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MINUTES OF THE BBC TRUST MEETING
Held on Wednesday 23 and Thursday 24 June 2010 in Norwich
Present: Michael Lyons Chairman Chitra Bharucha Vice-Chairman Diane Coyle Trust member Items 88 – 102 Anthony Fry Trust member Alison Hastings Trust member for England Patricia Hodgson Trust member Items 87 – 99 Rotha Johnston Trust member for Northern Ireland Janet Lewis-Jones Trust member for Wales David Liddiment Trust member Mehmuda Mian Trust member Items 91 – 95 and 97 – Jeremy Peat Trust member for Scotland 102 Items 89 – 102 Richard Tait Trust member
In attendance from Nicholas Kroll Director, BBC Trust the Trust Unit: Phil Harrold Head of Secretariat and Governance Kate Atkins Senior Adviser, Secretariat and Governance Mark Devane Head of Communications Alex Towers Head of Finance, Economics and Strategy Steve Pollock Head of Audiences and Marketing Items 87 - 91, 94 - 102 Mark Wakefield Head of Performance Items 87 – 98, Fran O’Brien Head of Editorial Standards 101 – 102 Item 87 Alison Gold Chief Adviser, Performance Item 87 Stephen Callow Senior Adviser, Performance Item 87 – 88 Gareth Barr Senior Strategy Adviser Items 87 – 93, Jon Cowdock Head of Strategy 96 and 99 Items 92 – 93 Peter de Val Head of Legal Items 92 – 93 Jon Pacey Chief Economic Adviser
Items 92 – 93 Alexandros Stratakis Baker & MacKenzie Items 92 – 93 Jo Ludlam Baker & MacKenzie
With: Items 95 – 98 Mark Thompson Director-General Items 95 – 98 Mark Byford Deputy Director-General Items 95 – 98 Caroline Thomson Chief Operating Officer Items 95 – 98 Zarin Patel Chief Financial Officer Items 95 – 98 Jessica Cecil Head of the Director-General’s Office Item 96 John Tate Director, Policy and Strategy Item 96 Gautam Rangarajan Controller, Public Service, Policy and Strategy Item 97 George Entwistle Controller, BBC Knowledge Item 97 David Fawcett Head of Policy, Policy and Strategy Item 97 Saul Nasse Controller, Learning Item 98 David Jordan Director, Editorial Policy and Compliance
AGENDA
87 Service reviews – Interim findings
88 Strategy review – Initial conclusions
89 Minutes and Matters Arising
90 Committees and Audience Councils
91 Director’s Report
92 Project Canvas – final conclusions
93 Mobile Applications
94 Portrayal Project
95 Director-General’s monthly report
96 Strategy review – efficiencies
97 Under 19s Learning
98 Editorial Guidelines – final draft
99 Other Business
100 Items for Noting
101 Business Handling and Communications
102 Conflicts of Interest
Wednesday 23 June
87 SERVICE REVIEWS – INTERIM FINDINGS
87.1 The Trust’s Head of Performance presented the draft interim findings of the service reviews of BBC One, BBC Two and BBC Four which were recommended to the Trust for approval by its Audiences and Performance Committee. The reviews had sought to assess how well the channels were performing against the commitments set out in their service licences and to consider the channels’ future direction and determine whether any changes to the licences were required.
87.2 Trust members discussed the interim findings and concluded that BBC One, BBC Two and BBC Four were all performing well in many respects and that, in general, audiences recognised that the channels provided high quality output across all genres and made strong contributions to delivering each of the BBC’s public purposes. They agreed there were areas in which each channel could improve, in particular to provide the more distinctive output that audiences expected from the BBC and identified the following challenges for the Executive:
o BBC One should increase the variety of programming in pre- watershed peak-time hours and show greater creative and editorial ambition at 9pm. o BBC Two should implement its plans in factual, drama and comedy to distinguish it more clearly from BBC One, even at the risk of reaching fewer viewers. o Building on a revised remit, BBC Four should aim to increase its impact and secure greater reputational dividend for the BBC.
In addition, the Executive should look further at ways to improve the quality and distinctiveness of parts of the daytime schedule; provide further assurance that robust plans were in place to meet the demand for high quality investigative and analytical current affairs; and improve the quality of non-news national and regional variations and increase their contribution to delivering the BBC’s public purposes.
