PART ONE: Annual Report and Accounts 2007/08 The BBC Trust’s review and assessment 07 08

Chairman’ s introduction 02 The BBC Trust 04

Overview The BBC in 2007/08 06 Performance overview 08

BBC outlook 14 BBC performance BBC content 21 BBC purposes 23 BBC services 24 BBC finance and business 29

BBC audience views 32 BBC governance Overview 37 Delivering value for money 37 Serving all audiences 42 Ensuring impartiality 43 BBC ’s economic power 45 Other regulatory information 48

The Trust ’s plans for 2008/09 50 Contact the BBC Trust 52 BBC Annual Report and Accounts 2007/08

01

This is the public’s BBC and the public pays for it with the licence fee. They have made it absolutely clear they want quality, value and something a bit special in return. The plans we have approved for the future direction of the BBC will safeguard the core values of the BBC at a time of radical change in technology, markets and audience expectations.

Sir Michael Lyons Chairman, BBC Trust October 2007 (on approval by the Trust of the BBC’s new six-year strategic plans)

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CHAIRMAN ’S INTRODUCTION 02 CHAIRMAN ’S INTRODUCTION 03

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will start the same for those aimed at young young at aimed those for start same the will people. Also this year we will review the arrangements for collecting the licence fee. when year a been has this personally, Speaking I have been p licence fee payers around the UK and to begin – feelings their strengthof the understand to also BBC.It’s their about – negative and positive been a year when I have been able to meet more the of people who make the BBC the cornerstone public of service broadcasting in theUK. I recall in particular attending the Sony and year this earlier Awards Academy Radio staffas Service World of faces the in delight the they won award after award – a well- deserved industry accolade for a service that brings great world. the around Britain to credit willWe continue to set testing challenges so can BBC the else what from distinctive and quality, in high is it for essential is this all Achieving offer. on is to remain the cornerstone public of service broadcasting in the UK. public to feel more reassured that the BBC is working for them. The Trust has been struck by management’s constructive and positive have they scrutiny increased the to response faced. It has sometimes been uncomfortable, but we believe that the benefitof this rigour the on those by recognised be starting to is it. of end receiving corporate good a be to BBC the want We neighbo alsoWe believe that cooperation with other media providers – which implies a degree of commercial caution by the BBC may – provide a better way protecting of long-term audience interests than increased regulation. This is an important issue and one which we will explore ahead. year the further in our complete will we ahead months the In of review south-east. And the public’s concerns about star about concerns public’s the south-east. And salarie those pay to what decides industry media the who appear on-airand on-screen. While we found the BBC was generally not paying more names, top the for broadcasters other than it isclear there’s some scope for the BBC to do more to keep these fees down. be We’ll and summer next this on progress reviewing reportagain. Overall, we want to see a BBC that operates in anopen an Sir Michael Lyons Chairman June 200819

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Life in Cold Blood

strongly appreciated by its users, but one where one but users,its by appreciated strongly thefinancial management needed urgent attention. will We not approve additional investment until satisfied that the rightcontrols until and place in are we have scrutinised in further detail the proposals. management’s The public’s influence has been strong through concerns prompted our review the of network news coverage the of changing United Kingdom, which has led BBC management to introduce changes. The BBC’s new commitment to make by London of outside programmes its 50%of theend this of Charter was sparked by what in dissatisfaction audience about learned we the from distance some UK the parts of those applied the same to the HD channel and Gaelic open held we’ve so doing In Service. Digital the at industry the in others for meetings process the during process, the of beginning we after and conclusions, initial our discuss to explain to – decisions final our reached have them and how we have taken on board their input. also We’ve encouraged the public to give us their views and we’ve canvassed them via formal research. This robust scrutiny and input from outside the BBC to our independent strength and real a is processes decision-making I believe means we are serving the public better. This year bbc.co.uk was the subject our of first extensiv has maintained its overall reach and grown its grown and reach overall its maintained has television reach is a remarkable achievement. been has iPlayer BBC the of arrival the so, Even importantillustration an and event landmark a theof public’s appetite for on-demand. of subject the course of was iPlayer BBC our first pu risky, such as The Mighty Booshand The No 1 Ladies Detective Agency Indeed, quality. affecting without deliverable are the only purpose the of money released is reinvestment to increase quality and to serve better. public the requires century 21st the in everyone Reaching investm in more detail later in the report. have we 3% of savings efficiency annual The str are set We’ve thereforeWe’ve sought to understand what program distinctive, particularly on television, and have used those to illustrate to management what the public wants, as well as what they don’t. have audiences programmes of range The from – wide is year this quality for high marked the more obvious examples, such as Cranford and Time what they don’t like, they expect us as Trustees Trustees as us expect they like, don’t they what sup be to

ut as can sometimes happen, the the happen, sometimes can as ut the crowd to justify the licence fee. fee. licence the justify to crowd the

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ves we set the management last October tiveness’, these objectives arose directly

extraordinarily high standard and highly valued. valued. highly and standard high extraordinarily The public frequently remind us that it’s their highlighting in shy not are they whilst and, BBC This is because much what of the BBC does – televi on when we approved the Director-General’s strategic plans for the next six years. These meets BBC the that ensure to seek objectives all the public’s priorities and addresses those areas where it is not performing as strongly as do who those reaching includes This to. needs it not currently value the BBC highly, but without jeopardising the loyalty those of who do. On page 17 we lay out these and the four other other four the and these out lay we 17 page On objecti from what we heard from licence fee payers payers fee licence from heard we what from and are now cemented within the BBC’s long-termstrategy. As to ‘reaching everyone’ and ‘quality and and ‘quality and everyone’ ‘reaching to As distinc unexpected reordered our priorities somewhat. priorities our reorderedunexpected Editorial integrity and trust in the BBC is fundamental to the contract between the BBC summer last of events The audiences. its and were serious, but we have been reassured by theprogress made so far by management in recovery of signs the and them to responding theof public’s confidence. The last these of was not originally on our B agenda. our task. You’ll see from this report our this thatfrom see task.You’ll our themes: main three on centred has focus andquality everyone;the increasingreaching distinctiveness BBC of programmes and services; and rebuilding trust amongst audiences. This report covers our first full year as BBC as year full first our reportcovers This Trustee In short, we make sure the BBC is clear what what clear is BBC the sure make short, we In ourselves satisfy we then and it, of expected is it is meeting this expectation. And we aim to do our job armed with a clear understanding diversity their all in – payers fee licence what of – expect and think about their BBC. To do this,To we must equip the BBC properly: we set the strategic direction, the priorities, and the budgets. make We sure the editorial boundaries the all and robust is framework within which the BBC must operate are clear and firmly in place. And mostof all, we set the possible as efficiently as – delivering of challenge – quality programmes and services which stand from out TheTrustworks thefor public who ownand thefor BBC. pay Forthem, ensurewe the BBC is independent, efficient and firmly focuseditson public purposes. INTRODUCTION CHAIRMAN’S 04 BBC TRUST: THE TRUSTEES THE TRUST: BBC The BBC Trust The Trustees

The BBC Trust is the sovereign body of the 01 02 03 BBC – 12 independent Trustees acting in the public interest. The Trust ensures that the BBC remains independent and delivers public value by providing distinctive services of the highest quality for everyone in the UK.

The Trust is responsible for ensuring that the BBC delivers its Public Purposes as set out in the Charter and Agreement, which gives the Trust 04 05 06 a set of governance tools to perform this task. These tools include purpose remits, service licences and public value tests.

The Trust sets priorities for the Executive, which manages the day --to day operations of the BBC and is headed by the Director -General, who is appointed by the Trust. 07 08 09 The Trust exercises supervisory and regulatory functions. These include approving the BBC ’s high -level strategy and budgets; approving the BBC ’s editorial guidelines; setting the framework for dealing with complaints and, where appropriate, hearing appeals; and ensuring the BBC complies with its fair trading policies.

10 11 12 A key principle of the Trust is to act in an open and transparent manner, and always to understand and take into account the views of the public before making decisions.

