7.The BBC has been a centre point of British life for 100 years. Its recent coverage of the Platinum Jubilee and the Ukraine crisis showcased the BBC’s strengths and underscored the continued relevance and importance of public service broadcasting. The BBC provides a trusted source of information across the UK and the world. It creates much-loved entertainment for millions, and delivers unrivalled educational content to children and adults alike. Through this the corporation plays a leading role in stimulating the creative industries, developing skills, nurturing British talent and creating economic benefits across the country.
8.Our evidence was clear that decisions about the BBC’s funding model must be led by a clear vision of what the BBC is for. This question is becoming more pertinent in a world of expanding choice, personalised content and competitive market dynamics. This chapter sets out the key considerations relating to the BBC’s purpose and why this needs to be clearly defined. The subsequent chapter explores strategic challenges facing the BBC and evaluates the corporation’s response.
9.The BBC’s mission is set out in the Charter. The broadcaster is to “act in the public interest, serving all audiences through the provision of impartial, high-quality and distinctive output and services which inform, educate and entertain”. This mission to ‘inform, educate and entertain’ was initially articulated by the BBC’s first Director-General Lord Reith and has underpinned the BBC’s work ever since. In the early 2000s ‘public purposes’ were introduced to help clarify the BBC’s work and objectives. These were updated ahead of the 2017 Charter, which tasks the broadcaster with delivering five public purposes:
10.In April 2022 the Government published a White Paper setting out its intention to review the broadcasting sector and replace the public service broadcasting purposes and objectives. The Government said this would support public service broadcasters in focusing on areas where they are “uniquely positioned to deliver and that would make us poorer as a nation—culturally, economically and democratically—if they were not provided.”
11.Inform: we heard consistent support for the BBC’s role in providing a trusted source of information. Many witnesses said the BBC’s news sources were crucial to ensuring that citizens could participate fully in the UK society and democracy—both local and national news coverage were highlighted in this regard. Trusted news sources are likely to remain valued in an increasingly complex information environment, particularly in the context of rising mis- and dis-information. Dr Richard Fletcher, Senior Research Fellow at Reuters Institute for the Study of Journalism, believed there would be an enduring desire for a prominent source of impartial news and fact-based reporting. This work is subject to significant challenges as set out in Chapter 3. The Reuters Institute’s Digital News Report 2022 found for example that BBC News had the biggest drop in trust compared to public service media brands across international markets, declining from 75 to 55 per cent between 2018 and 2022. We also noted there were wider areas the BBC could improve on, notably its business coverage.
12.Educate: we heard similar consistent support for the BBC’s educational role. Polly Mackenzie, then Chief Executive Officer at Demos, said that initiatives such as the BBC’s partnership with the Open University and its children’s programming provided “extraordinary” value. Others praised the corporation’s work during the covid-19 pandemic. The BBC told us that 68 per cent of primary pupils and 81 per cent of secondary pupils used Bitesize in the 2020 summer term, and that it was the educational resource most recommended by teachers to parents. We heard similar themes in our roundtable discussions with young adults in Salford.
13.Entertain: overall our evidence suggested enduring support for the BBC providing high-quality entertainment, with more varied perspectives on the appropriate extent of provision. On the one hand, we heard that high-quality entertainment was what the public most wanted. The BBC cited studies showing that people tended to name ‘entertainment’ as the most important aspect of the BBC’s offer, scoring an average of 48 out of 100 points, compared with 30 for ‘inform’ and 23 for ‘educate’.
14.We also heard that audiences valued the BBC’s distinctively British content and its ability to cover socially important issues through the medium of entertainment. This sets it apart from international streaming services which tend to contain fewer British cultural references and idioms, as well as from other operators offering more general mass market entertainment. We noted that some SVODs may be starting to produce more distinctively British content to retain and appeal to new customers in the UK market, but the effects remain to be seen and such approaches may change again in future.
