Mr David Scott and Mr Peter White

20 JANUARY 2010

  Q1  Chairman: Welcome. Thank you very much for coming at quite short notice. We are looking at the digital switchover process, both in television and radio. It is not going to be a long inquiry perforce of circumstance because we all have the slight suspicion that an election might come—we have the certainty that an election will come at some stage and the only question is quite when in the next few months. So we are taking the essentials as far as this is concerned. This is our first meeting and I will therefore start with some basic questions, if I may, starting with finance. How much do you now estimate that the process of digital switchover as far as television is concerned is going to cost?

  Mr Scott: Can I take that in two parts? I am accompanied here by Peter White, who is Chief Executive of the Help Scheme, and so he will address questions on that, which is a separate organisation. Digital UK itself has a budget made up of two parts. The first part is a communications budget which is funded from the licence fee. That budget was set at £201 million and we are presently expecting to come in at £145 million, so we will have a saving of £55 million or so. Secondly, we have an operating cost budget which is set at just over £30 million, which is met by all our shareholders. The numbers I have given you are for the total project, from the beginning in 2005 through to the end of the switchover programme. In addition to that Peter has a budget.

  Mr White: If I could take a bit of time to explain because ours is dependent on take-up and we are only about 20 per cent through. The original budget for the Help Scheme was £603 million. That assumed an original take-up of 65 per cent. After the competitive procurement process—that at the time the OGC said was a model of its kind—we saved just over £100 million; so at that point with 65 per cent take-up we would have been expected to spend £495 million. But that was still assuming a take-up of 65 per cent. Currently take-up is around 18 per cent and that does vary region by region, but on average it is 18 per cent. At this particular stage though there are a number of factors that may change that as we go forward -such as changes to the Scheme Agreement; so we have had a change including care homes, which brings additional cost. We have also just finished research that shows there are some people who are still struggling with switchover that we would like to help, and we think it would be a good thing to help. We think that there is probably an additional five to ten per cent of the eligible people that probably could benefit from our help. Also we are just about to introduce a new Freeview box. You will hear that one of the issues with switchover is the retuning issue. That new box really copes well with retuning and therefore we think that that may drive up demand. So actually with 18 per cent take-up so far and these other factors—when the NAO looked at this in February 2008 they predicted an underspend of £250 million, half of which was the procurement saving and half was take-up—we believe that at this stage it is probably wrong to assume more than an additional £50 million on top of that; therefore £300 million underspend is where we think it may turn out.

  Q2  Chairman: That is over a period.

  Mr White: That is over the life of the scheme.

  Q3  Chairman: Tell me this: you were estimating 65 per cent take-up and you are saying that so far the take-up is 18 per cent.

  Mr White: Yes.

  Q4  Chairman: That is an extraordinarily wide variation; why did we get it so wrong?

  Mr White: I was not around when the modelling was done, the 65 per cent—that was the Government model. I think it was based on estimates.

  Q5  Chairman: Who did that model?

  Mr White: The DCMS was doing that modelling at the time, and I think it was based on television conversion at the time, which did get substantially better from the time the model was done until now. Also, I think it was not known what take-up would be. These demand-led programmes are very difficult to predict. It is true that there are many of the eligible people who, we think, think that the offer is good value but they are choosing to help themselves and doing it very well; so it is their choice. So until you do these things it is very difficult to know what the demand will be.

  Q6  Chairman: Actually you could have done without a Help Scheme at all, could you not?

  Mr White: What is very clear is that for the people we are helping they are absolutely in need of that help, so I would say that there would be a good number of people who would be left with blank screens struggling to watch television if there was not a Help Scheme.

  Q7  Chairman: Did whoever was organising this take any advice from the Department of Social Security on take-up? Because they are the experts.

  Mr White: I do not know that but I can find out and write to you with that.

  Q8  Chairman: It would seem a sensible thing to have done. So we are then left, are we, with an underspend over the period, is that right, of £355 million, taking these two together?

  Mr Scott: £55 million from Digital UK, yes.

  Q9  Chairman: £55 million from you, which is a vast underspend, is it not?

  Mr Scott: Yes. We continue to seek savings as we go.

  Q10  Chairman: You are taking credit for it?