Full details of the Trust ’s role and functions can be found on the Trust website: bbc.co.uk/ bbctrust

Nicholas Kroll Director, BBC Trust BBC Annual Report and Accounts 2007/08

01 SIR MICHAEL LYONS 05 AL ISON HASTINGS 10 MEHMuDA MIAN PRITCHARD 05 CHAIRMAN TRuSTEE fOR ENGLAND A Commissioner of the Independent Chairman since 1 May 2007. Chairman Chairman, Audience Council England; Police Complaints Commission, London BBC TRUST: THE TRUSTEES TRUSTEES THE TRUST: BBC of the English Cities Fund. Non-executive Media consultant. Former Editor, and South East Region. Board member, director of Mouchel plc; Wragge & Co; Newcastle Evening Chronicle. Former Independent Safeguarding Authority. and SQW Ltd. Former Deputy Chairman member, Press Complaints Commission. Former non-executive director of and Acting Chairman, Audit Commission. Northern Birmingham Mental Health Former Chief Executive of Birmingham 06 DAME PATRICIA HODGSON DBE Trust and of the NHS Litigation Authority. City Council; of Nottinghamshire Principal, Newnham College, Cambridge. Former solicitor in private practice County Council; and of Wolverhampton Governor, Wellcome Trust; member of in Birmingham. Borough Council. Led the Lyons Inquiry the Higher Education Funding Council into the functions and funding of local for England, and of the Committee on 11 JEREMY PEAT government. Former Professor of Public Standards in Public Life. Non-executive TRuSTEE fOR SCOTLAND Policy, Birmingham University. Former director, Competition Commission. Former Chairman, Audience Council Scotland; non-executive director, Central Television Chief Executive of the Independent Chairman, BBC Pension Scheme Trustees. Limited; former Chairman ITV Regional Television Commission. Former BBC Former BBC National Governor for Advisory Council. Governor, Royal executive, who held many senior positions Scotland. Member of the Competition Shakespeare Company. Former Chairman including Director of Policy. Commission. Director of the David City of Birmingham Symphony Orchestra. Hume Institute. Columnist for the Herald 07 R OTHA JOHNSTON and Holyrood magazine. Former Group 02 C HITRA BHARuCHA TRuSTEE fOR NORTHERN IRELAND Chief Economist at the Royal Bank of VICE CHAIRMAN Chairman, Audience Council Northern Scotland. Former economic adviser to the Acting Chairman to 30 April 2007; Ireland; Entrepreneur in commerce and Government of Botswana, HM Treasury, Chairman, BBC Trust Audiences Councils property. Non-executive director of Allied and the Scottish Office. Committee and Remuneration and Irish Bank (UK) plc; Vice Chairman of Appointments Committee. Former Invest Northern Ireland; non-executive 12 RICHARD TAIT Consultant Clinical Haematologist and member, Northern Ireland Office Board. Chairman, BBC Trust Editorial Standards Deputy Director, Northern Ireland Pro-Chancellor, Queen’s University, Belfast. Committee. Professor of Journalism and Blood Transfusion Service. Former Chairman, BBC Trust Audience Council Director of the Centre for Journalism member, General Medical Council; Committee until March 2008. Studies, Cardiff University. Former Editor­ former Chairman, GMC Fitness to in-Chief, ITN; former Editor, Channel 4 Practise Adjudication Panels. Former 08 JANET LEwIS-JONES News. At the BBC edited Newsnight, The Northern Ireland member, Independent TRuSTEE fOR wALES Money Programme and the 1987 General Television Commission; former member, Chairman, Audience Council Wales; Election results programme. Former BBC BBC Broadcasting Council for Northern Vice President, British Board of Film Governor. Fellow, International Press Ireland; former member, Advertising Classification; Trustee, Baring Foundation; Institute; Fellow of the Society of Editors Standards Authority (Broadcasting). Chairman, Membership Selection Panel and of the Royal Television Society. Chairman, Advisory Committee on Animal of Glas Cymru (Welsh Water). Former Feedingstuffs for the Food Standards member, Welsh Fourth Channel (S4C) Agency. Trustee, Marie Curie Cancer Care. Authority; and former Commissioner, Postal Services Commission. Served on 03 DIANE COYLE the boards of the Strategic Rail Authority Chairman, BBC Trust Public Value and and of British Waterways. Fair Trading Committee. Economic consultant specialising in new technologies 09 DAVID LIDDIMENT and globalisation. Member, Competition Chairman, BBC Trust Audiences and Commission. Former Economics Editor of Performance Committee; Non-executive The Independent. Widely published author Director, All3Media; Associate, The Old and broadcaster on economics. Vic Theatre Company. Broadcasting career includes Director of Programmes, ITV; 04 DERMOT GLEESON Deputy Managing Director, LWT; Director Chairman, BBC Trust Finance and Strategy of Programmes, Granada TV; Head of Committee. Former BBC Governor. Entertainment Group, BBC Television. Chairman, M J Gleeson Group plc. Former Chairman, Major Contractors Group; former director of the Housing Corporation, and of the Construction Industry Training Board. Former Head, Home Affairs Section, Conservative Research Department; former member of Christopher Tugendhat’s cabinet in the European Commission. The issue of trust 06 I was quite upset when I found that the “BBC was involved in the phone THE BBC IN 2007/08 2007/08 IN BBC THE scandals. I lost a lot of faith in them…” * 1 7,000 STAFF attended the BBC’s Safeguarding Trust training in six months

Launch of BBC iPlayer The BBC ’s reputation for editorial integrity is its most The BBC iPlayer is a real step forward. valuable asset. That reputation was eroded during the * year and we took urgent action to restore public trust “It’s quite easy to use… my parents use it.” in the BBC and prevent any repetition of the events that did the damage. 42 MILLION programmes were accessed using BBC iPlayer in the first three months of 2008 THE BBC IN 2007/08:

A BBC adapting for the future It’s an institution – you rely on it being The BBC Trust only allows new BBC services to launch “there… I think we would miss it more if it considers the service will deliver public value * and the positive benefits will outweigh any negative than we think.” impacts. We approved the BBC iPlayer after a public value test and it has become a highly valued addition to BBC services. 5 0 % is the new target for the proportion of BBC staff to be based outside London by 2016

The BBC must always be thinking about how to respond to changes in technology, in the way people live and in how they use media. This year we approved a new six- year plan for the BBC to ensure it continues to provide something for everyone and good value for all licence fee payers. BBC Annual Report and Accounts 2007/08

A more open and accountable BBC It’s excellent that they’re being more 07 “open and transparent…” * THE BBC IN 2007/08 2007/08 IN BBC THE

53 ,536 PEOPLE visited Tele vision Centre in London for a tour of the studios

Distinctive high-quality programmes The BBC wants to get better at listening to what I’d give the BBC top marks for natural people think and explaining what it does. This year “history. It’s the BBC’s forte… for the BBC Trust offered people the chance to give their * views before it took major decisions. The Trust has example in Life in Cold Blood.” started explaining its decisions on its website. 91% of the audience strongly agree that Life in WHAT STOOD OUT Cold Blood was a high -quality programme FOR YOU?

A BBC valued across the world I listen to BBC radio for international “news and its analysis because it is When we judge how well the BBC is doing we always † take into account what audiences think about the factual without bias or partiality.” quality and distinctiveness of BBC programmes – not just how many people watched or listened. 2 3 3 M ILLION used the BBC’s global news services – television, radio and online – last year

BBC news audiences value and demand impartiality – the cornerstone of the BBC ’s reputation around the world. The BBC Trust makes sure editorial standards are of the highest quality. Ensuring impartiality is a key * Member of public at Trust workshop. priority for us. † Housewife, Herat, Afghanistan. 08 OVERVIEW 93% The percentage of adults in the UK using BBC services. Source: BBC Tracking Study. Claimed reach age 15+ 2007/08.

At the heart of BBC culture sit the values of honesty, integrity and straight dealing. These values have won the trust and support of the public over eight decades. Future public support depends on the BBC continuing to instil these values into everyone in the organisation. They must be impressed on people on the day they join and be at the heart of their professional life throughout their time at the BBC.

