Select Committee on BBC Charter Review Second Report


The Licence Fee

172.  We question whether the licence fee should be linked to RPI. We recommend that RPI should not be taken as a baseline for licence fee increases. We further recommend that, if the BBC is to launch new services, the Government should assess the BBC's funding needs on the basis of careful and robust costings without necessarily accepting that the BBC will need a licence fee increase above RPI. (Para 10)

173.  We therefore recommend that the BBC and the Government should work to minimise future licence fee rises. The licence fee should only rise significantly if there are exceptional and well substantiated reasons for it to do so.
(Para 17)

174.  The National Audit Office should be involved in scrutinising the licence fee bid. Its report should be published in full. This would mean that for the first time the public and Parliament would have the information necessary to make an independent and informed judgement on the BBC's plans. We also believe that the BBC and the DCMS should be doing more than industry consultations, the public should be consulted as well. Until these two things happen the public will continue to perceive the licence fee negotiations as secretive and opaque. The licence fee is rising at an unprecedented rate and it is time that it was open to proper scrutiny. (Para 21)

175.  The reclassification of the licence fee as a tax, and of the BBC as a central government body, could therefore have significant implications for the BBC's independence. We urge the Department of Culture, Media and Sport to spell out what these implications are and to ensure that the BBC's independence is safeguarded in light of these changes. (Para 27)

176.  As long as the licence fee is being recognised as, and treated as, a tax then our argument that Parliament should have a chance to properly scrutinise it becomes even stronger. (Para 29)

177.  Parliament is not given any opportunity (beyond hearing a Government statement) to scrutinise the licence fee formula agreed by the BBC and the DCMS. We believe this is wrong. Parliament should be able to scrutinise the proposed licence fee agreement which forms the basis upon which it will be asked to increase the licence fee each year. (Para 32)

The Costs of Digital Switchover

178.  We therefore urge the Government to consider again covering the costs of providing targeted help with digital switchover from general taxation.
(Para 42)

Spectrum Charging

179.  It is our conclusion that it would be illogical and unfair for licence fee payers to pick up the costs of ensuring the BBC uses its spectrum efficiently. This is particularly true when it is acknowledged that the BBC already uses its spectrum efficiently. Although we recommend that the BBC's use of spectrum should be kept under review we do not believe that licence fee payers should pay a charge that goes straight to the Treasury. (Para 51)

180.  We also recommend that Channel 4, as a not for profit public service broadcaster, should be exempt from spectrum charging. (Para 52).

181.  The decision as to whether to charge the BBC and Channel 4 for spectrum will have a direct impact on the quality of public service broadcasting and on the level of taxation to which the public is subject. The Government should therefore use their powers under Section 156 of the Communications Act 2003 to direct Ofcom to exempt the BBC and Channel 4 from any charge for radio spectrum. (Para 53)

182.  We therefore recommend that the proceeds from sale of analogue spectrum, and any receipts from the charging of broadcasters for spectrum, should be used to cover the costs of digital switchover. (Para 55)

The BBC World Service

183.  We recommend that under no circumstances should the BBC World Service be allowed to be treated or seen as a "tool" of public diplomacy or of governmental goals. Everything should be done to protect the editorial independence on which its reputation depends. (Para 63)

184.  We do not believe it is appropriate for a representative of the BBC World Service to serve either as a member or as an observer on a board chaired by an FCO Minister under the proposed definition of public diplomacy. We are also against the proposal that BBC staff should be employed by a Government management unit. The independence of the BBC World Service could be compromised by the closeness of the relationship proposed by Lord Carter's review. (Para 65)

185.  A 12 hour limit on the Arabic language news channel's broadcasting time will mean the BBC competing for audiences with one hand tied behind its back. We recommend that the Government should immediately provide the BBC World Service with the required £6 million to establish a 24 hour Arabic channel. (Para 74)

186.  We therefore recommend that the BBC should comprehensively review its international activities and that a strategy outlining the future of its public and commercial television, radio and online services used overseas be published. (Para 75)

187.  We recommend that as part of the comprehensive review of the BBC's international services the BBC World Service should continue to consider the need to provide television services beyond the Arabic language service. Further expansion may prove to be important but should not be dependent on cuts to existing radio services. (Para 78)

Broadcasting in the Nations and Regions

188.  We support the aims of the BBC's move to Greater Manchester and note that the area already has the making of a media hub. We believe that it is of utmost importance that the BBC establish an autonomous decision making centre in the area that is not forever referring back to the "main" London office. We also hope that staff working in the new centre will live locally to maximise the benefits of the move for the region. (Para 86)

189.  We recommend that the BBC should do its utmost to maximise clustering arrangements with other media companies in the Greater Manchester area. Even though the BBC has ruled out participating in a media enterprise zone located at the ITV/Granada site, it is crucial that the BBC works together with ITV and the independent sector to make a success of the Greater Manchester media enterprise zone. (Para 89)