  Mr Scott: Last year we reduced our communications activity by about £10 million and so we continue. Part of that is the economy obviously; but we are trying to tighten our communications and make them more efficient the whole time.

  Q11  Chairman: Just to put it into perspective, this was £355 million over the switchover period, that is correct; but it is also money that has come from the BBC licence payers in both cases. So it is not entirely impact free because if that money had been available it could have been used for other purposes like training inside the BBC, about which we are concerned in this Committee.

  Mr Scott: These budget sums for switchover were added to the licence settlement and were ring-fenced.

  Q12  Chairman: I have heard that argument before—and it was not an argument that was used initially, incidentally. You are looking at it from the point of view of the provider and we are looking at it from the point of view of the consumer, from the point of view of the public; it is the public who are paying the licence fee. And actually they have overpaid, have they not, because where is the money going to go?

  Mr White: There are two things. Can I answer the previous question? The money is collected throughout the life of the scheme so what we have made sure we have done has always been forecasting the best estimates and giving that to Government, so there is still time not to collect all of that money from the licence fee if there is an adjustment made before it is collected. So at the moment we have underspent against the model by £50 million by the end of the last financial year and there will be about 50 plus again this year. So it is not as bad as all that.

  Q13  Chairman: But I still do not know quite where this money goes at the end of it. Slight experience of governments over the years, my guess would be that it will not go to broadcasting; it will go back to the Treasury.

  Mr White: I do not have a view on that.

  Chairman: You do not have a view. You do not need a view; do you have any information on it?

  Q14  Lord Gordon of Strathblane: Or arguably back to the licence fee payer if somebody wanted to reduce the licence fee by the excess.

  Mr White: The scheme agreement, which is the rule book under which I operate, is very clear that if there is an underspend it goes back to Government to consider how they spend it; so as the Chief Executive of the scheme I do not have a view.

  Chairman: So at the moment, at any rate, there is underspend which could go back to whomever? But we have a strong suspicion that would be the Treasury—at least I have a strong suspicion it would be the Treasury.

  Q15  Baroness Bonham-Carter of Yarnbury: My Lord Chairman, is not the idea that it goes to the independent news consortia?

  Mr White: Again, that is for Government to decide.

Baroness Bonham-Carter of Yarnbury: That is what is suggested.

  Q16  Lord Maxton: There is some commitment to the Broadband commitment as well—some of it might go there.

  Mr White: The Government is talking about that.

  Chairman: I wanted to get that clear, but let us turn to the actual progress of the scheme itself.

  Q17  Lord Inglewood: As I think David Scott will know, I live in the Border transmission area where of course we have gone through digital switchover. The impression I have is that in general it went smoothly and people are able to operate the new technologies without any untoward difficulty. In my household—our children might disagree—we think we have it cracked, and that is the impression I have in the community in which I live. How do you see it having gone in terms of the impact in the communities where digital switchover has actually occurred? Do you think that you have succeeded?

  Mr Scott: I am glad that you have managed to switch satisfactorily. Yes, our experience is that it does go pretty smoothly. We expect normally that about 99 per cent of homes will have digital equipment installed in their homes ready for switchover at our first switchover date; and at the second stage or immediately afterwards we would expect that to be 100 per cent. We normally find that about one per cent of homes in the area will telephone us on switchover day asking for advice and information. The matter which they on the whole find difficult is how to retune their Freeview equipment, which they may have had installed for some years but not have retuned and so it is a new experience for them. We find that, of those people, we can help the vast majority in the space of about a five-minute telephone conversation and they go away having retuned the box while we are on the phone. From our research in areas after switchover—we go back and do some research a few weeks later—so far in four switchover regions which have completed we have found in every case a 100 per cent take-up, apart from one household in the West Country and we found that they had not converted. Our expectation is that everybody will convert.

  Q18  Lord Inglewood: Is the picture that is emerging a consistent one across the country as a whole?

  Mr Scott: Yes, so far it has been. When I say that we expect about one per cent of calls on switchover day, that number has varied from just under half a per cent to, I think, 1.3 percent—so it is in that band. But it averages at about one per cent of people asking for specific advice on the day of switchover.