Richard Tait Trustee, Chairman of Trust ’s editorial standards committee OVERVIEW 09

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with the weaknesses here is an important futureour work.for focus Theremoreon is this later in this section. ourdecisions approveto numbera new of services.Incarrying out public value tests on boththe BBC iPlayer and the HDTV channel werewe convinced that each wouldenable the BBC to reach people with something theyvalued. The BBC iPlayersuccessfully – launchedthis yearenables – the BBC to respondtheto clear demand from the public viewto BBC output timetheirata of own choosing.And thein case the HDTVof channelfoundhave (seewe page 45) strong evidence that a sizeable portion the of populationwouldvalue servicesucha and believethat the BBC’s commitment itto – particularlytheon free-to-view DTT and DSat platforms – will ensure that all who wish canto enjoythis promising newtechnology. Duringthe course ourdiscussions of with theExecutive o drewheavily theon extensive research and consultationcarriedwe out 2007in theon draftpurpose remits, concentrating areason where we found audiences had identified significant performance gaps. For example, foundwe that while the BBC ratedis very highlyoverall itsfor provision news of and currentaffairs itnoteffectively is reaching asked have approvers BBCwe theand low of solution. a management find purpose One to where we found some very marked performance wasgapsof that UK’s nations, regions and communities maximumreach consistent with the BBC’s purposes and va objectivemaximiseto reach couldcreate perversea incentive that might work against thehigh-quality output audiences expect from the BBC. Ourwish that the BBC should maximise reach withhigh-qu the BBC. Member of public at Trust workshop discussing

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intensifyingand that the BBC find may hardit sustainto this performance comingin years. approvedBBC’sthesix- when we why, is This yearstrategy lastset we management year, theexplicit objective maintaining of the REACHING REACHING The Trust exists to promote and defend theinterests licencepayersfee of the– public whotheownandfor BBC. pay part key A ourof task is to ensure that the BBC provides everyonethein UK with high-quality output thatthey value. Only doing by this can the BBCdeliver its sixpublic purposes and maintain support for the licence fee. are therefore We pleased notetothe BBC’s goodperform they switch away from old technologies andinto newones faster ata rate than areoldertherefore groups.audience We encouragednotetothat reach BBCto TV andradio held steady among age the 16–34 group,with notable growth and BBCfor Two BBCThree, as wellasOnline Radio reach 1. has increased to this age group. Despitethis encouraging performance we areaware tha thepast Reach nottheis only year. significant measure performance, of but it is an importantonethat enables tracktous how manypeople are using the BBC’s services. Throughout 2007/08 some 93% previousyears. The reach BBC of Radio fell slightlybut bbc.co.uk continued its upward momentum, as we would expect given the continuingstrong growth elsewhere in thesector. Inlast year’s annual report notedwe the changingmed populationused the BBC’s services a on weeklybasis. Performance was particularly strongwhich Television insawreach increase by 0.6% Members o

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andwhen this confidence damagedis – as it waslast by summer’s editorial failings the – relationshipcost key a to between the BBC and its audiences is potentially extremely high. And rebuilding audiences trust because matters traditiohave audiencesmadehave clear thatusto these arethe most important issues them.for Reach – a measureReacha – manypeople how of choose to use ou distinctiveness Quality and Inthe year under review focusedhave we threeon themes: key reach; quality and distinctiveness; and rebuilding trust. becauseitan indicationis the valueof the BBCdeliveringis alllicenceto payersfee and alsobecause the BBC cannot deliver the publicpurposes laidParliamentit on by unless itsservices are usedthe by vast majority of peoplethein UK. Thishas been yeara whichin firm foundations beenhave laidthe for remaining years this of are clear We licence periodfee until 2012. about what BBC audiences want; we have approvedthe Executive’s strategy futurefor years;agreedandhave we financiala strategy that includes challenging efficiency targets to releasemoneyfund to further increases in quality.There are signs that the performance the BBCof startingis reflectto the priorities sethave it,we although there are some areas whereinternal processes must beimproved.

OVERVIEW PERFORMANCE PERFORMANCE 10 “ Originality could be doing the Audiences expect the BBC

OVERVIEW same type of thing but to a to provide a clear alternative better quality, like Cranford.” to other channels by providing output that is fresh and consistent with the BBC’s core values.

Member of public at Trust workshop discussing Cranford, a drama on BBC One, was recognised as Finding from BBC Trust research into audience the BBC. high quality by audiences. views on BBC television, autumn 2007.

Increasing distinctiveness and quality

Audiences expect the BBC to set a benchmark To help understand better what is driving We take these findings very seriously. We for quality programming and content. However, audience perceptions we carried out more know from our research that a key driver in last year’s annual report we reported on research last autumn. Our research shows in overall approval of the BBC is the public’s research which showed a significant level of that audiences are not calling for a radical confidence that the BBC will meet their high audience dissatisfaction: ‘Audiences are telling change of direction. But they do expect the expectations of its output. To underline us loud and clear that they want fresh and BBC to provide a clear alternative to other our determination that the BBC should new ideas and a wide range of enjoyable and channels by providing output that is fresh differentiate itself by the high quality of its entertaining programmes – and that they feel and consistent with the BBC’s core values. output we are publishing findings from our the BBC could do better here.’ There was a By ‘fresh’ they mean television that can be research on television programmes that clear sense that the BBC was not providing familiar but which offers ‘a new take’ or score highly in terms of viewers’ perceptions. enough programming and content that was ‘a slight twist’ or that is in some way ‘a bit We hope this will promote debate about different from that available elsewhere, given different’ – although they do also see a place the kinds of programmes the BBC should that the BBC is a publicly-funded organisation for the genuinely new and ground-breaking. make. It reflects our belief that performance that can take risks that commercial Audience expectations that the BBC should assessment should focus on quality and broadcasters cannot. deliver fresh ideas are higher than for other distinctiveness as well as reach and share. broadcasters because the public believe that We provide more detail later in this report We have discussed these issues at length the way the BBC is funded frees it from some on page 21. with the Executive and we have set the BBC of the pressures on commercial providers. the objective for the six years of the current Perceptions of quality – measured as licence fee settlement to ‘seek to increase Audiences also believe that multichannel approval of BBC services – held steady year the distinctiveness and quality of its output’. television has complicated the picture. Where on year. We note an appreciable increase We will measure and report each year on once the BBC stood out for the range and in programmes scoring highly on the progress in delivering this and five other depth – as well as the quality – of its output, Appreciation Index (AI) on television and strategic objectives. Different audience groups there is now a strong sense that range is radio. Changes to the composition of the place widely differing values on the BBC; and provided by the wide choice available in the audience panel have resulted in marginal further objectives call on the BBC to increase multichannel world. At the same time, inflation in AI scores, but it is unlikely that perceived value among middle and low however, audiences believe that TV schedules the increase is wholly attributable to this. approvers while maintaining perceived value are genuinely dominated by ‘ratings chasers’ The true extent of the increase – and among high approvers. such as soaps, big entertainment shows and whether or not it can be maintained or reality TV, at the expense of serious drama improved – will only become apparent and factual documentaries, which are seen to in the future. have declined in volume and prominence. BBC Annual Report and Accounts 2007/08

“ I do trust the BBC at an 11

emotional level – I was raised OVERVIEW on them – but because of the way I see the world now and % think about their editorial, I question it.” 99 Member of public at Trust workshop discussing From the BBC Trust research workshop. The percentage of relevant staff who attended the BBC. the Safeguarding Trust course in the past year. This course is now being provided to the independent sector.

Rebuilding trust

Historically the BBC has enjoyed exceptionally Following these incidents, we agreed with ARTIfICE VERSuS DECEPTION high levels of trust compared with other the Director-General a ten-point action plan During the year there was much debate British institutions, and this reputation for which he issued in July. His plan included over where the boundary should lie editorial integrity is the BBC’s most valuable important organisational changes to improve between artifice and deception in asset. During the year that reputation was the rigour and consistency of editorial programme-making. To understand this eroded as a result of actions by some standards across the BBC; an independent issue better we commissioned research programme makers. We have taken steps to inquiry into circumstances surrounding the to discover what the public thinks. ensure that public trust in the integrity of the misleading trail; the suspension of all BBC BBC is restored, and that robust measures are competitions pending new guidelines; and The work showed that TV audiences put in place to prevent any repetition of the mandatory training on the BBC’s editorial have a sophisticated understanding of the practices that did the damage. standards for all programme and content staff. boundaries between what is acceptable and unacceptable in this area. Viewers Premium rate telephone services and As we reported last year we had already want programmes to be engaging and on-air competitions commissioned our own inquiry into the accept that a degree of artifice may be As we reported last year, instances came BBC’s use of premium rate services (PRS), necessary to achieve this – but not to light of programme makers misleading and we subsequently broadened this surprisingly they draw the line at audiences over on-air competitions and votes. inquiry into a more general review of the deception. They are willing to allow more In May 2007 we published a review by the effectiveness of the Executive’s response to flexibility for entertainment than for Director-General, which accepted that serious this succession of serious lapses in editorial factual programmes, and in factual output errors had been made. Further investigation standards. We also asked the Executive to they expect finer judgements on more brought other instances to light. review its compliance processes, taking sensitive subjects. If a factual programme account of compliance models elsewhere promises an emotional journey then they Monarchy: The Royal family at work in the industry, to ensure these were robust expect the journey to be genuine, not In July 2007 a trail for a forthcoming in all BBC output areas. The Executive advised faked. Audiences also have higher documentary series Monarchy: The Royal us in January that they were satisfied that expectations of some individual Family at Work was shown to journalists. It following the significant changes made, including presenters than others, and they expect a appeared to show the Queen angrily walking the enhanced role for the Director of Editorial higher degree of rigour from programmes out of a photo-shoot. In fact, the Queen had Policy and new management responsibilities that promise high impact – a major not walked out, and the impression that for compliance in output divisions, the interview or cultural event, for example. she had done so was the result of misleading compliance processes were robust. editing by the independent production The research showed that the BBC is company making the documentary. The BBC Our review reported in May 2008 and more strongly associated with values apologised to the Palace. has been published in full on our website. of honesty, trustworthiness and reliability It makes clear that the actions outlined in the than other broadcasters and that Director-General’s plan must not be thought audiences expect more from the BBC. of as a quick fix but a long-term change to However they do not want two tiers procedures, processes and safeguards of standards. They would like all throughout the BBC. broadcasters, including the BBC, to be subject to the same editorial guidelines. But for the most part, they feel that their high expectations can be met via the application of common sense rather than black and white rules. 12 “A s I’ve got older I’ve found The BBC adopted new

OVERVIEW out more about what the guidelines governing phone media are capable of and votes during the year while I’ve become more sceptical.” changes in technology now prevent people being charged for votes which are not counted.

