BBC World Service is responsible for commissioning and scheduling its own programmes and for making programmes for its language services, but purchases English language programme making and technical and support services from other groups of the BBC ('the Suppliers'). BBC World Service also receives services from and supplies services to the BBC's commercial subsidiaries ('the Subsidiaries').
It was agreed by a joint Foreign and Commonwealth Office (FCO)/BBC World Service Working Group that the BBC would draw up guidelines to govern the trading relationship between BBC World Service and other parts of the BBC in order to ensure that BBC World Service maintains its distinctive voice and to preserve the clear separation between Grant-in-Aid and licence fee income. Each of the Suppliers then drew up detailed agreements with BBC World Service.
KPMG LLP (the BBC's external auditors) have received a summary of the value of transactions and the related cash flows which have taken place during the year between BBC World Service and the Suppliers and Subsidiaries. KPMG LLP have reported to the BBC's Executive Fair Trading Committee that, in their opinion, the information included in the summary of transactions for the year ended 31 March 2008 has been accurately extracted from the books and records of BBC World Service and the Suppliers and Subsidiaries, and has been properly prepared on the basis of cost allocation and apportionment methods set out in the agreements between BBC World Service and Suppliers and Subsidiaries and, on this basis, there has been no material cross-subsidy between Grant-in-Aid and licence fee funds or between Grant-in-Aid and the BBC's commercial subsidiaries.
BBC Executive Board statement on BBC World Service Trading Protocols
The BBC Executive Fair Trading Committee is responsible for monitoring and reviewing compliance with the Trading Protocols. Following reports by the Head of Fair Trading and by internal and external auditors the Executive Fair Trading Committee is satisfied that:
+ the Trading Protocols reflect the requirements of the FCO/BBC World Service Working Group;
+ agreements consistent with the Trading Protocols are in place;
+ there has been no material cross-subsidy between Grant-in-Aid and licence fee funds or between Grant-in-Aid and the BBC's commercial subsidiaries.