The BBC is constitutionally established by a Royal Charter. An accompanying agreement recognises its editorial independence and sets out its public obligations in detail.
The Royal Charter is the constitutional basis for the BBC. It sets out the public purposes of the BBC, guarantees its independence, and outlines the duties of the Trust and the Executive Board.
The current Charter runs until 31 December 2016.
The first Charter ran from 1 January 1927 to 31 December 1936. Since then, every ten years or so, the Government has carried out a Review to see how the BBC serves the public and to consider its future.
The current Charter expires on 31 December 2016. The Government has already started the Review process to put in place a new Charter for the next ten years.
What is the Charter and Charter Review?
The Royal Charter is the document that allows the BBC to exist. It provides a framework for what the BBC does and how it is organised - it is the constitutional basis for the BBC. It is the document that spells out what the BBC needs to do to serve the public (its ‘public purposes’), guarantees the BBC’s independence, and outlines the duties of the people that run it - the Trust and the Executive Board.
The first Charter ran from 1 January 1927 to 31 December 1936 and since then, every ten years or so, there has been a new Charter.
The current Charter will expire on 31 December 2016 so the Government has started a Review process prior to putting in place a new Charter for the next ten years.
What’s in the Charter?
The current Charter states that the BBC exists to serve the public interest and that it shall be “independent in all matters concerning the content of its output, the times and manner in which this is supplied, and in the management of its affairs”.
It sets out how the BBC should serve audiences through its six “public purposes” such as “stimulating creativity and cultural excellence” and “representing the UK, its nations, regions and communities”. It also explains at a high level how the BBC should be organised and governed, including the roles of the Trust and Executive and how the two work together.
Alongside the Charter is another document, which is signed by the Secretary of State for Culture, Media and Sport and the BBC’s Chairman and Director General. It is generally known as the Agreement.
The Agreement provides more detail on many of the topics outlined in the Charter such as: the BBC’s services and how changes can be made to them; more on the delivery of the public purposes and the BBC’s commercial activities. It also covers rules about the BBC's funding and its regulatory duties.
Why is the Charter important?
The Charter and Agreement determine the future of the BBC.
They are of critical importance to the BBC and licence fee payers because they provide the framework for all the BBC’s activities for the coming Charter period. The documents together establish the BBC’s core public service remit and guarantee its independence.
Because the Charter Review only takes place every ten years or so, it is a rare and important opportunity for the whole country to debate the future of the BBC and ask fundamental questions about how it works. For example:
how should the BBC be funded;
how should it be governed; and,
how should it ensure that it serves the public interest in the decade to come?
How is the Charter related to the funding of the BBC?
The Agreement includes a section on funding but it does not stipulate the level of the licence fee – which is the BBC’s main form of funding. The level of the licence fee is set periodically by the Government and agreed by Parliament. The last licence fee settlement was made in 2010. It froze the level of the licence fee at £145.50 linked to a number of new funding obligations (set out in an Amended Agreement) and is set to run until March 2017.
In July 2015, the Government decided that it wanted the BBC to take on the cost of free TV licences for the over-75s. This prompted a negotiation with the BBC which resulted in an agreement which includes commitments to:
increase the licence fee by inflation in the next Charter period, from 2017, subject to Charter Review conclusions on the purposes and scope of the BBC and us undertaking equivalent efficiency savings to other parts of the public sector;
modernise the licence fee, to adapt it for an on-demand age; and
return the ring-fenced money – £150m a year – from the licence fee which is currently being used to support broadband roll-out.
Who makes the decision about Charter renewal and the Licence Fee settlement?
Generally the Charter Review is the opportunity for a public debate about the future of the BBC. Recent Charter Reviews have included an element of public consultation and Parliamentary debate.
The final decision about the content of the Charter and Agreement is for the BBC and Government of the day.