Member of public at a Trust workshop. Strictly Come Dancing was one of the BBC ’s popular programmes with phone votes.

SEMINAR ON TRuST IN BROADCASTING At the heart of BBC culture sit the values of As part of our inquiry into the BBC’s use In November we held a seminar, honesty, integrity and straight dealing. These of premium rate services we commissioned jointly hosted with Ofcom, on trust in values have won the trust and support of an independent review of the economic broadcasting. It brought together leaders the public over eight decades. Future public aspects of the BBC’s premium rate services. from across the industry to work on ways support depends on the BBC continuing This work discovered a previously undisclosed to rebuild public trust following last year’s to instil these values into everyone in the practice by Audiocall (a trading division of series of editorial and compliance failures. organisation. They must be impressed on BBC Worldwide), to retain all money raised people on the day they join and be at the from telephone calls mistakenly made by Agreements were made to consider a heart of their professional life throughout the audience when voting lines were closed, common approach to premium rate their time at the BBC. including money that could be due to telephony; on developing industry-wide charity. While the amounts from individual training on ethical and editorial standards; Among the key recommendations of our programmes due to charity retained by and on exploring a common framework review is that the BBC Editorial Guidelines Audiocall were small, this practice was wholly of principles to promote best practice in should be revised and reissued as a matter wrong and it is a matter of regret. The money programme-making. of urgency, and that, as a matter of priority, due to charity has been repaid with interest executive producers should be given more and the BBC Trust has requested the BBC Delegates will meet again later this year support in order to perform their critical role apologise on air, which it did on 24 May 2008. to review progress. as custodians of BBC standards and values. The BBC regularly tracks levels of trust. Other recommendations include measures Members of the public are asked how much to improve risk management – such as they agree with the statement ‘I trust the communicating experience of ‘near misses’ BBC’. Following the incidents of summer and much more widely so that lessons can be autumn 2007 which we have reported above, shared across the BBC by producers working levels of agreement with this statement in different genres. We also want the BBC dropped. However, by March 2008 trust to devise a way of assuring itself that the seemed to have recovered and was back compliance structures of its independent to the levels seen before these events. suppliers are of the highest standard and Encouragingly, the majority of people (78% are effective. in March 2008), also trusted the BBC to sort out the situation and do the right thing in the future. BBC Annual Report and Accounts 2007/08

13 OVERVIEW

I trust the BBC to be honest and open. The only thing that has put me off is the phone scandal. I still trust them to provide a variety of quality programmes.

Member of public at Trust workshop discussing the BBC. 14 BBC OUTLOOK OUTLOOK BBC % 16 . 2 The proportion of the UK ’s population who live in Wales, Scotland and Northern Ireland.

One of the great current challenges for the BBC is to find effective responses to the changing constitutional map of the UK as devolution takes deeper root in Scotland, Wales and Northern Ireland and regionalism rises up the agenda in England.

Rotha Johnston BBC Trustee, National Trustee for Northern Ireland BBC Annual Report and Accounts 2007/08

BBC OUTLOOK Although the time people 15

spend watching television OUTLOOK BBC remains fairly steady, viewing is becoming more fragmented. 87 % The number of homes in the UK that had access to digital television by April 2008.

The BBC has to satisfy many different and CHANGE IN THE wIDER MEDIA MARkET Radio changing demands. In the case of television, Television Radio remains very popular: 90% of adults for example, traditional linear channels still The pace of change in television, already listen every week. However, overall listening attract large audiences – and we expect fast, continues to increase. Digital switchover is in slow decline, particularly among the that to continue. But there is also a growing began last year and more than 87% of homes young. 15–24 year olds listen for almost three audience for on-demand video delivered via now have access to digital television. On- hours less a week than five years ago. BBC the internet – a development fuelled by the demand services, including BBC iPlayer, are Radio’s lead over commercial radio has rapid spread of broadband. This year the blurring the boundaries between television widened as listening to commercial stations Trust approved plans for the BBC to meet and the internet and new channels continue has declined relatively faster. the challenge of satisfying the new demands to launch. All this intensifies competition for created by rapidly changing technology, audiences, and puts pressure on traditional The commercial radio market is facing many while still continuing to deliver high-quality ‘linear’ television channels. challenges. However, in the face of declining services to existing audiences through listening figures and increased competition traditional channels. And there is more to come as the take-up from online media, radio advertising revenue of broadband and the speed of downloads has seen four consecutive quarters of In this section we explore how the BBC is increases, digital switchover progresses and growth. Consolidation has continued and adapting to different kinds of change in the Freesat is taken up. the commercial industry is now led by two UK; not just technological but also social, large players. constitutional and economic. Although the amount of time people spend watching television remains fairly steady at Digital-only stations – including BBC stations about 3.5 hours a day, viewing is becoming – have yet to make a breakthrough. Although more fragmented. Less than two-thirds growing, reach and audience awareness of viewing time is now spent with the five remain low. In November the government terrestrial channels (BBC One, BBC Two, launched the Digital Radio Working Group ITV1, Channel 4 and five). But each of these to look at how to promote digital radio and broadcasters has built portfolios of new increase penetration. It remains to be seen channels and overall portfolio reach for each whether the arrival later this year of the broadcaster has increased over the year. BBC second national digital multiplex led by One remains the UK’s most watched channel Channel 4 Radio will boost the market and we are pleased to note that the BBC TV sufficiently to ensure its long-term viability. portfolio has increased reach to 85% of the population. Television therefore remains central to the delivery of the BBC’s purposes with the unique power to bring together large audiences. p 16 As the internet joins television

BBC OUTLOOK OUTLOOK BBC and radio as a mainstream medium, the BBC’s online presence is increasingly MILLION important in serving groups such as 18–24 year olds. 17. 2

The Apprentice is one of the most popular The number of weekly users of the bbc.co.uk choices for people accessing programmes with internet service in the UK. BBC iPlayer.

Online The PwC study is examining the benefits A NEw BBC CONTENT STRATEGY The internet is now a part of everyday life and costs for both the UK as a whole, and as In the context of rapidly changing media for many people in the UK, especially the far as possible for each of the UK nations and markets, and the background of a licence fee young. More than half of households have the English regions. It will cover such things settlement less generous than hoped for by a broadband connection, and there are signs as the effects of the BBC on the wider media the Executive, a key task for the Trust this that mobile internet may be about to take off. market, its impact on quality, its role as a year has been approving the BBC’s six-year Broadband offers a much richer experience commissioner from independent producers, strategy (Delivering Creative Future). We – watching and sharing videos, game-playing, its effect on content, its role as ‘trainer for the led a re-prioritisation exercise that enabled social networking – and as a result people are industry’, its management of the partnerships us to approve a content strategy for the BBC increasingly turning to the internet for in which it is involved, its record as a developer retaining many elements of the original BBC entertainment, not just for information. of new technologies, the scale of its direct licence fee bid. investment in the creative sector, and the For broadcasters, the internet, already an arena impact of the BBC brand on the development We accepted that rapid changes in of intense competition, is becoming more so of the sector as a whole. technologies, markets and audience behaviour as, for example, newspapers use their sites to required a major shift of resources – subject to post videos and podcasts, effectively turning We expect the study to be complete in July relevant approvals processes – into online and themselves into digital broadcasters. Video- 2008. We will use the results to inform our on-demand offerings. This meant investment sharing sites such as YouTube provide new judgements on future priorities and investment in Web 2.0 and BBC iPlayer. We have competition in the field of entertainment. decisions and will also ask the BBC Executive considered much of the detail of this proposed As the internet joins television and radio to respond to the Trust’s conclusion on the investment within the context of the bbc.co.uk as a mainstream medium, the BBC’s online report. We will be particularly interested in service review (see page 28). Some proposals presence is becoming increasingly important the potential for the BBC to work more often – such as those for enhancements to the for delivery of its public purposes, especially in partnership with the wider media sector. Nations and Regions web offering – will be among groups such as 18–24 year olds who subject to a public value test. spend most time online. We approved investments in television THE BBC IN THE wIDER ECONOMY drama, comedy and entertainment – genres In changing media markets there is an of wide appeal. We also approved some important debate to be had on the impact new investment in content designed to reach (positive and negative) of the BBC on the specific audience groups such as children, wider UK economy. In order to ensure teens, as well as journalism for those the that this debate is properly informed, we BBC currently finds hard to reach, and also commissioned a wide-ranging independent in content in the UK’s indigenous languages. study from PricewaterhouseCoopers (PwC), Finally, we approved investment in a more and we held a seminar with industry experts collaborative relationship between BBC Two at the London Business School. and BBC Four as an important step towards enhancing the BBC’s factual programming – a distinctive and valued feature of its output. BBC Annual Report and Accounts 2007/08 p We demanded a clear 17

