—most notably recently in interpreting trends in Libya before the intervention by western forces in 2011—and we do not see how a diminution in the capacity of BBC Monitoring, a key source of information, will increase the FCO’s chances of improving its performance.
30.We are not wholly persuaded that BBC Monitoring’s output itself is entirely suited to the Government’s needs. The NUJ cited examples of trivial stories covered by BBC Monitoring’s Twitter and Facebook feeds, and it told us that when BBC Monitoring received Government funding, “editors aimed for a balance between the needs of government and other users when they selected material” but that “since 2011, when the transition from grants to the licence fee began, the focus has shifted towards the BBC”. The BBC, however, does not accept that there has been a ‘dumbing-down’ in output and stresses that coverage of geopolitical stories and analysis of news events are still the organisation’s “bread and butter”.
31.The NUJ told us that the provision of computer-selected data without human intervention had its limitations, and that if staff numbers were to be cut, BBC Monitoring’s output would “become more of a bulk service that is pumped out to clients, rather than something which is digested with…skill and expertise”.
32.The Government itself seems to recognise that it will get a less generous service from BBC Monitoring. It is relying on the new “Scheme”—to be agreed between the Government and the BBC—to safeguard its priorities, but it has accepted the BBC’s restructuring plan despite its implications for breadth of coverage. In at least one respect—the work of the video unit—the Government appears to have accepted that BBC Monitoring can no longer provide output as part of the core service, and that the Government will need to pay for this as an additional service in future.
33.We also observe that the Government is starting to bring in-house some of the functions that BBC Monitoring had previously performed. The Government is now more interested in a flow of raw data and less analytical material from BBC Monitoring. Mr Deane told us that the FCO was investing in additional staff and had set up an open-source unit tasked with improving its analytical capability. He understood that the Ministry of Defence and the intelligence agencies were doing likewise. BBC Monitoring will continue to carry out analytical work, but it seems that this will be on a smaller scale.
34.The Government, although it is the prime user of BBC Monitoring’s output, seems remarkably unconcerned about the implications of passing responsibility for funding BBC Monitoring to the BBC in 2013. Mr Deane, Head of Knowledge Management at the FCO, said that the Office had been “content” with the revised funding arrangements when they were agreed. But what may have seemed to be a neat way of reducing Government expenditure at the time of the 2010 Spending Review means that the Government now has less leverage over BBC Monitoring’s activities and priorities. As the Culture, Media and Sport Committee pointed out in its Fourth Report of Session 2010–12, BBC Licence Fee Settlement and Annual Report, there is “scope for tension under the new funding arrangements if the Government stakeholders wanted to maintain or expand monitoring services that the BBC judged to be unaffordable”. As we observe above, government departments are now setting up their own open-source monitoring and analysis services, rather than entrusting the work to BBC Monitoring.
35.There is a further, fundamental objection to the funding shift. The taxpayer is the main beneficiary of BBC Monitoring’s work, not the licence fee payer; and logically the taxpayer should fund it. Ms Unsworth doubted that BBC Monitoring would even exist were it not for the Government’s interest in its output. The UK is out of step with other countries that run similar operations: both the US and Australia, for example, fund their open-source overseas monitoring operations from central government funds.
36.We note the view of the NUJ that the Government would be a more stable source of funding for BBC Monitoring than the BBC. That is arguable: the chronicle of funding cuts described in paragraph 22 occurred mainly at a time when BBC Monitoring was under the financial care of the Government. We also note that fears that the BBC would impose budget cuts on the BBC World Service when it inherited funding responsibility from the FCO have so far proved unfounded.
37.The cuts proposed by the BBC to BBC Monitoring are substantial and would change the organisation radically. They involve some justifiable attempts at rationalisation and are accompanied by welcome technological investment; but we conclude that BBC Monitoring’s capability would nonetheless diminish. We do not believe that that is in the interests of the UK Government.
38.We have seen no evidence of a drop in demand within Government for open-source monitoring. If anything, given the increase in social media output, the Government is in greater need than ever of an extensive and well-resourced monitoring service. The Government is the prime customer, and there is no good reason why it should expect to have the benefit of a product which is key to policy-making without providing funding for it. Other countries with similar operations fund them from central government.
39.It was a mistake to end Government funding for BBC Monitoring. The motivation for this change was presentational, with predictable—and predicted—substantial consequences. The Government should reverse the changes made in 2013 and should restore Government funding for open source monitoring of media sources overseas, whether that is performed by BBC Monitoring or whether the Government does the work itself. Any transfer of the monitoring function from BBC Monitoring to the Government should only take place if it can be achieved without losing the expertise of those currently working for BBC Monitoring.
35 See , paragraph 7
36 See page 3
37 See , paragraph 11
38 Ms Unsworth
39 See page 8
40 Ms Stanistreet
41 Ms Unsworth
42 See page 4 and Ms Stanistreet
43 , July 2016 briefing note
44 Figure for 2012–13 taken from , Session 2010–12, BBC Licence Fee Settlement and Annual Report, paragraph 64. Figure for 2009–10 and impact on numbers of posts taken from BBC Monitoring 2010–11 Financial Review (not published)
45 BBC Monitoring Financial Review 2010–11, not published
49 BBC Monitoring Annual Reports for 2009–10 and 2010–11, not published
50 Ms Unsworth ; also
56 See page 9
58 Ms Stanistreet
60 . See also for funding for additional services.
61 Mr Deane and Ms Beck
62 . The FCO provided further detail in a .
64 , and . See also .
66 , Session 2010–12, BBC Licence Fee Settlement and Annual Report, paragraph 65.
67 See Ms Stanistreet
69 ; see also
71 See , Session 2013–14, The future of the BBC World Service, paragraph 5
28 October 2016