87.3 The Trust approved the interim findings of the service reviews of BBC One, Two and Four for publication on 5 July. It delegated responsibility for approving minor changes, prior to publication, to lead Trust member Diane Coyle. The Trust would report its final conclusions on BBC One, Two and Four in the autumn.
88 STRATEGY REVIEW – INITIAL CONCLUSIONS
88.1 The Trust’s Head of Finance, Economics and Strategy presented the latest draft of the Trust’s initial conclusions on the BBC strategy review. The document set out the Trust’s vision for the BBC’s future strategy and its position on the proposals relating to specific services.
88.2 Trust members underlined their support for a content-led strategy, focusing on the BBC’s core role as a provider of distinctive public service content. It was also
important that the BBC demonstrated value for money and was more open about its plans and how it could work better with the rest of the industry.
88.3 Trust members considered the draft findings relating to specific services. They did not think that a convincing case had been made, as presented, for the closure of 6 Music and agreed that a further review of the BBC’s digital radio strategy was needed. If, as part of that review, the Executive wanted to put together a different proposal for the overall shape of its music radio stations, the Trust would consider it. Trust members said they would consider a formal proposal from the BBC to close the Asian Network but would need to be convinced that any alternative proposal would be a clear improvement in terms of overall public value for British Asian audiences.
88.4 Trust members endorsed the concept of a 25% reduction in the BBC Online budget and said they would welcome a simpler and clearer focus, including core online publishing services, such as news, sport and weather alongside the BBC iPlayer. They reiterated their desire for more effective editorial controls and leadership across the board, with effort and funding concentrated where the BBC had a clear and distinctive role.
88.5 Trust members discussed a wide range of other issues relating to services and content, including the importance of strong BBC journalism.
88.6 The Trust agreed that a new approach to value for money was fundamental to public trust in the BBC and discussed a range of issues relating to the BBC’s funding, Executive pay, talent costs and Trust members’ remuneration. Members agreed they would discuss these issues further at their next meeting on 29 June, when they would also consider a final draft of the Trust’s initial conclusions on the strategy review.
Thursday 24 June
89 MINUTES AND MATTERS ARISING
89.1 The Trust approved the minutes of its meetings held on 20 May, 9 June and 16 June 2010 as accurate records of proceedings, subject to minor drafting changes. The Trust approved the publication of the minutes with no redactions.
89.2 The Trust noted the matters arising from previous meetings
90 COMMITTEES AND AUDIENCE COUNCILS
90.1 The Trust noted the reports from each of the committees and Audience Councils. The chairmen of each committee and council updated members on the major outcomes of their respective meetings.
90.2 The Chairman of the Finance and Compliance Committee said the committee had considered the level of Trustees’ expenses during the second half of the 2009-10
financial year and had approved the expenses report for publication.
90.3 The National Trust member for Wales updated the Trust on negotiations between the BBC and S4C over a new strategic partnership agreement. The Trust agreed to extend the existing agreement between the two organisations until the end of July and, if necessary, to grant a further extension until the end of September, while negotiations continued on the new agreement.
90.4 The Trust agreed to a recommendation from its Audiences and Performance Committee to postpone its review of English local radio until the end of 2011 to allow time for any changes arising from the strategy review to take effect. The Trust’s review of nations radio would go ahead as planned in autumn 2010.
91 DIRECTOR’S REPORT
91.1 The Director, BBC Trust presented his report, which provided an overview of activity undertaken by the Trust and previewed the key issues to be considered by the Trust at the meeting.
91.2 He noted that the legal action brought by the SNP against the BBC in relation to the Prime Ministerial debates had been withdrawn with the agreement of both parties.
91.3 The Trust noted a paper, which provided an update on issues around the governance of the BBC.
92 PROJECT CANVAS – FINAL CONCLUSIONS
92.1 The Chairman of the Strategic Approvals Committee (SAC) introduced this item which presented the committee’s recommendations to the Trust for the approval of the Executive’s proposal for the BBC’s involvement in Project Canvas.
92.2 Project Canvas is a joint venture (JV) between the BBC and five other partners to develop and promote a common standard that would allow viewers with a broadband connection to watch on their television sets on-demand services, such as the BBC iPlayer or the ITV Player, and other internet content, as well as ordinary linear television content. This would be via a device such as a set–top box connected to the internet.
