Green Paper on BBC Charter Review: BECTU response

31 March 2005

    Introduction

  1. BECTU is the trade union for workers (other than performers and journalists) in the audiovisual sector and specifically in the BBC. We have 7,000 members in our BBC Division and thus a close and continuing interest in the future of the Corporation. We responded to the earlier DCMS Consultation on Charter Review.
  2. Before engaging with the specific questions raised in the Green Paper, we strongly endorse the underlying proposal that the BBC's Charter should be renewed for ten more years from 2007. In doing this, we further endorse the existing model of Chartered status for the BBC - rather than statutory status by Act of Parliament. We entirely agree that the latter 'risks making the BBC more open to Government intervention' (p9). We also agree that a 10-year Charter 'is necessary to provide the certainty and independence that the BB needs' (p56) rather than an interim 5-year Charter requiring further review in only 2 or 3 years.
  3. We now move on to address the specific questions raised:

    4. The role of the BBC

    Q1: Do you think it is helpful to define the BBC's purposes in this way?

    Q2: Are these the right purposes?

    Q3: Are these the right characteristics?

  4. We broadly endorse the proposal that "'Inform, educate and entertain' should remain the mission statement of the BBC" (p23) but that this should be reinforced by a set of public purposes ie
    • sustaining citizenship and civil society
    • promoting education and learning
    • stimulating creativity and cultural excellence
    • representing the UK, its nations, regions and communities
    • bringing the UK to the world and the world to the UK
  5. We can further endorse the set of required characteristics of BBC content ie that it should be of high quality; challenging; original; innovative; and engaging.
  6. This broadly accords with our own views on the purposes and characteristics of the BBC as set out in our response to the earlier DCMS consultation on Charter Review and (in respect of public service broadcasting generally) in our response to Ofcom's Review of PSB. We particularly highlighted the BBC as the primary source of original programme production in the UK audiovisual sector.
  7. In characterising the BBC generally, we can certainly agree:
    • that 'it should set standards for other broadcasters in terms of the quality and distinctiveness of its service and their contribution to UK programming and production' (p20)
    • that it 'has a particular responsibility to serve UK audiences by providing more original programming (not repeated or bought-in) than any other broadcaster' (p29)
    • and that we should welcome the BBC's own strategy committing it to 'invest more in original UK drama, comedy, news, documentaries, the arts and music'. (p29).
  8. However, we would make two additional points of emphasis in this area:
    • Firstly, it follows from the requirement to' compete on the basis of quality' (p20) and to set a benchmark for other broadcasters that the BBC must retain the creative and technical resources to produce a critical mass of original programming in-house. We are seriously concerned that the Director General's programme of cuts and redundancies will jeopardise this. We will return to this issue later in this paper.
    • Secondly, while we accept the criticism that the BBC should not be reduced to merely competing for ratings on the basis of derivative programming, we also believe that the Corporation should never surrender the aim of universal provision for a mass audience. Retreating to the provision of what other broadcasters fail to deliver would undermine public support for the licence fee and thereby the long-term viability of the BBC.
  9. There are some other more specific issues raised in this section:
    • We note the BBC's unique role in training the industry. The Corporation is by far the UK's biggest investor in broadcast training and its contribution dwarfs that of the independent production sector (which has made inflated claims about its training contribution, with a great deal of reliance on 'on-the-job' training). This training role is a key component in delivering on the public purpose of 'stimulating creativity and cultural excellence' and should not be allowed to be undermined by the Director General's programme of cuts and redundancies.
    • We welcome the encouragement for the BBC 'to put together a film investment strategy to ensure that the best UK films are shown to a wider television audience' (p38). BBC investment in UK film production, added to a guaranteed outlet on television, will benefit both the BBC and the British film industry.
    • We support the retention of the World Service as a Government funded area of the BBC. We see no justification for reducing the number of vernacular languages it broadcasts in but would welcome the development of television as well as radio services.
    10. Q4: Do you agree that the BBC should be at the forefront of developments in technology, including digital television?
  10. We agree that 'The BBC needs to take a leading role in the organisation and funding of digital switchover, using the licence fee to bring the benefits of digital TV to all.' (p9).
  11. We note the BBC's existing successful role as a digital driver through the involvement in Freeview, which stands as a stark contrast to the abject failure of ITV through ITV Digital.
  12. We hope that the Corporation will be provided with the funding and resources to continue its role in promoting digital switchover and to establishing digital television as a universal service rather than a subscription led initiative. If adequate funding - over and above the BBC's own internal needs - is provided within the licence fee settlement, we would specifically support the BBC providing funding for Channel Four (as a public service broadcaster and a statutory corporation without shareholders) to cover its capital costs in achieving digital switchover.

