BBC RESPONSE TO CMS SELECT COMMITTEE QUESTIONS, NOVEMBER 2010

Willingness to pay/value for money 1. The Committee would be grateful for information on any research conducted since the 2008/9 Annual Report on the public’s view about the appropriateness of the licence fee as a funding mechanism, its willingness to pay and value for money perceptions.

Response from BBC Management

Appropriateness of the licence fee as a funding mechanism In August 2009 TNS repeated a question for the BBC asking about replacing the licence fee with advertising that had been first posed to the public as part of research conducted for the Peacock Review in 1985. This was to ascertain whether, given the vastly greater media choice today, public attitudes towards the licence fee were different now compared with a generation ago. The results were as follows:

• In 1985 62 per cent of the public thought it would be a good idea ‘if the licence fee was replaced entirely by revenue from advertising on the BBC’ (31 per cent thought this would be a bad idea; 8 per cent don’t know)1 • Asked exactly the same question in August 2009, a much lower proportion of the population thought replacing the licence fee with advertising would be a good idea – 44 per cent (51 per cent thought this would be a bad idea; 5 per cent don’t know).2

Other surveys conducted by ICM and ComRes since the 2008/09 Annual Report was published suggest that the licence fee has more support than any one of the alternative means of funding the BBC.

• A poll by ICM for the Guardian in September 2009 found that when asked what they would like to see as the main source of BBC funding, 43 per cent of the public backed a licence fee paid for by everyone with a TV; 30 per cent indicated a subscription-only service paid by those who want to receive BBC programmes; and 24 per cent selected advertising (4 per cent don’t know)3 • In November 2009, ComRes asked a similar question to the public for Newsnight about the preferred method of BBC funding, and this also showed the licence fee to have the highest degree of support at 38 per cent, with advertising on 30 per cent; subscription on 21 per cent; money raised from taxes on 7 per cent (3 per cent don’t know).4

1 NOP for the Committee on Financing the BBC (Chairman: Professor Alan Peacock) for the Home Department, 2,047 adults, October 1985 2 TNS for the BBC, 2,163 UK adults 16+, August 2009 3 ICM for the Guardian, 1,001 GB adults 18+, September 2009 4 ComRes for Newsnight, 1,000 GB adults 18+, November 2009

1

One survey (by YouGov for Deloitte) in July 2009 returned a different result. Asking respondents ‘Would you prefer to receive adverts across all channels instead of paying a licence fee’, 57 per cent in the survey said yes and 36 per cent said no (8 per cent don’t know).5 However, the question asked did not relate the licence fee to the BBC and was not specifically about how the BBC should be funded. As the findings from the other surveys above show, the licence fee has greater support when respondents consider it in terms of what it is paying for and in terms of how they would prefer to see the BBC financed.

In summary, therefore, the results from three national surveys that have asked the public how the BBC should be funded conducted since the publication of the 2008/09 Annual Report (TNS2, ICM3 and ComRes4) suggest that the licence fee, whilst not universally popular, is viewed as the most appropriate means of funding the BBC. Value for money of the licence fee Research from 2009 shows that the majority of the public – around six out of ten – believe the BBC offers good value for money through the licence fee.

• Most recent published figures from autumn 2009 / spring 2010 on the value for money of the licence fee from an annual survey by Kantar Media for the BBC Trust show that 58 per cent of the public think the licence fee is value for money (38 per cent think it is not value for money; 4 per cent don’t know)6 • In an ICM poll for the Guardian in September 2009, 63 per cent said the BBC was good value for money (35 per cent disagreed; 2 per cent don’t know)7 • And in a ComRes poll for Newsnight in November 2009, 56 per cent said the BBC was good value for money (42 per cent disagreed; 2 per cent don’t know).8

Willingness to pay the licence fee In August 2009, TNS asked the public on behalf of the BBC how much they were willing to pay for the BBC from the point of view of their household and from the point of view of society as a whole.

• Almost nine out of ten people were willing to pay something for the BBC (87 per cent thinking about their household and 86 per cent thinking about society as whole) • The average amount respondents were prepared to pay was £19.42 per month (from the perspective of the individual) and £18.32 per month (societal

5 YouGov for Deloitte, 2,071 adults 18+, July 2009 6 Kantar Media for the BBC Trust, 2,251 UK adults 15+, autumn 2009 / spring 2010. Respondents answer on a four-point scale: 58 per cent = value for money is the net of 15% saying ‘very good value’ and 43% saying ‘fairly good value’. 39 per cent = not value for money is the net of 15% saying ‘not at all good value’ and 23% saying ‘not very good value’ 7 ICM for the Guardian, 1,001 GB adults 18+, September 2009 8 ComRes for Newsnight, 1,000 GB adults 18+, November 2009

2 perspective), both higher than the current level of the licence fee.9

The average amount respondents were prepared to pay in this 2009 survey was slightly down on a similar exercise conducted by Ipsos MORI for the BBC in 2008 where the average amount respondents had been willing to pay was £20.43 per month.10

The average willingness to pay figures from August 2009 of £19.42 per month (household perspective) and £18.32 per month (societal perspective) appear higher than willingness to pay figures published by Ofcom in 2008.11 (In the study for Ofcom, the average amount respondents had been willing to pay for the BBC had been £11.56 (personal perspective) and £13.87 (citizen perspective).) However, these figures are not directly comparable because of differences in the methodology used.

2. Why did you not make clear in this year’s Annual Report that the figure “82% of the public would miss the BBC if it wasn’t there” was a 3% decrease on the previous year’s figure of 85% as reported by the Trust Chairman in the 2008/9 Annual Report?

Response from BBC Trust

Over the last four years there has been a substantial trend increase in the percentage of those agreeing that they would miss the BBC if it didn’t exist, with only 70% agreeing with this statement in 2007. Figures are likely to very from year to year and the decline to 82% is therefore not necessarily significant. Next year’s survey will show us whether this is the beginning of a downward trend or whether it merely reflects an annual variation

9 TNS for the BBC, 1,094 UK adults 16+ (household perspective), 1,069 UK adults 16+ (societal perspective), August 2009 10 Ipsos MORI for the BBC, 4,577 UK adults 16+, May 2008 11 Holden Pearmain for Ofcom, 1,217 UK adults 18+ (personal perspective), 1,257 UK adults 18+ (citizen perspective), June 2008

3

Audience reach, share and viewing

3. In 2009/10, what was the 15 minute reach among 16-34 year olds for (i) each of the BBC’s television services and (ii) the television portfolio in aggregate?