commitment from BBC OUTLOOK BBC management that there would be no increase in the % level of peak time repeats on BBC One. 3 Trustees Jeremy Peat, Mehmuda Mian Pritchard The percentage annual recurring efficiency and Alison Hastings visiting BBC offices in savings target set by the Trust. Manchester for the Trust meeting in September 2007.

To pay for these investments we approved THE TRuST’S OBJECTIVES fOR the Executive’s proposal to reduce the level THE ExECuTIVE of originated programming by 10%. We did As part of our approval of the BBC’s 4 The BBC should restore trust in so on the understanding that while this would forward strategy we have set the Executive its output. mean more repeats outside peaktime it would six high-level objectives consistent with our Trust is the foundation of the BBC’s benefit audiences – provided management framework of Reach, Quality, Impact and relationship with licence fee payers. Last commissioned content that is particularly Value for Money (see below). year’s editorial failings led to a decline in valued by audiences and which they will trust in the BBC and the BBC has begun appreciate the chance to see again. This Reach to remedy this as a matter of urgency. approach is consistent with the findings 1 The BBC should maintain the of research carried out on audience attitudes maximum reach consistent with its Impact to repeats noted in last year’s annual report. purposes and values. 5 The BBC should increase the delivery However, we received a clear commitment The BBC must provide everyone in the UK of its purposes. from the Executive that there would be no with something they value. In an increasingly Our research has highlighted key areas increase in the level of peak time repeats competitive environment this is likely to of weakness in the BBC’s delivery of its on BBC One – an important commitment become more difficult, so while we want purposes (see page 23) and we believe given audiences’ clear dislike of peaktime reach maximised this should only be done that remedying these gaps must be a repeats here. in a way consistent with the BBC’s purposes top priority in the implementation of the and values. BBC’s six-year strategy.

Quality Value for Money 2 The BBC should seek to increase the 6 The BBC should deliver 3% year-on­ distinctiveness and quality of its output. year efficiency targets. Audiences have high expectations of the Licence fee funding is a great privilege for BBC and of the quality of its output. the BBC and it has a duty to make sure Our research has revealed significant that it spends public money as efficiently weaknesses in the BBC’s ability to and effectively as possible. We believe that differentiate itself from other broadcasters this efficiency target, though challenging, by providing content that is fresh and new. is achievable. We will track progess closely to ensure that it is not achieved at the cost 3 The BBC should maintain perceived of the range of quality programming and value among high approvers. The BBC content that audiences expect and deserve. should increase perceived value among middle and low approvers. For each objective we have established a There is clear evidence from our research high-level set of measures that we will use that significant parts of the audience feel to track performance on a quarterly basis the BBC is not serving them as well as and report on each year in the annual report. it should. The BBC must address this The savings will be reviewed each year by the problem, but it must also maintain BBC’s auditors and in 2010 by the National perceptions of value among those who Audit Office. are currently high approvers. 18 “T here is a home-counties and

BBC OUTLOOK OUTLOOK BBC London bias on the BBC – for example we have not had a single snowflake in Wales % this week and yet snow in London is all over the news.” 82 Member of public at Trust workshop discussing The Trustees familiarising themselves with The percentage of the UK population who are the BBC. BBC Scotland output during a visit to Glasgow. interested in news about other nations in the UK.

The BBC throughout the UK

As well as technological change, one of Nations’ impartiality review of drawing on the rich variety of the UK and the great current challenges for the BBC A recurring message from our public communicating it to multiple audiences. As is to find effective responses to the changing meetings and audience research, and from examples, political coverage is seen as unduly constitutional map of the UK as devolution our work with BBC Audience Councils in the focused on Westminster in volume and style; takes deeper root in Scotland, Wales and four nations, has been concern about the there is seen to be a general bias in favour of Northern Ireland, and regionalism rises up the perceived lack of representation of the nations stories about England or telling stories from agenda in England. The challenges take many in network programmes and insufficient focus an England perspective; and there is evidence forms. There is a clear desire from audiences on the devolved nations in network news. that several stories in the nations which may around the UK for a fuller and more accurate have been significant to the UK were not representation of their nation or region. This We therefore decided that the first taken up by the network. Overall, Professor is not just locally, but also to the rest of the impartiality review we commissioned should King concludes that the BBC has not UK audience through network programming. “assess whether the BBC’s network news and responded adequately and appropriately to There are growing pressures to move more current affairs output was impartial, accurate the UK’s changing political, social, economic production out of London – not just into and clear as to which facts and views applied and cultural architecture. the rest of England, but into the devolved to the individual nations and to consider if the nations too. There is an appetite for more nations’ policies were properly reflected and The significant weaknesses identified by programming in the UK’s indigenous languages explained.” We commissioned Anthony King, Professor King’s assessment must be put right. – this year, for example, we have given Professor of Government at the University of In the closing sections of his report, Professor conditional consent to the launch of a digital Essex, to carry out the review. His work was King offers a range of suggestions and issues TV service in Gaelic (see page 45). And there supported by content analysis from Cardiff for consideration in resolving the concerns is much-increased scrutiny of all broadcasters’ University School of Journalism and audience he has highlighted. In its initial response to our performance in meeting these challenges research from British Market Research review, the BBC’s management has expressed – witness, for example, the Scottish Bureau (BMRB). commitment to responding to the important Broadcasting Commission set up by the concerns raised. We have highlighted a government of Scotland in 2007 with a brief The Trust welcomes the review’s conclusion that number of issues for immediate action around to ‘investigate the current state of television there is little or no evidence that BBC network the accuracy and clarity of reporting, missed production and broadcasting in Scotland coverage in this area falls short on grounds of opportunities and balance of coverage. and define a strategic way forward for fairness or impartiality. The BBC is also praised the industry’. The National Assembly for for the impartiality of its coverage of politics We have asked the Executive to provide a Wales has also established a Broadcasting and policy in all four nations of the UK. This final plan by July which sets out how they will Commission to look at the future of public is an important conclusion and central to the deliver the proposed actions over the next service broadcasting in Wales. Trust’s duty to ensure the impartiality of the year. We will seek the co-operation of the BBC’s output. Audience Councils in tracking the success of The Charter lays on the BBC the public action being taken, and within 18 months will purpose of ‘Representing the UK, its nations Notwithstanding examples of good practice, ourselves repeat the research undertaken regions and communities’ and this is a however, and supported by findings from to assess the BBC’s progress in improving responsibility we take very seriously as the Cardiff research, the review highlights its performance in this area. (You can find out BBC Trustees. During the course of the year concern that BBC network news and current more about the Audience Councils and their we have launched a number of significant affairs programmes taken as a whole are not activities on pages 34–35. The map opposite initiatives to ensure that the BBC continues reporting the changing UK with the range and shows their geographical remits.) to respond effectively in this important area. precision that might reasonably be expected The BBC is for the whole of the UK and it given the high standards to which the BBC The full report is available on our website. should reflect the whole of the UK in its should aspire. There are specific concerns as output and in its investment decisions. to accuracy and clarity of reporting, the balance of coverage, and missed opportunities BBC Annual Report and Accounts 2007/08

Average levels of affection 19

for the BBC are noticeably BBC OUTLOOK lower the further people live from London. 17 % Doctor Who is one of many network programmes The target percentage for network production currently made in Wales. in the nations by 2016, compared with 7.7% in 2007/08.

