Examination of Witnesses (Questions 180
- 199)
WEDNESDAY 6 JUNE 2007
MR SHAUN
WOODWARD AND
MR ANDREW
RAMSAY
Q180 Baroness Howe of Idlicote:
I meant, financially?
Mr Woodward: That also includes financially;
a profligate BBC, which, for example, can do things which mean
that inappropriately it stifles competition, does not serve the
broadcasting industry or the member of the public who is also
a licence fee payer. I think it is a caricature of the situation
to imagine that the timing of Michael Grade's departure, in any
shape or form, could have continued to influence, in any way,
positively, adversely, the outcome.
Q181 Baroness Howe of Idlicote:
Are you saying it was fixed at the moment he went, and it stayed
like that?
Mr Woodward: The BBC's arguments which were
relevant to us making a decision on what the settlement should
be, had been made, and had been made effectively, and his departure
made no material difference to the arguments put forward by the
BBC at that stage.
Q182 Chairman:
The frank answer is, the amount had not actually been decided
at that time?
Mr Woodward: As is perfectly obvious, and there
is nothing to be discovered in that. It is a matter of public
record that the final decision had not been made.
Chairman: Let us move on, to the process of
appointment.
Q183 Lord King of Bridgwater:
As you know, we made a recommendation about the process of appointment
that there be a majority of non-political members on the panel
and that the panel should be chaired by a non-political member
who was not a civil servant. Why do you think we made that recommendation?
Mr Woodward: Without wishing to second-guess
the psychology of members of the Committee, I cannot say.
Q184 Lord King of Bridgwater:
You can say, because we put the reasons in our Report?
Mr Woodward: Absolutely. Also, if you recall,
the Government responded to it at the time by, on the one hand,
recognising the integrity of the appointments process to be absolutely
critical, but also we recognised that we believed the process
we had, founded on Nolan Principles, actually was one which would
serve the BBC efficiently and effectively. It was our view that—of
course, Lord King, you are perfectly entitled to disagree—the
judgments we made were the right ones, and if we have a disagreement
on those judgments I respect that, but I believe the process we
have just gone through actually has served the BBC and the licence
fee payer extremely well.
Q185 Lord King of Bridgwater:
If, you have said, you have a panel of independent members that
you thought was far enough for it to be chaired by a civil servant,
which of course was Mr Ramsay, and that was your position?
Mr Woodward: It was our position.
Q186 Lord King of Bridgwater:
Can I just take you through that; can you remember the background
of Sir Quentin Thomas, who is down here as the President of the
British Board of Film Classification?
Mr Woodward: Yes.
Mr Ramsay: A former civil servant.
Q187 Lord King of Bridgwater:
A very distinguished civil servant. Can I ask you about the background
of the Chair of the Natural History Museum, Oliver Stocken, who
was another member of the committee?
Mr Ramsay: He was Finance Director of Barclays
Bank in the nineties, I think, and he is a leading figure on various
non-executive boards.
Q188 Lord King of Bridgwater:
You are clear about that?
Mr Ramsay: Yes; absolutely.
Q189 Lord King of Bridgwater:
The information I have is different?
Mr Ramsay: He was the Finance Director of Barclays,
and the reason I asked him, as I was explaining earlier, was that
he had a different set of talents.
Q190 Lord King of Bridgwater:
Then can I ask you about Sheila Drew Smith?
Mr Ramsay: Sheila was appointed as the independent
assessor.
Q191 Lord King of Bridgwater:
Who is a civil servant?
Mr Ramsay: She is not a civil servant; she is
not currently a civil servant and has not been for a time.
Q192 Lord King of Bridgwater:
She has the office of Commissioner of Public Appointments?
Mr Ramsay: She was asked by that organisation
to act.
Q193 Lord King of Bridgwater:
What is her background?
Mr Ramsay: She is an economist by background.
The rules under which we operate the public appointments system
are set by the Commissioner for Public Appointments, so the whole
system which we operate operates to rules which are agreed with
the Commissioner, and this process was in line with that. On each
occasion that we have an appointment of this kind someone who
is trained as an independent assessor sits on the panel to ensure
that the rules which the Commissioner lays down are stuck to,
that the process is fair throughout and Sheila's role in this
context was to do that.
Q194 Lord King of Bridgwater:
As you know, the appointment of Sir Michael Lyons, whom I do not
know personally, I have no criticism of him at all, it has been
said, in criticism, that he had close links with the Labour Party,
and with Gordon Brown in particular, and was selected for this
role, and that he is a former Labour councillor and carried out
two major reviews for the Government for which he was paid half
a million pounds. I do not know whether that is true or not. You
will recall the concern of the Committee and the reason why we
said that it was desirable to avoid the chairmanship being run
by a civil servant. You have your duty to ministers, ministers
are politicians and, as a former member of the Nolan Committee,
why we set up the Nolan Committee Rules was that there should
be transparency, one of the key issues of Nolan, and it should
be absolutely apparent that independence is being observed and
that political prejudice should be avoided. You have your duty
to ministers and yet you chaired this selection committee. I accept
absolutely that you did this in a completely honourable and responsible
way, but it is perception which matters and that is another very
important point which Nolan brought up. Would you like to comment
on all of that?
Mr Ramsay: My duty, in this context, to ministers
is to provide a process which is absolutely full of integrity,
and nothing else, and the role of Sheila Drew Smith is to make
sure that happens.
Q195 Lord King of Bridgwater:
May I say this; in your case, I accept absolutely what you say.
There could be, of course, just conceivably, another official
in your position, anxious about the concern as to who was to be
promoted to be the next Permanent Secretary in the Department
shortly, a name that was of interest to a future Prime Minister.