15.Others suggested that the BBC’s entertainment offer was becoming less relevant. Dr Helen Weeds, Honorary Senior Research Fellow at Imperial College Business School, said that younger audiences tend to find and pay for personalised entertainment online, reflecting a wider shift away from the expectation that the BBC would provide everything. Young adults at our Salford roundtable discussion expressed similar sentiments. These perspectives reflect the findings from a recent Ofcom study that “the BBC is seen to especially excel in providing informative and educational content and to a lesser extent in the provision of entertaining content”, in part due to the volume and variety of alternative SVOD entertainment. This issue relates closely to perspectives on market failure covered later in this chapter.
16.Several witnesses highlighted the BBC’s role in providing a ‘national glue’. We heard that this was becoming both more complex and more important. Dr Adrian Wooldridge, Global Business Columnist at Bloomberg, told the Committee that the BBC’s role was “to assert national unity in a world that is atomised and fragmented … what is best in our traditions and ourselves.” Andrew Neil, a broadcaster and journalist, thought the BBC played a key role in defining “who we are, where we come from and where we hope we are going”. Dr Rob Watson, Director of Decentred Media, and Jasmine Dotiwala, a broadcaster and producer, emphasised the BBC’s role in bringing the nation together during the pandemic. We heard some perspectives questioning this logic—Dr Cento Veljanovski, Founder and Managing Partner at Case Associates, was “not sure that it is the role of a state broadcaster” to bring a nation together in these ways, for example—but the majority of our evidence emphasised the importance of this role.
17.Previous findings elsewhere support these views. A report by the Constitution Committee concluded that the BBC, alongside the NHS and the monarchy, provided some of the core foundations for a “shared heritage and history of the country” which underpins the UK’s cultural union. Ofcom has judged the BBC to be successful in bringing audiences together in large numbers through drama, news and major live events.
18.We heard that the way in which the BBC delivers on its mission needed to adapt, and in some areas improve, to remain relevant. Three themes stood out: serving audiences, personalisation and strategic purpose. First was the need for the BBC better to meet the expectations of audiences who feel misrepresented and underserved. We heard there was a difficult balance in providing content for a range of audiences in an age of diverging values and cultural disputes, and there was increasingly a risk of alienating audiences through content choices. David Goodhart, Head of Demography, Immigration and Integration at Policy Exchange, offered a warning about the importance of bridging rather than feeding such cultural divides:
“I look across the Atlantic at the United States and wonder whether we could develop our own version of the red state/blue state distinction that has evolved there and that seems to be tearing politics apart. Blue-state Britain would be metropolitan—big-city London and the other big cities. It would be value-diverse and very ethnically diverse … well-educated white professionals [would live there], and the ethos would be much more liberal modernity and much less attachment to tradition, even to national norms.
Red-state Britain, on the other hand, would be small-town, suburban, rural, much more ethnically homogenous, with fewer graduates and much less well educated.”
19.He argued that a key part of the BBC’s function was to “act as a kind of bridge between these two” and warned the BBC needed to avoid “doing the splits. It cannot take sides in these great value divides”. Dr Adrian Wooldridge similarly cautioned that the BBC should provide a common “reference point that the whole country can look at”. This was particularly true for news:
“I say this having lived in the United States for 13 years. What Fox television, and the reaction to it on the part of CNN and MSNBC, did to the culture and democracy of the United States was tragic beyond belief. Having a world in which people cannot agree, not just on their values but on what constitutes reality, is death to democracy.”
20.Second was a need to balance audience expectations of individual personalisation against wider public value. We heard that online content was becoming increasingly tailored to individual preferences, with algorithms dictating what content people see on the basis of their previous interests and online profile. Some thought these trends might undermine the BBC’s value in providing a common good and shared experiences, or insulate people from having to confront alternative perspectives.
21.Others thought that increased personalisation could help the BBC use tailored content to nudge consumers towards areas that provide a wider public good. We noted however that doing so effectively would require better data and audience insight than the BBC currently holds. These issues would need to be thought through as part of the BBC’s work on developing its future vision, which we call for in Chapter 3.
22.Third was the BBC’s overall strategic purpose. We heard concern that BBC needed to define and demonstrate better its driving purpose to the public in a future where people could be, and may wish to be, informed, educated and entertained by other providers. We noted the BBC’s commitment to public service, value for all and Reithian content. In order to respond to the challenges outlined above, a clear strategic vision of what it is seeking to achieve and how will be essential.
