Conclusions and recommendations
1.The targets set for the BBC World Service proved to be undemanding and, despite the fact that they were met easily ahead of schedule, they have not been revised. In 2013, the BBC Trust and the Foreign and Commonwealth Office (FCO) jointly set the BBC World Service (the Service) three high-level targets to be achieved by December 2016 covering: the size of its overall audience, the size of its television audience and the size of its online audience. The Service met the first two of these targets in 2014–15 after only one year and achieved all three comfortably in the second year. Despite this, the Trust has not reviewed and amended the targets which currently remain in place unchanged.
Recommendation: The BBC Trust, or its proposed successor, needs to ensure that the targets set for the Service from January 2017 are suitably stretching and subject to regular review.
2.We are disappointed that the BBC World Service chose to reduce the amount of information it published on its performance. The Service reports publicly on only two aspects of its performance: its total audience size, including the size of its television and digital audiences; and audience satisfaction, as measured by the extent to which its audience rates it the most trusted international news provider and whether it helps keep them informed, compared to its international competitors. Prior to the end of grant funding from the FCO in 2013–14, the Service reported in more detail on these two aspects. For example, it previously reported audience satisfaction in terms of whether it rated more highly than its closest international competitor for awareness, reach, objectivity, relevance, value and loyalty. Subsequent to our hearing, the Service published in July 2016 figures for audience size for each individual language service in 2015–16.
Recommendation: The Service should report publicly on a wider range of performance information and in more depth—for example the cost per audience member for each language service where appropriate—to demonstrate better to the licence fee payer the value it delivers.
3.The accountability arrangements for new government funding of £289 million have not been agreed. In November 2015, the Government announced extra grant funding of £289 million for the Service from 2016–17 to 2019–20 on the basis that, as a provider of accurate, impartial and independent news, the Service helps to strengthen democratic accountability and governance and promote Britain, and its values, around the world. The Service intends to use this additional funding to enhance and expand its services and is currently preparing plans for this. However, there are potential difficulties arising from the Service being funded by two different sources, government grant and licence fee income, with different accountability arrangements, and the FCO, BBC Trust and BBC have still to agree the accountability arrangements for the new grant funding, and how its successful use will be measured.
Recommendation: While editorial control of the Service should rest entirely with the BBC, this does not mean that there should not be effective accountability on the BBC’s part for how it uses the new government funding. The FCO, BBC Trust and BBC should agree and publish accountability arrangements for this funding as quickly as possible.
4.Investment in new language services is a long-term commitment but it is not yet clear whether the new funding from the FCO will continue beyond 2019–20. The extra funding of £289 million, plus a government guarantee in May 2016 of licence fee funds of £254 million a year for the five years from 2017–18, provides the Service with a degree of financial stability which should allow it to develop new services. However, there are a number of risks to the successful delivery of these plans, such as recruiting and training the new staff required, and there is uncertainty over the future of the new services once this extra funding ends in 2019–20.
Recommendation: The Treasury and FCO should inform the BBC within the next 18 months about whether they intend to continue to provide the Service with extra grant funding beyond 2019–20 so that it can plan properly for the provision of language services beyond this date.
5.The level of commercial income generated by the BBC World Service has not matched the ambitions it set out in 2010. The Service stated in December 2010 that its aim was that, from 2014–15, its commercial income should be an important, complementary part of its funding. To this end, it has piloted the use of advertising on a small number of its websites and FM radio services and it charges some of its broadcasting partners for its output. The Service increased its commercial income from £4.6 million in 2010–11 to £6.1 million in 2014–15 and expects it to increase further, to £8.1 million, by 2016–17. However, this income forms only a small part of its total funding. The Service is looking at ways to increase this income but it was not clear how it intended to achieve this.
Recommendation: The Service needs to clarify its plans for maximising its commercial income, while maintaining editorial integrity, as soon as possible and the BBC Trust, or its successor, should measure its success in delivering these plans.
6.The BBC World Service faces significant strategic challenges in a fast-moving and competitive operating environment. The Service needs to be agile and flexible in its response to rapidly changing global political events, audience consumption habits and technology and to increased competition. Despite this pace of change, the Service has only opened one new language service, its Thai service on Facebook, since 2010. It uses a number of criteria when deciding which services it should open and close, including the likely audience size and the Service’s ability to meet the need for impartial news. It was not clear, however, the extent to which the Service took account of the cost-effectiveness of individual language services in reaching its decisions. While it did consider likely audience size, about 10% of its audience survey data was over 5 years old and therefore, by the Service’s own admission, of limited value, given the pace of change.
Recommendation: The Service must put in place a robust framework for deciding priorities when adapting its services to a changing environment, which takes full account of the cost-effectiveness of individual services, alongside its other decision-making criteria, and facilitates an agile response.
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14 September 2016