Select Committee on Communications First Report


CHAPTER 3: The Process of appointment

17.  According to the new Royal Charter that took effect on 1 January 2007, the Chairman of the BBC Trust is the guardian of the licence fee revenue and the public interest in the BBC (article 22). It is therefore crucial that he is politically independent and is perceived to be so. It is also vital that he has the trust of the licence fee payers, the wider public, the media industry and parliamentarians from all backgrounds. The only way to ensure this is to have a rigorous and transparent selection process which is free from political interference.

18.  The new Chairman of the BBC Trust is Sir Michael Lyons. He was appointed on 5 April 2007. We were the first parliamentary Select Committee to which he gave evidence and we would like to make it clear that, although we have concerns about the way that the selection was carried out, we are not questioning Sir Michael's abilities to carry out the job. We do not believe that the quality of the outcome validates the process.

The selection process

19.  When Gavyn Davies was appointed as Chairman of the BBC in 2001 he was the first chairman in the history of the Corporation to have been chosen after an open competition that conformed to Nolan rules. There is no doubt that the current selection process is an improvement on what went before but we do not believe these improvements go far enough.

20.  When we started this inquiry there were limited details in the public domain relating to the process by which Sir Michael Lyons was appointed. Those details that had been made public were quite hard to find. There was no single piece of paper, or page on either the BBC or Department of Culture Media and Sport (DCMS) website, that detailed how the job was advertised, how applications were sought, the job description, the membership of the selection panel and the role Ministers had played in the process.

21.  The Nolan principles that underpin public appointments emphasise the importance of being as open as possible. Despite this we note that obtaining the information detailed above took us several public evidence sessions, follow-up correspondence with the DCMS and considerable time. If it was this difficult for a Select Committee to find out what happened then it would have been near impossible for the average licence fee payer. We also note that the then Minister for Creative Industries and Tourism, Shaun Woodward MP, approached his evidence session with us not in the spirit of being as open as possible but instead with the view that if the Government was not explicitly required to make information public then it would not. When we asked Andrew Ramsay, Director General of Culture, Creativity and Economy at DCMS whether the Secretary of State exercised her powers to change the shortlist he told us "I am not sure whether I am entitled to comment on that" (Q 208). When we pursued the Minister on this point he told us "I do not think they are required to make it public" (Q 219). It later transpired that there was no reason why the information could not be made public and the DCMS provided us with an answer.

22.  This is what we understand happened. Michael Grade resigned with immediate effect on 28 November 2006. The job of Chairman of the BBC Trust was advertised in early January 2007 and the DCMS engaged a firm of head-hunters to help them identify candidates (Q 167). The then Secretary of State for Culture, Media and Sport, Tessa Jowell, was responsible for appointing a panel to select the new Chairman. The panel she appointed was chaired by a civil servant (Andrew Ramsay, the Director General for Culture and Creativity at DCMS). The other members were Sir Quentin Thomas (President of the British Board of Film Classification and a former civil servant), Oliver Stocken (Former Finance Director of the Barclays Group and Chair of the Natural History Museum), and Dame Sheila Drew Smith (an independent assessor trained by the Office of the Commissioner for Public Appointments (OCPA)). The independent assessor's job was to "to ensure that the rules which the Commissioner lays down are stuck to, that the process is fair throughout" (Q 193). She was also a full and participatory member of the panel.

23.  The selection panel drew up a shortlist of four candidates. That shortlist was put to Ministers who had the opportunity to add or subtract names. In this instance Ministers asked for one name to be added to the shortlist (not Sir Michael). It appears that there were more candidates who met the criteria than made the shortlist. The individual added to the shortlist was one such candidate (p 40).

24.  The short listed candidates were all interviewed by the selection panel on 12 March 2007. Each interviewee was marked against published criteria and scored on a scale of A-D (where C and above were acceptable). The score and rank of each candidate was then put to Ministers along with an interview report. Four of the five candidates were recommended as appointable but one was more highly recommended than others (p 40). Ministers chose Sir Michael Lyons who was appointed by Her Majesty by Order in Council.

25.  What is clear is that this process gives Ministers considerable opportunity to influence the selection. Ministers appointed the selection panel, Ministers were allowed to change the shortlist of candidates and ultimately Ministers were able to choose between four candidates who passed the interview process.

26.  These are the things we do know. What we do not know is whether Sir Michael was the candidate most highly recommended by the selection panel and thus whether Ministers followed the recommendation of the panel. In terms of the earlier stage of the process we do not know what influence, if any, Ministers had over who the head hunters encouraged to apply.