92.3 The Trust’s Head of Finance, Economics and Strategy said that SAC had considered the BBC’s proposed participation in the Project Canvas JV and recommended that it be approved, subject to clarification of the position on state aid compliance, and subject to conditions. The Trust’s Chief Economist outlined the position on a number of issues including industry engagement. He reported that recent developments in relation to the process of engagement were welcome. The Trust’s Head of Legal informed the Trust about a letter that the Executive had received from the Royal National Institute of Blind People (RNIB), making legal and other representations concerning accessibility features, and gave
privileged legal advice about its contents.
92.4 Trust members discussed how best to ensure that the BBC’s participation in the Canvas JV complied with state aid law, and received privileged legal advice on the subject from external legal counsel. They decided that any approval should be subject to a condition that the Canvas JV would reimburse the BBC for its expenditure prior to October 2009 through (i) the reimbursement of expenditure, if any, which did not result in assets (plus appropriate interest) and (ii) the purchase at market value of all the resulting assets.
92.5 Trust members then discussed whether to approve the proposals, and considered the checklist of questions supplied to them for the meeting.
92.6 Trust members considered whether an appropriate approvals process had been undertaken in consulting on the provisional conclusions and proceeding to formulate the final conclusions, and were satisfied it had. They did not consider that any further period of consultation or additional work was required before they formed a final view.
92.7 Trust members remained satisfied that the public value assessment (PVA) properly and appropriately evaluated the public value and delivery of the public purposes by the Canvas proposals, and that the market impact assessment (MIA) did likewise as regards their potential market impact, and did not consider that any points or conclusions drawn required clarification or further comment in the final conclusions, particularly in view of stakeholder comments. Trust members agreed that Canvas was consistent with the BBC’s public purposes, created public value and delivered the public purposes. Trust members were satisfied that any likely adverse impact on the market was justified by the likely public value of the proposal and that the Canvas proposal complied with the Competitive Impact Principle. On the basis of privileged independent legal advice, Trust members were satisfied that the Canvas proposals were compliant with competition law, including state aid law.
92.8 Trust members decided, however, that conditions of approval as set out in the draft final conclusions and as above in respect of legal compliance (state aid) were required. The conditions imposed related to industry engagement; cost; preserving the free-to-air always principle; accessibility and usability; access for content providers, ISPs and platform operators; syndication; legal compliance; and certain Trust reviews.
92.9 Trust members did not identify any other matters that they thought ought to be addressed in the final conclusions and approved the proposals, subject to the conditions mentioned.
92.10 Trust members provided the Trust Chairman and the Chair of the SAC with delegated authority to supervise and agree any typographical or consequential amendments or redactions to the final conclusions for publication, and to approve press materials for any announcement.
93 MOBILE APPLICATIONS
93.1 The Chairman of the Strategic Approvals Committee introduced this item by updating the Trust on the committee’s consideration of proposals from the Executive to launch applications for mobile smart phones. There had been representations from industry about the proposals.
93.2 The Trust discussed whether to approve the proposals and considered the checklist of questions supplied to them for the meeting. It reached the provisional view that the proposals did not represent a significant change to the UK public services and was, therefore, minded to conclude that a public value test was not required.
93.3 The Trust agreed to offer those making representations a period of time to consider its provisional conclusions and reasoning and to raise any additional points. The Trust agreed that, looking beyond the current decision, it should give further consideration to the BBC’s longer term principles and priorities in the distribution and syndication of content as part of the next phase of work on the strategy review.
94 PORTRAYAL PROJECT
94.1 The Trust’s Head of Audiences updated the Trust on ongoing work to investigate ways in which the BBC might better portray the full diversity of the UK’s nations, regions and communities, as outlined in the Trust’s current work plan. A joint Trust/Executive group had been set up to draw together the key activity across the BBC that was focused on or relevant to portrayal and to work towards a strategic vision for addressing the complexities around portrayal. Additionally, the Executive had been considering issues of portrayal through a programme of research and review, including a joint project with Channel 4 on disability.
94.2 Trust members discussed the importance of this work and the need to make progress in this area. It was noted that issues of portrayal had originally been raised by its advisory bodies, the Audience Councils for England, Northern Ireland, Scotland and Wales, which should be kept informed of progress.
94.3 The Trust agreed that its work on portrayal should continue to be led by its Audiences and Performance Committee and agreed a series of actions, including developing its annual purpose remit survey as a way of helping understand audience perceptions around portrayal. The Trust stressed the need to work with the Executive to develop a way of measuring progress in this area. The Trust agreed it should invite the Director of Vision to brief the Trust on the work being carried out by the Executive into issues of portrayal.
