Examination of Witnesses (Questions 40
- 59)
WEDNESDAY 23 MAY 2007
MR MICHAEL
GRADE
Q40 Baroness McIntosh of Hudnall:
Could I ask you, first, since you answered yes to that, who is
defending the interests of the BBC, if it has autonomous interests,
if it is not the Trust? Secondly, what impact is this arrangement
of the Trust and the Executive Board likely to have, in your view,
on the BBC's output as a broadcaster?
Mr Grade: I do not see any conflict. The BBC
Executive are very human, they want to expand, they want to grow.
Everybody wants to move forward and to do new things and so on.
Audiences demand that sometimes. But, in the complicated media
world that we have today, everything that the BBC does will have
some kind of impact on the private sector, and licence-fee payers
have a huge interest in the BBC in ensuring that money is wisely
spent, efficiently spent, and that the independence of the BBC
is secured. That is, ultimately, the responsibility of the Trust.
The Trust also has to understand that licence-fee payers have
a wider interest in the plurality of choice that they presently
enjoy and increasing choice, and that they must not allow the
BBC's enthusiasm and excitement as an institution to expand, to
do so in a way that could have the potential to reduce the overall
choice available to licence-fee payers, because licence-fee payers
are consumers in the private sector as well as the public sector.
That is the thing that has to be policed and managed much better
than hitherto. That seems to me to be the kernel of the argument.
Q41 Baroness McIntosh of Hudnall:
Could I press you a little bit on that. I understand your answer
and I accept what you say but you have not quite addressed this
question of whether there is in fact an autonomous set of interests
that belong to the BBC which itself needs to be defended. You
have said that the Governors, as previously constituted, were
more concerned to defend the interests of the institution than
those of the licence-fee payers, which is a perfectly clear analysis,
but what are the interests of the BBC autonomously and who is
defending them?
Mr Grade: The BBC's interests are to get as
much money as possible, to spend it in the way that the Executive
would like to spend it. They want to be totally free to spend
it how they want to spend it but there is £3 billion of public
money and there has to be an effective check and balance on the
Executive to make sure that they are delivering value for money,
that their plans are securely thought through and that they are
not going to have a damaging effect on the growth of the private
sector. Some of those issues are not issues that the Executive
would necessarily take to its heart if it were not called to account.
One must remember, also, that, under the Governors, all the evidence
on which the Governors made the decisions was evidence provided
by the Executive of the BBC. A preposterous state of affairs!
I created the Governance Unit, which is now enshrined in the Constitution,
which works entirely for the Trust. It worked for the Governors
when I set it up, and they depended for their enhancement, their
pay and rations, on the Governors, not on the management. You
had had a secretariat, prior to my arrival, which purportedly
worked for the Governors but, in fact, their advancement, their
performance reviews, were conducted by the Executive, so their
careers were in the hands of the Executive, not in the hands of
the Governors. Inevitably, on balance, which way was the recommendation
going to be skewed? It would be skewed in favour of the Executive.
The Governors were in no position, until I arrived really, to
get the evidence on which to question and turn the Executive down.
This was all a muddle that had to be sorted out and we did sort
it out. The Governance Unit now is an extremely effective unit,
independent of management and the Executive, working for the Trust,
providing the Trust with the objective and independent evidence
it needs to come to its conclusions.
Q42 Chairman:
If any Government decided to lean upon the BBC, do you think the
structure that you have at the moment would make it easier for
the BBC to defend themselves than it was previously?
Mr Grade: I do not think it makes it easier
or harder. It is a very easy thing to do to resist that kind of
pressure, if any Government was stupid enough to try to apply
that pressure.
Q43 Chairman:
You never found that yourself.
Mr Grade: Never. I never had any calls from
anybody in government or close to the Government trying to nudge
me in any direction. I think politicians are too smart to do that
these days.