Ministerial influence

27.  The process detailed above conformed with the guidance published by the OCPA on ministerial appointments to public bodies. This was certified by the independent assessor Dame Sheila Drew Smith.

28.  Our concern is that the OCPA guidelines do not do enough to limit Ministerial power over this unique appointment. The Chairman of the BBC is not like any other Ministerial public appointment. The Government have acknowledged that the BBC "is unique—in its quality, its scope, its reach and in the public trust it engenders".[5] In fact the White Paper on the Future of the BBC argued for the unusual governance arrangements embodied by the BBC Trust on the grounds that the BBC is unlike any other organisation and its governance structure should reflect this. We agree that the BBC is unique and we therefore believe that the appointment of the Chairman of the BBC should be subject to additional scrutiny and safeguards over and above those used for day-to-day appointments to public bodies. There should be greater separation of Ministers from the appointments process to ensure public confidence.

29.  Recent history shows that it is possible for the Government of the day to come into conflict with the BBC. The political independence of the BBC was brought sharply into public focus by the events surrounding the Hutton Inquiry which led to the resignation of the then Chairman of the BBC Board of Governors Gavyn Davies and his Director-General Greg Dyke. When designing the selection process that sought to replace Gavyn Davies the Government acknowledged that something needed to be added to the standard arrangements in order to ensure public confidence. To this end a panel of privy counsellors was appointed to scrutinise the process (but not the candidates). This extra layer of scrutiny was not used for the most recent appointment. Shaun Woodward MP told us that the Commissioner for Public Appointments had thought the extra scrutiny had only been necessary last time because of "the special circumstances … post Hutton" (Q 195).

30.  Ministers have three main points of influence over the current selection process. First, in appointing the selection panel. Secondly, in being able to add and subtract names from the shortlist and finally in having a choice of four names to choose from.

31.  On the first point we do not believe it is practical for anyone else to appoint the selection panel but we do believe the process should be more transparent and that Ministers should not be able to appoint a civil servant or political chairman. This was also the recommendation of the House of Lords Select Committee on BBC Charter Review two years ago. Civil servants are ultimately accountable to Ministers. They are there to serve their Minister and they are immersed in the culture and priorities of their Department. Andrew Ramsay assured us that as Chairman of the selection panel his only duty to ministers was "to provide a process which is absolutely full of integrity, and nothing else" (Q 194). We have no doubt that Mr Ramsay acted with full probity, but how does his position look to the licence fee payer? The public are clear that they want the independence of the BBC to be paramount. But it is a justifiable concern that a civil servant could act in the best interest of his Minister, rather than in the interests of the licence fee payer. For an appointment like this perception is crucial.

32.  It is for these reasons that we recommend that there should be a duty on the Secretary of State to appoint a selection panel of at least five members including the Chairman and the independent assessor. There should be a majority of non-political members. The panel should be chaired by a non-political member who is not a civil servant. To ensure that Ministers appoint a selection panel that will have the trust of all licence fee payers we suggest that the composition of the panel should be announced to Parliament in a written ministerial statement. This recommendation is in line with the new Prime Minister's plans for the Executive to become more responsive to Parliament and the public. The requirement for Ministers to justify publicly the panel's composition will ensure a panel that fulfils the criteria that we have recommended.

33.  To address our concerns about Government influence over the shortlist we recommended that if Ministers add or subtract any names from the shortlist this should immediately be made public through a written ministerial statement to Parliament. The names and details of the candidate should not be made public but the fact of Ministerial involvement should be.

34.  Finally we recommend that Ministers should no longer be able to choose between all the candidates that scored a C or above in the interview process. Allowing Ministers this choice means that the candidate considered most capable of doing the job might be passed over for a candidate Ministers consider to share their political priorities. We therefore recommend that the independent panel should recommend only one name to Ministers and that name should be the candidate who scored highest at interview. Ministers will still have to be answerable for the appointment so they should retain the power to reject that name and ask the panel to think again.

Should Parliament have a greater role?

35.  Ensuring less Ministerial influence over the appointment of the Chairman of the BBC Trust should go some way to ensuring public trust but the appointment needs careful scrutiny. The interests of licence fee payers must be represented at some point in the process. The obvious way to achieve both these goals is to give Parliament a role. MPs are the only democratically elected representatives of the licence fee payer.