  Q19  Lord Inglewood: Is what has happened what you anticipated when you were planning it?

  Mr Scott: Yes.

  Q20  Baroness Howe of Idlicote: You say that 99 per cent and really 100 per cent the day after, as it were, have been completed, but given the whole area, the whole of the country, are you anticipating that it will be completed by the target date, as well as being within budget? You have clearly given the answer to the second part of that.

  Mr Scott: Yes, I am absolutely confident that we will complete on the target date. It is a very complex engineering project where it all has to be knitted together and once dates are set they are very, very hard to move. In delivering that engineering project which Arqiva, the transmissions mast operator are doing, they are of course weather dependent particularly. We have had three wet summers in a row which, I am glad to say, they have managed to cope with, and not got behind. In the last few weeks we have obviously had a lot of snow which has made access to some of their sites very difficult but, again, there is no indication at the moment that that is going to cause them any time delay.

  Q21  Baroness Howe of Idlicote: And we are talking about both rural and urban areas?

  Mr Scott: Yes.

  Q22  Baroness Howe of Idlicote: And to add to that group all those really bad reception areas—one of which I live in. So you are quite confident about all of that?

  Mr Scott: Absolutely.

  Q23  Baroness Howe of Idlicote: In fact given the whole scene are there any other problems that you anticipate?

  Mr Scott: I suppose there have been two changes to the activity which we undertake in the last period. First of all, Ofcom and Government and the broadcasters decided to rearrange the Freeview platform to introduce high definition services. Our plan had originally been that the Freeview standard definition free-to-air services would be carried on all six of the multiplexes. Now they are going to be carried on five and the sixth one has been cleared for high definition services, which are just launching. So that was an adjustment to our plan and that resulted in the need for Freeview to organise a national retune on 30 September of last year, when every Freeview home in the country had to retune their boxes in order to continue to receive all their services. We supported Freeview through that and I am glad to say also that the research which we did afterwards showed that about half the country, about eight or nine million homes retuned on 30 September and a few weeks later we found that 97 per cent had and 1.4 per cent were planning to do so very shortly.

  Q24  Baroness Howe of Idlicote: Do you think it is complete by now?

  Mr Scott: Yes.

  Q25  Lord Gordon of Strathblane: While the experience in Granada must give you a fair degree of confidence, surely London is a different order of magnitude to any other part of the country in terms of straight numbers?

  Mr Scott: Yes, in terms of numbers obviously you are right. I think that as we go through the process we are working with the grain of the market place so already 91 per cent of homes in the UK have digital television services. I expect that by the time we get to London in 2012 that number will be higher. So, yes, the numbers are large. In Granada we were faced with three million homes switching at the end of last year and that went through very smoothly.

  Q26  Lord Gordon of Strathblane: There is no danger that coverage of the Olympics will be in any way hampered in 2012—one hopes?

  Mr Scott: I absolutely hope that that is right. I believe that is right. I was referring to changes that have been made along the route. There is another change which Government and Ofcom are considering and I think have decided to implement, which is that as part of the television switchover programme we released something called the digital dividend, which is 14 frequency channels. The original plan which was agreed in 2003 or 2005 specified which frequencies would be released and there has been a slight adjustment to that; so frequencies 61 and 62, which are used for television at the moment and were planned to continue to be used for television broadcasting after switchover, will now be released either at the time of switchover or shortly afterwards. We are working with Ofcom and the broadcasters to plan that activity, which will affect something like 800 of the 1,100 masts which will require some adjustment to our plan.

  Q27  Lord Maxton: You operate very largely through Freeview in all this but we have had Freesat since the introduction of the scheme, so to speak. Does that affect it in any way?

  Mr Scott: Obviously when I give numbers of households with digital equipment I am including Sky services, Freesat services, cable services and Freeview. But the switchover programme affects the terrestrial transmission masts and so it does not affect the satellite or cable services.

  Q28  Bishop of Manchester: I am one of the seven million viewers within the Granada region. I think we were really pleased that we were given such top priority in the North West as one of the very first regions to have the switchover, although listening to Lord Gordon I am really becoming a bit cynical now that we were probably merely being tested out for the teething problems which London might then have. You have been quite reassuring on the teething problem issue. Certainly in Manchester I have not come across any problems. We do have a home in South Lakeland and I have to say that I have had to retune on several occasions, although that may simply be my inadequacy. I did pick up in a local Lancashire newspaper that there had been some genuine problems I think in the Lancaster area in relation to picking up BBC signals; is that right?