Response from BBC Management

i) The table sets out the 15-minute average weekly reach for each of the BBC television services and the BBC television portfolio overall among 16-34 year- olds in financial year 2009/10. The figures for financial year 2008/09 are also given to match the presentation of the reach figures for all individuals in the Annual Report. With the exception of BBC Two and the BBC News Channel, average weekly reach among 16-34 year-olds of individual BBC television services in 2009/10 is equal to or higher than in 2008/09.

ii) As the table also shows, in 2009/10 the BBC television portfolio reached 76% of 16-34 year-olds in a week on average, slightly up on 2008/09. In addition, across a month, 91% of 16-34 year-olds on average watch BBC television. Across a three-month period, 97% of 16-34 year-olds on average watch BBC television. And across a year, we would expect the figure to be even higher.

Source: BARB, 15 mins consecutive average weekly reach, average monthly reach based on BARB months, and average quarterly reach among 16-34 year-olds, financial year 2009/10 (30 March 2009 – 28 March 2010 minus week 53 owing to BARB panel change).

Average weekly reach (15-minute consecutive) of each BBC TV service and the BBC TV portfolio overall among 16-34 year-olds in financial year 2009/10 (and financial year 2008/09)

16-34 year-olds FY 16-34 year-olds FY 2009/10 2008/09 Average Average Average Average weekly weekly weekly weekly reach reach reach reach 000s % 000s % BBC One 9,557 66.3% 9,488 66.2% BBC Two 6,055 42.0% 6,393 44.6% BBC Three 3,937 27.3% 3,725 26.0% BBC Four 709 4.9% 667 4.7% BBC HD Channel 216 1.5% 69 0.5% CBeebies 1,599 11.1% 1,543 10.8% CBBC 466 3.2% 403 2.8% BBC News Channel 671 4.7% 730 5.1% BBC Parliament 15 0.1% 17 0.1% BBC TV portfolio overall 10,944 75.9% 10,783 75.2%

4

Source: BARB, 15 mins consecutive average weekly reach among 16-34 year-olds, financial year 2009/10 (30 March 2009 – 28 March 2010 minus week 53 owing to BARB panel change) and financial year 2008/09 (31 March 2008 – 29 March 2009).

4. In its Fifth Report of Session 2009-10, BBC Annual Report 2008-9, our predecessor Committee concluded that the BBC should be more transparent in setting out its reach targets (recommendation 4). In its July 2010 response, the Trust stated that “in line with the Committee’s recommendation we will review the information we provide and consider whether additional measures of reach would give a better indication of performance.” We would appreciate an update on progress.

Response from BBC Trust

The relevant recommendation in the Committee’s Fifth Report of Session 2009- 10, BBC Annual Report 2008-09 is set out below:

The BBC should be more transparent in setting out its reach targets, including the figures for minimum level of reach considered necessary to serve its target audiences. It should also consider publishing additional measures of reach likely to provide a better indicator of the proportion of the public watching entire BBC television programmes, and the time licence fee payers spend on individual services each week, rather than just 15-minute reach figures. (Paragraph 34)

This recommendation has two parts. The first sentence refers to reach targets and the second sentence to performance data reporting. The Trust’s response also had two parts. Regarding reach targets we stated that, ‘The Trust shares the Committee's objective of transparency but does not set reach targets for individual services. We set an overall target that BBC services as a whole should reach 90 per cent of the population but it is a matter for BBC management to determine how each service should contribute to this target’. Regarding performance reporting we stated that, ‘The Trust regularly monitors the reach of individual BBC services and publishes its assessment of performance in the BBC annual report. In line with the Committee's recommendation we will review the information we provide and consider whether additional measures of reach would give a better indication of performance’.

The Trust did not therefore undertake to review the use of reach targets. However, it is in the process of reviewing the BBC’s performance reporting framework and the level and quantity of data that is published as part of the BBC strategy review. This review will conclude before the end of this year.

5

5. According to the Trust’s service review for younger audiences, the average amount of BBC Television viewing for teenagers was 24 minutes a day in 2008, compared with 75 minutes for all individuals. What are the comparative figures for 2009/10?

Response from BBC Management

The figures for the average amount of viewing for BBC television in 2008 reported in the BBC Trust’s service review for young people include the following services: BBC One, BBC Two, BBC Three, BBC Four, CBeebies, CBBC, BBC News Channel, BBC Parliament. The BBC HD Channel was not included.

The average amount of BBC television viewing (excluding the BBC HD Channel) for 2009/10 are as follows: 23 minutes a day for teenagers (13-19 year-olds) and 74 minutes per day for all individuals

Source: BARB, average minutes viewed per day of BBC television by 13-19 year-olds and all individuals 4+, financial year 2009/10 (30 March 2009 – 28 March 2010 minus week 53 owing to BARB panel change) and 2008 (31 December 2007 – 28 December 2008). BBC television includes: BBC One, BBC Two, BBC Three, BBC Four, CBeebies, CBBC, BBC News Channel, BBC Parliament and, where described above, BBC HD Channel.

6. In the interests of transparency, will the BBC publish details of its audience share figures in the next year’s Annual report?

Response from BBC Management

Audience share figures for BBC services are already made public and are published for television by BARB (http://www.barb.co.uk/report/index) and for radio by RAJAR (http://www.rajar.co.uk/listening/quarterly_listening.php).

The BBC is currently actively exploring new ways in which it can more regularly and consistently share in the public domain data on the performance of its services. The BBC is scoping the nature of the data to be made available and how frequently it will be published. We expect to begin publication next year.

6

BBC Three 7. What was the cost per user hour figure for BBC Three in 2009/10 excluding the hours viewed of acquired programming and transfers from BBC One and Two?