23.Professor Stuart Allan, Professor of Journalism and Communication at Cardiff University, stressed that the new media environment was leading to “a very different conception of public service broadcasting; one that has to make a case for its own relevance”. Archie Norman, former chairman of ITV, cautioned that “The last thing that any of us want to see is a BBC that carries on trying to do the same thing, in a legacy way, increasingly short of funds and therefore increasingly failing and disappointing people”. He thought that something further than standard transformation pledges was needed:
“Most organisations seeking to transform do not transform. It is normal for chief executives to say, ‘We are transforming’, but most of the time it does not happen … Organisations transform when something very disruptive happens: you fracture the old culture, everybody changes seats, new people come in.”
24.The BBC told us that its mission to inform, educate and entertain remained “as relevant today as when we started broadcasting 100 years ago”, and that it was proud to play a key role in bringing the nation together. When asked about the BBC’s relevance to individuals, Tim Davie, Director-General of the BBC, acknowledged opportunities to make the BBC more relevant, for example through improved localisation, but maintained it had to “balance the stories we see as important editorially with personalisation”. He added that the BBC was focused on producing distinctively British content, and that delivering an excellent public service was the driving force behind the BBC’s work. The then Minister of State for Media, Data, and Digital Infrastructure, Julia Lopez MP, said the Government would “look at the core purpose and future of the BBC in the Charter review” and was “keen to hear what the BBC’s ideas are for the things that it should focus on.”
25.The BBC plays a key role in bringing the nation together—most importantly at times of crisis, celebration and big national moments, such as sporting events. This role as a national glue will only become more important, and more complex, in the context of increasing social, cultural and demographic change.
26.The BBC’s mission to ‘inform, educate, entertain’ has stood the test of time. But the way in which it is delivered needs to change for it to remain relevant in this rapidly changing market and society. The BBC needs to be guided in how it should change by a clearly articulated strategic purpose and vision, as we set out in Chapter 3.
27.The concept of universality is commonly said to lie at the heart of public service broadcasting. The BBC said a universal service meant “everybody pays, sharing the costs, so that everybody gets great programmes and services.”
28.The issue of universality raises three questions when considering alternative funding options. First, some alternative public funding models would not guarantee equal access to all BBC services at the same price. A progressive system would involve some paying more and others less. We heard that this would need to be justified to the public but was not inherently problematic.
29.Second, subscription-based funding models would involve some people paying extra for certain types of content. This raises the more complex questions of what should be free and what should be paid for, why, who decides and whether this model would still count as a ‘universal service’. We explore this in more detail in Chapter 4.
30.Third, these different interpretations of universality raise more general funding implications. An expansive interpretation suggests that the BBC should provide a wide range of content and channels, requiring more funding. A narrower version focused on ‘core’ public service programming suggests the opposite.
31.These tensions were evident in our inquiry. Some thought it was the BBC’s role to provide a wide variety of universally accessible content. We heard about the Reithian value of drawing in audiences with entertaining universal programming. Others thought the BBC provided too much universally accessible material. Andrew Neil argued that “not everything has to be universal”. Liam Halligan, an economist, said a more limited range of “public service output should continue to be freely accessible in the UK”, with more premium content on a subscription-based iPlayer service.
32.Greg Dyke, former Director-General of the BBC, thought that it was easy to suggest that a universal service was becoming less important, but more difficult to anticipate the real-world effects of removing access to services. He cited a study, commissioned by the BBC, showing that the majority of participants deprived of BBC content and services changed their minds and decided to pay the full licence fee or more in order to regain access.
33.Tim Davie said universality was “a word you can debate and come at from different angles” but he was clear it did not mean “‘do everything for everybody’. We do not need everyone’s media time.” He said the concept should be understood as “accessibility for all”. When asked about whether this notion was being used to defend the status quo and existing licence fee system, Tim Davie argued the BBC was focused on “ensuring that there is open and clear access to our services” but it was “open-minded on how to deliver that”.
34.The concept of universality remains integral to the BBC but suffers from a lack of clarity. It does not necessarily mean delivering everything for everyone across every platform, or that everyone must pay the same. We call on the BBC to provide a clear definition of its understanding of universality in response to this report, detailing how this, alongside its strategic purpose, will shape its future decisions on its programming and allocation of resources.