  Mr Scott: Yes. These were absolutely anticipated and expected issues. What you are referring to, I think, is that something like four per cent of homes in the Granada television region were also going to be able to pick up services from Wales. So after switchover, when we got to high power services from Wales and from Granada, when people retuned their boxes about four per cent of homes were going to be able to receive Welsh services as well as the Granada services. The Welsh services which they are receiving are transmitted on lower frequencies than the Winter Hill signals, so many of the boxes when they are retuned will capture—they start retuning from the lower frequencies and go on up—the first signal they get, receiving a Welsh signal and then lodge that. The Granada signals were then grabbed and put higher up in the EPG so they are in the 800 numbers rather than at 1, 2, 3 or 4. This, as I say, was planned and expected. It is solvable. It is fiddly where it requires people either to do a manual retune of their box, which requires them to put in the specific frequency numbers they want; so that obviously makes it difficult for them to get the information—it is not entirely intuitive. Or they can root around with their "favourites" functionality, if that exists on the boxes. It was an issue, you are quite right; it was referred to in the Lancashire paper. It was anticipated and I think is now being dealt with. It is going to happen again when we get down to the West region in the next few months; again, about four per cent of homes in the West region around Bristol will be able to pick up the Welsh signal as well as the West signal.

  Q29  Bishop of Manchester: Can I continue to press you on this about your phrase "and is being dealt with"? Does that mean that there are still quite a lot of homes in, say, the Lancaster area that are unable pick up the local Granada news? I suspect that that is actually what you are saying, and that it may be a little while before what you are aiming for is actually achieved.

  Mr Scott: I do not know the answer to that question. The concern that was in the media, following the switchover on 2 December, appears to have abated. I think the last article I have seen was 20 December, and I have not seen any issues or complaints that have been raised since then. Certainly we had a lot of calls to our advice line in the normal way, asking how to deal with this, but that call volume has dropped away completely. So I am not aware of large numbers of people who are still struggling.

  Bishop of Manchester: And the fact that I have had to retune several times, is that my incompetence? Do not answer that!

  Q30  Lord Maxton: Can I ask what is almost the reverse question of the Wales one here. In parts of the west of Scotland at present with analogue terrestrial you pick up Ulster. Will the switchover do away with that particular problem?

  Mr Scott: No, probably not. The digital terrestrial network has been built using the same masts as the analogue network, so I would think that somebody as you describe, in the west of Scotland, who might be receiving a UTV signal is probably doing that because he does not have a line of sight to a transmitter for STV, and if that is the case he will continue to receive a signal after switchover from the same mast which he has now, which is presumably the Divis mast near Belfast.

  Q31  Lord Maxton: For people in the west of Scotland "Car crashes in Belfast" is not of great interest!

  Mr Scott: Of course satellite services would give them the region that they require.

Lord Maxton: Yes, it gives you BBC Wales even.

  Q32  Lord St John of Bletso: If I could touch on the Help Scheme, you mentioned an 18 per cent take-up and of course those eligible are aged 75 and over and those who live in care homes and the eligible disabled. What groups have been the major users of this scheme and what contribution have those had to make? There has been mention of a £40 contribution; so how many have paid the contribution and how many have had that service for free?

  Mr White: If I start with who is taking it up. There are slightly more people 75 and over than the eligible disabled who are eligible for this scheme, and we are finding that the older people have a higher propensity to take it up—but only slightly. So that shifts the proportion by about five to ten per cent. So whilst we are saying there is a tendency for more older people to take up the scheme it is not a significant shift from the proportions of those eligible. On the free and £40, about 40 per cent of eligible people are entitled to free help, so 60 per cent are asked to pay £40. You are three times more likely to take up the scheme if you get it free. So clearly that is the effect.

  Q33  Lord St John of Bletso: How is the scheme communicated to those who are eligible? And is the scheme correctly targeted to those three categories? I suppose the final question is: when will this scheme come to an end?