Q44 Lord Hastings of Scarisbrick:
Mr Grade, could I ask you to unravel a little bit more of the
spider's web of the interaction between the two boards, as it
were. You have the Trust Board which has a chairman (as you were)
and there is the Executive Board which also has a chairman (who
could be the Director-General or not the Director-General) and
there are independent non-executives on the Trust Board, as well
as there are independent members on the Executive Board. Could
you just explain a little bit how that all affects the role and
function of the Chairman of the BBC now as compared to the previous
Chairman of the BBC, when he was Chairman of the Governors, and
how the different Chair roles, between the Executive Board and
its independent non-executives and the Trust Board and its non-executives,
function.
Mr Grade: There is no doubt, there can be no
doubt and there should be no doubt, that the Chairman of the BBC
is the Chairman of the Trust. The fact that the Director-General
is called the Chairman of the Operating Board is irrelevant. The
responsibility for the money, the responsibility for the behaviour
of the BBC, all of that, constitutionally, is very clear: it lies
entirely in the hands of the Trust and the Chairman of the Trust.
There can be no doubt about that. In many of the arguments I had
during the Charter Review Period on the governance issues, many
models fell down when I asked the question: "If there is
a financial scandal in the BBC"—which there never will
be—"under your model [whatever the model was] where
does the buck stop?" Many of the models collapsed at that
point because it was not clear where the responsibility for the
money lay. It is very clear under the present Constitution that
responsibility for the spending of the money lies ultimately with
the Trust and the Chairman of the BBC, and the Trust is the sovereign
body of the BBC and what the Trust says goes. The fact that the
Director-General is called Chairman of the Operating Board or
the Executive Board is just a nomenclature. It has no constitutional
significance.
Q45 Lord Hastings of Scarisbrick:
Are you suggesting then that maybe the previous Chairman Gavyn
Davies or the previous Chairman but one Christopher Bland did
not feel that they were responsible ultimately for the expenditure
of the money of the BBC?
Mr Grade: Yes, they did. That is one of the
things that we have to be sure to preserve in the new system.
Q46 Lord Hastings of Scarisbrick:
If Christopher Bland re-emerged into the role of the Chairman
of the BBC under the new Trust arrangement, how would he perceive
the difference?
Mr Grade: He would feel very clearly that his
constitutional role was to be at one remove from the day-to-day
operations of the BBC and to be there to represent very clearly
the interests of the licence-fee payers. That is not clear in
the previous model. Not clear at all.
Q47 Lord Hastings of Scarisbrick:
Although the Governors always perceived previously that they were
representing the licence-fee payers.
Mr Grade: Yes, they assumed that position but
there was no evidence to support it. When the Chairman of the
Trust in future comes before this Committee or before Parliament
in any shape or form and says, "I am representing the interests
of the licence-fee payers", he or she will have evidence
to support that statement. Previously, you would make that statement
but there was no evidence to support it. It was just the view
of 12 good men and women true that they were representing them,
but they had no mandate. The Trust will now have a mandate through
its own evidence gathering of how licence-fee payers are thinking.
Q48 Lord King of Bridgwater:
I think that last point is pretty offensive to a lot of previous
holders of your office, who certainly saw, as any board of directors
do when they have to face in about three or four different directions:
their shareholders, their customers, their employees, and the
quality of their products is linked into that. You say there is
no question who the Chairman of the BBC is and this is absolutely
clear: the Chairman of the Trustees. One of the most common areas
of complaint people are going to raise is content of programmes.
It is nothing to do with you, in the first instance. It is the
responsibility of the Chairman of the BBC, as the public will
see it, who is not your successor but is actually what was the
Director-General.
Mr Grade: In the first instance, if there were
controversy about a programme which was either about to be transmitted
or had been transmitted, the Director-General would offer a point
of view that, let us say, he is going to defend the programme
publicly, and say, "We were right to transmit this programme"
or "We are going to transmit this programme. We see no reason
why it should not be transmitted." It is ultimately the Trust
who will have to make the decision as to whether they think the
Director-General's decision was right or wrong. Because they are
not involved in the decision, they are able to sit in judgment
from a distance and say, "The Director-General was wrong.
This programme should not have been transmitted for the following
reasons ...".