Response from BBC Management

BBC 3 C ost pe r U se r H our ( C pU H ) adjust e d for A cquisit ions, Re pe at s & iPlaye r

2009/10 2008/09 2007/08 Content Spend (£m) 87.5 87.3 96.5 CpUH as in ARA (pence) 8.6 10.6 13.0 CpUH without acquisitions & other channels' output (repeats) (pence) 16.5 19.1 21.0 CpUH adjusted to include cost s and vie w e r hour s of BBC Three output on other channels (pence) 15.2 17.0 19.2

CpUH adjusted to include viewer hours of BBC Three output on iPlayer (pence) 14.0 N/A N/A

8. In 2009/10, what were the 15-minute and 30-minute weekly reach figures for BBC Three among (i) 16 to 34 year olds and (ii) its overall audience, when acquired programmes and programmes transferred from BBC One and Two are excluded?

Response from BBC Management

When acquisitions and transfers from BBC One/BBC Two are removed, 69.9% of the channel’s programming remains (in terms of programme minutes broadcast). This is programming originated for the channel. 15-minute (consecutive) average weekly reach to programming excluding the acquisitions and transfers stands at 2.2m 16-34 year-olds (that is 57.3% of BBC Three’s average weekly reach to 16- 34 year olds before the exclusions) and 6.1m individuals overall (that is 52.7% of BBC’s Three average weekly reach to all individuals before the exclusions). .

Unfortunately we are unable to provide the 30 minute consecutive average weekly reach figure as requested. This is because the industry software we use for this kind of analysis would automatically exclude any programme of under 30 minutes when calculating 30 minute consecutive average weekly reach. This would mean that the reach figure generated would exclude not only acquired programming and that transferred from BBC One and Two but also all BBC Three originations of

7 under 30 minutes in length. We would be happy to explain the technical issues in detail to officials.

Source: BARB, 15 mins consecutive average weekly reach among all individuals 4+ and 16-34 year-olds, financial year 2009/10 (30 March 2009 – 28 March 2010 minus week 53 owing to BARB panel change).

Reach of BBC Three calculated excluding acquisitions (= films and programmes acquired by the BBC) and programmes transferred from BBC One and BBC Two (= narrative repeats and repeats of programmes on BBC Three previously shown on BBC One and BBC Two and first showings on BBC Three of Spooks as this is primarily a drama associated with BBC One).

NB: The definition of 15-minute consecutive reach used for this analysis differs slightly from the channel reach figures provided in answer to question 3. This is because this is a more complex analysis only possible using a different application which bases channel reach on an individual watching the specified minutes consecutively of one programme and automatically excludes programmes of less than the specified reach minutes. This is different from the industry standard application for calculating channel reach which bases reach on an individual watching the specified number of minutes consecutively of the channel - be that of one programme or split over more than one programme as long as it is consecutive. This application does not allow analysis at an individual programme level.

Spending in nations and regions 9. The 2008/09 BBC Annual Report included a figure (£948 million) for the amount of licence fee spend in the nations and regions outside of London in 2008/09. Why did this year’s BBC Annual Report not include an equivalent figure for 2009/10?

Response from BBC Management

In 2008 the BBC Trust required BBC Management to adopt the Ofcom definition of out of London production. In line with the approach taken by Ofcom in its own reporting, the BBC has chosen to report content spend in the nations and regions as a percentage of eligible network output. This is reported in table 2-9 on page 2- 39 of the BBC Annual Report and Accounts 2009/10.

• The 2008-09 BBC Annual Report also included a table showing BBC spend on BBC television programmes made in the nations and regions (table 9 page 42 Part Two). The Committee would be grateful for the table updated for 2009/10.

The updated version of table 9 (as featured on page 42 of the 2008/09 Annual Report and Accounts) is shown below:

Nation 2009/10 2008/9 England £325m £329m NI £41m £36m

8 Scotland £110m £98m Wales £67m £53m Total £543m £516m

10. In absolute terms, the amount spent on output in the nations and regions outside London has decreased over the past three years (from £984 million to £903 million). How has this decrease affected the annual volume of content produced in the nations and regions outside London?

Response from BBC Management

The previously advised figure of £903m was extracted from the accounting records before these were finalised and should in fact have been £960m. The correct figure of £960m represents a year-on-year increase when compared to 2008/09, although slightly down on 2007/08.

The decrease over the two year period is substantially for the reasons set out on page 6 of BBC Annual Report 2008–09: BBC Trust’s response to the Committee's Fifth Report of Session 2009–10, namely, changes in the level of overhead allocation, efficiency savings, the move of some Radio 2 operations out of Birmingham and a reduction in expenditure on radio sports rights.

The total TV hours produced in the nations and regions increased over the last three years from 8,382 in 2007/08 to 8,890 in 2009/10 Over the same period the total of radio hours produced in the nations and regions decreased from 294,570 in 2007/8 to 282,794 in 2009/10.

Pensions 11. What proportion of licence fee income is it reasonable to contribute towards staff pensions?

Response from BBC Management

In line with an increasing number of organisations, the BBC intends to reform its pension provision. It does so within the context of the BBC Trust having set stretching efficiency targets and a requirement to maximise value for money in all BBC activities. Without pension reform, the BBC's pension costs could rise from current levels of around 3.5% to as much as c10% of the licence fee. The BBC believes that this would be unsustainable and inappropriate for the licence fee payer.

The BBC believes that its proposals will reduce the cost to between 5% and 7% of

9 the licence fee and will achieve the right balance between providing affordable, competitive pension benefits, whilst reducing risk and providing value for money to the licence fee payer. In the long-term, once the deficit has been eliminated, the BBC expects the proportion of the licence fee spent on pensions to return to around current levels.

Staff costs 12. In next year’s Annual Report, will you include a breakdown of headcount by salary band for all BBC employees?

Response from BBC Management

The BBC is committed to increasing the levels of transparency regarding pay. We already publish the names and actual salaries of the top c100 managers in the BBC as well as details of all senior management pay in salary bands

We do not intend to publish a full breakdown of headcount by salary band for all BBC employees in next year’s annual report. However, salary ranges for staff grades are published on our internal web site and we provide information on average salaries annually to the recognised unions.

We continue to work towards greater levels of transparency in our pay data and over the next 12 months expect to publish further salary information.

BBC Charities 13. What is the rationale for maintaining no more or less than four BBC charities?