Producing more content outside London BBC NETWORK PRODUCTION AROUND THE UK We want the BBC to make significantly more content outside London than it does now, and to base a significantly higher proportion of its staff outside London than it does now. In broad terms our long-term aim is that the BBC should make at least as much content in the nations as reflects their Scotland 3.5% Wales 3.2% percentage of the population of the UK, Northern Ireland 1.0% and that at least 50% of BBC staff should Total Nations 7.7% be based outside London. North of England 8.9% In May 2008 we approved plans that will help Midlands 4.0% 13 make these aspirations a reality. In future the South of England 12.9% BBC will use the Ofcom definition of network Total English regions 25.7% production from the nations rather than its own definition. The Ofcom definition is much London 66.6% more challenging: under the previous definition the BBC sourced 15.9% of network production from the nations in 2007/08; under the Ofcom definition the percentage is 7.7%. 14 1

Scotland, Wales and Northern Ireland together make up nearly 17% of the UK National Audience 3 6 population. By 2012, network production Councils from the nations (using the Ofcom definition) 1–12 England 2 should reach at least 12% by spend, with the 13 Scotland 17% target reached no later than 2016, when 14 Northern Ireland 5 the current Charter ends. We will monitor 15 Wales these targets carefully to ensure that the BBC 4 is helping to build strong and sustainable Regional Audience 15 7 network production in all three nations. Council Areas 1 North East We will also look at production in the 2 North West English regions. 11 3 Yorkshire 9 4 West Mids 10 The Executive began a review of the supply 5 East Mids 12 8 of content to network television in September 6 East Yorks & Lincs 2007, focusing on ensuring long-term 7 East sustainability across the UK. We expect to 8 South West receive the review’s final recommendations 9 West later in 2008. 10 South 11 London 12 South East

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howeverfacechallenges attractingin similarly largeaudiences specialistto factual output for topicssuchas science, history and the arts. rejuvenated the weekday slot 7pm with The ONE Show andhas brought large audiences to landmark series such as Life in Cold Blood and Tiger: Spy in the Jungle The remit BBC of One also includes high- qualityfactu is to reachto is these heights more frequently, riskandanyavoid to becoming of stale by providingfresh entertainment and drama thatdemonstrate high quality and creative ambition.The channel must notbecome over-reliant on established titles. BBCremitOne’s betheto is BBC’s most popularmixed theUK, offering widea range high-quality of programmes.Memorable BBC One drama and entertainment included TheStreet, The No 1 Ladies Detective Agency and reversinglonger-terma fall overprevious years.However younger audiences have continueddecline.to The number 16–34 of yearoldviewers has fallen around by 1.5%. performance Come Dancing We are also pleasedWe notetothat BBC One’s overallaudien Audienceperceptions BBC of One tend to fluctuate line in withoverall perceptionsof theBBCreflection a – of BBCplace One’s asthe flagship of the Corporation’s output. recorded channel the of perceptions in fall The latein summer 2007therefore may reflect theconcerns overtrust atthe aretime. We pleasednotetothat sinceOctober 2007 have One BBC for approval and trust of levels improvedMarchand by 2008 hadreached similarlevels Aprilto 2007. TelevISIon TelevISIon Individual

BBC PERFORMANCE 24 BBC PERFORMANCE 25

Radio

ienceoverthe

% %

’s audience ’s and presence have builthave aud

of listening of BBCto stations is enttheon sporting calendar. s thes third most listened to

BBC Annual Report and Accounts 2007/08

17

now vianowdigital platforms particular.in DAB – However, growing. also is podcasts to Listening theoverwhelming majority digital of radio listeningtheto isBBC’s analogue services (Radios2,and 3,live).4 5 1, Awareness theof digital-only services also remains low: the populationof onlyheardhave 41% of them,evenwhen prompted, and concerns grownhave about the future within DAB of thecommercial radio market. BBC 7 remainsthe most popular BBC digital stationand i digital-onlyradio service thein UK. are We reviewing BBC 7’s children’s provision as part ourchildren’s of review. BBC 6 and1Xtra The size audience of for Radio 5 live is quitedepend Howeverthe station’s annual average reach hasdeclined while share has risen slightly. Whilstapproval generallyis strong, there hasbeen falla thein proportion high of approvers,and the service’s reputation as the bestsportfor has declined note slightly. We thatthe station successfullyis building digitala listenership,decreasing its reliance mediumon wavetransmissions. It remains beseento whether,overtime, this helps the service stabilise its reach. Digital radio listening is growing steadily. More than 17% yearbut still attract only around halfmillion a listeners a week each. 1Xtra has refreshed its scheduleand remains committed offeringto speechprogramming itsfor target audience, alongsidedistinctivea range music. of 5 live Sports Extra theon multiplex fluctuates according to season.It has the ability buildto high levels reach of but falls back when fewerhours arebroadcast. notemanagement’s We objectivebuildto awareness Sports of Extra. The percentage of listening to BBC radio stations via digital platforms.

listening

average

highest

the

vice’s performance vice’s lightin of d.Its listeners rate the network

t itst average reach and hours of

y. It has maintained y. its weekly reach,

’s level of approvallevel of ’s has risen thein

attracts

4

lastyear bu listeningare alldeclining. Schedule changes made2007in farnotso have increased reach; – which million. is at 1.9 will We continue to trackthe ser thesetrends, but notethatwe the only other classicalmusic radio station thein UK, Classic FM, is also facing declines in reach and share andthisbedue increased may to listening to Radio 2 and Radio 4. Radiocontinuing 4 is refreshto its output successfull whileshare listening of has increased slightly. Itattracts the highest average listening hours BBCany of station: hours just under 13 week.a Its listeners continue a have to veryhigh regard thefor station. It has the highest mean scores against the public servicebroadcasting characteristics allfor radioservices surveyed, scoring highest ‘well-madefor high-quality programmes.’ declineA reachin among 35–55 year olds hasbeen stabilised someto degree but this needscontinued notethat focus.high a We proportionlisteners of listen livedigitally, themajority digitalvia DAB radio. Live online listeningincreasingis rapidly and faster than otherany BBC radio station. Podcasts have becomevery popular and this does not appearaffectedhave to overall reach levels. Indeed,there someis early evidence that thosewho ‘listen again’ theon internet are listeningnow moreto liveradio. highlythefor quality its of programmes and the broad range of music it plays. note We the workdoneRadio by develop to 2 talent and thestation’s role developingin newartists through its ‘Music Club Introduces…’ strand. Radio 3 stableand listeners’ approval the stationof hasincrease Radio hours of any BBC station.

houghits reach has fallen very

wo years, wo andare we pleased to

’s reach ’s and share bothhave grown old it close to my heart. to my close it old

anything.” I’d more than radio miss

“I h

ember of public at Trust workshop discussing

slightlyits this audienceyear, share has been Radio 2 remainsthe most popular station thein UK. Alt notethat, alongside this growing popularity, itsreputation asstation a UK andnew, for livemusic remains strong. Reach among the targetaudience has also grown theeachin of pasttwo years and the station reachesnow justunderyear olds. million 5 15–29 We willlook morein detail Radioathow and1 serve 1Xtra younger audiences ourinreview BBC of services and content youngerfor audiencesThelater launchthis new year. of programmesunder‘Switch’teenstheaimedat bannerdesignedis appealto directly anto underservedaudience. Radio 1 thein past t RADIo BBC network radio stations continue to performstrongly overall, reaching two-thirds UKof adults every week. Listeners are increasinglyusing digital platforms, suchas and online,DAB listento livelistenor again. CBBCfaces tougher competition from commercialchannels tightly focused on particulargroups children. of Inour review of bbc.co.uknotedwe that thisthe year, relaunch the CBBCof website latein 2007 appeared users its among reaction negative a provoke to initially.This demonstrates demandinghow thechildren’s audience can beandlook we forwardunderstandingto more about this importantaudience andthe how BBC providesitfor as part ourreview of of children’sservices, under now way. homes.Italso is notable that CBeebies is clearlyregarded as the best pre-school measures. quality of number a against channel M the BBC. 26 “Th eir breaking news is great.

BBC BBC PERFORMANCE They’re there when things

are happening. They do report it as it is. I don’t think MILLION they colour it.” 2.8

Member of public at Trust workshop discussing BBC News is performing very well in terms of The number of people who listen to one of the 39 the BBC. maintaining reach on TV and radio. local stations and who do not listen to any other BBC network radio.

