Following is the text of the statement made by Tessa Jowell, the Culture Secretary, to the Commons today on the future of the BBC:
With permission Mr Speaker, I would like to make a statement about the future of the BBC.
I will set out for the House the background to the current Review of its Royal Charter, and our proposals set out in a Green Paper on its funding, governance and purposes.
Published today, its title is 'A strong BBC, independent of Government'.
Alongside the NHS, the BBC is one of the two great institutions of British national life.
For over 80 years, it has sought to represent the highest standards in broadcasting. Its archives are a record of our national collective memory, from the Coronation to the 1966 World Cup. From Dixon of Dock Green to The Office.
Since the Corporation's foundation, its Royal Charter has been reviewed by the Government roughly every ten years, the last in 1996.
Like its predecessors, this review has examined the Corporation's scale and scope, its funding and governance. But this one has been unique. In the level of public consultation, and in tackling perhaps the greatest challenge the BBC has ever faced – the changes in TV technology that will soon result in a wholly digital Britain.
The BBC, like any public institution, needs to adapt if is to serve its audiences and keep pace with change. But its values, its global reach, its standards and its editorial independence must be preserved and strengthened.
For that is what the British people want. The results of our public consultation and research are very clear.
Overwhelmingly, the public like and trust the BBC:
- They understand and support the principles of public service broadcasting
- They want the BBC to have scale
- They want it to set the highest standards
- They want it to be independent of Government, Parliament or any commercial influence
- And they want it to listen.
But they also have significant criticisms:
- That the BBC is not responsive enough to their interests.
- That there has been a decline in quality – particularly in television: a tendency towards copycat programming at the expense of real innovation.
- Some people worry about the value for money of the licence fee and particularly those who want but can't get Freeview.
- And some of the BBC's commercial competitors believe it has too much freedom to expand into new markets and stifle competition.
We have to find a balance between meeting those concerns while ensuring that public service broadcasting leaves a footprint in every medium, a guarantee of quality, impartiality and innovation.
That balance is harder to strike as the media change.
In 1988, Britain had four TV channels. Today, there are more than 400.
In a few years, we will become a fully digital nation when the switchover from analogue to digital TV is made.
And as technology changes, so do the public's expectations. The challenges facing the BBC are enormous, as it plays a leading role in guiding the nation through this period of change. To do so it needs certainty about its future, so after closely considering the Select Committee's alternative recommendations in this area, we have decided that the BBC's Charter should be renewed for a further ten years.
Now I would like to turn to the question of funding.
The review looked at the different options for funding the BBC, and consulted the public.
Perhaps surprisingly, the Licence Fee retains a high degree of public support.
And although not perfect, we believe it remains the fairest way to fund the BBC. So it will continue throughout the next Charter. In the coming months, we will decide on the right level for the Fee after 2007. But beyond that we have to take account of the rapid advance in technology and media consumption.
So during the life of the next charter we will:
- review the case for alternative funding models, particularly subscription, to make a contribution after 2016;
- and review the risk to plurality in public service broadcasting, encompassing Channel 4's longer-term position; whether any public funding (including licence fee income) should be distributed more widely beyond the BBC in order to sustain plurality; and, if so, how any such distribution might take place.
The old definition of the BBC's purposes as being to educate, inform and entertain still hold true.
But by itself it is no longer enough in a world of ever increasing choice. So we have identified five new purposes for the BBC, which I set out in the Green Paper. In addition, over the next charter period we expect the BBC to play a substantial part in developing a digital Britain.
The BBC will play a leading role in the process of switching Britain from analogue to digital television. It will be at the forefront of public information campaigns. It will help to manage 'Switchco' – the organisation that will co-ordinate the technical process. And it will help to establish and will fund schemes that help the most vulnerable consumers.
Hon Members will know from their own postbags that there is disquiet that in some cases households are expected to pay the fee when they cannot receive the full range of BBC services. That is why we think it is important that the BBC should help to drive the switchover process.
Governance
Now I would like to move to the issue of governance, where we will introduce radical change – a BBC-specific model that gives expression to the values on which the BBC is built.
There is widespread consensus that the current model of Governance is unsustainable.
The Governors' dual role as cheerleader and regulator does not sit easily in a public organisation of the size and complexity as the BBC. It lacks clarity and accountability.
Licence fee payers need to know who is speaking up for them, and they deserve to know how important decisions are made and what influence they can exert.
So the Green Paper sets out the new model which we intend to introduce. One that reflects the public value approach of the current BBC model, but which also draws significantly on Lord Burns' work.
The BBC Governors, with their dual role of managing the BBC, but also holding it to account, will be replaced by two bodies, each with a clearly defined role.