Response from BBC Management

The BBC engages in a wide range of charitable activity including its own charities, charity partners and access appeals. The BBC's family of charities are Children In Need, the World Service Trust, Restoration Fund, Performing Arts Fund and the Wildlife Fund. In general, these charities raise funds from the general public via BBC programming. The exception is the World Service Trust: whilst this charity partners with the World Service it is funded by external grants, mainly from the Department For International Development, the European Union, UN agencies and charitable foundations.

There is a strong historical and heritage element to some of our charities. For example, Children In Need was established as a registered charity in 1989 but the BBC has been running televised appeals for children since 1955 and radio appeals for children since 1927. However, some of our other charities such as Restoration Fund, the Performing Arts Fund and the Wildlife Fund have been established more recently in conjunction with specific editorial propositions. These charities were established following advice from the BBC's independent Appeals Advisory

10 Committee to ensure impartiality and to minimise reputational risk to the BBC. The purpose in setting up a new BBC charity is to ensure that all monies raised are distributed equitably to a basket of charities based on need. There is a clear understanding that some of these charities will raise monies, distribute them and then cease to exist. For example, the Restoration Fund is likely to close down in the next couple of years. Also the BBC is currently in discussions with the Wildlife Fund about whether it can continue to support it with a broadcast appeal.

As the Director-General made clear to the CMS Select Committee in September, the BBC does not intend to continue setting up new charities every few years. As the World Service will be funded directly by the licence fee from 2014 the BBC must now consider how the World Service Trust should operate more directly within the BBC’s family of charities. This might also be an appropriate opportunity to look at all our current charitable activity to ensure that the BBC’s direct involvement is proportionate and fully justifiable. We would undertake such a review reporting to the BBC Trust.

Staff Survey 14. The Committee would be grateful for a copy of the results of the staff survey referred to in Q10 of the evidence session. The survey is attached as a separate document

11

External Consultants 15. How much has the BBC spent on external consultants over each of the past five years?

Response from BBC Trust and BBC Management

The amount the BBC – both Trust and Management - spent on external consultants over each of the past five years is as follows, excluding secondments, project management and external audit is as follows:

Year Total 2005/6 £ 9,223,310 2006/7 £ 9,055,154 2007/8 £ 9,403,821 2008/9 £ 9,660,972 2009/10 £ 8,914,211

Digital Switchover 16. The BBC Director-General told the Committee that the BBC’s digital television channels “have made a significant difference to people wanting to take digital television up.” What research does the BBC have to support this?

• How many homes have taken up digital TV, which otherwise would not have done do, due to the BBC’s digital channels?

Response from BBC Management

It is not possible to estimate the number of homes that have taken up digital TV thanks to the BBC’s digital channels. However, the value of digital television content in general – and that of the BBC in particular - in encouraging take-up of digital television has been well-documented, as far back as a viewer’s panel report for the DCMS in 2001: http://www.digitaltelevision.gov.uk/pdf_documents/publications/DCMS_digital_tv Field Code Ch _e.pdf

Ofcom’s analysis of the impact of the BBC’s new digital services on digital take- up from 2004 concluded that – in the context of Freeview becoming the fastest- growing digital platform – ‘Overall, it is our view that, although the precise impact is hard to quantify, the BBC can take a substantial amount of the credit for DTT’s success since its relaunch. The BBC’s new services have certainly pushed DTT take up much faster than if they were not there (in both radio and TV).’ This report cited evidence from a BBC / TNS survey which showed that ‘the new digital BBC services were a significant factor in the purchasing decisions of many new Freeview customers'.

12 A DTI report from 2004 into attitudes to digital switchover showed that BBC channels (News 24, BBC Three, BBC Four) were in the top ten of channels that people in non-digital households would like to receive / try out: http://www.digitaltelevision.gov.uk/pdf_documents/publications/AttitudestoSwitch Field Code Ch over_300304.pdf

The digital switchover trial conducted in 2005 at Ferryside and Llansteffan, concluded that ‘The key driver for digital television and for acceptance of the ending of analogue transmissions is the Content, not the Technology. Trial households liked the additional services from ‘trusted’ brands (BBC3, BBC4, News 24, ITV2, ITV3 etc). Digital radio services through the television set top box were also well received.’ http://www.digitaltelevision.gov.uk/pdf_documents/publications/Digital_Switchov Field Code Ch erTrial_Report.pdf

Operational costs 17. Why is it that infrastructure and other non-content costs for BBC television services account for around 22% of operating costs, nearly double the 12% figure for the BBC overall?

Response from BBC Management

The basis of calculation of these two figures is different. The 12% represents the proportion of overheads within the total BBC cost base, excluding digital switchover (£406.3m / £3,475.4m).

The 12% overhead figure forms a part of total Infrastructure and Support cost, and it is this wider category from which the 22% quoted here is derived. Overheads are the key element within infrastructure and support costs, forming approximately half these costs. The infrastructure and support category also include the costs of marketing, press and publicity, libraries, learning support and community events, and of central functions such as the BBC Trust. These central costs are apportioned across the range of BBC services. The allocation to television services for infrastructure and support costs equates to 22% of overall spend allocated to television for 2009/10. A full breakdown of this is shown in note 2b on page 2-101 of the BBC’s Annual Report and Accounts.

13 Efficiency savings 18. Are the efficiency savings which the BBC has reported in its financial statements consistent with the NAO checklist for reported efficiency savings within government? • If not, why not?

Response from BBC Trust

Under the Agreement the NAO works with the BBC Trust on a programme of value for money studies each year. In this respect the NAO reports its findings to the BBC Trust. As the BBC is not a government department there is no requirement for the BBC to report directly to Government on the efficiency savings it has achieved and have these audited by the NAO.

However, the BBC Trust has itself sought to ensure that the efficiency savings reported under the BBC’s current efficiency programme follow recommended NAO best practice. To this end, in 2009, the BBC Trust asked the NAO to review the metrics and systems used by the BBC to monitor the performance impact of the BBC’s Continuous Improvement efficiency programme. These systems had been designed by the BBC Executive taking account of the NAO’s published criteria for assessing efficiencies as set out under the CSR2007 “Value for money” programme. When reporting on their review of the design of the BBC’s efficiency measurement systems, the NAO raised no major issues with BBC systems and metrics, but did offer some recommendations for improvement, as a result of which the BBC responded by making minor changes to the way that performance is reported to the Executive Board and Trust.