    13. Funding

    Q5: Do you support the proposal for a further review of alternative funding methods, before the end of the next Charter period?

    Q6: Do you have a view on any aspect of the operation of the licence fee: concessions, its collection or its enforcement?

  13. Before addressing the specific questions we wish to state our strong support for the basic proposition that 'The licence fee remains the best way to fund the BBC �The licence fee should continue to fund the BBC throughout the next ten years.' (p58). We are among those respondents to earlier consultations who believed that 'the licence fee provided unparalleled value for money'. (p62).
  14. We set out our criticisms of alternatives to the licence fee in our response to the initial DCMS consultation. We retain the view that for the reasons set out in our earlier submission and in the Green Paper - the alternatives of direct funding from Government, of advertising and sponsorship; and of subscription are clearly inferior and undesirable alternatives to the licence fee.
  15. While not directly addressed in the Green Paper, we believe that forthcoming licence fee settlements should match broadcasting inflation and will therefore need to be set above RPI. We believe this will be necessary for the BBC to achieve the public purposes set out by Government. We note, moreover, that even in multichannel households, viewers continue to be willing to pay their licence fee in addition to subscription services.
  16. Specifically in response to Q5, we do not support the proposal for a further review of alternative funding methods before the end of the Charter period ie towards the end of switchover.
  17. We believe the basic arguments against alternative funding methods will continue to hold good over the period of the renewed Charter. We believe that it will be premature, within this timescale, to seriously contemplate a move to a levy on households or PC ownership; that subscription compromises universality; and that a 'mixed funding' model is merely a recipe for confusion and inefficiency. For similar reasons to the Green Paper's rejection of a shorter Charter period, we reject a mid-Charter alternative funding review. This will simply bring only unnecessary instability to the BBC at a time - digital switchover - when the Corporation needs certainty and independence. We believe there will be adequate scope for alternative funding debates in the natural cycle of Charter Renewal in 10 years time.
  18. On the issue of licence fee concessions, as raised in Q6, we agree that 'the current cope of licence fee concessions is about right' (p63). If there is a social case for additional assistance to low-income groups, we believe this is more appropriately provided through the benefit system than through extending concessionary licence fees.

    19. Governance and regulation

    Q7: Have we defined the roles of the BBC Trust and the Executive Board sufficiently clearly'?

    Q8: Is this the right way to define the public interest remit of the BBC Trust?

    Q9: How many of these options would you like to see adopted in the Trust's statement of promise. Are there any other options that you would like to see considered?

    Q10: Have you any views about how the BBC Trust should handle complaints?

    Q11: How many members do you think the BBC Trust needs?

    Q12: What skills and expertise do you think they need?

    Q13: Are there any particular communities or interest groups that you think the Trust members should represent?

  19. We will not address every specific question raised on Governance and Regulation, but we have a number of particular points we wish to make, following on from our earlier submission to the DCMS consultation.
  20. We can generally support the basic, underlying proposal to replace the Board of Governors with a 'BBC Trust' and a separate Executive Board. We see this as different in detail but not in principle from the BBC's own evolution towards a Governance Unit separate from BBC management. We believe this approach is clearly preferable to the use of an external regulator (whether a new body or Ofcom) - which would, in our view, be an unwieldy and ineffective solution, potentially too far removed from the life of the Corporation and therefore over-reliant on formal procedures.
  21. Other more specific points are as follows:
    • Q7: We support the provision of a separate body of expert staff for the Trust which, like the Governance Unit, should allow Trust members access to information and expertise unmediated by BBC management.
    • Q7: We believe greater clarity is needed about how 'regulatory responsibilities should be divided between Ofcom and the BBC Trust' and we are particularly wary of Ofcom's suggested role in relation to proposed new services. Our own view is that the BBC, through the proposed service licence agreements to be approved by the Trust, should be capable of conducting its own market impact testing and that the involvement of Ofcom may introduce at best confusion and at worst the self-interest of commercial broadcasters into BBC strategic decisions. The Trust would, in our view, be sufficiently independent of BBC management to take adequate account of these broader competition considerations.
    • Q9: We agree with all of the listed proposals for accountability and openness in the operation of the Trust. We believe that by de-mystifying their proceedings in this way, Trust members can win additional public confidence. We do agree, however, with the additional option of external, independent appraisal of Trust members, with the option for licence payers and stakeholders to submit views on their performance.
    • Q13: We fully agree that 'Trust members need to be able to reflect the interests of a wide range of different UK communities' and that they need expertise in the 'broadcast and media industries' (p12). We have long argued that the balance and composition of the BBC Governors is a matter of concern and we favour a system in which Trust members would be more broadly representative of the country as a whole. Specifically in terms of interest groups, we believe representation from among those who work in or for the BBC would bring a desirable extra layer both of accountability and of expertise.