Q49 Lord King of Bridgwater:
Are you saying that for the day-to-day, varying qualities of debates
about programmes, the Trustees are going to get involved in that?
Mr Grade: Not in day-to-day, no. They are going
to set the framework.
Q50 Lord King of Bridgwater:
When somebody rings up and says, "I think this was a lousy
programme, I am going to write to the Chairman and complain about
it," will he be encouraged to write to the Chairman of the
Trustees or the Chairman of the Executive Board?
Mr Grade: One of the things that we achieved
in my time at the BBC and which I am sure the Trust will go on
to develop in its own way is a much more common law, friendly
complaints procedure. In the first instance, anybody who makes
a complaint will be steered through to the complaints procedure
at the BBC which allows for an appeal to the Trust. If they are
not satisfied with the answer they get from the Executive, if
they wish to appeal they can appeal to the Trust and the Trust
has its own complaints procedure.
Q51 Lord King of Bridgwater:
Say I want to complain about a programme yesterday and I ring
up the BBC, their information desk or whatever, and say, "I
want to write to the Chairman about this programme" who shall
I address it to?
Mr Grade: You can write to whoever you wish
to. You can write to the Chairman of the Trust. You will be directed
to the BBC's complaints procedure.
Q52 Chairman:
Who is responsible for that? In the first instance, it is the
Executive Board.
Mr Grade: The first port of call is the Director-General.
If you wish to complain to the Chairman of the Trust, you can
write to the Chairman of the Trust and say, "I think it is
a shocking programme, will you please look into this for me"
The Chairman will give it to the Executive; the Executive will
come up with a response. If you are not satisfied with that response,
you will appeal.
Q53 Lord King of Bridgwater:
If I write to a Member of Parliament to complain about a programme,
will I get a reply from Sir Michael Lyons?
Mr Grade: Yes, you will.
Q54 Lord King of Bridgwater:
About an individual programme?
Mr Grade: Yes.
Q55 Lord King of Bridgwater:
Or will I get it from Mr Thompson?
Mr Grade: I have no idea how Sir Michael will
wish to deal with the matter but if he gets a personal letter
from somebody he will reply to it.
Q56 Lord King of Bridgwater:
It is not a question of politeness in a personal letter; it is
a question of where things should be correctly addressed. I do
not want to labour the point, I think we have the point pretty
clearly already, but if individual members of the public want
to complain about an individual programme they heard last night,
it would be dealt with by the Executive Board. For something that
becomes more major, something systemic, that is a different matter
and the Trust might become involved. Anyway, I have made the point.
Mr Grade: No, the Trust has its own Complaints
Committee which will deal with appeals from any member of the
public who wishes to complain if they are not satisfied with the
response they have got from the Executive.
Lord King of Bridgwater: I think I have made
the point.
Q57 Baroness Thornton:
That sounds a bit like a regulator, to me. It is what you do with
Ofwat. I am returning to the words of the Royal Charter and the
role of the Chairman, because I think we might have a problem
here—and of course it will be tested as time goes forward.
In the Royal Charter it says, "The Trust shall be the sovereign
body within the BBC"; however it also states that the position
of the Chairman of the BBC is an "honorary title". My
understanding of "honorary title" is just that. That
does not accord with the description you have been giving of what
you think the role of the Chairman of the BBC is as it moves forward
and it certainly does not accord with what the role of the Chairman
of the BBC was in the past. In a way, the question is: Where does
the buck stop?
Mr Grade: It stops with the Trust. The Chairman
is primus inter pares of the Trust.
Q58 Baroness Thornton:
Is the Chairman there just to chair meetings? An honorary position
is really an honorary position. It is not a leadership position,
in my view.
Mr Grade: It is a leadership position. Someone
has to run the Board. You have to have somebody who chairs the
meetings and takes the responsibility for getting consensus amongst
the Board.
Q59 Baroness Thornton:
That is very important, I accept.
Mr Grade: I am not quite sure what the draftsmen
were getting at when they referred to it as an "honorary
position". I have no idea what arcane legalese lies behind
that phrase.
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