DCMS A BBC For The Future Rev1

A BBC for
the future:
a broadcaster
of distinction
May 2016
#yourBBC
A BBC for the future:
a broadcaster of distinction
Presented to Parliament
by the Secretary of State for Culture, Media & Sport
by Command of Her Majesty
May 2016
Cm 9242
© Crown copyright 2016
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Contents
Foreword 5 3. Enshrining independence

and accountability 46
Key recommendations 6 Creating a unitary board for the BBC 48
Introducing an external regulator 51
Executive summary 8 A new framework and licensing regime 54
Reforming regulatory processes and powers 56
1. Introduction: the BBC is much loved and A longer Charter 57
remains a central part of British society 18 Increasing accountability to the nations 59
Changing context 20 Continued partnership with S4C 59
A central role for public service broadcasting 22 An easier, more efficient complaints system 60
Maximising public value, adapting further 23 Engaging with the public 61
What the BBC does and how it compares 24
4. Supporting the creative sector 62
2. Prioritising distinctiveness and serving Assessing market impact 65
all audiences 26 Making the BBC a better partner 66
The BBC’s mission 28 Content distribution 69
Reforming the public purposes 30 Promotion of services 70
Defining and evidencing distinctiveness 31 Maximising consumer choice 70
Achieving greater distinctiveness at service level 37 A new contestable fund 71
Protecting the World Service 39 BBC archive 73
Meeting the growing challenge of serving Supporting local news 73
all audiences 40
Digital switchover for radio 74
Improving provision for Black, Asian and Minority
Ethnic (BAME) audiences 40
Improving provision for nations and regions 42
Department for Culture, Media & Sport | A BBC for the future: a broadcaster of distinction 3
Contents
5. Enhancing efficiency and transparency 76 7. Annexes 104

Competition in content production 78 Annex 1 – Charter Review timeline 105
BBC Studios 82 Annex 2 – Consultation and engagement 106
Delivering further efficiency 83 Annex 3 – Summary of consultation data 109
Increased transparency of BBC spending 85 Annex 4 – Summary of polling 112
Commercial subsidiaries reviewed and regulated 85 Glossary 116
The National Audit Office role 87 End notes 118
Research and development 89
6. Ensuring a modern, sustainable,

funding model 90
The licence fee level 92
Closing the iPlayer loophole 94
Greater freedom to manage budgets 96
Using the licence fee for public service content 97
Greater transparency in future licence
fee settlements 97
Investigation and prosecution of
TV licensing offences 99
Introducing more flexible payment plans 100
Voluntary payments for over-75s 100
Paving the way for a new more sustainable
funding model in the longer term 102
4 Department for Culture, Media & Sport | A BBC for the future: a broadcaster of distinction
Foreword
The BBC’s current Royal Charter, its We want the BBC to thrive in a world
eighth, comes to an end in December. of increasing technological, social
Over the last ten months we have and economic change. And we will
listened to the views of hundreds of ensure the BBC has a governance and
organisations and institutions and regulatory framework that guides it
hundreds of thousands of members always to act in the public interest and
of the public. We have also had deliver good value to the people who
the benefit of expert input from pay for it.
committees in Westminster, Holyrood,
John Whittingdale Cardiff and Stormont, and there has The new Royal Charter will also go
Secretary of State for Culture, been a vocal, and often passionate, further than ever before in protecting
the fundamental principle of BBC
Media & Sport public debate.
independence. The BBC should always
The proposals that we are publishing have the editorial and operational
To inform, educate and entertain. today, therefore, are the result of independence to decide how best
For almost 100 years the BBC one of the largest and most open to serve its audiences and the BBC
has been pursuing the vision consultations ever conducted, and will now, for the first time, be able to
of its founder and first Director- are informed by the evidence that appoint the majority of members to
General, Lord Reith. It is a revered has been provided to us by those its sovereign board.
who watch and listen to the BBC:
national institution, and familiar Like any organisation the BBC is not
those who rely on it, those who
treasured companion. It is a love it, those who can be frustrated perfect. And it has made mistakes.
cultural, economic and diplomatic by it and those underserved by it. What is important is that the BBC
force that touches the lives of learns from those mistakes, and
The proposals that the government that previous failings are addressed.
almost all of those who live in
has set out in this white paper are In renewing the BBC’s Royal Charter,
the UK and hundreds of millions about ensuring the BBC has a bold, therefore, the government wants
beyond these shores. It is the strong and stable decade ahead. to enhance the best of the BBC,
heart of our public service They will embolden the BBC to take but address those areas where it
broadcast system, and remains risks, confidently and unashamedly to could, and should, do better.
the envy of the world in what create the highest quality, distinctive
content for all audiences. The government is clear that the
is a now a global media market. BBC has a vital and enduring role to
At its best, the BBC makes play for the next Charter period and
programmes that are popular as beyond. As the BBC approaches its
well as individually and collectively centenary the government will provide
unique – informing, educating and the foundations for a stronger, more
entertaining in a way which serves independent, more distinctive BBC
all nations, regions and communities that will inform, educate and entertain
in the UK. The BBC can only be for many years to come.
successful if it continues to create new
and innovative content which breaks
boundaries and sets new standards
through its creativity, ambition
and innovation. John Whittingdale
Secretary of State for Culture,
Media & Sport

Key recommendations
−−Enable the BBC to make even −−Ensure the BBC’s market impacts −−Promote greater transparency
more great programmes for are assessed more widely and within the BBC through enabling
audiences to enjoy, by incentivising effectively by providing Ofcom licence fee payers to understand
more distinctive output that with powers to investigate any how the BBC spends its budget
informs, educates and entertains. aspect of BBC services. between different types of
−−Create a strong unitary board −−Open the BBC’s content programming, and through new
for the BBC, enhancing its commissioning to greater transparency on remuneration
independence. The board will be competition, by removing the of talent paid over £450,000.
fully responsible for the governance in‑house guarantee for all −−Deliver a stronger role for
of the BBC and the delivery of its television content except news the National Audit Office to
services. In contrast to the BBC and news-related current affairs. scrutinise BBC spending and
Governors and the BBC Trust, this This will provide hundreds of millions value for money. The National
new governance structure will see of pounds of new opportunities Audit Office will become the
the BBC responsible for appointing for the independent sector, help BBC’s financial auditor given the
at least half of the board members. drive efficiency savings and provide £3.7 billion of public money that
−−Appoint Ofcom as the external new creative opportunities for the it spends. The scope of its value
independent regulator of the BBC. The government also provides for money investigations will be
BBC, as recommended by the in-principle support for BBC plans explored further.
independent review by Sir David to spin-off its in-house production −−Help make the BBC a better
Clementi. Ofcom is the widely into a new subsidiary, BBC Studios, partner, with a new focus on
respected and experienced media opening up new opportunities to partnership in the Charter. The BBC
and telecommunications regulator. produce programmes for the BBC should leverage its size and scale to
and other broadcasters in the UK enhance and bolster the creative
−−Increase the licence fee level in and internationally.
line with inflation for five years industry sector by working more
from 2017/18 so that the BBC −−Establish a new contestable public in productive partnership with UK
can continue to provide high service content fund to create new players of all sizes so that others can
quality, distinctive content for opportunities for others to provide benefit more extensively from its
all audiences. It will consequently the best public service broadcasting expertise and reputation.
remain one of the best-funded content in the UK and enhance −−Ensure that the BBC serves all
public service broadcasters in plurality in the provision of public nations and regions in the UK
the world. service content. through a clear focus on the BBC’s
−−Enhance the efficiency of the obligations in the new operating
BBC by expecting the board to licence regime, clear board-level
investigate issues relating to responsibilities, and a continued
excessive management layers, commitment to the out-of-London
and overall staffing levels. This production targets.
could deliver significant further
efficiency savings by the end of the
next Charter.

Key recommendations
−−Enshrine a commitment to −−Modernise the licence fee by

diversity in the Charter, as part requiring all those who consume
of a new overall commitment BBC on-demand content (e.g. on
to ensuring the BBC serves all BBC iPlayer) to pay the licence
audiences. The BBC should be at the fee, introducing more flexible
forefront of representing diversity payment plans and taking forward
both on and off screen. recommendations from David Perry
−−Ensure the BBC supports and QC’s review of television licence fee
invigorates local news provision enforcement. The Charter will also
across the UK, through the delivery empower the BBC to pilot some
of proposals to work in partnership elements of subscription in addition
with the local news industry to to their current services.
support local democracy, including −−Provide greater freedom for the
an additional 150 local news BBC to manage its own budgets
journalists. by phasing out protected funding for
−−Embed the core principle of the broadband (£150 million a year) and
impartiality of the BBC in its local television (£5 million a year),
overall mission to ensure it remains while protecting the World Service,
the most trusted provider of high which brings high quality and
quality news for audiences in the UK impartial news to global audiences
and abroad. including where free speech is limited.
−−Establish an 11-year Charter to
2027, separating Charter Review
from the political cycle and
enhancing the BBC’s independence.
−−Introduce a new regularised
process for setting the licence
fee, giving the BBC the financial
certainty it needs by setting the
licence fee every five years and
ensuring that future licence fee
settlements can be informed by
independent advice for the benefit
of licence fee payers.

Executive summary
Executive
summary
Prioritising distinctiveness and serving all audiences 11

A better framework of governance and regulation 13
A BBC that partners with and supports the wider creative sector 14
Enhancing transparency and efficiency 15
Ensuring a modern, sustainable, funding model 16

Executive summary
The BBC is one of this nation’s In renewing the BBC’s Royal Charter The proposals in this paper flow from
most treasured institutions. The and Framework Agreement (the an extensive process of consultation
Charter) it is right that we ask and evidence gathering, in line with
Royal Charter, the constitutional
questions of the BBC. We should the government’s commitment to
basis of the BBC, guarantees celebrate the things it does well, an open and transparent Charter
the BBC’s independence and and protect what licence fee payers Review process. This has included
provides the framework for how cherish and value. But we shouldn’t a public consultation, to which over
the BBC is governed and funded. shy away from seeking reform where 190,0001 people contributed, an
The current Royal Charter is due necessary – to help the BBC thrive independent review of the governance
to expire at the end of 2016. in the future, and to better meet the and regulation of the BBC led by Sir
high expectations we all have of it. David Clementi, a public opinion study
In reviewing the BBC’s performance considering in particular the views
over the past decade, and setting its of underrepresented groups, and a
framework for the future, we want review of the BBC’s market impact.
to create a stronger BBC – one that In total over 300 organisations and
continues to command a central role experts have engaged in the Charter
in the lives of so many people here in Review process. Many others have also
the UK and overseas. contributed formal reports including
the Culture, Media and Sport Select
This white paper sets out the Committee, Lords Communications
government’s proposals for ensuring Committee, the BBC Trust and
the right supporting framework is in the BBC Executive. In addition, the
place to strengthen what is one of Radio Times conducted a survey
our greatest public institutions for on the BBC, which over 9,000 of its
the coming decade and beyond. readers completed. The government
considered all of these contributions.
An open and transparent Charter Review process
192,564 4,000
responses to the public adults across the UK participated in nationally
consultation received representative polling, 16 focus groups and
12 in-depth interviews
The Clementi Review Independent report

Over 300 looking at how the into market impact
organisations and BBC is governed and and distinctiveness
experts engaged in regulated published of BBC published
Charter Review process 1 March 2016 1 March 2016

Executive summary
It was a clear message from our To enable the BBC to thrive over − places supporting the wider UK
consultation that the BBC remains the coming Charter period, the creative industries at the heart of its
much loved and admired, and that government will therefore set a operations, taking care to minimise
it plays an important role in the framework for the BBC which: any undue negative market impacts;
daily lives of most of the population. − enhances its efficiency and
A wide range of audiences rate − allows it to focus its creative energy
on high quality distinctive content transparency; and
it highly – with 80 per cent of
consultation responses saying the that differentiates it from the rest − allows it to be supported by a
BBC serves its audiences well or of the media market while serving modern, sustainable and fair system
very well.2 And its market share in all audiences; of funding.
television, radio and online means it − protects the fundamental principle This will mean the BBC can successfully
remains a powerful media force in the of independence and ensures it is adapt to the changing environment
UK, despite increased competition governed and regulated effectively, it finds itself in, continue to provide
(see below and opposite). with clear accountability for great programmes and services for all
promoting the public interest; audiences, whilst ensuring it does so
For all these notable successes, the
BBC has faced questions in recent in the public interest.
years, including about its governance,
its distinctiveness, the market impact
of its more mainstream services, the The BBC in numbers
extent to which it serves all sections
The BBC is the largest and most influential player in the UK media market.
of society, and its efficiency and
It has:
value for money. Furthermore, over
the coming decade the BBC will need − the highest audience share of any provider in UK television and radio
to respond to a series of challenges, markets, with 33 per cent of the television audience and 53 per cent of
including continued changes in the radio audience;3
technology which will further increase
− nearly £5 billion of annual revenue (including £3.7 billion from the
choice for consumers.
licence fee)4 making it one of the best-funded public service broadcasters
in the world;5
− one of the world’s leading websites (bbc.com) with 101 million unique
browser visits in January 20156 and a news and information site (bbc.co.uk)
which is one of the most clicked online content portals in the UK;7
− the most used on-demand service (iPlayer) provided by the major
broadcasters and platforms in the UK, with around three in ten adults
(31 per cent) using it in 2014;8
− the largest production capacity in the UK, with an in-house facility that
supplies 20 per cent of all originated non-news television content in the
UK and around 65 per cent of all radio content;9
− a global audience of 348 million reached weekly across radio, television
and online – the BBC World Service audience now stands at 246 million
and BBC Global News reaches 108 million on television;10 and
− through its commercial subsidiary BBC Worldwide, probably the largest
distributor of secondary and ancillary television and audio rights
outside the US studio system, with assets that include stakes in around
40 different commercial stations across the globe.11

Executive summary
Prioritising distinctiveness
43%
The BBC is the largest radio
operator in the UK – share of all and serving all audiences
radio listening hours Q1 2015 The BBC, by virtue of its founding
public service ethos and unique 43% of the public believe BBC One
Orion Other
BBC
network
funding model, can afford to take and ITV1 are quite similar apart
UTV
0.9% 8.7% 46.0% risks, to be innovative, ambitious, from the adverts
3.4% inspirational and bold. This means
Communicorp
UK that the BBC should, in these respects, Source: GfK Social Research, Research
2.4%
be different to commercial providers, to explore public views about the BBC,
giving listeners and viewers more May 2016
choice, more variety and more high
quality content. The public are clear
This is not an argument that the BBC
about this: 80 per cent believe in the
should not be popular. Some of the
importance of the distinctiveness of
BBC’s most distinctive programming
the BBC.12
Bauer
13.3%
– from David Attenborough’s Life on
In many ways the BBC is different: Earth to Brian Cox’s The Wonders
BBC local/ 74 per cent of people believe the BBC of the Universe – reach very wide
Global regional
18.2% 7.1% delivers ‘fresh and new’ programming13 audiences by virtue of their quality.
and there are many examples of And the BBC can only be successful
Source: Ofcom, The Communications outstanding BBC content, including in if it continues to reach people across
Market 2015, based on RAJAR, all natural history, comedy, science, arts, all nations, regions and communities
adults (15+), 12 months to Q1 2015. news and current affairs. But as the in the UK. But with the BBC enjoying
Base: National Total Survey Area 33 per cent market share in television,
BBC Trust and others14 have observed,
the BBC needs to be more ambitious 54 per cent market share in radio17
in certain areas. This is the case and the third most popular UK online
particularly in its more mainstream service,18 commissioning editors
services on television, radio and online, should ask first and foremost “is this
such as BBC One (where 46 per cent programme sufficiently innovative and
of the BBC content budget is spent15), high quality?” and not “where will this
Radio 1, and Radio 2 (see chart). feature in the ratings figures in the
The government therefore wants to next week or month?”.
support the Director-General in his
aim to create a BBC that is “more
distinctive than ever – and clearly
distinguishable from the market”.16

Executive summary
New public purposes New mission:
Providing impartial news and information to help people To act in the public interest,
understand and engage with the world around them serving all audiences with
The BBC should provide accurate and impartial news and impartial, high‑quality and
current affairs to build people’s understanding of all parts of the distinctive media content and
UK and of the wider world. Its content should be provided to the services that inform, educate
highest editorial standards. It should offer a range and depth of and entertain.
analysis and content not widely available from other UK news
providers, using the highest calibre presenters and journalists,
Achieving this will require a change
and championing freedom of expression, so that all audiences
of culture within parts of the BBC
can engage fully with major UK and global issues and participate
– a change that the new BBC board
in the democratic process as active and informed citizens.
will need to support as one of its
Supporting learning for people of all ages main priorities. To help achieve this,
The BBC should help everyone learn about different subjects the government will:
in ways they will find accessible, engaging, inspiring and
− place a requirement for distinctive
challenging. The BBC should provide specialist educational
services at the heart of the BBC’s
content to help support learning for children and teenagers
overall core mission of informing,
across the UK. It should encourage people to explore new
educating and entertaining – the
subjects and participate in new activities through partnerships
mission will also require the BBC
with educational, sporting and cultural institutions.
to give greater focus to serving
Showing the most creative, highest quality the diverse nations, regions and
and distinctive content communities of the UK through a
The BBC should provide high quality output in many different requirement to serve all audiences;
genres and across a range of platforms which sets the standard − embed distinctiveness within a
in the UK and internationally. Its services should be distinctive revised set of the BBC’s public
from those provided elsewhere and should take creative risks, purposes – these will also highlight
even if not all succeed, in order to develop fresh approaches the need for the BBC to be impartial;
and innovative content. − ensure the more mainstream
Reflecting, representing and serving the diverse services of BBC One, Radio 1 and
communities of all the UK’s nations and regions Radio 2 are more differentiated from
The BBC should reflect the diversity of the UK both in its the rest of the market in areas such
content and as an organisation. In doing so, the BBC should as playlists, genres, and levels of
accurately and authentically represent and portray the lives of new programming through the new
the people of the UK today, and raise awareness of the different operating licence regime;
cultures and alternative viewpoints that make up its society.
It should ensure that it provides content and services that
meet the needs of the UK’s nations, regions and communities.
It should bring people together for shared experiences and help
contribute to the social wellbeing of the UK.
Reflecting the UK, its culture and values to the world

The BBC should provide high-quality news coverage to
international audiences, firmly based on British values of
accuracy, impartiality, and fairness. Its international services
should put the UK in a world context, aiding understanding of
all parts of the UK. It should ensure that it produces content
which will be enjoyed by people in the UK and globally.

Executive summary
−−require the BBC to give greater A better framework of

focus to serving those from Black, World Service future funding
governance and regulation
Asian and Minority Ethnic (BAME)
backgrounds and from those nations £254m The framework of governance and
regulation is central to the success
and regions that are currently less Protected licence fee
well-served, building on its new funding per annum of the BBC, as it is for other public
diversity strategy; and and private sector bodies. The BBC
−−support the World Service – £85m Trust model has been more effective
than the previous board of Governors
arguably the BBC’s most unique and New funding from
distinctive service – by protecting government for in a number of respects, including
its funding at £254 million per year additional services* through increased transparency.
for the five years from 2017/18 and But as the independent review led by
providing £85 million per year of Sir David Clementi concluded, there
*2016/17: £34m, 2017/18-2019/20:
government funding for increased £85m per year is a wide consensus that the current
provision in specific areas. system needs substantial reform, in
particular to provide a clearer division
The government will also require of responsibilities.
Ofcom’s licensing of the BBC to Performance scores serving
include specific provision for the ethnic groups The new Charter will therefore:
nations, retain its commitment to −−create a unitary board for the BBC
quotas on the amount of shows made %
with responsibility for governing
outside London, and continue support the BBC in the public interest, in
70
for minority language broadcasting line with the mission and purposes
services in partnership with S4C and 60 62% set for it in the Charter. At least
MG Alba. Together, this will ensure the 50 55% 54% 50 per cent of the appointments to
BBC continues to play an important the new board will be made by the
46%
role in supporting a vibrant media 40
BBC itself;
industry across the whole of the UK. 30 −−introduce external independent
20 regulation of the BBC by Ofcom,
as recommended by the Clementi
10
Review. This will ensure a strong
0 regulator sits alongside a strong
The BBC offers quite a bit, a lot, BBC; and
or everything I need
White British/Irish
−−reform the mechanisms and powers
Chinese/Mixed/Other of regulation by requiring Ofcom
Asian to establish a new operating licence
Black regime for the BBC, backed with
clear sanctions.
Base: White: 1,721; Asian: 216; Black: 151;
Chinese/Mixed/Other: 188
Source: NatCen Social Research for BBC
Trust, Purpose Remit Survey, 2015

Executive summary
Alongside these key reforms to the

BBC’s governance, the government Clearer roles and responsibilities
will introduce four important other
changes to the accountability Proposed model
framework for the BBC:
Governance Regulation
− separate the Charter Review process
from the political cycle and enhance
independence by establishing an BBC Executive Ofcom
11-year Charter to 2027, with a
Set strategy Issue licences
mid-term review to check the Deliver services Regulate editorial standards
effectiveness of the core proposals Oversee operational delivery Arbitrate complaints
established in this Charter; Measure performance Regulate commercial activity
Engage the public Regulate market impact
− make the BBC more accountable
Monitor and review performance
to the nations of the UK;
− reform the BBC’s complaints system;
and
− set new expectations for public A BBC that partners with But there is more that can be done,
engagement and responsiveness. and supports the wider particularly as the BBC’s scale and
resources can have a negative impact
creative sector
on individual services and offerings
Lengths of Royal Charter The creative sector in the UK has in the UK media market by crowding
flourished in recent years – it has been out investment or creating barriers to
growing at twice the rate of the rest entry for new firms. The BBC needs to
of the economy since 2008 and now move from a mindset of minimising
accounts for £84 billion of Gross Value its negative market impact or seeing
Length Number of
Added (GVA) and 8.7 per cent of total other media players primarily as
Charters
exports of services.19 But the sector is rivals, to one that proactively seeks
going to face a series of challenges in to enhance and bolster – and work
More than ten years
2 the coming years. In this context the in partnership with – the wider
BBC must do what it can to support broadcasting and creative industries.
Ten years
5 the sector – from established players
to micro and small and medium
This is not about shaping the BBC
in the interests of competitors. It is
sized enterprises. about maximising the net benefit of
Less than ten years
1 There is much that the BBC already
public funding, for the benefit of the
public, the BBC, the creative sector
Charter extensions
(six months – 4 does. It is a major purchaser, spending
more than £1 billion on the services
and the UK’s economy and soft power.
three years) of around 2,700 suppliers involved

in making programmes for the BBC.20
Its presence can also drive up the
quality of commercial programming
and it works collaboratively in
partnership with others, enabling
them to benefit from its reach
and reputation.

Executive summary
To deliver this, the new Charter will: In addition, there will also be more Requiring further transparency and
transparency about the volume and greater efficiencies across overheads,
−−help make the BBC a better partner, impacts of the BBC’s promotion of distribution and content production
leveraging its size and scale to its own services, with a requirement will therefore be a core ongoing
benefit the creative industry sector for the BBC to take greater care to responsibility of the new unitary
by working more in partnership steer its promotional activity towards board. Its analysis will need to include
with UK players of all sizes, through areas of public value. The BBC will also what more can be done to lower
a new focus on partnership in be expected to ensure its content is pay-bill costs, given only very modest
the Charter; available as widely as possible. It will reductions in headcount in recent
−−ensure the BBC’s market impacts be expected to lead the industry in years, despite the licence fee being
are assessed more widely and any future digital switchover for radio. frozen since 2010.24 The government
effectively. Under the current And it will be encouraged to open up will make a number of changes to the
system the regulator can only assess its archive further so that the public Charter to support this work:
the market impact of ‘significant’ and other organisations can benefit
new services – the new Charter from its rich content. −−remove the in-house guarantee
will provide Ofcom with powers for all BBC television content
to investigate any aspect of BBC production except news and news-
Enhancing transparency related current affairs, opening up
services, including where minor
changes have over time combined and efficiency hundreds of millions of pounds of
to have notable impact, with production spend to competition. In
The BBC has taken a number of light of the benefits of competition
proportionate powers to sanction; steps to enhance the efficiency of its for the creative industries and the
−−ensure the BBC supports and operations in recent years,21 with plans licence fee payer, all productions,
invigorates local news provision to deliver £1.5 billion of savings by the including returning series, sports,
across the UK, through the delivery end of this Charter alone.22 But with children’s and non-news related
of proposals to work in partnership only 23 per cent of the public believing current affairs will be tendered by
with the local news industry to the BBC is efficient23 – and with the the end of the next Charter, unless
support local democracy; and need to continuously bear down on there is clear evidence that this
−−establish a new £20 million per costs to ensure the programmes and would not be value for money. There
annum contestable public service shows audiences love are protected – will be a phased introduction of this
content fund to create new further action is needed. requirement;
opportunities for other broadcasters −−provide in-principle support for the
and producers to make public BBC’s Studios proposal, provided
service broadcasting content. the BBC design this in a way that
The government will consult on delivers the necessary safeguards;
the details of this in the autumn.
−−enshrine greater public scrutiny of
BBC spending and value for money
through the National Audit Office
(NAO) by making it the financial
auditor of the BBC, reflecting that
the BBC spends almost £4 billion
of public money each year.25
The government will explore
further the merit of giving the
NAO powers to conduct value for
money investigations of the BBC’s
commercial subsidiaries;

Executive summary
− require a review of the BBC’s − require the BBC’s new unitary Ensuring a modern,
commercial operations. The BBC board to ensure that the BBC is sustainable, funding model
has three commercial subsidiaries, transparent and efficient in how it
including two (Global News and spends its funding. The public has In order to provide the BBC with the
Studioworks) that have been a right to know how its money is level of funding and certainty it needs
loss-making in recent years. The being spent. There will therefore be to deliver against its updated mission
unitary board will be required to new requirements placed on the and purposes over the next Charter
assess the extent to which these BBC to report spend by genre each period, the government will maintain
commercial operations promote year, and to disclose the names of the licence fee as the main funding
the public interest and deliver value talent paid more than £450,000. model for the BBC and will:
for money for the BBC. Ofcom will
be given powers to ensure that the In the light of the BBC spending − increase the licence fee level in line
BBC’s commercial subsidiaries trade almost £170 million26 a year on with inflation to 2021/22 – this will
fairly; and technology the government will mean the BBC will receive over
also require the BBC to undertake a £18 billion of income from 2017/18-
detailed review of its current research 2021/22 and will ensure that the
and development (R&D) activity. BBC remains one of the best-funded
public service broadcasters in the
world (see chart opposite).27
The BBC is the largest content producer in the UK − provide greater freedom to the
(companies by revenue, 2014) BBC to manage its budgets – since
2006 the government has chosen
to protect a number of areas of
StudioCanal
£34m Argonon
£30m Red Arrow
spending from the licence fee, but
Hat Trick
Productions £30m Others under the next Charter these will all
£51m £230m
Sony be removed, with the exception of
£52m
Avalon BBC
the World Service;
£58m £741m
William Morris
− provide additional support for BBC
£62m finances by helping the BBC to
Zodiak
£69m address some of the challenges it
Warner Brothers
£85m
faces in managing its cost pressures
NBCU (as agreed at the 2015 Summer
£101m ITV
£536m
Budget), including allowing those
Tinopolis
£140m aged 75 and over to make voluntary
payments if they choose to, while
Fremantle All3Media EndemolShine
continuing to protect the licence fee
£147m £253m £425m concession during this Parliament; and
− enhance the BBC’s independence
Source: Ofcom, Review of the operation of the television production sector, 2015 from government by introducing
a new regularised licence fee
settlement process once every
five years.

Executive summary
The government will also modernise −−improve the fairness and Given that the licence fee will continue
the current licence fee system to make effectiveness of the process of to come under pressure in the coming
it fairer. It will: investigation and prosecution of years in a continually evolving and
licence fee evasion by taking forward diverse media environment, the
−−close the ‘iPlayer loophole’ so that recommendations from David Perry government supports the first moves
those who currently view BBC QC’s review of television licence fee towards a more sustainable funding
on‑demand programmes only enforcement; and model in the longer term. The BBC has
(e.g. on the iPlayer) for free pay the committed to consider and explore
same as those watching or recording −−enable the BBC to make its content
‘portable’ so UK licence fee payers whether elements of subscription
it on television as it is shown live; have a role to play alongside the
can access BBC iPlayer while on
−−introduce more flexible payment holiday in other EU member states. core licence fee model in its future
plans to help those on lower incomes funding, as it aims to develop and test
with paying the licence fee and the scope for additional sources of
increase flexibility and convenience commercial revenue. It will be for the
for all licence fee payers; BBC to set the scope of the plans, but
the government expects that progress
and success will be appropriately
reviewed, with further development
The BBC is the best‑funded public service broadcaster in Europe potentially taking place in the
second part of the Charter period,
£ million
in order to feed into the next Charter
4,000 Review process.
3,500
3,000
2,500
2,000
1,500
1,000
500
0
2010 2011 2012 2013 2014
BBC (United Kingdom) France Télévisions (France)
RAI (Italy) WDR – Westdeutscher Rundfunk (Germany)
SWR – Südwestrundfunk France Médias Monde (France)
(Switzerland) RTBF (Belgium)
Comparison European public service broadcasters’ unconsolidated

operating revenue.
Source: The Yearbook of the European Audiovisual Observatory 2015

1. Introduction: the BBC is much loved and remains a central part of British society
1. Introduction:
the BBC is much
loved and remains
a central part of
British society
The context the BBC is operating in will change dramatically
over the next Charter period 20
There remains a central role for public service broadcasting
in this changed and changing world 22
Maximising the public value it provides, the BBC will need to adapt further 23
What the BBC does… 24
…And how it compares to others 25
The BBC plays a unique role At its best, the BBC makes superb There is nothing inevitable about
in British society; very few programmes and serves a range the BBC’s success. From humble
of audiences, which it is hard to beginnings as the UK’s sole
national institutions can claim
imagine any other broadcaster broadcaster in 1922, few would have
to occupy such a heightened wanting or being able to do. Many anticipated the much-loved national
place in the public consciousness play an important role in promoting institution that many take for granted
and people’s affections. It is citizenship, education and learning, today – and certainly many other
widely respected for the quality and cultural excellence. Beyond its celebrated British brands have failed
and independence of its news programming, the BBC contributes to to survive into their ninth decade.
and current affairs, and even the health of one of the most vibrant The BBC owes much of its success
creative economies in the world. The to its founder Lord Reith and his
in a multi-media age its most creative industry sector grew at twice enduring mission for the organisation
popular programmes continue the rate of the rest of the economy in to inform, educate and entertain.
to draw the country together, 2014, with film, television, video, radio But it has also had to adapt to
as with the London Olympics, and photography alone contributing remain strong, navigating a series of
world-class drama like War and £10.8 billion to the UK economy.28 changing economic, social, political
Peace and The Night Manager, or The BBC is therefore part of the social and technological tides. This has led to
and economic fabric of this country, numerous changes in scale and scope
natural history such as Life Story.
and a source of great pride. No other and to governance and funding over
country in the world has anything the past century: from being the UK’s
quite like it. sole broadcaster to providing multiple
radio, television and online platforms
The BBC is widely respected abroad and services.
as well as at home. It sets an
international benchmark for quality, This pace of change is accelerating.
producing outstanding television, radio The last ten years have arguably
and online programmes and services seen the greatest period of change in
that are exported throughout the broadcasting and telecommunications
world. The World Service is one history, with increasing choice
of the leading sources of international and competition, evolving viewing
news and BBC services reach habits, ever-more diverse audiences,
348 million people around the world and shifting consumer and citizen
each week.29 This helps ensure, along expectations all driving change within
with other internationally respected the industry. The BBC has not been
global UK media brands, that the UK immune from these structural forces,
continues to lead the world in terms and has had to innovate and reform
of soft power, measured for its global in response. Its 53 per cent audience
influence through its culture, media market share of the radio market,
and education.30 33 per cent market share of television
audiences, and strong online presence
shows that it is still a powerful media
force in the UK (see box 4, page 25)
despite increased competition.
For all these successes, the BBC The context the BBC is − Technological change. Around
has faced questions in recent years, operating in will change two thirds of households now have
including over its governance, its a digital video recorder, take up of
dramatically over the next
distinctiveness, the market impact of connected televisions is growing and
its more mainstream television, radio Charter period almost half of adults now watch on
and online services, accusations of The BBC, like every other broadcaster, demand catch-up services.34 The
bias, and concerns about waste and is facing what it describes itself as a next ten years will see continued
value for money. It has also been hit ‘world in transition’.33 It is difficult to changes in technology that will
by a number of high profile scandals. predict the economic, political, social, have profound implications for how
And there is a sizeable minority of technological developments and people consume media. Increasingly,
people who do not think that the BBC behavioural changes we will see over people are enjoying what they want,
is delivering for them – indeed over the coming decade. One of the few when they want and on a wider
20 per cent report that they would not things that is certain about the media range of platforms than ever before
miss the BBC if it didn’t exist.31 These landscape of the future is that it will – and may be using technology
are all serious issues that the proposals look very different from that of today. and services in 2027 that either do
in this white paper will seek to ensure But five forces may have a profound not exist or which are only in their
are not replicated over the coming impact on the BBC and other major infancy now.
Charter period. players in the UK media market over
But despite these issues, overall the the coming Charter period.
BBC approaches its centenary in good
health, with a strong and widespread
reputation for quality. This was borne Box 1. Media consumption via mobile will continue to grow
out in many of our consultation
responses: eight out of ten people feel hours, billion
the BBC served audiences well or very
well, three quarters of people believe 80
it produces high quality and distinctive 70
content, and an overwhelming
60
majority of the responses want the
BBC to remain independent.32 50
40
30
20
10
0
2012 2013 2014 2015f 2016f 2017f 2018f 2019f 2020f
PC Tablet Smartphone
Excludes offline app and TV-based usage; PC 6+, smartphone/tablet 8+

Source: Enders Analysis, 2015

−−Demographic change. The

Box 2. People will increasingly access content on devices other than demographic makeup of the UK has
their television changed in a number of respects
over the past decade: the overall
minutes/day population has grown, the number
500
and proportion of older people
has increased and society has
400
become more diverse overall.39 The
audiences which the BBC is seeking
to serve will continue to change,
300
both at home and abroad over the
coming Charter period. The BBC is
200
already facing particular challenges,
for example in meeting the needs
100
of people from black, Asian and
minority ethnic backgrounds, and of
0
2015f 2020f 2015f 2020f 2015f 2020f 2015f 2020f younger audiences, who increasingly
16-24 25-34 35-54 55+ watch and consume content in
markedly different ways to previous
TV PC/tablet/smartphone
generations.40 Increasing variations
exist among the different nations
Excludes offline app usage and non-viewing TV time (e.g. console gaming) and regions too.41
Source: Enders Analysis, 2015
−−Global instability. The world
is facing a range of geopolitical
−−Consolidation, competition and −−Increased public expectations. challenges, including instability in
globalisation. The media market People rightly expect higher the Middle East, and the rise of
has seen significant consolidation standards from public organisations: state sponsored media outlets with
and convergence in recent years. integrity, openness, a focus on the large global audiences. Over the
Media companies are increasingly public interest. One recent report course of the next decade there
offering ‘all media’ packages, noted: “The public want all providers will almost certainly be areas of
integrating mobile, broadband and of public services to adhere to the world where democratic values
television services. Seven of the ten and operate by common ethical such as freedom of speech continue
biggest UK independent production standards... for the public, ‘how’ to be suppressed or neglected and
companies, for example, are now things are done are as important as when the BBC’s reputation for
integrated with major international ‘what’ is done”.36 However, although integrity and trust will never be
broadcasting companies such as people expect more, they tend to more important.
Sky Europe, Liberty Global and trust less. Another report found
Universal.35 But there have also been that: “trust in institutions is no
powerful new entrants such as BT, longer automatically granted on the
Amazon, Apple, Google and Netflix, basis of hierarchy or title. In today’s
meaning, for consumers, there is world, that trust must be earned”.37
more choice than ever before. These Although trust in the BBC remains
trends are likely to continue – and higher than in many institutions,38
perhaps accelerate – over the next the public rightly expects higher
decade, and will clearly have an standards from the BBC compared
effect on the market in which the to commercial broadcasters and
BBC will be operating over the next other media companies and the
Charter period. BBC is going to have to work hard to
maintain its privileged position over
the coming decade.

Each of these drivers brings both There remains a central In fact, in an increasingly fragmented
opportunities and threats for the role for public service world the provision of high quality,
BBC. Political change, for example, public service content is arguably
broadcasting in this changed
may increase the value of bringing more important than ever. For
impartial news to parts of the world and changing world example, the BBC helps the UK
that would not otherwise enjoy it. But The government believes there is and its diverse communities have
it may also mean that opportunities still a strong and enduring rationale shared conversations by reflecting
for distributing high quality news are for the BBC continuing into the a wide range of mainstream voices,
curtailed by those seeking to deny 21st century, despite – and at times which furthers understanding and
their citizens access to such services. because of – the changes identified tolerance.42
Technological change may mean that above. It is possible to overstate the
licence fee payers access the BBC The BBC has played an important role
extent to which the market cannot in these areas and the government
in new ways, offering a degree of deliver socially-optimal broadcasting.
personalisation previously not possible. expects the BBC to continue to take
The private sector can and often does a leading role through the coming
But it may also lead to fragmenting provide high quality broadcasting
audiences, making it more difficult Charter period, consistent with its
that rivals the best of the public editorial independence.
for the BBC to bring people together. sector: Sky Arts, HBO and respected
Globalisation can enhance the BBC’s international news outlets such as The central objective for the next
ability to earn revenues from its Reuters and theguardian.com are all Charter period is therefore to ensure
content abroad, lowering demands on evidence of this. This raises legitimate that the BBC can successfully adapt
the licence fee payer. But it can also questions about the appropriate to the changing environment it finds
mean that the BBC gets disconnected scale and scope of a BBC funded by itself in, so that it can maximise the
from its core UK public service mission a compulsory flat-rate licence fee public value it provides for the
by seeking to “compete” with global for those who watch television. But £3.7 billion of public money it
players that have a very different set public service broadcasters such as receives each year.
of objectives and incentives. If the BBC the BBC do still deliver positive effects
responds successfully to these trends it for society by delivering programming
will continue to operate as the world’s that a free market might under-
leading public service broadcaster, provide by virtue of not valuing its
delivering high quality programming social benefits, such as:
to millions. If it fails to respond it risks
potentially finding itself marginalised − extending democratic knowledge
in an ever-crowded media world. through independent news and
current affairs;
− helping extend the principles of
democracy and free speech abroad;
− inspiring audiences through
programmes that expand their
horizons in areas such as natural
history, science and the arts; and
− addressing the needs of audiences
such as minority language groups
and children, and delivering other
types of broadcasting such as arts
and music that may not be provided
by commercial providers to the
same extent.