    22. Organisation and infrastructure

    Q14: Do you think a 'window of creative competition' can be made to work? If not, would you support a raised quota for independent production in BBC television?

    Q15: Do you think a voluntary 10% quota for radio is sufficient? Or should the quota be increased or made mandatory?

  22. We strongly agree that 'The BBC needs to have sufficient scale to continue providing high quality services, excellence in training and research and to sustain a critical mass of in-house production (p13). We further note the Green Paper's strong endorsement of the BBC's role in respect of technological research and of training (p83-84). However in our view, neither the Director-General (in the current and future programme of cuts and redundancies) nor the Green Paper (in its discussion of the independent quota) are assisting in achieving the stated aim of sustaining this critical mass.
  23. The BBC does indeed, in our view, need to retain a strong in-house production base. As primarily a programme producer rather than a mere commissioner, the Corporation commands a broad range and critical mass of creative and technical skills in its labour force. This, we believe, is a guarantor of high quality programming across all genres and provides the necessary space to develop talent and innovation. This said, the in-house production base is - in the direct experience of BBC members - already ridden by chronic job insecurity and by 'staffing' figures that mask large numbers on fixed term rather than permanent contracts.
  24. The successive rounds of cuts announced by the Director-General will further undermine this production base both directly and indirectly (through cuts in essential support services such as occupational health and safety, training and film/tape libraries). Ironically, some functions will simply be outsourced and thereby provided less efficiently but with increased transaction costs and profit margins funded by the licence payer.
  25. The end result will be a BBC weakened and less able to rise to the challenge set out in the Green Paper. The Director-General's calculation appears to be that at a 'political level' - regardless of the practical impact of these cuts - there will be a favourable response to this ritual of self-inflicted 'savings'. Sadly, we fear he may be correct and that despite the lip-service paid to the value of in-house production, this debate is now fundamentally slanted in the opposite direction.
  26. This slating of the debate is, in our view, apparent in the Green Paper's discussion of independent production. Before indicating our concerns on this we firstly acknowledge and approve that the Green Paper does not - despite some strident lobbying from independent producers - set out any immediate proposal for an increase in the independent quota and that a number of the specific arguments for in-house rather than independent production are set out in paragraph 7.11.
  27. The Green Paper refers to the changes - favourable to independents - introduced following the ITC review of the programme supply market; to the BBC's proposals for a 'window of creative competition' (which, in effect, provides for a 40% independent quota); and to Ofcom's forthcoming review of the production sector. The future direction of policy is posed as a choice between the BBC's WOCC (where the Green Paper can 'support the principles' (p87) but requires a more detailed examination of how it will work) and the option of an increase in the statutory independent quota. Completely absent from the discussion is any critical view of the independent sector itself.
  28. We believe that this uncritical view of the independents is now a well-established characteristic of DCMS and of successive regulators. We believe the public policy debates in this area have become distorted and that a more balanced and even-handed approach is necessary and desirable. Some of the points we hope could be considered are as follows:
    • While attention is drawn to the BBC's failure to meet the independent quota in 2 recent years (which is at least partly explained by changes in the definition of independents) there is no acknowledgement of the successive and significant year-on-year increases in spending by the BBC on independent production throughout the recent period.
    • Having been created by an act of public policy the independent sector is now large (recent estimated annual turnover £1.5b for the top 150 companies); increasingly concentrated (with the largest 5% of companies making 80% of the programmes and broadcasters habitually dealing with small groups of preferred suppliers); and - in terms of the super-indie - extremely well rewarded financially. The independents are already the largest source of programme supply in some areas; the larger independents already dwarf many of the smaller ITV franchises; and yet the independents' brilliantly effective lobby is for a remorseless further increase.
    • The independents are part of the broadcasting establishment and should now be treated as such - with increased responsibilities to match their increased rights under the new terms of trade. Their record on employment, on training, on equal opportunities, on regional production and on individual creators' rights should be given the same close scrutiny as are the practices of the BBC.
  29. In the light of this, we do not favour further changes in the independent quota. We question the all-but-spoken presumption that further realignment is necessary in favour of independents and against in-house production, and we do not believe further 'quota-filling' will ultimately benefit audiences. We believe the value of the in-house production base (which, once taken below a critical mass, would be very hard to recreate) is undervalued, under-examined and under appreciated in a debate which seems to operate on terms set by the independents.
  30. In specific response to Q14, we therefore think that the WOCC will be harmful rather than helpful to the future of the BBC and we do not support a raised quota for independent production.
  31. On the linked question of the voluntary 10% quota for radio, we believe the same underlying arguments on the relative merit of in-house and independent production apply. The BBC, which often exceeds this quota, is proposing to extend its scope. BBC radio services are generally extremely well regarded by audiences and we there see absolutely no justification for a change in the current 10% voluntary arrangement. We believe public policy in this area should be guided by the interest of the audience and not by the commercial self-interest of independent producers for radio - and certainly not in a context where commercial radio broadcasters have, compared to the BBC, made no remotely equivalent contribution to promoting independent production.

