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BBC White Paper and Related Issues: Government Response to the Committee’S Third Report of Session 2016–17

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BBC White Paper and Related Issues: Government Response to the Committee’S Third Report of Session 2016–17 House of Commons Culture, Media and Sport Committee BBC White Paper and related issues: Government Response to the Committee’s Third Report of Session 2016–17 First Special Report of Session 2016–17 Ordered by the House of Commons to be printed 11 October 2016 HC 715 Published on date 17 October 2016 by authority of the House of Commons London: The Stationery Office Limited The Culture, Media and Sport Committee The Culture, Media and Sport Committee is appointed by the House of Commons to examine the expenditure, administration and policy of the Department for Culture, Media and Sport and its associated public bodies. Current membership Nigel Adams MP (Conservative, Selby and Ainsty) Andrew Bingham MP (Conservative, High Peak) Damian Collins MP (Conservative, Folkestone and Hythe) (Acting Chair) Julie Elliott MP (Labour, Sunderland Central) Paul Farrelly MP (Labour, Newcastle-under-Lyme) Nigel Huddleston MP (Conservative, Mid Worcestershire) Ian C. Lucas MP (Labour, Wrexham) Christian Matheson MP (Labour, City of Chester) Jason McCartney MP (Conservative, Colne Valley) John Nicolson MP (Scottish National Party, East Dunbartonshire) The following Members were also members of the Committee during the Parliament: Jesse Norman MP (Conservative, Hereford and South Herefordshire) Steve Rotheram MP (Labour, Liverpool, Walton) Powers The committee is one of the departmental select committees, the powers of which are set out in House of Commons Standing Orders, principally in SO No 152. These are available on the internet via www.parliament.uk. Publication Committee reports are published on the Committee’s website at www.parliament.uk/cmscom and in print by Order of the House. Evidence relating to this report is published on the inquiry publications page of the Committee’s website. Committee staff The current staff of the Committee are Elizabeth Flood (Clerk), Katy Reid (Second Clerk), Kevin Candy (Inquiry Manager), Hannah Wentworth (Senior Committee Assistant), Keely Bishop (Committee Assistant) and Jessica Bridges-Palmer (Media Officer). Contacts All correspondence should be addressed to the Clerk of the Culture, Media and Sport Committee, House of Commons, London SW1A 0AA. The telephone number for general enquiries is 020 7219 6188; the Committee’s email address is [email protected] Government Response to the Committee’s Third Report of Session 2016–17 1 First Special Report The Culture, Media and Sport Committee published its Third Report of Session 2016-17, on BBC White Paper and related issues, HC 150 on 2 August 2016. The Government’s response was received on 15 September 2016 and is appended to this report. Appendix: Government response Letter from Rt Hon Karen Bradley MP, Secretary of State for Culture, Media and Sport, dated 15 September 2016 The government welcomes the Culture, Media and Sport Select Committee’s recent report on the BBC White Paper and related issues, and I would like to thank the Committee for their continued contribution to the Charter Review process. I am very pleased that the Committee has welcomed the White Paper as a positive commitment to the future of the BBC. Suggestions made by current and previous Committees—and others who have contributed to the Review—have helped greatly to inform this process. I am very grateful for all the work this Committee has done, which have been invaluable contributions to the review of the BBC’s Royal Charter. The Committee has welcomed many of our key policies, such as the strengthening of the BBC’s governance though the abolition of the BBC Trust and the establishment of a unitary Board, Ofcom’s new role as external, independent regulator, and the enhanced role for the National Audit Office. The Committee and the government are also in agreement about the importance of distinctiveness for the BBC, and the other changes to the BBC’s culture that we think are needed to ensure that the BBC can become an even better partner for the broadcasting and technology sectors. Like the Committee, the government also welcomes the BBC’s support of local news and look forward to seeing detailed future proposals from the BBC. There are some particular areas highlighted, and recommendations made in your report, to which I would like to respond briefly. The Committee will find the detail behind many of these points in the draft Charter and Framework Agreement I have published today. Governance and the unitary board The Committee recommends a smaller unitary board, with a higher proportion of executive members than proposed in the White Paper. It suggests that a board of twelve— comprising five government-nominated non-executives (the Chair and four representatives of the nations), and three non-executive