35.Market failure is commonly said to play a role in the BBC’s purpose. The concept is that the market does not generally provide public goods at socially optimal levels. As former BBC chairman Gavyn Davies has said, the ‘inform, educate, entertain’ mission must be delivered “in a way which the private sector, left unregulated, would not do. Otherwise, why not leave matters entirely to the private sector?”
36.Opinions vary on the extent to which market failure should inform the BBC’s purpose and outputs. Ryan Bourne, an economist, suggested that the private sector was increasingly able to provide services that had traditionally been the preserve of public service broadcasters. Professor Patrick Barwise, Emeritus Professor of Management and Marketing at London Business School, however, argued that commercially driven media environments (notably the United States) tended to have more partisan news, less well-informed citizens, and greater problems with divisive narratives and conspiracy theories.
37.The majority of our evidence suggested that the BBC delivers valued content in areas typically underserved elsewhere—notably news, education, cultural programming and minority languages. Some argued that the BBC should focus more exclusively on areas for which the market caters poorly. We heard however that too heavy a focus on market failure would generate an uninspiring “eat your greens broadcaster—risk averse, earnest and unable to reach large sections of UK audiences”. Such an approach would risk leading to falling viewing share and increasing irrelevance.
38.Professor Mariana Mazzucato, Professor in the Economics of Innovation and Public Value at the Institute for Innovation and Public Purpose, University College London, argued that that the BBC was better understood as a “dynamic public sector organisation that shapes and creates new markets.” She said a focus on market failure was too narrow to account for the BBC’s role in leading innovation, setting new standards, de-risking investment in new markets and providing high-quality consumer experiences.
39.The BBC told us that changes to its funding model could have “profound” consequences for the value provided to audiences and the UK’s creative economy through its market-shaping activities. It is estimated that every £1 of the BBC’s direct economic activity generates £2.63 in the wider economy. Over 50 per cent of the BBC’s teams are based outside London and a similar proportion of its network television production is in the nations and regions. Around half the BBC’s economic impact is outside London, compared with an industry average of 20 per cent. In 2020, 41 per cent of UK independent productions outside of London were commissioned by the BBC, accounting for £885 million worth of productions. The BBC is also known for its work on sports, particularly youth sports and women’s football, as well as its investments in orchestras, music commissions and live events. BBC Studios is the top international TV distributor outside Hollywood and generated exports valued at £800 million in 2021–22. The UK’s gross value added (GVA) for the creative sectors has been ranked as the highest in Europe (see chart below).
40.Alistair Law, Director of Policy at Sky, said that the BBC’s ability to invest in market-shaping areas—such as training, apprenticeships and producing original British programming—derived from its “unique funding position” which enabled the corporation to take greater risks than commercial operators. Adam Minns, Executive Director of the Association for Commercial Broadcasters and On-Demand Services, said that the BBC’s co-productions benefited commercial actors across the industry, and that changes to the BBC’s scope or funding “might benefit one part of our members’ businesses but it might harm another part.”
41.Others cautioned that market-shaping work which ‘crowded in’ investment and activity had to be balanced against the risk of ‘crowding out’ other actors and duplicating commercial services. The radio operator Global argued that the BBC generally erred on the side of crowding in the market through “additive and distinctive content” but sometimes “strays into areas that purely duplicate the commercial sector”, for example in podcasts. Magnus Brooke, Director of Policy and Regulatory Affairs at ITV, said the BBC’s programming acquisitions were an “odd use of the licence fee” as the corporation competed with other UK public service broadcasters in bidding for US content that would appear on UK terrestrial TV in any case. In June 2022 Ofcom called on the BBC to improve its approach to assessing the competition impacts of its services.
42.Archie Norman, former Chairman of ITV, noted the challenges in seeking to be a market-shaper in the context of constrained budgets and political scrutiny:
“If you are to innovate, you have to be prepared to take risks. Part of the problem is that failing is very dangerous for the BBC. If you make an investment and it falls over, or produce programmes that do not work, you attract a lot of criticism.