Cost per user hour 19. Is the cost per user hour figure for each BBC service presented in the Annual Report based on content costs alone, or does it also include distribution and overheads? • If the cost per hour figure is base on content costs alone, why are other costs excluded?

Response from BBC Management

The CpUH calculation includes only content costs. This methodology is used to demonstrate more clearly the incremental impact of spending on each service. The distribution and infrastructure and support costs are almost all cost neutral with regard to the prioritisation of expenditure by service.

14 Audience perceptions 20. The 2009/10 Annual Report states that in 2009/10, 37% of viewers surveyed agreed strongly that BBC television programmes are “original and different”. What proportion disagreed that BBC television programmes are “original and different”?

Response from BBC Management

The full results rating BBC programmes as “original and different” are as follows: • 37.3 per cent agree strongly (the figure quoted in the 2009/10 Annual Report) • 38.4 per cent agree slightly • 9.6 per cent disagree slightly • 3.4 per cent disagree strongly • 11.3 per cent no strong views.

Therefore, in 2009/10 the net agree that BBC programmes are “original and different” is 76 per cent and the net disagree is 13 per cent.

Source: GfK NOP for the BBC from the Pulse panel of c.20,000 UK adults 16+, financial year 2009/10. Owing to rounding, figures may not sum to 100.

Project Canvas 21. What actions are the BBC taking to facilitate access to Project Canvas for other platforms?

Response from BBC Management

Project Canvas has now been incorporated as a joint venture (YouView) in which the BBC is a shareholder with a seat on the board.

YouView is a platform in itself and, as such, facilitation of access for other platforms may not be the most technically efficient solution or consistent with the aims of the venture. However, competition is promoted by the platform through consumer electronics equipment manufacturers (set-top box and television set manufacturers can licence the technical specification and brand in order to incorporate YouView into their products) and content providers (who make their offerings available on YouView). The BBC continues to publish its own linear channels and the BBC iPlayer product to a wide range of platforms.

15

22. How is the BBC addressing concerns that Project Canvas will distort the nascent market for internet-enabled television platforms, and that the marketing budget is disproportionate and tough for rivals to match?

Response from BBC Trust and BBC Management

The BBC’s involvement in Project Canvas was subject to a rigorous and broad- ranging approval process conducted by the BBC Trust. This process included both an assessment of the Public Value likely to be created by the propostion and also a Market Impact Assessment. The Trust concluded that the adverse impact of Project Canvas would be more than offset by the public value created by the BBC’s participation. At the conclusion of its approval process the Trust set out conditions designed to ensure the proposition constituted an open standard with the full engagement of the wider industry and minimal entry controls for content providers..

Ofcom looked at the market effects of YouView (as a whole, including the BBC’s participation) and chose not to investigate further at this stage. The OFT also concluded that Canvas did not qualify for investigation under the merger provisions of the Enterprise Act 2002.

Whilst the marketing activity of YouView is a matter for the venture, the BBC is satisfied that the budget set aside for marketing is realistic and consistent with a product such as this. Should the marketing effort become disproportionate, the BBC will use its influence as a board member to ensure the best outcome for licence fee payers.

The BBC will follow its existing guidelines for cross-promotion to dictate how YouView will be referred to on the BBC’s own services.

23. What parental control mechanisms will Project Canvas deploy to restrict under-age access to post-watershed materials?

Response from BBC Management

Trust approval of BBC participation was conditional on the joint venture providing appropriate information and signposting to enable users to make informed choices about the suitability of content wherever possible.

PIN-based access control will be implemented with the user able to change the default PIN during the installation process. For video on demand content, it is up to content providers to flag their own content as inappropriate. YouView will require the PIN to be entered prior to playing any content containing this flag.

Content delivered by linear broadcast is subject to compliance with Ofcom’s Broadcast Guidelines whilst video on demand content comes under the remit of

16 ATVOD, which is in the process of creating its own content labelling guidelines.

The BBC will continue to monitor the way in which features are implemented and be prepared to exert its influence at board level should any issues arise.

It is worth noting that the iPlayer application is already using a warning and opt-in password system to indicate material that might not be suitable for all audiences. We expect that this system will continue to operate within the iPlayer domain on YouView.

BBC Online 24. As far back as 2004 a Government review (the Graf review) concluded that the BBC should redefine the remit and objectives for its online services. The BBC Trust conducted its own service review of BBC online in 2008, concluding that BBC Online required firmer editorial control and clarity of purpose. In July 2010, in its BBC Strategy Review Interim Conclusions, the Trust again reached the same conclusions. Why has it taken so long for the BBC to devise and implement an online strategy with a clear editorial rationale?

Response from BBC Management

We have always had a clear editorial rationale for the component parts of BBC Online, which have become key to the delivery of the BBC’s public purposes alongside Television & Radio. Output in areas such as News Online, Sport Online and the children’s sites) have helped to establish BBC Online as one of the UK’s most widely used websites and the only UK website in the UK top 10.

The Trust’s review (published 2008) acknowledged the overall success of the service but required changes to its governance to ensure more effective editorial direction and control. In response to the review, management implemented a new system of management controls, including the appointment of a Controller BBC Online who assumed overall accountability for the service and much stronger central management. This included a system of review to ensure that each area of activity was distinctive in relation to the rest of the market.

Since the Trust’s review the nature and usage of the internet in the UK has continued to evolve and given this the Trust challenged management to further clarify the scope and remit of its online presence when undertaking the strategic review. Putting Quality First has further strengthened these management controls and sets out a single strategy for BBC Online with three headline commitments: • Halving the number of top-level domains • Reducing spend against the service licence by 25% • Doubling the traffic the site sends to others.

The Trust is currently considering management's proposed approach to this strategy, which includes distilling the current range of propositions into fewer,

17 better products and setting demonstrable boundaries for the service, with clarity on those areas of activity which it will not undertake.

25. BBC Online expenditure rose by some 12% from £178 million to £199 million in 2009-10. Why did the BBC Trust allow increased expenditure on the service, given the deficiencies in Editorial rationale and clarity of purpose?