A BBC Trust will be the custodian of the BBC's purposes, the Licence Fee and the public interest.
An Executive Board will be accountable to the Trust for the delivery of the BBC's services. The functions of the two bodies will be clearly defined, enabling the Trust to judge the management's performance clearly and authoritatively.
So the Trust will have the high-level powers of approval over BBC budgets and strategy.
It will have the tools to hold the BBC to account, issuing new service licences for each BBC service and applying a public value test to proposals for new services.
Michael Grade, whose current appointment as Chairman of the BBC continues until 2008, will be the first Chairman of the Trust.
The Trust will represent the licence fee payer. To do that, it will need to listen to them and to consult them. Ways of doing this might include webcasting Trust meetings, publishing audience research or electing local representative councils.
Day-to-day management will be carried out by the Executive Board, which will be strengthened by a significant minority of non-executive members and whose Chair will be appointed by the Trust.
Over the past months, we have examined closely the changes Michael Grade has made. We have also studied the model proposed by Lord Burns for an external Public Service Broadcasting Commission.
Our Trust model builds in the strongest elements of the BBC's own proposals. These include the establishment of a separate Governance Unit; the introduction of Service Licences and the application of public value tests to new services and any major changes to existing ones.
The BBC's proposals are a step in the right direction but as they stand they fall short of the accountability test because they do not resolve the confusion of the Governors' dual role and depend too much on behavioural rather than structural reform.
So BBC Trust incorporates the key recommendation from Lord Burns that there should be clear separation of different responsibilities, to avoid confusion or capture.
However, we believe that the Burns proposals for a unitary BBC board, with a Government-appointed Chair, and an external PSB Commission, also with a Government appointed Chair, would fail to provide sufficient authority, clarity or distance from Government.
Nor do we believe that now is the right time to decide whether contestability – or any other form of wider funding for PSB – may be appropriate in the future.
Our proposal makes sure there is only one, clear sovereign body and only one Government-appointed Chair. That will make the Trust a powerful advocate for the public interest, able to safeguard the BBC's independence.
But strong does not mean over-mighty, and we have to ensure that the BBC deals fairly with the wider market.
The BBC's competitors have become increasingly concerned about the impact a publicly funded BBC can have on their businesses. Successive Governments have allowed the BBC to be, in effect, a desirable market intervention.
But we also need it to be constrained when its interests collide with the commercial sector and threaten the choice and quality of programming from other broadcasters.
It should not play copycat.
Or chase ratings for ratings sake.
We do want the Corporation to maximise its income from commercial services, but we also want to see a clear link between those services and its public purposes.
To achieve this, the BBC will be subject to tough new internal and external processes.
Ofcom will be given powers to conduct market impact assessments for proposed new services. Ofcom will retain full Competition Act powers in relation to the BBC, and in addition we will consider giving it a new power of approval over the BBC's internal code on fair trading.
Another area of debate is the BBC's use of independent productions, the balance between in house and externally commissioned programmes. I want to ensure that the licence fee truly becomes venture capital for creativity. That it is used to put the finest talent on the air.
25 per cent of its television productions already have to be commissioned from the independent sector.
But I believe there is scope to go further. We will consider a range of options for reform in this area, including the BBC's proposal for a new 'window of creative competition" and increases in the existing quotas. Either way, I expect to see substantial progress in this area. The BBC has exclusive access to the licence fee. In return, I want it used to encourage independent productions as well as in-house.
For radio, the BBC has adopted a voluntary 10 per cent quota. We will consult on whether that is sufficient.
To reflect the whole of the UK and its different communities, the BBC also needs to make sure that a significant slice of production takes place outside London and it needs to provide a range of specific services for the UK's Nations and regions. People should see the full diversity of the UK and their local community, reflected in mainstream as well as regional programming
Conclusion
In reaching these conclusions I am immensely grateful to Terry Burns and his Panel, to Michael Grade and the BBC, to Ofcom and, most of all, to the members of the public who, in their thousands, made their voices heard. We have endeavoured to take the best of what they have told us.
In a changing world values still endure.
In a changing world trust becomes ever more important in people's lives.
So in our changing world this Government will secure a BBC that belongs to its Licence payers and embodies the values the British people want.
• A BBC that promotes citizenship and builds our civil society.
• A BBC that promotes education and learning.
• A BBC dedicated to creativity and cultural excellence
• A BBC that celebrates our nations, regions and communities.
• A BBC that brings the world to the UK and the UK to the world.
• A BBC which is strong, independent and securely at the heart of British broadcasting for ten more years.
Mr Speaker, this Green Paper will deliver a secure and stable BBC providing high quality programmes to the people of Britain, and I commend this Statement to the House.