43.This balance could affect the viability of different funding models. A BBC focused on market failure suggests a narrower range of programming, a smaller budget and reduced opportunities for private income as its activities would be skewed away from commercial prospects. But it would still require a substantial budget to sustain a core offering that engaged audiences. As Dr Helen Weeds noted, in order to deliver public benefits “the programming actually needs to be watched.” A more expansive BBC focused on shaping markets would require greater funding and risk appetite, but would need to articulate with clarity how it was not duplicating offerings from the commercial sector.
44.Tim Davie told us that the BBC was valued because it was “driven not by market failure but by making the market … If you want to see a market failure option, there are options available in the US. I do not think the majority, including when we speak to licence fee payers, want to see that happen.” Sir Peter Bazalgette, Chairman of ITV, told us that other broadcasters would not wish to see this either, arguing that “A strong BBC is an organisation that … ITV, Channel 4 and Channel 5 can collaborate with creating more value for everyone.”
45.The BBC plays an important role in providing services that are underserved by the private sector. But this should not be its sole focus: we do not support a market failure model for the BBC. The corporation also plays a central role in supporting and shaping the UK’s creative economy. This market-shaping work should feature prominently in the future vision we are calling for.
46.When responding to the independent review the Government must set out how the BBC’s future funding model and remit will incentivise the corporation to strike the right balance between addressing market failure and shaping markets for the benefit of the UK creative industries and wider economy. In response to this report the Government should commit to commissioning and publishing independent market impact studies ahead of any decision on the BBC’s future funding model.
47.We heard that the BBC’s future funding should safeguard the corporation’s international benefits, including its contribution to the UK’s soft power. The BBC told us it was the only public service broadcaster in any country that reaches half a billion people across the world weekly and that its news service was the most trusted across the globe. Many news consumers live in countries with limited press freedom, and the recent covid-19 pandemic and war in Ukraine underscored the importance of this work. Tim Davie told us the BBC was a world leader in combating disinformation using digital tools such as watermarked content to identify trusted news, for example.
48.Others highlighted how the BBC contributed to soft power by showcasing UK creativity and attracting overseas talent to the UK. This benefits the UK’s creative economy and tourism sectors, and helps the pursuit of UK foreign policy and trade objectives.
49.Julia Lopez MP acknowledged the importance of the BBC’s international footprint and the value of soft power but admitted the department did not hold assessments of how much value this provided to the UK or contributed to UK policy objectives.
50.The BBC continues to provide an essential international service which promotes UK democratic values and informs people across the world. It delivers this through a range of means, including entertainment. This is ever more important in an era of declining press freedom and rising authoritarianism. When responding to its independent review the Government should commit to safeguarding the work of the BBC World Service, and if necessary enhancing it.
51.When responding to the results of its independent review the Government should publish an assessment of the benefits that the BBC’s international output, including the World Service, provides to UK soft power and wider objectives in foreign policy, international trade and inward investment. This should set out how changes to the BBC’s funding might affect these benefits. The BBC should provide the Government with scenarios and estimates to inform this work. The Government should provide an interim update on this work by 1 December 2022.
8 (Julia Lopez MP)
9 Written evidence from the BBC ()
10 Department for Culture, Media and Sport, Broadcasting: Copy of Royal Charter for the continuance of the British Broadcasting Corporation, Cm 9365 (December 2016): [accessed 10 June 2022]
11 For details on their development see Select Committee on Communications, , Appendix 6
12 Department for Culture, Media and Sport,
13 Department for Digital, Culture, Media & Sport, Up next—the government’s vision for the broadcasting sector, CP 671 (29 April 2022): [accessed 8 June 2022]
14 (David Goodhart), (Professor Stuart Allan), (Prof Mazzucato). See also Charitable Journalism Project, Local news deserts in the UK (June 2022): [accessed 6 July 2022]
16 Reuters Institute, Digital News Report 2022 (June 2022), p 17: [accessed 30 June 2022]
17 (David Goodhart, Dr Adrian Wooldridge)
18 (Polly Mackenzie)
19 (Prof Mazzucato)
20 Written evidence from the BBC ()
21 See Appendix 4
22 Licence fee payers were asked to divide 100 points between the elements of the mission depending on what their household wants the BBC to provide in return for their licence fee. ‘Entertain’ received 48 points out of the 100 on average, compared with 30 for ‘inform’ and 23 for ‘educate’. The study was led by Yonder and comprised 3,797 adults in licence fee households, Dec 2020–Jan 2021. Owing to rounding, figures do not add up to 100. Study cited in written evidence from BBC ().