It is precisely because of those sorts of issues that the Nolan
Committee, and I hope Parliament, has been concerned to try to
protect the independence of these sorts of appointments, so that
they can be seen to be whiter than white. It was not a frivolous
comment, or some sort of hatred of civil servants, or to say do
not have a civil servant as chairman, it is precisely to observe
their appointment. Can I make the point to you that it has exposed
you personally to those sorts of criticisms, precisely for the
reason that no-one identified, and that this committee identified,
and that the Government, and really I do not want to address this
to you, really I want to address this to the Minister, the Minister
just ignored, and the Government has ignored, and allowed these
criticisms to arise to which there is no adequate answer?
Mr Woodward: I find it quite interesting to
reflect on previous appointments. When Michael Grade reminded
this Committee that, historically, when he was Executive of the
BBC, in the eighties, it was all done with a nod and a wink and
a telephone call, there was no Nolan process. I think the Nolan
process was an extremely important improvement on that. I think
also we have to be careful sometimes of overbureaucratising the
situation, and again caricaturing what happened, in terms of,
as you said, Lord King, perception. There is perception by some
that this was not an adequate process, but I think that perception
rightly should be challenged and I will now defend robustly the
position in which I think we found ourselves. It was of concern
to the Secretary of State, at the time, that there could be a
perception problem; that is what led officials to write to the
Commissioner to seek views on the need for a scrutiny panel. It
was the decision of the Commissioner, for example, that there
would not be a scrutiny panel, because when they looked back on
the appointment of Michael Grade there were very special circumstances
which related, post-Hutton, to the appointment of the Chairman
of the BBC. It was felt right to have an extra level of scrutiny,
of three Privy Counsellors, at that time. I have to say, I have
the highest respect for the Commissioner, and even though the
Secretary of State was minded, precisely, Lord King, for the reasons
you adduce, that there could be a problem of perception, it was
the decision of the Commissioner that actually there should not
be an additional level of scrutiny, because it was not necessary.
In this particular case, I do not question the decision of the
referee. I think the referee's integrity here, and I know you
are not remotely suggesting otherwise, is actually one which also
is at stake when we talk about perception. I believe this system
works and I believe I have seen no evidence whatsoever, both in
published and private documents to ministers, which suggests anything
other than that the highest standards have been maintained.
Q196 Lord King of Bridgwater:
I accept your statement entirely. It is the statement that any
minister in your position would make. I have to say that, if you
look at the general public view on this, and that is what you
have got to protect the integrity of Government and Parliament
from, it fails to be achieved. So far from not respecting our
recommendation about a chairman of this panel not being a civil
servant, actually the majority of the panel was civil servants
as well. If I may say so, and I rest my case now, I think that
was a grievous mistake and I think it was a great pity that it
was not seen to be a much more independent panel.
Mr Woodward: With respect, I think it is terribly
important, since this is a matter of record, I have just had the
opportunity of reminding myself of the background of the selection
panel and I do think, again, it is a little bit to caricature
the position of this having been a group only of people who were
civil servants. Oliver Stocken, as well as being Finance Director
of Barclays from 1993-1999, held several non-executive directorships,
including Great Universal Stores, Nova plc, Pilkingtons, Rank,
Deputy Chairman of 3i. I think, therefore, there are people who
move into public life with considerable—- -
Q197 Lord King of Bridgwater:
Which one?
Mr Woodward: He is one of the four. Sheila Drew
Smith is an experienced OCPA independent assessor; her background
is as an economist. She has worked in both the public and the
private sectors. She was appointed Commissioner of the Audit Commission
in May 2004. She has experience of Housing Corporations; she has
worked on the South East Regional Housing Board. These are people
of enormous experience.
Lord Maxton: Was the process of selection influenced
in any way by the fact that there was not a Chairman in place
to be replaced, if you like, there was a gap there and therefore
the process was slightly faster perhaps, slightly less rigorous,
than it might have been? Secondly, following on, and taking the
opposite point of view, frankly, Lord King came very close to
suggesting that anybody with political experience, with a political
background, should not hold public appointments.
Lord King of Bridgwater: No.
Q198 Lord Maxton:
I think that is a very dangerous area to go into?
Mr Woodward: If I may, I am going to make two
specific comments and then ask Andrew, because he oversaw the
process. I do not believe that the outcome of the process was
changed materially by the circumstances which brought it about.
In other words, Michael Grade's departure may have meant that
at the same time as we were dealing with the licence fee negotiations
we had to find ourselves searching for a new Chairman of the Trust,
but I do not believe, in any shape or form, that process was compromised
or that the quality of the candidate was affected, in any way.
Indeed, if one looks back historically, I think that would have
been much more likely to be the case following the departure of
the then Chairman and Director General of the BBC post-Hutton
than it would have been at this instance, because ITV had gained
a new, extremely good Executive Chairman. I do not believe that
process was affected at all.
Mr Ramsay: The process was not affected in any
way by the circumstances. We did absolutely what we should have
done and we would have done it whether there had been a Chairman
in post or not. In terms of political background, that is no bar
to public appointments and I think one or two people here would
be able to give evidence of that.
Q199 Lord Corbett of Castle Vale:
For the record, can I make clear that I know and have worked with
Michael Lyons, when I was a Birmingham MP and he was the Chief
Executive of Birmingham City Council; let us get that out of the
way. Minister, you had a brief exchange with My Lord Chairman
earlier about opening up this process more and you said that if
you were to go down that road possibly it could take longer. Can
you say how long this whole process of the BBC Charter Review
took from start to finish?
Mr Ramsay: The whole process was about three
years. We started planning it I think about three years before.
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