MONDAY 1 JULY 2002

MS SUE STREET, MR GREG DYKE, MR JOHN SMITH AND MS ZARIN PATEL

  140. I am sure it would not be totally effective but it seems a worthwhile idea to consider. How do you track businesses that may need more than one licence? If you have a business that has several different buildings, they need a licence each, do they?
  (Ms Patel) Every separate site needs a separate licence. There is plenty of commercially available data about businesses' names and addresses to be able to find them.

  141. How do you define a different site? For example, I have a multinational headquarters in my constituency which is going to be in seven different buildings but all on the same site.
  (Ms Patel) That would probably count as one licence.

  142. They need one licence for 4,000 people?
  (Ms Patel) It is the site that gets the licence.

  143. How does the cost of collection vary between direct debit licence holders and others?
  (Mr Smith) Direct debit is the cheapest by a long way because we don't have to pay the collection agent.

  144. What is the rough average cost in both cases?
  (Ms Patel) Probably something like 12p versus 26p, if you pay over the Post Office counter.

  145. The rest of the costs of collecting a licence fee is the cost of enforcement, is it? We are talking about £5, on average?
  (Ms Patel) Yes. The 12p is the charge you pay to the bank for doing the transaction. The 26p is the charge you pay the Post Office for doing the transaction.

  146. That is not very much of a reduction on the overall average cost. Nevertheless, it surprises me that the increased number of direct debits has not brought down the cost of collecting a licence fee. You seem to be very proud of the fact that you have exactly the same costs now for collecting licence fees as you had ten years ago. As far as direct debits are concerned, I would have expected them to bring down the cost.
  (Mr Smith) Pound for pound, it has or it will have done but overtaking that will be other efforts introduced to give new people new ways of paying in order to get the evasion rate down. What we really want is the combined cost of the two to come down. Remember, 1% improvement is £25 million a year to the BBC, so it's quite a big thing for us.

  147. Were you aware when you chose Capita to run your new scheme that they were the people in charge of running the ILA scheme?
  (Mr Smith) Yes.

  148. That did not affect you?
  (Mr Smith) No.

  149. Despite the fact that this is probably this government's greatest disaster so far?
  (Mr Smith) I do not want to get into the debate about the relationship between Capita and the government on the ILA scheme but no two contracts are identical. What we are asking them to do is not what the government asked them to do.

  150. Are you really saying that because your contract is a different sort of contract from the ILA scheme or any of the other schemes that Capita have been running you did not pay any attention to the fact that Capita had failed so badly in a number of other major schemes?
  (Mr Smith) No, as I said earlier, it is not a question of not paying any attention because we went and visited any place where we felt that there was a direct read across between their experiences in one place and experiences of the BBC. We formed a judgment that the circumstances in that case, like two or three others that have received high profile negative press, did not apply to us, just because of what we are asking them to do and the way in which the contract is structured and the controls and protections which are available to the BBC if the performance is not good.

  151. What plans does Capita have to improve on the past performance of Consignia?
  (Ms Patel) First, very well managed, modern contact centres that conform to industry best practice. There has been significant under-investment in technology. They will give us longer opening hours to meet customer needs, better customer service levels, a much better spread of contact centres across the country. We will now have contact centres in Belfast and Glasgow to tackle high evasion in those areas.

  152. Contact centre means call centre?
  (Ms Patel) Yes.

  153. Does it matter where that is?
  (Ms Patel) Yes. Knowledge and voice will help a great deal in Northern Ireland to tackle evasion. The other thing they give us is a culture of performance and innovation in staff. We have high sickness and absence rates. They will tackle that. There are very good industrial relations practices and they give people training and development opportunities so people matter in this way. The last thing they give us is modernising technology where there has been significant under-investment in the past. There will be a new system of one technology platform. Currently we have had many which adds to complexity and cost. We get a new database which allows us to find these unlicensed premises and target them better so people pay on the first contact.

  154. That database is superior to the Post Office database, although the Post Office have a universal requirement to deliver—?
  (Ms Patel) It is the information that the database has. At the moment, the database has only one year's history for any one particular address. We cannot tell whether a person is an habitual evader. If we have that knowledge, we can make them pay at the first contact. For example, if someone will only pay if an inquiry officer visits and we know that, we would go straight to that rather than writing letters because we know that does not work. It is what is in the database that matters. Also, the other bit of modernising technology is hand held technology for the field, which allows faster turn round both to them and from them back into the office and modernising the back-office, the document imaging and workflow and so just a complete modernisation programme.

  155. How will they update their database in terms of new buildings being built?
  (Ms Patel) Our marketing organisation AMV will do that. We have access to the electoral role register where we will match addresses. We will buy external, commercially available sources of data particularly for business, students, lodgers and second homes, so it's about buying better data.

  156. What incentive are Capita going to have, if any, to try to increase the number of people paying by direct debit?
  (Ms Patel) They do not have any direct contractual incentives, but it helps their cost base if they can get as many people as possible to pay by direct debit because it's cheaper for them.

  157. Mr Smith, you said we catch people who then pay up. A lot of people do not pay up as a result of being caught. Paragraph 3.23 makes it plain that you followed up prosecution follow-up visits of 47,963 people or homes and took out a second prosecution statement in 32% of cases. My understanding was that roughly one in three follow-up visits were all to people who were known not to have started to purchase the licence after they have been prosecuted and found guilty, so only a third of those merited a second prosecution. Is that because the two-thirds had got rid of their televisions?
  (Mr Smith) Two thirds of the people we catch in the first place buy a licence straight away.

  158. Therefore, you only do a prosecution follow-up visit to 47,000, which is a third, but of those you only prosecute a further 32%, as I understand it.
  (Mr Smith) Because they then pay up on the second visit.

  159. Two-thirds of those that you visit on a follow-up pay up?
  (Mr Smith) Yes.