Maximising the public value it More distinctive More efficiency and transparency
provides, the BBC will need to At its best, the BBC provides high The drive for greater efficiency is a
adapt further quality content which is distinctive discipline that all organisations should
and different from that of other aspire to – but when entrusted with
This white paper sets out the five broadcasters. But there is evidence almost £4 billion43 of public money
priorities for ensuring the BBC can to show it can go further. This will that aspiration becomes a strong
maximise its public value over the become increasingly important as obligation. The BBC has made progress
next Charter Review period. It is choice and competition continue to over the last Charter period. It is
based on a vision for a strong and expand and consumer habits evolve. undoubtedly more efficient than ten
independent BBC that is accountable, To retain its unique status, the BBC years ago. But it should not rest on
more distinctive, market sensitive, will need to do more to stand apart its laurels. The public consistently say
efficient and transparent, and from the competition, rather than that value for money is something
underpinned by sustainable and looking to replicate services consumers they expect the BBC to prioritise and
secure funding. are already getting elsewhere. This is the BBC will lose public confidence if
not to say that the BBC should not it cannot show that it spends its funds
Accountable and well governed be popular – distinctive programmes wisely. In a time of constrained public
No organisation can succeed can have widespread appeal. It is to spending the government wants to
without effective governance. say that popularity should not be support and enable the BBC’s drive
There is a wide consensus, including its primary objective; maximising its for greater efficiency – particularly in
from the BBC Trust itself, that the public value must come first. This will the way it spends its money in making
current structure and nature of the be captured in the new mission and television and radio content. We will
governance and regulation of the public purposes. also introduce new measures to
BBC has not met expectations and make how the BBC spends its money
needs to change. The fundamental Greater sensitivity to market impact more transparent.
principle of independence needs to be The creative industry sector in the UK
protected and there needs to be clear has flourished in recent decades. But Sustainable and secure funding
accountability, strong management it will face a number of challenges in It is vital that the BBC has a
and a regulatory system that holds the the years ahead. Given its scale, the sustainable funding model, fit for the
BBC to account for delivering against behaviour of the BBC is likely to have next decade. The licence fee, despite
its public purposes and acting in the a significant influence on the future of some drawbacks, is the best way of
public interest. the UK media market. Recent reforms funding the BBC for the next Charter
have helped embed an awareness period. However, the licence fee
of market impact amongst BBC needs to be fairer and easier to pay
management but the BBC needs to for those on lower incomes and for
move from a mindset of “minimising all licence fee payers. The licence fee
its negative market impact” to one will rise with inflation over five years
that proactively seeks to enhance from 2017/18 and this will provide
and bolster – and work in partnership the BBC with the funding it needs to
with – the wider broadcasting and thrive and deliver against its updated
creative industries. This is not about mission and purposes. The BBC must,
shaping the BBC in the interests of however, continue to deliver value for
competitors, but about maximising the licence fee payer.
the net benefit of public funding.

What the BBC does…
Box 3.
National services
Television Radio
Eight channels available via digital television, live online via channel Ten national radio stations, national radio stations for listeners
websites and as video-on-demand via BBC iPlayer. in Wales, Scotland and Northern Ireland, plus local radio stations
throughout England, available via analogue and digital radio,
digital television, online via BBC iPlayer Radio on-demand.
Online
Nations and regions services

Production centres across the country make television and radio
programmes for local audiences and the wider network.
International services Commercial services

Internationally focused services available across the world, Profits from the BBC’s commercial services help support its public
both publicly funded and commercial. service mission.
Licence Fee funded
BBC’s main commercial arm; Largest television studios and post

investing in, commercialising and facilities provider in the UK.
showcasing content from the BBC
Radio, television, and online. News, information and around the world.
comment gathered from
mass media around the world. BBC Store is a multi-channel retailer
selling thousands of books, DVDs,
Commercially funded Supplies television facilities to audiobooks and toys for fans of
overseas broadcasters transmitting our programmes. BBC Store sells
from the UK. products online, by phone and post.
24 hours a day international The BBC’s international website

news and information for a global audience.
television channel.

…And how it compares to others
Box 4. The BBC is the biggest television provider in the UK Box 6. The BBC is the largest
(viewing share of channel groups in all UK homes, 2014) radio operator in the UK
(share of all radio listening hours,
Virgin Q1 2015)
Media
0.0% Other BBC
Viacom 12.6% Orion Other network
2.3% 0.9% 8.7% 46.0%
UTV
UKTV BBC One 3.4%
4.9% 21.7% Communicorp
BSkyB others UK
3.5% 2.4%
Sky One/Two/Three
(Pick TV) BBC Two
2.1% 6.1%
Sky Sports channels
2.6% BBC other
5.4%
Channel 5
others
1.6%
Channel 5 Bauer
4.4% ITV 13.3%
ITV2 15.6%
Channel 4 Channel 4 ITV ITV3 2.4%
others 4.8% others 2.3% BBC local/
6.1% 1.7% Global regional
18.2% 7.1%
Source: Communications Market Report 2015

Source: Ofcom, The Communications
Market Report 2015, based on RAJAR,
all adults (15+), 12 months to Q1 2015.
Base: National Total Survey Area
Box 5. The BBC is the largest content producer in the UK
(companies by revenue, 2014)
StudioCanal
Argonon
Box 7. The BBC is the third most
£34m
Hat Trick £30m Red Arrow popular online service
Productions £30m Others
£51m £230m (top ten most popular internet
Sony
£52m websites visited on a property
Avalon
£58m
BBC level, March 2015)44
£741m
William Morris
£62m
Sky sites Apple Inc. Google sites
Zodiak 28m 27m 46m
£69m
Warner Brothers Mail
£85m Online/
Daily Mail Facebook
NBCU 41m
£101m 28m
ITV
£536m
Tinopolis
£140m

£147m £253m £425m
eBay
Source: Ofcom, Review of the operation of the television production sector, 2015 31m BBC sites
40m
Yahoo sites Microsoft sites

33m Amazon sites 37m
37m
Source: Ofcom, The Communications

Market Report 2015, based on comScore
MMX-MP, UK, March 2015

2. Prioritising distinctiveness and serving all audiences
2. Prioritising
distinctiveness
and serving
all audiences
Giving the BBC a mission to inform, educate and entertain distinctively 28
Reforming the public purposes 30
Defining and evidencing distinctiveness 31
Achieving greater distinctiveness at service level 37
Prioritising funding and protecting the World Service 39
Meeting the growing challenge of serving all audiences 40
Improving provision for Black, Asian and Minority Ethnic (BAME) audiences 40
Improving provision for nations and regions 42
The BBC rightly strives to Ensuring the BBC is sufficiently

be innovative, ambitious, distinctive – discernibly different in
approach, quality and content to Our aim… is to create a BBC that is
inspirational and bold. These more distinctive than ever – and clearly
commercial providers – is a central
are some of the things that we objective of this Charter Review. distinguishable from the market.
most admire and value in the A distinctive BBC is a powerful tool; Lord Hall, Director-General50
BBC. It can push boundaries and expanding our knowledge, experience
take creative risks because, in its and imagination, bringing the country The detailed independent study
own words, it has “the privilege together in shared experiences and on the BBC’s impact on the market
of being able to make good supporting our national culture and commissioned by government
public life. also supported the view that the
programmes without also having
BBC needs to be more distinctive,
to consider whether they will The notion of a distinctive BBC is not particularly on its more mainstream
make a profit”.45 new. The last Charter Review in 2006 services, such as BBC One and Two,
concluded that “the BBC’s content Radio 1, Radio 2, Radio 5 Live, and
should offer something distinct from BBC Online.51 Recent reviews by
other broadcasters”; and the BBC the BBC Trust reached some similar
has worked over the last Charter conclusions.52 The government
to try to meet these expectations.46 therefore strongly welcomes the
Research conducted for the BBC Trust vision expressed by the current
found that 73 per cent of the public Director-General to make the BBC
thought that the BBC’s content was more distinctive than ever.53
high quality, and 60 per cent agreed
that it was distinctive.47 An even This is not an argument that the BBC
higher proportion of those responding should cease to be popular. The BBC
to our consultation agreed.48 Yet can only be successful if it continues
in recent nationally representative to reach and provide public value to
quantitative polling commissioned all nations, regions and communities
by the government, only 38 per cent in the UK. The BBC has demonstrated
thought that “the BBC makes lots of time and again that it can be both
television programmes that no other popular and distinctive. It would be
broadcaster could make” and only hard to imagine other broadcasters
27 per cent agreed that the BBC making the same volume and
“makes lots of programmes which variety of high-quality public service
are more daring or innovative than programmes such as The Great British
those made by other broadcasters” Bake Off, Wolf Hall, Planet Earth,
(see box 8).49 Doctor Who and The Archers. These
programmes are loved all across
the UK.
80%
80% of the public think BBC
distinctiveness is important
Source: BBC Trust Consultation Response,
October 2015
This is, however, an argument that Giving the BBC a mission

popularity itself must not be the to inform, educate and
primary measure of success for the I think if the BBC has one issue that
I wish it would deal with, it is that it
entertain distinctively
BBC. We expect much more from our
BBC than that. Commissioning editors pays too much attention to ratings. Lord Reith, the first Director-General
should ask first and foremost “is this I must say I thought that the first day I of the BBC, put informing, educating
programme sufficiently innovative walked through the door and I thought and entertaining at the heart of the
and high quality?” and not “where it more the last day I walked through BBC’s mission. This has remained part
will this feature in the ratings figures the door, in the outward direction. of the DNA of the BBC to this day and
in the next week or month?”. Gavyn Davies, former Chairman of the BBC, BBC Trust research indicates that there
February 201454 is strong support for it to remain.55
The government is therefore clear
Box 8. Public views on The government wants to ensure that the core of the BBC’s mission,
distinctiveness the BBC retains its unique status to “inform, educate and entertain”
and continues to thrive. To continue should endure.
% to be successful in the future, and
to merit its special privileges and
100
13% substantial public funding, the BBC
90 We want the BBC in the next decade
35% needs to stand apart from other
80 to be the place people come to make
broadcasters, distinguishing itself
70 brilliant programmes, programmes of
from the market. This will become
60 distinction. For producers, directors,
increasingly important as choice and
50 writers, artists to have the creative
25% competition continue to proliferate,
40 freedom to do things they would find
viewing habits evolve, audiences
30
fragment, and consumer and citizen it hard to do elsewhere.
20 27%
expectations expand. The government British, Bold, Creative, The BBC’s Programmes
10 will therefore: and Services in the next Charter,
0 October 201556
The BBC makes lots of TV − embed distinctiveness in the BBC’s
programmes that are more daring
or innovative than those made
overall mission;
by other broadcasters − reform the public purposes making
Agree them more clearly defined and
Neither agree nor disagree emphasising key elements such as
Disagree distinctiveness, impartiality and
Don’t know diversity;
− require the BBC to provide more
Base: all respondents in Wave 1 (2,093)
distinctive services through
Source: GfK Social Research, Research strengthening the existing content
to explore public views about the BBC, requirements at service level on
May 2016
television, radio and online;
− protect the World Service –
arguably the BBC’s most unique and
distinctive service; and
− require the BBC to meet the growing
challenge of serving all audiences.

The next Charter does, however, − Recognise the core underlying All of these elements will therefore be
provide the opportunity to more fully need for the BBC to promote the enshrined in the BBC’s mission in the
explain what we expect from the BBC, public interest. This is set out in next Charter to encourage the BBC
by expanding the existing mission. the current Charter, but there is to create new and innovative content
Government will therefore: also merit in making explicit in the which breaks boundaries, sets new
mission the ultimate responsibility standards, and serves all audiences.
− Add an explicit requirement of the BBC to act in the public
to be distinctive, high quality interest. This is about ensuring that
and impartial. Many, if not all, while the BBC must serve licence New mission:
broadcasters seek to some extent to fee payers, it should do so taking a
inform, educate and entertain, and To act in the public
wide and balanced view of its direct
it is hard to imagine a programme and indirect economic, social and
interest, serving all
that didn’t seek to achieve one of cultural impacts. It must seek to do audiences with impartial,
these aims. But what sets the BBC what adds most public value in a high-quality and distinctive
apart from others is the consistent diverse, competitive, and pluralistic media content and services
high standard and quality expected environment, where viewers and
by its audiences, the impartiality
that inform, educate and
listeners have an increasing choice entertain.
that is core to its role of informing of media content and providers.
and educating, and the degree
to which its content should be − Include a requirement to serve
clearly distinguishable from that all audiences. This is not merely
of other broadcasters. The public about making content available on
support this view. A clear majority different platforms, although this
of those polled for the public is important. Nor does it mean
opinion study commissioned by the maximising audience share and
government said that the balance ratings, meeting an overall ‘reach’
of the BBC’s overall content should figure each week, or increasing
be distinctive and different from the amount of BBC content
other broadcasters57 and the Trust’s consumed for its own sake. Serving
research showed that high quality all audiences means making sure
and impartiality were considered that the BBC is for the diverse
to be amongst the most important communities across the UK and
values for the BBC.58 that every demographic group is
being served by the BBC to some
extent. Being “served” means
not just consuming content, but
getting value from the BBC and
so benefiting indirectly from its
public mission.

Reforming the public purposes The government therefore intends to

retain the approach of public purposes
The last Charter established six broad but will reform them to incorporate The Trust believes that clarification
‘public purposes’ (see box 9). These some constructive improvements that and simplification of the BBC’s current
provide a framework for what the BBC were raised through the government’s public purposes would be helpful
should be seeking to achieve beneath and the BBC Trust’s consultations, and proposes some revisions that are
its mission, helping direct the activities reflecting the key areas of reform the result of extensive consultation
of the BBC and enabling others to that the public, the BBC, and other and testing with the public. These
hold it to account. The introduction stakeholders have called for. Revised should set out clearly what the BBC
of purposes has been widely regarded public purposes are set out in box 10, is there to achieve. We also propose a
as a positive innovation. Of those few which make a number of changes: measurement framework so that the
respondents that addressed the issue impact of performance against those
in the government’s consultation, the −−clarify the language particularly purposes can be monitored.
majority felt they should be retained, in relation to news, creativity and
BBC Trust response to
either in their current form or with its international role (purposes one, government consultation60
some changes.59 four and five);
−−emphasise the key factors that In addition to these revised purposes,
are central to the mission of the new Charter will recognise the
Box 9. Current public purposes
the BBC; its impartial news and BBC’s important role in encouraging
− sustaining citizenship and current affairs, its distinctive creative the growth and success of the UK’s
civil society; output, and its need to serve creative industries. It will set out how,
diverse communities; in delivering its public purposes, the
− promoting education BBC will be expected to work with
and learning; −−simplify the purposes with
the UK’s creative industries through
the removal of the current sixth
partnerships, developing skills and
− representing the UK, its nations, purpose. While the BBC has an
supporting training. In delivering its
regions and communities; important role in technology (as set
public purposes, the new Charter
out further in Chapter 5) which will
− stimulating creativity and will also recognise the importance
be reflected in the Charter, this is
cultural excellence; of the BBC working in partnership
not the core of its role; and
with others to promote technological
− bringing the UK to the world −−include greater detail, to make innovation, knowledge sharing and
and the world to the UK; and it clear to any reader what is continuing its leading role in research
expected of the BBC. These new and development.
− in promoting its other purposes, purposes will be connected with the
helping to deliver to the wider governance and regulatory
public the benefit of emerging framework, set out in Chapter 3.
communications technologies This follows the approach of the
and services and, in addition, current Charter, with the purposes
taking a leading role in the setting the objectives that all BBC
switchover to digital television. activity should be working towards.

Defining and evidencing

Box 10. New public purposes
distinctiveness
Providing impartial news and information to help people
Embedding distinctiveness within the
understand and engage with the world around them
mission and purposes of the BBC is
The BBC should provide accurate and impartial news and
intended to put distinctiveness at the
current affairs to build people’s understanding of all parts of the
core of the BBC’s culture, freeing its
UK and of the wider world. Its content should be provided to the
outstanding creative talent to take
highest editorial standards. It should offer a range and depth of
creative risks and push the boundaries
analysis and content not widely available from other UK news
of quality programming, and making
providers, using the highest calibre presenters and journalists,
sure its output as a whole will be
and championing freedom of expression, so that all audiences
distinct from the market. But it will
can engage fully with major UK and global issues and participate
also be important to ensure that the
in the democratic process as active and informed citizens.
Charter helps the BBC to make sure
Supporting learning for people of all ages each and every individual service is
The BBC should help everyone learn about different subjects sufficiently distinctive.
in ways they will find accessible, engaging, inspiring and
challenging. The BBC should provide specialist educational Box 11. Roundtable events with
content to help support learning for children and teenagers the creative sector
across the UK. It should encourage people to explore new
subjects and participate in new activities through partnerships As part of the Charter Review
with educational, sporting and cultural institutions. process, government arranged
a set of roundtable events with
Showing the most creative, highest quality and representatives from the creative
distinctive content sector. In this forum, the need for
The BBC should provide high quality output in many different the BBC to take more risks was
genres and across a range of platforms which sets the standard a common theme,61 reflecting
in the UK and internationally. Its services should be distinctive the Director-General’s view that
from those provided elsewhere and should take creative risks, the BBC “must be more prepared
even if not all succeed, in order to develop fresh approaches than ever to take risks”.62 There
and innovative content. was a general view that the BBC
Reflecting, representing and serving the diverse is in some ways less risk-taking
communities of all the UK’s nations and regions than in the past, and that it is no
The BBC should reflect the diversity of the UK both in its longer seen to have the licence to
content and as an organisation. In doing so, the BBC should take risks which recognises that
accurately and authentically represent and portray the lives sometimes they will fail. Under the
of people across the UK, and raise awareness of the different new Charter, with a greater focus
cultures and alternative viewpoints that make up its society. on distinctiveness, the BBC will be
It should ensure that it provides content and services that given back that permission and
meet the needs of the UK’s nations, regions and communities. the BBC will have the editorial and
It should bring people together for shared experiences and help operational independence it needs
contribute to the social wellbeing of the UK. for its creative talent to try, fail
and succeed.
Reflecting the UK, its culture and values to the world
The BBC should provide high-quality news coverage to
international audiences, firmly based on British values of
accuracy, impartiality, and fairness. Its international services
should put the UK in a world context, aiding understanding of
all parts of the UK. It should ensure that it produces content
which will be enjoyed by people in the UK and globally.

At its best, the BBC already provides

Box 12. A definition of distinctiveness distinctive content within each of its
There is wide agreement that the BBC should be distinctive. What is less clear services. Radio 1Xtra, Radio 3, Radio 4,
is how exactly this should be defined. At one end of the spectrum a narrow Radio 6, BBC Local and Nations Radio,
definition can be drawn, where each and every programme on the BBC must the BBC Asian Network and BBC Four,
be entirely unlike any other provider. The other extreme would allow a whole for example, are quite clearly distinct
service to be called distinctive by virtue of a single factor, such as its mix of from commercial competitors. Even on
genres. The right balance is between these two extremes. the BBC’s more popular services such
as BBC One, BBC Two, Radio 1, Radio
A description that captures the spirit of distinctiveness well comes from 2, Radio 5 Live and its online services
a former BBC Chairman who, in setting out his vision for the BBC, said: there is much that is distinctive.
But in these areas the evidence is
“It means to inform, educate and entertain – and do it in a way that’s more mixed.
original, distinctive, ambitious, ground-breaking, risk-taking, memorable,
innovative, informative, stretching, inspirational. It means programmes that Television
challenge, that open our eyes, and that bring delight. It means setting the There are a number of highly
gold standard for every genre of content from news and current affairs to distinctive programmes on BBC One,
drama, comedy and yes, quiz games and everything in between. And doing which is the home to some of the
it across television, radio, and online. most loved BBC content, from world
class drama such as War and Peace, to
What is does not mean is patronising, derivative, formulaic commodity making ballroom dancing a spectator
programming that may deliver value to shareholders or advertisers but can sport for families with Strictly Come
leave audiences short-changed.”63 Dancing, to holding current affairs
For the purposes of the next Charter a more formal definition is needed. debates around the country each week
Building on the BBC’s own definition, distinctiveness will be defined as: with Question Time. BBC One’s genre
mix is different to ITV; for example,
“A requirement that the BBC should be substantially different to other factual programming makes up
providers across each and every service, both in prime time and overall, 26 per cent of BBC One’s genre mix
and on television, radio and online, in terms of: in peak time compared to 11 per cent
for ITV.64 Its acquisitions and repeats
− the mix of different genres, programmes and content; have decreased in recent years, with
− the quality of output; hours of repeats in peak time on BBC
− the amount of original UK programming; One falling from 138 to 78 between
2010/11 and 2014/15.65 Some key
− the level of risk-taking, innovation, challenge and creative ambition; and
quality ratings have also improved
− the range of audiences it serves.” such as the BBC One ‘Fresh and New’
scores which have gone up to
72 per cent in the latest results.66

However, there is evidence that − there has been a decline in volumes

BBC One could have greater levels of in certain public service genres
creative ambition in its programming, in peak time (although this may Some viewers do not find BBC One
while staying true to its overall to some extent reflect more sufficiently distinctive in some
positioning as a more mainstream investment in fewer hours of these important ways and we believe it is
TV channel. This is of particular genres rather than a reduced overall possible to continue to serve loyal
significance given the service accounts commitment).69 For example, audiences well while taking more
for by far the largest proportion of hours of comedy and arts and creative risks in programming and
spend of any BBC service. In particular: music programming in peak time scheduling choices.
on BBC One reduced by 11 per BBC Trust, Service Review of BBC One, Two,
− the BBC Trust argued in both 2010 cent and 35 per cent respectively Three and Four, July 201477
and 2014 that BBC One needed to between 2010 and 2014.70 This is
be more distinctive, with the 2014 within the context of wider concern
report noting that some viewers Box 13. BBC One could be
about provision of certain types
find the channel “over reliant on more distinct
of programming raised in Ofcom’s
familiar programmes and believe 2015 Public Service Broadcasting
it has a tendency to ‘play safe’ in Review.71 The BBC Trust’s audience
%
programming and scheduling”. It research in support of its 2014 100
also noted that “nearly two-thirds review of services report found that 11%
90
of the pre-watershed weekday for some audiences in particular 34%
80
schedule is composed of a small magazine style factual programmes 70
number of long-established are seen as ‘patronising’ or ‘dumbed 60
programmes, shown year round”;67 down’ and are regarded as ‘cheap 50 11%
− the government’s market impact programming’;72 and 40 43%
study suggested that BBC One’s − public polling shows that 43 per cent 30
schedule has become less innovative agree “BBC One and ITV 1 are quite 20
and risk-taking over the past 10- similar apart from the adverts”.73 10
15 years, noting a decline in new
0
titles, bottoming out in 2010, and In terms of BBC Two, the BBC Trust BBC One and ITV1
a static daytime schedule highly found many things to praise in its are quite similar,
apart from the adverts
reliant on long-running property and 2014 report74 and the distinctiveness
collectables programming: Homes appears to have been enhanced in
Under the Hammer in its 20th series, recent years on some metrics.75 But Agree
Bargain Hunt in its 43rd series, it has also seen a decline in certain Neither agree nor disagree
Disagree
and Escape to the Country in its genres between 2010 and 2014, with
Don’t know
16th series;68 current affairs and music and arts in
peak time declining by 26 per cent
and 18 per cent respectively, whilst Percentages shown in figure sum to
less than 100% because of rounding
entertainment increased by
15 per cent in the same period.76 Base: all respondents in Wave 1 (2,093)
Source: GfK Social Research, Research
to explore public views about the BBC,
May 2016

Box 14. BBC commitment Box 15. Radio 1 and 2 could be more distinct
to UK film
% %
As part of its commitment to
distinctiveness, the BBC should 100 100
36% 32%
continue to showcase British film 90 90
and ensure that its film strategy 80 80
links both film production with 70 70
exhibition and coverage of British 60 14% 60
18%
film on television and online. 50 50

19%
The BBC is one of the three 40
18%
40
major public investors of film in 30 30
31% 31%
the UK. Every year BBC Films 20 20
invests around £10 million in film 10 10
development and production, 0 0
supporting around eight feature Radio 1 and commercial pop Radio 2 and commercial pop
films.78 The BBC also represents a radio stations like Capital radio stations like Magic FM
Network and Absolute Radio and Heart Network
huge opportunity for British film- are quite similar, apart from are quite similar, apart from
makers and new talent in getting the adverts the adverts
their films seen by UK audiences. In Agree
developing a new film strategy and Neither agree nor disagree
thinking about how it can enhance Disagree
the distinctiveness of its output Don’t know
the BBC should articulate how it
can maximise the impact both of Percentages shown in figure sum to less than 100% because of rounding
its role as an investor in, and an Base: all respondents in Wave 1 (2,093)
exhibitor of, UK films. Given the
Source: GfK Social Research, Research to explore public views about the BBC, May 2016
increased convergence between
film and television, this should
include further consideration Radio On Radio 1 this includes the extended
of the role of BBC Worldwide The BBC’s most mainstream radio Newsbeat programme, The Surgery
in promoting British film, as services, Radio 1 and Radio 2, are the with Gemma and Dr Radha, the Teen
recommended in the 2014 Film most popular music radio stations in Hero Awards and the recent coverage
Policy Review.79 the UK.80 They play an important role of refugees in Jordan on the Greg
in the BBC’s public service offering, James Show. On Radio 2, this includes
particularly in support of home-grown the Jeremy Vine Show and the popular
talent in the music industry. Many 500 Words Competition.
acts gained their breakthrough on BBC
radio, for example Adele, Sam Smith
and Coldplay all received their first
track plays on Radio 1. Both Radio 1
and Radio 2 have broader playlists
than their commercial rivals and a
range of specialist music shows and
live sessions. They deliver further
public value through content that
informs and educates.

However, as with BBC One, there is −−both Radio 1 and Radio 2 currently In addition, some concerns were raised
evidence that there could be even have relatively modest public service through the BBC’s consultation that
greater levels of ambition to enrich the requirements (for example, two Radio 5 Live focuses too greatly on
market and maximise the public value social action campaigns per year the most popular sports, especially
these stations can offer, while still on Radio 184 and over 100 hours football, rather than covering a
remaining channels of broad public per year of arts programming on wider range. It was also noted that
appeal. For example: Radio 2).85 This content is often exclusivity arrangements can prevent
pushed to the margins of the other broadcasters offering alternative
−−while the BBC provide a figure schedule: Radio 1 documentaries, or additional coverage that would
of just 3 and 13 per cent for for example, tend to be aired late increase choice for radio listeners.
Radio 1 and Radio 2 respectively in the evening outside of peak time, The government’s market impact
for playlist overlap with their meaning much of the “talk time” study also noted the perception of
nearest commercial competitors,81 during peak hours is similar to that Radio 5 Live as a sports station rather
the average daytime listener will found on commercial stations;86 and than sports and news.88
experience a much higher degree of
overlap than this might suggest.82 −−nearly a third of respondents to
This is because the BBC’s figures do the nationally representative polling
not take into account the number (31 per cent) agreed that BBC Radio
of times a track is played, with more 1 and commercial pop radio stations
popular tracks often played more like Capital Network and Absolute
regularly. For example, Radio 1 can Radio are “quite similar” apart from
play the same track around 100 the adverts and only 14 per cent
times in a given month, with a disagreed (see box 15). This view
“long tail” of tracks played just once was held most strongly among
or twice.83 The BBC should play Radio 1’s target demographic of the
a mix of popular tracks alongside under-25s, of whom 42 per cent
new and less well known music to agreed. For Radio 2 only 18 per cent
ensure that these tracks reach large disagreed that it was “quite similar”
audiences, but a balance is needed to commercial pop radio stations
to ensure it is sufficiently distinctive; like Magic FM and Heart Network
apart from the adverts, with
31 per cent agreeing.87
35
Online The government therefore welcomes

Box 16. The BBC website could BBC Online is the third most viewed the BBC’s plans to make its online
be more distinct online service in the UK, behind offering more distinctive and to reduce
Facebook and Google, but far ahead its new magazine-style content.
% of any other UK news outlet.89 The While the BBC will maintain a full
100
BBC’s online news has a far higher range of subjects and stories, its focus
90
28% trustworthiness rating than other will be on rigorous, impartial analysis
80
providers.90 However, in respect of of important news events and current
the BBC’s online provision, some affairs. Online content does not easily
70 17%
stakeholders have raised concerns lend itself to the kind of quotas that
60
17%
that the BBC provides ‘soft news’ currently exist for television and
50
and ‘magazine’ style content that Radio and as such it has relatively few
40
39% replicates what is provided elsewhere licence obligations, but with the move
30
and which contributes little to its towards increased online provision,
20
public service mission. It is difficult this will need to be kept under review.
10
to quantify the extent of this issue
0
given the lack of data in this area, The government’s market impact
The coverage of news on study concluded that greater
the BBC website is much and the potential for blurred lines
the same as that available between what constitutes ‘news’ distinctiveness of the BBC’s
on other websites mainstream services could have
as opposed to ‘soft news’. But the
market impact report for government not just a positive impact for the
Agree
Neither agree nor disagree also reflected these concerns, saying commercial market providers of
Disagree that, while the provision of soft news up to £115 million per year by the
Don’t know
is relatively small, the BBC’s online end of the next Charter, but also an
offering would benefit from being overall positive net market impact.92
Percentages shown in figure sum to more more distinctive, particularly given The report suggests that if the BBC
than 100% because of rounding the size of its readership. It suggested competed a little less for audiences
Base: all respondents in Wave 1 (2,093) that distinctiveness in the online through content which is already
sector would mean a “shift in the provided by the commercial sector
Source: GfK Social Research, Research
positioning of the BBC’s online news and instead focused a little more
to explore public views about the BBC,
May 2016 and information services away from on high public value programmes
‘softer’ news stories and towards more which people enjoy, everyone would
in-depth analysis and explanation”.91 be better off, and the BBC would
Given the predicted growth in online maintain levels of market share and
traffic over the course of the next – crucially – would remain popular
Charter period it will be particularly across television, radio and online,
important to ensure sufficient serving all audiences.93 People would
distinctiveness of BBC services here. have more choice across different
genres while allowing the wider sector
to grow and encouraging the growth
of the UK creative industries.

Box 17: Examples of current requirements by service

I want a system that holds our feet
firmly to the fire on distinctiveness.
That’s why I welcome an external
regulator reviewing the delivery of
the BBC’s remit.
60 hrs 1,380 hrs Lord Hall, BBC Director-General,
November 201594
at least 60 hours of at least 1,380 hours of
specialist music each week national and international The BBC’s new regulator, Ofcom
news each year (explained in Chapter 3), will also
have an important role in assessing
40% 40 hrs the board’s performance in delivering
at least 40 per cent of at least 40 hours of current a more distinctive BBC. As the
music in daytime is from affairs in peak each year experience of the BBC Trust shows
UK acts each year this will necessarily involve a degree
of judgement. But to support Ofcom’s
45% 40 hrs delivery of this role and to ensure a
clear framework of expectations for
at least 45 per cent of the at least 40 hours of music
music in daytime is new and arts programmes the BBC board the new Charter will
each year each year retain and strengthen the existing
system of content requirements
10 (see box 17).
at least ten festivals and The BBC is already exceeding many
significant live events of its existing requirements, an
in the UK and abroad achievement for which it should
covered each year rightly be proud. It has also made
some modest proposals about
Source: BBC Service Licences how these requirements could be
reformed.95 The government welcomes
the BBC’s recognition that obligations
Achieving greater This is necessarily part of the process in relation to distinctiveness will
distinctiveness at service level for creating distinctive content. be needed, but wants to set a
This will not be simple to achieve, bigger ambition.
The new BBC board (explained in particularly in television where next
Chapter 3) will be central to driving day ratings can receive substantial
the BBC to deliver more distinctive attention. Commissioners throughout
mainstream services on television the BBC therefore need to feel
radio and online, for embedding a confident that if in taking these risks
culture of innovation, encouraging there are times when ratings dip as a
risk-taking and supporting creative result, this is not a sign of failure.
ambition amongst the strong
creative talent at the BBC. To do this,
commissioning editors will need to
feel empowered to make creative
choices and take risks. In taking risks,
success can never be guaranteed.

To achieve this:
Box 18. Examples of potential reforms to content requirements
− there will be a presumption against
removing any of the current
requirements, which would result in
a weakening of the distinctiveness
of the BBC;
− consideration will be given to
whether any additional requirements Radio Television
are needed, for example the
BBC has proposed to introduce a A clearer division of peak Greater coverage of public
commitment to new UK music on and off peak requirements service genres – Ofcom
Radio 1 and 2 in daytime;96 so that content of greatest has identified that some
public value reaches large key genres are in general
− the level at which these new
numbers. decline and there are
requirements are set will consider the
other categories where
BBC’s existing performance in setting A greater focus on breaking the BBC could, potentially,
a new baseline to ensure that they new UK acts and playlists deliver more such as arts,
are meaningful. For example, BBC unlike other broadcasters. religion, current affairs and
One and BBC Two broadcast 621
An increase in some of children’s programming.
ii
hours of current affairs programming
in 2014/15, 70 per cent higher than the existing requirements Commissioning more
their quota of 365 hours;97 relating to news, unique titles in peak and
information, current affairs non-peak – increasing
− in some select areas with a strong
and social action issues the volume of new
public interest, higher levels will be
on mainstream services. programming on BBC One,
considered, for example the BBC
has suggested extending the social Broader sports coverage to stimulate creativity and
action activity on Radio 1 to four – that also support sports innovation and ensure a
campaigns a year in daytime; which currently receive “fresh” look and feel to
less coverage. the core programming
− there will also be a focus on peak
schedule.
time programming, so that valued
public service content is more Fewer high-output long-
directed towards periods of the term titles. There are many
day when the greatest number long-term titles that the
can benefit; and BBC runs that are hugely
− in addition to these content popular; it would therefore
requirements, it will be important be inappropriate to
to have a wider framework of introduce artificial caps to
performance metrics that will help average run of titles. But in
to inform any assessment of the light of the heavy reliance
BBC’s performance over time. on long-run series (as
noted above) there is the
The case for clearer average age potential to reduce reliance
targets for the more mainstream on long-term titles both in
radio services will also be considered peak and off peak.
further to ensure the BBC is serving
distinct audiences. Further details on
the process for establishing these new
requirements and metrics are set out
in Chapter 3.

Box 19. BBC content spend on services Box 20. World Service
future funding
Television
£254m
Protected licence fee
funding per annum
£1.1bn £404m £46m £85m

Funding from
government for
Radio additional services
per annum*
*2016/17: £34m, 2017/18-2019/20:

£85m per annum
£41m £46m £38m £88m £49m
The government will therefore ensure
that the BBC protects licence fee
funding for the World Service at
£8m £6m its current level of £254 million
per annum.101
Source: BBC, Annual Report and Accounts 2014/15
The BBC will also receive additional
funding from the government for
the World Service of £34 million in
Prioritising funding and Matching investment to the strategic 2016/17 and £85 million a year in the
protecting the World Service priorities for the BBC is generally a three subsequent years, a significant
matter for the BBC board. But there proportion of which will be Official
The decisions that the BBC makes in is one area so critical to the public Development Assistance. As a provider
allocating funding between services interest role of the BBC that it is of accurate, impartial and independent
will have important consequences for appropriate for the Charter to be more news the BBC World Service helps to
the overall distinctiveness of the BBC. directive. The World Service is one of strengthen democratic accountability
In radio, budgets have a broad spread the BBC’s most distinctive services. and governance, and promote Britain
across the wide range of services. It is hugely valued by audiences98 and our values around the world.
This is not the case in television and a vital part of the UK’s ability
where BBC One receives a far greater to lead the world in terms of soft The languages in which the World
concentration of funding (see box power and influence,99 with its reach Service operates, and the objectives,
19). While of course the BBC needs and reputation helping to project priorities and targets of the World
to invest in its flagship services, the UK’s cultural and democratic values Service will continue to be agreed
BBC board will need to give careful to more than 246 million people with the Foreign Secretary.
consideration to its service-level worldwide.100
funding decisions.