  Mr White: We get the data on the eligible people from the Department for Work and Pensions and from the local authorities for the blind and partially sighted data, and we then write to those individuals—the Information Commissioner allows us to write up to three times before we hear back from them. We also do lots of media campaigns and outreach activities with charities and local authorities. But we actually write to those people who are eligible. The scheme runs across the country, mirroring the ITV region switches, so eligibility opens before the ITV region switches and closes one month after the final transmitter switches in a region. So it closes down as it goes along; so in some regions the offer has closed already and the after-care period has ended as well, so we close it down as we go through.

  Q34  Chairman: I am still not totally sure: what form does this help take? What is the help?

  Mr White: We will provide equipment. The standard offer in most of the regions so far has been a DTT box, a Freeview box. We will come into the home and install it; we will check the aerial works, and if the aerial needs upgrading and we are able to—sometimes we are not able to if there are planning restrictions or rented accommodation—then we will replace the aerial.

  Q35  Chairman: When you say "we"?

  Mr White: We the Help Scheme; so the Help Scheme and our main contractor who is Eaga plc, whom we appointed in the procurement process. We then also provide an aftercare process, so there is a free phone number that people can call if they have problems retuning their box afterwards.

  Q36  Chairman: So there is a separate plc going round the country?

  Mr White: No, it is us running it throughout the scheme region by region and Eaga plc, which is our contractor delivering the scheme, are with us all the way through the scheme.

  Q37  Chairman: In every region?

  Mr White: In every region, yes.

  Q38  Lord Maxton: Is the Help Scheme limited to the Freeview service? In other words, can you make a contribution towards Freesat or SatFree, to Satellite Sky?

  Mr White: In every region we open it up to all platform providers to be able to offer options; and so to date we have been offering Freesat services and a Sky service. We have not had any bids from cable operators to do that. So, yes, you can choose a Freesat or a satellite service from Sky.

  Q39  Lord Maxton: Because obviously with a care home it might very well be the cheaper alternative to put in one satellite dish and provide that service to all the rooms within that home.

  Mr White: There is a process which assesses what can be done.

  Q40  Chairman: Let me go back to this cost again. There is this fee of £40 but how much on average would it cost you to provide the help on a per person basis?

  Mr White: Because of a reasonably large fixed cost obviously to run the scheme the cost per person helped varies depending on take-up, but on current take-up it could be around £200 per person actually helped. There is also a benefit to those people we do not help because sending out details of the switchover to all eligible people, we talk to a lot of them on the phone, talking through what their needs are and then some decide that they are already sorted and do not need help. That is still quite good value because our boxes are better than the cheapest box you can buy. We have heard about the different regions' service issues. The new box we are putting in sorts those very easily; it retunes automatically using a trigger in the broadcast signal. An installer, who is CRB checked, turns up to the home—and that costs money if the individual was doing that. The aftercare service—we will also turn up at the home again afterwards to talk people through the equipment if they are really struggling to use it. Aerial installations can cost hundreds of pounds. So for the £40 fee to make sure that you get everything you need to switch, for a lot of people is a very good and secure value package.

  Q41  Chairman: As you say, they are getting very substantial support in that.

  Mr White: Yes, and a significant number of people we are helping need that support.

  Q42  Chairman: I do not know if this pre-dated you but did it ever occur to you that this might actually all be organised through the Social Security Department? Why do we need a separate help department for all this? Could it not be done through the Social Security Department and they actually provide resources to agents throughout the country?

  Mr White: It is probably better asked to the DCMS who set up the scheme, I think, rather than us.

  Q43  Chairman: Let me ask it the other way. You must have some advantages, so tell me what they are.

  Mr White: I think one of the reasons why the DCMS did it is that there are not many government departments that run engineers who visit people's homes, so it is a very physical service. We are buying television equipment; we are technically ensuring that that equipment is right; we are actually training and managing installers who go and visit homes. So 60 per cent of people who opt in get an installation within 15 days. It is a very slick operation and you need people with experience in this to manage it.

  Q44  Baroness Bonham-Carter of Yarnbury: Can I confirm something in answer to the first question. You mentioned £300 million that you thought would be left over. Is that from the Help Scheme?