95 DIRECTOR-GENERAL’S MONTHLY REPORT
95.1 The Director-General outlined recent highlights from the BBC’s services, including
the season on opera, the year-long season on science, Radio 1’s Big Weekend in Bangor and Doctor Who. He noted the visit of President Sarkozy to Broadcasting House to unveil a plaque commemorating a broadcast by General de Gaulle in 1940.
95.2 The Deputy Director-General outlined key stories covered recently in the BBC’s journalism output, including the Cumbrian shootings and the findings of the Saville inquiry into the Bloody Sunday shootings. He noted that BBC One’s coverage of England’s World Cup match against Slovenia had attracted an average audience of 10 million viewers, 69% of the audience share.
95.3 The Director-General said the BBC has begun discussions with the unions about the corporation’s annual pay offer which was a flat rate £475 payment for employees earning less than £37,726 with pay frozen this year for all other staff. He briefed the Trust on progress against reducing the senior manager paybill against the 25% target.
95.4 The Director-General updated the Trust on current discussions surrounding UKTV, in particular around advertising sales.
96 STRATEGY REVIEW – EFFICIENCIES
96.1 The Trust noted the agreed conflicts of interest process in place for discussion about the BBC pension scheme (see note at minute 102). Jeremy Peat left the meeting for this item.
96.2 The Chief Financial Officer presented a paper updating the Trust on the efficiency plans which had been set out in the Executive’s strategy review proposals, Putting Quality First. She also gave a presentation on efficiencies and financial projections.
96.3 Trust members discussed a wide range of issues with the Executive. It was agreed that the Executive would continue work in this area during the summer and report back to the Trust in the autumn.
97 UNDER 19s LEARNING
97.1 The Controller, Knowledge presented the findings of a strategic assessment exercise by BBC Formal Learning of its provision for under 19-year-olds. This had included research to establish user needs; levels of engagement for current learning output among the under-19s audience; the views of parents; the views of internal and external stakeholders; and the activities and views of private sector providers.
97.2 Trust members discussed the findings of the review and the Executive’s proposals for the future of the under 19s learning portfolio, which they agreed would provide a strong public service proposition. They noted that the proposed strategy could be funded from existing resources but would necessitate some reprioritisation within Learning, including the closure of the teen brand BBC Blast, as proposed in the pan-BBC strategy review.
97.3 The Trust approved the conclusions of the strategic assessment exercise and the closure of BBC Blast and the deletion of the reference to it in the BBC online service licence. It also agreed that the Executive should retain in principle the flexibility to recycle existing online funding from BBC Jam reversioning and the closure of Blast. The Trust commended the Executive’s work on under 19s learning and thanked the Head of Policy, who was leaving the BBC, for his service to the Corporation over many years.
98 EDITORIAL GUIDELINES – FINAL DRAFT
98.1 The Deputy Director-General presented the final draft of the revised BBC Editorial Guidelines. The guidelines had been put out to public consultation and had been amended in the light of the findings of the consultation, the Trust’s audience research, legal advice and other concerns raised.
98.2 The Chairman of the Trust’s Editorial Standards Committee (ESC) said the guidelines had been subject to a lengthy and rigorous process and commended the collaborative working between the Trust and Executive.
98.3 Trust members discussed the guidelines and approved them for publication. The Trust delegated to the Trust Chairman and the Chairman of the ESC approval of any changes which might arise prior to publication.
99 OTHER BUSINESS
99.1 Trust biennial review of the WOCC The Trust approved the terms of reference for its second review of the Window of Creative Competition (WOCC).
99.2 Online independent supply review The Trust approved the terms of reference for its online independent supply review, subject to minor drafting changes.
100 ITEMS FOR NOTING
(a) BBC World Service Annual Review 2009/10 (b) Offline approval – Freedom of Information Act s36 (c) Minutes from committees and Audience Councils (d) Documents for sealing
101 BUSINESS HANDLING AND COMMUNICATIONS
101.1 The Trust discussed the handling and communication of items considered at the meeting.
102 CONFLICTS OF INTEREST
102.1 For discussion related to item 96, Jeremy Peat left the meeting. Mr Peat is Chairman of the BBC Pension Trust Ltd and, given the level of deficit in that scheme, is potentially conflicted regarding financial projections. This matter is declared in Mr Peat’s register of interests, which is publicly available on the Trust’s website.