We note that reach, share and listening are Radio Scotland offers a diverse range of Although BBC News (formerly called News not growing to the BBC Asian Network speech, sport and musical genres and changes 24) is now clearly ahead of Sky News in terms despite the overall growth of the DAB are being made to modernise and refresh it. of viewing, we note that Sky News still has a market. A new controller is now in place However, reach and share to Radio Scotland very good reputation among viewers for being and we await the outcome of his planned have slipped significantly and this is a concern. high quality and informative. schedule changes. Reach for Radio Scotland was down in 2007/08, to 21.5% from 23.1%, and share of We welcome the introduction of the 8pm loCAl AnD nATIonS’ RADIo listening has also fallen to 8%. This may be due bulletin on BBC One as an innovative way BBC English local radio stations provide to increased competition from commercial to reach audiences who may not otherwise highly valued local news and information radio but there may also have been losses to choose to watch news. We are also to audiences who can sometimes feel BBC Radios 2 and 4. We note however that encouraged by the strong performance of underserved by the rest of the BBC. The 39 the proportion of its listeners who are ‘high the BBC One news at ten o’clock. We have stations together reach 2.8 million people approvers’ of the station has grown this year. discussed with management the need to who do not listen to any other BBC network The station also rates well for the quality and balance a response to strong public interest radio. However, BBC local radio stations face attractiveness of its programmes. in big crime stories with the duty to cover a the challenge of maintaining their relevance range of other topics. We are satisfied that and appeal while remaining distinctive within Due to no RAJAR coverage we have little management understands our concerns and local markets and within the BBC radio data on Radio nan Gàidheal’s performance, that they will aim to strike the right balance portfolio. The 39 local radio stations had an we are encouraged by audience research on in future. average combined weekly reach of 19% of listening which indicates that reach is stable adults in 2007/08. Average weekly reach and year-on-year. We endorse the Executive’s commitment share has been trending downwards in recent to bring a range of high-quality current years and some services serving cities are JoURnAlISm affairs stories to mainstream audiences by showing particular declines in common with We are encouraged to see that BBC News maintaining Panorama at 8.30pm and we have local commercial services. We also note that is performing very well in terms of maintaining been encouraged by the range and nature the proportion of high approvers of English reach on TV and radio, and continuing to of the topics covered. However, we are local radio appears to have risen slightly to grow reach online and on mobile devices. concerned that current affairs output on 65% in the last year. Reach to BBC News has been supported by BBC Two – notably This World – is not gaining the strong performance of Radio 1 and Radio strong audiences, despite doing well in BBC Radio Ulster/BBC Radio Foyle remains 2 at breakfast time. This has led to an overall industry awards. We have asked management the most listened to radio station in Northern rise in the reach of BBC news on radio – to consider how these programmes could be Ireland, reaching more than 38% of adults including among some of the audience the given greater prominence on BBC Two and and taking over 20% share of listening. It is BBC has traditionally found it hard to reach. we note the commitment in the Executive’s very highly valued, with an approval score 2007/08 Statement of Programme Policy significantly above the overall BBC score in Public perceptions of BBC News were to ‘experiment with new approaches to Northern Ireland. Its proportion of high affected temporarily by the BBC’s broader increase the impact of BBC Two’s foreign approvers is consistently higher than the editorial problems during the summer of 2007 affairs coverage.’ other nations’ radio services. – even though none of these came about as a result of actions by the News division. BBC Radio Wales’s reach has fallen this year, In terms of impartiality, audience perceptions although its share of listening has increased. are steady year-on-year. Three-quarters of We note the recent changes to its daytime the audience say that they trust BBC news schedule. Radio Cymru’s reach and share programmes to give a fair, informed and have both declined in each of the past two balanced view on important events and years and we note that its reach to all adults issues. Audience perceptions of the BBC’s within its transmission area is now just 6.2%. trustworthiness are steady year-on-year. BBC PERFORMANCE 27

M I LLION LLION I M

d over Christmas 2007, appears Christmas 2007, over d

e,including the launch of

BBC Annual Report and Accounts 2007/08 of peopleof who listen tothe BBC

82

to be on targetbeonto meetto usage forecasts. Contentrequests morehave than doubled sinceits launch million4.7to week the a by Marchend of 2008. it appears However, that thiswouldbeenhave unlikely without the introductionstreaming, of which outstrips downloadsratioa by eight of one. to We willmonitor the effects streaming of on areWe costs, trafficweb behaviour. user and encouragedindications by that BBC iPlayer increase may reach nicheto programming, with shows from BBC Three and BBC Four regularlyappearing among themost top20 requested shows. It is too earlyfull a for performancebut iPlayer’s BBC of evaluation we are committed to conducting a full review closely also are We 2009. of end the by Executive’s the deliveryof the monitoring serviceavailable full the make to commitment on non-Windows operating systems. welcomewe Finally, refreshmovesto the bbc.co.uksit a homepage that users can personalise. Initialreactions largelyhave been positive andthe pagehas received above average qualityscores. We areWe happy to note that BBC iPlayer, launche which Thenumber World Service each week. 1

ver the year, with verthe year, the site thanpreviousin years, the duced:the Net Promoter is to remainto is distinctive and

millionworldwide. While the growth

attractingmillion weekly anaverage 17.2 of usersfrom the UK alone, andtotal a of 33.2 ratewas lower continuedincreases reachin are encouraging giventhe increasing competition. newandA more sensitive measure quality of hasbeen intro advocacy rating. A number areas of bbc.co. of ukreceive very high scores thison measure, includingnews, sport, CBeebies andnumber a learning of sites. While this encouraging,is notethatwe local sites tend scoreto low thison (andother) quality measures, and our researchhas identified local provision to be onearea where audiences believe the BBC shoulddobetter. Management currentlyis refreshinglocal sites andwill we consider theirproposals local new, broadbanda for videoservice later this year. onlIne Thisyearconducted we majora review of bbc.co.uk(seenext page). As ourreview lookeddetailin atperformance overthe last threeyears, givewe only headlines thisin reportbbc.co.ukon 2007/08.in are pleased We that bbc.co.uk’s reach grew16.2% by o relevanttimegreatata of social, economic andpolitical change. Ourresearch ELCS was carriedout markets key in among opinion formers–prioritya audience thefor World Service.found that valuedtheis We ELCS distinctivefor journalism that complements othernews sources. However ourresearch revealedthat while there anappetiteis for news-related ELCS output there low is awarenessit. of Management workingis to addressthis problem. Afghanmedia, including television, growing.is Thechallenge Afghan women listening to BBC World Service radio.

promoter

and and

Net particularly particularly

online online

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highly highly CBeebies CBeebies services, services, Within Within

researchinto the BBC Afghanistan service, andinto the English Language Core Service (ELCS)radio.on The Afghanistan service receivedoverwhelmingly positive responses. Ittheis most trusted source news, of and theone mostof popular radio services thein country.competition However, from other TheTrust’saudiences and performance committeecom qualitymeasures suchas trust, objectivity and relevance, and in some markets such as Nigeria Service scores World the Bangladesh, and media. local thanmeasures these on higher TheWorldService continues betheto leadinginter listenersthe overall audience was down slightlytheon record levels2006/07. of The internet is becoming an increasingly important mediumthefor WorldService manypartsin the world.of The online audience grew by 34%year-on-year, although notethatwe the Spanish-languagesite BBC Mundo failingis keepto upwith overall growth internetin access.Attracting newand younger audiences improvingto key is performance here. We notethat the We WorldService maintained itsreach, alt advocacy rating. BBC TheWorldService fundedis through a parliamentaryGrant-in-Aid rather than the licencefee. The Trust’srole agreeto is and publishlong-term objectives agreementin withthe Foreign and Commonwealth Office andapproveto high-level strategy. InJune 2007issuedwe the WorldService Operating Agreement,equivalent theto service licences issuewe thefor BBC’s UK services. Key eventsduring the year included the launch BBC of Arabic TV Marchin 2008, and the transfer the of international English language newswebsite commercialto operations as BBCNews.com. Using

s

’

hroughservicemorethanone l we are satisfied with the with satisfied are we l

tatedthein service licence. thebbc.co.uk service licence.