BBC World News is the prime

means by which the BBC distributes Box 21. The BBC can improve its performance in representing different
its television news and current ethnic groups
affairs programmes to international
audiences. But it does not have the The BBC helps me understand what is going on 78%
in the wider world
same reputation for quality as the
World Service – which is renowned The BBC makes high quality programmes or 76%
for its radio output. This is in part online content
a question of funding: BBC Global The BBC provides programmes and online content
News, the commercial subsidiary that which cover a wide range of cultural activities 75%
operates the service, had revenues
in 2014/15 of just £94 million, less The BBC is good at representing my ethnic group 39%
than 10 per cent of the revenues of
BBC Worldwide, and a staff of just
120. The BBC must ensure that all its Base: all respondents, 2,298 except for “BBC is good at representing my ethnic group”
prominent international services have where the base is all respondents, 623
a reputation for delivering high quality, Source: NatCen Social Research for BBC Trust, Purpose Remit Survey, 2015
distinctive output. The new unitary
board should therefore consider what
reforms are needed to improve the Improving provision for Black,
Box 22. Performance scores Asian and Minority Ethnic
quality of BBC World News.
serving ethnic groups
(BAME) audiences
Meeting the growing challenge % Ofcom’s third review of public service
of serving all audiences broadcasting in July 2015 found
70
that satisfaction with and positive
The BBC has an important role in 60 portrayal amongst BAME audience
62%
reflecting and serving the full range is a problem across all public service
50 55%
of diverse communities within the 54%
broadcasters.102 They found that half
UK, including in terms of age, gender, 40
46%
of all black ethnic groups (55 per cent)
sexual orientation, religion, disability, felt under represented and a similar
ethnicity, nation and region. When 30
proportion (51 per cent) felt negatively
considering how well these different 20 portrayed on television. This was
audiences are served the evidence can reflected in the BBC Trust Purpose
give conflicting results, depending in 10
Remit Survey which found that
part upon the metric chosen. Young 0 in 2014, less than four in ten
people, for example, on average use The BBC offers quite a bit, a lot,
or everything I need (39 per cent) of non-white British
BBC services less than older people but participants agreed that the BBC is
often report equivalent satisfaction White British/Irish
Chinese/Mixed/Other good at representing their ethnicity,
levels. But there are at least two areas Asian making this the lowest scoring area
where a broad range of evidence Black (see box 21).103
shows the BBC needs to reform, and
which the government would like to Base: White: 1,721; Asian: 216; Black: 151;
see addressed in the coming Charter Chinese/Mixed/Other: 188
period: to better serve black, asian and
minority ethnic audiences and people Trust, Purpose Remit Survey, 2015
in the nations and regions.

There is also data suggesting The wider media sector is starting to The government welcomes this
some core BBC services are respond to the challenge. A number strategy. The key aspects are:
disproportionately watched by of broadcasters (including the BBC)
white people. These issues of BAME have come together in the Creative − new portrayal targets: with
audiences feeling underserved by the Diversity Network to promote 15 per cent of lead roles going to
BBC was flagged by Trevor Phillips, diversity through initiatives like the BAME actors by 2020 and 50 per
the former head of the Equality and Senior Leadership Programme.105 cent of lead roles going to women;
Human Rights Commission who Others have set targets, such as − new workforce targets: with
labelled BBC Two “Britain’s whitest Channel 4, which is aiming to increase 15 per cent of senior leadership roles
terrestrial television station” and the proportion of executives from for BAME, ten per cent LGBT and
claimed “people of colour are paying BAME backgrounds from eight per eight per cent for disabled staff and
a hundred and fifty pounds a year for cent to 15 per cent by 2020,106 and to have a gender balanced senior
the upkeep of services that actually Sky Entertainment, which has set a leadership team by 2020;
do not serve them.” 104 target of 20 per cent of writers and − new commissioning guidelines:
significant on-screen roles from BAME ensuring that independent producers
backgrounds.107 The government notes have diversity in their thinking from
Box 23. Performance scores the broadcasting sector’s commitment
representing ethnic groups the very start of the creative process;
to tackling diversity and welcomes the and
positive interventions, like the British
% Film Institute’s (BFI) very successful − new initiatives: to gather views
‘three ticks’ funding scheme, now ‘BFI from diverse audience members via
60 diverse audience panels, improved
Diversity Standards’, which has been
50 extended to all projects in receipt training for managers and recruiters,
52%
of BFI lottery funding.108 However, an overhaul of recruitment practices
47%
40 the pace of change is too slow. Our and tracking of social mobility
television screens and radio waves still amongst BBC staff.
30 34%
32%
do not adequately reflect the society
20 we live in. The BBC has recognised
that it must do better, and set out its
10 commitment to tackling diversity on
and off screen in its diversity strategy.
0
The BBC is good at representing
my ethnic group
White British/Irish
Chinese/Mixed/Other
Asian
Black
Base: White: 56; Asian: 216; Black: 156;

Chinese/Mixed/Other: 195
Trust, Purpose Remit Survey, 2015

But more still needs to be done. The BBC must also give consideration Improving provision for
Given its role and public service to the full range of ideas for how it can nations and regions
mission the BBC should lead the enhance its performance, such as the
way in truly representing the diverse proposal for a BBC centre of excellence Just as the BBC also has an obligation
communities it serves. Over the for diversity programmes and BAME to serve diverse audiences, as outlined
next Charter period, the government programme makers in Birmingham, above, it also should have an explicit
wants the BBC to be the leading as suggested by Sir Lenny Henry. duty to serve and reflect licence fee
broadcaster in addressing diversity payers from across all parts of the
issues on and off screen, by bringing In addition and recognising that UK and to bring to them the issues
a realistic and positive portrayal and portrayal and satisfaction of minority that are relevant for their individual
representation of underrepresented audiences is an issue for all the communities.
groups, such as BAME and women public service broadcasters, the
into the mainstream, having a higher government will also introduce a pilot
proportion of groups consuming for contestable funding (as set out in
its content and providing specific Chapter 6). This will mean that funds
programmes and services. The will be available for making shows
government will enshrine diversity about and for diverse audiences,
in the new Charter’s public purposes, helping aspiring talent from minority
which along with a commitment to communities to get commissioned,
serve all audiences enshrined in the and onto the schedules.
BBC mission, will help hold the BBC
to account for delivering for everyone
in the UK.
Box 24. How well the BBC represents life in the nations and regions through its content
Northern Ireland Scotland

Mean nations, regions and Mean nations, regions and
communities performance communities performance
51% 44%
Wales England
Mean nations, regions and Mean nations, regions and
communities performance communities performance
48% 53%
Mean nations, regions and
communities performance
UK total 52%
Base: England: 1,217, Wales: 364; Scotland: 359; Northern Ireland: 358
Source: NatCen Social Research for BBC Trust, Purpose Remit Survey, 2015

Box 25. BBC content supply in the nations and regions

Across the nations and regions of the
Producing more network TV content in the nations and regions is a priority
UK we know that the public want us
for the BBC in order to address the perception amongst audiences outside
to do more to portray the full diversity
London that it could represent them better. The BBC produced over 50 per
of life across the UK throughout our
cent of its content out of London with 18 per cent spent in Scotland, Wales
programmes and services. The UK is
and Northern Ireland in 2014/15.
changing and it is not straightforward
to represent or portray every aspect
of British life across all of our services.
However, the BBC has a major role
Network TV programming spend BBC local radio and nations radio
to play here, and in the next Charter
by region as a percentage of hours output:
we will evolve our programmes and
eligible spend (2014):
services to meet these changing
audience demands.
London 46.7% London 8,260 hrs
British, Bold, Creative, BBC, p.46.112
Scotland 9.2% Scotland 12,494 hrs
Northern Ireland 2.5% Northern Ireland 8,722 hrs
Wales 6.5% Wales 13,784 hrs
England (ex London) 35.2% England
(ex London) 225,084 hrs
Total nations: 18.1%
Total out of London: 53.3%
Source: BBC Annual report and Accounts 2014/15
The government’s consultation was However, the results of BBC Trust

clear that, overall, people think that research, the Ofcom Public Service
the BBC serves its audiences well.109 Broadcasting Review and the
Respondents agree that the BBC has government’s public opinion research
made clear its commitment to the all show that audiences in the nations
UK’s constituent nations and regions and in some English regions feel less
and feel this is reflected in some of its well represented and reflected by the
best content, such as Gavin and Stacey, BBC, with viewers in Scotland and
The Fall, Peaky Blinders, Shetland and Northern Ireland scoring the BBC
Poldark.110 less favourably than England and
Wales (see box 24), and those in the
North of England scoring the BBC less
favourably than their counterparts in
the South.111

The government has challenged the The BBC has the editorial and − To increase nation-specific
BBC to address the issues raised by operational independence to decide content: the BBC already spends
the public and has consulted with how best to serve its audiences. more per head on services in the
administrations and legislatures of To address the challenges the nations than for audiences in
Scotland, Wales and Northern Ireland government set, the BBC has made England. The BBC plans to protect
to understand their concerns in more the following commitments and the spending in the nations relative
detail. This includes specific concerns government understands it will be to other areas, and to make some
raised in the consultation about imminently publishing details of these: additional funding available to
the lack of decentralised decision- further improve existing dedicated
making and budgets for parts of the − To improve commissioning: services in the nations, as well as
BBC based in the nations and about In the current Charter, the BBC has investing in a new digital offer with
aspects of the BBC’s commissioning made significant strides in moving more content and personalised
process which appear to work less well television production outside of services for the nations and regions.
for the nations and regions. London. In 2014/15 it exceeded In addition, the BBC is carrying out a
the 17 per cent target for content review looking at whether it has the
production in the nations, producing right balance between the provision
18 per cent (see box 25). But it of pan-UK news and dedicated news
is not just about spending the services in the nations.114
licence fee across the UK, it is also
important that the BBC’s services
reflect the whole country. The
current commissioning structure
for BBC network channels (e.g. BBC
One and BBC Two) was seen as a
barrier to the BBC creating content
which is representative of each
nation, as commissioners for these
channels are generally not based in
the nations.113 The BBC is proposing
reforms to address this – it will
create drama commissioning roles
in all nations and will ensure that
commissioners across all genres
have specific objectives to improve
portrayal. They will also fund BBC
‘Writers Rooms’ – a programme to
work with and develop new writing
talent – in each of the nations. These
moves will support both the creation
of more content that reflects the
diverse nature of the UK, through
commissioning more programmes
like The Fall, made in Northern
Ireland, but also potentially greater
investment in production in the
nations where some of this content
will be made, and also help sustain
the creative economy and the TV
production sector outside London.

The government welcomes the BBC’s − Maintain the commitment −
efforts and believes this will address to ‘out-of-London’ quotas
a number of the key issues relevant enabling a healthy independent
to the nations and regions. But in production sector in the nations
addition, the government will: and regions. Quotas for content
production outside London are
−−Require the licensing of the BBC the largest current intervention in
to include specific provision for generating value and driving the
the nations. The government wants content production industry in the
to enable the BBC to better serve nations and regions. There was
its audiences in the nations and overwhelming support for the out-
to be held to account in doing so. of-London quotas from stakeholders
To address the concerns raised by in the nations and as such they will
the public about portrayal requires remain unchanged. Stakeholders
a change in the way in which the in Scotland raised concerns about
BBC manages its services in the the ‘lift and shift’ phenomenon;
nations, to allow more localised when shows produced in Scotland
decision-making and flexibility in may have been commissioned
managing budgets across services. in London and transferred to
Following the recommendations Scotland for production, rather than
made by Sir David Clementi (as set originating in Scotland, resulting
out in Chapter 3) the government in content that is not ‘of Scotland’
will require Ofcom’s licensing of the even though it is produced there.
BBC to include specific provision for The need for more nation-specific
the nations. This will provide the content which is ‘of that nation’ has
regulatory basis against which the been recognised by the BBC and
BBC’s provision for the nations can the government expects this to be
be held to account. addressed through their changes to
commissioning processes. The BBC’s
network television supply target of
17 per cent for content spending in
the nations will be maintained with
spend being proportionate to the
population of each nation.
45
3. Enshrining independence and accountability
3. Enshrining
independence
and accountability
Creating a unitary board for the BBC 48

Introducing an external regulator 51
A new framework and licensing regime 54
Reforming regulatory processes and powers 56
Separating the Charter Review from the political cycle 57
Increasing accountability to the nations 59
Continuing the partnership with S4C 59
Introducing an easier, more efficient complaints system for audiences 60
Engaging with the public as citizens as well as consumers 61
How the BBC is governed The current system of governance and

and regulated is crucial to its regulation for the BBC was introduced
ten years ago, with the establishment There is now a large degree of
success, as it is for other public consensus amongst witnesses
of the BBC Trust. This system
and private sector bodies. improved on the board of Governors that the BBC’s present structure is
It requires building the right in a number of respects, including unsustainable. In particular, most
framework of accountability, increased transparency and more argued that, whatever the merit
incentives and checks and effective engagement with licence fee of seeking to move on from the
balances necessary to ensure the payers. There were also high hopes combined cheerleader/accountability
that this structure would provide mechanism provided by the BBC
BBC acts in the public interest,
greater accountability and ensure the Governors, with the establishment
maintains its independence, BBC acted in the public interest. But in 2007 of the BBC Trust, the changes
delivers for licence fee payers, it has become increasingly clear that were not radical enough, failing
takes account of its market the BBC has been constrained by the either to meet the BBC’s needs for
impact and operates efficiently governance reforms of the last Charter, clear management structures and
and transparently. which have in practice confused rather responsibility or to give the public
than clarified responsibilities. confidence that the BBC was being
rigorously held to account by an
The government commissioned an independent body representing
independent review of the governance licence fee payers’ interests.
and regulation of the BBC, led by
Culture Media and Sport Select Committee
Sir David Clementi (the Clementi Report, p8117
Review) to investigate these issues.116
The Clementi Review published The new Charter will therefore:
its findings in March 2016 and
recommended fundamental change to − create a unitary board for the BBC;
the current system. The government − introduce full external regulation
accepts these recommendations and of the BBC by Ofcom;
is therefore committed to major
− reform the mechanisms of
reform of the system of governance
regulation including establishing
and regulation of the BBC – keeping
a new operating framework and
the good, but changing where
operating licence regime;
necessary – to ensure that the BBC
can continue to thrive in the next − separate the Charter Review process
decade and beyond with a strong from the political cycle;
unitary board balanced by strong, − make the BBC more accountable
independent external regulation. to the nations of the UK;
− reform the BBC’s complaints
system; and
− set new expectations for public
engagement and responsiveness.

Creating a unitary board − division of governance and Role

for the BBC regulation – a unitary board in The new BBC board will be
combination with an external collectively responsible for ensuring
The Clementi Review made clear that regulator will ensure that important that the BBC acts in the public
clarity of responsibilities is essential regulatory functions are kept interest and meets its wider Charter
for effective and accountable decision outside of the BBC, as the current obligations. It will therefore have
making. This is the case for any Chair of the BBC Trust has called overall responsibility for governance
organisation, but particularly for one for. Under the current system, for of the BBC which will involve a range
as important as the BBC. It found example, there is no appeal external of duties:
that the current Trust model confuses to the BBC Trust for either editorial
governance and regulation and keeps decisions about political impartiality − creating an effective BBC by
important regulatory functions, which or decisions about the introduction overseeing strategy, service
should be undertaken by an external or closure of services. This will be delivery, operational delivery
body, within the BBC. This led Sir avoided in future; (including management structures,
David Clementi to describe the current finance, staffing levels, audit and
system as ‘flawed’.118 risk, procurement, compensation
and partnerships). It will also have
The Clementi Review recommended The strongest case for more significant primary responsibility for ensuring
that the BBC should have a single change is in this area of oversight, the BBC takes account of both public
unitary board, collectively responsible where a fault line continues to lie in and market impacts;
for everything the BBC does, for the blurred accountabilities between
− delivering an efficient BBC, that
delivering against the public purposes the Trust and the Executive board.
delivers value for money for the
and other obligations of the Charter, And that’s why we want to propose
licence fee payer, both in its public
and for acting in the public interest. reform. Responsibilities for strategy,
service and commercial operations;
It also recommended independent financial and operational management
regulation by Ofcom. The government need to sit with the BBC Executive – − measuring performance, including
agrees. This model will address to allow them to respond to a rapidly of programmes, services and
the two main criticisms of the changing environment. Responsibilities standards; and
current system: for regulation and broader − public engagement, taking account
accountability need to sit at one of both consumer and citizen
− clarity of governance – a single BBC remove. That way, there should be no interests.
unitary board will ensure there is no possibility of vagueness or uncertainty
confusion of governance issues. It about who will be held responsible for In fulfilling its responsibilities the board
will make it clear who in the BBC is what, when the chips are down. should seek to maximise transparency.
responsible for what. This will help In doing this, as recommended by the
to avoid situations that have arisen The cleanest form of separation Clementi Review, it will need to report
recently in areas such as the Digital would be to transfer the Trust’s annually in a range of areas to ensure
Media Initiative which the NAO responsibilities for regulation and transparency (see box 26).
found to have wasted £100 million119 accountability to an external regulator.
and executive pay, where the NAO There should be a single body
found that “decisions to award responsible for setting those standards
severance payments that exceed for the BBC, licensing and regulating
contractual entitlements were its activities, and holding it to account
subject to insufficient challenge for the way it spends public money.
and oversight”.120 The Public
Rona Fairhead, BBC Trust, Oxford Media
Accounts Committee said their
Convention Speech 2015122
investigation of executive pay
“exposed a dysfunctional
relationship between the BBC
Executive and the BBC Trust”;121

The responsibilities that fall upon The government agrees with the
Box 26. BBC board reporting the board and the activities it will Clementi Review that these four
need to undertake are significant. members “will need to be able to
− Audit: how finances are The board will need to provide clear balance their representative role with
managed as well as looking at public reports on each of these areas their legal duty under the Charter to
wider issues that the board is showing how the BBC has performed, serve the BBC as a whole; and given
responsible for such as value for providing public accountability the need to limit the size of the board
money. for how the BBC has delivered its they will need to bring specific skills
− Remuneration: how senior objectives. All members of the BBC to complement the skills of others.”123
executive pay is determined. board will be expected to undertake There will then be no fewer than four
roles that contribute to the discharge further non-executive members and
− Nominations: the appointment
of these functions in line with the no fewer than two further executive
of senior executives and some
wider duties on the board, such as members of the board, with the exact
non-executive board members.
the important and enduring role to number of each to be determined by
− Operating framework and uphold the independence of the BBC. the Chair of the board, consistent with
licensing: how it has met its The board will also need to be self- the upper limit of 14 total members.
regulatory obligations and critical, making sure that as a group
delivered against its Charter it operates effectively to promote the Appointments
objectives overall. BBC’s public service objectives. For the new BBC board to be effective
in meeting all of its duties it will need
− Editorial and complaints: how
The government accepts the Clementi to have the right people on it who
it has ensured the BBC meets
Review’s recommendation about the have the skills, knowledge, experience,
its high editorial standards, how
size, constitution and role of the board. stature and independence to hold an
complaints have been handled
As such, it will consist of between organisation as large and complex
and what it has learned.
12 and 14 members, reflecting the as the BBC to account. Given the
− Distribution: how it has made need for a breadth of expertise and responsibilities set out above, the
content available to the public. experience, accepting that in general time commitment required of non-
− Competition and fair trading: smaller boards are to be preferred executive members of the board is
how it has properly managed for reasons of both effectiveness and likely to be more substantial than is
its commercial and non- accountability. The board will be made usual in other organisations. For a
commercial activities. up of a majority of non-executive public service organisation, spending
members with a non-executive chair £3.7 billion of public funds each year,
− Consultation and outreach: how
and deputy chair. There will also be it is essential that these appointments
it has engaged with the public
non-executive members designated are also made with due transparency
and what it has learned from
for each of the four constituent and scrutiny. It is equally important
this activity.
nations of the UK. that the BBC board is able to ensure
it has the right mix of skills and that
the process of appointments and
make up of the board is compatible
with the fundamental principle of the
independence of the BBC.

The government accepts the proposal Whether made by public appointment In addition, the candidate identified
of the Clementi Review that both the or by the BBC board, all appointments for appointment as the Chair will be
government and the BBC should have will be expected to follow public subject to a confirmatory hearing
a role in appointing members to the appointments best practice, including before the Culture, Media and
board, with all appointments following independent members on selection Sport Select Committee ahead of
a robust and transparent process. The panels. The government intends to appointment, as is currently the
government will enshrine this in the go even further than this. All public case. The appointments for members
new Charter. Following the proposals appointments to the BBC board from each of the four nations of the
and recommendations in the Clementi will have a triple lock to ensure the UK will carry forward the current
Review, a Public Appointments best candidates are identified and arrangements for involving each
process, led by the government, appointed for these positions: of the nations in the process.
will be used to appoint the Chair,
Deputy Chair and members for each − the appointments will follow the Transitional arrangements, including
of the four nations of the UK (a total best practice of public appointments in respect of the BBC board, are
of six members). Both the remaining guidance including specifying the discussed on page 56.
non-executive members and executive skills and criteria;
members of the board will be − there will be a requirement for the
appointed by a nominations BBC Chair to be closely involved
committee of the board. This means at each stage of the appointments
that for the first time the BBC itself process including in the drafting of
will be empowered to appoint role specifications; and
members to its sovereign board. − the Queen-in-Council will
It also ensures that the BBC board will ultimately appoint each member
always have at least 50 per cent of its on recommendation from the
members appointed by the BBC itself, government.
compared to the current Trust model
which is entirely appointed by
government via a Public Appointments
process. This will strengthen the Box 27. Appointments to the unitary board
independence of the BBC for the future.
Member Appointment process
Non-executive chair of the BBC Public appointment followed by
parliamentary scrutiny
Non-executive deputy chair of the BBC Public appointment
Non-executive member for England
Non-executive members for Scotland, Public appointment involving the
Wales and Northern Ireland relevant government or executive
as under current arrangements
Other non-executive members BBC board appointment
Executive members

While the board will collectively have Introducing an The Clementi Review considered
responsibility for all that the BBC does, external regulator two broad options for how external
it is important to distinguish between regulation of the BBC could work:
the role of the executive and non- The BBC requires regulation for a
executive members particularly in combination of different reasons. − ‘Ofbeeb’: creating a new bespoke
relation to editorial matters. The board It needs editorial regulation to make regulator for the BBC that would
as a whole will have responsibility for sure it meets the standards that sit alongside the existing regulator
setting the overall editorial direction we expect, for example in terms of Ofcom.
and the framework for editorial avoiding harm and offence. Regulation − Ofcom: giving the existing
standards. The Director-General is needed to check that the BBC is communications and broadcasting
will remain the editor-in-chief and delivering against the strong duties regulator responsibility for regulating
chief executive of the BBC. Executive placed on it under the Charter. It is the BBC in its entirety.
members of the board will rightly have also important that a regulator is able
functions in relation to the day-to- to consider the impact of the BBC The Clementi Review set out the
day operation of the BBC and making on the wider market. arguments in favour of both models
specific editorial decisions. Non- but it concluded that the arguments
executives may have specific roles in The BBC Trust has introduced some for consolidating regulation of the
regard to the editorial framework, but regulatory rigour to the BBC’s BBC within Ofcom heavily outweigh
not making pre-broadcast case-by- activities, with ‘Public Value Tests’ and those in favour of setting up a bespoke
case decisions. extensive consultation with industry regulator. The main reasons for
and licence fee payers. But this work this are:
The Charter will enshrine the is hindered by the current Charter
independence of the BBC and it will which states that the BBC Trust is − scale and credibility of Ofcom –
be a duty of each and every board ultimately the ‘sovereign body’ of the Ofcom is the existing public service
member to uphold and protect BBC, and giving the Chair of the Trust regulator for the broadcast industry,
this independence. In addition, and the honorary title ‘Chair of the BBC’. with a successful track-record, the
recognising the importance of the This amounts to the BBC itself making scale and credibility to deliver and
editorial decision making of the the final judgements about whether an overview of the sector that
Director-General as editor-in-chief, its programmes have met the editorial allows for informed decision-making;
we will enshrine in the Charter the standards required and taking the final − need to avoid dual-regulation –
Director-General’s independence determination about the introduction the Ofbeeb model cannot avoid
and final responsibility for the BBC’s or closure of services. the situation of having the BBC
editorial decisions and creative output. regulated by two separate bodies.
The regulation of the BBC must be, Even if ‘Ofbeeb’ took on all of the
In order for the board to be able and must be seen to be, separate from functions that have been suggested,
to discharge its duties it will need and independent of the BBC. The it would necessarily rely on Ofcom
to be properly supported. It will BBC Executive itself recognises this, to be able to undertake the
be important that it has access with the Director-General saying in competitive regulation functions;
to independent advice and to the November 2015: and
wider organisation so that it can
properly scrutinise and challenge “I welcome an external regulator
recommendations it receives. Some reviewing the delivery of the BBC’s
have suggested that a separate unit remit. And having the power to
would be required to ensure this. impose remedies if we fail to meet
While it is crucial that the board our purposes or breach our service
receive this support, the decision as licences.”124
to exactly what is required and how
it is provided is rightly a matter for
the board to determine.

− need to avoid regulatory capture The conclusion that the regulatory Ofcom will be responsible for
and conflict – a model that sets role should move wholly to Ofcom assessing the performance of the
a regulator up with responsibility was also the position held by many BBC board in meeting its Charter
for only one body is now generally of the stakeholders that responded obligations. It will therefore have
considered to be problematic, as to the public consultation. Those overall responsibility for regulating
it risks either capture or conflict. who argued for a different model to the BBC. This will involve:
As Burns noted, “It is increasingly that of the Trust, such as the House
regarded a poor regulatory practice of Commons Culture, Media and Sport − monitoring and reviewing
to institute regulators with only one Select Committee, recognised that performance including by assessing
‘client’”125 and since then we have an increase in Ofcom’s regulatory role on a periodic basis the extent to
seen a further move away from is desirable. which the BBC is meeting its overall
this practice, for example with the mission and its accompanying public
merger of Postcomm and Ofcom. The government agrees with the purposes, with powers to remedy
conclusion that Ofcom is the best any identified failings;
body to take on full regulation of − establishing a licensing regime
the BBC. As the regulator for the setting out regulatory requirements
The strongest, and simplest, argument broadcast and communications and expectations;
in favour of the Ofcom model is sector it looks across the whole
that Ofcom is already the public of an increasingly interconnected − regulating editorial standards to
service regulator for the United technological and commercial ensure the BBC meets requirements
Kingdom’s broadcasting industry. landscape. It already regulates the in areas such as accuracy,
It already has regulatory powers rest of the broadcasting sector in impartiality, harm and offence;
in respect of the BBC, already has respect of content regulation, issuing − holding the BBC to account
considerable experience in almost licences, looking at media plurality for its assessment of both
all of the regulatory issues that the and competition issues. And under market impact and public value,
BBC gives rise to, and has during its section 198 of the Communications alongside regulation of commercial
twelve years of existence built up a Act 2003, Ofcom already has activity; and
significant reputation for dealing with significant powers to regulate the − acting as the appeal body in terms
competition issues that are likely to BBC, insofar as the Charter permits. of complaints.
come increasingly to the fore. Ofcom Ofcom will need to change to take
has scale and credibility. It would on these responsibilities and there are Under the new Charter therefore the
be a strong regulator to match a some important issues for the Ofcom BBC will, for the first time, be wholly
strong BBC. board to consider about how as an regulated by an external regulatory
Sir David Clementi, A Review of the organisation it will approach this. The body. This will introduce wholly
Governance and Regulation of the BBC, government will make sure Ofcom has independent scrutiny of what the
March 2016 the powers it needs to do this. As the BBC does, ensuring that it is held to
Clementi Review summarises, Ofcom account in delivering its obligations
“would be a strong regulator to match under the Charter and acting in the
a strong BBC”.126 public interest.

Box 28. Clearer roles and responsibilities
Current trust model
BBC Executive It is hard to define BBC Trust Both Ofcom and the Ofcom
where ‘operational’ BBC Trust have roles
Deliver services ends and ‘strategic’ Set strategy in regulating the same Editorial standards
Operational begins, often Issue licences content, requiring a Complaints
activities depending on the MOU to set out how
scale and context of Measure performance Market impact
it works in practice.
the issue, as seen in Approve guidance Assessment
executive pay.
Regulate commercial
activity
Check value for money
Public Engagement
Proposed model
BBC Executive Ofcom
Set strategy Issue licences

Deliver services Regulate editorial standards
Oversee operational delivery Arbitrate complaints
Measure performance Regulate commercial activity
Engage the public Regulate market impact
Monitor and review performance

A new framework and Licensing regime The government agrees with both of
licensing regime Alongside these three documents these recommendations. In addition,
will sit a new operating licence the new licensing regime will need
For Ofcom to do its job properly, it framework. The BBC currently has to reflect the reformed mission
will need to have the right tools. There 26 service licences which are set by and purposes set out in Chapter 2,
is currently a wide array of protocols, the BBC Trust. These licences cover particularly in relation to the focus on
remits, licences and other documents each of the BBC’s television channels distinctiveness. The government will
that set out what the BBC should and radio stations, as well as one do this in two ways:
be doing and how it should be doing licence that covers its online portfolio,
it. With Ofcom as a new regulator including iPlayer, the red button −−building on the existing system,
the government wants to see a new service and BBC Three. These are require the licensing of the BBC
framework and new licensing regime important documents – setting out to include content requirements
that consolidates and streamlines what is expected of the BBC in each that provide a set of measurable
the existing documents into a clearer particular service and providing the outputs to which the BBC can
system that can be more easily means for assessing whether the BBC be held, the majority of which
understood. is delivering. will be at service level. The BBC
will be obliged to report against
Operating framework The Clementi Review recommended these content requirements, and
At the highest level the Charter sets this new regime would contain more the regulator will enforce against
out the BBC’s mission, purposes and detail than the licences currently them, ultimately with the ability
overarching constitution. Beneath provided for Channel 3 and Channel to sanction the BBC if required.
that a more detailed Framework 4 by virtue of the unique funding In the light of the need for a more
Agreement sets out the detail such model of the BBC, the standards that distinctive set of BBC services there
as saying what the licensing regime the public expects as a result and the will be a strengthening of overall
should include. The Clementi Review obligations placed on it by the Charter. requirements; and
recommends that beneath the It would also be different from the −−require the regulation of the BBC
Charter, there should then be an current model in two respects: to include a framework of further
operating framework, setting out the performance metrics to provide
detail of how the relationship between −−greater focus on quantitative
metrics – the new regime should a wider evidence base against
the regulator and the BBC will operate which the BBC’s performance can
which should “build on relevant be moved towards a more clearly
regulatory approach with a greater be assessed. These new measures
regulatory elements within existing will be a resource that will provide
Trust documentation, such as the focus on measurable quantitative
obligations that specify desired a guide to the work of the BBC’s
‘Fair Trading Policies and Framework’, board, their commissioners and
‘Purpose Remits’, and ‘Distribution outputs and outcomes rather than
the more qualitative approach of editors, and will build in real
Framework’ that the Trust has incentives for the BBC to focus
developed over the past decade”.127 the existing service licences; and
on the public purposes and to
The government will give Ofcom −−streamlined scope – there is the produce innovative, distinctive
flexibility in how it designs this new potential to reduce the number content and services.
framework to meet these objectives. of licences. The Clementi review
But the government agrees that a highlighted options relating to
consolidation of the various policies licences based around genre and
that currently govern the relationships groups of services (e.g. television).
between the BBC Executive, Trust and There is also the option of having
Ofcom would help to simplify and just one licence document setting
clarify roles and responsibilities. out what is expected of the BBC
across the range of its services.

The government will provide BBC publications This framework is set out in the table
guidance to the regulator on content In addition to these regulatory below. Together these documents
requirements and performance documents, The Clementi Review will provide a clear framework for
metrics to set clear policy parameters recommended that the BBC be the BBC that will make it clear which
for the creation of this new regime. required to publish documents organisation is responsible for what.
Ofcom will then be expected to in relation to both its output and It will bring together the various
consult to establish the final set of corporate activities, referred to as the elements of existing regulation into
requirements and metrics in line with Creative Remits and Workplan, giving a clearer framework that will support
this guidance. Some of the areas which a transparent account of its plans on the increased accountability of
the government is considering to an annual basis, including budgets for the BBC.
include in its guidance are set out in services. The government agrees that
Box 18 in Chapter 2. These will need these will be serve an important role
to be kept under review by Ofcom in ensuring the BBC is accountable
over the period of the Charter and to the public and clear about its
it will have the power to revise and intentions. The Charter will enshrine
amend the content requirements and the obligation for the BBC to produce
performance metrics following due these documents.
consultation. The government will also
require the BBC to publish its audience
‘Appreciation Index’ data that will
allow the public and the regulator Box 29. New framework and licensing structure
to assess how well it is serving its
audiences.
Government
The Charter is the constitutional basis of the BBC

BBC Charter setting out its mission and public purposes as well as
These metrics will help Ofcom and Framework its governance structures. The Framework Agreement
assess the performance of the BBC Agreement provides further details including setting out the detail
of what is required in the licensing regime.
in meeting its public purposes in
an objective way. But coming to a
view about the BBC’s performance
will always require complex and This is where the detail for how Ofcom and the BBC will
Operating interact is set out, including the detail setting out the
nuanced judgement: not all aspects Framework processes that Ofcom will use to regulate the BBC.
of performance are susceptible to
Ofcom
quantitative measures, and metrics

that do exist may not always point in This will contain the content requirements (primarily
the same direction. The regulator will Operating quantitative service level obligations) placed upon the
Licence Regime BBC by the regulator as well as setting out performance
therefore need to apply its experience metrics that will measure the BBC’s performance.
and skills in taking an approach to
monitoring the overall performance
of the BBC that recognises these The BBC will be required to set out in advance its plans
Creative Remits
BBC
for the year ahead, providing transparency of its strategy

complexities. This will need to be and Workplan and spending plans.
reflected in how Ofcom organises
itself to perform the role.

The Clementi Review recommended −−In addition to these annual and Reforming regulatory
that the BBC board should have periodic reporting requirements, processes and powers
responsibility in the first instance for Ofcom will have the ability
publicly reporting its performance. to undertake any additional For Ofcom to be an effective regulator
The government agrees that the first investigations of BBC activity falling of the BBC, it will need appropriate
duty falls on the BBC board to account under its regulatory remit that it processes and powers. A number of
for its activity which is why there will deems necessary, and to publish changes are needed to the current
be strong obligations placed on the its findings. It could, for example, system to deliver this.
BBC board, as set out earlier in this choose to investigate the BBC’s
chapter. The role for Ofcom, then, is performance in particular genres One area in which reform is needed
one of holding the BBC to account and or in how it is supporting certain is the way in which changes to BBC
setting out how it has discharged its audiences where there is clear services are approved – for example
own duties. The Charter will therefore evidence that the BBC is failing to the opening or closing of a channel.
set out Ofcom’s role in reporting on meet its audiences’ expectations, Under the current model the BBC Trust
both an annual and periodic basis: and where it is proportionate to is ultimately the responsible body for
do so. Further information about determining whether a change is in
−−Annually Ofcom will need to report Ofcom’s powers in this regard is the public interest and whether any
on the BBC’s compliance with set out in Chapter 4. market impact is justified, drawing
its licence obligations and on its on work from Ofcom and the BBC
performance metrics, as discussed Timing and transition Executive in doing so. The Charter
in Chapter 2. It will also need to The fundamental changes to sets out the mechanism for doing
say what else Ofcom has done as governance and regulation set out this, called a Public Value Test (PVT).
a regulator of the BBC (e.g. how in this section will require time for Such an assessment is needed, but
it has handled complaints and if the bodies involved to implement, the current arrangements have proven
it has made an adjudications on given the complexity of the changes, cumbersome, expensive and time-
new services). the need for a smooth transition, consuming, blurring governance and
−−Periodically Ofcom must take and the requirement to consult on regulatory functions. This is bad for
a more detailed look at the BBC some elements of the new structures. the public and bad for the industry
and how it is delivering against Recognising the need for stability at because it means that decisions can
its purposes. This provides this time, the current Chair of the BBC take years to work their way through
opportunities to look both broadly Trust will continue as Chair of the the system. For example, the most
across the range of services and BBC through to the end of the current recent regulatory decision, to move
specifically at any issues of concern. term (October 2018). The government BBC Three online, was announced in
will work closely with the relevant March 2014 but not agreed by the
organisations and will set out further BBC Trust until November 2015.
details on transition in the summer.

The Clementi Review proposed Separating the Charter Review This raises the question of the
that the BBC board should take from the political cycle appropriate length of the next Charter.
responsibility in the first instance A longer Charter period would give
for taking account of the public The BBC has been constituted by the BBC freedom to operate with
value and impact on the market in Royal Charter since 1927. While other greater certainty and confidence. But
their decisions, in line with its role approaches such as a statutory basis a shorter Charter would ensure it does
in overseeing all of the BBC’s work have been suggested, responses to our not become out of date in an era of
and ensuring it delivers in the public consultation emphasised continued ever increasing technological change.
interest. It balanced this by saying support among both industry There is also a benefit in further
that Ofcom should be able to make stakeholders and the general public distancing the Charter renewal process
a final determination on whether a for maintaining the Royal Charter as from the UK national electoral cycle:
change is acceptable. This puts the the method by which to constitute with fixed term parliaments of five
responsibility for considering the the BBC. This includes the BBC Trust, years this could favour either a shorter
public interest in the right place, which believes that a Charter “is the Charter of seven to eight years or a
with the BBC board setting the BBC best method for guaranteeing the longer one of 11. Charters have been
strategy and having responsibility for independence of the BBC.”128 of varying length in the past so there
delivering against the BBC’s Charter is no precedent for a particular length.
obligations, while ensuring that there The Royal Charter as the foundation
is a hard edge of regulation to make of the BBC has stood the test of time
sure this is done properly, holding the and while some reforms are needed, Box 30. Lengths of
BBC to account with particular regard these don’t mean the whole process of Royal Charter
to market impact and protecting the enshrining the BBC by Royal Charter
legitimate interests of third parties should be abandoned. The government
to the extent that the BBC has failed will therefore continue the unbroken
to give them due consideration. The line of Royal Charters from 1927,
ensuring that there is a constitutional Length Number of
new Charter will set out a model for Charters
a reformed process that follows this basis for the BBC and laying out the
public purpose of the corporation
principle. The Framework Agreement
will also specify time-frames by which guaranteeing its independence and
outlining its governance structures.
More than ten years
2
such a process should be conducted,
given the market uncertainty that
can be caused by a protracted period
The government will also enshrine
Ten years
5
in the Charter those important
of assessment. Further detail about
Ofcom’s regulatory powers and
conventions that have been
established over time, to ensure future
Less than ten years
1
sanctions are set out in Chapter 4. Charter Reviews are appropriately
transparent, open and democratic.
Charter extensions
(six months – 4
This will include the requirement for three years)
a future Charter Review to undertake
public consultation and to allow
parliamentary scrutiny through
debates in Westminster and in the
devolved legislatures.

