House of Lords - Select Committee on the BBC Charter Review

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Select Committee on Select Committee on the BBC Charter Review First Report

CHAPTER 9: Summary of Recommendations

Safeguarding the independence of the BBC

280. We do not believe that the Government's proposals in the Green Paper will reduce the BBC's vulnerability to political pressure. We therefore recommend that the Government adopt our recommendations so as to secure a strong BBC, truly independent of Government. (para 32)

281. We believe it is vital that the process for agreeing the constitution of the BBC is open, transparent and not in the hands of any one political party. Unfortunately the process for agreeing a Royal Charter satisfies none of these criteria. We recommend that the BBC be established by statute so that its constitution is subject to parliamentary scrutiny. We urge the Government to reconsider its proposal to persist with a Royal Charter. (para 42)

282. We recommend that a short interim Charter be granted to the BBC while legislation is being prepared. It should not be possible to amend the agreement between the BBC and the Secretary of State without approval of both Houses of Parliament. In addition, if it is necessary to grant another Charter while legislation is being prepared, the Government should undertake that the Charter will not be amended without the approval of both Houses of Parliament. (para 43)

283. The BBC should take measures to ensure that the Nolan principles of standards in public life are strictly observed throughout the BBC. Those responsible for BBC programming should stand down from reporting on an issue if they have a direct conflict of interest. They should be required to publicly declare relevant interests that could be reasonably perceived to influence their reporting. (para 29)

284. We recommend that a permanent House of Lords Select Committee on Broadcasting and Communications be established. (para 44)

Governance and regulation of content

285. We recommend that there should be one Chairman of the BBC, i.e. the Chairman of the BBC Board. The management committee (called the executive board in the Green Paper) should be chaired by the Director-General. (para 80)

286. There should be no non-executive members on the BBC's management committee. (para 83)

287. The chairman of the BBC should be chosen on the basis of a recommendation by a truly independent panel. To this end we recommend that there be a duty on the Secretary of State to appoint a selection panel with a majority of non-political members and with a balance between its members who have explicit political allegiances. The panel should be chaired by a non-political member who is not a civil servant. This panel should operate according to Nolan principles and should recommend a short list of one to the Prime Minister. (para 88)

288. Other members of the BBC Board (or the BBC Trust in the Government's model) should be appointed in a similar manner to that described above with consultation of the BBC Chairman. (para 89)

289. An effective separation between governance and regulation can only be realised if the two roles are carried out by clearly distinct bodies. Neither the licence fee payer nor the BBC's competitors will have full confidence in a regulatory body unless it is quite separate from the BBC itself. (para 74)

A NEW BBC BOARD

290. We propose a unitary BBC board, named the BBC Board, responsible for governing the BBC in accordance with best corporate governance practice. This board should see itself as responsible to the licence fee payer. (para 92)

291. The BBC Board should have a majority of non-executives and a non-executive Chairman who would be the Chairman of the BBC. The Director-General, Deputy Director-General and the Director of Finance should all be members. The non-executive members should perform a wide range of governance functions such as chairing the remuneration, appointments, audit, standards and complaints committees. (para 93)

292. The BBC Board should sit above a management committee of senior executives which should be chaired by the Director-General. The appointments committee should make recommendations to the Board for the appointment of the Director-General. (para 94)

293. It is vital that the skills of the Board members go beyond financial and managerial qualifications. Members of the Board should represent a range of experience from across public life, business, the professions and civil society. We do not believe that any Board member should have duties to represent a particular constituency or interest group. The aim of the selection process should be to find the best members irrespective of where they come from. Members of the Board should be the best people for the job from across the United Kingdom. We would expect the Board between them to have experience and knowledge of the nations and regions of the United Kingdom. (para 99)

THE ROLE OF OFCOM

294. In order to secure clearly independent regulation and clarity for complainants, Ofcom should take final responsibility for BBC programme regulation. This would mean that the Ofcom Content Board would have the same regulatory responsibilities for BBC content as it has in respect of other terrestrial public service broadcasters. (para 106)

