TUESDAY 23 FEBRUARY 1999

MR MARK BYFORD, MS CAROLINE THOMSON and MR ANDREW HIND

  40.  Does repositioning mean less money?
  (Mr Byford)  Let me explain it to you. No, overall the investment of more than £7 million in the Arabic service will continue. It is the largest investment in terms of language services that we make, but, of course, every language service is part of our ongoing efficiency savings programme. We do not say that certain language services are not, so there is that commitment there, but the major investment in the Arabic service continues. The repositioning is about concentrating in order to secure its success for the future in news and current affairs, peak time listening in the mornings and developing its Internet presence where already we are seeing a major take-up in the Arabic service. In terms of Russian, as part of their efficiency savings programme, there has been some small reduction in programming for 1999/2000, but overall our commitment to Russian as a key language service is there.

  41.  I think what you are saying, cutting through the management-speak—I am trying to understand your last point and I am not always conversant with your market-speak—is that there is in fact less real terms money going into both the Russian and the Arabic services, although you are saying that this service will not be harmed by that cut.
  (Mr Byford)  In the Arabic service, in broad terms, it is stable. There may be a small reduction because of the ongoing efficiency savings programme. In terms of overall commitment, it is in a pretty stable position, but, as I said before, using the money for the Arabic service in a slightly different way in order to secure its long-term success. In terms of the Russian service, there are some savings being made as part of our ongoing efficiency savings programme, but again commitment to it and its high investment continues.

  42.  Your memorandum states that in recent years audience figures fell by 5 million. Presumably those have been identified as being within the shortwave audience. Is that perhaps the reason why you allow repositioning towards the Internet and FM broadcasts? If that is the case, is there not a danger following on from David Heath's point that Internet access and FM access might move you away from the traditional audience towards, as you say in the memorandum, opinion-formers?
  (Mr Byford)  It is right to say that the World Service global audience reach reduced last year from 143 million to 138 million. Part of that was because of the end of the Finnish service; part of it was a transfer of Radio International. It was not wholly because of declines in audiences. However, some of it was. It was a catalyst to the World Service team to say that over the years we have been building audience, but as competition around us explodes in many areas of the world, and certainly through deregulation delivery mechanisms as well have changed, the World Service cannot stand still. Nor must it go through a revolution of ending short wave, as you suggest, and put all our eggs into FM and the Internet. This is evolutionary. However, we estimate that 80 per cent of that audience today are being reached through short wave. Even in five years' time the vast majority of our audience will be through short wave. Increasingly, we are seeing that that is complemented by FM and medium wave. Certainly in major conurbations of the world where people now enjoy delivery mechanisms that give an improved audio quality sound they will turn to that. It is very important that the World Service, as it has done for years, adapts and is able to bring in a complementary delivery service. With regard to the Internet, it depends where you are in the world—we are all travelling at different speeds—but the best analysis is that over 300 million people will be using the Internet by 2002. The World Service could say, "Let's not be in it", or it could say, "Let's put everything in it because that is the future". We are saying neither of those things. We are saying that it is an important complementary delivery mechanism that we need to develop from now, but on a journey. It will always be a complementary delivery mechanism to short wave and FM. Even in five or seven years' time short wave will still be our core composition. Hence, that is why, even within our capital investments, the Oman transmitter is the key capital investment in the three year Comprehensive Spending Review settlement. That is all about securing our short wave/medium wave reach within the Gulf and South Asia.

  43.  You do not agree with the argument that you will leave behind a traditional short wave audience or a traditional World Service audience in favour of opinion-formers and people which a higher income with access to the Internet?
  (Mr Byford)  No. Our overall goal is to retain the wide reach that we enjoy today that makes us the world's leading international broadcaster. Our goal is to retain that 140 million audience. Clearly, in order to do that, it means, Mr Heath, that the groups that we have identified are still at the heart of that proposition. But it also means that we have to recognise that delivery mechanisms are changing. They present opportunities. If we are expanding FM and the Internet with care and we can rationalise short wave, but in a careful and considered manner, that releases money to invest for the future. That is not about revolution; it is about evolution.

  44.  Mr Byford, let me clarify a few things. Am I right in saying that the World Service currently receives substantially less in funding from the FCO than it did in 1995/96? Is that right?
  (Mr Byford)  Yes, I think that is right.
  (Mr Hind)  In real terms.