Given the priority the government It will be for the government of the
places on protecting the independence day to determine the precise scope of
of the BBC, the next Charter period this review, consulting the BBC unitary
will be for 11 years to 31 December board and Ofcom. The review will
2027. But given the speed of change not, however, consider changes to the
within the sector and the fundamental fundamental mission, purposes, and
reform of the governance and licence fee model, as these have been
regulatory structures that this Charter determined by the current Charter
will make, it would not be appropriate Review process. This will provide long-
to wait over a decade to review term stability to the BBC on these
how the reforms are bedding in and central issues.
whether any changes are needed. The
Charter will therefore make provisions The continuance of the Royal Charter
for a review to provide a health check system in this reformed manner
focusing on the governance and will ensure that the right balance
regulatory reforms at the mid-term. continues to be struck between
This review will take into account scrutiny and independence; ensuring
the relevant findings of the most the BBC has clarity about its long
recent review of BBC performance term objectives and is protected from
that Ofcom will have published. political influence and ensuring that
Future funding issues, including an the reforms proposed in this Charter
assessment of the BBC’s commercial are having the desired effect.
income and activities, should be
considered alongside the review.
To perform this review the
government will have full access
to information and co-operation
from the BBC management.
Box 31. Charter timeline
Start of UK Mid Term Review UK End of

11 year National National 11 year
Royal Election Election Royal
Charter Charter
2017 2018 2019 2020 2021 2022 2023 2024 2025 2026 2027
BBC Royal Charter Length and Mid Term Review

Increasing accountability Additionally, the memoranda of Continuing the partnership

to the nations understanding agreed with each of with S4C
the devolved administrations and
The BBC is our national broadcaster, legislatures committed to three The BBC Trust and S4C Authority have
acting in the interests of the whole further measures which will be had a strong and successful funding
of the UK. But it must also reflect enshrined in the new Charter: and accountability partnership since
the democratic makeup of the UK. 2011. In addition, S4C and the BBC
As noted in Chapter 2, the BBC needs − the devolved administrations will have developed a wider strategic
to be better at representing the have a formal, consultative, role relationship that is delivering for
audiences it serves, particularly in the in any Charter Review, including audiences in the Welsh language and
nations where views on the BBC are providing the devolved governments has shown the benefits of the two
generally less positive than England.129 with copies of the draft Charter to organisations working closely together
This situation has not been helped by lay in the devolved legislatures; – for example, the inclusion of S4C
the current Charter which distances − the BBC will lay their annual content on iPlayer has meant that
the responsible trustees for the reports and accounts in each of Welsh language content can reach a
nations from the BBC’s delivery. the devolved legislatures; and wider audience.
To ensure appropriate accountability − the BBC will be required to submit In the new Charter period it is
with the nations, the new Charter will: reports to, and appear before, important that the funding and
committees within the devolved accountability arrangements in place
− require specific non-executive legislatures on the same basis as between the two continue to protect
members of the unitary board to the UK Parliament. the independence of both parties
provide accountability to each of and provide certainty and clarity of
the nations of the UK, alongside funding for S4C. Both the BBC and
wider responsibilities placed on S4C believe this is possible – both in
them. These members will have the short term as the BBC moves to
an important obligation to engage new governance arrangements and
with the public in the nations and also in the longer term, where the
to understand their needs as well S4C Review will be able to assess
as providing other relevant skills these in detail. The S4C Review,
and expertise to the board. This will which will be carried out in 2017,
bring the voices of the nations right will be a comprehensive review
to the heart of BBC decision making; looking at a range of issues including
and remit, accountability, governance
− give the regulator the power to and funding arrangements. The
scrutinise the BBC’s performance government, the BBC and S4C are
in delivering for the nations, and confident that any new arrangements
make sure the people of those between S4C and the new BBC board
nations can be clear about what will protect the issues of independence
they can expect from the BBC. that are important to S4C and the
As such, we support the proposal stakeholder community during the
from the Clementi Review that the review period.
licensing regime should set out the
obligations and measures that the
BBC is required to meet and report
against in serving their audiences
in Scotland, Wales and Northern
Ireland.

Introducing an easier, more There are two main reasons why This approach will require Ofcom
efficient complaints system the reforms have not satisfied critics. to take on responsibility for the
First, there remains confusion around regulation of aspects of BBC content
for audiences
responsibilities. Currently, one currently outside of the Broadcasting
An important way in which audiences complaint can be handled by two Code. The government will work
can hold the BBC to account is by different regulators, the BBC Trust with Ofcom and the BBC to make
telling the BBC what they think about and Ofcom. Hundreds of complaints sure that the BBC is held to the high
its services and programmes directly: about the BBC go to both. Second, editorial standards that the public
the BBC receives more than 250,000 Ofcom is specifically precluded from rightly expects.
editorial complaints every year. regulating the BBC’s accuracy and
impartiality record – the subject of
The current complaints system was a large proportion of complaints.
described by the Clementi Review as This means that the BBC Trust deals
“complicated and confusing”.130 This with this important area without any
reflects long-standing concerns about external oversight.
the complaints systems in the BBC.
For example, in evidence to the House The reformed model of governance
of Lords back in 2011 Lord Grade, provides an opportunity to improve
former Chair of the BBC, described and streamline the way audience
the situation as “hopeless, absolutely complaints are considered and make
hopeless”.131 Since then the relevant it easier for the public to engage
bodies – the BBC Executive, the BBC with the BBC. The new Charter will
Trust and Ofcom – have worked introduce two changes:
together to try and make things work
−−a single complaints system
as well as possible, implementing
with regards to the BBC in relation
changes following the 2012
to editorial matters. In the first
complaints framework review,132 but
instance the BBC will handle the
they are hampered by the structures
complaint. Where a complainant
in which they work. A number of
is unsatisfied with the response, or
consultation responses reflected
where the BBC fails to respond in a
this concern.
timely manner, the complainant will
then be able to complain to Ofcom;
−−external regulatory oversight
of editorial matters. Ofcom will
be able to consider complaints
about all BBC content, including
accuracy and impartiality in BBC
programmes. This means the BBC
will continue to be held to the high
editorial standards that the public
expects. It will build on the expertise
and experience that Ofcom already
has in considering complaints
about the BBC and the rest of the
broadcasting sector.

Engaging with the public as Given how crucial it is to understand Ofcom, as regulator, will also have
citizens as well as consumers how well the BBC delivers for the UK an important supplementary role to
as a whole, the government wants play. In the first instance it already
The BBC does more than provide this engagement to become better, undertakes a significant amount of
content to viewers as customers. more flexible and driven by real need. research to understand how people
Being publicly funded it needs to use Under the new model of governance are using media and communications
its resources to benefit the UK as a the primary responsibility for this technology, such as through the
whole – capturing the wider social will fall squarely on the BBC’s board. Communications Market Review
benefits that justify the provision of The government expects the BBC to and in support of its Public Service
publicly funded broadcasting. As do much more to engage audiences. Broadcasting Reviews. With its new
Sir David Clementi said in his review, This is not the kind of activity where responsibilities to hold the BBC to
“The BBC will need to do more to government can be prescriptive and it account, it will need to make sure
engage licence fee payers, and be would not be right to impose analogue it has sufficient understanding of
accountable to them, in the next solutions for a digital age. But this what the public needs and expects
Charter period. It needs to engage the only makes the duty on the board of the BBC.
public as citizens as well as consumers stronger – it must actively develop its
of BBC content.”133 This will ensure the own approach to make sure audience
BBC is providing the right services for and citizen engagement informs its
the country as a whole, beyond the decision making.
preferences of individuals.
This means that the BBC will need
One of the central functions of the to spend a considerable amount of
BBC Trust under the current Charter time and effort understanding and
has been to represent the interests of reaching out to people in all parts of
licence fee payers, with the definition Britain so that it can shape its services
of ‘licence fee payer’ being very broad, to create the greatest public value,
effectively meaning everyone living focusing on engagement with the
in the UK. To engage with licence fee public as citizens as well as consumers.
payers the BBC Trust has developed It will be able to build on some of
a range of tools to understand the foundations that the Trust has
people’s views. Some of these, such laid in this area. Complementing the
as Audience Councils, are mandated existing outreach programmes with
by the Charter, others have been new digital tools should allow the
developed by the Trust itself. For BBC to do this even more effectively
example, the Trust publishes its annual than has been possible to date. It will
‘Purpose Remit Survey’ showing also need to understand the views
research about how audiences rate the and citizen/consumer interests of its
BBC’s performance against its public international audiences.
purposes, and how they prioritise what
the BBC should be focussing on.

4. Supporting the creative sector
4. Supporting the
creative sector
Assessing the BBC’s market impact more effectively 65

Making the BBC a better partner 66
Sharing content and services as widely as possible 69
Increasing transparency about the volume and impacts of the BBC’s promotion
of its own services 70
Maximising consumer choice – avoiding bidding wars and scheduling sensitively 70
Establishing a new public service content fund 71
Opening up the BBC archive further 73
Supporting and invigorating local news provision across the UK 73
Leading the industry in a potential future digital switchover for radio 74
The UK creative sector has

Box 32. The creative industries have grown at twice the rate of the UK
thrived in recent years, and economy since 2009
the BBC is a contributor to its
success. The sector has grown % growth
at twice the rate of the rest of
50
the economy since 2009 46%
(see box 32), generating 40

£84 billion, or 5.2 per cent, of
Gross Value Added, for the UK 30
economy, supporting almost 20%
two million jobs and contributing 20
8.7 per cent of UK service
10
exports.134 It is critical to both
the economic health and wider
0
‘soft power’ of the UK that this 2009 2010 2011 2012 2013 2014
robust growth continues in the Creative industries growth UK economy growth
decade ahead. The BBC, given its
size and scale, has an important Source: Department for Culture, Media & Sport, Creative Industries Estimates, January 2016
role in enabling this.
A number of studies, including the −−direct contracting: the BBC is a
government’s market impact study major purchaser, spending more
conducted by Oliver & Ohlbaum and than £2 billion, including its in-house
Oxera, have highlighted a variety production spend, on the services of
of ways in which the BBC can have around 2,700 suppliers involved in
positive effects on the rest of the making its content. It accounts for
market, these include: around 50 per cent of all original UK
content spending by PSBs, of which
−−crowding-in: the BBC’s in recent years over £400 million
commitment to content spending as per year has been contracted out to
a whole, and to UK content spending independent production companies
specifically, can encourage other rather than delivered in-house.136
commercial players to spend more
of their income on UK content in −−partnership working: the BBC
areas such as news, drama and arts often works in partnership with
than they otherwise might – the so others, enabling other creative
called ‘crowding-in’ effect.135 organisations to access the creative
talent within the BBC and benefit
from its reach and reputation.
−−technology spillovers: the BBC’s
role in developing platforms such as
Freeview, Digital Audio Broadcasting
(DAB) and iPlayer has reduced
the risks in these developments
for commercial broadcasters and
has established new patterns of
consumer behaviour.
The BBC can, therefore, evidently be The government wants to see a The following further measures will
a force for good for the broadcasting thriving, successful BBC enabling a enable the BBC to be more market
sector and the creative industries thriving, successful and diverse UK sensitive in the new Charter period:
as a whole. However, there is also a media landscape. Given the UK’s
range of evidence which suggests that broadcasting and creative industries − the BBC’s market impacts will be
the BBC can have a negative impact are going to face a series of challenges assessed more effectively;
on parts of the UK media market. in the coming years, including − the BBC will become a better
The government’s market impact increasing competition for audiences partner;
study, for example, noted that the and content from global platforms − the BBC should share its content as
BBC could push up input costs which like Google, Netflix and Amazon, widely as possible;
create barriers to entry, or hamper and with audiences making increasing
commercial market growth when use of audiovisual content online, − there will be more transparency
public investment through the BBC it is critical that the BBC leverages about the volume and impacts of
increases the risk or reduces the return its size and scale to maximise its the BBC’s promotion of its own
to new commercial investment and positive potential impacts on the services;
so crowds it out.137 These impacts creative sector and minimise any − the BBC should avoid bidding
may be unintended consequences, undue negative impact. This will allow wars and the BBC board should
but they are no less real as a result. both the BBC and the wider sector carefully consider the impacts of its
There is also some evidence to suggest to flourish in the face of globalisation scheduling decisions;
that some of the positive market and technological change. − the licence fee will create new
impacts of the BBC may be lower than opportunities for others to
they were at the start of the current The new Charter will therefore
emphasise that the BBC needs to tread provide pluralistic public service
Charter ten years ago.138 broadcasting content in the UK;
more lightly and considerately around
Recognising these effects, regulators its commercial competitors and that − the BBC will open its archive further;
have previously blocked some BBC it should promote positive outcomes − the BBC will support and invigorate
proposals for new services, including for others as well as for itself wherever local news provision across the UK;
the video-on-demand joint-venture possible. The proposals already set and
between BBC, ITV and Channel 4,139 out in Chapter 2, aimed at making the
and the proposal for BBC One catch- BBC’s larger services more distinctive, − the BBC will lead the industry in a
up services (BBC One+1).140 Concerns will have a role here. The plans set potential future digital switchover
have also been expressed, as part of out in Chapter 5 to open up more of for radio.
the government’s consultation, about the BBC’s spend to the independent
the potential wider impact of some of production sector will also benefit the
the BBC’s future plans, including the wider creative economy.
impact of proposed music streaming
services on commercial providers,
and the further commercialisation
of bbc.com on other UK media
players with global offerings, such as
theguardian.com and the MailOnline.

Assessing the BBC’s market In order to ensure that Ofcom can −−Sanctions: Under the current
impact more effectively carry out these functions effectively, system there has been insufficient
the current system of assessing incentive for the BBC Executive to
As set out in Chapter 3, the BBC’s new market impacts will be strengthened take account of the rulings of the
board will have initial responsibility in two important respects: BBC Trust in its regulatory role.
for assessing whether the introduction In its service licence reviews, for
of new services by the BBC promotes −−New powers: the reformed regime example, on a number of occasions
the public interest by striking the right will give Ofcom broad powers as recommendations were made that
balance between benefitting viewers recommended by the Clementi were then not followed through
and listeners (and thus creating public Review. As set out in Chapter 3, by the Executive, or only belatedly.
value) and avoiding undue impacts on there are two important aspects The 2010 Service Licence Review
other services and companies. This is of this approach: (a) Ofcom will for BBC One, for example, called
an important responsibility, and given freely determine when an issue or a for the channel to improve its
concerns that the BBC has not always change requires investigation, giving distinctive offering by “being more
been as sensitive to its potential it wider powers than the BBC Trust ambitious and taking more creative
impact on third parties as it needs to which must meet a ‘significance’ risks in peak time”,143 but although
be, the new unitary board will need test; and (b) intervention will not some progress had been made, the
to ensure that it firmly keeps sight of just be limited to new services: if, for 2014 Service Licence Review for the
these considerations. example, incremental changes over channel noted that some viewers
time led to notable changes to the still didn’t “find BBC One sufficiently
But the ultimate decision on these BBC’s market share the regulator distinctive in some important
issues will lie with Ofcom. Ofcom could assess the appropriateness of ways”.144 A system of regulation
already has a wealth of experience that independently of whether the that is not backed by sufficient
in ensuring that the introduction BBC had introduced a new service. force is clearly an inadequate one,
of BBC services does not cause These broad powers will allow the and the new system needs to
disproportionate market impacts. Its regulator to take a proportionate improve on this. The regulator will
recent assessment of the BBC’s plans approach, able to scale the intensity therefore have a range of powers to
to introduce a BBC One+1 channel, of investigation and remedy sanction the BBC, including where
for example, found this would likely depending on the significance of an appropriate through proportionate
lead to decreased profitability of issue or change. This will help ensure fines, and the ability to direct the
commercial competitors,141 and led to the strong unitary board is balanced BBC, for example to stop proposed
the BBC Trust declining this proposal.142 by a strong regulator. changes or to reduce the scale of
services or activities. Systems will
be put in place to ensure that any
proceeds from financial sanctions
on the BBC are not mingled with
general taxation.

The regulator will also need to ensure Making the BBC

that the nature of decision-making in a better partner
terms of assessing the public value Under the current Public Value Test
of BBC proposals does not bias non- regime, where a decision is debatable, The BBC is a diverse organisation with
commercial interests over commercial the default position appears to be to outstanding creative resources and
ones: concerns have been raised that approve a new service. For example, skills at its disposal. Reaching almost
under the previous system the ‘benefit the BBC Trust recently provisionally the whole of the UK’s population via
of the doubt’ has at times been given approved the extension of CBBC’s television, radio or online, it is uniquely
in favour of proposed changes even hours to 9pm. This was despite the placed to connect large audiences
when there were significant negative Trust’s audience research finding that with ideas and content. However,
impacts on the wider market and ‘respondents were, on the whole, the BBC can be even more successful
the public value was questionable. opposed to extended hours.’ if it harnesses the creativity and
It would not, however, be appropriate COBA145 inventiveness of others and can create
– as some have proposed – to go enormous value by lending its reach
further and formally bar the BBC from and expertise externally. Working and
any actions that might have a major delivering in partnership with others
potential negative market impact. is a key theme for the BBC and for
Ofcom will need to take a view on the organisations who seek a platform
benefits identified and will carefully for public value content, particularly
consider the proportionality of those in the educational, sporting and
gains against any downsides, paying cultural sectors.
particular attention to the question
of whether a proposal may cause The BBC has delivered very successful
significant harm to competition. projects with a range of cultural
partners during the current Charter,
and there is a general consensus
that it has improved its partnership
working in recent years, in part due to
the leadership shown on this issue by
the current Director-General. Flagship
partnerships have been delivered with
the British Museum, the Imperial War
Museum (see box 33), and the Royal
Shakespeare Company (RSC) for the
400th anniversary of Shakespeare.
There are a wide range of other
cultural partnerships which provide
great value for viewers and listeners.
Radio 3, for example, has supported
live classical music events outside of
London, including festivals in Lichfield,
Cheltenham, Bath and Huddersfield.

Similarly, the BBC worked closely

Box 33. The BBC as a successful partner with partners such as the National
Theatre Wales, with whom it
First World War Centenary:146 the BBC worked with established the Wales Drama Award,
the Imperial War Museum (supported by the Arts and and in Scotland the BBC joined a
Humanities Research Council) to mark the Centenary number of partners to deliver a
of World War 1. This landmark four-year programme 16-day cultural programme of free
(2014-18) has already helped to create over 130 specially and live BBC events to accompany
commissioned programmes and around 2,500 hours of the Glasgow Commonwealth Games.
programming including World War One At Home, which is The BBC can also deliver important
collecting over 1,400 stories from places around the UK outcomes through working in
which still bear traces of war. The BBC also worked with partnership with sports organisations.
the Imperial War Museum to preserve and digitise the Many respondents to both the
archive material of the landmark 1964 series The Great War. Charter Review consultation and the
consultation on the government’s
‘A History of The World in 100 Objects’:147 the new sport strategy150 highlighted
partnership between BBC Radio 4 and the British Museum the important role the BBC plays
produced the hugely successful radio show and book, for sports in Britain.
which explored the history of the world through a series of
The BBC has a long history of showing
manmade objects in the British Museum’s collections. The
nationally significant live sporting
100-part radio series was described by The Guardian as a
moments, from Wimbledon to the
‘broadcasting phenomenon’,148 and the interactive website
Olympic Games. It also helps to
encourages museums and individuals to submit objects
introduce audiences to sports that
relating to different time periods or themes. Visitors to
may not otherwise reach mainstream
the British Museum can view the original 100 objects on
audiences, for example in its coverage
display in its galleries.
of World or European Championships
in sports like swimming, gymnastics
‘This Girl Can’:149 the BBC continues to support Sport and hockey. And its partnership work
England’s highly successful ‘This Girl Can’ strategy, a such as its support for Sport England’s
national campaign to inspire women of all ages to exercise. ‘This Girl Can’ campaign, for example,
This includes producing a ‘This Girl Can Too’ promotional further promote sport participation.
video featuring the BBC’s female presenters and providing The government wants to see the BBC
links and promotion through its own participation-oriented further enhance the partnerships it
sporting initiative, ‘Get Inspired’. builds in sport to help deliver the key
outcomes that we know engagement
in sport and physical activity can bring.

− Focusing more on potential − Incentivising partnership working

market impact – the BBC needs to on television – it is not clear that
We are often told that partnership is be sensitive to the market impact of all those responsible for budgets
something we seem to do to people, some of its partnerships. Its heavy in the BBC are appropriately
rather than with them. In the next promotion of certain large festivals, incentivised to prioritise partnerships
Charter, that must change, as we for example, can have negative (or the public value they can
learn how to work in a genuinely impacts on smaller local and provide) over delivering on other
collaborative way with like-minded regional festivals. aspects of their day-to-day role.
institutions, with suppliers, individuals This is particularly the case with
− Engagement with SMEs – while
and competitors. television which has, in general, far
it is right that the BBC also works
British. Bold. Creative. BBC, September 2015 with large established players such less of an established track record
as the Open University, RSC and of successful partnership working
However, while many stakeholders the British Museum, it should also than radio, and where stakeholders
have told the government that the ensure that in its tendering and have said that the BBC appears to
BBC remains a coveted partner, there partnership strategy it is placing be less open to taking the associated
are areas where it could improve. sufficient priority on engaging risks.151 Opening up television to
These include the following: smaller organisations as well as more partnership working should
individual artists. therefore be a priority for the BBC
− Partnering ‘with’ not ‘to’ – and the board may want to assure
some have described the BBC as − Integrating editorial and itself that the depth and breadth of
previously taking an approach of commercial negotiations – partnerships on radio is replicated
having partnering done ‘to’ them, while the BBC effectively integrates on television.
not collaboratively and mutually editorial and commercial issues
‘with’ them. Some of the BBC’s most relating to rights and contracting in These issues are primarily matters
successful partnerships have been its negotiations with its commercial for the new unitary board to consider
those where it has been partnering broadcasting partners, it is less clear and address. But the government also
‘with’ not ‘to’ and the BBC appears that this is the case with some of sees that working in partnership is a
to have learnt from some of its past its more ‘creative’ partnerships: way in which the BBC can multiply
experiences here, but as it itself discussions about commercial the public value that comes from
acknowledges (see quote above), issues can take place at a late stage the licence fee, by enabling others to
further progress is possible. and therefore risk jeopardising the connect with audiences. Therefore the
− Focusing on the long term – success of the partnership. new Charter will ensure that positive
the long-term funding and Charter engagement with the wider market,
framework for the BBC makes it and partnership working in particular,
uniquely well placed to focus on is a natural part of the BBC’s way
longer-term horizons, and avoid a of operating. The new Charter
short-term style of ‘fly-in, fly-out’ will require the BBC to prioritise
partnership. collaborative working where to do
so would provide public value, and to
− Better coordination – the Director- ensure that its partnerships are fair
General has recently appointed a and beneficial to both parties. The
Head of Creative Partnerships to government also expects that the new
improve coordination and clarity of board will consider how best to report
the BBC’s partnership approach, but on working in partnership with others
there is more that could be done. and what metrics it could include in
the relevant regulatory documents
to ensure that the public can assess
whether the BBC is enhancing the
breadth, depth, quality and positive
impact of its partnerships.

Sharing content and services During the government’s consultation,

as widely as possible
As the media environment has
pay-TV operators highlighted that
the BBC relies on the iPlayer as the
main way in which viewers can access
56%
56 per cent of UK
changed substantially, there are BBC content. While the government
increasingly more ways in which believes that the BBC must make households have a
BBC services and content can be sure that viewers have appropriate pay TV subscription,
consumed, on a wide range of devices access to BBC content – whether up from 44 per cent
and through many different portals that be on its own platform (the 10 years ago
and platforms. The BBC itself is BBC iPlayer), or those operated by
committed to a strategy of making others – the BBC also has a duty as a Source: Oliver & Ohlbaum and Oxera,
its full range of content available public service broadcaster to ensure BBC television, radio and online services:
where the consumer would expect it that its content is given appropriate An assessment of market impact and
distinctiveness, 2016
and in ways that secure appropriate prominence, findability and attribution
prominence, attribution, quality and on those platforms run by others,
value for money. The BBC iPlayer is and should have the flexibility to
the most widely available video-on- secure these public benefits in
demand service in the UK, available commercial negotiations.
on over 10,000 devices and platforms.
However, BBC video-on-demand The BBC should look to maximise
content is not currently available to the opportunities it has to make
watch outside BBC iPlayer on some its services and content as widely
leading pay-TV apps. available as possible and it should only
place reasonable conditions on how
As viewing habits change and services its content is distributed. The BBC can
develop, the BBC’s approach to where rely on a proprietorial approach but
and how it shares services and content only where the public interest is best
will need to keep pace with where served by this.
and how audiences consume content,
ensuring that it delivers against its It is for the BBC board to set and
commitment to make BBC content publish a strategy and policy on
as widely available as possible. With distribution – consulting industry –
more than half of all households and for the BBC to pursue distribution
taking subscription-based services, arrangements in line with that
the BBC needs to consider how it strategy. The regulation of this part
can continue to make services and of its work will be part of Ofcom’s
content available to viewers who use Operating Framework for the BBC as
other platforms and applications to set out in Sir David Clementi’s review.
watch content. Any complaints about the BBC’s
distribution arrangements should
go to the new BBC unitary board with
appropriate appeals to Ofcom.

Increasing transparency about This is particularly the case given the Under the current Charter the BBC
the volume and impacts of lack of clarity about the extent to Trust regulates the BBC’s cross-
the BBC’s promotion of its which the BBC’s promotion activities promotion of its commercial services
are focused on drawing attention through its UK public services, as
own services to less well-known or high-value part of its fair trading guidelines.
The BBC, like other broadcasters, public service content, as opposed In the next Charter period Ofcom
promotes its programmes and services to advertising already popular will regulate such cross-promotion
across its television channels, radio programmes and stations with a activity (the BBC’s promotion of
stations and online services via trailers view to maximising overall audiences. commercial propositions) within the
and links. Promotion of this kind can new Operating Framework. As part of
The new Charter will make clear the process of issuing this Framework,
benefit audiences, allowing them to
that any promotion should focus on Ofcom will consult publicly, giving
hear about programmes which might
showcasing high public value content industry an opportunity to comment
interest them, and thereby bring the
and that this needs to be carried out on the impact of these current
BBC’s unique public service content
in a way that is sensitive towards the practices. This will enable Ofcom
to the widest range of audiences.
rest of the market. This will be the to set rules around the BBC’s cross-
However, given that the BBC is responsibility of the BBC board. But promotion of commercial services
perceived as being ‘advertisement the government is clear that the board through its UK public services.
free’ there are legitimate questions should ensure that promotions should
to be raised about the extent to be tied closely to supporting the BBC’s
which it should be using its valuable public purposes rather than driving Maximising consumer choice
airtime on either television or on radio market share. – avoiding bidding wars and
advertising its own programmes. scheduling sensitively
Under the new Charter the BBC
The BBC also needs to balance the
board will also need to publish The extent and potentially adverse
positive impacts on audiences with
information or relevant metrics on effect of competitive scheduling
the potentially difficult consequences
all its promotion activities, including between the BBC and competitors
of this for other providers: the BBC’s
the amount of promotion of public was an issue raised during the course
popular television services can confer
service content. This should include of Charter Review. The government’s
significant reach when they promote
the number of minutes of promotion recent market impact study conducted
shows on BBC radio stations. While
it undertakes and time of day. This will by Oliver & Ohlbaum and Oxera
commercial television channels
provide greater transparency relating analysed this issue and concluded
have the same ability as the BBC
to the BBC’s operations and allow that overall the extent of competitive
to promote their own programmes
the public and the wider market to scheduling was unclear. How schedules
across their own portfolio of channels,
assess whether the BBC’s activities are made and agreed is a complex
the BBC is the only scale broadcaster
are proportionate. and dynamic process. However,
with an extensive portfolio of services
econometric analysis of scheduling
across television, radio and online
slots and associated revenue impacts
platforms, and only it can promote its
for ITV did suggest that scheduling
own radio services on television for
on BBC One is probably reducing the
free. It therefore occupies a position
relative profitability of drama series
in which it needs to be mindful of the
in particular, with ITV drama viewing
consequences of its own actions.
down around six to eight per cent
when clashes occur.152 ITV has in turn
indicated that this loss of viewers and
advertising revenue has a potential
adverse effect on incentives to invest
in such content.

While the use of digital recorders But while the government would like It is the government’s view that while
and catch-up viewing is increasing, to see the BBC continue to ensure the licence fee continues to be paid
the majority of people still watch that UK audiences have access to for receipt of television services a
television live and scheduling does quality content from abroad, it small proportion of the licence fee
effect which programmes licence fee would also like to see due restraint may be available to organisations
payers can watch and enjoy. by the BBC through a focus on other than the BBC to help deliver
buying programmes which would quality and pluralistic public service
The government is clear that it cannot be unlikely to be shown by other content, using competitive forces to
and indeed should not determine free-to-air broadcasters in particular. ensure the highest quality for the best
either the content or scheduling of Guaranteed income via the licence value for money. This approach may
programmes. And schedule clashes fee allows the BBC to take risks and help deliver appropriate volumes of
are clearly not the responsibility of trial new things with British audiences. certain valued public service genres
one particular operator in the market. If other free-to-air broadcasters are which Ofcom recently identified as in
We expect the BBC board to consider willing to pay for acquired content decline, and stimulate plurality within
the best interests of viewers – giving made overseas and make it available public service broadcasting in areas
them a choice and variety of shows to UK audiences there will often be such as children’s programming where
to watch, and carefully consider any little or no public interest in the BBC the BBC has a near-monopoly and
potential undue negative impacts of becoming engaged in a battle for that where contestability might deliver
its scheduling decisions. content (particularly for rights other new, fresh content. This system has
There is a further issue relating than sports) bidding up the price, operated abroad in both New Zealand
to ‘bidding wars’ for programme or spending licence fee income on and Ireland for a number of years.
rights. In general, the BBC should be something which could be provided
by others. The government therefore intends to
commissioning new content rather pilot – on a small scale – a contestable
than buying previously made content fund for public service content in
from others and it is indeed the largest Establishing a new public the next Charter period. This will be
investor in original UK programming. service content fund available to organisations to create
Purchasing ready-made content from public service broadcasting content
others can provide public value at The licence fee is a fee paid by the which would need to be shown to
times by bringing previously unseen, general public to watch or record the UK population on a platform
high quality programmes to UK television programmes. This applies with an appropriate reach and be
audiences. The BBC introduced ‘Scandi regardless of which television channels free-at-the-point-of-use (for example,
drama’ in the UK through The Killing, a person receives or how those content could be shown on Channel 4,
for example, which was first aired on channels are received. The licence fee Channel 5 or ITV).
BBC Two. is not a payment for BBC services or
any other specific television service, The contestable public service content
although licence fee revenue is used fund will receive up to £60 million of
to fund the BBC. While almost all funding for two-three years (planned
the licence fee income is currently £20 million per annum) after which
provided to the BBC, that has not the impact of the scheme will be
always been the case – indeed 12 per assessed and a decision taken about
cent was used for other purposes prior whether to close, maintain or grow
to 1962 and £75 million of the licence the scheme. Funding will be directed
fee is still used to fund public service from unallocated funding from the
content on S4C, for example. 2010 licence fee settlement, to help
support a series of priority areas in
public service broadcasting provision.
This money is additional and separate
from the funding agreement that the
government and the BBC reached in
July 2015.

The government will consult on the

most appropriate body to administer Box 34. New public service content fund
this new fund and on the criteria for
the scheme over the coming months. A fund of £20 million a year for a two-three year trial period, starting in
It is anticipated that the scheme 2018/19. Available for content on television or shown online and focused on
will include funding for children’s under served genres, as identified by Ofcom, and under served audiences.
programming (where there has been a
21 per cent reduction in public service Possible underserved genres the fund could focus on:
broadcast investment since 2009153 − children’s programming;
in part due to stricter advertising − religion and ethics;
restrictions) and potentially one or
more of the other genres identified as − formal education; and
‘at risk’ by Ofcom in its third public − arts and classical music.
service broadcasting review.154 It could
also be used to support content for Underserved audiences:
those audiences that are underserved − diverse audiences/BAME and groups with protected
by public service broadcasters at characteristics; and
present (such as BAME audiences
− nations and regions.
or audiences in the nations and
regions) to support greater diversity
in programme making, both on and In addition the scheme will need evaluation criteria
off screen. The intention is that the against which bids will be assessed; government will
fund will be operational to make its consult on these in the autumn. These could include:
first grants in 2018/19, subject to − value for money (including likely impact and reach);
state aid approval from the European − creative risk-taking;
Commission. − innovation;
− leveraged funding (to allow co-funded bids); and
− content in English or a UK minority language.
How would bids be assessed?

− Applications considered by a small panel of industry
figures who would be appointed by the organisation
administering the fund.
− All funding applications to have secured distribution on a
free-to-air broadcaster/online publisher so available free
to those who have funded it.
− Could require investment to be balanced between a
variety of mainstream programmes for large audiences
and specialist or niche audience output.

Opening up the BBC As part of the Ideas Service, the Supporting and invigorating
archive further BBC already has plans to make local news provision across
available a significant amount of its the UK
The BBC has a rich, near 100-year historical content in digital format as
legacy of programme making. That well as act as a platform for digital Local and regional news provision in
content, besides offering the potential content from partner organisations the UK is a key element of our plural
to be exploited commercially, can such as museums and universities. media landscape – reporting on issues
act as a unique lens on British and The government welcomes this that matter to the communities they
global history, as well as informing commitment and encourages the affect and helping hold decision-
and inspiring those in education and BBC to do more to open up its archive makers to account. However, the
academia. and ensure that it can be used by industry has faced challenging times:
the public and as wide a range of the circulation of regional newspapers
The BBC archive is, therefore, a
institutions and organisations as has seen an average annual decline of
valuable asset for the nation. The
possible. There should be particular almost seven per cent between 2009
BBC’s Genome Project (launched in
scope to do more to enable access to and 2013 and revenues have suffered
2010) estimated there to be more
BBC historic news archive given the similarly (see box 35).155 This is in large
than a million archived programmes,
low costs of securing rights relative part attributable to the increased
as well as extensive collections
to other output. role of the internet: while many local
of documents, still images, sheet
news providers are making great
music, artwork and physical objects.
strides in transitioning their audiences
Although the BBC has made great
online, the monetisation of this move
strides towards digitisation in recent
remains challenging.
years, much of the archive remains
in its original state – only a small
proportion of its archive has been
digitised to date. Box 35. Regional press revenues have been in decline
In ‘British, Bold, Creative’, the BBC set
£ millions
out a vision for the creation of a new
‘Ideas Service’, which could have a 900
Decline in total revenue on prior year
significant impact on how audiences 800
and third party institutions access 700
-7.1%
-6.0%
-4.1%
and use the BBC’s archive. The BBC
600
sees significant potential in curating
500
content from across the BBC and from
partners – using both new content 400 -12.1%
-11.2%
and mining the richness of the archive 300 -8.9%
to help explain the world around us. 200 -2.7% -3.7% -3.8%
Of course there are limits to what 100
can be achieved cost-effectively, as 0
securing rights for that content can 2008 2009 2010 2011 2012 2013 2014
be complex, time-consuming and Trinity Mirror Johnston Press Archant
therefore costly.
Note: Trinity Mirror numbers include both national and regional revenues, since these are
not reported separately in recent years.
Source: O&O for NMA, The news market in the 21st Century and the likely implications
for the BBC’s role, 2015

The government expects the BBC to The government welcomes this Leading the industry in
use its privileged position to support focus, but recognises that these a potential future digital
the provision of news and information plans will need to be implemented
switchover for radio
and specifically we expect to see a in consultation with industry. In
positive partnership with the local particular, there are details about Over the current Charter period the
news sector. The BBC has set out the Local Public Sector Reporting BBC has played an important role
proposals about how it would like Service which still need to be resolved. in developing the market for digital
to do this: The BBC has been working with the radio in the UK, which has seen
News Media Association (NMA) to significant growth over the past few
−−a News Bank – syndicating audio develop proposals and good progress years (see box 36). The BBC has four
and video content for local and has been made in agreeing the national digital-only radio stations
regional news organisations across principles of such a service that sees and has extended Digital Audio
the UK; the BBC providing some funding for Broadcasting (DAB) coverage of its
−−a Data Journalism Hub – partnering local journalists to provide reporting national services to over 97 per cent
with a university to make data for use by the BBC and other news of households. The BBC has also
journalism available for news providers. These proposals could supported the investment being
organisations across the UK; provide a positive contribution to the made by the Department for Culture,
−−an Independent Audit of Local diversity and quality of local news Media & Sport and commercial radio
Content – looking at usage of local provision. The government welcomes to extend local DAB coverage to
press content by the BBC on its the BBC’s commitment to continue match commercial FM coverage by
media platforms and vice versa; and to work with the industry to develop the end of 2016. The government
and implement these plans and its expects that over the next decade
−−a Local Public Sector Reporting commitment to provide funding for the BBC will continue to support
Service – investing in a service to 150 journalists from 2017, given the the transition from analogue to
report on local institutions. public interest in a plurality of local digital radio and to strengthen its
and regional news provision. This partnerships with commercial radio
number could rise to 200, subject to and industry stakeholders.
the outcome of a joint review of usage
and funding in 2019.
These proposals will sit alongside the
BBC’s existing local services which the
government wants to see continue to
thrive. The provision of local news and
current affairs are vitally important
to the communities they serve, for
example, BBC local radio provided
essential information to listeners
during the floods resulting from
Storm Desmond.

