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24 September 2014
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Michael Grade


Michael Grade CBE

BBC Chairman

Response to the Green Paper


Given at the Westminster Media Forum

Tuesday 24 May 2005
Printable version

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Ladies and gentlemen, the document we are launching today sets out the BBC Board of Governors' detailed response, reflecting the interests of licence-fee payers, to the proposals contained in the Green Paper.


In broad terms, we are positive about the Green Paper. Occasionally we feel it does not go far enough. And there are areas where it raises significant questions on which we want to make our own views clear. But in general terms we welcome it.


What I'd like to do this morning is to outline the main points of our response in four key areas.


These are:


the role of the BBC

how to fund the Corporation

issues of governance, regulation and accountability

and finally, the question of the scale and scope of the BBC


First, the role of the BBC.


The Green Paper outlines a set of purposes for the BBC - sustaining citizenship, education and culture; serving different communities; playing a global role and, for the next Charter period, building Digital Britain.


On behalf of the BBC, the Governors accept these purposes.


They give us - and the licence-fee payers - a clear yardstick against which to measure how well the BBC is delivering.


The BBC should be judged against results. The assessment framework we are developing - based on reach; quality and distinctiveness; audience impact; and value for money - will enable us to do this.


The results of our assessments will be published - further evidence of a more open and transparent BBC.


Next: the question of how best to fund the BBC.


We welcome the decision to grant a new Charter for ten years and to confirm licence-fee funding for the whole of that period.


The licence fee is central to the whole idea of the BBC as we know it. We feel strongly that the fundamental strengths of the licence fee system will remain valid - if not even more valid - in the fully digital world to come.


So while we accept that the funding issue may be revisited by a future Government, we would want it to recognise that the licence fee is integral to what the BBC delivers for its licence-fee payers: independence, universal availability, and pure focus on the public interest.


And we would also suggest to Government that it makes good common sense to await completion of digital switchover before embarking on the next funding review.


There is one funding question raised by the Green Paper on which we remain fundamentally opposed.


This is the idea of contestability, of top-slicing the licence fee.


This would break the clear and well-understood line of accountability between the BBC and the licence-fee payer.


It runs entirely counter to the need to increase accountability, a key emphasis in the Green Paper.


It would pose a threat to the political independence of the BBC, handing a punitive fiscal sword of Damocles to any unscrupulous government that wanted to bring the BBC to heel.


And it would seriously weaken the BBC's ability to invest in content at a time when the provision of public service programming from other public service providers is in doubt.


Using the licence fee to solve a theoretical future deficit in PSB provision is a thoroughly bad idea. Not good news for viewers and listeners.


The next area of response I want to outline concerns governance, accountability and regulation.


The present board of Governors accept the Government's decision to change the way the BBC is governed. We would have preferred that the radical changes we have already made had been given a proper chance to prove themselves.


But it is difficult to object to the Government's new model since it clearly does meet the principles we ourselves laid down at the start of the debate. The future model will increase public confidence by creating a clear separation between, on the one hand, the management of the BBC and, on the other, the new Trust charged with setting BBC strategy and holding management to account.


This model maintains the BBC's independence and we are confident it can be implemented so that, maybe for the first time, licence-fee payers can be totally comfortable that their interests are the prime consideration for the Board, not the interests of the institution itself.


On the detail of the plan: we agree that the new Trust should probably not have more than 12 members. We also feel the Trustees should not be chosen strictly on the basis that they represent certain interest groups, but rather for the broad range of skills and expertise that they bring.


There is one exception to this. In the new age of devolution, we do think it's vital that the whole UK is heard in the Trust's deliberations. Therefore we are proposing that there should be a Trustee from each nation, connected to the accountability structures the Trust decides to create in each nation. Such 'ex officio' Trustees would of course have to understand that their primary responsibility is to represent ALL licence-fee payers, not just their national constituents.


On the subject of accountability, it is clear in the modern age of governance that the BBC must be more open and transparent; particularly in the way it listens to audiences and consults on changes.


The Governors have already approved a complete revamp of the BBC's complaints procedures to increase their openness and fairness. But we are looking to go further, by improving the processes for handling appeals, and we will soon consult on the proposed changes.


