On behalf of the BBC, Chairman Michael Grade today welcomed the White Paper and
draft Charter and Agreement saying they marked a significant milestone in the
process of BBC Charter review and signalled radical reform of the 80 year old
He also welcomed the Government's re-confirmation of its decision last year to
renew the BBC's Charter and to continue licence fee funding of the Corporation
until 2016, recognising the BBC as the cornerstone of public service broadcasting
in the UK now and through digital switchover.
Michael Grade acknowledged that the Government's White Paper required the BBC to
make radical changes to the way it operates to satisfy licence fee payers and the
wider media industry.
He emphasised that, in delivering its public service
remit, the BBC must deliver public value to the benefit of the nation as a whole,
and to the individuals who pay for BBC services through their licence fee.
Michael Grade said: "On behalf of the BBC I welcome the White Paper because the structural changes it
demands will ensure the continuing independence of the BBC.
"The new governance
model lays on the Trust a duty to represent the interests of the licence fee
payers both as paymasters of the BBC and as consumers with an interest in wider
"An overhaul of the BBC's governance to a modern structure that serves the
licence fee paying public is long overdue.
"Promises of delivery and sincere
words of assurance are no longer enough: the BBC has to demonstrate sustained
"The BBC must operate only in the public interest, ensuring value for money and
high quality output.
"But in doing so, the BBC accepts it has a responsibility to
take account of its potential impact on the wider market and to demonstrate
through transparent decision-making processes how it delivers public value to the
"The new BBC Trust - separated from BBC management - will be
equipped to make this a reality.
"The new system of service licences and purpose remits will ensure expectations
and measures of performance are clear and consistent.
"The Trust will work with
Ofcom to deliver assessments of market impact in which all parties can be
Michael Grade said that the public would judge the success of the structural
changes by the range and quality of services and programmes the BBC provides:
"In the end all these structural changes are designed to deliver the highest
quality and the most innovative programmes for audiences.
"Those appointed as
Trustees will be the champions of licence fee payers, and ensure that decisions
made on their behalf are rooted in evidence that demonstrates delivery of
audience expectations or wider public value."
The BBC Director-General, Mark Thompson, said the new governance arrangements would
provide a robust framework for the BBC to operate within, and greater clarity of
expectations allowing the Corporation to concentrate on its core purpose of
providing programmes and services that inform, educate and entertain.
said that his management team had already embarked on a programme of change,
including efficiency measures to deliver greater investment into programme-making.
Mark Thompson said: "The public purposes set out in the White Paper are a clear remit for the BBC to
deliver, but achieving them will be a challenge and not a simple box-ticking
"The BBC is passionate about quality content and we want to deliver on
every appropriate platform programmes that are innovative, distinctive and
"We are developing a creative strategy that will be the BBC's
creative blueprint for the next Charter and set the UK's benchmark for quality
"The efficiency savings we are implementing will release more of the
public's licence fee into the services they are paying for and help deliver the
expectations they have clearly communicated through the Charter review process
outlined today in the Government's White Paper."
Notes to Editors
1. Guide to key elements of new BBC Trust
a. Purpose remits
The White Paper sets six public purposes for the BBC.
The Trust is required to
develop purpose remits which set out the priorities for each purpose and say how
performance will be judged, and to consult publicly in the course of developing
This is a new requirement. Preparatory work will begin although the purpose
remits will be a matter for the Trust to decide.
b. Service Licences
Service Licences are required for each of the BBC's UK public services.
licences must define the scope of the service, its aims and objectives and other
They must make clear how the service will contribute to the
public purposes and include indicators against which the Trust can monitor
The Trust must ensure that these indicators take into account the
views of Licence Fee Payers.
A framework document was published by the BBC Governance Unit for consultation in
Further preparatory work will be conducted by the Governance Unit
over the summer, in order to ensure the Trust can take decisions on Service
Licences as soon as possible.
c. Public Value Test (PVT)
Any proposals for a new public service or significant change to the BBC's
existing public services must be subject to a Public Value Test, overseen by the
The PVT involves a Public Value Assessment (PVA), conducted by the Trust,
and a Market Impact Assessment (MIA).
The MIA will be overseen by a Joint
Steering Group comprising Ofcom, BBC and possibly independent members.
will undertake the MIAs in line with a methodology agreed by Ofcom and the BBC.
The Trust will then consider the outcomes of the PVA and MIA and reach a
The Governance Unit published the methodology for the PVT - subject to the
Government's White Paper - in October 2005.
The Governance Unit will undertake
preparatory work in this area including with Ofcom in advance of the Trust.
d. Fair trading and competition
The Trust must develop a new Fair Trading Policy which will be more specific than
the BBC's existing Fair Trading Commitment and will apply to all of the BBC's
The Trust must also publish Competitive Impact Codes covering
aspects of public service activity that could raise significant competition
The Trust is must take account of Ofcom codes when doing so, must
consult publicly on draft codes, and must review them at least every three years.
The Governance Unit will begin preparatory work in this area and gather evidence
in order to inform the Trust's decisions.
e. Criteria for BBC commercial services
The Agreement sets out new governance arrangements for the commercial services.
The Executive Board will be responsible for oversight of the commercial services.
The Trust must set up and publish procedures for the approval of commercial
services, ensuring that the four criteria set out in the Agreement are applied.
f. Trust Accountability to licence fee payers
The Trust must consult publicly on key policies - such as fair trading and
accountability, and on the BBC's public service remits, services licences and,
through the public value test process, on changes to services.
Subject to the Trust's approval, further plans for engaging directly with licence
fee payers include:
Regular public meetings around the UK (like those held since July 2005 in
London, Glasgow, Cardiff and Belfast)
Regular public survey of 10,000 licence fee payers
Annual meeting with BBC management to review specifically the results of
the audience survey
2. Process of Charter review
The Government launched its Charter review process with a public consultation in
The BBC published its contribution to the debate about the BBC's
future role, Building Public Value, in June 2004.
The Government published its
Green Paper in March 2005 which included some firm policy decisions relating to
the Charter, licence fee funding and governance.
The Secretary of State also
announced she had invited Michael Grade to become the first Chairman of the
The BBC responded to the Green Paper formally in May 2005.
finalised, the Charter and Agreement will be the legal documents that enshrine
the BBC's remit and guide its operations for next Charter period.
In October last year the BBC published - for the first time ever - its case for
the next licence fee settlement.
The Government will decide on the level of the
licence fee later this year.
BBC Press Office