BBC Annual Report and Accounts 2008/09

BBC Trust Chairman Sir Michael Lyons looks back at the past year at the BBC and sets out how the Trust will serve licence fee payers in the future.

Welcome to the Trust's Annual Report. It is published at a time when we have been engaged in a wide ranging debate about the future of communications in our country, spurred by the Government's Digital Britain review. Our role in this debate has been to ensure the voices of licence payers have been heard. And that goes to the heart of our job as Trustees – to be the voice of licence fee payers and to get the best out of the BBC on their behalf. After all, they own and pay for it.

I believe there are certain things almost everyone wants from the BBC – that it constantly produces exciting content and pushes the boundaries; is impartial and isn't influenced by either political or commercial voices; that it squeezes the most value possible out of every pound from the licence fee payer; and that it maintains the highest possible standards. And this last means that the BBC should aspire to be better than others, that it should set the standard.

Governing the BBC for licence fee payers

How do we make sure the BBC achieves these aims? The Trust has considerable power to wield on behalf of licence fee payers to shape the BBC over the longer term to serve the public better – and we are not afraid to act quickly and decisively in their interests. Our role is both to challenge and support the Director-General and his staff in delivering for licence fee payers. In practice this means being clear with managers and programme makers about what the public wants and, when there's a problem, challenging them to come back with a solution which, once examined and agreed, we then follow up to make sure it has had the desired effect.

The BBC's year

So how have we done this year? Our starting point is what audiences think. One of the questions we ask regularly is: ‘Would you miss the BBC if it wasn't there?' And I'm delighted that the value the public places on the BBC is rising – this year 85% said that they would, compared with 70% two years ago. Indeed performance against all our objectives – reach, quality, value for money, trust, delivery of our public purposes and efficiency – is moving in the right direction, thanks to the efforts of the BBC's talented staff. But there is further to go in making sure the BBC is properly shaped for the future and in responding to concerns the public raise with us.

Tightening editorial controls in light of Ross/Brand

The BBC scored a spectacular own-goal this year, with the Ross/Brand case. What this showed was that the public feels a strong sense of frustration when the BBC fails to measure up to expectations, particularly when failure is self-inflicted.

There was undoubtedly failure by the performers, but the biggest failure was in editorial control, which allowed the show to air. The Trust acted immediately, putting its sometimes uncomfortable findings into the public domain. Within a week of the strong public reaction we had got to the bottom of the problem. We were very clear with the Director-General that those responsible must be held to account, leading to two senior resignations and the suspension of Jonathan Ross, and that there needed to be a dramatic tightening of editorial control. Our position within the BBC enabled us to act quickly and deliver clear results.

This case also led us to a much wider examination of the public's views on taste and decency, which will inform our new editorial guidelines next year. We know many people want to see a tightening of editorial controls and we will be consulting widely on the new guidelines. But we must steer clear of putting too heavy a burden on programme makers so that they can still produce the risk-taking, innovative and challenging content the public expects.

Quality of programming

On that front, we've seen evidence this year of improving satisfaction with the quality of BBC programmes. Everyone will have their favourites, mine included A Short Stay In Switzerland, Being Human and Five Minutes Of Heaven. This is where people most want their licence fee to be used. The extraordinary privilege of this funding gives the BBC the opportunity to take risks and do things that commercial broadcasters can't. But it is also the area where it has furthest to travel, both in constantly coming up with new ideas and stopping doing things that have become a bit stale.

Serving audiences across the UK

The BBC is often seen as too focused on London and the South East and, as an adopted Midlander, it's one of my personal missions to address this. It's an ambition that is shared by my fellow Trustees. We've made good progress here with new targets on making programmes outside London, and new investment in Salford and elsewhere. We've also pushed for changes in editorial style to reflect better the reality of decision making in the UK's devolved administrations, and the Audience Councils that advise the Trust are telling us that all this is beginning to make a difference.

Getting value for money

Getting value for money for the licence fee payer has never been more critical than in these challenging economic times. Despite licence fee funding the BBC is not immune from the recession. Income from both the licence fee and commercial enterprises goes down, putting the BBC's budget under pressure, which makes securing maximum return on investment for licence fee payers more important than ever. This year the BBC made good progress on reducing overheads, but we have set some challenging targets over five years to release another £1.9billion in efficiencies. And we need to maintain and strengthen discipline on top salaries. Every penny saved means money released for better programmes and new services like iPlayer.

Supporting other public service broadcasters

The BBC also has a duty to help other public service broadcasters whose funding is now coming under strain. Over the past year the BBC has stepped up its efforts to work with other broadcasters to find ways to help them reduce their costs or increase their income through imaginative partnerships. This is important because we know the public welcomes choice and regards competition as important, especially when it comes to news. But at the same time we need to maintain focus on the BBC's own services, since it cannot afford to be distracted or spread its energy and resources too thinly.

Defending the BBC's independence

One of the things licence fee payers value most about the BBC is its independence, which is the foundation of its reputation at home and abroad. The Trust's job is to protect the right of the Director-General to make editorial decisions without fear or favour. An example of this over the past year was the DEC Gaza Appeal. It was important that the BBC made the decision whether or not to broadcast the appeal without undue influence. Our job was to give the Director-General the space to make this decision. Defending the BBC's independence will continue to be one of the most important parts of our role.

The Trust's six commitments

The BBC's relationship with licence fee payers rests on six clear commitments:

• Standards: to maintain the very highest editorial standards that reflect the broad views of BBC audiences
• Serving all audiences: to offer value to everyone in the UK, whoever they are, wherever they live
• Content: to be a leader not a follower, offering content of the highest quality and of a kind that no-one else is doing
• Supporting public service broadcasting: to the extent possible within the obligations to licence fee payers, to support the provision of public service content by others and sustain contribution to the UK creative sector
• Value: only to spend as much money as the BBC needs to deliver the public mission set out in the Charter
• Independence: never to allow external interests to exercise undue influence on the BBC's editorial or operational independence

The BBC has big ambitions to serve the public better, bringing them new technologies and content without losing any of the very high standards of journalism and programme making that are its foundations. As Chairman, I am determined that the Trust will support and challenge the BBC to serve all of the audiences in the UK better than ever, continually improving itself so that it maintains and deserves the high level of trust and affection that the British public has for it.

Sir Michael Lyons
Chairman
18 June 2009