The BBC Trust has today decided to suspend the online education service, BBC Jam, with effect from 20 March 2007. The Trust has requested BBC management to prepare fresh proposals for how the BBC should deliver the Charter obligation to promote formal education and learning, meeting the online needs of school age children. Once completed, the Trust will subject BBC management's proposals to a full Public Value Test, including a market impact assessment by Ofcom.
The Trust's decision follows extensive discussions with Government and the European Commission about how to address allegations from some in the industry that Jam is damaging their interests.
Chitra Bharucha, Acting BBC Chairman said:
"Promoting education and learning is one of the BBC's six Public Purposes and a core part of the Corporation's public service remit. A decision on how the BBC delivers this purpose must, under the terms of the Charter, be based on the interests of the public after considering the effect on the market.
"Despite a rigorous approval process involving the BBC Governors, the Department for Culture Media and Sport, and the European Commission resulting in extensive conditions on the service, BBC Jam has continued to attract complaints from the commercial sector about the parameters of its activities. Recently complaints were made to the European Commission alleging the service had not complied with its conditions of consent. Subsequently, the Governors requested management suspend the roll out of any new BBC Jam content pending resolution of how best to address the allegations.
"As part of the original terms of BBC Jam's consent, the BBC Trust must carry out a review of the service, including a market impact assessment, during 2007. We have considered the European Commission's request in light of industry's allegations of non-compliance to subject BBC Jam to a separate review, in advance of that already scheduled for later this year. The Trust's view is that, whilst it is paramount that BBC Jam complies with the conditions of its consent, two consecutive regulatory reviews would be unnecessarily bureaucratic and complex, with serious implications for delivery of the service to licence fee payers.
"The Trust's duty is to act in the interests of the public. Whilst we are not currently in a position to determine whether the BBC is non-compliant, as alleged by the industry to the EC, we cannot ignore the allegations facing the BBC right now and the ongoing prospect of challenge if action is not taken.
"Overall we have concluded that the best approach is to suspend the service in full now and request BBC management to prepare fresh proposals for how the BBC meets its public purpose of promoting formal education in the context of school age children. A clear, straightforward process, including the Public Value Test the Royal Charter requires for significant changes to existing services and any proposed new BBC services to ensure independent decisions are reached in the public interest, will ensure an open and transparent approach to determining whether the BBC's service for school age children creates maximum public value whilst minimising negative market impact.
"We regret the need to suspend BBC Jam during this process and apologise to its users, the BBC staff who have worked on the service to date, suppliers and the independent production companies affected by this decision."
In developing its proposals the BBC Trust has asked BBC management to draw on the successes of BBC Jam; to consider how a fresh proposition can best meet the needs of 5 to 16 year olds; and to take account of changes in the market and new developments since BBC Jam was approved in 2003. The Trust expects management to build on its existing investment and to consider the value for money aspects of any proposal. The Trust has asked management to deliver its proposal within three months. A full Public Value Test will then follow.
The Trust's Public Value Test will include a market impact assessment by Ofcom and an open consultation to which the public and all other stakeholders will be invited to respond. The PVT process provides the Trust with the evidence and analysis it needs about potential market impact and public value to reach a judgement and final independent decision about a proposed service. If approved by the Trust, the service would require European Commission state aid approval.
Chitra Bharucha also said:
"The BBC exists only to serve the public. Its mission is to inform, educate and entertain. Because all the BBC's services on television, radio and online are funded by the compulsory licence fee, they must meet a public purpose. The Royal Charter requires the BBC to meet six public purposes, one of which is to promote education and learning. BBC Jam has been an important element of the BBC's delivery of this purpose.
"The Trust's priority is to ensure the needs of the children and young people who use and value the service are not neglected during this process.
"The Trust must ensure the BBC creates public value whilst minimising any negative impact it might have on the market. Acomplex and costly review, in addition to the full review of the service to which the Trust was in any case committed, is not a commonsense way of securing value to licence fee payers. Whilst we regret the need to suspend the service, we trust the end result should be something that the public will value and which is subject to clear regulatory requirements that are achievable, meeting the needs of BBC operators and providing commercial competitors with confidence and adequate transparency."
Notes to Editors
The remit of BBC Jam is to offer a free interactive online learning service for 5 to 16 year olds of all abilities, reflecting the school curricula in England, Scotland, Wales and Northern Ireland. The service was being rolled out incrementally and had approval to run until 30 September 2008.
BBC Jam's service licence, which includes details of all the conditions of the original consent, is available at www.bbc.co.uk/bbctrust
The first elements of BBC Jam were launched in January 2006. Little more than 10% of the content of the whole service has been made available, while the remainder was due for roll-out up to September 2008, building up to a portfolio of 136 subject areas (including separate language versions). The service has a total budget of 150m, while 50% of the total content budget some 45m was agreed to be commissioned from independent production companies in the private sector.
Article 87(1) of the EC Treaty prohibits any aid granted by a Member State through State resources which distorts or threatens competition by favouring certain undertakings in so far as it affects trade between Member States. All new aid needs to be notified to and approved by the Commission before being put into effect and in the case of BBC Jam this approval was granted in 2003.
The BBC's involvement in the Digital Curriculum was first made public in 2000. The following is a timeline of the process which followed:
- The formal consultation into the Digital Curriculum started in September 2000, when the BBC published a consultation document on its plans.
- Following consultation and discussions with the industry and Government, which generated a framework for the service, the Board of Governors approved the service proposition on 25 April 2002. The proposition was submitted to the Secretary of State for Culture, Media and Sport on 3 May 2002. It was approved by the Secretary of State in January 2003 and the EU the following October.
- BBC Jam soft launched with a few modules in January 2006. More material was launched during 2006 and this was followed by a hard launch, with full marketing support, in October 2006.