MONDAY 1 JULY 2002

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

  220. This is what puzzles me. We are told by ministers and I was told either by your immediate predecessor or his predecessor—I have been on this Committee a long, long time—that the reason you could not have the NAO looking at the BBC's accounts is because of the threat to editorial freedom. It is not a fear that looms high in your mind, is it? If I said the NAO might come in tomorrow, would you have all your editors at panic stations?
  (Mr Dyke) There is a real distinction between the World Service and the BBC domestically.

  221. Explain it.
  (Mr Dyke) I am not sure this is the time or the place to get into a long discussion about it.

  222. Explain the difference because it will help us to understand. We are mystified.
  (Mr Dyke) One would be an argument about the coverage of politics in this country.

  223. The NAO is non-political.
  (Mr Dyke) If we did get into that long discussion, you would have to deal with BBC governors because this in the end is not a matter for the director general. There were quite strong arguments against when we were established in 1982 and those positions have not changed.

  224. You know what they are, do you, the strong arguments that were against in 1982; or are you just taking it for granted they were and you have not bothered to re-examine them?
  (Mr Dyke) I have looked at what the arguments were because I guessed this question might come up.

  225. In that case, you should be well prepared.
  (Mr Dyke) Being prepared and deciding to enter the debate are two different things. It was suggested that maybe I should say exactly which part of this report does this refer to.

  226. We have been told there is consultation going on and I assume you were part of the consultation. That was information given us by the Permanent Secretary. I am sure you have no objection to letting us know what your views are on this subject since it is something we have made strong representations time and again to the government about.
  (Mr Dyke) In the discussions with the government we will be putting our views forward.

  227. This consultation that is going on in relation to the Communications Bill, Ms Street, how does this impact on the issue of the auditing by the National Audit Office, because in giving your answer you intended that to be a placatory answer and the issue might still be open. What in the consultation leads to that optimism?
  (Ms Street) I do not wish to be too optimistic but I want to give you a careful answer.

  228. Chairman, you ask the question at the beginning of the meeting and they renege on it at the end of the meeting.
  (Ms Street) It is exactly the same answer, but I do not want to manage expectations one way or the other. The position which ministers take at present on this, which is an extremely important issue, is that they want to look at the oversight and regulation of the BBC in the round, in what is called the new ecology of broadcasting under the Communications Bill which is currently in draft and being scrutinised before it is introduced, if it were to be introduced. The position now is that, with the advent of OFCOM and its regulatory role, the position of the BBC, how OFCOM would relate to the BBC and what would be left and how what is not regulated by OFCOM should be regulated and scrutinised becomes a natural part of the debate in which the case would need to be made for why the NAO scrutiny is less risky or better than the very many forms of external audit and scrutiny which the BBC governors already accept.

  229. Sir John, have you been approached as part of this consultative exercise so far?
  (Sir John Bourn) No.

  230. I assume you will be in touch with the NAO?
  (Ms Street) We certainly will.

  231. Perhaps you will do us the courtesy of extending the consultation in our direction as well, particularly as the Sharman Committee, set up at our request, recommended exactly what we are asking for. Perhaps you will write to us in relation to what I have just asked?
  (Ms Street) If I may, I need to consult ministers on this because it is a matter of policy.[7]

  232. I am not asking you to say you want to set the policy aside; I want to know about the consultation, because we have been told that the consultation was a gleam of light possibly as far as we are concerned. Obviously, we do not want to miss such an opportunity and we are rather nervous because your new chairman, Gavyn Davies, suffered a conversion of messianic proportions when he became the chairman.
  (Mr Dyke) I am not sure my chairman would accept that. I think you should put the question to him.

  233. I did not put a question. I am just making a casual, throw away observation. Take the old detector vans. How many of these have you got nowadays?
  (Ms Patel) Enough to cover the country.

  234. You could cover the country with one if you drove it all year. What do you mean by enough to cover the country?
  (Mr Dyke) Can I suggest that we send you that information later? I do not think it is necessarily in the public interest to know how many vans we have.[8]

  235. That suggests how few you have.
  (Mr Dyke) It might, or it might suggest we have an awful lot.

  236. Bear in mind that while you give it in confidence the Committee determines whether it remains in confidence. If we think it would be harmful to publish, that would be taken into account but if you let us have that information it would be very helpful. Coming back to the original model, we were told that there was a divergence of 141 million with the original model and 218 million. That is a variation of 77 million, over 50% of the original 141. That is an appalling error, is it not? Why was the model so bad and when was it last upgraded?
  (Ms Street) The main urgency to upgrade had occurred in November 2000 when the concessions for over 75s were introduced. That changed the pattern of renewals. Work had started in 1998. As you know, the way in which properties have been constructed and used in different ways and the pattern of movement of people have meant that I do not think any model is ever going to be perfect. It can only be an estimate. The present model is extremely thorough and that is why, to the extent that one can estimate the size of the iceberg, it is a lot bigger because we've tried to capture everything.

  237. What is the fundamental difference in the type of information used that was not used previously that makes it so much more reliable?
  (Ms Street) There are three main differences. The assumption of the proportion of households or business premises that have TV sets, which has gone up to 97.6 from 97.25; various upgrades which I have mentioned about student residences, business premises and hotels and much more sophisticated modelling and statistical input. It is basically new information and capturing it as sensitively as possible.[9]

  238. Of the occasions that are detected, you prosecuted about a third, 135,000. Of that 135,000, 56% paid a fine. That left 44%, 59,000, who did not. That is an awful lot of people who have refused or are you still pursuing them, because that is £6 million-worth of licence fees. Have you given up on them?
  (Mr Dyke) Are you talking about the fines?

  239. Yes.
  (Mr Dyke) It is not our responsibility to pursue the fines.

8   `Commercial in Confidence' note not printed. Back

9   Note by witness: These percentages relate to households only. Back