We also accept the Green Paper conclusion that the status quo - long debated, and eventually agreed in the Communication Act (2003) in terms of the role of Ofcom in the affairs of the BBC - is the right option.


We certainly recognise Ofcom's value in setting common standards across broadcasting in many areas, but the BBC has a unique mission and a unique funding mechanism. Delivering its remit should be the responsibility of its own unique governance body; clearly the Government agrees that there is a role for the Trust AND a defined role for Ofcom - which is, after all, a private sector economic regulator.


Lastly, on the scale and scope of the BBC:


We accept the Green Paper proposal for increased flexibility when it comes to adding or removing services in response to changing audience expectations and technologies.


Indeed we feel the Green Paper rather under-estimates the potential impact of new technologies in the years ahead.


This is not just a matter of the switchover to digital television.


Digital radio, digital satellite, HDTV, mobile platforms,

pod-casting, on-demand delivery via broadband - these, and no doubt many more technologies as yet unveiled - also have the potential to transform the media landscape and provide new ways to build public value.


So it is vital that the BBC remains agile, able to respond flexibly, on behalf of licence-fee payers, to the new opportunities that open up and the new ways that licence-fee payers wish to enjoy BBC content.


The introduction of our new Public Value Test will ensure that any proposed new service, or substantial change to an existing service, is subject to rigorous and objective scrutiny, both in terms of audience need and of possible market impact - BEFORE any decision is made by the Trust.


The Green Paper challenges the BBC to ensure that its contribution to UK production furthers the economic development of the UK beyond London. As you know, the BBC has committed itself to a major shift of production from the BBC to the rest of the UK, with a new broadcast centre in Manchester and large increases to network investment in Scotland, Wales and Northern Ireland - and a new tier of ultra-local services across the UK. All of the detail of this agreed policy is, of course, subject to rigorous value for money testing by the governors.


In addition, the BBC has spelled out, in terms, its commitment to supporting independent production. These are clear benefits for licence fee payers in ensuring that the BBC attracts and sustains the best ideas from both in-house production and from the independent sector, on a fair and equal basis of opportunity.


The governors have confidence that the proposal for a WOCC - a window of creative competition - is the best way to open up BBC commissioning and the licence fee to independent producers, while maintaining a sustainable in-house production base with all the benefits that brings: including, not least, the training it provides across the broadcast industry. It will only work if there is a level playing field between in-house and independent commissioning. The governors will police this rigorously - by which I mean zero tolerance.


In the near future, the Board will consider detailed plans from management designed to ensure meritocracy and transparency in the way the BBC commissions all output. The Board will want to ensure that the BBC is fair to all the stakeholders and that the needs and interests of licence-fee payers are paramount.


In Radio, the voluntary ten per cent quota has been extended, releasing a further 3,000 hours for independent commissioning. We do not believe there is a need to make the radio quota mandatory.


On the BBC's commercial activities, I was particularly pleased to see the Green Paper's acknowledgement that they bring significant benefits to licence-fee payers. The BBC has recently taken steps to withdraw from activities that are not related to its core public purposes.


Commercial efficiency is the primary purpose of the BBC's activities in this area, but we accept that the other criteria set out in the Green Paper must define the scope and manner in which the BBC commercial activities are undertaken.


It is the licence-fee payers' investment that has created the intellectual properties that drive these commercial revenues, and they are entitled to a proper return on that investment.


But licence-fee payers are consumers in the wider market-place too, and the Board will wish to ensure that the BBC's impact on that wider market-place does not inhibit consumer choice.


Well, those are the main outlines of our response to the Green Paper.


During the ten years of the BBC's next Charter, the broadcasting landscape faces revolutionary change. The responsibility of the BBC Governors now, and of the BBC Trustees in the future, is to ensure that the interests of licence-fee payers are properly represented and protected through the huge changes ahead.


The BBC welcomes the Green Paper and its vision of a strong and independent BBC - a BBC putting its creative energies at the service of the public, helping to lead Britain into the next phase of the digital revolution, and working to ensure that the benefits of that revolution are available to everyone.


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