Response from BBC Trust

The Trust’s review of BBC Online, which was published in May 2008, found significant weaknesses in management’s financial, strategic and editorial oversight of the service. When the Trust approved increased investment in March 2009 the Chairman said, in a published letter to the Director General, that this approval was subject to a new system of management controls being implemented effectively. It was also made clear that should this new system of controls either appear or prove to be inadequate it would regard this as a serious breach of BBC Online’s service licence requiring an appropriate sanction, which might include withholding authorisation to spend in any particular area of concern. No such breach has as yet occurred but the Trust will be carrying out a review of the new system of governance in 2011 which will include consultation with stakeholders.

Acquisitions 26. How much did the BBC spend on acquired overseas television programming in 2009/10 and what does it expect to spend in the current year?

Response from BBC Management

In 2009/10 the BBC spent £93m on acquired television programming (as in the ARA chart 2-2). Of this £80m was acquired non UK programming.

In 2010/11 the BBC expects to spend between £75-85m on acquired television programming (it is difficult to be more precise at this stage due to scheduling plans for the remainder of the year and due to some deals yet to be completed). Of this approximately 87% (or £65m to £74m) is expected to be on acquired non UK programming.

As part of the recent Strategy Review announcements, from 2013 onwards, spend on imported programmes and films will be capped at no more than 2.5p in every licence fee pound.

18

Complaints 27. The Committee has received correspondence alleging that the BBC complaints process is lengthy and bureaucratic, and places an inordinate amount of obstacles in the way of complainants. How do you respond?

Response from BBC Trust and Management

At the first stage of the service, complainants are regularly surveyed independently by IPSOS-MORI (e.g. Oct-Dec 2009, sample 750). Almost three quarters (72%) say that getting in touch with the BBC to complain is very or fairly easy and this continues to be consistent, suggesting that the first stage of the BBC complaints service is accessible for most people.

Between April 2009 and March 2010, 94% of these complaints were answered within 10 working days. A turnaround of 100% within 10 working days is unachievable because of the complexity of some complaints and the need to investigate them. If complainants write back to say they are unhappy with their response, they are told how to take the matter further. Escalation remains low at 0.1%, suggesting the complaints process is working for most people.

Complainants who do not consider their complaints to have been satisfactorily resolved at Stage 1 can complain to the Editorial Complaints Unit (ECU) within 20 working days of the final Stage 1 response, though later complaints will be accepted if there is good reason why they could not have been submitted within that period. This is consistent with Ofcom's practice.

The ECU is expected to complete 80% of its investigations within the relevant target time (20 working days in most cases, and 35 working days for a small minority of particularly complex or difficult cases). Inevitably, some investigations take longer to complete than the time provided by the applicable target, but the ECU has consistently achieved or exceeded the 80% figure in recent years. No obstacle is placed in the way of complainants beyond stating their complaints and sending them to the ECU by email or post. However, complaints erroneously sent to the ECU in the first instance are referred to other areas of the BBC for appropriate Stage 1 responses.

Having completed an investigation, the ECU writes to the complainant setting out its findings and the basis on which they were reached. It is then open to the complainant to correspond further with the ECU or to appeal to the Editorial Standards Committee of the BBC Trust. In either event, the complainant has an opportunity to address any new points.

Editorial management is required to take appropriate action in the light of ECU findings, and a note of the action is published along with a summary of the finding at http://www.bbc.co.uk/complaints/ecu/. The action will include broadcasting a Field Code Ch correction where this is appropriate and proportionate. Complainants who regard the action as insufficient are able to appeal to the Trust’s Editorial Standards Committee on that ground.

19 Under Article 24(g) of the Charter the Trust is responsible for setting the framework in which the BBC handles complaints. The complaints framework applies to complaints about editorial issues, fair trading, TV licensing, party election broadcasts, the BBC Trust, the Digital Switchover Help Scheme and general complaints. The Trust reviewed the complaints process in 2008 and keeps complaint handling under review through its oversight role. It is currently reviewing the framework in light of two years experience and complaints handling best practice. This review will consider, amongst other things, whether the handling of editorial complaints is timely and whether any simplification of the process is necessary

28. Last year, the Trust’s Editorial Standards Committee answered less than half of the appeals it received within 16 weeks. The Trust’s General Appeals Panel accepted 28 appeals, but only completed two within 60 days. How do you account for this poor performance, and what are you doing to improve it?

Response from BBC Trust

The Trust acknowledged in this year’s Annual Report and Accounts that while the ESC had made improvements in handling within its target timeframe, (up from 9% to 48% of appeals handled in time) the figure was still low and that it would be making greater efforts to improve this next year.

The Trust is the final arbiter in the complaints process and therefore typically considers complaints that raise complex issues and may require lengthy and sensitive investigation. So far, this year we have seen further significant improvements the ESC has considered 48 appeals, of which 83% (40) were handled within the target 16 week period.

In terms of the General Appeal’s Panel the Trust acknowledged that the handling figures were disappointing but that significant progress would be expected this year.

This year the GAP has accepted two appeals, both of which were handled within the set timeframe. The Trust Unit has also considered 10 other appeals which it recommended did not proceed to the Panel, of which five received their decision within the 20 working day time frame. The five others all received their decision within 25 working days.

The review of the Complaints Protocol will address how the Trust can improve performance against complaints handling KPIs.

20 Licence fee collections 29. Is the BBC monitoring, and seeking to enforce licensing of, those without a TV licence who watch its live streamed output online?

• If so, how is it doing so, and has it brought any prosecutions of any unlicensed viewers?

Response from BBC Management

A TV Licence is required to watch or record any television programmes which are shown online at the same time as they are being broadcast on television.

TV licensing enforces all requirements for a licence including those who watch or record live television online without being covered by a licence. Enforcement in this area is part of the normal routine for Enquiry Officers and they are briefed as to the circumstances that require a TV Licence when someone is watching online. There have been successful prosecutions of people watching online without a licence.

The vast majority of people (97%) own a television. Those who are licensed for the main TV at their home address will also be licensed to watch TV at home on a PC. The number of people who only use a PC to watch TV is very small.

30. What changes, if any, would the BBC like to see in TV licensing in light of online and mobile television viewing?

Response from BBC Trust

The question of whether such viewing should result in a licence being levied on devices other than TV sets is a matter for the government. However, as noted above in answer to question 29, in terms of online and mobile viewing, as long as a household already holds a licence, then that household will also be covered for viewing online, or on their mobile phone. Given that only 0.3% of people consume TV only via the internet in a week, and across a year that number is virtually zero, we think it unlikely that online and mobile television viewing is a significant threat to the licence fee at present. However, we will continue to monitor trends in this area.