23 Written evidence from the BBC ()
24 Enders Analysis, ‘Outsourcing culture: When British shows aren’t “British”’, 9 March 2021: available at [accessed 7 July 2022]
25 (Dr Adrian Wooldridge)
26 The Drum, ‘Netflix production chief on spending $1bn-a-year on UK shows’ (25 March 2022): [accessed 20 June 2022]
27 (Dr Helen Weeds)
28 See Appendix 4
29 Ofcom, Exploration into audience expectations of the BBC in the current media environment (22 June 2022), pp 6 and 22: [accessed 22 June 2022]
31 (Andrew Neil)
34 Constitution Committee, (10th Report, Session 2015–16, HL Paper 149), para 66
35 Ofcom, Annual report on the BBC 2020–21 (25 November 2021), p 6: [accessed 9 June 2022]
36 (David Goodhart)
39 (Dr Adrian Wooldridge)
40 (Polly Mackenzie)
42 (Polly Mackenzie and Rory Sutherland)
43 (Archie Norman), (Sir Peter Bazalgette). See also BBC, ‘A digital-first BBC—BBC Director-General Tim Davie’s speech to staff’ (26 May 2022): [accessed 10 June 2022]. The BBC said it plans to improve on the number of signed-in users as part of its digital-first strategy.
44 (Polly Mackenzie), (Prof Stuart Allan) and (Andrew Neil), see also Appendix 4
45 (Prof Stuart Allan)
47 Written evidence from BBC ()
51 Written evidence from the BBC ()
52 (Prof Stuart Allan)
53 We explore these issues and funding models in Chapter 4.
54 Core outputs might include areas typically underserved by the market such as news, education and cultural programming. These are explored in further detail in Chapter 4.
55 Written evidence from the Voice of the Listener & Viewer ()
58 Supplementary written evidence from Liam Halligan ()
60 The study involved depriving 80 households of all BBC content for nine days. At the end of the study, 70 per cent of those who initially said they would rather do without the BBC, or would prefer to pay less for it, changed their minds and were willing to pay the full licence fee or more in order to keep BBC content and services. BBC, ‘BBC publishes results of deprivation study’ (27 April 2022): [accessed 10 June 2022]
63 Department for Digital, Culture, Media & Sport, Report of the Independent Review Panel, The Future Funding of the BBC (1999), p 10: [accessed 8 July 2022]
64 (Ryan Bourne)
65 Written evidence from Prof Patrick Barwise ()
66 Written evidence from Prof Jeannette Steemers (), Public Media Alliance () and Musicians’ Union ()
67 Andy Hayes ()
68 Written evidence from Jean Prince ()
69 Written evidence from Prof Jeannette Steemers ()
70 Written evidence from Prof Marianna Mazzucato ()
71 Written evidence from the BBC ()
72 KPMG, An assessment of the economic impact of the BBC (March 2021): [accessed 8 June 2022]. This report was prepared for the BBC.
73 BBC, ‘Benefits for everyone: Making the case for a universal BBC’ (25 February 2021): [accessed 9 June 2022]
74 KPMG, , p 2
75 Written evidence from Cardiff University and PEC ()
76 BBC, ‘BBC’s Annual Plan set to deliver greater value for all’ (30 March 2022): [accessed 8 June 2022]
80 (Liam Halligan)
81 (Sebastian Enser-Wight)
83 Ofcom, Review of the interaction between BBC Studios and the BBC public service: Findings (22 June 2022): [accessed 22 June 2022]
88 Written evidence from the BBC ()
90 Written evidence from Prof Joanne Garde-Hansen ()
91 Written evidence from the National Union of Journalists (), Directors UK (), Bectu (), The British Broadcasting Challenge () and Cardiff University and PEC ()