Review of the future funding of the BBC: BECTU's written evidence

(to the UK Government Davies Review Panel) 26 March 1999

BECTU is grateful to the Review Panel for the invitation it has received to submit written evidence regarding the review of the future funding of the BBC.

BECTU does not believe that the Panel can meaningfully examine the future funding of the BBC without having some clear idea of what it is that the government and society want and expect from the BBC.

BECTU takes the view that the BBC should be required to provide universal access to all and a diversity and plurality of programmes not covered by other broadcasters. The BBC should be at the forefront in this technology driven age but it must ensure that its efficiency savings do not damage the creative powerhouse. The savings that the Corporation have been making have resulted in BBC Production losing many staff to the independent sector and such departments as drama, and light entertainment are failing to win their share of the business. The internal market continues to depress the creative staff in the organisation and its administration is costly, unworkable and diverts time, effort and money from programme making.

We believe that the Government should review the settlement for years 4 and 5 announced by the last Government.

The BBC are in a very competitive market place and their rivals are not required to provide the diversity and public service which is required from the BBC. At the time of the last Licence Review total revenue for all commercial TV companies was double that of the BBC, today it is four times and by the time of the next Licence Review commentators are expecting it to be eight times the BBC income. That talent costs and the rights to sport and movies have increased way ahead of inflation. The BBC have 40% of the television audience and its reach is 95%. In order to maintain this the BBC need RPI plus 2% settlements in the future.

It is not only broadcasting inflation that means the BBC need an RPI plus settlement, but the move from analogue to digital increases expenditure. The total cost of distribution is considerably higher under digital than analogue.

BECTU is concerned that the government may oppose an RPI plus formula, however the panel must give serious consideration to what other options there are. The government could consider basing the licence on GDP. Overall we believe that bearing in mind the cost viewers have to pay to cable and satellite operators, the cost of the licence fee even with an RPI plus 2% increase in future years will continue to be excellent value for money at less than the cost of a daily newspaper.

BECTU views with great concern any proposition to introduce commercial advertising or sponsorship into the BBC, and believes that such a move would not only damage the BBC but would have serious consequences for ITV, Channel 4 and Channel 5.

We are aware that there are those who support the introduction of commercials and sponsorship on the new BBC channels, again we believe this would be a grave error of judgement as some of the new channels cross over on to BBC1 & BBC2, for example, News 24 during the night, and the likely level of finance from this source certainly would not be enough to replace the licence fee.

BECTU recognises the concerns of the Selection Committee in relation to concessionary licences to the disadvantaged. BECTU supports the BBC's contention that any reform would need to be guided by some key principles. These being:

1. any changes must be revenue neutral for the BBC;

2. they must be seen to be fair, enforceable and sustainable;

3. they must not give rise to anomalies or inequalities or threaten the government's aspirations that the BBC remains a high quality broadcaster.

BECTU supports the continuation of the concession for the Blind. At the moment there is no similar concession for the deaf and maybe this should be considered. However, probably a more important point for the deaf would be the BBC agreeing to at least match the ITC targets for subtitling.

Free licences for pensioners would cost the BBC £600m of their £2.2 billion income, that equates to the entire budgets of BBC2 and Radio stations 1 to 5 inclusive. If it is to be revenue neutral, and we believe it must be, then the cost would be £40 extra on the licence.

If free licences are to be provided to the Government's definition of poor pensioners (those on income support) then this would cost £150m or £10 on the licence fee. We are sympathetic to the argument being made for poor pensioners. However we do not accept that the BBC should pay the bill.

The private utilities do not pick up the bill for concessions on heating rates in winter, this is picked up by the Social Security budget. At the end of the day all concessions must be revenue neutral.

BECTU does not oppose most of the BBC commercial interests. We believe their commercial activities should continue to be regulated by the OFT, MMC and DG4.

BECTU believes that the BBC should explore the possibilities of commercial exploitation of its on-line services.

We would like to have greater transparency in the BBC accounts for all commercial interests. BECTU does not accept that the published BBC accounts are open or transparent enough. It should be possible to have a clearer picture of how the BBC spends the licence payers money from its published accounts. It is not unreasonable for those who have an interest in these matters to want to know how much the BBC spends annually engaging management consultants.

The BBC must guarantee that BBC staff and resources will be used to support BBC programme making prior to providing their facilities for commercial gain.

We support the BBC being self regulatory, however we would like to see a Board of Governors more representative of society.

BECTU would urge the panel to consider the points made in this submission the key points being:

• Review the licence settlement for years four and five

• Support the continuation of a licence fee as the main means of funding the BBC

• All concessions to pensioners, etc. must be cost neutral

• Ensure the BBC income matches Broadcasting inflation by providing RPI plus settlements

• End the internal market in the BBC

• Slow down the levels of efficiency savings as it is damaging staff moral, and the creative powerhouse

• Commercial interests to be secondary to supporting BBC programme makers

• BBC to remain self regulatory