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Michael Grade

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BBC will change to deliver its Charter remit

Category: BBC

Date: 14.03.2006
Printable version

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 institution.


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 choice.


"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 commitment.


"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 United Kingdom.


"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 confident."


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.


He also 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 exercise.


"The BBC is passionate about quality content and we want to deliver on every appropriate platform programmes that are innovative, distinctive and entertaining.


"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 content.


"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 them.


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.


The licences must define the scope of the service, its aims and objectives and other important features.


They must make clear how the service will contribute to the public purposes and include indicators against which the Trust can monitor performance.


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 October 2005.


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 Trust.


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.


Ofcom 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 decision.


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 activities.


The Trust must also publish Competitive Impact Codes covering aspects of public service activity that could raise significant competition issues.


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)


Dedicated website


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 December 2003.


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 Trust.


The BBC responded to the Green Paper formally in May 2005.


Once 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




Category: BBC

Date: 14.03.2006
Printable version


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