  Mr White: Yes.

  Q45  Baroness Bonham-Carter of Yarnbury: Just from the Help Scheme?

  Mr White: Yes.

  Q46  Baroness Bonham-Carter of Yarnbury: Just one question to Mr Scott. There was some concern before this all began about multi-occupancies, landlords and so on. Have you had problems there or have you managed to resolve people being left out?

  Mr Scott: You are quite right. One of our high risks that we identified at the outset was what would happen in flats where landlords, either social landlords or private landlords, might not have done what they needed to do in terms of updating aerials or reception. That is a risk which we have been downgrading as we go and I have to say we have been working quite hard on it. In the social sector we do work in a region for about 18 months before switchover. We try to identify all the social housing providers. We list them individually, we work out how many units, what accommodation they have; we prioritise the highest volume providers first. But by the time we get to switchover we will have been in touch with all of them and have a confirmation that all of their buildings are ready for switchover. So far we have a 100 per cent record on that. The private landlords are much harder to identify because there is no central listing of where they are, but we again work hard trying to communicate to people who are obviously tenants—where we can see from the address that it is flat number so and so, or 16B or whatever—to tell them what they need to talk to their landlord about and we communicate to landlords where we can find them. We make use of the tenants' deposit scheme and we communicate through landlords associations and elsewhere. But so far—and I think that Granada was probably going to be the first big test in this—this has not proven to be an issue at switchover.

  Q47  Lord King of Bridgwater: You said that the boxes you provide are rather better than some of the cheaper ones that are available. Who provides them? Who produces them?

  Mr White: We buy them from a number of sources. In fact we are just going through a procurement process that may look at changing that supplier; so it is a number of different suppliers that is changing over time.

  Q48  Lord King of Bridgwater: But you roll it out to tender, do you?

  Mr White: Eaga are currently going through a tender, yes. We set the specification for the box and then go to manufacturers and ask them to deliver to that specification.

  Q49  Lord King of Bridgwater: What sort of numbers are you talking about?

  Mr White: We have currently helped just over a quarter of a million people and the majority of those are with a Freeview box.

  Q50  Lord King of Bridgwater: So you bought a quarter of a million boxes?

  Mr White: Yes.

  Q51  Lord King of Bridgwater: Which you paid for out of public funds, which were supplied to people free of charge?

  Mr White: Or £40 if they had to pay £40.

  Q52  Lord King of Bridgwater: How long does your obligation to stay with them last?

  Mr White: We have said 12 months. We have found that most people get used to using the equipment pretty soon after switchover, but some people do struggle. There will always be some people, particularly in this group, who do hang on to the service and we will then work with local charities and the people they have contact with to hand them back.

  Q53  Lord King of Bridgwater: Why are you going out again? Have you had problems with some of the manufacturers?

  Mr White: There are some boxes with faults but it is a very small number and well within industry norms. Mainly we go out because people are struggling to use the equipment; so it is an understanding thing. It is not the equipment itself, it is the user.

  Q54  Lord King of Bridgwater: I am sorry, I am asking about your placing of an order. I understood that you place an order with various manufacturers.

  Mr White: Because value for money is still at the heart of what we do and box cost is a significant part of the cost of the scheme and therefore we are ensuring that we are always getting the best price for the box. It is absolutely nothing to do with the quality of the boxes; this is about making sure that we continue to get good quality boxes at the best price for the licence fee payer, who is ultimately paying.

  Q55  Lord Maxton: Freeview boxes now can be bought with a DVR capacity. Do your boxes have that?

  Mr White: We offer that as an upgrade option so obviously that would cost more money. But we offer that and the choice of integrated TVs if people choose that too, which we would then deliver and install and support. Not many people have taken those up but we do offer them.

  Q56  Lord St John of Bletso: The Help Scheme offers assistance for just one television in the house. What would the cost be if households had more than one television set?

  Mr White: The scheme only allows us to help with one television; so we actually do not help with any of the other televisions in the house. So that is up to the householder to sort the other televisions out.