36.  On 3 July this year the new Prime Minister published a Green Paper on the Governance of Britain.[6] Through this document the Prime Minister has made clear that he too believes that Parliament should have a greater role in scrutinising public appointments "the Government believes the time is now right to go further and seek to involve Parliament in the appointment of key public officials".[7] The Green Paper goes on to state that "Government nominees for key positions such as those listed below should be subject to a pre-appointment hearing with the relevant select committee".[8] However, the Chairman of the BBC Trust is not one of the positions listed.

37.  We were pleased to see Government support for parliamentary scrutiny of public appointments. This type of scrutiny may help avoid future problems with appointments.

38.  However, we are concerned that the BBC is not specifically mentioned anywhere in the Green Paper. The paper does state that "The Government, in consultation with the Liaison Committee,[9] will prepare a list of such appointments for which these hearings will apply".[10]

39.  The Government's proposals for pre-appointment hearings are that they "would be non-binding, but in the light of the report from the committee, Ministers would decide whether to proceed. The hearings would cover issues such as the candidate's suitability for the role, his or her key priorities, and the process used in selection".[11] We think that this is the right way to conduct such hearings. Hugo Swire MP (the then Opposition spokesperson for Culture, Media and Sport) gave evidence to us before the Government announced its plans. We agree with his view that the role for parliament should not be to impede the appointment, but to have a public session and make its report public. He suggested that it would be "a very brave Secretary of State" that appointed any candidate not reported on favourably by Parliament (Q 444).

40.  We note that there is some concern that public hearings might deter suitable candidates. Much of this concern is based on observations about how the United States Senate holds confirmation hearings for a large number of public posts. These hearings have attracted much criticism for concentrating on issues other than the candidate's qualifications and aptitude for the job. In 1998 the House of Commons Treasury Committee advocated confirmation hearings for certain public appointments in the UK but were mindful of what has happened in the US and therefore suggested the following resolution, "when the Committee is taking evidence at a confirmation hearing … questioning will be restricted to issues of the appointee's personal independence and professional competence, including the possession of knowledge or experience likely to be relevant … This resolution will justify an intervention by the Chairman if questioning strays outside the areas mentioned".[12]

41.  When we took evidence from Michael Grade he was concerned that public hearings would "deter a lot of very talented people from putting their names forward" (Q 65). We believe that a resolution like that outlined above would ensure that candidates were not put off. With such safeguards in place we question whether the type of person who would still be put off by the prospect of a Committee hearing is the type of person who should be chairman of the BBC. Sir Michael Lyons told the Committee that, although he did have concerns about pre-appointment hearings, post-hoc parliamentary scrutiny of his appointment would not have deterred him from applying (QQ 369-371).

42.  We recommend that the House of Commons Liaison Committee and the Government agree that the Chairman of the BBC Trust should be one of the appointments that Parliament vets. This vetting should focus only on the candidate's qualifications and aptitude for the job. Both Houses should have a role in this vetting. We therefore propose that a method be found whereby a Joint Committee of both Houses of Parliament should carry out the pre-appointment hearing. The Government should undertake to respond to the report of the Joint Committee before the appointment is finalised.

43.  For those members of this Committee who were previously on the House of Lords Select Committee on BBC Charter Review, it has been a long standing objective to address the democratic deficit that exists with reference to parliamentary scrutiny of the BBC. The first report of that Committee noted the process for agreeing a Royal Charter meant that the Government of the day had almost unchecked power to change the entire constitution of the BBC. The Committee therefore recommended that the BBC should be based on a statutory footing by an Act of Parliament. The second report of that Committee recommended that Parliament should have greater involvement in setting the licence fee. We support these recommendations.

44.  We are pleased that the Government's attitude towards the role of Parliament seems to be changing. The Prime Minister has made it clear that he wants several powers that are currently in the hands of Ministers to transfer to Parliament. We therefore hope that in the long term the Government will address the democratic deficit that exists over the BBC.


5   Department for Culture, Media and Sport, Review of the BBC's Royal Charter: A strong BBC, independent of government, March 2005, foreword. Back

6   Ministry of Justice, The Governance of Britain, July 2007 Back

7   Ibid, para 74. Back

8   Ibid, para 76. Back

9   NB The House of Commons Liaison Committee consists of MPs who chair Select Committees. Back

10   Ministry of Justice, The Governance of Britain, July 2007, para 77. Back

11   Ibid, para 76. Back

12   Third Report of the House of Commons Treasury Committee, Confirmation Hearings, 25 February 1998 Back


 
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