BBC Annual Report and Accounts 2018–19: TV licences for over 75s Government and the BBC’s Responses to the Committee’s Sixteenth Report of Session

First Special Report

The Digital, Culture, Media and Sport Committee published its Sixteenth Report of Session 2017–19, BBC Annual Report and Accounts 2018–19: TV licences for over 75s on 11 October 2019. The Government’s response was received on 12 February 2020 and is appended to this report.

Appendix One: Government Response

Introduction

1.Government welcomes the publication of the Committee’s report into the BBC’s 2018–19 Annual Report and TV licences for over 75s. In this response, the Government will outline its position on each recommendation.

2.In the context of several recommendations, it is important to note that the BBC is operationally and editorially independent from the Government. Ensuring that the BBC complies with its duties under the Royal Charter is a matter for the BBC Board in the first instance. Ofcom, as the BBC regulator, is also responsible for ensuring that the BBC is robustly held to account as the nation’s broadcaster.

TV Licences for Over 75s

3.The Government recognises the importance of television to people of all ages, particularly for older people who value television as a source of entertainment, companionship and a way to stay connected with the world. The Government remains disappointed with the BBC’s decision to restrict the over 75 TV licence fee concession to only those aged over 75 and in receipt of Pension Credit. The Government believes that TV licences for over 75s should be funded by the BBC. The Government’s response to these recommendations are set out below.

Recommendation 1: In response to this report, the Government and the BBC should set out the steps that they are taking to ensure that the licence fee negotiations in 2021 are conducted in a wholly different way, with a sensible timescale, parliamentary oversight and involvement of licence fee payers.

4.In the 2016 White Paper, ‘A BBC for the Future: a broadcaster of distinction’, the Government recognised the importance of greater transparency in the licence fee-setting process, and that scrutiny of the BBC’s finances should be carried out in an open and accountable way.1

5.In line with the requirements in the Charter, the Government will consult with the BBC, and others as appropriate. The Government will set out more detail on the process to be followed shortly.

Recommendation 2: Whatever assumptions were made in 2015 about the funding of free licence fees for all of the over 75s, this is clearly not a sustainable proposition for the BBC alone. The Government should set out proposals for how it can support this measure in the future, alongside the commitment that has been made by the BBC.

6.Section 89 of the Digital Economy Act 2017 provides that the BBC is responsible for the future of the over 75s TV licence fee concession. This reform was subject to public discussion and debated extensively during the passage of the Digital Economy Act through Parliament.

7.The BBC announced in June 2019 that only people who are aged 75 and above and in receipt of Pension Credit will continue to receive a free television licence from June 2020. The Government has made clear that it is disappointed with the BBC’s decision to restrict the over 75 licence fee concession to only those in receipt of pension credit. The Government recognises the value of free TV licences for over 75s and believes they should be funded by the BBC.

Recommendation 3: The BBC should set out, in a single consumer-facing publication, how the scheme (the implementation of licence fee collection for eligible over-75 year olds) will work, what support is available, and what the implications of non-payment or evasion will be, before the end of December 2019.

8.The Government agrees that the BBC should set out clear information about how the over 75s concession will operate. It corresponds with the Government’s request to the BBC to do more in supporting those affected by the decision, as it is important that those affected have information that will help them in understanding the steps they can take.

Recommendation 4: It is not the BBC’s role to become involved in take-up of Pension Credit. The broadcaster must ensure that its implementation plans do not result in more licence fee income being diverted to activities that are rightly the responsibility of the Department for Work and Pensions. In response to this report the Government should set out what impact an increase in take-up of Pension Credit would have on the wider social security budget, and the BBC should provide a detailed breakdown of the estimated £38 million transition costs of the first year of the new scheme.

9.Pension Credit is an important protection for the retirement incomes of some of our most vulnerable people. The Government remains clear that it wants everyone eligible to claim those benefits to which they are entitled. DWP staff in Pension Centres and Jobcentres, including visiting officers, are committed to engaging with people who may be eligible to benefits to provide help and advice about entitlement, as are staff in Local Authorities who administer Housing Benefit. It is too early for an assessment of the potential impact on additional Pension Credit claims to be made.

BBC Pay

Recommendation 5: We are pleased to note that the BBC has acted on our recommendation to include a gender split in pay ranges so that people can see how men and women are being paid at the level they are working within. We expect the BBC to include an update on the impact of this change in its next annual report, and to take further, timely action on fair pay in the wake of damage to its reputation as a result of the findings in our 2018 inquiry.

Recommendation 6: It is welcome that the BBC is now taking long overdue action on the issue of Personal Service Companies and has accepted that they bear responsibility. We expect the broadcaster to ensure that the earmarked funds are used to support those presenters who told us they were facing “life-changing” liabilities as a priority, rather than higher paid presenters who are likely to be more able to manage uncertainty in future income.

Recommendation 7: In response to this report the BBC should set out the governance and leadership lessons that it has learnt from “historical problems” and the changes that it has made to its management as a result.

10.The Government welcomes the report’s findings and expects the pay issues highlighted to be resolved as quickly as possible. The BBC Board is ultimately responsible for the appropriate use of licence fee revenue, and we expect the BBC to ensure efficiency, pay restraint and value for money.

11.Transparency is vital, which is why the Government set out new obligations in the Charter for the BBC to disclose the salaries of all BBC staff paid over £150,000 from the licence fee. Also, in the Equality Act 2016, the Government introduced mandatory annual disclosures of the gender pay gap in listed public bodies with over 250 employees.

12.The Government agrees that it is important the BBC is taking action on this issue of Personal Service Companies. The specific amounts that the BBC sets for paying its staff and talent is a matter for them, as the BBC is operationally and editorially independent from the Government. The Government encourages the BBC to continue addressing this matter appropriately.

13.The Government is aware that the BBC has provided evidence to demonstrate that it has made significant changes to address issues around equal play, including reacting to the DCMS Select Committee’s previous recommendation to include gender split in pay ranges. As a public service broadcaster funded by the licence fee, the Government encourages the BBC to be leading the way in promoting equality in the workplace.





Published: 16 March 2020