21 Fair trading 31. With regard to fair trading, in the Annual Report the Trust criticise the BBC for a lack of properly documented competitive impact assessments. What measures are the BBC taking to address this issue?

• What sanctions are imposed on BBC employees who fail to follow fair trading procedures?

Response from BBC Trust and Management

The BBC has taken a number of steps to address this issue. These include: • updating its Fair Trading training programme to create greater awareness of the need (and processes) for ensuring that the potential competitive impact of proposed public service activities is properly considered. • updated internal guidance to inform on the approach and appropriate level of documentation required in relation to Competitive Impact assessments. • enhanced procedures for undertaking Competitive Impact assessments in relation to specific types of activity including the acquisition of sports rights, the BBC’s online activities and syndication activities.

Furthermore, as noted in the Report and Accounts, the Trust’s independent auditor has provided reassurance to the Trust that appropriate improvements have been made.

The BBC takes a proportionate approach when considering its response to a failure to follow Fair Trading procedures, based on the facts of each case. If the breach was considered sufficiently serious, disciplinary action could be instituted. To date no sanctions have been imposed as a result of Fair Trading complaints/appeals.

22 2010 staff survey

Report for BBC Overall

The response rate for the 2010 survey was 65% across the BBC, which represents a significant increase from the last survey in 2008, when 61% participated. The results in the table below show the response rate for BBC Overall compared to 2008.

BBC Overall ‘08 BBC overall ‘10

Total population 23,726 22,080

Number of responses 14,558 14,298

Response rate 61% 65%

Not all differences between the 2010 results and those for 2008 will be significantly different. Some will be down to chance. But, as a rule of thumb, all differences of +/- 1% pt can be viewed as statistically significant and those of more than +/- 5 % pt represent a more substantial shift. Overview ƒ The BBC has continued to improve its response rate to the staff survey, achieving 65% this year (vs. 61% and 44% in 2008 and 2005 respectively). ƒ It is important to celebrate the fact that scores for the vast majority of questions have improved or remained in line with those from 2008, but the BBC should avoid complacency. ƒ Some o f th e key in dicat ors of engagement h ave seen si gnifi cant i mprovement s si nce th e last survey, with a greater proportion of employees feeling proud to work for the BBC and saying that they would speak highly of the Corporation as an employer. ƒ There is also a sense that employees are strongly aligned to what the organisation is trying to achieve, although they are not entirely convinced that their managers or senior leaders communicate the strategy in a compelling way. ƒ Whilst the results for line management have continued to see improvement this year, they still remain some of the lower scores in the survey, suggesting that this should still be an area of focus. ƒ Generally employees feel better informed than they did in 2008, although only around half of people feel that the reasons for change are well communicated to them. Given the size of the BBC and the constant backdrop of change, this is perhaps not surprising, and more encouragiliingly, is on ljthtfthly just short of the Ipsos MORI top 10 norm (the hig hes t per form ing external benchmark). A Managers’ Guide, giving further support and advice, is available on Gateway http://explore.gateway.bbc.co.uk/staffsurvey2010/ Key themes

Biggest increases since 2008 The table below shows the questions where results have risen most since 2008.

The reasons for change are well communicated to me up by +9% I would speak highly of the BBC as an employer to people outside the up by +8% organisation I receive the information I need to do my job well up by +6% My manager keeps me informed of changes and how they may affect me up by +6% One fall since 2008 The table below shows the question where results have dropped since 2008.

I feel free to use my judgement to make decisions without ‘referring up’ down by -1%

Working culture ƒ The relationship between employees and the BBC is a strong one. Employees demonstrate that they are happy to speak highly of the BBC as an employer to people outside of the organisation, and that they are also extremely proud to work here. These scores continue to surpass the Ipsos MORI top 10 norm. ƒ Whilst it is encouraging to see that the vast majority of employees feel that they have at least one good friend at work, it is interesting to note that a far smaller proportion feel valued as a person at work. In addition, a fifth do not feel that there is someone they can talk to when they are unhappy about a work issue. ƒ Given the variety of people that the BBC employs, it is reassuring to see that seven in ten employees feel that the Corporation values diversity. ƒ Providing adequate opportunities for upward feedback and consultation is vital to ensure that employees have a voice so they feel involved in the decision-making process. Therefore it is great to see that three quarters of employees have contributed to decisions that have been made where they work in the last six months. ƒ However, employees feel less certain about challenging the current status quo – three fifths would feel confident in challenging unacceptable behaviour at work, whilst only around half feel able to challenge conventions and ways of working that inhibit creativity. ƒ These lower scores are perhaps linked to the fact that less than three fifths feel that their opinions count. ƒ Around three fifths of employees feel that they often get the opportunity to use their talents and do what they do best, but a fifth actively disagree. This may be something that the BBC wants to look at to ensure that they are getting the best out of their employees. ƒ In terms of empowerment, around two thirds feel that they are able to have a say over the way they work, and three fifths are able to use their judgement to make decisions without ‘referring up’. However, around a fifth actively disagree with these statements – a barrier which may be preventing employees from contributing and achieving their best. Alignment to strategy ƒ Aligning employees to organisational strategy is vital to ensure that everyone is heading in the same direction and strivinggg for common goals. ƒ When it comes to the overall strategy of the BBC, employees do not tend to feel that it is communicated in a compelling way – either by their managers or senior leaders within their division. High levels of neutrality in this area suggest that people do not feel strongly enough to comment or lack the knowledge to do so. Improving communications around this area could help to move fence-sitters into a more positive area.

2 Key themes

ƒ Whilst employees may not feel that strategy is compellingly communicated, this does not necessarily impact on their understanding of it. Therefore it is great to see that four in five understand how their work fits into the overall aims of the BBC and three quarters know how their role contributes to meeting the needs of their audiences. ƒ Employees can see a clear link between the work they do and the wider picture, with around seven in ten saying that the work they do is important to the overall success of the BBC. ƒ Understanding of how the BBC’s editorial standards and values as they apply to the work of employees has increased significantly since 2008, perhaps partially because of managers. Two thirds of employees say that their manager has made clear to them the importance of delivering these values and standards – an increase of 4% points since the last survey. ƒ Improvement in these areas may help to explain why a greater proportion of employees now understand why the Corporation is changing so much and feel that it is going in the right direction.