295. A condition of Ofcom being given this new responsibility must be that the Ofcom Content Board is significantly strengthened. We therefore recommend that the Content Board should be given its own budget and staff with specific skills in the area of content regulation. It should be re-established as a semi-autonomous body and should operate in an open and transparent manner. (para 108)

296. Ofcom's role should be to adjudicate on appeals against decisions on complaints made by the BBC Board. Ofcom's duties should be similar to those of a Court of Appeal. The BBC should respond to all complaints in the first instance. This could be secured by complainants first contacting the BBC, who would inform complainants of the opportunity to appeal to Ofcom if the BBC did not resolve the complaint in a fair and timely way. Similarly Ofcom would refer to the BBC all complaints about the BBC which it had received directly and would only take-up complaints if the complainant rejected the resolution offered by the BBC. (para 109)

SECURING VALUE FOR MONEY

297. The BBC Board should be responsible for ensuring the BBC secures value for money and the Board should be accountable for its use of public money. (para 111)

298. The NAO should have full right of access to the BBC and the power to conduct and independently select the subject of Value for Money Reviews. It should report the results to Parliament. (para 118)

Funding

299. The system of funding the BBC until 2017 should be through a licence fee. We support the Government's decision to conduct an interim review of methods of funding but this should not be conducted until after the completion of analogue switch-off. (para 132)

300. Licence fee settlements above RPI should only be agreed if there are exceptional reasons to justify the fact that they exceed the rate of inflation. (para 120)

301. Given the substantial financial benefit that the Government will accrue from analogue switch-off we do not believe that the costs of promoting and co-ordinating digital switchover and providing targeted help for the vulnerable and disadvantaged should fall on the licence fee payer. Such costs should be covered by the Government (i.e. the general tax payer) because switchover is a Government policy which applies to, and affects, all broadcasters and all viewers and listeners. (para 200)

302. The criteria used in setting the level of the licence fee should be open and transparent. The role of the NAO should also be expanded to include responsibility for assessing the efficiency of the BBC and evaluating its funding requirements when the proposed level of the licence fee is set. It should be given the access necessary to do this. The NAO should advise Parliament accordingly. (para 137)

303. The costs of BBC licence fee collection and enforcement appear excessive and we recommend that the BBC continues to improve the cost efficiency of its licence fee collection and benchmarks its performance against other similar systems, such as that in Germany. (para 138)

304. At the earliest opportunity, non-payment of the licence fee should be decriminalised and brought into line with civil offences through the use of fixed penalty notices and civil court orders. (para 141)

The role of the BBC

305. In order to help ensure that the BBC will maintain a wide variety of high quality programming, including popular and innovative programming, the BBC Board should strive to ensure that the BBC's output as a whole fulfils the full range of public purposes. That does not mean that each and every BBC programme should necessarily be required to meet the full range of public purposes or programme characteristics. However, the BBC Board should aim to ensure that every BBC programme displays several of the desired characteristics. (para 165)

306. The BBC should be conscious of its public service obligations when deciding whether to bid for imported programmes, especially when another UK free-to-air channel is aiming to procure the same product. (para 166)

307. We endorse the Government's proposal that strengthening broadcasting in the nations and regions should be a core public purpose of the BBC. We also welcome the BBC's commitment to use new digital technology to provide innovative local programming. However, it would be perverse if expansion of the BBC's activities were to drive out of business existing services that are valued by the local population. We therefore recommend that, as with all new BBC services, new local services should be subject to rigorous independent market impact assessments and their remit should be defined in service licences. The BBC Board should define the terms of the service licences. New services should not be introduced if their effect is likely to damage the quality, diversity and plurality of choice available to the local population. (para 176)

308. We recommend that the BBC, ITV and independent production companies should work together to create shared centres of regional excellence. (para 181)