    32. Scope of publicly-funded services

    Q16: Do you agree that the BBC should be able to propose changes to its range of services over the course of the next ten years?

    Q17: Do you agree with our proposals for handling new services?

  32. We agree, as a starting point, that 'The BBC should continue to be a broadcaster of scale and scope, active in all the main genres and with the ability to adapt to new technologies and new consumer developments' (p3). We further welcome the policy statement that 'The current range of BBC services has broad public acceptance and should be maintained' (p87), and have no objection to the proposal that 'each service needs to be defined by a licence that gives it a clear, distinctive form and remit' (p89).
  33. We acknowledge that during the Charter period the BBC - faced for example with new platforms or means of delivery - may need to vary the range of services it provides. In relation to Q16, we can therefore clearly agree that the BBC should be able to propose changes to its range of services over the course of the next ten years.
  34. In terms of the proposals for handling new services we can further agree that the BBC Trust should test any such proposals through 'a rigorous and open public value test' (p89). As indicated above (paragraph 21), however, we are wary of Ofcom's suggested role in the process ie that it should agree the methodology of assessment and that it should carry out a market impact assessment - with the Trust only recommending the proposed service if the public value 'clearly outweighs any adverse market impact' (p89). We believe that the involvement of Ofcom may introduce at best confusion and at worst the self-interest of competing commercial broadcasting into BBC strategic decisions. The Trust should, in our view, be able to conduct or commission any necessary market impact tests and should be sufficiently independent of BBC management to take full account of the broader competition considerations when making its recommendations on new services.
  35. A further specific point arising from this section concerns the proposed Creative Archive. While supporting the proposal in principle, we believe it should only go forward when satisfactory arrangements are in place to deal with claims concerning individual creators' rights, including moral rights.

    36. Commercial services

    Q18: How strictly should the BBC's commercial services be restricted to those businesses that are linked to public purposes and public service?

    Q19: Is the existing fair trading commitment a useful addition to the arrangements for regulating the BBC's commercial services? If not, what option would you prefer?