In addition, the BBC should develop

Box 36. Digital radio listening in the UK has seen a steady increase arrangements to deliver and procure
with third party organisations,
% as appropriate, support for the
60
most vulnerable listeners at risk of
losing BBC radio services after a
50 switchover, and to make appropriate
arrangements to deliver this
40 scheme with or through third-sector
organisations. These arrangements
30
would need to be agreed as part of
20 the government’s decision to proceed
and in the context of future funding
10 settlements for the BBC.
0
2009 2010 2011 2012 2013 2014 2015
Weekly Reach Share
Weekly Reach: The number as a percentage of the UK/area adult population who listen to a
station for at least five minutes in the course of an average week
Share: The percentage of total listening time accounted for by a station in the UK/area in an
average week
Source: RAJAR, Market Trends, 2015
A decision about whether or not to In response to a decision to proceed

proceed with a radio switchover is with a future radio switchover,
likely to be taken by the government the government would expect the
at some point during the next Charter BBC to complete the final phase of
period. This is not a decision that its national DAB network so that
can or should be taken at this stage. its coverage is equivalent to FM
However, if the decision is taken to coverage, subject to value for money
switch, the government expects that considerations. In doing so, the BBC
the BBC will take a leading role in that will need to ensure that coverage of
transition, working in partnership with BBC Nations services in Scotland,
commercial radio. In doing so the BBC Wales and Northern Ireland in DAB
must consider the best way to enable also fully matches FM coverage
the wider radio market to flourish ahead of a switchover taking place.
whilst managing its own impact. The government would also expect
the BBC to ensure that appropriate
enhancements were made to its local
DAB coverage in England – subject
to value for money – and to reach
agreement with commercial radio on
sector-wide marketing plans, as well as
the arrangements and funding for the
delivery phase of switchover.

5. Enhancing efficiency and transparency
5. Enhancing
efficiency and
transparency
Opening up more commissioning to competition 78
Providing in-principle support for the BBC’s proposal to establish its
production arm as a new commercial subsidiary (BBC Studios) 82
Giving the new unitary board responsibility for delivering efficiency across
the BBC’s activities, including pay and staffing 83
Increasing transparency of BBC spending 85
Reviewing and regulating the BBC’s commercial subsidiaries
and ensuring they operate fairly and efficiently 85
Introducing more independent scrutiny about how effectively
the BBC spends its funds 87
Continuing and improving the BBC’s leading role in technology
and research and development 89
The BBC is a publicly-owned The BBC has operated a rolling series As part of this Charter Review, the
institution granted unique and of efficiency programmes over the government has therefore considered
last two decades, beginning with how the BBC can better harness the
significant privileges, including
the ‘Producer Choice’ programme, full potential of the funding it receives
nearly £4 billion of public funding which began the process of opening and how the BBC’s management can
a year.156 While it is editorially up BBC production to competition, be set the right incentives to ensure
and operationally independent, and culminating in ‘Delivering the efficient use of public funds.
this position requires that it Quality First’, its current efficiency This will, of course, be a central area
is scrutinised effectively for programme. As part of this the BBC of the of the new unitary board’s
the decisions it takes and the is planning to make £1.5 billion of responsibilities. In addition, during
savings by 2016/17.157 the next Charter the BBC will be both
efficiency with which it spends enabled and compelled to operate
its money. The Delivering Quality First more efficiently through competition,
programme has already delivered transparency and scrutiny.
significant results: the BBC has
reduced its management costs by Specifically, the government will:
13 per cent since 2011158 and its
overhead costs stand at 7.6 per cent, −−open to full competition the
with the BBC planning to be in the top £740 million162 the BBC spends each
quartile of comparable organisations year on in-house television content
by next year.159 production (with the exception
of news and news-related current
But it is clear that significant challenges affairs), concluding a process first
remain. Only 23 per cent of people started in the 1990s;
said in nationally representative −−provide in-principle support for
polling that the BBC is efficient in how the BBC’s proposal to establish
it spends its money. And the BBC itself its production arm as a new
recognises that striving for greater commercial subsidiary (BBC Studios);
levels of efficiency is a continuous
process.160 Its own analysis suggests −−enshrine greater public scrutiny of
that £200 million of additional annual BBC spending through the National
savings can be delivered by 2021/22,161 Audit Office;
and there are legitimate questions −−require greater transparency of BBC
about the extent to which the BBC is spending on its staff, talent and
operating as efficiently as possible in its output;
a range of areas. −−ensure the BBC’s commercial
subsidiaries are reviewed and
regulated to operate fairly and
efficiently; and
−−require the BBC to undertake
a detailed review and value for
money assessment of its current
R&D activity.
Opening up more
Box 37. Main existing BBC content quotas (in per cent)
commissioning to competition
Statutory BBC Trust-imposed
The BBC is a substantial commissioner
quotas framework
and producer of original public
service content. It currently spends Television Radio Online
over £1 billion a year in the UK’s
creative economy,163 in addition In-house productionA 50 80 75
to the £740 million it spends on Independents 25B 10 25C
producing television content in-
Open to full competition 25 10 n/a
house.164 During this Charter period,
the BBC has opened up more of its A A minimum guarantee for television and a maximum for in-house radio and online
content production to competition via content supply.
a ‘Window of Creative Competition’ B Qualifying independents only.
for its television and radio content C In fact, 30 per cent of qualifying online content spend was allocated to independent
production. There are now also suppliers in 2014/15.
quotas for the amount of BBC
content that must be made by Competition has increased
qualifying independent producers Box 38. Overview of BBC commissioner choice, making sure
across television, radio and online. original UK television content that commissioners have access
In television, for example, 50 per cent spend 2014 to and can choose from the best
of qualifying hours are guaranteed to creative talent to drive up the quality
in-house production, 25 per cent are Non-qualifying
spend (e.g. news)
Qualifying
in-house production of the shows we watch and listen to,
allocated to independent production 31% 35%
and has also helped ensure licence
companies not owned by broadcasters fee payers get value for money by
(qualifying independents), and subjecting a proportion of the BBC’s
25 per cent are competed between budget to market forces. Notably, of
BBC in-house production and the 25 per cent of television content
qualifying and non-qualifying
£1.2bn production for which the BBC’s
independents, with less competition in-house production unit competes
in radio and online (see box 37). with independent producers, the latter
typically win 80 per cent, although
this varies substantially by genre.
This regime has also helped the UK’s
Qualifying
external production independent television production to
34%
grow to £2.9 billion165 a year (see box
Source: Based on data published by BBC
39), and Ofcom’s latest analysis shows
Trust and Ofcom that 259 companies166 are producing
content for the public service
broadcasters.

This raises the question of whether

Box 39. Independent producer revenues by TV and non-TV activities further reforms could deliver
further benefits: for the BBC, for
£ million the independent sector in television
3,500
production, for the burgeoning and
Revised Methodology
emerging independent sector in radio
3,000 and online content production, and
2,500 most importantly, for licence fee
payers, by making the best content in
2,000 the most efficient and cost-effective
1,500 way. As the BBC Trust has noted,
“the BBC’s current framework of quotas
1,000 needs to be reconsidered to ensure the
500 Corporation retains the ability to secure
high-quality and creative content on
0
2004 2006 2007 2008 2009 2010 2011 2012 2013 2014 behalf of the licence fee payer.”165
(2005 (2007 (2007/ (2010 (2010 (2011 (2012 (2013 (2014 (2015
Census) Census) 2008 Census – Census – Census) Census) Census) Census) Census)
Census) restated) restated)
TV revenue Non-TV revenue
* Non-TV revenue includes corporate production, new media and other non-TV activities
such as online publishing, talent
Source: Oliver and Ohlbaum report for Ofcom, Trends in TV Production, 2015
The market has been characterised in The content production reforms of

recent years by mergers and buy-outs the last Charter have undoubtedly
of some of the UK’s most successful been successful. Many of the BBC’s
independent producers – a sign of best-loved programmes are made
the commercial and creative success by independent producers, including
of the UK production industry – but Sherlock, Question Time, the Graham
the market remains dynamic with Norton Show, University Challenge
between 77 and 136 new companies and numerous others (see box 40
starting up in each of the last for award-winning examples).
four years.167

The Director General, in a speech in

Box 40. Examples of award-winning independently-produced content 2014 said that “competition is good
for the BBC for the BBC and I want more of it.”169
The government agrees. While the
Television Radio BBC’s own proposals for content
production reform go some way to
harnessing the benefits of greater
Sherlock Radcliffe and Maconie
competition (the BBC has proposed
produced by Hartswood films 6Music, produced by Smooth
lowering the level of in-house
Operations
− Winner, Best Drama Series at 2011 guarantees from 50 per cent in some
BAFTA Awards − Silver, Music Radio Personality genres and entering into a voluntary
of the Year award at the Radio commitment of 60 per cent of radio
− Winner, Outstanding Lead
Academy Awards 2014 hours being opened up to the market
Actor in a miniseries (Benedict
within six years), the BBC can be
Cumberbatch) and Outstanding
Just Silence more ambitious in its approach to
Supporting Actor in a miniseries
Radio 1, produced by Just Radio commissioning content, particularly
(Martin Freeman), at the 66th
television content, such that licence
Primetime Emmy Awards − Gold in the Best Documentary fee payers get both the best possible
award, Radio Academy Awards content and value for money from the
Line of Duty 2013 funds the BBC invests, at the earliest
produced by World Productions possible opportunity.
− Winner, Best TV Drama at the The Danny Baker Show
5Live, Produced by Campbell The government therefore proposes
2014 Freesat TV Awards full competition for all the BBC’s
Davison Media
− Winner, Drama Series at the 2015 television and online content spend,
Royal Television Society Awards − Gold, Speech Radio Personality and will remove all existing in-house
of the Year, Radio Academy guarantees, with the exception of news
My Life: I Am Leo Awards 2014 and news-related current affairs. This
produced by Nine Lives Media − Gold, Best Entertainment change will empower commissioners
Programme, Radio Academy to select the very best content for
− Winner, Children’s Programme at Awards 2013 licence fee payers, from the BBC’s own
the 2016 Royal Television Society producers and creative talent as well
Awards as from independent producers.
− Winner, Best Factual at the 2016
International Kids’ Emmy Awards
Online The BBC will continue to have to meet
the independent production quota in
− Winner, Best Factual at the 2015 The Dumping Ground: television, and the government will
BAFTA Children’s Awards You’re The Boss also retain production quotas in the
developed and produced by CBBC nations and regions.
Interactive and Somethin’ Else
This is a significant change for the
− Winner, Best Interactive (Adapted) BBC. It goes further than the BBC
at the 2015 BAFTA Children’s agreed with the Producers Alliance
Awards for Cinema and Television (PACT) in
December 2015 as in addition to that
agreement, which the government
expects the BBC to deliver whether or
not BBC Studios receives regulatory
approval, there will also be full
competition in television for children’s,
sports, non-news related current
affairs content and returning series.

A change of this magnitude in markets − the government’s proposed The mid-term review will also assess
at very different stages of development mid-term review will assess the the effectiveness of this new approach
needs sufficient transitional time. effectiveness of the approach to to competition in radio and online.
Therefore, in addition to the opening content commissioning; and
up agreed by the BBC and PACT, As noted above, there will be one
− children’s, sports and non-news exception to this new regime. To
namely at least 40 per cent of the related current affairs will be fully
existing in-house guarantee within the ensure there is sufficient plurality
competed by 2019; in the supply of news, and given the
first two years to 2018, the government
proposes that: For radio, the new Charter will require practical difficulties in opening up the
the BBC to compete a minimum of BBC’s news provision to competition,
− the BBC will reach 100 per cent 60 per cent by 2022, in line with the the government will continue to
competition (except in news and agreement with Radio Independents exempt the BBC’s news and news-
news-related current affairs) by Group (RIG). related current affairs output from
the end of the Charter period, the approach of full competition.
demonstrating immediate progress, For online, 100 per cent of the BBC’s
subject to the new BBC unitary non-news online content will be open
board identifying any exceptions on to full competition by the end of the
value for money grounds; Charter period.
Box 41. Overview of BBC television content production quotas (excluding news and news-related
current affairs)
Current situation
Independent production
In-house guarantee (50%) WOCC (25%) quota (25%)
BBC + PACT proposal
In-house guarantee BBC Studios Independent production

(20%) contracts WOCC (45%) quota (25%)
(10%)
No less than: Potentially open No more than: No less than:

40% in Current Affairs to competition in 20% in Current Affairs 40% in Current Affairs
40% in Children’s future depending 20% in Children’s 40% in Children’s
50% in Sport on decisions by
BBC Commissioners
White paper proposal
Full competition for commissions Independent production

(75%) quota (25%)

But importantly, it would also make

Box 42. The BBC is the biggest player in the UK content the BBC more efficient. On the
production market (companies by revenue, 2014) basis of positive experiences in the
past, the BBC believes that exposing
StudioCanal
£34m Argonon BBC productions to the discipline
£30m Red Arrow
Hat Trick
Productions £30m Others
and competition of the market will
Sony
£51m £230m result in improved efficiency of
£52m its productions: the BBC achieved
Avalon BBC
£58m £741m significant efficiencies of around six
William Morris per cent a year during the 1990s after
£62m
Zodiak the Broadcasting Act 1990 opened up
£69m
Warner Brothers
25 per cent of television content to
£85m external producers.172
NBCU
£101m ITV
£536m
Establishing the BBC’s production
Tinopolis
£140m unit as a commercial player is a
significant move. The BBC believes
its production arm, housed in a new
£147m £253m £425m commercial subsidiary, would initially
receive around 15 per cent of all UK
Source: Ofcom, Review of the operation of the television production sector, 2015 commissioning spend. This would
make it one of the largest production
Taken together, these reforms Providing in-principle support companies in the UK with estimated
will open up hundreds of millions revenues of approximately
for the BBC’s proposal to
of pounds of BBC spend to £400 million at launch.173
establish its production
competition.170 This will provide
arm as a new commercial Noting the potential for market
a welcome boost to the creative
subsidiary (BBC Studios) distortion from a change of this
economy but fundamentally it is
nature, a number of stakeholders
about ensuring the BBC secures The BBC first announced in voiced concerns about this proposal
the best possible creative ideas and 2014171 that it plans to move a during the government’s consultation.
provides audiences with the best significant proportion of its in-house Some of these related to the number
possible content at the best possible programme-making capacity into of returning series transferred
price. Not only does competition BBC Studios, a new commercial automatically to BBC Studios at its
bring in new ideas – it also drives and subsidiary. This new company would launch, which is addressed above.
inspires the BBC’s own creative talent compete for programme commissions But there are also concerns about the
and production staff to new heights. from the BBC as well as from other potential lack of effective separation
broadcasters both in the UK and of BBC Studios from the rest of the
internationally. BBC group. A lack of clarity over this
separation could result in market
The BBC proposals are designed to distortion, since BBC Studios is
make its own production capability supposed to operate as a commercial
resilient for a future with increasing business without any element of
competition for commissions, public subsidy through the licence
including from global players. The BBC fee, operating on a level playing
hopes that giving BBC production staff field with commercial producers. By
the opportunity to work for more than winning contracts from others there
one potential customer, as is currently is also the risk that this could shrink
the case, will give more creative a flourishing sector.
freedom to the people that BBC
Studios will employ and make it an
attractive employer for the best talent.

The BBC has worked with PACT to The government hopes these concerns As set out in Chapter 3, the
tailor the BBC Studios proposal174 can be addressed and overcome government is creating a new unitary
to address some of these concerns. and believes that the new approach board which will be uniquely well-
However, their agreement also notes to competition in BBC spend and placed to ensure that the BBC is
that BBC Studios needs to be subject the establishment of BBC Studios run efficiently and that the BBC is
to a number of safeguards to make as a new commercial subsidiary transparent to allow effective scrutiny.
sure that it operates fairly. This view could offer significant creative and Among other issues, the government
was endorsed by Ofcom, which noted economic benefits for the BBC, the expects it to address the following
that BBC Studios had the potential wider production sector and most challenges, which focus on pay-related
to be a pro-competitive development importantly licence fee payers. issues given the high proportion of
if appropriately regulated. the overall budget this represents:
Radio falls outside of the BBC’s
Recognising Ofcom’s preliminary proposals for Studios. But through Layers of management
view that BBC Studios could be Charter Review we have considered As the BBC’s Director-General has
a pro-competitive move for the what the appropriate framework recently acknowledged, the BBC
UK’s television production market, should be for independent production continues to have a reputation
the government is pleased to give in radio. The BBC agreed in June for excessive management layers.
‘in-principle’ support to the BBC’s 2015 that 60 per cent of radio hours The BBC itself notes that it still faces
proposals, subject to them passing would be available to independent challenges in achieving its target
the appropriate regulatory tests and production by 2022, an increase from of senior management representing
requirements: it is essential that the 20 per cent now. The government at most one per cent of the total
new BBC Studios will trade fairly and welcomes this agreement as workforce.176
without advantage through the licence contributing to the overall move
fee. This support is also dependent towards greater competition and Management and talent pay
on the successful adoption of the will enshrine this commitment in In recent years the BBC has taken
government’s proposed approach the Charter. steps to bring under control the
of full competition in content amounts it spends on its senior
spend and the removal of the BBC’s Giving the new unitary board management. Talent spend is down
existing in-house guarantees (except responsibility for delivering by 15 per cent since 2008177 and its
total management bill has reduced
for news and news-related current efficiency across the BBC’s
affairs) as outlined above. When the by 13 per cent since 2011.178 Some of
activities, including pay its top earners also have lower total
BBC provides further detail about and staffing
BBC Studios the whole proposal remuneration packages than those of
will be subject to rigorous scrutiny, The BBC clearly has a range of costs competitors: the Director-General’s
consultation with industry and final beyond content production, and while total remuneration package in
approval by the BBC’s regulator, it has proposals to deliver annual 2014/15, for example, was £466,000179
to ensure appropriate separation while the Chief Executive of Channel
efficiencies of at least one per cent of
from the BBC’s public services. 4, a much smaller and less complex
its addressable cost base,175 the BBC
will need to develop strategies for organisation than the BBC, earned
further efficiencies in other areas. £855,000180 in the same year.

However, in a survey for The Times in Overall staffing levels Other areas
2014 almost eight out of ten people Many public sector organisations There is a range of other costs
thought that the BBC paid its top have recently delivered substantial the board will need to investigate
management and talent too much,181 efficiencies through headcount including property costs, where the
with 87 earning more than the Prime reductions, with overall Civil Service BBC performs poorly on certain
Minister (£150,000).182 In light of staff numbers, for example, falling benchmarks, particularly regarding the
the public’s views, the BBC’s new by over 15 per cent since 2009. price per square metre of Broadcasting
unitary board should take a robust A number of media organisations have House.184 And the BBC has already
approach to remuneration for talent experienced similar reductions. Despite demonstrated that savings can be
and management. The BBC must an extensive efficiency programme, made to certain programme budgets
continue to strive to be an ever-more BBC staff numbers grew by 300 without there being a corresponding
efficient, lean organisation and be between 2013/14 and 2014/15183 and drop in audience appreciation.
seen to be bearing down on costs – only fell by 1 per cent since 2010
paying particularly close attention to (see box 43). This suggests that greater As we set out in Chapter 3, the
how much it pays those who earn the focus is needed in this area. BBC board will need to report on
highest salaries – paid for with licence areas such as value for money on
fee payers’ money. an annual basis.
Box 43. Staff reductions at the BBC have been very modest compared
to those in the Civil Service since 2010 In relation to the perception of
excessively high pay, this is first and
foremost the responsibility of the
remuneration committee of the
unitary board. But the new body
5% reduction
responsible for accountability should
10% reduction
be actively prepared and seeking to
hold the board accountable for overall
15% reduction levels of pay across the BBC.
CMS Select Committee Report, 2015185
20% reduction
25% reduction
2009 2010 2011 2012 2013 2014 2015

Q1 Q1 Q1 Q1 Q1 Q1 Q1
Civil service staff numbers BBC public service group employees
Source: Institute for Government; BBC Annual Report and Accounts

Increasing transparency The BBC will maintain the current Reviewing and regulating the
of BBC spending cap on talent spend of a maximum BBC’s commercial subsidiaries
of 16 per cent of internal content
The new board can also go further
and ensuring they operate
costs. The new BBC board will also
on improving the transparency of have a duty to manage talent costs fairly and efficiently
how the BBC spends the licence fee. and conduct and report on a rolling The BBC commissions and owns
The BBC publishes a lot of information programme of talent pay reviews, globally sought-after content: shows
about how it does its business and with independent, expert advice. The like Doctor Who and formats such as
how it spends the licence fee on the BBC board’s remuneration committee, Strictly Come Dancing are international
various services it runs. At present, chaired by a non-executive director, hits, showcasing the best of British
for example, the BBC publishes will also approve the pay levels creativity. BBC content, beyond the
information on its aggregate spend of new staff and freelance talent direct enjoyment it brings to UK
on individual services, such as BBC above £250,000. The government audiences, is therefore a valuable
One, and on the number of hours also expects the new BBC board commodity that can be marketed to
of content it broadcasts in different to consider other ways in which provide licence fee payers with the
genres. However, the BBC can go it can improve transparency and best return on their investment.
further in becoming more transparent management of talent pay.
to licence fee payers. There are two The BBC uses its commercial
particular priorities: Spend by genre subsidiary BBC Worldwide to distribute
As the House of Lords Select BBC content in the UK and overseas.
Talent spend Committee on Communications It currently has the right of first refusal
The BBC already publishes data on noted,186 transparency about the over the ability to invest in, and later
the number and salaries of talent in BBC’s spend on particular genres is on to exploit, BBC content, making it
news, radio, television and digital by crucial in holding the BBC to account, a stable and reliable investor in BBC
broad bands in its annual report, and particularly against the background content. BBC Worldwide’s returns to
the names and detailed remuneration of reductions in overall funding for the BBC, in the form of programme
packages of management earning the BBC which have been reflected investment and the dividend it pays,
more than £150,000. The public have in reduced investment in individual are equivalent to 12 per cent of
a right to know what the highest genres, including key public service the BBC’s television budget.188 It is
earners the BBC employs are paid out genres such as specialist factual and also a significant intervention in the
of their licence fee. The new Charter current affairs.187 market, being the biggest distributor
will therefore require the BBC to go outside the US Studios189 and owning
further regarding the transparency The public has a right to understand
the financial choices the BBC 50 per cent of UKTV, which owns
of what it pays its talent and publish and operates ten commercial UK
the names of all its employees and makes on the types of content it is
prioritising. There will therefore be a linear television channels including
freelancers who earn above £450,000 Dave, the UK’s most popular
(the current Director-General’s salary) new duty placed on the BBC in the
next Charter period to provide annual non‑public service channel.190 There
in broad bands agreed with the BBC. is substantial private capital linked
reporting on its spend by genre, in
line with industry standard genre to BBC Worldwide: 49.9 per cent of
classifications developed by Ofcom BBC America, for example, is owned
where appropriate. by entertainment company AMC, to
whom the BBC also ceded operational
control of the channel (but which
is required to maintain the BBC’s
editorial standards).

Questions have been raised regarding

BBC Worldwide’s commercial Box 44. The BBC’s commercial subsidiaries
record – headline sales and profits in
2015/16 were both lower than those
in 2009/10191 – and whether it indeed
delivers as much value as possible for
Revenue Staff
the licence fee payer: the House of
Commons Culture, Media and Sport BBC Worldwide
Select Committee considered issues
around the transparency of BBC £1bn 1,800
Worldwide’s accounts as well as the
fairness of its interaction with the BBC BBC Global News
public services in a recent report.192
Decisions early in this Charter period, £94m 124
such as the loss-making acquisition
of the Lonely Planet travel guide
(subsequently sold), have led to BBC Studioworks
considerable controversy.
£30m 120
The content supply market is
going through a period of rapid Source: BBC Commercial Holdings 2014/15 Statutory Accounts
change, seeing the consolidation
and integration of content suppliers
and distributors internationally. The As with BBC Worldwide, questions An increasing amount of the BBC’s
government believes that the current have been raised about the economic activity is being undertaken
content distribution arrangements commercial performance of the BBC’s in commercial subsidiaries and this will
through BBC Worldwide should other commercial subsidiaries. For increase further if BBC Studios gains
therefore be re-assessed in light of most of the current Charter, both BBC regulatory approval. It is vital that
the developments in the international Global News and BBC Studioworks these businesses do not gain an unfair
market for content. have been loss‑making.193 Moreover, advantage over commercial rivals due
the BBC has not always been able to to their privileged link with the BBC’s
Though the largest, BBC Worldwide assure the broader market that the public services. The BBC’s commercial
is not the only commercial subsidiary relationships between its commercial subsidiaries should ultimately serve
the BBC operates (see box 44). The subsidiaries and the public service are the BBC public service, not the other
BBC also owns BBC Global News, its compliant with the BBC’s Fair Trading way around.
commercial international English- obligations due to a perceived lack of
language news operation, and BBC transparency. The model of commercial services
Studioworks, a resource company regulation introduced in the last
offering studio and post-production Charter sought to ensure the BBC’s
services. If it achieves regulatory commercial activities: fit with
approval, BBC Studios will become the the BBC’s public purposes, were
BBC’s fourth commercial subsidiary. commercially efficient, did not
jeopardise the BBC’s reputation,
and did not distort the market.

While the government considers that −−require the BBC board to be Introducing more independent
this framework remains appropriate, more transparent about how scrutiny about how effectively
it wants to see the BBC held more the BBC operates its commercial
the BBC spends its funds
accountable for the performance of subsidiaries: in consultation with
its commercial subsidiaries in the industry and with agreement In addition to increased competition
next Charter and more transparent from Ofcom it will need to publish in commissioning, a focus on
about how it operates them. The new enough information to provide transparency and value for money at
Charter will therefore: confidence that relationships the board level, and tougher and more
between the public service and transparent regulation of the BBC’s
−−split responsibility for the the commercial subsidiaries are commercial operations, the BBC will
existing ‘four commercial compliant with regulation (without receive more external scrutiny during
criteria’ between the BBC board jeopardising the ability of such the next Charter period from the NAO.
and Ofcom. The BBC board will businesses to operate commercially);
have responsibility for ensuring and All public bodies are required to spend
the subsidiaries fit with the BBC’s their funds in accordance with four
public purposes, are commercially −−provide for Ofcom to develop a key principles: regularity, propriety,
efficient and uphold the reputation fair trading framework, following feasibility and value for money
of the BBC (the governance criteria) consultation with stakeholders, (see box 45). These principles set
while Ofcom will have ultimate which will set out broad principles of out the very high standard people
responsibility for ensuring they fair trading and rules to ensure that expect for any public organisation in
do not distort the market (the the interaction between the BBC’s receipt of public funds, even if they
regulatory criterion). As a last resort, public service broadcasting activities are operationally independent from
Ofcom would be able to direct the and its commercial activities do not central government. The government
BBC to stop commercial ventures unduly distort competition in the will therefore enshrine these principles
where there is clear evidence that market. The BBC board will take in the new Charter to apply to the
public and commercial activities are primary responsibility for ensuring way the new BBC unitary board makes
not effectively separated and where compliance with these rules. To spending decisions for the BBC.
commercial operations may be give industry confidence that the
unfairly subsidised by the BBC; BBC is operating fairly, Ofcom
will be responsible for considering
−−ensure the board undertakes appeals from stakeholders under
strategic reviews of each the framework about the BBC’s
commercial subsidiary on a activities, and how the BBC has
periodic basis, considering whether assessed fair trading complaints.
the current arrangements best Ofcom will also have the ability to
serve the public interest. This step-in to review concerns about fair
should also include the case for trading and to impose requirements
closing or reorganising loss‑making in relation to interaction between
subsidiaries, such as Global News, the BBC’s public service broadcasting
particularly given concerns over its activities and new commercial
quality record. It will be required subsidiaries.
to publish summary details of
these strategic reviews and the
commercial efficiency benchmark
each subsidiary will be held to.
The first of these reviews should
be completed by the end of 2018;

While the NAO’s recommendations

Box 45. Principles of public spending in the UK are not binding on any of the
Regularity – The management of public resources should accord with the organisations it audits, its findings
relevant legislation and other statutory frameworks, delegated authorities will provide valuable direction and
and government guidance. For the BBC these are established through its challenge for the BBC’s board. The
Charter, and other agreements it makes with government. Charter will therefore establish the
Comptroller and Auditor General
Propriety – Management of public resources should meet high standards as the BBC’s financial auditor, in
of public conduct, robust governance and the expectations of Parliament, line with the normal arrangements
including its conventions and control procedures, and any requirements of for public bodies such as the BBC.
the Public Accounts Committee. In 2014/15 the NAO audited 442
accounts196 for 344 public bodies,
Value for money – Procurement, projects and processes are systematically ranging across central government
evaluated and assessed to provide confidence about suitability, effectiveness, departments, independent regulators
prudence, quality, value and avoidance of error and other waste, taking into and arm’s length bodies operating in
account the wider public interest, not just that of the BBC itself. a commercial setting such as Network
Feasibility – Proposals using public funds should be implemented accurately, Rail. The NAO’s work will support the
sustainably and to the intended timetable. BBC board in ensuring that the BBC
is performing effectively with the
necessary financial controls. This will
The NAO scrutinises how effectively Past NAO scrutiny for the BBC also give the NAO a more in-depth
public funds are spent and whether has been shown to work well and understanding of the BBC’s operations,
these principles are observed by to be compatible with the BBC’s aiding the value-for-money work,
public bodies. Under the current editorial independence. The NAO is and will also allow Parliament to hold
arrangements the NAO already carries uniquely placed to scrutinise public the BBC to account for whether its
out value-for-money studies on the bodies, including the BBC, from a public resources are managed in line
BBC’s publicly-funded operations, fully independent perspective: the with the requirements of regularity
a crucial way in which external, Comptroller and Auditor General, and propriety.
independent scrutiny on behalf of the the head of the NAO, is an officer
taxpayer is applied to the BBC. These of the House of Commons, and the The government will also consider
reports have increased transparency: NAO does therefore not report to any further the potential merit of letting
on the BBC’s record on severance minister. The NAO does not question the NAO carry out value for money
payments the NAO found that in a government policies, but challenges reports about the BBC’s commercial
number of cases the BBC paid senior whether government delivers these operations: as set out above, the
managers more salary in lieu of notice policies in a cost-effective way. activities of the BBC’s commercial
than they were contractually entitled Similarly, the NAO also does not subsidiaries do not receive public
to, costing licence fee payers at least question the merits of the BBC’s money but do return profits to the
£1 million.194 In its report on the BBC’s editorial or creative judgements, for BBC’s public service division.
failed Digital Media Initiative the NAO which the BBC has, and will retain, It is therefore in licence fee payers’
concluded that there had been failings an exemption in the Charter. interests to know whether these
regarding the BBC’s procurement activities are carried out efficiently,
process and that the financial benefits As set out in Chapter 3, the new effectively and with economy.
of this £100 million project had been Charter will put in place a much However, the government will need to
overstated.195 stronger governance framework for consider further the possible impacts
the BBC, with a powerful unitary of this on the ability of the BBC’s
board that is responsible for running commercial operations to compete
the BBC. However, this also calls for effectively in the open market.
a stronger element of scrutiny that is
truly external to the BBC.

Under the current Charter, the sixth The government wants to see the
Box 46. The National public purpose sets out the BBC’s BBC retain a role in technological
Audit Office role in digital switchover. As set out development and R&D, and for
in Chapter 2, since this has now been this the BBC needs to improve its
442 successfully completed, this purpose
has become outdated and will be
understanding of the value it adds in
this area. The BBC should therefore
audited 442 accounts
for 344 public bodies removed. However, technological undertake and publish a detailed
change over the next Charter period is review and cost-benefit analysis of
£1tr likely to continue at pace and the BBC
will need to continue to adapt to this,
its R&D activity, including the iPlayer,
looking at its successes to date,
audited £1 trillion
and to changing audience demands, in objectives for the future, and potential
combined revenue
cost-effective ways. The government ways in which it might be able to
and expenditure of
believes the BBC has an important role improve collaboration with others.
government bodies
to play in technological innovation This should also include an analysis of
£ £1.15bn and development. While a specific

public purpose may not be the best
the value delivered for the licence fee
payer, and the creative economy more
helped deliver audited way in which to enshrine this role, broadly, as a result of this investment.
savings of £1.15 billion this activity is important for effective
across government delivery of the BBC’s public purposes, In response to our consultation, the
in 2014 and can have large wider public idea was also raised of introducing
benefits. This is why the government a Technology Advisory Board,198 in
Source: The National Audit Office, Annual order to improve the way the BBC
Report and Accounts 2014/15 proposes to include specific reference
to this activity, in explaining how the governs its technology projects and
purposes will be delivered as set out to encourage an increased importance
being placed on working in effective
Continuing and improving above in Chapter 2.
partnership with others in this sphere.
the BBC’s leading role in The BBC clearly plays an important Such a board would act as a ‘critical
technology and research and valued role in R&D and friend’, asking questions, and offering
and development technology. Stakeholders have voiced insight and expert advice, to ensure
positive views about the BBC in consistent standards are applied, the
The BBC has, since its inception,
this space in response to our public right people are involved, and the work
played an important role at
consultation. However, a number of is offering the most value for licence
the forefront of technological
stakeholders also suggested ways fee payers. The government supports
development and promotion in the
in which the BBC can improve, the idea but believes it is for the BBC
broadcasting sector. Its stable income
primarily through more effective and to decide how to take it forward and
has meant that it has been able
collaborative partnerships, but also in how to ensure a board membership
to innovate and make early stage
ensuring it spends its not insubstantial which reflects the wide range of
investments where other commercial
R&D budget of about £75 million197 technology sectors the BBC impacts.
broadcasters have not. The BBC led
per year in a more effective way.
the way for the rest of the industry
with the development of the iPlayer,
and more recently the BBC has played
a role in the development of ultra HD
standards in collaboration with others,
including international technical
standards bodies.

