Select Committee on Communications Minutes of Evidence


Examination of Witnesses (Questions 1249 - 1259)

THURSDAY 6 DECEMBER 2007

Mr Mark Thompson and Ms Caroline Thomson

  Q1249  Chairman: Can I make two announcements first? As always, the declaration of Members' interest is on one of the tables. Secondly, for those who have been following these proceedings throughout, there is no public meeting next Wednesday. Welcome to you both. Caroline Thomson, you have not been given a label so tell us your position.

  Ms Thomson: I am Caroline Thomson and I am Chief Operating Officer.

  Q1250  Chairman: This is the first parliamentary Committee you have come to since the BBC announced its major six year plan.

  Mr Thompson: I think that is correct.

  Q1251  Chairman: Can you remind us, first in the financial context, where you have ended up compared to your bid for the next five years?

  Mr Thompson: The first thing to say is that the shift in the current licence fee settlement from a formula based on RPI plus or minus to an absolute set of numbers over the period means it is actually quite difficult to give a definitive answer to that because it will depend on the run rate of inflation over this coming period. Although there are Treasury forecasts there is a fairly large amount of debate about how inflation will pan out. We had been asking for a licence fee that would increase somewhat above inflation. I will not go into the detailed formula but we have a licence fee which goes up in nominal terms by 3% for the first two years of the settlement and by 2% for the next three years with the amount in the sixth year to be assessed. The difference between what we had asked for and what we will receive, assuming a mid-case on inflation, is probably around £2 billion over a six year period. It is very important to emphasise that this is occasionally written as if we have had a £2 billion cut but it is not a cut in that sense. What we expect is the licence fee, as a whole in terms of the BBC's take of the licence fee, to remain broadly stable, possibly declining very slightly in real terms over the period. The challenge the BBC faces is that over this period we have significant responsibilities to discharge in the matter of, in the broader sense, digital switchover and digital conversion, the building out of transmitters to enable the switch to DTT as part of the broader analogue switch off. We have our own costs. We also have the costs pan-industry marketing costs and we also have the costs of the government's targeted help scheme. Also, because of what is happening to media, we have some infrastructure and other costs of our own to discharge. That means, within the context of the licence fee settlement we have, that we have to look pretty hard at releasing resources for our current operations to enable us to continue to offer high quality service to the public and yet release cash which we can use to discharge these additional responsibilities.

  Q1252  Chairman: To cut through that, would it be fair to say that you are operating in a context where you have £2 billion less over the next six years than you had hoped for?

  Mr Thompson: Yes.

  Q1253  Chairman: The result is that you refer to 2,500 post closures, which is an interesting phrase. I assume that includes redundancies. It is 2,500 posts you are going to lose.

  Mr Thompson: For reasons you will understand, and I will try to make this as simple as I can, over this period because of our plans, and in particular because of the developments we believe we need to make in certain digital services, we expect to create posts. We also believe there is scope and indeed both the BBC Trust, and behind them the government, are very clear they wish the BBC to make efficiencies in existing services. There are many ways of making efficiencies but part of the way in which we have to approach efficiency is looking at whether we can deliver existing services using fewer people than we currently do. 2,500 existing jobs we expect to go but we also expect to create some new jobs and where we can we will try and redeploy existing staff into new jobs so the net number of redundancies we expect in this period is 1,800, which is roughly 10% of the head count of the public service UK BBC.

  Q1254  Chairman: The number of jobs that are going compared with the number of new jobs being created, it would seem more jobs are going than are being created.

  Mr Thompson: It is true that the total head count of the public service BBC will reduce over this period. However, I believe of the 2,500 people occupying the posts which are going to close we will be able to redeploy 700. Several hundred other new jobs will be created in areas, for example, some of the internet operations where we do not believe we have the current in-house talents. I am afraid in addition to the numbers I have given there are hundreds of other new jobs that will be created over this period.

  Q1255  Chairman: We have been through some of this before so we will not re-trail the whole thing. Our interest in this inquiry is the provision of news. I have always believed that the provision of impartial and balanced news is really the essence of the BBC. Would you agree with that?

  Mr Thompson: I would agree 100%, yes.

  Q1256  Chairman: As I also understand it, 400 journalist posts are to be closed down. I am not sure how I see that as compatible with your statement that you are giving more weight to journalism. You are closing 400 journalist posts down and you are giving more weight to journalism. The two do not seem to add up.

  Mr Thompson: If you believe that head count is the only way of measuring our commitment to journalism then you would have a point. I would say we see journalism playing, as it does currently, a central role in what the BBC does. Over this period our investment in journalism is going to remain very, very strong. The proportion of the licence fee contents we spend on journalism as a whole will go up over the period. However, we believe that the combination of new technology and some opportunities we have not just to reduce duplication, that is important as well, but also to look at the way we create our news programmes across television, radio and the web, together mean that we can deliver the same or higher quality of journalism with somewhat fewer people.

  Q1257  Chairman: If I was a news editor, if I can put it that way, and I have 400 less journalists would I not regard that as a bit of a deficit?

  Mr Thompson: Across the BBC we currently have a population of 7,200 journalists and we will end this period we believe with a population of 6,800 journalists.

  Q1258  Chairman: That makes you the biggest in the world.

  Mr Thompson: I believe the BBC journalists' delivery of services to the public here and around the world bears comparison with any other news organisation in the world. I have to say I believe that because of the expertise and the quality of the people we have and it is not just the head count numbers. Every part of the BBC has to look hard at whether there are ways it can deliver what it does to the public in ways which use the licence fee in the most efficient way possible. I believe it is absolutely consistent to say that we are totally committed to high quality impartial journalism for the UK public and people around the world. We are going to use technology and better ways of working to make the licence fee go further. If one believed that it was impossible to maintain quality standards if you were ever going to reduce head count, quite apart from the BBC no part of public sector reform would be possible.

  Q1259  Chairman: Those posts are basically unnecessary, are they, and surplus to requirements?

  Mr Thompson: A significant part of our news operations will be either marginally or, in some cases, unaffected by these changes. For example, we believe our news gathering operation, which is a significant part of the reason for the BBC's strength in journalism, in very large measure should be preserved. Particularly our global news gathering operation is going to become more distinctive and more important in the future. What we have been doing is running in parallel a television news operation, a radio news operation and an operation for our website and for other mobile platforms. That often means you have a number of different journalists working on different platforms on essentially the same story. Moreover, we sometimes find, and I would be surprised if there are not members of this Committee who have not been on the receiving end of this as I have myself, that multiple BBC News outlets are seeking, for example, their own interview with the same person when they are in the news. The record I once got to was 37 requests for interviews from my colleagues in the BBC on a particular day. We believe that although we want to preserve the character of different news programmes, and it is entirely appropriate that Today should want an interview, Newsnight should want an interview, Five Live should want an interview, and so forth, but that there are ways of maintaining the diversity and plurality of our news operation but working slightly better to co-ordinate what we do. We believe that, although all of my colleagues in journalism are working very hard, there are ways of organising ourselves and critically using some of the new technologies, particularly between different platforms, to deliver the same or better quality to the public but with slightly fewer people involved.


 
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