  Q57  Baroness Eccles of Moulton: Could we turn, please, to the DCMS/DTI cost/benefit analysis that took place in 2005? It indicated that there was going to be both economic benefit through savings by not continuing with dual transmission, and also consumer benefit in that it was going to release spectrum for other uses. Is it time for that analysis to be reviewed or is it still pretty well accurate as things are progressing?

  Mr Scott: I will happily answer that question but I will start off by saying, as you said in your question, it is an analysis that was done by BERR or BIS and the DCMS and it is their cost/benefit analysis and not mine. That said, it was originally done in 2003 by the departments with some independent economists and I think that they considered that there was a net benefit of about £2 billion. It was updated in 2005 and the assessment then was that it was broadly in the same order, about £1.7 billion. Since then Ofcom has done some further work and thinks that the frequencies which are going to be released will be worth a bit more, so maybe the net benefit is larger now than originally planned. What I would say—it is a matter obviously for the departments—we are half way through the programme and I cannot see a great benefit in updating that analysis now. Personally, I would probably wait until the end of the project when Ofcom will have perhaps done some more work on the allocation of frequencies, which is the big number. It does not obviously impact on the work that I am doing. This cost/benefit analysis was done by the departments to inform Government policy. My job is to deliver that policy and to be efficient in doing so. That is what we do.

  Q58  Baroness Eccles of Moulton: As things are at present, although it is not directly within your remit, you do not see any great need for anybody either Ofcom or DCMS?

  Mr Scott: Personally not, but you probably should ask that question of the departments.

Baroness Eccles of Moulton: We will do that. Thank you.

  Q59  Lord Macdonald of Tradeston: Can I ask you to offer your overview on this just to help us understand the area better. I am aware of what you have just said about it being more a government area than your own, but just in looking at the benefits, could you guide us in terms of the communication industries, who might be the beneficiaries and who might be the losers in the cost/benefit analysis?

  Mr Scott: I am sorry, I am not going to be able to help you hugely on that in that I have never actually gone deeply into the analysis which the Government undertook. But the frequencies which are going to be freed up are probably going to be auctioned by Ofcom. They could be used for further television services; they could be used for broadband; they could be used for mobile services, and I think that the market and the auction process and however that is structured will decide who is going to get the frequencies. So I am not being terribly helpful, I am afraid.

  Q60  Lord Macdonald of Tradeston: Another aspect of it is perhaps the environmental impact. We have seen figures that suggest that perhaps the energy required for the kind of digital television that you are encouraging might be a cost of over £1 billion a year to the consumers. I am not quite sure how many households there are but that is maybe working out about £40 per household per year. Do you have a view on that? Has it been an issue that you have had to address?

  Mr Scott: Again, this is work that the government departments have looked at. There are of course two parts to this. At the moment we are running a dual transmission system, both the analogue terrestrial system and the digital terrestrial system, and at the point of switchover the analogue system gets switched off. So there are energy savings there, I believe. From the consumers' point of view, the boxes and equipment in their homes, I think there is greater energy consumption than a normal television set. However I think that work is being done—and I know that Sky, for instance, has introduced some more efficient set-top boxes, so work is happening in that area. Part of the problem is that of course these boxes should ideally be left in a standby mode, switched on overnight because they do receive downloads over the air during the night.

  Q61  Lord Macdonald of Tradeston: Are there any safety factors involved in leaving the boxes on all night?

  Mr Scott: Not that I am aware of.

  Q62  Lord Macdonald of Tradeston: Are there any technological changes in progress that would reduce the amount of energy that will be used by the digital screens?

  Mr Scott: You are getting into an area which is beyond my competence, I am afraid.

  Q63  Lord Maxton: So if you have a television and a box you have two power uses.

  Mr Scott: Yes.

  Q64  Lord Maxton: But if you have an integrated Freeview television does that use less power than the two boxes combined?

  Mr Scott: I am afraid I do not know the answer to that question.

  Q65  Lord Gordon of Strathblane: You mentioned that you have been able to cope with the request from DCMS and Ofcom to accommodate HDTV. Do I take it that that will become available to each area as switchover occurs?

  Mr Scott: Broadly you are right. From switchover regions from now on those services will be introduced at that time. In addition to that there are some areas which will get the HD services before switchover. So London, for instance, will be getting HD services this year on Freeview, although switchover is not until 2012. This is a BBC-led project but my understanding is that about half of the country will be able to receive Freeview high definition services this summer, 2010.