  45.  Next year FCO funding will peak and then it will decline again.
  (Mr Byford)  Yes, in terms of capital investment coming in as part of the CSR settlement there is, if you like, another three years and there is up-front an amount in year one for the Oman transmitter of some £9 million, but overall in the three year settlement there is——

  46.  With respect, however we dress it up, the reality is that it will decline over the years to come.
  (Mr Byford)  No. In terms of operating expenditure it is on a real terms increase, but in terms of capital flow it is changing within that three year period.

  47.  You do a terribly good job of evading giving a yes or no answer. With respect, I would like you to say, "yes" or "no" to this. I have been informed, and I want to be absolutely right about it, that in the current period, the FCO provides you with substantially less funding that you had in real terms in 1995/96, yes or no?
  (Mr Byford)  Yes.

  48.  So you have less money now than you did.
  (Mr Byford)  No.[1]

  49.  Secondly, while the funding will peak in the next financial year, overall it then declines, yes or no?
  (Mr Byford)  It does decline because of spend on capital.

  50.  So we accept that it declines. This leads me to my worry about the impact of these cuts on the consumer effectively. I have another worry also because I used to work for the BBC; I was there for ten years. There is a worry when editorial independence gets mixed up with the financial paymaster. I am worried by some of the stories I read and some of the internal BBC documents that I have seen, which seem to ask rather interesting questions. I would like to ask you two or three of them. First, there was an internal document floating around the BBC which recently said that care has to be taken not to apportion blame to our funders. What does that mean?
  (Mr Byford)  I have not seen it.

  51.  You have not seen that document?
  (Mr Byford)  I read it in The Observer but I have not seen that document.

  52.  So there was no discussion in the BBC about apportioning blame to the funders about the reason for the cuts?
  (Mr Byford)  Not among us as a team, no.

  53.  Not at all?
  (Mr Byford)  No. We welcomed the CSR settlement in July, before I arrived, and I recognise that it gives some security of tenure over the three year period, but I had not been part of the notion of blame over reasons.

  54.  You would be aware that within the World Service there is certainly considerable concern among programme makers about a muddying of the distance that some people would like to see between the paymaster and the editor?
  (Mr Byford)  I think everybody in the World Service, whether it is the three people at this table, or a researcher or a producer, recognise that at the heart of the proposition and its strength is editorial independence from government, from the funder. That is at the heart of it.

  55.  I have a crucial question to ask you and I read it in the newspapers so maybe it is not true. But it seems to me to be astounding that the Foreign Secretary was being invited in February to present the new schedule for the World Service. It is a bit like asking the Home Secretary to come along and talk about the new series of Eastenders that the BBC will be launching. How is it that somebody decided that it would be good idea for the Foreign Secretary to come along, rather than somebody like yourself?
  (Mr Byford)  Let me stress again that within the three year plan, at the start of its opening is the absolute confirmation that editorial independence is non-negotiable and is absolutely critical to its strength.

  56.  So why was the Foreign Secretary being asked to do this?
  (Mr Byford)  He never was. Even within that preparatory material prepared by a team below myself, that was mistaken. What was taking place, and has been, is that while we have been planning the best way to use the three year settlement framework in order to produce the three year plan, we also looked at the new CSR arrangements that lead to a new relationship with the Foreign Office based on a new broadcast agreement, a new financial memorandum and a new tasking document, which looks at the outputs from the money that we get. That was what that article was referring to, that the Foreign Secretary himself would want to give details of the new broadcast agreement and financial memorandum, while we are giving full details of our three year plan.

  57.  Can you make those three documents available to the Committee?
  (Mr Byford)  I would be happy for that. Obviously, the Foreign Office itself has responsibility too for the broadcast agreement and memorandum.

  58.  Subject to their views, would you seek the approval of the Foreign Office to disclose those three documents to the Committee?
  (Mr Byford)  The broadcast agreement, the financial memorandum and the tasking document, yes, I would. Ms Thomson has just told me that they are in draft at the moment. I think you are suggesting that when they are resolved you would like them. Yes, we would be happy with that.

  59.  My final question is this. Are you happy with the cuts that you are having to administer and do you believe that those are in the interests of the listeners and viewers of the World Service?
  (Mr Byford)  I am never happy with either cuts or reductions when they involve job losses—of course not. I am sensitive to that, as the editorial leader of the service, but I also recognise that the plan is about development at its heart, about investment for the future and, as I said to Mr Illsley, change——