6. Ensuring a modern, sustainable, funding model
6. Ensuring a
modern, sustainable,
funding model
Inflation-linking the licence fee, with additional support to sustain BBC income 92
Closing the iPlayer loophole 94
Giving greater freedom for the BBC to manage its budget in the way it sees fit 96
Using the licence fee for public service content 97
Ensuring greater transparency in future licence fee settlements 97
Improving the fairness and effectiveness of the process of investigation
and prosecution of TV licensing offences 99
Introducing more flexible payment plans 100
Allowing those aged 75 and over to make voluntary payments
if they choose to while protecting the concession during this Parliament 100
Paving the way for a new more sustainable funding model
in the longer term 102
It is vital that the BBC has a However, the funding of the BBC −−Ensure the BBC has greater freedom
sustainable funding model that needs to be modernised and so the to manage its budget in the way
government proposes to: it sees fit by giving the BBC more
is fair, accountable and fit for the
freedom over its funding by
future. The government is clear −−Provide the BBC with the level of removing protected funding for
that the licence fee continues to funding and certainty it needs to local television and broadband.
be the most appropriate funding thrive and deliver against its updated
mission and purposes by: −−Pave the way to a more sustainable
model for the BBC for the next funding model in the future by
Charter period. • granting the BBC a funding empowering the BBC to consider
settlement based on the licence and explore the scope for additional
fee linking to inflation from sources of commercial revenue,
2017/18 to 2021/22; including testing whether some
• allowing those aged 75 and over elements of subscription –
to make voluntary payments if in combination with the licence
they choose to, while continuing fee – could achieve this.
to protect the concession during
this Parliament; and The government will also continue to
fund public service content from the
• ensuring certainty over the licence fee, including S4C.
process for setting the BBC’s
funding settlement beyond
2021/22, enhancing the BBC’s
independence from government
by introducing a new regularised
process once every five years.
−−Modernise the licence fee to make it
fairer and easier to pay for all by:
• closing the iPlayer loophole so
that those who currently consume
BBC programmes on-demand
(e.g. on the iPlayer) for free pay
the same as those watching or
recording it on television as it is
being shown live;
• improving the fairness and
effectiveness of the process of
investigation and prosecution of
licence fee evasion; and
• introducing more flexible
payment plans.
Inflation-linking the licence − a frozen licence fee would continue − the licence fee is a household fee,
fee, with additional support to ensure that the BBC is challenged and so even if the rate of the fee
to make efficiencies – as set out is frozen the revenue generated
to sustain BBC income
in Chapter 5 the BBC is planning from it can still rise if the numbers
The licence fee system will be to deliver £700 million a year of of households rise; indeed new
maintained for the coming Charter efficiencies by the end of 2016, households are forecast to form at
period. While no system of funding following the freeze in the licence a rate of 219,000 a year in England
meets all the criteria of an ideal fee introduced in 2010; alone between 2017-2027;204 and
funding system, the current system − BBC income has risen since 2010 − the BBC’s commercial revenue may
provides the BBC with a sustainable relative to European public service well increase over the next Charter
core income paid by all households broadcasters (see box 47) and the period: the BBC is forecasting a
who watch or receive television, and it BBC remains one of the best-funded 15 per cent increase in returns from
commands wider public support than public service broadcasters in the its commercial holdings over the
any alternative model.199 However, world in terms of overall revenue.201 next five years,205 with new ventures
the current licence fee of £145.50 is a It also benefited from above such as BBC Store having the
considerable amount for households inflation growth in the licence fee202 potential to increase this.
on lower incomes. And, as a flat rate from 2000-2007 and increases of
fee, the government must ensure the between two and three per cent
licence fee delivers value for money from 2007-2011;203
for all licence fee payers.
Inflation-linked licence fee
Since 2010, the licence fee has been Box 47. The BBC is the best-funded public service broadcaster
frozen at £145.50. There are a number in Europe (Comparison of European public service broadcasters
of arguments for continuing to freeze unconsolidated operating revenue)
the licence fee at its current level:
£ million
− evidence from the polling carried
out as part of the government’s 4,000
consultation showed that the
3,500
majority (61 per cent of people),
wanted the licence fee to remain 3,000
frozen or to be reduced, while only 2,500
a minority (22 per cent), favoured an 2,000
increase of any kind. Those on lower
incomes were even less likely to 1,500
favour an increase;200 1,000
500
0
2010 2011 2012 2013 2014
BBC (United Kingdom) France Télévisions (France)
RAI (Italy) WDR – Westdeutscher Rundfunk (Germany)
SWR – Südwestrundfunk France Médias Monde (France)
(Switzerland) RTBF (Belgium)
Source: The Yearbook of the European Audiovisual Observatory 2015

However, the government wants to This settlement will provide the BBC The government expects that the
ensure that the BBC has sufficient with sufficient income to deliver the licence fee will increase as set out
funding to invest in high quality, reforms required in the next Charter in box 48 below, on the assumption
distinctive output that audiences as well as allowing it to meet its that inflation is in line with current
enjoy and value at a time when the ambition to invest in some of the new Office for Budget Responsibility (OBR)
revenues of some leading commercial services outlined in its paper, ‘British. projections.212 If inflation is on average
providers have been growing.206 Bold. Creative.’211, but with the clear higher or lower than this, the actual
This rising public investment in the expectation and incentives to ensure level of the licence fee will accordingly
BBC will also continue to result in the BBC uses public money in the be higher or lower.
continued value in the UK’s creative most efficient way possible.
industries. With the licence fee frozen
for the past six years the BBC has been
required to make 16 per cent cash
releasing savings.207 This is a significant Box 48. Licence fee – historical and forecast levels to 2020/21 assuming
challenge for any organisation. In inflation is in line with OBR projections
addition the BBC has agreed to take
on the cost of licences for those aged £
2010 settlement 2016 settlement
75 and over (costing an estimated 180
£745 million by 2020)208 and has 160
absorbed other costs, with the licence 154.50 157.50 160.50
151.50
fee now funding the World Service 140 145.50 145.50 145.50 145.50 145.50 145.50 148.00
and S4C. Given these challenges, the 120

efficiency savings the BBC has and will 100
continue to make, and the fact that
80
the public does not want a significant
change in the scale and purposes of 60
the BBC, the government will provide 40
the BBC with a licence fee settlement 20
rising with inflation209 for the first
five years of the Charter period, from 0
2 3 4 5 6 7 8 9 0 1 2
2017/18 – 2021/22. This will mean /1 /1 /1 /1 /1 /1 /1 /1 /2 /2 /2
011 012 013 014 015 016 017 018 019 020 021
2 2 2 2 2 2 2 2 2 2 2
the BBC will receive over £18 billion of
public money between 2017/18 and
2021/22.210 Source: OBR inflation projections, Budget 2016

Additional support for BBC finances Given these measures, agreed in Closing the iPlayer loophole
As well as an inflation-linked licence July 2015, the BBC estimate that the
fee settlement the government will result of the agreement is a flat-cash The public have mixed views on the
further help support BBC finances settlement overall by 2021/22.213 This licence fee, but there remains strong
(as agreed at the 2015 Summer is a firm but fair settlement for the support for the continued provision
Budget) by: BBC, consistent with the cuts currently of a sustainable source of funding
being asked of unprotected central for the BBC that is both paid for by
− closing the ‘iPlayer loophole’ so that government departments. It will result everyone and which is separate from
those watching BBC programmes in a funding pressure that is less than general taxation, helping maintain the
on-demand for free (e.g. on the some of those in the industry are BBC’s editorial independence from the
iPlayer) will also be subject to the facing (the Guardian Media Group, for government. However, changes in the
licence fee for the first time by 2017 example, is reportedly facing 20 per viewing habits of audiences and the
generating additional revenue for cent cuts to running costs over the proliferation of devices, platforms and
the BBC; next three years)214 and less than services mean that it is increasingly
− phasing the costs of the over- those faced by many in the public difficult for the licence fee to remain
75s concession over three years, sector (the Department for Work fit-for-purpose in the modern
with the BBC only taking on full and Pensions and the Ministry of media age.216
responsibility for these costs Justice, for example, are both facing
The success of BBC iPlayer has helped
from 2020/21, and then taking cuts to administrative resource
develop the UK on-demand market
responsibility for the concession spending of over 22 per cent in real
to become the largest in Europe.
policy in the next Parliament; terms).215 Within this settlement the
However, as viewing habits shift away
− allowing those aged 75 and over BBC will need to make savings to
from linear television, viewers paying
to make voluntary payments if allow reinvestment in new services
for a television licence to watch or
they choose to, while continuing to and ensure more money for quality
record any television as it is being
protect the concession during this content. Overall the settlement
shown will increasingly foot the bill for
Parliament; and provides a fair balance between
public service content that many enjoy
sustainable funding for the BBC
− phasing out some areas of protected without any payment.
and value for money for the licence
funding to give the BBC greater fee payer.
freedom about how it spends its
budgets, as set out later in this
chapter.

Box 49. Television ownership is declining while on-demand usage

is growing
2009 2012 2015
UK households
that own a TV set
97% 96.6% 94.9%
iPlayer TV requests
(millions)
722 1,773 2,870
Source: Based on BARB data on television ownership in private domestic households and
BBC iPlayer Monthly Performance Pack, December 2015
The government has therefore In order to improve enforcement and

committed to modernise the licence allow BBC content to be ‘portable’
fee to include BBC on-demand for UK licence fee payers (so they
programmes, and close the so-called could gain access while on holiday in
iPlayer loophole, and intends to Europe, something which is currently
lay a statutory instrument before not offered) the government thinks
Parliament to enable this shortly. there is a case for iPlayer to require
This will ensure that the television- verification – i.e. access should be
watching public gets a fair deal, that conditional upon verification of licence
those who enjoy licence fee funded fee payment – so that individuals
on-demand programmes are also in other countries, and those in
contributing to the cost of producing the UK not paying the fee, cannot
it, and that the funding of the BBC access licence fee funded content
remains robust for the future. for free. The government will discuss
verification and other options with
the BBC and look at the best way of
implementing this, including through
regulations if needed. It will be up to
the BBC to determine whether this
is an appropriate means of charging
international viewers.

Giving greater freedom for the

Box 50. Phasing out of protected funding for broadband and
BBC to manage its budget in local television
the way it sees fit
The government also intends to Broadband roll-out217
provide the BBC with greater freedom
within its funding settlement by
Nearly 4 million UK homes and businesses
reducing the number of protected now have access to superfast broadband
areas. While there are clearly some
areas where protection of budgets is
90% of UK premises are now covered
important, such as the World Service
(where the government will introduce In the case of broadband, funding from the licence fee has meant that nearly
protection from 2017/18, as set out 4 million homes and businesses are now able to access superfast broadband
in Chapter 2), we will phase out the for the first time. A proportion of licence fee funding will continue to allow
protections for broadband and local the completion of this phase of the roll-out up until 2020/21. Protected
television funding (worth £155 million funding for broadband will then be phased out entirely, reducing to £80
a year) as these important public million in 2017/18, £20 million in 2018/19, £10 million in 2019/20 and
policy interventions will no longer ceasing in 2020/21 in line with the conclusions of this phase of the roll-out
be required beyond this period. Over programme.
the last licence fee period three areas
of the BBC’s budget were protected Local TV
– by 2020, this will have reduced so
that only the World Service will be 20 stations already launched
protected, giving the BBC greater
freedom within its funding settlement.
A further 11 stations due to
launch in 2016
Three further stations expected in 2017
The 2010 licence fee settlement218 provided up to £25 million to build the
transmission network to support new local television services and up to
£5 million per year over three years to enable local television stations to
access content funding from the BBC. This focused on acquiring a fixed
volume of content for a fixed price, totalling £300,000 per station over
the course of the first three years of their operation, thus supporting the
establishment and growth of a new sector with 20 stations launched since
November 2013. In phasing out this protection, the government will ensure
that local television stations that are launched by 31 July 2017 and wish to
receive this BBC support for their first three years of operation will receive it.
Funding for these arrangements only will be provided by the BBC from
an underspend of the £15 million funding that was protected in the last
licence fee settlement for local television content but has not been spent in
its entirety. This funding will be rolled-forward for the above purposes and
made available between 2017/18 – 2019/20. No further funding for local
television will be protected in the licence fee settlement starting in 2017/18
but the BBC will continue to work and develop its partnerships with local
television and other local news providers.

Using the licence fee for public It is appropriate, therefore, that the fee Ensuring greater transparency
service content is used to fund public service content in future licence fee
both by the BBC, for example BBC
In maintaining the licence fee model,
settlements
radio and online content, and beyond
the government is clear that the the BBC – for example, where public The government recognises that
licence fee remains a licence to watch service content can be delivered more the level and stability of funding
or receive television programmes, and efficiently and effectively by others or are important factors for the BBC.
is not a fee for BBC services – to support plurality in public service But transparency of how the BBC’s
although licence fee revenue is used to content provision. Funding for S4C will funding is set, and how the BBC
fund the BBC and other public service therefore continue to be provided, in spends the money it is allocated, is
objectives. While almost all licence part, through the licence fee by the equally important. The government
fee income is currently provided to the BBC and the Charter will make clear wishes both to set the BBC’s funding
BBC, as noted previously, that has not that the licence fee is not solely for on a stable footing to enhance
always been the case – indeed 12 per the use of the BBC. its independence and, to address
cent was used for other purposes prior concerns that the BBC spends its
to 1962. money efficiently and delivers value
for money, to ensure there is rigorous
scrutiny of the funding needs of
Box 51: Continued funding for S4C from the licence fee
the BBC ahead of future licence
fee settlements.
There was strong support from stakeholders in Wales for the continuation
of licence fee funding for S4C.219 A number of public consultation responses The Lord’s Communications
and focus group participants also called for continued funding for S4C. Committee also considered this issue
Participants in Wales were aware of the input the BBC had to S4C and and recommended in its report that
greatly valued this channel.220 the level of the licence fee should be
set along the lines of the German
The BBC currently provides £74.5 million to S4C and has confirmed this level model – whereby an independent
of funding will continue until 2017/18. The BBC may choose to reduce the regulator would recommend the
grant to S4C by an equivalent percentage to the percentage reduction in licence fee level to the government
BBC funding over the period 2018/19-2020/21. However, the government is and the Secretary of State would
encouraged to see that the BBC has stated that it intends to protect funding then be required to approve the
for the nations and regions relative to other areas. recommendation or publish their
The government expects the BBC to continue to work in close partnership reasons for not doing so.221
with S4C to maximise value for money for the licence fee payer and the
taxpayer, including in the proposed co-location of S4C and BBC Wales.
Beyond 2017/18, consideration needs to be given to the ongoing funding of
S4C from government, to ensure that the broadcaster remains on a stable
footing. Government is committed to carrying out a comprehensive review
of S4C in 2017. This will look at S4C’s remit, funding and accountability
arrangements, including the element of funding from the licence fee.
Following this review the Secretary of State maintains the power to amend
the process for setting S4C’s funding.

The government is clear that the In addition to regularising the timings −−commercial revenues – the BBC’s
licence fee is a tax, and therefore of licence fee settlements, the commercial structures may change
should be set by government and not government will require the BBC to (as set out in Chapter 5) and this
by an independent body. However, provide a set of data on its funding could result in a change in revenue
to improve scrutiny of the BBC’s needs, including proposals for any for the BBC which may affect its
funding needs, provide the BBC with new activities or services, and forecast ability to deliver against its Charter
greater certainty around its funding, income ahead of each licence fee objectives. Alternatively, the BBC’s
and to allow Parliamentary scrutiny settlement. Elements of this data commercial revenues may increase
of the licence fee-setting process, the may be independently assessed in and could result in a greater return
government believes that the process helping the government to determine to the BBC public service;
of setting the licence fee should be the right level of funding for the −−evasion rates – introducing
regularised. The licence fee will be BBC. The level of the licence fee will verification for BBC iPlayer may help
set once every five years with the then be set in a statutory instrument to reduce evasion and therefore
next settlement taking place in 2021. ensuring suitable Parliamentary increase the amount of licence fee
Given the 11-year Charter period scrutiny (via the negative resolution income collected; and
consideration will need to be given procedure as is currently the case).
to whether an one-off settlement of This will improve the transparency −−industry costs – the media industry
a different length should be made in of the licence fee-setting process may continue, through digitisation
2021 to align the settlements with and ensure that scrutiny of the BBC’s and technological change, to find
the Charter period. This process of finances is carried out in an open and more efficient ways of working,
setting new fixed funding terms, and accountable way. meaning that the same quality
the scrutiny that will be undertaken and quantity of output could be
in setting the level of the licence fee The first time this process will be delivered at lower cost; though
will be set out in the Charter. This undertaken is in 2021 when the conversely cost inflation above the
will enable the BBC to plan with government will review and set a new level of general inflation in parts
greater certainty while ensuring funding settlement for the BBC. This of the sector could add to cost
that there is sufficient flexibility for will enable the government to assess pressures.
change if needed during the length whether the revenue generated from
of each Charter. the licence fee has been as expected
over the first five years of the Charter
and what the level of the licence fee
should be. The following factors will
be relevant to that decision:
−−household growth – the number
of households paying the licence
fee may increase or decrease due
to household growth, in variance
to forecast levels, as it has in the
last Charter period. An increase in
the number of households paying
the fee would result in additional
revenue being generated which
could be returned to the licence fee
payer in the form of a reduction to
the licence fee;

Improving the fairness and

Box 52. TV licence fee enforcement
effectiveness of the process of
investigation and prosecution The BBC Trust is responsible for overseeing the licence fee collection
of TV licensing offences arrangements put in place by the BBC Executive Board, and ensuring they are
While the licence fee remains the “efficient, appropriate and proportionate”. This responsibility was set out for
preferred funding model for the BBC the first time in the 2006 Royal Charter. The Trust provides a review of licence
among the public, there is an ongoing fee collection each year as part of the BBC’s Annual Report and Accounts.
debate about whether evasion of the
licence fee should be decriminalised. Number of people Number of people
There is some support for this idea convicted of a TV licence imprisoned for non-
from the public and in Parliament.222 offence in 2013/14: payment of fines relating
However, the independent TV to a TV licensing offence
Licence Fee Enforcement Review
(Perry Review) concluded that while
153,369 in 2013/14:
decriminalisation of the TV licensing
offences might be preferable in
32
theory, it is difficult or impractical Amount of Magistrates’ Number of licensed
to achieve under the current licence Court time taken up by households:
fee framework.223 TV licensing cases:
25.4m
The government has examined the
case for decriminalising the licence fee
0.3%
offence, in light of this range of views Source: TV Licence Fee Enforcement Review, 2015
and the recent Perry Review.224 David Ministry of Justice Quarterly Statistics, Outcomes by offence, May 2014
Perry QC led an open, independent, TV Licensing Freedom of Information Release 2014
and evidence-based review which
concluded that while the licence fee
framework remains, there should
be no fundamental change in the
sanctions regime. The review also
noted very few individuals are
imprisoned for non-payment of a fine
related to the TV licensing offence
and the proportion of magistrates’
time taken up is much lower than
sometimes claimed (see box 52).
The government agrees with the
review’s assessment that the current
regime represents a broadly fair
and proportionate response to the
problem of licence fee evasion and
provides good value for money (both
for licence fee payers and taxpayers).
However it is not the case that
the criminal sanction is endorsed;
rather it is necessary because of the
characteristics of the licence fee
framework.

The Perry Review also recommended Introducing more flexible This would help those who struggle
a number of options for improving payment plans to make higher initial payments, and
the fairness and effectiveness of increase flexibility and convenience for
the process of investigation and Affordability of the licence fee also all licence fee payers.
prosecution. Some of these, such continues to be a key issue of concern.
as closing the iPlayer loophole, Government is acutely conscious In addition, the government welcomes
have already been addressed – of the impact of raising the licence recent moves by the BBC and TV
the government plans to lay a fee at a time of constrained public Licensing to simplify the licence fee
statutory instrument to close the spending and when family budgets refund policy to make it fairer and
loophole shortly. Others are being continue to be challenging.226 It is more transparent. The current system
taken forward by the BBC. The notable in our research that support means that refunds are only able to
government is pleased to note that for the licence fee declines based on be paid for every three month period
the BBC is taking steps to increase the socio-economic grouping.227 While left on a television licence, so in order
transparency of its prosecution policy, an increase in the licence fee at the to be eligible for a refund there needs
including by publishing its ‘Prosecution level of inflation is the right decision to be at least three months remaining
Code’, which sets out how customers for both the BBC and the public, the on the licence. This leads to losses
can take steps to avoid prosecution. government intends to help those on of one or two months’ worth of
The BBC has also shared evidence lower incomes by making the licence payments for those who do not meet
that it is addressing the review’s other fee easier to pay through proposals to this criteria, and for those who have
recommendations, including better provide more flexible payment plans. not yet reached the threshold required
targeting of unlicensed addresses, for the next three month refund – for
investigating the gender disparity in The Perry Review highlighted that example, if there are five months left
prosecution and conviction statistics, the current payment plans for paying on a licence, only a refund for three
and adjusting the tone and content the licence fee, which are set out months will be paid. However, TV
of its written communications. in legislation,228 inhibit the ability Licensing has confirmed that from the
of TV Licensing to help those on beginning of the first full financial year
In addition, the Perry Review lower incomes to pay the fee and of the new Charter period (April 2017),
recommended that TV Licensing may avoid prosecution, as it is unable to monthly refunds will be available.
be better able to target households offer alternative, more manageable This is a welcome step in improving
without a TV licence if there were a payment schemes. For example, the fairness of the current licence fee
requirement for cable and satellite individuals are currently required to collection system for the public.
television companies to share their pay the cost of a 12-month licence
subscription information with TV over six months. This can be hard
for some people who are struggling
Allowing those aged 75
Licensing. The review suggested
this could improve value for money to pay their monthly bills. This and over to make voluntary
for the licence fee payer.225 The requirement to pay 12 months over a payments if they choose
government intends to explore this six-month period is currently set out to while protecting
with subscription providers. in regulations which means that the the concession during
BBC is unable to collect payments this Parliament
on a different basis. The government
intends to update legislation to allow Television, radio and online services
clearer and more flexible payment are an important part of many older
schemes, especially for those facing people’s lives, providing information
difficulty in paying the licence fee. This and entertainment and keeping
will enable the BBC to trial alternative them connected. That’s why the
payment plans, including removing the government has committed to
up-front payments. protecting the concession providing
free television licences for those aged
75 and over for the remainder of
this Parliament.

The BBC agreed last year to take A number of individuals aged 75 and Given the desire amongst some people
on the cost of these concessionary over included in their consultation aged 75 and over to pay for the cost
licences from government, and responses that they wished to of a television licence, the government
requested that responsibility for contribute towards the cost of the will make changes to allow those who
the policy be transferred to them in services they received from the BBC, wish to make a voluntary payment to
2020/21.229 The agreement allows the and felt that they should be able to the BBC including updating regulations
BBC to contribute towards reducing make a voluntary payment. Others if needed. However, the government
the deficit along with all other emphasised the value they got from is committed to protecting pensioner
publicly-funded organisations. The being able to access television content benefits, so will ensure that this is
government agreed that this cost will which they otherwise could not have a voluntary option for those who
be phased in over three years, to allow afforded, underlining the importance can afford it, while protecting the
the BBC to prepare for the removal of of the concession to these individuals. concession for all those aged 75 and
government funding for the cost of over in this Parliament. In 2020/21,
these licences. the BBC will take on responsibility for
the policy.
Box 53. Public views on the BBC’s funding model
Q2. Currently, the BBC is funded via the licence fee which costs £145.50 a year – the equivalent of £12.13 a month.
There are a number of ways in which people might pay for the BBC in the future. For each of them, please tell me if
you think it would be a good or bad way of funding the BBC.
100 6% 6% 6% 6% 7%
90 24% 22% 34% 38% 43%
80
70 25%
21%
60
23%
50 22%
49% 47% 22%
40
30 37%
34%
20 28%
10
0
Lower licence fee The licence fee Universal Lower licence fee Current licence fee
for some as now household levy and subscription and subscription
Good Neither good nor bad Bad Don’t know
Base: all respondents in Wave 2 (2,119)

Source: GfK Social Research, Research to explore public views about the BBC, May 2016

Paving the way for a new But audience habits and attitudes So while the licence fee is the most
more sustainable funding are changing and there has never appropriate funding model for the
been so much choice for audiences, next 11-year Charter period, it may
model in the longer term
both in terms of content and access. or may not be the best option in the
In order to ensure that the BBC Conditional access technology will decades beyond, as technology and
continues to flourish, and is able to also become increasingly available; media consumption habits continue
provide world class public service and support for flat-rate fees could to develop.
content and services in an evolving decline, particularly with changes in
media environment, the long-term consumption habits.
security of its funding should continue
to be considered alongside the impact
on the public of the licence fee model.
None of the funding models set out in Box 54. The popularity of subscription services is growing
the government’s consultation230 – the
licence fee, a household levy, and a % UK market penetration
mixed public fee/subscription model
– fulfil all the criteria for an ideal 60
funding mechanism for the BBC, and it
50
is clear that there are a range of views
among the public as to which is most 40
appropriate. Indeed, the most recent
survey by the BBC on this issue found 30
support for the licence to be below
50 per cent.231 However, as this 20
chapter has already set out, the
10
government believes that the licence
fee remains the most appropriate 0
funding model for the BBC for the 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015
coming Charter period. Digital satellite Digital cable Pay DTT IPTV
While a levy may have the potential

Source: Oliver & Ohlbaum and Oxera, BBC television, radio and online services:
to address some of the criticisms of
An assessment of market impact and distinctiveness, 2016
the current system, including the
criminal sanction for TV licensing
offences, and the regressive nature
of the charge, it currently does not
command significant public support.
Furthermore, it would also mean a
significant number of people who do
not directly consume BBC services
would be asked to fund the BBC in
a way they do not do so now.

There are additional opportunities The government is clear that the Additionally, due to the BBC’s global
for the BBC to maximise revenue licence fee should remain the bedrock reputation, international demand
for consumption of its services, and of funding for the BBC, and there for its content is high. It has been
to explore options for providing are no plans to replace it with a estimated that as many as 65 million
content for which it could charge. subscription model in the coming people around the world access
The government supports the BBC Charter period.233 This is because BBC content for free via the BBC
continuing to develop such initiatives a subscription model would need iPlayer.234 While the BBC disputes
domestically as well as abroad. Indeed to take account of the fact that this figure, and believes that at least
the BBC already offers commercial unless subsidised, it would likely 95 per cent of viewing of television
services for an additional charge in the only capture the private rather than programmes on BBC iPlayer is from
UK: the exploitation of its archive via the social value of BBC output. It within the UK,235 the government
the commercial channel portfolio of could therefore risk distorting BBC supports any initiatives to use the
the broadcaster UKTV which it jointly priorities away from the wider public international demand for BBC content
owns; the new ‘BBC Store’, which interest and negatively impact on to maximise revenue, and to address
allows digital downloads of favourite the market. However, this should the situation whereby international
BBC shows to be purchased; and the not prevent or deter the BBC from audiences are accessing content for
BBC has for many years supplemented adapting to a world in which paying free that is funded by UK licence
its income through the sale of DVDs for ‘top-up’ services is becoming more fee payers. The BBC is already
and VHS.232 commonplace. Elements of additional considering the best way to monetise
subscription revenue should, therefore, its content abroad, and whether an
be considered and explored. international subscription model could
be developed to address these issues.
The government welcomes the BBC’s BBC Worldwide has recently launched
commitment to develop and test BBC Extra as a subscription service in
some form of additional subscription the United States and will evaluate
services during the first part of the further markets. The government will
next Charter period, and to consider support such initiatives, and enable
whether elements of subscription the BBC to do what is needed to
could provide a more sustainable achieve the most value for licence
funding model in the longer term. fee payers.
It will be for the BBC to set the scope
of these plans (subject to appropriate
regulatory scrutiny) and the BBC
board will need to ensure progress and
success are appropriately reviewed.
The government is clear that this
would be for additional services only.
Licence fee payers will not be asked to
pay for ‘top-up’ services for anything
they currently get. The BBC may
therefore lead further developments,
pilots and exploration of elements
of subscription in the second part of
the Charter period, if justified and
required, in order to inform the
next Charter Review process and
for potential wider roll-out in the
next Charter.

7. Annexes
7. Annexes
Annex 1 – Charter Review timeline 105

Annex 2 – Consultation and engagement 106
Annex 3 – Summary of consultation data 109
Annex 4 – Summary of polling 112
Glossary 116
End notes 118
7. Annexes
Annex 1 – Charter Review timeline
Independent reports
1. The Clementi Review looking at how the
BBC is governed and regulated published
1 March
2. Independent report into market impact

and distinctiveness of BBC published
1 March
3. BBC Charter Review Summary of

Consultation Responses published
DCMS BBC 1 March
Charter Review 9 INDUSTRY ROUNDTABLES
Advisory Group WITH 72 ORGANISATIONS
established Roundtables: White paper published
12 July Children’s TV 12 May
Commercial broadcasters
Creatives (2)
Local Press Report of polling and focus
Online content groups research
BBC Charter Partnerships 12 May
Review Public Radio
Consultation Technology
published
16 July 16 FOCUS GROUPS
AND POLLING
192,564 >300 Nationally representative polling

of over 4,000 adults across the UK,
responses received organisations 16 focus groups and 12 in depth
and experts interviews. Draft Charter Parlimentary New Charter
PUBLIC published debates comes into effect
CONSULTATION engaged
1 January
ENGAGEMENT WITH PUBLIC AND INDUSTRY ACROSS THE UK NEXT STEPS
JULY 2015 JAN 2016 JULY 2016 JAN 2017

7 BBC TRUST Transition to new
PUBLIC SEMINARS
model of governance
and regulation
9,085 Radio Times
survey responses
House of Lords Select
Committee on Communications
BBC Charter Review:
BBC Trust publishes Reith not revolution
formal response to 24 February
Charter Review Public
Consultation
8 October
House of Commons Select Committee
on Culture, Media and Sport
BBC publishes BBC Charter Review
‘British, Bold, Creative’ 11 February
7 September
BBC Trust publishes a

second phase of consultation
7 September
DCMS engagement and research
BBC Trust and Executive input in Charter Review
BBC Trust initial Other research and evidence gathering
response published and Charter Review next steps
consultation launched
22 July

7. Annexes
Annex 2 – Consultation and engagement
The government committed to Nine roundtable events Local press

an open and transparent Charter Archant
Creatives (I) CN Group
Review. In considering the Andy Pryor
192,564 responses to the public Johnston Press
Armando Iannucci KM Group
consultation, 9,085 responses (writer and producer) Local World
to a Radio Times survey and the Comic Relief & Sports Relief Newsquest
4,000 people that participated Directors UK News Media Association
in nationally representative Hat Trick Society of Editors
polling, 16 focus groups and Jesse Armstrong Tindle News Group
12 in-depth interviews, DCMS John Lloyd Trinity Mirror
has heard from or engaged with Left Bank Pictures
Outline Online content
over 300 organisations and ArtUK
PBJ Management
industry experts. We are grateful Founders Factory
to everyone who has contributed Creatives (II) Guardian News & Media
to the process to date. Abi Morgan ITV
Boundless Johnston Press
Advisory panel Curve Media News Media Association
Panel members were acting as Directors UK Reed Smith
individuals, and not representing the Douglas Road Productions Trinity Mirror
views of their organisations. Jed Mercurio
Neal Street Productions Partnerships
Alex Mahon Agency, The Association of British Orchestras
Former CEO Shine productions Association of Independent Festivals
Children’s TV British Museum
Andrew Fisher Aardman Animation Creative Industries Federation
Executive Chairman of Shazam Baroness Floella Benjamin National Theatre Wales
Blue Zoo Productions Open University
Ashley Highfield Children’s Media Foundation (CMF)
Chief Executive of Johnston Press Royal Shakespeare Company
Entertainment One Family UK Music
Colette Bowe, Dame Kindle Entertainment
Chairman of the Banking Standards Novel Entertainment Radio
Board, President of the Voice of the Producers Alliance for Cinema and Bauer Radio
Listener and Viewer and former Television (Pact) Folder Media
Chair of Ofcom Jeanette Steemers, Prof Global Radio
Writer’s Guild’s Children’s Committee Jazz FM
Darren Henley Zodiak Kids Studio Radiocentre
CEO of Arts Council England Radio Independents Group
and former Managing Director Commercial broadcasters UTV (Talk Sport)
of Classic FM 21st Century Fox
Commercial Broadcasters Association Technology
Dawn Airey (COBA) Arqiva
CEO of Getty Images and former Discovery Networks Cisco
Chairman of Channel 5 Disney Digital Television Group (DTG)
QVC UK Fujitsu
Lopa Patel Samsung
Scripps Networks International
Founder of NewAsianPost.com and Tech UK
Sky
inclusion think tank Diversity UK
Turner Broadcasting Systems
Stewart Purvis
Professor of Journalism and former
CEO of ITN

7. Annexes
Additional organisations and

experts engaged included:
C E
Campaign for Broadcasting Equality Education Broadcasting Council for
A Campaign for Press and Broadcasting

Freedom
Northern Ireland
Einar Thorsen, Dr
AM for Blaenau Gwent Carntogher Community Association Enders Analysis
AM for Cardiff Central Ceredigion County Council England and Wales Cricket Board (ECB)
AM for South Wales West/ Channel 4 Equality and Human Rights Commission
Welsh Lib Dems Channel 5 Equity
Amazon Chartered Institute of Library & Ericsson
An Comunn Gaidhealach Information Professionals (CILIP) European Audiovisual Observatory
An Ghaelárais Irish Language Centre CMS Select Committee European Broadcasting Union
Andrew Neil (Broadcaster and Comhairle nan Eilean Siar
Journalist)
Apple
Commercial Broadcasters Association
(COBA)
F
Argyll and Bute Council Communications Consumer Panel Football Association, The
Arts Council England and ACOD Facebook
Arts Council of Wales Comunn na Gaidhlig Federation of Small Businesses
Association of Independent Music Consultation Institute, The Fèisean nan Gàidheal
Austrian Broadcasting Corporation Conradh na Gaeilge Freedom Association, The
Convention of Scottish Local
B Authorities
Co-operative Party, The
G
Bayerischer Rundfunk Glasgow City Council
Cornhairle nan Eiliean Sur
BBC Executive Google
Development Department
BBC Trust Cornwall Council
BBC Studios
BBC Worldwide
Councillor Upper Bann Sinn Féin H
CPNI Highlands and Islands Enterprise
Broadcasting, Entertainment, Creative England
Cinematograph and Theatre Union,
The (BECTU)
Creative Industries Council
Creative Scotland I
BFI Creative Skillset Independent Producers Scotland
Birmingham County Council Cymdeithas yr Laith Institute of Engineering and Technology
Bord na Gaidhlig Cytûn – Churches Together in Wales Institute of Welsh Affairs
Bournemouth University International Broadcasting Trust
British Academy of Songwriters,
Composers and Artists D Invest NI
Isle of Man Gov
British Horseracing Authority Daniel Jackson, Dr Incorporated Society of Musicians (ISM)
British Recorded Music Industry (BPI) David Clementi, Sir
Broadcast
Broadcasting Spectrum Collaborative
David Ellis, Dr
David Puttnam, Lord J
Projects Des Freedman, Prof John Birt, Lord
BT Dock10
Dwr Cymru Welsh Water L
Learned Society of Wales, The
Liverpool Chamber of Commerce
Lenny Henry, Sir
Local press owners
Local TV Network (LTVN)
London First
LyleBailie International

7. Annexes
M P U
Malaria Consortium Parliament Soft Power Committee UK Lawyers for Israel
Mark Thompson (former Director Patrick Barwise, Prof UK Interactive Entertainment Industry
General of the BBC) Piers Vitbsky, Dr UK Screen Association
Mechanical Copyright Protection Pinewood Studio UK Sport
Society Plaid Cymru Ulster Orchestra
Media Reform Coalition PRS for Music Ulster Orchestra Society
Merched y Wawr Publishers Association, The United Against Separation
Metaglue Urdd Gobaith Cymru
Met Office
R
MG Alba
Mo-Sys Camera Motion Systems Revision World Networks V
Music Publishers Association Robert Beveridge, Prof Voice of the Listener and Viewer (VLV)
Rondo Media Voice of British Advertisers
N Royal National Institute of Blind

People (RNIB)
Viacom International Media Networks
(VIMN)
National Assembly for Wales’ Cross Rugby Football League Virgin Media
Party Group on the Welsh Language Voice of the Listener and Viewer
National Audit Office
S
National Press Owners
National Union for Journalists S4C W
NBC Universal Save BBC 3 Wellcome Trust
Netflix Save Our BBC Welsh Government
NESTA Scottish Government Welsh Language Commissioner
Newsnight Wales Campaign Scottish Professional Football League What Next? Cardiff
Nick Ross (Broadcaster) Scottish Sports Association
Northern Ireland Executive Sheffield Live
Shotoku Broadcast Systems A number of Members of Parliament
Northern Ireland Screen also responded to the public
Northern Film and Media Snell Advance Media
Social Democratic Labour Party (SDLP) consultation.
Northern Visions/NVTV
NUJ Glasgow Broadcasting Branch Society of Authors, The
Somethin’ Else
O Sound Start
South Wales Police Commissioner
Ofcom South West News Service
Ofcom Advisory Committee Sport England
for England Steven Barnett, Prof
Ofcom Advisory Committee STV (Scottish Television)
for Northern Ireland
Ofcom Advisory Committee
for Scotland
T
Ofcom Advisory Committee techUK
for Wales Teledwyr Annibynnol Cymru (TAC)
Older People’s Commissioner Telesgop
for Wales Third Age Trust, The
Oliver & Ohlbaum Traditional Music & Song Association
openDemocracy of Scotland
Oxera

7. Annexes
19 questions asked
Annex 3 – Summary 12 week consultation period
of consultation data 192,564 responses received – 184,898 emails and 7,666 online
Over 60,000 responses arrived on final 2 days of consultation period
81% of responses said BBC serving audiences very well
Question Response % of valid responses

General Don’t like or understand the consultation/question 6%
The BBC should remain independent 20.7%
Responses with anti BBC/BBC Bias/abolish the BBC comments 2.3%
Q1: How can the BBC’s public No changes are needed to the public purposes 2.8%
purposes be improved so there is
more clarity about what the BBC Changes should be made to the public purposes 1.9%
should achieve?
Q2: Which elements of All elements of universality are important for the BBC 34.6%
universality are most important
for the BBC? The BBC should provide all types of content and meet the 41%
needs of everyone
Covering single unifying events such as the Proms, Royal 9.9%
Weddings, major sporting events and elections is most
important
The BBC should be available and accessible on all platforms 11.6%
The BBC should not seek to be universal 2.4%
Q3: Should Charter Review No – the BBC should not establish a set of values 1.7%
formally establish a set of values
for the BBC? Yes – the BBC should establish a set of values 0.8%
Q4: Is the expansion of the Yes – expansion of the BBC’s services is justified 68.5%
BBC’s services justified in the
context of increased choice for No – expansion of the BBC’s services is not justified 5.5%
audiences? Is the BBC crowding Yes – the BBC is crowding out competitors but this is justified
out commercial competition and, 3.3%
if so, is this justified? Yes – the BBC is crowding out competitors and this is not 0.5%
justified
No – the BBC is not crowding out competitors 15.2%
Q5: Where does the evidence The evidence suggests the BBC has a positive wider impact on 65.9%
suggest the BBC has a positive the market
or negative wider impact on the The evidence suggests the BBC has a negative wider impact on 3.3%
market? the market
Q6: What role should the BBC The BBC should have very little or no role 0.3%
have in influencing future
technological landscape including The BBC should have a leading or very big role 1.5%
in future radio switchover? The BBC should have a partnership or moderate role 0.2%
The BBC should have a positive role in radio switchover 0.4%
Q7: How well is the BBC serving The BBC is serving its audiences well or very well 81.4%
its national and international
audiences? The BBC is not serving its audiences very well or could improve 6.3%
Q8: Does the BBC have the right Yes it has the right genre mix (including generally/mostly/ 15.8%
genre mix across its services? probably/think so responses)
No, the BBC does not have the right genre mix 3.7%
Q9: Is the BBC’s content The BBC’s content is sufficiently high quality and distinctive 74.2%
sufficiently high quality and
distinctive from that of other The BBC’s content is not sufficiently quality and distinctive 8.2%
broadcasters? What reforms
could improve it?
Q10: How should the system of The system should be changed 0.6%
content production be improved
through reform of quotas or The system should not be changed 0.7%
more radical options?