  Q66  Lord Gordon of Strathblane: Since you have just completed Granada people in Granada can receive HD terrestrial?

  Mr Scott: The Winter Hill transmitter at the point of switchover in December was enabled for HD, yes. Part of the issue is that the consumer equipment required to receive HD is only just coming to the market now. Transmission services from Granada onwards will carry HD services at switchover.

  Q67  Lord Gordon of Strathblane: Is there not a danger that your very success in accommodating the Government's desire might lead them to say, "Could you manage 3D at the same time while you are at it?"

  Mr Scott: Nobody has mentioned that; you are the first!

  Q68  Lord Maxton: Part of the inquiry is the switchover to digital radio. Clearly when you switch to digital Freeview television you actually get radio stations on your television that you did not have before. Has that been part of the equation? Do you think that people have been drawn to it?

  Mr Scott: I think that some people do enjoy listening to digital radio services through a Freeview box or through an IDTV. Is that a major part of what we are doing now? We are really focusing on television analogue switch-off and making certain that people can receive television afterwards.

  Q69  Bishop of Manchester: Can I just return to the Help Scheme. I entirely understand the reasoning behind the point that there should be assistance only on one television in each home. On the other hand, I am sure we can all think of or know of situations where you have an elderly couple, each of whom is over 75; one of them is permanently bedridden and needing quite a lot of care and requires to have a television. But the other person who is also over 75 actually needs a bit of space and has, in a sense, equal needs of a different kind. I can see that in that sort of situation that there are powerful arguments for saying that each of them should be able to qualify for the kind of help the scheme gives. Has that been addressed at all?

  Mr White: If one of the televisions in the home is already converted by the householder we will convert the television in the bedroom; so we would go in and convert one TV.

  Q70  Bishop of Manchester: That is not quite what I am asking.

  Mr White: We will go in and help if they have converted one. The scheme does not allow me to help on any more than one television per household, so it is a matter of policy. Because the conversion generally, even within this eligible group, is quite high we do not come across many of those cases and actually what we are finding is that there are a significant number of households in this group with still one television. So we have not come across a particularly significant issue with that.

  Q71  Bishop of Manchester: I can see that if that situation were to arise—and I suspect it is actually quite considerable in the background—there appears to be plenty of money in the kitty which could cope with it.

  Mr White: We do talk to eligible people whom we have served; we do customer feedback; we listen to the phone and we do pass back trends to the DCMS if we spot things that could help. However that is not something that we have picked up.

  Q72  Baroness Howe of Idlicote: I was wondering if you had given some thought to the Equality Bill going through Parliament because carers, who clearly would fall into this category, could well be listed as a recipient of what you are doing. So have you looked at that at all?

  Mr White: The Scheme Agreement is very clear on who is eligible and not, and we comply with the Scheme Agreement in that.

  Q73  Baroness Howe of Idlicote: But it might make it something on which you could spend some of your money quite quickly and easily.

  Mr White: We do spend a lot of time talking to the eligible people before we serve them and afterwards, and if we spot issues we do feed them back; but that is not something that we have particularly picked up.

  Q74  Chairman: The surplus appears to be being spent several times over by different government departments, committees and goodness knows what. Let me ask a final question. Just to sum up, Mr Scott and then Mr White; just give us your overall impression on how the process has gone and whether you regard it as successful.

  Mr Scott: So far we are 18 per cent of our way through this process but all the indications are that the digital television switchover project is on track and will conclude on time, and will be well within its budget.

  Mr White: I am content with how the Help Scheme is delivered and I believe that take-up seems about right and appropriate. I think that the hard to reach are hard to reach and we are putting a lot of effort in to reach them. We are not complacent and we can always do better, but I am generally content about how we have done so far.

  Q75  Chairman: One thing that you have made absolutely clear is that you had no part yourself in the prediction of what the take-up was going to be.

  Mr White: I have been predicting since I took over in May 2007 and forecasting based on take-up, but not before then, no.

Chairman: Thank you both very, very much for coming. You have given very clear evidence, and perhaps if we have other questions we might write to you. Thank you again for coming this morning.