and four executive Board members appointed by the BBC—would give a better balance, and a more effective Board. It also agrees with the Director General that the Board should collectively choose a Senior Independent Director from among its number, rather than have a Government-nominated Deputy Chair. The government and the BBC have always agreed that there should be mix of public and BBC appointments—all made in line with public appointments best practice—but we have worked closely and constructively to develop the details about the exact balance. I can confirm that I agree with the Committee that some changes can be made to secure the 2 Government Response to the Committee’s Third Report of Session 2016–17 independence of the Board. The new Charter will set out that the government-appointed members will be reduced from six, the number proposed in the White Paper, to five. This number will include the Chair, and Nations members for England, Scotland, Wales, and Northern Ireland. The BBC will appoint a further nine members, four of which should be executive and five of which should be non-executive members. This proposal differs somewhat from both those of the BBC, and the recommendations of the Committee, but still ensures the independence of the BBC Board, whilst ensuring each nation of the UK has a voice. It gives the BBC a majority of the appointments and parity with government in terms of non-executive members. Given the reduction in size from the Board proposed in the White Paper, I also agree that the post of Deputy Chair should be removed, and a Senior Independent Director should be appointed instead, which should be from the nonexecutive members. I also share the Committee’s concerns that representatives of the nations on the Board should not absolve the Board as a whole from its duty to represent and reflect the nations fairly and that these representatives should also bring special skills, in addition to their understanding of the views and needs of their respective nations. This is something we have been sure to reflect in the rules in the Charter and Agreement around how the new Board should be composed. I also take note of the concerns around the selection of Board members from preferred candidates of Ministers, and wholeheartedly agree with the emphasis placed on the independence of the BBC, and that the new governance arrangements should preserve, and be seen to preserve, this independence. The new Charter puts the independence of the BBC front and centre, and full and thorough public appointments processes will be followed for government appointments. Chair of the unitary board I have taken on board the Committee’s point that the two roles of Chair of the BBC Trust and Chair of the new BBC Board are different, with different responsibilities, and that the process of appointing the Chair should be via an open and fair public competition. Whilst I believe the current Chair of the BBC Trust has the experience and skills that would likely stand her in good stead to be appointed as a result of such a process, I do agree that this public appointments process should now go ahead, as it is important that the public and industry have confidence that the Chair of the BBC Board has been recruited in a transparent way. We will now take the necessary steps to set this in motion as soon as possible. Accountability and the National Audit Office (NAO) I welcome the Committee’s support for the enhanced role proposed for the National Audit Office, one that will remain fully compatible with editorial independence of the BBC. The NAO will remain unable to question editorial and creative decisions the BBC takes, an arrangement that has worked well in the past. We have also worked constructively with the BBC, in light of the concern the BBC has raised about the government’s proposal to extend the NAO’s ability to conduct value for money to the BBC’s commercial subsidiaries. I agree with the Committee’s assessment that the NAO has the experience and capability to assess the commercial subsidiaries. I believe that this can be done without putting these Government Response to the Committee’s Third Report of Session 2016–17 3 companies at a competitive disadvantage. The new Charter will enshrine the NAO’s new role, and I am confident that this will enhance transparency and accountability of the BBC significantly. Pay transparency The White Paper set out the government’s aims for greater transparency around BBC expenditure, and improved accountability and value for money. The BBC has made real progress in this area, and is supportive of this principle. This is welcome. In the White Paper the government proposed that the BBC should publish the names of talent earning more than £450,000. The Committee recommended that this policy should go further, and that that threshold should be lowered. I agree with this and the draft Charter and Agreement have now set the threshold at the same level as for BBC executives, at £150,000.
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