190.  We do not believe that the move to Greater Manchester, which will bring such obvious benefits, should be used as a bargaining gambit in BBC's licence fee negotiations. The BBC should fully commit to the move as soon as possible. (Para 94)

191.  We therefore welcome the BBC's commitment to subject the proposals for new local services to a public value test which will include the publication of a market impact assessment. As we recommended in our first report this market impact assessment should be carried out by a competent and reputable third party. The results of the Public Value test should be published and interested parties should be entitled to appeal against the findings of the Market Impact Assessment to Ofcom if they are able to show prima facie well reasoned and evidenced grounds for such an appeal. (Para 98)

192.  We support this suggestion and recommend that the BBC should publish full accounts of its investments in local services. (Para 99)

193.  We recommend that the BBC should consider the provision of ultra-local services as an opportunity to demonstrate its partnering skills by working alongside a range of local organisations. The BBC may have a contribution to make to such grass roots initiatives by facilitating and partnering rather than by controlling and directly supplying new local services. Accordingly, we believe that any implementation of the BBC's proposals for ultra-local services should be preceded by further pilot initiatives involving strong local, grass roots, participation. (Para 101)

194.  We therefore recommend that there should be more transparency in the commissioning process. The BBC Trust should give clear guidance to BBC management on the desired amount of regional production. Management should have to report regularly to the Trust on its progress in this area. The Trust should publish an annual account showing how much regional commissioning has taken place. If regional commissioning does not increase then the Trust should report fully and transparently what measures it has required management to take to address the situation. (Para 105)

The Broadcasting of Sports

195.  We therefore support the Green Paper's vision that the BBC must continue to play a prominent role in bringing audiences together for shared experiences of nationally important sporting events. (Para 112)

196.  We recommend that the BBC should promote participation in sport through local and accessible sports. We also recommend that within the limits of its broadcasting schedule, the BBC should provide a national platform for coverage of minority sports. The BBC should be congratulated on the work it has done in this area so far and should continue to work in partnership with sports' governing bodies to develop its role in the field of grassroots local and youth sport. (Para 116)

197.  We believe the approach of breaking up exclusive sports rights into packages is the right one to take. We are clear it is in the benefit of the consumer if there is more than one significant provider of sports coverage. However, with regard to the football Premier League's live television rights we have concerns that the number of packages; the quantity of games contained within them; and the ability of one broadcaster to purchase five out of six of the packages, will not create a competitive market. Our primary interest is in the creation of a market that provides fair and genuine choice for the consumer. It is in the public interest to ensure there is competition for sports rights and that free to air broadcasters, including the BBC, have a real chance to acquire a significant share of major sports rights packages.
(Para 121)

198.  Accordingly we recommend that the BBC be subject to the same regulatory framework as all UK broadcasters when acquiring listed events. (Para 126)

199.  We strongly encourage the BBC to make a genuinely competitive bid for live TV rights of home Test cricket when negotiations begin with the ECB in 2009. (Para 135)

200.  We strongly believe that some live home Test cricket should be available on free-to-air television. We support the House of Commons recommendation and believe this is the most hopeful way forward. (Para 137)

201.  We recommend that while editorial decisions are an internal matter for the BBC, it should seek to maximise the full potential of its sports rights portfolio. One possible option would be to utilise its existing digital channels more imaginatively and flexibly in the broadcasting of sport. (Para 140)

The Broadcasting of Religion

202.  We support a wide definition of broadcasting about religion and other beliefs. It encourages all broadcasters, including the BBC, to find new, innovative and informative ways of tackling issues of religion, spirituality, ethics and values through all the different programming genres. Evidence we have received shows that by approaching religion in this way viewers and listeners engage with it. (Para 150)

203.  We are eager to see more high quality, innovative and thought-provoking programmes emerging from the BBC Religion and Ethics Department.
(Para 152)

204.  We recommend that if the BBC is going to continue to provide the high quality of current affairs coverage for which it is known it must provide its viewers and listeners with the background knowledge they require to understand the context of the story. This is as true for stories related to religion and other belief systems as it is for any other subject area. We therefore recommend that the BBC should ensure that its correspondents are competent to report in a knowledgeable way in all areas on which they will be asked to report. (Para 156)

205.  We therefore recommend that the BBC should be given a duty within the Agreement with the Secretary of State to make sure viewers and listeners have a better understanding of the different religions and other belief systems through the objective portrayal of their different beliefs, practices and forms of worship. (Para 161)

206.  It is our recommendation that the BBC should review its programme output to ensure that it complies with the Communications Act 2003 by providing services of a suitable quality and range dealing with religion and other beliefs. (Para 166)

207.  We were surprised at the differing perceptions of CRAC's role that we observed between the BBC, CRAC's members and Ofcom. Indeed, it is not at all clear what the role of CRAC is or whether it adds value to the broadcasting of religion. We therefore recommend that the position of CRAC be reviewed and clarified by the BBC in consultation with Ofcom. (Para 171)

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