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BBC Trust Put These out to Public Consultation

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BBC Trust Put These out to Public Consultation BBC Strategy Review Supporting analysis December 2010 Getting the best out of the BBC for licence fee payers BBC Strategy Review / Supporting analysis Introduction In summer 2009, the BBC began a wide-ranging review of all aspects of its future strategy. In March 2010, the BBC Executive then published the strategy proposals that it put forward to the Trust, titled Putting Quality First. The BBC Trust put these out to public consultation. A summary can be found at Annex A. In July, the Trust published its initial conclusions in response. These focused in particular on two areas. First, the shape of the BBC’s broadcast and online services and the content within them. Second, the way in which the BBC controls its costs and how much it tells people about where the money is spent. In both areas, the Trust concluded that there was more to be done to set even higher standards. We set the Executive a number of challenges, and committed the Trust to further work on areas including in particular: • Value for money • Performance objectives and reporting • Distribution • Boundaries with the commercial market We have now completed that work and published the final strategy for the BBC, available online at http://www.bbc.co.uk/bbctrust/our_work/strategy_review/index.shtml. The strategy itself has been designed to be as concise as possible since it will, to some degree, be a working document for BBC management. This document therefore sets out the supporting analysis in longer form. A new licence fee settlement The Trust recognises that the BBC’s new licence fee settlement changes the picture somewhat. It is not realistic to expect that a 16% budget reduction can be made in the space of four years without some changes to the range of services and activities being required. In the course of the next year or so, the BBC Trust and Executive will therefore need to agree between them what a realistic target is for productive efficiencies in the period from 2013/14 to 2016/17, and how any remaining gap in funding is best met. That is likely to require a more fundamental review of the cost base and the shape of BBC services than was done in the course of the Strategy Review. It is likely that it will also need to incorporate the reassessment of the television portfolio that we had imagined would take place around switchover in 2012/13. The guidebook for this process will be the strategy that is set out here and the key principles will be the four objectives we have set for the future BBC: increase quality and distinctiveness; improve value for money; set new standards of openness and transparency; do more to serve all audiences. Therefore, while this supporting document necessarily looks back to the review process we have been through, the final strategy itself looks forward to the changes that are to come. December 2010 1 BBC Strategy Review / Supporting analysis Summary of initial conclusions The Trust supported the core vision and principles behind the Director-General’s proposals in Putting Quality First and will pursue a strategy that focuses on the BBC’s core role as a provider of distinctive public service content, since: • it is a strategy that addresses current audience demand for more fresh and new ideas • it reflects the BBC’s obligations as a recipient of public money and its role in fostering a creative public space • in the longer term, technological change could well make the BBC’s role as a funder and provider of UK content more important and its role in funding the supporting infrastructure for the distribution of that content somewhat less important. The Trust agreed that the principles set out by the BBC Executive to ‘put quality first’ and ‘do fewer things better’ point the BBC in the right direction. We also agreed with the Director-General that the BBC should to go further in concentrating a greater proportion of its funds on content and creativity. The Trust concluded that to deliver this strategy would require changes in BBC culture and behaviour in three areas: Value for money – how to be as transparent as possible and how to show licence fee payers that all their money is being spent wisely. Distinctive content – how to apply a new filter to commissioning and scheduling decisions that always puts quality first and concentrates on innovative public service content. How to turn the five new editorial priorities (journalism; knowledge, music and culture; UK drama and comedy; children’s content; events that bring communities and the nation together) into gold standards of BBC excellence. Openness – how the BBC could be more straightforward and open about its plans and strategy and how it could work better with the rest of the industry, in particular by explaining where it will set the boundary of its activity. We considered that to address concerns in the marketplace that the BBC seems too big, and disquiet among the public about whether the licence fee is always being spent as efficiently as possible, the first priority should be to tackle these questions about behaviour and prove that no resources are being wasted. December 2010 2 BBC Strategy Review / Supporting analysis In particular, the Trust stated that a new approach to value for money was fundamental to public trust in the BBC We said we wanted to accelerate the changes we were already making to increase transparency and value for money and that the BBC’s obligations to licence fee payers should include: Financial responsibility and efficiency – the BBC must not take any more public money than it needs. At that point, the BBC was already conducting a long-term efficiency review with a view to finding further savings through more radical changes to the cost base from 2013 onwards and the Trust stated it would appoint its own external advisers to interrogate the assumptions and conclusions of that review and would ask the National Audit Office to consider taking on this work for us. In the meantime, we thought the BBC needed to scrutinise its budgets with as much rigour as the rest of the public sector to see what scope there may be for saving money. The Trust therefore asked the Director-General to conduct a rapid exercise of this sort and to report back immediately after the summer, to assure ourselves that we were doing everything possible to remove slack in the organisation. Setting an example on pay – it is important that the top management of the BBC responds to public concern and shows leadership to the rest of the BBC in tough times. We therefore asked the Director-General to accelerate existing work to reduce the senior pay bill by 25% – so that it would be completed within eighteen months, by which time we expect there to be a different, simpler management and pay structure in place. In the meantime the Director-General and all members of the BBC Executive Board each volunteered that for this year and next they will forego a month’s salary. In parallel, Trustees volunteered to take an equivalent 8.3% pay cut for those two years. Transparency – licence fee payers have a right to know more about how their money is spent on management salaries and talent costs. We asked the BBC to disclose more detail about how these costs are structured and challenged them to provide greater transparency about who is at the top end of the talent pay scale, if this could be done without divulging individual salaries. The Trust identified the next five years as a transitional period, requiring careful long- term planning to allow the BBC to manage the transition to a fully digital, on-demand world, and to restructure its services to do fewer things better in the longer term. Online – to prepare for a future where the BBC will have two distinct online functions – providing on-demand access to BBC TV and radio programmes while also remaining a publisher of distinctive, original public service material for the web. We agreed the first step should be to simplify the existing content on BBC Online and to strengthen editorial control of its future development. In television – to identify the future tipping points where reassessment will be needed of the range and structure of services. We stated that the first such point should be around the conclusion of switchover in 2012/13, by which point trends in on-demand viewing should also be clearer. For radio – to assess the likely shape of digital change and the BBC’s role in promoting that change on behalf of licence fee payers, both the services it provides and the contribution it makes to the transmission infrastructure. December 2010 3 BBC Strategy Review / Supporting analysis In each case the Trust was clear that the BBC had already begun to do its thinking, but concluded that it needed to move more quickly. The Trust conclusions about the immediate implications for existing services were: Television – the immediate focus should be on increasing the distinctiveness of existing services, with a particular focus on greater variety and ambition on BBC One in peak time, and making BBC Two stand out as a clearer alternative through greater depth and ambition in its factual programming, comedy and drama. Further action is needed to improve the quality and originality of the daytime schedules. Network Radio – for the time being, the central focus for radio strategy ought to be: to deliver greater distinctiveness on Radio 1 and Radio 2; and to put together a full strategy for the BBC’s contribution to future digital development, based on Government policy, detailed discussion with the commercial radio industry and an appraisal of the potential of DAB against alternatives, including Internet Protocol radio.
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