309. We welcome the BBC's aim to devolve programme production and commissioning across the United Kingdom. We do not believe additional regional production quotas beyond the existing "out-of-London" quotas are necessary as long as the BBC keeps to the commitments it has made. (para 183)

310. We recommend re-prioritisation of the World Service's activities should continue and we encourage the Foreign and Commonwealth Office to focus World Service resources where it judges there is most need. (para 189)

311. The opportunities and benefits of BBC World Service Television in a range of languages outweigh the financial costs. We think the case is particularly strong for an Arabic language television service. (para 193)

312. The BBC's public information campaigns on digital switchover should be platform neutral and should educate the public on the different capabilities of the different digital platforms. (para 205)

313. The BBC should maintain a strong Research and Development Department. (para 209)

The BBC's impact on the market

314. All proposals for new BBC services, and significant changes to existing services, should be subjected to a Public Value Test. This must always include a market impact assessment commissioned from an independent third party. Where significant and well reasoned concerns about existing BBC services are raised, these services should also be subjected to a Public Value Test. (para 224)

315. We believe there should be a right of appeal for an aggrieved party to Ofcom on matters of substance and/or procedure if it is considered that the BBC has not paid due regard to the evidence obtained through the Public Value Test. We also believe that the BBC Board should have a duty to publish its reasons for approving or rejecting a proposal by the BBC management. (para 227)

316. If a market impact assessment indicates that the launch of a new BBC service will risk stifling a new market then the new service should not be launched. (para 228)

317. There is value to the licence fee payer in being informed of services provided by the licence fee. However we agree with the Government that research on the value of cross promoting BBC publicly funded services should be commissioned and we recommend that the findings of that research should be made public. The BBC should take the research findings into account. (para 230)

318. The BBC Fair Trading Commitment should be revised so that matters of internal BBC housekeeping are separated from those of external regulation. Matters of external regulation should be the responsibility of Ofcom. However, in the spirit of light touch regulation, and respecting the BBC's editorial and journalistic independence, Ofcom should seek to work in partnership with the BBC to rectify problems and fair trading infringements. Financial penalties should be imposed only as a last resort. (para 243)

319. The BBC's fair trading rules should be subject to approval by Ofcom as the lead sectoral competition regulator. (para 244)

320. In order for both the above recommendations to work we recommend that the BBC should be required to provide information relevant to fair trading and competition matters to Ofcom on request. This should form part of the Fair Trading Commitment. (para 245)

321. We recommend that the BBC Board should enforce strict separation between the management of commercial and public service activities within the BBC. (para 249)

Commissioning independent content

322. We support the proposal for the Window of Creative Competition (WOCC). We believe that in operating the WOCC the BBC should keep two objectives in mind: stimulating greater competition between the BBC and external producers in order to secure the best programming for licence fee payers, and achieving greater value for money for licence fee payers. The WOCC should open up competition to any supplier, whether the BBC, an independent production company or another broadcaster. (para 266)

323. The management of WOCC should be the responsibility of the BBC. The BBC Board should have a duty to monitor it carefully and to publish a bi-annual report on its operation. We recommend that the BBC should set indicative targets within the WOCC for sourcing from small and regional companies. (para 267)

324. The 10 per cent voluntary quota for independent radio production should be made mandatory. The BBC should consider the 10 per cent quota as a floor and not a ceiling and should operate a competitive commissioning process to secure the best programming available. (para 273)

325. We recommend a 25 per cent independent production quota for BBC's Online commissions (excluding news). In order to ensure that wider industry has confidence in the process we recommend that the BBC Board have a duty to secure fulfilment of the online independent production quota, to monitor commissioning of independent online content and to report bi-annually. (para 276)

326. One of the proposed public purposes for the BBC is to stimulate creativity and cultural excellence. We recommend that an explicit part of this remit should be to do what it can to support British film but without compromising the objective of providing licence fee payers with the best programmes. (para 279)