Communications ƒ Overall, employees feel better informed than they did in 2008. Two thirds say that they receive the information they need to do their job well – an increase of 6% points since the last survey. ƒ The proportion of people who feel that the reasons for change are well communicated to them has increased by 9% points since 2008, and is now within touching distance of the Ipsos Top 10 norm. ƒ Line managers are well placed to keep their teams up-to-date with developments, and this has improved since 2009, with three fifths now saying they are kept informed of changes and how these will affect them.

Performance management and development ƒ Whils t over four fifths o f emp loyees know w ho is respons ible for manag ing them in terms o f objectives, performance, feedback and development, only three fifths feel that their manager agrees clear objectives with them. ƒ 63% say that they have had opportunities to learn and develop in the last year, although other results suggest that employees are not having important conversations with their regarding their development - over a third say that they have not had a useful conversation about their learning and development needs in the last six months. ƒ This is likely to be linked to the fact that only half feel that there are opportunities for career development within the BBC. ƒ As identified in the last survey, the role of line managers in performance management is a potential area of improvement. Around three out of ten employees do not feel that their manager gives them regular feedback or lets them know that they are doing their job well. ƒ A similar proportion say that they have not had an honest, constructive conversation with their manager about the quality of their work in the last six months.

3 Detailed results breakdown 1 of 3

% Strongly agree % Tend to agree % Neither/nor % Tend to disagree % Strongly disagree % Don’t know BBC Shift Building the basics ‘10 since ‘08

I have the tools & technology I need to % Agree: do my job well 17 53 10 14 5 70 +1

I know what is expected of me at work 32 52 8 6 2 84 +2

I receive the information I need to do my job well 16 50 17 13 5 65 +6

I understand how my work fits into the overall aims of the BBC 29 50 12 6 2 79 +4 I’ve had an honest, constructive conversation with my manager, within 30 29 12 13 15 the last 6 months, about the quality of 59 +3 my work I know who is responsible for managing 48 35 7 6 4 me in terms of objectives, performance, 82 +3 feedback and development 27 34 17 12 9 1 My manager agrees clear objectives with me 61 +4 The way we work

I have at least one good friend at work 58 28 9 31 86 =

In the last six months, I have contributed to decisions that have been made 40 35 12 8 6 75 +1 where I work Creative ideas and new thinking are 34 39 14 9 5 welcomed and discussed where I work 72 +2

I am encouraged to apply the BBC 26 39 24 7 31 values in the way I work 65 +4

I feel able to challenge conventions and 17 34 22 17 10 1 ways of working that inhibit creativity 51 +3

I know how my role contributes to 31 45 16 5 31 meeting our audiences’ needs 76 +4

I believe the BBC values diversity 27 43 18 7 41 70 N/A Learning and skills

In the last 6 months I’ve had a useful conversation about my learning and 19 29 16 19 16 48 +3 development needs

In the last year, I’ve had opportunities to learn 26 37 15 12 9 and develop 63 +1

I believe there are opportunities for m y career 19 30 19 17 14 1 to develop at the BBC 49 +1

Most days, I get the opportunity to use my talents and do what I do best 20 41 18 13 8 61 +3

4 Detailed results breakdown 2 of 3

% Strongly agree % Tend to agree % Neither/nor % Tend to disagree % Strongly disagree % Don’t know

BBC Shift Being valued ‘10 since ‘08 My manager gives me regular feedback on how % Agree: 49 +3 I am doing 15 34 19 19 13 My manager often lets me know that I’m doing 50 +1 my job well 17 34 20 16 13

At work I feel valued as a person 18 38 19 14 11 56 +3

My opinions count here 17 39 21 13 10 56 +3

My manager helps me resolve problems or 21 40 19 10 8 62 +3 difficulties in my work I feel that the work I do is important to the overall 26 45 18 7 4 71 +3 success of the BBC There’s someone I can talk to when I’m unhappy 23 43 15 11 71 65 +1 about a work issue I understand how decisions about my pay are 7 17 20 25 28 2 24 = made I would feel confident in challenging 18 43 18 13 8 1 60 N/A Leadershipunacceptable behaviour at work My manager communicates the BBC’s strategy in a com pellin g wa y 10 30 3416 9 1 40 +2

Senior leaders in my division communicate the BBC strategy in a compelling way 9 29 30 19 12 1 38 N/A

I feel free to use my judgement to make decisions without ‘referring up’ 14 47 19 14 6 61 -1

In my team, we get on well with each other 38 48 9 32 86 +1

MkdiihIdMy manager makes a decision when I need her/him to do so 26 45 15 9 5 71 +2

My manager keeps me informed of changes and how they may affect me 20 40 18 12 8 61 +6

The reasons for change are well communicated to me 15 34 24 16 10 49 +9

I am able to have a sayyy over the way I work 20 44 17 11 7 64 =

My manager helps me when I’m struggling with workload or deadlines 16 37 26 12 8 1 53 +3

I believe that my manager means what s/he says 27 40 17 8 7 1 67 +3

I understand why the BBC is changing so much 19 45 20 10 5 1 64 +2 Senior leaders in my division behave in a way that is consistent with the BBC Values 12 33 31 10 9 4 45 N/A

5 % Strongly agree % Tend to agree % Neither/nor % Tend to disagree % Strongly disagree % Don’t know Detailed results breakdown 3 of 3

% Agree: BBC Shift Proud of what we do ‘10 since ‘08

I feel proud to work for the BBC 57 32 7 21 89 +4

I would speak highly of the BBC as an employer to people outside the 42 33 13 8 3 75 +8 organisation I believe that the BBC is going in the right 15 33 27 16 73 direction 48 +6

5. Editorial standards

BBC ’10 Shift since ‘08 I have a clear understanding of the BBC's % Agree: editorial standards and values as they apply to 37 46 123 12 83 +5 my work My manager has made clear to me the importance of delivering the BBC's editorial 26 39 22 7 4 2 65 +4 values and standards through my work I feel safe and confident about raising editorial standards worries or questions with my 32 39 17 5 32 71 +2 manager

6