7. Annexes
Question Response % of valid responses

Q11: How should we pay for the No change is needed 59.8%
BBC and how should the licence
fee be modernised? Licence fee – reform of the fee is required (see consultation 15.1%
document definitions) including closing the iPlayer loophole
Universal Household Levy (see consultation document 3.9%
definitions)
Mixed public funding and subscription (see consultation 2.3%
document definitions)
Full subscription 3.1%
Advertising 1.4%
Q12: Should the level of Yes – the level of funding for certain services should be 4.7%
funding for certain services protected
or programmes be protected? No – funding for certain services should not be protected 1%
Should some funding be made
available to other providers to Yes – funding can be offered to others with conditions 0.8%
deliver public service content?
No – funding should not be made available to other 1.3%
broadcasters
Q13: Has the BBC been doing Yes – the BBC has done enough to deliver value for money 75.7%
enough to deliver value for
money? How could it go further? No – the BBC has not done enough to delivery value for money 10.7%
Q14: How should the BBC’s No reform to the BBC’s commercial operations is needed 4.5%
commercial operations, including
BBC Worldwide, be reformed? Reform to the BBC’s commercial operations is needed 1.6%
Q15: How should the current The BBC’s governance should not be changed 1.9%
model of governance and
regulation for the BBC be The BBC Trust should be reformed 1.3%
reformed? There should be a standalone regulator 5.3%
Ofcom should regulate the BBC 3.5%
Other reform to the BBC’s governance is required 3.1%
Q16: How should Public Value Public Value Tests and Service Licences shouldn’t change/ 1.1%
Tests and Service Licences be should stay the same/there are no problems with them
reformed and who should have Reform of the Public Value Tests and Service Licences is 0.7%
the responsibility for making required
these decisions?
Q17: How could the BBC improve The BBC should improve by engaging more 4.4%
engagement with licence fee
payers and the industry, including No change is needed to improve engagement 1.2%
through research, transparency
and complaints handling?
Q18: How should the relationship The BBC’s relationship with government/Parliament/Ofcom 4.4%
between Parliament, Government, should not change
Ofcom, the National Audit The current relationship and accountability structures should 9.7%
Office and the BBC work? What change
accountability structures and The BBC should remain independent from government/
expectations, including financial 72.8%
Parliament/Ofcom
transparency and spending
controls, should apply?
Q19: Should the existing Yes – the BBC should have the same Charter 1.2%
approach of a 10-year Royal
Charter and Framework No – the BBC should have a longer Charter 0.3%
Agreement continue? No – the BBC should have a shorter Charter or a break point 0.4%
Responses from organisations and industry experts

The responses received from organisations and industry experts generally contained a great deal of detail, as they were received from organisations with a
large amount of expertise in their area. These responses were analysed against the consultation areas they covered and the specific points raised

7. Annexes
Radio Times ‘Give your views on the BBC’ survey
In August 2015, the Radio Times conducted a survey of its readers, asking
16 questions related to the Charter Review. 9,085 responses were received
and have been considered as part of the Charter Review process. The results,
published by the Radio Times, show that respondents:
− Support the principal of a publicly funded broadcaster (95.7%), supported
by the licence fee (91.4%), which rises with inflation (88.1%);
− Would consider paying for a TV licence even if entitled to a free one (80.5%);
− Don’t think the BBC tries to cover too much (75.2%);
− Shouldn’t try to avoid high profile scheduling clashes (57.7%) and shouldn’t
make fewer entertainment shows (59.5%);
− Think the BBC’s content is sufficiently high quality and distinctive from
other broadcasters (84.9%), and has the right mix of genres (78.9%);
− Don’t think that licence fee funds should be made available to other
broadcasters (80.4%);
− Support three mainstream popular music stations (56.8%);
− Shouldn’t divert money from other genres to sport (83.3%) and shouldn’t
create a dedicated sports channel (56.3%).
Two of the questions allowed respondents to make additional comments.
Analysis of these responses has shown that:
− 3% indicated that there should be some sort of licence fee reform –
including closing the iPlayer loophole or changing arrangements for those
over 75.
− On the BBC’s genre mix, 7.1% indicated that there should be less light
entertainment programmes and 4.9% indicated that higher quality and
distinctive services and content were needed.

7. Annexes
Annex 4 – Summary of polling
− DCMS commissioned GfK Social • Wave 1 (16 questions) was conducted − The focus group sessions were held
Research to conduct quantitative and between 20th and 26th January 2016 all over the country, with some being
qualitative research to explore public with a sample of 2,093. specifically for underserved audiences
views of the BBC. • Wave 2 (10 questions) was conducted (young people aged 18-24 and BAME
− The quantitative research consisted between 26th February and 1st audiences). All of the telephone
of 2 waves of nationally representative March 2016 with a sample of 2,119. interviews were with speakers of
polling with a sample of approximately minority languages.
− The qualitative research involved 16
2,000 UK adults aged 16+ each wave. mini focus groups (5-6 people in each) − Below is a summary of the key
Random location sampling was used and 12 in-depth telephone interviews to findings – the full report will be
in both waves and interviews were explore people’s views in more detail, published separately.
conducted face to face in people’s conducted between 26th January and − The findings indicated that most people
homes. 5th February 2016. were happy with the BBC’s recent
expansion but very few of those asked
supported increases in the licence fee in
the future: 61 per cent would rather it
was frozen or cut.
Question Response % of all respondents

Thinking about the BBC generally, Mean score 6.4
what is your overall impression,
on a scale of 1 to 10, where 1
means extremely unfavourable
and 10 means extremely
favourable?
The BBC’s mission is to inform, To inform: performs well 73%
educate and entertain audiences
with programmes and services To educate: performs well 70%
of high quality, originality and To entertain: performs well
value. Thinking about the aim to 71%
inform/educate/entertain, how
well do you think the BBC serves
your household?
There are different views on the I am glad that the BBC now has more TV channels, radio 55%
expansion of BBC services. Which stations and online services – it gives me much more choice –
of the two views on this card and I am happy to continue paying for this at the level I
comes closest to your own?* do now
I think that the expansion of the BBC services has gone too far 32%
– I would rather pay less than I do now and lose some of these
extra TV channels and radio stations and online services
Don’t care 8%
Don’t know 5%
The BBC has introduced a wide Proportion agreeing with “The BBC should continue to 58%
range of new channels, radio expand its services to take full advantage of developments in
stations and online services. technology but without adding TV channels”
At the same time, commercial Proportion agreeing with “The fact that commercial services
broadcasters have also expanded 52%
have expanded or been established (e.g. ITV digital channels
what they do. There are many and Netflix) at the same time as the BBC has expanded shows
different views on the expansion that the BBC is not crowding out the competition”
of BBC services. Please indicate
how much you agree or disagree Proportion agreeing with “As there are so many new 46%
with the following statements. types of media services provided by other organisations
(e.g. Netflix, Amazon Prime plus channels like More4 and
new Sky channels), the BBC does not need to further expand
its services”
Proportion agreeing with: “As the BBC has national, regional 31%
ad local radio stations it is very hard for commercial providers
to get many listeners”

7. Annexes

The BBC licence fee costs £145.50 Good value 45%
a year – the equivalent of £12.13
per month. Thinking about this Bad value 32%
and the services the BBC offers, Neither
in particular TV channels, radio, 19%
online services and website, do Don’t know 4%
you think that the BBC offers
good or bad value for money?
As indicated, the BBC is funded Should be increased above inflation 2%
via the licence fee which costs
£145.50 a year – the equivalent Should be increased in line with inflation 20%
of £12.13 per month. It will stay Should be frozen
frozen at this rate until 2017. 30%
Thinking about the five years Should be reduced 31%
after this, which of the following
statements is closest to your None of these 10%
own view? Don’t know 6%
People have differing views The BBC is efficient in how it spends its money 23%
around whether the BBC
spends its licence fee funding The BBC is not efficient in how it spends its money 35%
efficiently. Which of the Neither
following statements comes 25%
closest to your view? Don’t know 16%
Currently, the BBC is funded Proportion saying good: The licence fee as now 47%
via the licence fee which costs
£145.50 a year – the equivalent Proportion saying good: The same licence fee as now 49%
of £12.13 per month. There are for most people but a lower or no charge for those on the
a number of ways in which people lowest incomes
might pay for the BBC in the Proportion saying good: Universal household levy 37%
future. For each of them, please
tell me if you think it would be Proportion saying good: Lower licence fee and subscription 34%
a good or bad way of funding
the BBC. Proportion saying good: Current licence fee and subscription 28%
If you had to choose just one of The licence fee as now 29%
these options, which would you
prefer to be used for the future The same licence fee as now for most people but a lower 25%
funding of the BBC? or no charge for those on the lowest incomes
Universal household levy 11%
Lower licence fee and subscription 14%
Current licence fee and subscription 8%
Don’t know 12%
Wave 1 survey data

Wave 2 survey data
* Prior to this question participants were shown an infographic illustrating the expansion of BBC services between 1995 and 2015

7. Annexes

£3.7 billion is raised through the Yes 49%
licence fee each year – currently
almost all of this is spent on No 39%
the BBC’s own radio and TV Don’t know
programmes and services, 12%
including public service content.
Should more of this money be
made available to other free-to-
air broadcasters and independent
producers to commission and
make public service content?
This might be shown on the BBC
or on other networks.
Should the government require Yes, the government should require minimum funding 50%
the BBC to guarantee a minimum
level of funding for any of No, decisions should be left to the BBC 38%
these types of public service Don’t know
broadcasting or should these 12%
decisions be left to the BBC?
The 803 participants who News 55%
supported government ring
fencing were shown a list of Children’s (under 16s) 43%
public service genres and asked:
Current affairs programmes (e.g. Panorama and Question Time) 40%
Please read out any that you
think should be protected. The World Service 37%
Local TV 35%
Younger people’s (16-34) 27%
Music (e.g. Glastonbury and the Proms) 24%
Religious programmes 21%
Arts (e.g. The Culture Show) 20%
Minority language services 17%
Don’t know 13%
Thinking about the quality of Proportion agreeing with: The BBC makes consistently high 59%
BBC content, please indicate quality TV and radio programmes and online content
how much you agree or disagree Proportion agreeing with: The BBC shows too many repeats
with the following statements. 49%
Proportion agreeing with: Other broadcasters content is 32%
generally less high quality than the BBC’s
Proportion agreeing with: The BBC shows too many 24%
imported programmes, rather than showing enough British
made programming
Do you think the balance Yes 59%
of the BBC’s overall content
should be distinctive because No 29%
it is publicly funded? By that Don’t know
I mean being different to that 12%
from other broadcasters.
Wave 1 survey data

Wave 2 survey data

7. Annexes

Thinking about whether the Proportion agreeing with: It is okay for the BBC to show the 50%
BBC’s content is distinctive same sorts of programmes as commercial broadcasters as long
compared to that from other as they aren’t on at exactly the same time
broadcasters, please indicate Proportion agreeing with: BBC1 and ITV1 are quite similar, 43%
how much you agree or disagree apart from the adverts
with the following statements. Proportion agreeing with: The BBC makes lots of TV 38%
programmes that no other broadcaster would make
Proportion agreeing with: The BBC makes lots of 27%
programmes that are more daring or innovative than those
made by other broadcasters
Proportion agreeing with: Radio 1 and commercial pop radio 31%
stations like Capital Network and Absolute Radio are quite
similar, apart from the adverts
Proportion agreeing with: Radio 2 and commercial pop radio 31%
stations like Magic FM and Heart Network are quite similar,
apart from the adverts
Proportion agreeing with: The coverage of news on the BBC 39%
website is much the same as that available on other websites
Proportion agreeing with: Other than news, the content on 34%
the BBC website is much the same as available on other websites
Proportion agreeing with: The BBC makes lots of online 27%
and website content that no other organisation would make
The BBC sometimes promote Yes 54%
their television programmes
on BBC radio and their radio No 41%
programmes on BBC television
– so for example you may hear Don’t know 4%
information about a new BBC1
drama series on Radio 2 or you
may see a promotion for Radio
1’s Breakfast show between
programmes on BBC1. This is
known as ‘cross promotion’. Have
you seen or heard any of this kind
of cross-promotion on the BBC?
The 1,113 aware of cross Yes 59%
promotion were asked: Have you
ever then chosen to watch or No 39%
listen to another BBC programme Don’t know
as a result of any cross promotion? 2%
Still thinking about ‘cross Proportion agreeing with: The BBC should be able to 65%
promotion’ please indicate how promote its services across its television channels and radio
much you agree or disagree with stations, however it likes
the following statements. Proportion agreeing with: As the BBC can promote for 30%
free its television programmes on its radio stations and its
radio stations via its television channels this gives it an unfair
advantage over other broadcasters
Proportion agreeing with: As the BBC offers lots of different 67%
services it makes sense to tell people about what is available
in different ways including cross-promotion
The 1,113 aware of cross Proportion agreeing with: I like hearing about BBC television 68%
promotion were asked: Still programmes on the radio or radio programmes via the
thinking about ‘cross promotion’ television as I learn about new programmes which I may
please indicate how much you otherwise not have heard about
agree or disagree with the Proportion agreeing with: The BBC does too much cross 23%
following statements. promotion – it wastes air time which should be dedicated
to programming
Proportion agreeing with: The BBC does too much cross 21%
promotion – it wastes air time which should be dedicated
to programming

7. Annexes
Glossary
BBC Executive Catch-up TV NAO

The Executive Board is responsible or TV ‘on demand’, is a system for National Audit Office.
for the operational management watching TV programmes after they
of the BBC. have been broadcast using a computer, Ofcom
phone, etc. that is connected to The Office for Communications
BBC Trust the internet. – independent regulator and
The BBC Trust is the governing body competition authority for the
of the BBC. Clementi Review UK communication industries.
Independent review into the
BBC Group governance and regulation of the On-demand
The BBC Group refers to the BBC BBC led by Sir David Clementi. see ‘catch-up TV’ above.
and its commercial subsidiaries.
DAB Operating Licence
BBC Studios Digital Audio Broadcasting. New licensing regime for the BBC to
The BBC’s proposed new commercial be administered by Ofcom, replacing
production subsidiary. DCMS the existing Service Licence regime
Department for Culture, Media administered by the BBC Trust
BDUK & Sport. (see Service Licence).
Broadband Delivery UK – the
delivery arm for the government’s Delivering Quality First Peak time
broadband programmes (and part Delivering Quality First (DQF) is the Peak time is when consumption
of the Department for Culture, BBC’s plan for delivering efficiency of content is usually highest.
Media & Sport). savings of £700 million per year by For television Ofcom define this
2016/17. as 6pm to 10.30pm.
Broadband
A term used by retail internet service Digital switchover Perry Review
providers to describe their high‑speed, The process of switching over the Independent review into the
always‑on, access to the internet. analogue television broadcasting decriminalisation of the licence fee,
The term broadband originally refers system to digital, as well as ensuring led by Sir David Perry.
to the range of high frequency that people adapted or upgraded their
signals used to carry the data being televisions and recording equipment PSB
transmitted. Broadband is most often to receive digital TV. This process was Public Service Broadcaster
delivered via connection through a completed across the UK in 2012. (or Broadcasting) – in the UK these
telephone line or cable service, but are: the BBC, ITV, Channel 4, S4C
can also be delivered using wireless MIA and Channel 5.
and satellite connections. A potential Market Impact Assessment –
an element of the Public Value Test PVT
access speed of less than 512 kbps Public Value Test – the process set
is deemed not to be broadband. that looks at the impact of any new
BBC service or significant change to out in the current Charter for how the
an existing BBC service. BBC Trust determines whether new
BBC services and changes to services
should go ahead, taking into account
the public value and market impact.

7. Annexes
S4C Superfast Broadband Unitary board

A Welsh language public service BDUK (see previous) defines A structure for governing an
television channel based broadcast Superfast Broadband as having a organisation whereby a single
throughout Wales. potential headline access speed of board made up of executive and
at least 24mbps, with no upper limit. non-executive members has
The first television channel to be Typically, at a wholesale level, the collective responsibility.
aimed specifically at a Welsh-speaking underlying capability can be measured
audience, S4C is (after BBC One, ITV, in gigabits. The retail market then WOCC
BBC Two and Sky1) the fifth-oldest takes this capability and delivers Window of Creative Competition.
television channel in the United affordable propositions.
Kingdom (Channel 4 was launched in
the rest of the country one day later). Telecommunications
Conveyance over distance of speed,
Service Licence music and other sounds, visual images
Services Licences are issued by the or signals by electric, magnetic or
BBC Trust for every UK public service. electromagnetic means.
It defines the scope, aims, objectives,
headline budget and other important Terms of Trade
features of each service and states Guidance produced by Ofcom (in their
how performance is assessed by ‘Code of Practice for Commissioning
the Trust. from Independent Producers’) setting
out how public service broadcasters
Smart television should negotiate agreements with the
The integration of the internet independent production sector over
(and associated software applications) the commissioning of new works.
into television sets and associated
devices such as Blu‑Ray players, Ultra HD
games consoles and set‑top boxes. Ultra-high-definition television (also
Consumers can browse the internet known as Super Hi-Vision, Ultra HD
and access a range of services television, UltraHD, UHDTV, or UHD)
(catch‑up TV, video‑on-demand, includes 4K UHD (2160p) and 8K UHD
user‑uploaded content), as well as (4320p), which are two digital video
linear broadcast TV content, via their formats proposed by NHK Science
TV screen. & Technology Research Laboratories
and defined and approved by the
Spectrum International Telecommunication
Radio spectrum – those sections Union (ITU).
of the electromagnetic spectrum
(typically defined as between
3KHz and 300GHz) which are used
by a wide range of wireless based
services including broadcasting,
telecommunications and
business radios.

7. Annexes
End notes
DCMS, BBC Charter Review

1 6
BBC, BBC Full Financial Statements 13
BBC Audience Information Data
Public Consultation: Summary of 2014/15, Jul 2015, p.11: http:// Tables, April – June 2015, p.6:
Responses, March 2016,p.5: Total downloads.bbc.co.uk/annualreport/ http://downloads.bbc.co.uk/
number of emails, letters and pdf/2014-15/BBC-FS-2015.pdf aboutthebbc/insidethebbc/
online survey responses received howwework/accountability/pdf/
7
Ofcom, The Communications
by closing date: 192,564; Duplicate summary_audience_information_
Market Report, August 2015, p.358:
responses, blank responses, and april_june_2015.pdf
http://stakeholders.ofcom.org.uk/
non‑consultation responses such
binaries/research/cmr/cmr15/CMR_ 14
Stakeholder responses to DCMS
as spam and general queries
UK_2015.pdf consultation. BBC Charter Review
identified during the analysis
Public Consultation: Summary of
process: 7,304: https://www.gov.
8
Ofcom, The Communications
Responses, March 2016, pp.19-20:
uk/government/uploads/system/ Market Report, August 2015, p.5:
https://www.gov.uk/government/
uploads/attachment_data/ http://stakeholders.ofcom.org.uk/
uploads/system/uploads/
file/504099/BBC_Charter_Review_ binaries/research/cmr/cmr15/CMR_
attachment_data/file/504099/
Public_Consultation-_Summary_ UK_2015.pdf
BBC_Charter_Review_Public_
of_Responses.pdf 9
Oliver & Ohlbaum and Oxera, Consultation-_Summary_of_
2 BBC television, radio and online Responses.pdf
Public Consultation: Summary services: An assessment of market 15
46% of spend regulated by
of Responses, March 2016, p.39: impact and distinctiveness,
service licence and 41% of total
https://www.gov.uk/government/ February 2016, p.28: https://www.
service spend. BBC Full Financial
uploads/system/uploads/ gov.uk/government/uploads/
Statements 2014/15, p.13: http://
attachment_data/file/504099/ system/uploads/attachment_data/
downloads.bbc.co.uk/annualreport/
BBC_Charter_Review_Public_ file/504012/FINAL_-_BBC_market_
pdf/2014-15/BBC-FS-2015.pdf
Consultation-_Summary_of_ impact_assessment.pdf
Responses.pdf
16
Lord Hall Speech at the Science
10
BBC Media Centre, BBC’s weekly
Museum on the future vision
Oliver & Ohlbaum and Oxera,
3 global audience rises to record
of the BBC, 7 September 2015:
BBC television, radio and online 348m , 29.04.2016: http://
http://www.bbc.co.uk/mediacentre/
services: An assessment of market www.bbc.co.uk/mediacentre/
speeches/2015/tony-hall-
impact and distinctiveness, latestnews/2016/bbc-weekly-
distinctive-bbc
February 2016, p.9: https://www. global-audience
gov.uk/government/uploads/ Oliver & Ohlbaum and Oxera,
17
11
BBC Worldwide Annual Review
system/uploads/attachment_data/ BBC television, radio and online
2014–2015, p.13: http://www.
file/504012/FINAL_-_BBC_market_ services: An assessment of market
bbcworldwide.com/media/109098/
impact_assessment.pdf impact and distinctiveness,
annualreview2014-15.pdf
February 2016, p.9: https://www.
BBC, BBC Full Financial Statements
4
12
BBC Trust, Response to the DCMS’s gov.uk/government/uploads/
2014/15, Jul 2015, p.7: http:// Charter Review Consultation, system/uploads/attachment_data/
downloads.bbc.co.uk/annualreport/ October 2015, p.7: http:// file/504012/FINAL_-_BBC_market_
pdf/2014-15/BBC-FS-2015.pdf downloads.bbc.co.uk/bbctrust/ impact_assessment.pdf
The Yearbook of the European
5 assets/files/pdf/about/how_we_
Audiovisual Observatory 2015 govern/charter_review/dcms_
ranked the BBC number one in response.pdf
the 50 leading European PSBs in
terms of unconsolidated operating
revenues: http://www.obs.coe.int/
en/home
7. Annexes
18
Oliver & Ohlbaum and Oxera, 22
BBC Trust, Reducing costs through 29
BBC Media Centre, BBC’s weekly
BBC television, radio and online ‘Delivering Quality First’: Report global audience rises to record
services: An assessment of market by the Comptroller and Auditor 348m, 29 April 2016: http://
impact and distinctiveness, General presented to the BBC www.bbc.co.uk/mediacentre/
February 2016, p.148: https:// Trust Value for Money Committee, latestnews/2016/bbc-weekly-
www.gov.uk/government/uploads/ NAO, February 2015, https:// global-audience
system/uploads/attachment_data/ www.nao.org.uk/wp-content/ 30
Portland and Professor Joseph
file/504012/FINAL_-_BBC_market_ uploads/2015/03/Reducing-costs-
Nye, Soft Power 30 Index 2015,
impact_assessment.pdf through-delivering-quality-first.pdf
July 2015: http://softpower30.
GVA of the Creative Industries
19 23
GfK Social Research for the portland-communications.com/
was £84.1bn in 2014 and DCMS, Research to explore public
NatCen Social Research for
31
exports of services from the views about the BBC, May 2016,
BBC Trust, Purpose Remit Survey
Creative Industries accounted for p.33: www.gov.uk/government/
UK report, July 2015, p.8:
8.7 per cent of total exports of publications/research-to-explore-
http://downloads.bbc.co.uk/
services for the UK in 2013, DCMS, public-views-about-the-bbc
bbctrust/assets/files/pdf/review_
Creative Industries Economic
BBC Annual Report and Accounts
24
report_research/ara_2014_15/
Estimates, January 2016, pp.5-6:
2014/15, July 2015, p.84: uk.pdf
32
annualreport/pdf/2014-15/bbc-
attachment_data/file/494927/ Public Consultation: Summary
annualreport-201415.pdf
Creative_Industries_Economic_ of Responses, March 2016:
Estimates_-_January_2016.pdf
25
BBC Full Financial Statements BBC served audience well or
2014/15, p.26: http://downloads. very well (81 per cent); the BBC’s
20
Frontier Economics for BBC,
bbc.co.uk/annualreport/pdf/2014- content is sufficiently high quality
The contribution of the BBC to the
15/BBC-FS-2015.pdf and distinctive (74.2 per cent);
UK creative industries, April 2015,
BBC should remain independent
p.22: http://downloads.bbc.co.uk/
26
(72 per cent), p.39: https://www.
aboutthebbc/insidethebbc/reports/ 2014/15, July 2015, p.14: http://
gov.uk/government/uploads/
pdf/bbc_report_contribution_to_ downloads.bbc.co.uk/annualreport/
system/uploads/attachment_data/
the_UK_creative_industries.pdf pdf/2014-15/BBC-FS-2015.pdf
file/504099/BBC_Charter_Review_
PwC, BBC Efficiency Review,
21 The Yearbook of the European
27
Public_Consultation-_Summary_
July 2015: http://downloads.bbc. Audiovisual Observatory 2015 of_Responses.pdf
co.uk/aboutthebbc/insidethebbc/ ranked the BBC number one in 33
BBC, British, Bold, Creative, The
reports/pdf/bbc_report_pwc_ the 50 leading European PSBs in
BBC’s Programmes and Services
update_overheads_efficiency_ terms of unconsolidated operating
in the next Charter, September
review.pdf BBC, Driving Efficiency revenues: http://www.obs.coe.int/
2015, p.6: https://downloads.bbc.
at the BBC, November 2014: en/home
co.uk/aboutthebbc/reports/pdf/
http://downloads.bbc.co.uk/ 28
Creative Industries Economic futureofthebbc2015.pdf
aboutthebbc/insidethebbc/ Estimates January 2016, p.12:
howwework/reports/pdf/bbc_ https://www.gov.uk/government/
efficiency_report_2014.pdf uploads/system/uploads/
Creative_Industries_Economic_
Estimates_-_January_2016.pdf
7. Annexes
34
Ofcom, PSB Annual Report, 38
NatCen Social Research, British 44
All sites listed are at the Property
July 2015. Around two thirds Social Attitudes: the 30th Report, (including all the sites and apps
(67 per cent) of households now 2013, p.16: http://www.bsa. owned by the organisation) level.
have a digital video recorder, take natcen.ac.uk/latest-report/british- Please note MMX Multi-Platform
up of connected TVs is growing social-attitudes-30/key-findings/ includes laptop/desktop browsing,
and almost half of (48 per cent) of introduction.aspx laptop/desktop video steams
adults watch on demand/catch-up and mobile use. Mobile includes
39
Population Estimates for UK,
service, p.7: http://stakeholders. Android smartphones and iOS
England and Wales, Scotland
ofcom.org.uk/binaries/broadcast/ smartphones and tablets. Only
and Northern Ireland, mid-2014:
reviews-investigations/psb-review/ those entities that have been
http://webarchive.nationalarchives.
psb2015/PSB_Annual_Report_ tagged as part of the census
gov.uk/20160105160709/http://
summary.pdf network report Android usage data.
www.ons.gov.uk/ons/rel/pop-
Google sites include YouTube.
35
Ofcom, Review of the operation estimate/population-estimates-for-
of the television production uk--england-and-wales--scotland- 45
sector: A report for the Secretary and-northern-ireland/index.html BBC’s Programmes and Services
of State for Culture, Media & in the next Charter, September
40
Ofcom, PSB Annual Report 2015,
Sport, December 2015: http:// 2015, p.24: https://downloads.bbc.
July 2015, p.7: http://stakeholders.
stakeholders.ofcom.org.uk/binaries/ co.uk/aboutthebbc/reports/pdf/
ofcom.org.uk/binaries/broadcast/
broadcast/reviews-investigations/ futureofthebbc2015.pdf
reviews-investigations/psb-review/
tv-production-sector-review/
psb2015/PSB_Annual_Report_ 46
DCMS, BBC white paper: A public
TV_Production_Sector_Review.pdf
summary.pdf service for all: the BBC in the digital
36
Committee on Standards in Public age, March 2006, p.10: https://
Ofcom, PSB Annual Report 2015,
41
Life, Ethical standards for providers www.gov.uk/government/uploads/
July 2015, p.16: http://stakeholders.
of public services, June 2014, p.5: system/uploads/attachment_data/
ofcom.org.uk/binaries/broadcast/
https://www.gov.uk/government/ file/272256/6763.pdf
reviews-investigations/psb-review/
psb2015/PSB_Annual_Report_ BBC Trust, Response to the DCMS’s
47
summary.pdf Charter Review Consultation,
CSPL_EthicalStandards_web.pdf
Technical Annex A: Purposes,
42
This fits within the government’s
Edelman, 2016 Edelman Trust
37
Values and Scope, November
Counter-Extremism Strategy
Barometer: Executive Summary, 2015, p.48. When asked “The BBC
which notes the important role
p.3: http://www.edelman. offers content and programmes
of broadcast media: https://www.
com/insights/intellectual- which are distinctive”, 60 per cent
property/2016-edelman-trust- agreed, 18 per cent disagreed,
barometer/executive-summary 21 per cent neither agreed nor
file/470088/51859_Cm9148_
disagreed. When asked “The BBC
Accessible.pdf
offers content and programmes
43
BBC, BBC Full Financial Statements which are high quality”, 73 per cent
2014/15, Jul 2015, p.7: http:// agreed, 10 per cent disagreed,
downloads.bbc.co.uk/annualreport/ and 16 per cent neither agreed nor
pdf/2014-15/BBC-FS-2015.pdf disagreed: http://downloads.bbc.
co.uk/bbctrust/assets/files/pdf/
about/how_we_govern/charter_
review/annex_a.pdf
7. Annexes
48
DCMS, BBC Charter Review Oliver & Ohlbaum and Oxera,
51
BBC Trust response to DCMS’s
55
Public Consultation, Summary of BBC television, radio and online Charter Review Consultation,
Consultation Responses, March services: An assessment of market Technical Annex A: Purposes,
2016, p19: Almost three quarters impact and distinctiveness, Values and Scope, November 2015,
(74 per cent) of the responses to February 2016, p.13, p.18: https:// p.14. When asked “The BBC’s main
the consultation indicated that www.gov.uk/government/uploads/ mission is to ‘inform, educate
the BBC’s content is sufficiently system/uploads/attachment_data/ and entertain’ its audiences.
high quality and distinctive from file/504012/FINAL_-_BBC_market_ To what extent do you agree or
that of other broadcasters: https:// impact_assessment.pdf disagree that this should continue
www.gov.uk/government/uploads/ to be the BBC’s main mission?”,
52
BBC Trust, Service Review
system/uploads/attachment_data/ 49 per cent said they “definitely
of BBC Television, July 2014,
file/504099/BBC_Charter_Review_ agree”, 36 per cent “tend to
p.32: http://downloads.bbc.
Public_Consultation-_Summary_ agree”, 10 per cent “neither agree
co.uk/bbctrust/assets/files/
of_Responses.pdf of disagree”, 2 per cent “tend to
pdf/regulatory_framework/
disagree”, 1 per cent “definitely
GfK Social Research for DCMS,
49
service_licences/service_reviews/
disagree”, and 2 per cent “don’t
Research to explore public views television_services/television_
know”: http://downloads.bbc.co.uk/
about the BBC, May 2016, p.63. services.pdf BBC Trust, Service
bbctrust/assets/files/pdf/about/
When asked whether the BBC Review Radio 1, 1Xtra, Radio
how_we_govern/charter_review/
“makes lots of TV programmes 2, Radio 3, 6 Music and Asian
annex_a.pdf
that no other broadcaster could Network, March 2015, p.7: http://
make”, 38 per cent “agreed”, downloads.bbc.co.uk/bbctrust/ 56
27 per cent “disagreed”. When assets/files/pdf/our_work/music_ BBC’s Programmes and Services
asked whether the BBC make lots radio/music_radio.pdf in the next charter, September
of programmes which are more 2015, p.5: https://downloads.bbc.
53
BBC, A distinctive BBC, April 2016:
daring or innovative that those co.uk/aboutthebbc/reports/pdf/
made by other broadcasters, futureofthebbc2015.pdf
aboutthebbc/insidethebbc/
27 per cent “agreed”, 34 per cent
reports/pdf/bbc_distinctiveness_ 57
“disagreed”: www.gov.uk/
april2016.pdf Research to explore public views
government/publications/research-
about the BBC, May 2016,
to-explore-public-views-about-
54
Oral Evidence to the Culture,
p.62. When asked the question:
the-bbc Media and Sport Select
“Do you think the balance of the
Committee: Future of the
Lord Hall Speech at the Science
50
BBC’s overall content should be
BBC HC 949, 11 February
Museum on the future vision distinctive because it is publicly
2014, Q111, p.17: http://data.
of the BBC, 7 September 2015: funded?” 59 per cent said “Yes”,
parliament.uk/writtenevidence/
http://www.bbc.co.uk/mediacentre/ 29 per cent said “No”, and
committeeevidence.svc/
speeches/2015/tony-hall- 12 per cent said “Don’t Know”:
evidencedocument/culture-media-
distinctive-bbc www.gov.uk/government/
and-sport-committee/future-of-
publications/research-to-explore-
the-bbc/oral/6170.pdf
public-views-about-the-bbc
7. Annexes
58
BBC Trust response to DCMS’s 60
BBC Trust response to DCMS’s BBC Trust, BBC One, Two, Three
67
Charter Review Consultation, Charter Review Government and Four Service Licence Reviews,
October 2015, p.7. When asked Consultation, October 2015, 2014, p.6: http://downloads.
“Do you think it is important or p.4: http://downloads.bbc.co.uk/ bbc.co.uk/bbctrust/assets/files/
not important that the BBC…?”, bbctrust/assets/files/pdf/about/ pdf/regulatory_framework/
91 per cent said that quality and how_we_govern/charter_review/ service_licences/service_reviews/
high editorial standards were “very dcms_response.pdf television_services/television_
important” or “fairly important”, services.pdf
Government roundtables with
61
and 88 per cent said impartiality
Creative Industry Experts, 20 and 68
was “very important” or “fairly
27 January 2016. BBC television, radio and online
important”: http://downloads.bbc.
services: An assessment of market
62
BBC, A Distinctive BBC, April
impact and distinctiveness,
about/how_we_govern/charter_ 2016, p.3: http://downloads.bbc.
February 2016, pp. 96-99: https://
review/dcms_response.pdf co.uk/aboutthebbc/insidethebbc/
www.gov.uk/government/uploads/
reports/pdf/bbc_distinctiveness_
59
april2016.pdf
Public Consultation, Summary of file/504012/FINAL_-_BBC_market_
Consultation Responses, March
63
Michael Grade speech at the impact_assessment.pdf
2016, p.7: When asked the question IPPR Oxford Media Convention, 69
“How can the BBC’s public 20 January 2005: http://www.bbc.
BBC television, radio and online
purposes be improved so there co.uk/pressoffice/speeches/stories/
is more clarity about what the grade_ippr.shtml
BBC should achieve?”, 3 per cent 64
Ofcom, PSB Annual Report 2015 February 2016, p.18: https://www.
said that said that no change was Output and Spend Annex (Fig 21), gov.uk/government/uploads/
required, and 2 per cent indicated p.24: http://stakeholders.ofcom. system/uploads/attachment_data/
that some change was required org.uk/binaries/broadcast/reviews- file/504012/FINAL_-_BBC_market_
(only 5 per cent responded overall). investigations/psb-review/psb2015/ impact_assessment.pdf
The majority of organisations who PSB_2015_Output_and_Spend.pdf
responded said that the current
70
DCMS analysis of data submitted
structure of public purposes with
65
DCMS analysis using data by the BBC to DCMS. Comedy
more specific purpose remits, submitted by the BBC. hours on BBC One in peak were
provided a “helpful framework” 66
BBC, Audience Information 79 hours in 2010 and 70 in 2014.
for the BBC to operate within: Data Tables, April – June 2015, Arts and Music hours on BBC One
https://www.gov.uk/government/ p.6: http://downloads.bbc.co.uk/ in peak were 20 hours in 2010 and
uploads/system/uploads/ aboutthebbc/insidethebbc/ 13 in 2014.
attachment_data/file/504099/ howwework/accountability/pdf/ Ofcom, Public Service Broadcasting
71
BBC_Charter_Review_Public_ summary_audience_information_ in the Internet Age, July 2015,