  36. We are pleased that the Green Paper acknowledges 'There is widespread support for the idea that the BBC should make money on behalf of the licence fee payer out of assets paid for by the licence fee payer' (p99). We further support the view that 'The BBC should be encouraged, as it is now, to generate as much income as it can through commercial activity' (p99). Based on this, we can agree in principle that the commercial services should be linked to public purposes and public services - especially in the light of the European Commission's recent rulings in respect of the commercial activities of public service broadcasters in Germany, Holland and Ireland.
  37. We do, however, have a clear disagreement with the Green Paper's and the BBC's attitude to parts of its commercial services which are clearly, in our view, still linked to its public purposes ie the possible sale or transfer of BBC Broadcast and BBC Resources.
  38. BECTU opposed the initial establishment of Broadcast and Resources as separate commercial subsidiaries of the BBC. Management's justification at the time, in relation to Broadcast, was that this would secure significant amounts of commercial work. This has not materialised and we believe the only major attraction to the market is the contractual guarantee of 7 more years work from the BBC. When that contract expires, the BBC itself will be at the mercy of the market. We have in Broadcast a competitively priced operation producing a high quality product overwhelmingly for the BBC itself. We see no justification for a sell-off other than a cynical wish to reduce the BBC headcount.
  39. Similar arguments can be made in relation to Resources but with a bigger question about the future flow of work, especially in the light of the proposed drive to move programme making out of London. A long-term guaranteed supply contract is therefore less likely, making the sale a less viable proposition.
  40. We believe the BBC's original decision to make Broadcast and Resources into commercial subsidiaries was demonstratively a mistake. We regard these as essential parts of the BBC's long term future operations. We therefore oppose the proposed sales of BBC Broadcast and BBC Resources and urge the Government to reconsider its attitude on this issue.
  41. In terms of the regulation of commercial services, we consider that BBC's Fair Trading commitment provides a robust and proven framework for ensuring compliance with competition law. The track record demonstrates, in our view, that this system has been entirely effective. We see no justification for an extension to Ofcom's existing role and certainly not for Ofcom to have the right of approval over the BBC's internal rules in this area. Giving Ofcom the potential right to full examination of the BBC's financial operations would, in our view, be totally inappropriate for a regulator with close interests in the commercial broadcasting sector.

    42. The wider system of public service broadcasting

    Q20: Do you agree that the case for a plurality of publicly - funded broadcasters should be kept under review?
  42. We have set out our view on a number of issues raised in this section in our response to the Ofcom PSB Review and to the initial DCMS Consultation on Charter Review. Some of the key points - which have been expanded on more fully elsewhere - are as follows:
    • We regard the BBC as the cornerstone of PSB.
    • We support equally strongly the broader system of a plurality of PSB providers.
    • We believe that Ofcom's proposed £300m funding for a Public Service Publisher should be channelled via existing PSB providers (principally ITV and - if a case can be made on financial grounds - C4) rather than a separate and freestanding PSP.
  43. While welcoming the Green Paper's rejection of any immediate move towards 'top-slicing' of the licence fee (ie diverting some licence fee resources to other PSB providers), we would strongly oppose any subsequent move in this direction. We are not convinced that, even with an enhancement of the licence fee, such a proposal would not be at the expense of funding needed for the BBC itself, either initially or in the future. We further believe this would lead to an erosion of public support for the basic BBC licence fee. The possible additional introduction of an external body such as a Public Service Broadcasting Commission would, in our view, simply insert a layer of chaotic competition, redirect scarce public resources to private profit; and, as a final consequence, produce an inferior broadcasting service for viewers.
  44. Our own view on the appropriate source of funds for the broader PSB system - and specifically for the proposed Public Service Publisher - is to favour a levy on the turnover of UK licensed broadcasters (other than PSB providers) - eg BSkyB. This could be extended to all delivers of broadcast programmes - which could in the future include telecom and internet service companies. Such a levy could be linked to the provision of original PSB programming ie the more such provision, the less the levy.
  45. In the light of this we do not favour the proposed interim review concerning the possible use of licence fee income for broadcasters other than the BBC. Such a review would, in our view, be extremely destabilising for the BBC only part way through the Charter period and would be almost equivalent to having a interim 5-year Charter review. There is no reason why ideas for the future of PSB cannot continue to be explored and debated in the industry without the need for a formal review. We believe the decision to grant the BBC a clear 10-year licence period is wise and that it should not be undermined in this way.

    46. Conclusion

  46. We welcome many of the proposals in the Green Paper - including the renewal of the Charter for 10 years from 2007, the retention of the licence fee as the method of funding and the reform of the Governors by means of the BBC Trust rather than the use of any external regulator. However, we have major concerns in respect of the treatment of the BBC's in-house production base; we would strongly oppose any increase in the independent quota; and we also oppose the proposed sale of BBC Broadcast and Resources. We do not favour the proposed interim review in respect of alternative funding for the BBC itself and of the use of licence fee income for other PSB broadcasters. We hope you will take note of our views and look forward to the next stage of the Charter Review process.
Last updated 18 June 2005