Consultation-_Summary_of_ april_june_2015.pdf p.4: http://stakeholders.ofcom.
Responses.pdf org.uk/binaries/consultations/
psb-review-3/statement/PSB_
Review_3_Statement.pdf
7. Annexes
72
BBC Trust, Service Licence DCMS analysis of data submitted
76
BBC, British, Bold, Creative,
81
Review of BBC TV: BBC One, by the BBC to DCMS. Current The BBC’s Programmes and
BBC Two, BBC Three and Affairs on BBC Two in peak fell Services in the next charter,
BBC Four Analysis of Responses from 82 hours in 2010 to 61 hours September 2015, September
to Public Consultation, April in 2014. Music and Arts on BBC 2015, p.30: https://downloads.bbc.
2014, p.11: http://downloads. Two in peak fell from 142 hours co.uk/aboutthebbc/reports/pdf/
bbc.co.uk/bbctrust/assets/files/ in 2010 to 117 hours in 2014. futureofthebbc2015.pdf
pdf/regulatory_framework/ Entertainment hours on BBC Two 82
RadioCentre Response to DCMS
service_licences/service_reviews/ in peak rose from 197 hours in
Green Paper on BBC Charter
television_services/consultation_ 2010 to 227 hours in 2014.
Review, October 2015, p.18,
analysis.pdf 77
BBC Trust, Service Review of RadioCentre have estimated that
73
GfK Social Research for DCMS, BBC One, Two, Three and Four, the degree of overlap to be 53%
Research to explore public views July 2014, p.7: http://downloads. for Radio 1 and 65% for Radio 2,
about the BBC, May 2016, bbc.co.uk/bbctrust/assets/files/ but this compares the stations
p.63: www.gov.uk/government/ pdf/regulatory_framework/ with a broad range of commercial
publications/research-to-explore- service_licences/service_reviews/ providers: http://www.radiocentre.
public-views-about-the-bbc television_services/television_ org/wp-content/uploads/2015/10/
services.pdf Radiocentre-response-to-DCMS-
BBC Trust, Service Review of
74
Green-Paper-on-BBC-Charter.pdf
BBC Television: BBC One, BBC 78
BFI, Public Investment in Film in
Two, BBC Three & BBC Four, the UK, BFI Research and Statistics, 83
CompareMyRadio, Cake By the
July 2014: http://downloads. December 2015, p.4: http://www. Ocean by Dnce has been played
bbc.co.uk/bbctrust/assets/files/ bfi.org.uk/sites/bfi.org.uk/files/ 100 times in the previous 30 days
pdf/regulatory_framework/ downloads/bfi-public-investment- on Radio 1: http://comparemyradio.
service_licences/service_reviews/ in%20film-in-uk-2015.pdf com/stations/BBC_Radio_1
television_services/television_ 79
DCMS report, It’s still all about 84
Radio 1 Service Licence: http://
services.pdf
the audience: two years on from downloads.bbc.co.uk/bbctrust/
75
BBC, BBC Two fresh and new the film policy review, January assets/files/pdf/regulatory_
scores have increased from 2014, p.19: https://www.gov.uk/ framework/service_licences/
73 in July – September 2011, government/uploads/system/ radio/2013/radio_1.pdf
to 79 in April – June 2015. uploads/attachment_data/ 85
Radio 2 Service Licence: http://
DCMS analysis of ‘Fresh and file/274265/1316-A_Film_Policy_
downloads.bbc.co.uk/bbctrust/
New’ scores from BBC audience Doc_ACCESSIBLE.pdf
assets/files/pdf/regulatory_
information: http://www.bbc. 80
RAJAR Quarterly Report, December framework/service_licences/
co.uk/aboutthebbc/insidethebbc/
2015, Radio 1 has 10.3 million radio/2014/radio2_apr14.pdf
howwework/accountability/
weekly listeners. Radio 2 has
audienceinformation/
15.5 million listeners a week:
http://www.rajar.co.uk/listening/
quarterly_listening.php
7. Annexes
86
Speech by Lord Hall, Director-
BBC television, radio and online BBC television, radio and online General of the BBC, at the Cardiff
services: An assessment of market services: An assessment of market Business Club on 23 November
impact and distinctiveness, impact and distinctiveness, 2015: http://www.bbc.co.uk/
February 2016, p.123: https:// February 2016, p.148: https:// mediacentre/speeches/2015/tony-
www.gov.uk/government/uploads/ www.gov.uk/government/uploads/ hall-cardiff
system/uploads/attachment_data/ system/uploads/attachment_data/ 95
BBC, A Distinctive BBC, April 2016,
file/504012/FINAL_-_BBC_market_ file/504012/FINAL_-_BBC_market_
impact_assessment.pdf impact_assessment.pdf
87 90
BBC’s response to DCMS Green reports/pdf/bbc_distinctiveness_
Research to explore public views Paper: BBC Charter Review, april2016.pdf
about the BBC, May 2016, p.69. Audience Appendix, p.46: 96
BBC, A Distinctive BBC, April 2016,
When asked the question: “Radio 1 http://downloads.bbc.co.uk/
and commercial pop radio stations aboutthebbc/insidethebbc/
like Capital Network and Absolute reports/pdf/bbc_charter_review_
reports/pdf/bbc_distinctiveness_
Radio are quite similar, apart from audiences_appendix.pdf
april2016.pdf
the adverts”, 31 per cent said they
91
“agree”, and “15 per cent said they BBC, Performance Against Public
97
“disagree”. Of those under 25, Commitments, 2014/15, p.2: http://
42 per cent they “agree”. When downloads.bbc.co.uk/annualreport/
asked the question: “Radio 2 and pdf/2014-15/bbc-papc-2015.pdf
commercial pop radio stations 98
like Magic FM and Heart Network Research to explore public
are quite similar, apart from the views about the BBC, May
file/504012/FINAL_-_BBC_market_
adverts”, 31 per cent said they 2016, pp.57‑59. When UK-based
impact_assessment.pdf
“agree” and 18 per cent said participants were asked about
they “disagree”: www.gov.uk/
92
their views regarding ring fencing
government/publications/research- BBC television, radio and online
of licence fee funds for particular
to-explore-public-views-about- services: An assessment of market
BBC services, the World Service
the-bbc impact and distinctiveness,
was highlighted as an important
88
Oliver & Ohlbaum and Oxera, service for people from other
BBC television, radio and online countries living in the UK and for
services: An assessment of market those from the UK living overseas,
impact and distinctiveness, such as members of the armed
February 2016, p.123: https:// forces: www.gov.uk/government/
93
Oliver & Ohlbaum and Oxera, publications/research-to-explore-
system/uploads/attachment_data/ BBC television, radio and online public-views-about-the-bbc
file/504012/FINAL_-_BBC_market_ services: An assessment of market 99
Portland and Professor Joseph
impact_assessment.pdf impact and distinctiveness,
Nye, Soft Power 30 Index 2015,
February 2016, pp. 17-22: https://
July 2015: http://softpower30.
portland-communications.com/
7. Annexes
100
BBC Media Centre, BBC Global 107
Sky, Press Notice, August 2014: BBC, British, Bold, Creative,
112
Audience Estimate, 29 April https://corporate.sky.com/media- The BBC’s Programmes and

2016: http://www.bbc.co.uk/ centre/news-page/2014/sky- Services in the next charter,
mediacentre/latestnews/2016/ unveils-new-targets-to-improve- September 2015, p. 46:
bbc-weekly-global-audience bame-representation https://downloads.bbc.co.uk/
aboutthebbc/reports/pdf/
BBC, Full Financial Statements
101 108
BFI, Diversity Standards,
futureofthebbc2015.pdf
2014-15, p. 13: http://downloads. November 2015: http://www.
bbc.co.uk/annualreport/pdf/2014- bfi.org.uk/sites/bfi.org.uk/files/ National Assembly for Wales
113
15/BBC-FS-2015.pdf downloads/bfi-film-fund-diversity- Communities, Equality and

standards-2015-11-27.pdf Local Government Committee
102
Ofcom, PSB Diversity Research
Inquiry into the BBC Charter
Summary, June 2015: 109
Review, March 2016, pp. 18-20:
http://stakeholders.ofcom.org. Public Consultation: Summary
http://www.assembly.wales/
uk/binaries/consultations/psb- of Responses, March 2016, p.15:
laid%20documents/cr-ld10602/
review-3/statement/PSB_Diversity_ https://www.gov.uk/government/
cr-ld10602-e.pdf and Scottish
Report.pdf uploads/system/uploads/
Parliament Education and
103
NatCen Social Research for BBC Culture Committee’s report on
BBC_Charter_Review_Public_
Trust, Purpose Remit Survey UK the renewal of the BBC Charter,
Consultation-_Summary_of_
report, July 2015, p.33: http:// February 2016, pp.14-15: http://
Responses.pdf
downloads.bbc.co.uk/bbctrust/ www.parliament.scot/S4_
assets/files/pdf/review_report_ 110
BBC, British, Bold, Creative, EducationandCultureCommittee/
research/ara_2014_15/uk.pdf The BBC’s Programmes and Reports/ECS042016R03.pdf
Services in the next charter,
104
Trevor Philips, Speech at the We understand the BBC is
114
September 2015, p.46:
Oxford Media Convention, 2 March currently conducting a news review
https://downloads.bbc.co.uk/
2016: http://www.ippr.org/files/ that will be looking at various
aboutthebbc/reports/pdf/
events/files/events-speech- different programme formats
phillips-160302.pdf?noredirect=1 and will be carrying out audience
111
research as part of that process.
105
The Creative Diversity Network
Research to explore public views
is a forum, paid for by its member Gaelic, Welsh, Irish language and
115
about the BBC, May 2016: www.
bodies. Its role is to bring together Ulster-Scots.
gov.uk/government/publications/
organisations, who employ and/
research-to-explore-public-views- 116
Sir David Clementi, A Review of
or make programmes across the
about-the-bbc and BBC Trust the Governance and Regulation
UK television industry to promote,
Response to the DCMS’s Charter of the BBC, March 2016: https://
celebrate and share good practice
Review Consultation, October www.gov.uk/government/
around the diversity agenda.
2015, Annex A, 2015: http:// uploads/system/uploads/
106
Channel 4, Channel 4 launches downloads.bbc.co.uk/bbctrust/ attachment_data/file/504003/
360° Diversity Charter, January assets/files/pdf/about/how_we_ PDF_FINAL_20160224_AM_
2015: http://www.channel4. govern/charter_review/annex_a.pdf Clementi_Review.pdf
com/info/press/news/channel-4-
launches-360-diversity-charter
7. Annexes
Culture, Media and Sport Select

117
Lord Hall Speech to the Cardiff
124 130
Committee, BBC Charter Review, Business Club, November 2015: the Governance and Regulation
p.8: http://www.publications. http://www.bbc.co.uk/mediacentre/ of the BBC, March 2016, p.77:
parliament.uk/pa/cm201516/ speeches/2015/tony-hall-cardiff https://www.gov.uk/government/
cmselect/cmcumeds/398/398.pdf uploads/system/uploads/
125
Independent’s Panel’s Report,
118
Sir David Clementi, A Review of Emerging Themes, 2004: http://
PDF_FINAL_20160224_AM_
the Governance and Regulation webarchive.nationalarchives.gov.
Clementi_Review.pdf
of the BBC, March 2016, p.17: uk/+/http://www.bbccharterreview.
https://www.gov.uk/government/ org.uk/pdf_documents/050123a_ Communications Committee,
131
uploads/system/uploads/ Governance.pdf 2nd report, The governance and

attachment_data/file/504003/ regulation of the BBC, June 2011:
126
PDF_FINAL_20160224_AM_ http://www.publications.
the Governance and Regulation
Clementi_Review.pdf parliament.uk/pa/ld201012/
of the BBC, March 2016, p.8:
ldselect/ldcomuni/166/16606.htm
119
NAO Report, Digital Media https://www.gov.uk/government/
Initiative, January 2014, p.11: uploads/system/uploads/ 132
BBC Trust, 2012 Complaints
https://www.nao.org.uk/wp- attachment_data/file/504003/ Framework Review, 30 May 2012:
content/uploads/2015/01/BBC- PDF_FINAL_20160224_AM_ http://www.bbc.co.uk/bbctrust/
Digital-Media-Initiative.pdf Clementi_Review.pdf governance/complaints_
framework/framework_review
120
NAO Report, Severance payments Sir David Clementi, A Review of
127
and wider benefits for senior BBC the Governance and Regulation 133
managers, June 2013, p.8: https:// of the BBC, March 2016, p. 52: the Governance and Regulation
www.nao.org.uk/wp-content/ https://www.gov.uk/government/ of the BBC, March 2016, p.64:
uploads/2013/07/10193-001_BBC_ uploads/system/uploads/ https://www.gov.uk/government/
BOOK.pdf attachment_data/file/504003/ uploads/system/uploads/
PDF_FINAL_20160224_AM_ attachment_data/file/504003/
121
House of Commons Committee
Clementi_Review.pdf PDF_FINAL_20160224_AM_
of Public Accounts, BBC Severance
Clementi_Review.pdf
Packages, Recommendation #7 128
BBC Trust, Response to BBC
p.6: http://www.publications. Charter Review Consultation, 134
Creative Industries Economic
parliament.uk/pa/cm201314/ October 2015, p.70: http:// Estimates, DCMS, January 2016,
cmselect/cmpubacc/476/476.pdf downloads.bbc.co.uk/bbctrust/ p.5: https://www.gov.uk/
assets/files/pdf/about/how_we_ government/uploads/system/
122
Rona Fairhead, BBC Trust, Speech
govern/charter_review/dcms_ uploads/attachment_data/
at Oxford Media Convention,
response.pdf file/494927/Creative_Industries_
March 2015: http://www.bbc.co.uk/
Economic_Estimates_-_
bbctrust/news/speeches/2015/ 129
NatCen Social Research for
January_2016.pdf
oxford_media_convention BBC Trust, Purpose Remit Survey
UK report, Appendix Table D:4 135
Ohlbaum and Oxera, BBC
123
Performance in general measures, television, radio and online services:
the Governance and Regulation
by nation, Autumn 2013, p. 58: An assessment of market impact
of the BBC, March 2016, p.36:
http://downloads.bbc.co.uk/ and distinctiveness, Oliver &,
bbctrust/assets/files/pdf/review_ February 2016, pp.11-12: https://
report_research/ara2013_14/uk.pdf www.gov.uk/government/uploads/
PDF_FINAL_20160224_AM_
Clementi_Review.pdf
7. Annexes
136
2,700 suppliers: Frontier Economics 140
BBC Trust, Final decision on 146
Imperial War museum, First World
for BBC, The contribution of proposed changes to BBC television War Centenary Partnership:
the BBC to the UK creative and online services, November http://www.iwm.org.uk/corporate/
industries, April 2015, p.22: 2015: http://www.bbc.co.uk/ projects-partnerships/first-world-
http://downloads.bbc.co.uk/ bbctrust/our_work/services/ war-centenary-partnership
aboutthebbc/insidethebbc/reports/ service_changes_decision
The British Museum, A History of
147
pdf/bbc_report_contribution_
Ofcom, Proposed changes to BBC
141
the World in 100 objects: http://
to_the_UK_creative_industries.
Three, BBC iPlayer, BBC One and www.britishmuseum.org/explore/a_
pdf £400 million per year: Ofcom
CBBC Market Impact Assessment, history_of_the_world.aspx
PSB Annual Report 2015, output
June 2015, p.2: http://stakeholders.
and spend annex, July 2015, p.5:
148
The Guardian, Maev Kennedy:
ofcom.org.uk/binaries/research/
http://stakeholders.ofcom.org. Radio 4’s A History of the World
tv-research/bbc-mias/market_
uk/binaries/broadcast/reviews- in 100 Objects draws to a close,
impact_assessment_report.pdf
investigations/psb-review/psb2015/ 14 October 2010: http://www.
PSB_2015_Output_and_Spend.pdf
142
BBC Trust, Final decision on theguardian.com/media/2010/
proposed changes to BBC television oct/14/radio-4-history-world-
137
and online services, November objects
2015: http://www.bbc.co.uk/
149
Sport England, This Girl Can:
bbctrust/our_work/services/
impact and distinctiveness, http://www.thisgirlcan.co.uk
service_changes_decision
February 2016, p.12: https://www. 150
HM Government, Sporting Future:
143
BBC Trust, Service Licence Review
A New Strategy for an Active
system/uploads/attachment_data/ for BBC One, Two and Four,
Nation, December 2015: https://
file/504012/FINAL_-_BBC_market_ November 2010, p.2: http://
impact_assessment.pdf downloads.bbc.co.uk/bbctrust/
assets/files/pdf/regulatory_
138
See, for example, Oliver & file/486622/Sporting_Future_
framework/service_licences/
Ohlbaum and Oxera, BBC ACCESSIBLE.pdf
service_reviews/one_two_four/
television, radio and online services: Partnership roundtable.
151
tv_services_final.pdf
An assessment of market impact
and distinctiveness, February
144
BBC Trust, Service Licence Review
152
2016, p.12: https://www.gov.uk/ for BBC One, Two Three and Four, BBC television, radio and online
government/uploads/system/ July 2014, p.7: http://downloads. services: An assessment of market
uploads/attachment_data/ bbc.co.uk/bbctrust/assets/files/ impact and distinctiveness,
file/504012/FINAL_-_BBC_market_ pdf/regulatory_framework/ February 2016, pp. 197-214:
impact_assessment.pdf service_licences/service_reviews/ https://www.gov.uk/government/
television_services/television_ uploads/system/uploads/
139
Competition and Markets attachment_data/file/504012/
services.pdf
Authority case: BBC Worldwide FINAL_-_BBC_market_impact_
Ltd, Channel Four Television
145
The Commercial Broadcasters
assessment.pdf
Corporation and ITV plc joint Association, Response to
venture: https://www.gov.uk/cma- the DCMS’s Charter Review
cases/bbc-worldwide-ltd-channel- consultation.
four-television-corporation-and-
itv-plc-joint-venture-cc
7. Annexes
153
Ofcom, PSB Annual Report 2015, 160
BBC, British, Bold, Creative, The 166
Ofcom, Review of the operation
Output and Spend annex, July BBC’s Programmes and Services of the television production sector,
2015, p.14 (Figure 12): http:// in the next charter, September December 2015, p.14: http://
stakeholders.ofcom.org.uk/binaries/ 2015, p.93: https://downloads.bbc. stakeholders.ofcom.org.uk/binaries/
broadcast/reviews-investigations/ co.uk/aboutthebbc/reports/pdf/ broadcast/reviews-investigations/
psb-review/psb2015/PSB_2015_ futureofthebbc2015.pdf tv-production-sector-review/
Output_and_Spend.pdf TV_Production_Sector_Review.pdf
161
154
Ofcom, Third Review of Public BBC’s Programmes and Services 167
Oliver & Ohlbaum, Trends in TV
Service Broadcasting, 2 July 2015: in the next charter, September Production for Ofcom, December
http://stakeholders.ofcom.org.uk/ 2015, p.96: https://downloads.bbc. 2015, p.30: http://stakeholders.
consultations/psb-review-3/ co.uk/aboutthebbc/reports/pdf/ ofcom.org.uk/binaries/broadcast/
futureofthebbc2015.pdf reviews-investigations/tv-
Oliver and Ohlbaum for NMA,
155
production-sector-review/O_O_
The news market in the 21st 162
Annex_Trends.pdf
Century and the likely implications of the television production sector,
for the BBC’s role, September 2015, December 2015, p.13: http:// 168
BBC Trust, The supply arrangements
p.41: http://www.newsmediauk. stakeholders.ofcom.org.uk/binaries/ for the production of the BBC’s
org/write/MediaUploads/PDF%20 broadcast/reviews-investigations/ television content, radio content
Docs/OandO_NMA_-_UK_news_ tv-production-sector-review/ and online content and services,
provision_at_the_crossroads.pdf TV_Production_Sector_Review.pdf June 2015, p.8: http://downloads.
bbc.co.uk/bbctrust/assets/files/pdf/
156
BBC, Full Financial Statements 163
BBC Annual Report and
our_work/content_supply/2015/
2014/15, p.26: http://downloads. Accounts 2014/15, July 2015
content_supply_review.pdf
bbc.co.uk/annualreport/pdf/2014- p.4: http://downloads.bbc.co.uk/
15/BBC-FS-2015.pdf annualreport/pdf/2014-15/bbc- 169
Tony Hall – speech at the ‘Future
annualreport-201415.pdf of the Licence Fee’ seminar, City
157
BBC, Reducing Costs Through
University, London, 10 July 2014:
‘Delivering Quality First’, 164
BBC Executive response: http:// of the television production sector,
speeches/2014/dg-city-university
downloads.bbc.co.uk/bbctrust/ December 2015, p.13: http://
assets/files/pdf/review_report_ stakeholders.ofcom.org.uk/binaries/ 170
BBC Trust, The supply arrangements
research/reducing_costs/reducing_ broadcast/reviews-investigations/ for the production of the BBC’s
costs.pdf tv-production-sector-review/ television content, radio content
TV_Production_Sector_Review.pdf and online content and services,
158
June 2015, p.50: http://downloads.
2014/15, July 2015 p.25: 165
bbc.co.uk/bbctrust/assets/files/pdf/
http://downloads.bbc.co.uk/ of the television production
our_work/content_supply/2015/
annualreport/pdf/2014-15/bbc- sector, December 2015, p.2: http://
content_supply_review.pdf
annualreport-201415.pdf stakeholders.ofcom.org.uk/binaries/
broadcast/reviews-investigations/ Tony Hall – speech at the ‘Future
171
159
PwC, BBC Efficiency Review,
tv-production-sector-review/ of the Licence Fee’ seminar, City
July 2015, p.1: http://downloads.
TV_Production_Sector_Review.pdf University, London, 10 July 2014:
bbc.co.uk/aboutthebbc/
insidethebbc/reports/pdf/bbc_
speeches/2014/dg-city-university
report_pwc_update_overheads_
efficiency_review.pdf
7. Annexes
172
BBC, British, Bold, Creative, The BBC, BBC Annual Report and
179 186
House of Lords Select Committee
BBC’s Programmes and Services Accounts 2014/15, July 2015 on Communications, BBC Charter
in the next charter, September p.110: http://downloads.bbc.co.uk/ Review: Reith not revolution,
2015, p.89: https://downloads.bbc. annualreport/pdf/2014-15/bbc- February 2016, p.25: http://
co.uk/aboutthebbc/reports/pdf/ annualreport-201415.pdf www.publications.parliament.
futureofthebbc2015.pdf uk/pa/ld201516/ldselect/
180
Channel 4, Britain’s Creative
ldcomuni/96/96.pdf
173
BBC, British, Bold, Creative. Greenhouse: Channel Four
BBC Studios: Strengthening the Television Corporation Report 187
Ofcom, Public Service Broadcasting
BBC’s role in the creative industries, and Financial Statements 2014, in the Internet Age, Ofcom’s
September 2015, p.17: http:// p.125: https://c4-cp-hosting. Third Review of Public Service
downloads.bbc.co.uk/aboutthebbc/ s3.amazonaws.com/annualreport/ Broadcasting, July 2015, p.28:
reports/pdf/bbc_studios_2015.pdf Channel%204%20Annual%20 http://stakeholders.ofcom.
Report%202014_2.pdf org.uk/binaries/consultations/
Ofcom, BBC Content Production
174
psb-review-3/statement/PSB_
Options, Ofcom’s advice to the 181
YouGov/The Sunday Times Survey
Review_3_Statement.pdf
Secretary of State for Culture, Results, March 2014: https://
Media & Sport, December 2015, d25d2506sfb94s.cloudfront.net/ 188
p.8: http://stakeholders.ofcom.org. cumulus_uploads/document/ 2014/15, July 2015 p.136:
uk/binaries/broadcast/reviews- l9krw6z8vo/YG-Archive-Pol- http://downloads.bbc.co.uk/
investigations/tv-production- Sunday-Times-results-140314.pdf annualreport/pdf/2014-15/bbc-
sector-review/BBC_Content_ annualreport-201415.pdf
182
BBC, Inside the BBC: Salaries
Production_Options.pdf
and Expenses, 11 April 2016: 189
BBC Annual Report and
175
BBC, British, Bold, Creative, The http://www.bbc.co.uk/ Accounts 2014/15, July 2015
BBC’s Programmes and Services corporate2/insidethebbc/ p.61: http://downloads.bbc.co.uk/
in the next charter, September managementstructure/ annualreport/pdf/2014-15/bbc-
2015, p.93: https://downloads.bbc. biographies/#heading-a-to-c annualreport-201415.pdf
co.uk/aboutthebbc/reports/pdf/ 183
BBC, BBC Annual Report and 190
UKTV, Corporate Site:
Accounts 2014/15, July 2015, http://corporate.uktv.co.uk/about-
176
BBC, BBC Annual Report and p.84: http://downloads.bbc.co.uk/ uktv/article/who-we-are-and-
Accounts 2014/15, July 2015 annualreport/pdf/2014-15/bbc- what-we-do/
p.25: http://downloads.bbc.co.uk/ annualreport-201415.pdf
BBC Worldwide Annual Report
191
annualreport/pdf/2014-15/bbc- 184
NAO, Managing the BBC’s estate. and Accounts, 2009‑10
Report by the Comptroller and and 2014-15: http://www.
177
Oliver & Ohlbaum for the Auditor General presented to bbcworldwide.com/media/109098/
BBC Trust, A review of the BBC’s the BBC Trust Value for Money annualreview2014-15.pdf
arrangements for managing on- Committee, 3 January 2014, #13, 192
House of Commons Culture,
screen and on-air talent, February p.7: https://www.nao.org.uk/
Media and Sport Committee,
2015, p.6: http://downloads.bbc. wp-content/uploads/2015/01/
BBC Charter Review, February 2016
co.uk/bbctrust/assets/files/pdf/ Managing-the-BBC-estate.pdf
p.15: http://www.publications.
review_report_research/managing_ 185
House of Commons Culture, parliament.uk/pa/cm201516/
talent/managing_talent.pdf
Media and Sport Committee, BBC cmselect/cmcumeds/398/398.pdf
178
BBC, BBC Annual Report and Charter Review, February 2016, 193
BBC, full financial statements
Accounts 2014/15, July 2015 p.44: http://www.publications.
2014/15: http://downloads.bbc.
p.25: http://downloads.bbc.co.uk/ parliament.uk/pa/cm201516/
co.uk/annualreport/pdf/2014-15/
annualreport/pdf/2014-15/bbc- cmselect/cmcumeds/398/398.pdf
BBC-FS-2015.pdf; Full financial
statements 2007-2014: http://
www.bbc.co.uk/annualreport/2014/
download.html#section-3
7. Annexes
194
NAO, Severance payments and 200
GfK Social Research for DCMS, 204
2,182,190 households/10 years
wider benefits for senior BBC Research to explore public views (from 2017 to 2027) = 218,219
managers, June 2013 p25: https:// about the BBC, May 2016 p.31: households, DCLG live tables on
www.nao.org.uk/wp-content/ Of those asked ‘As indicated, the household projections, 2012 based
uploads/2013/07/10193-001_BBC_ BBC is funded via the licence fee tables, table 406: https://www.gov.
BOOK.pdf which costs £145.50 a year – the uk/government/statistical-data-
equivalent of £12.13 per month. sets/live-tables-on-household-
195
NAO, BBC Digital Media Initiative
It will stay frozen at this rate projections
report, January 2014: https://
until 2017. Thinking about the
www.nao.org.uk/wp-content/ 205
‘We forecast that the impact of
five years after this, which of the
uploads/2015/01/BBC-Digital- these new initiatives, coupled with
following statements is closest
Media-Initiative.pdf continuing strong returns from
to your own view?, 31 per cent
the underlying BBC Worldwide
196
NAO website, about us, our work: thought it should be reduced’,
portfolio, would be around
https://www.nao.org.uk/about-us/ 30 per cent thought ‘it should
£1.2bn in cumulative returns to
our-work/ be frozen’, 20 per cent that
the public service BBC over the
BBC, full financial statements
197 ‘it should be increased in line with
next five years – a more than
2014/15: http://downloads.bbc. inflation’, 2 per cent that ‘it should
15% increase on returns over the
co.uk/annualreport/pdf/2014-15/ be increased above inflation’,
previous five years.’ BBC, British
BBC-FS-2015.pdf 10 per cent said ‘none of these’
Bold Creative, September 2015,
and 6 per cent said ‘don’t know’.
198
Digital TV Group and Institute p.94: https://downloads.bbc.
Only 12% of DEs opted for the
of Engineering and Technology co.uk/aboutthebbc/reports/pdf/
fee to be at least maintained via
response to DCMS’s Charter futureofthebbc2015.pdf
inflation, compared to 22% of all
Review Government Consultation, respondents (including 36% of
206
ITV financial accounts: total
October 2015. ABs): www.gov.uk/government/ revenue 2015: £2,972m, 2010:
199
ICM/Ipsos MORI polling on publications/research-to-explore- £2,064m: http://www.itvplc.
behalf of the BBC from 2004 public-views-about-the-bbc com/sites/itvplc/files/ITV%20
to 2015 (2015 findings are from Annual%20Report%202015.pdf
The Yearbook of the European
201
fieldwork conducted in May); Sky Annual Reports: UK revenue

Audiovisual Observatory 2015
Online survey of 2,000 people 2015: £7,820m, 2010: £5,709m:
ranked the BBC number one in
conducted on behalf of cable.co.uk https://corporate.sky.com/
the 50 leading European PSBs in
between 19 and 20th September documents/annual-report-2015/
terms of unconsolidated operating
2015; Polling data from 12 large annual-report-spreads-2015.pdf
revenues: http://www.obs.coe.int/
nationally representative surveys en/home Letter from the Culture Secretary
207
conducted between 2013 and to Sir Michael Lyons, 21 October

2015 (two conducted for the BBC
202
The licence fee settlement in 2000
2010: http://downloads.bbc.
specifically) cited in the BBC’s was based on an increase of RPI
consultation response; all from +1.5% per annum.
news/2010/sos_letter.pdf
2009 showed the licence fee as 203
The 2007 licence fee settlement
the first choice of funding model. was based on an increase of 3%
BBC, British, Bold, Creative, The for the two years from April 2007,
BBC’s Programmes and Services followed by 2% for the three years
in the next charter, September following that.
2015, p.12: https://downloads.bbc.
co.uk/aboutthebbc/reports/pdf/
7. Annexes
208
This figure does not include any 215
Department for Work and House of Lords Select Committee
221
potential voluntary payments. Pensions Spending Review on Communications, BBC Charter

Although the BBC is not currently settlement 2015: https://www.gov. Review: Reith not revolution,
able to accept voluntary payments, uk/government/news/department- February 2016, pp.3–4: http://
the government will update the for-work-and-pensions-settlement- www.publications.parliament.
regulations to allow people to at-the-spending-review; Ministry uk/pa/ld201516/ldselect/
make voluntary payments by of Justice Spending Review ldcomuni/96/96.pdf
2018/19, when the new funding settlement 2015: https://www.gov. 222
Abolish the TV licence
arrangements begin. Summer uk/government/news/ministry-
(closed petition), January 2016:
Budget, July 2016, p.74: https:// of-justices-settlement-at-the-
https://petition.parliament.uk/
www.gov.uk/government/uploads/ spending-review-2015
petitions/104367
system/uploads/attachment_data/ 216
The number of iPlayer requests
file/443232/50325_Summer_
223
TV Licence Fee Enforcement
has increased from 722 million
Budget_15_Web_Accessible.pdf Review, Department for Culture
in 2009 to 2.7 billion in 2015:
Media & Sport, July 2015,
209
Consumer Price Index. iPlayer performance pack: http://
pp.23–33: https://www.gov.uk/
www.bbc.co.uk/mediacentre/
210
Based on projected income in line government/uploads/system/
latestnews/2016/iplayer-perf-
with Consumer Price Index. uploads/attachment_data/
pack-jan
file/445212/166926_Perry_Review_
211
Broadband Delivery UK Superfast
217
Text-L-PB.pdf
BBC’s Programmes and Services
programme delivery data as
in the next Charter, September TV Licence Fee Enforcement
224
31 March 2016.
2015: https://downloads.bbc. Review, Department for Culture
co.uk/aboutthebbc/reports/pdf/ 218
Letter from the Culture Secretary Media & Sport, July 2015: https://
futureofthebbc2015.pdf to Sir Michael Lyons, 21 October www.gov.uk/government/uploads/
2010: http://downloads.bbc. system/uploads/attachment_data/
212
Office of Budget Responsibility,
co.uk/bbctrust/assets/files/pdf/ file/445212/166926_Perry_Review_
Economic and Fiscal Outlook,
news/2010/sos_letter.pdf Text-L-PB.pdf
March 2016, p.12: http://cdn.
budgetresponsibility.org.uk/ 219
Ofcom Advisory Group for Wales, 225
TV Licence Fee Enforcement
March2016EFO.pdf Response to the DCMS’s Charter Review, Department for Culture
Review consultation, “There is a Media & Sport, July 2015,
213
Based on current projections
strong justification for protecting pp.43–44: https://www.gov.uk/
for licence fee variables.
the funding of S4C from further government/uploads/system/
214
The Guardian, Guardian News reductions.” uploads/attachment_data/
& Media to cut costs by 20%, file/445212/166926_Perry_Review_
220
25 January 2016: http://www. Text-L-PB.pdf
Research to explore public views
theguardian.com/media/2016/
about the BBC, May 2016, p.58. 226
jan/25/guardian-news-media-to-
An example of a contribution by Research to explore public views
cut-running-costs
a participant: “Culturally, they’re about the BBC, May 2016, p.31:
[S4C services] of huge value.” 61 per cent of people favour either
18-24, C2DE, Male, Aberystwyth: a freeze or a decrease (30 per cent a
www.gov.uk/government/ freeze and 31 per cent a reduction):
publications/research-to-explore- www.gov.uk/government/
public-views-about-the-bbc publications/research-to-explore-
7. Annexes

227
ICM/Ipsos MORI polling on behalf
231 234
GlobalWebIndex, Report into
Research to explore public views of the BBC from 2004 to 2015, VPN usage, 2015.
about the BBC, May 2016, p.41: 2015 findings are from fieldwork
The BBC’s assessment is based
235
When asked whether the licence conducted in May 2015, cited
on analysis of its server data and
fee would be a good or a bad in p.52, BBC’s response to the
geolocation services – this can
way to fund the BBC, only 4 in 10 Department of Culture, Media &
differentiate between IP addresses
(42 per cent) of those in the lowest Sport’s Green Paper: BBC Charter
that are using “hosting data
socio-economic grouping said the Review, Audience Appendix: http://
centres”, which may include VPNs
licence fee was good, compared downloads.bbc.co.uk/aboutthebbc/
and proxy servers, and those that
to half of those in the highest insidethebbc/reports/pdf/
are not. The BBC is confident that
socio-economic grouping. While bbc_charter_review_audiences_
at least 95 per cent of viewing of
when asked the same question appendix.pdf
TV programmes on BBC iPlayer is
about a licence fee model where 232
The BBC also has experience of from within the UK, with the other
those on lower income would pay
funding content through alternative 5 per cent of usage including that
a lower fee, approval by this group
funding models outside of the UK. from hosting data centres. Some
increased by over 10 per cent
It owns and operates (and partners of the VPN usage will also be from
(53 per cent): www.gov.uk/
with) pay TV channels abroad as within the UK. 5 per cent of traffic
government/publications/research-
well as services that carry and equates to 5 per cent of unique
to-explore-public-views-about-
are funded in whole or in part by browsers, which would imply
the-bbc
advertising (BBC World and BBC. under 1m users (Source: comScore,
228
Communications (TV Licensing) com online services). Digital Analytix).
Regulations 2004: http:// 233
GfK Social Research for
www.legislation.gov.uk/
DCMS, Research to explore
uksi/2004/692/made
public views about the BBC,
229
Letter from George Osborne May 2016, p.41: Previous polling
and John Whittingdale to Lords evidence has indicated low
Hall, 3 July 2015: https://www. support for alternative funding
gov.uk/government/uploads/ models, including subscription
system/uploads/attachment_data/ (12 representative polling surveys
file/443735/Letter_from_George_ showed an average of 19 per cent
Osborne_and_John_Whittingdale_ support for a subscription model),
to_Tony_Hall_FINAL.PDF polling conducted as part of the
Charter Review showed that when
230
asked if a lower licence fee with a
Public consultation, July 2015,
‘top-up’ subscription model would
pp.52–54: https://www.gov.uk/
be a good or a bad funding model
government/uploads/system/
for the BBC, 34 per cent said this
uploads/attachment_data/
would be a good model, while
file/445704/BBC_Charter_Review_
38 per cent said it would be bad.
Consultation_WEB.pdf
However, focus group participants
spontaneously mentioned
subscription as an alternative
funding mechanism and many were
attracted by the idea of additional
choice: www.gov.uk/government/
publications/research-to-explore-
Department for
Culture, Media & Sport
4th Floor, 100 Parliament Street
London SW1A 2BQ
www.gov.uk/dcms

DCMS A BBC For The Future Rev1

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A BBC for

Foreword 5 3. Enshrining independence

5. Enhancing efficiency and transparency 76 7. Annexes 104

6. Ensuring a modern, sustainable,

Department for Culture, Media & Sport | A BBC for the future: a broadcaster of distinction 5

6 Department for Culture, Media & Sport | A BBC for the future: a broadcaster of distinction

−−Enshrine a commitment to −−Modernise the licence fee by

Department for Culture, Media & Sport | A BBC for the future: a broadcaster of distinction 7

Prioritising distinctiveness and serving all audiences 11

8 Department for Culture, Media & Sport | A BBC for the future: a broadcaster of distinction

An open and transparent Charter Review process

The Clementi Review Independent report

Department for Culture, Media & Sport | A BBC for the future: a broadcaster of distinction 9

10 Department for Culture, Media & Sport | A BBC for the future: a broadcaster of distinction

Department for Culture, Media & Sport | A BBC for the future: a broadcaster of distinction 11

New public purposes New mission:

Reflecting the UK, its culture and values to the world

12 Department for Culture, Media & Sport | A BBC for the future: a broadcaster of distinction

−−require the BBC to give greater A better framework of

Department for Culture, Media & Sport | A BBC for the future: a broadcaster of distinction 13

Alongside these key reforms to the

three years) of around 2,700 suppliers involved

14 Department for Culture, Media & Sport | A BBC for the future: a broadcaster of distinction

Department for Culture, Media & Sport | A BBC for the future: a broadcaster of distinction 15

16 Department for Culture, Media & Sport | A BBC for the future: a broadcaster of distinction

Comparison European public service broadcasters’ unconsolidated

Department for Culture, Media & Sport | A BBC for the future: a broadcaster of distinction 17

Excludes offline app and TV-based usage; PC 6+, smartphone/tablet 8+

20 Department for Culture, Media & Sport | A BBC for the future: a broadcaster of distinction

−−Demographic change. The

Department for Culture, Media & Sport | A BBC for the future: a broadcaster of distinction 21

22 Department for Culture, Media & Sport | A BBC for the future: a broadcaster of distinction

Department for Culture, Media & Sport | A BBC for the future: a broadcaster of distinction 23

What the BBC does…

Nations and regions services

International services Commercial services

Licence Fee funded

BBC’s main commercial arm; Largest television studios and post

24 hours a day international The BBC’s international website

24 Department for Culture, Media & Sport | A BBC for the future: a broadcaster of distinction

…And how it compares to others

Source: Communications Market Report 2015

Fremantle All3Media EndemolShine

Yahoo sites Microsoft sites

Source: Ofcom, The Communications

Department for Culture, Media & Sport | A BBC for the future: a broadcaster of distinction 25

The BBC rightly strives to Ensuring the BBC is sufficiently

This is, however, an argument that Giving the BBC a mission

28 Department for Culture, Media & Sport | A BBC for the future: a broadcaster of distinction

Department for Culture, Media & Sport | A BBC for the future: a broadcaster of distinction 29

Reforming the public purposes The government therefore intends to

30 Department for Culture, Media & Sport | A BBC for the future: a broadcaster of distinction

Defining and evidencing

Department for Culture, Media & Sport | A BBC for the future: a broadcaster of distinction 31

At its best, the BBC already provides

32 Department for Culture, Media & Sport | A BBC for the future: a broadcaster of distinction

However, there is evidence that − there has been a decline in volumes

Department for Culture, Media & Sport | A BBC for the future: a broadcaster of distinction 33

film on television and online. 50 50

34 Department for Culture, Media & Sport | A BBC for the future: a broadcaster of distinction

Online The government therefore welcomes

36 Department for Culture, Media & Sport | A BBC for the future: a broadcaster of distinction

Box 17: Examples of current requirements by service

Foreword 5 3. Enshrining independence

5. Enhancing efficiency and transparency 76 7. Annexes 104

Assessing the BBC’s market impact more effectively 65