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esultourreview, of and was much

trustworthy than other sites because it is not trying not is it because to advertise sell or something you

“T

Contributor to research for the BBC Trust review of bbc.co.uk Therewere also weaknesses strategicin andeditorial oversight. requiredhave We managementbringto forward proposals dealto with these shortcomings. also We believemanagement must demonstrate moreclearly bbc.co.ukhow delivers public valuewhile taking into account potential negativemarket impact, askedandhave we themdevelopto systema assessingfor output that will demonstratethis. in investment new approve not will We unti bbc.co.uk control improved for proposals Executive’s investment their considered have we and plans in more detail. In October we approved management’s directionof broad plansthe thefor service when approvedwe the BBC’s six-yearstrategy. Inthe lightour review of believewe cautious a approach approvingto more detailed plans is in the best interest of licence fee payers. will We consider the plans takinginto account their public value, distinctivenessand competitive impact. achieve better To accountability willwe restructure During our review concerns were raised overthe accountabilitylevel of that was possiblehavingsingle by a service licence servicea for as diverse as bbc.co.uk servicethethatbelieve not shoulddo We governedbet licence, but we will create separate annexes to the service licence covering the main editorialareas: news,sport, local,andnations formallearning, vision.andmusic,and audio Full details the of review are on our website. asr a higherthan s among

we foundwe

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expectationsopen of dialogue andhope we thatmanagement’s plans investto in audienceparticipation and interactivity will meet this need. bbc.co.ukas distinctive, other operators concernshave about its presence somein markets.found that managementWe had agreedno definition distinctivenessof or any consistentmeasuring of way haveit. We askedmanagement adoptto ourproposals rigorousa for and consistent approach to assessing the distinctiveness bbc.co.uk of Search and navigation: Distinctiveness: encouraging Improved management control: linking to external sites: disappointed that bbc.co.uk’s links to external sites are not leading to more click-throughsspitein this of being identified asprioritya thein Graf review 2004. of askedhave management We ensureto that usersare encouraged navigateto externalto sitesandwill we closely monitor progress. weakness. There is little horizontal navigation, navigation, horizontal little is There weakness. andthe BBC’s internal search engine is ineffective.notethat management We is tryingquestionedareas.bothimprove to We whetherthe BBC should beproviding a mainstreamexternal search engine, and we askedhave management reviewto its future. managementcontrol insufficiently strong. Financialaccountability was ineffective: the truespendinglevel of only became known to licence fee payers. are:areasThechange see wherewant to we viewthe BBC investment thein service is reasonablea bbc.co.uk the top ten destinations for UK users.

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“T Contributor to research for the BBC Trust review of bbc.co.uk contributiontheto delivery the BBC’sof publicpurposes. Its performance is particularlystrong thein areas sustaining of citizenship,promoting learning, representing theUK and its nations, regions and communities,bringingand of the world to theUK and the UK to the world. In our By providingBy news and other content high qualiof Audiencesdescribe it asstandards a setter andasthe one bestof sites thein world. Scoresqualityfor support this. During the periodunder review nearly two-thirds of itsusers beenhave ‘high approvers’ and the site’sadvocacy rating, expressed asNet a Promoterscore, higheris than most other UK sites surveyed. We were struck We highlyhow by users value thesite i for the public value yardsticks reach, of quality, impactand valueIts money. for reach grewdespite strong competition. Itthe is onlyBritish site consistently among the top ten destinations for UK users. In the three years that we reviewed bbc.co.ukit We reviewWe each BBC service in depth at leastonceevery five years. 2007/08 In reviewedwe bbc.co.uk, looking itathow performedagainst its service licenceand whetherits licenceshould berevised to reflect users’ needs and changes in the market.Inbroad terms foundwe bbc.co.uk beantoexcellent service, highly valued by itsusers, and meeting most its of service licencecommitments. There were, however, areasthat concerned andus where wantwe to see change. BBC.Co.UK S

BBC PERFORMANCE 28 BBC PERFORMANCE 29

MILLION MILLION

especially with people who who people with especially

ave raised ave some specific ly efficient, but also appropriate BUSIneSSeS BUSIneSSeS

BBC Annual Report and Accounts 2007/08

£347 £347

lICenCe Fee ColleCTIon Thefinancial health of the BBC depends on collectingthe licenceefficientlyfee and effectivelyand keeping evasion within bounds. that note to pleasedare we past year the Over the combined cost collection of and evasion is lowerthan the previous year aspercentage a gross of licenceincome.fee However evasion itselfhas remained steady with at5.1% the fall beingdriven reductiona by collectionin costs. collection the sure make to duty a has Trust The process is not on an is this that recognise We proportionate. and have We emotions. strong arouse can that issue begun a review to ensure the right balance is being struck between the need to raise the avoid to need the and revenue maximum heavy-handedness, not do therefore and set television a own not do findings our report to expect We licence. a need 2008. of end the by CommeRCIAl are pleased We that BBC Worldwide onis trackmeetto the financial targets set in its five-yearTrust plan which the agreed in March During 2007. 2007/08 it generated revenues million 2006/07) million (£810 and£916 of million2006/07) (£111 million profits£118 of before interest and tax, both ahead budget. of notehowever that someWe investment activitywas put back2008/09 to which is expectedbereflectedto lower in profits in that year. BBCsix-year strategic plan. Asreport we h we pageon 28 the concernsabout with the Executive strategic and financial oversightof the service bbc.co.uk In the coming year we will expect forecasting and reportingrobust more see to service. by spend of The value of annual savings achieved over the last three years.

SeRvICe

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accountantsKPMG reviewto the resentone-offa benefit rather

ime,linked savings serviceto

way costsway are classified so that all appropriate costsare included servicein licencebudgets future.in Our newbaseline budgets eachfor service2008/09,for issued 2008,Mayin take thisaccount of work and also reflect the efficiency savings we expect the Executive to makeand the newinvestment priorities the of PeRFoRmAnCe reportedhave We elsewhere (pagehow 24) BBCservices performed termsin their of content.All the services workalsoto have withinthe budgetary limits set out theirin servicelicences. However the financial results reportedservices Partshowinthat 11 Two exceededtheir budget limits 2007/08.in We werepleased that theseone of ‘breaches’ wasfactin anunderspend duegreater to efficiencies being achieved than initially forecast.thein main, However, the overruns reflect someconfusion about to allocate how costsbetween content and non-content spending.Spending itemson suchas central infrastructureand support, and development activities are not included in content spendand fall outside the service licence budgetaryregime. Inorder resolveto this issue askedwe the independent lICenCeS lICenCeS thanrecurrenta saving. Insetting ournew efficiency target have, we thefor first t performanceensureto that cuttingin costs donotcompromisewe have quality.on We establishedclear definitions to as what constitutesefficiency savings and the baselines againstwhich savings will bemeasured. In drawndoinghave we so guidanceon available fromthe wider public sector and adviceon fromthe National Audit Office. £4 millionthe savingsof £4 came from property salesand rep The Trust is reviewing the arrangements for the collection of the licence fee.

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PeRFoRmAnCe AgAInST S Ournewefficiency target for the BBC takes effectfrom 2008/09. This past year marked thefinal phase of the BBC’s previous three-yearobjective deliverto annual cash savings £355 of million. The Executive reports itson performance against this target in itsreview Part(pagein 84). were Two We disappointedthat the Executive didnotmeet thetarget, falling short £8million, by although thesavings they didmake are still significanta achievement.The shortfall expectedis beto madetheupin coming years from actions alreadynotethat some We under way. A Thelicencesettlementfee announced the by governmentJanuaryin 2007 gavethe BBC the advantagecertainty of about its income for thefollowing sixyears, but it also posed some problems.The settlement was lowerthan theExecutive hadhoped, and it couldcreate difficulties inflationif worked We rises. with budgets and plans of review a on Executive the andapproved newsix-yeara strategic plan thefor BBC (seepage 17). This includes a challenging target 3% of efficiencies each year releaseto cash from existing operations. Thesesavings, added theto increased income expectwe the BBC’s commercial operations produce,to should allowthe BBC meetto compromise any without expectations audience quality.on The review has also enabled tous steerfunds areasto seewe as priorities. We willclosely monitor the performance the of BBCagainst these plans.

performance AsTrustees arewe responsible overseeingfor thefinancial and business performance of the BBC.keepclose watcha theonWe financial needsthe BBC,of ensurewe the BBC deliversandvaluereview we money, for the performancethe BBCof against its financial targetsand objectives. Financial and business and business Financial FoR T

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TeChnologIeS A DIgITAl SWITChoveR h TheBBC requiredis the by government to providehelpcertain to groups within the publicwhofind may the switchover digitalto televisionparticularly hard. The help which theBBC must provide, and the people eligible receiveto this help,been have determined by thegovernment but ittheupto is BBC runto thehelp scheme. DelIveRIng Thepublic purposes the BBCof include a dutytaketo leadinga role thein switchover digitalto television within the UK andhelp to delivertheto public the benefit of emerging technologiesand services. report We below someonthe waysof the BBC responding.is On page we look 27 at the BBC’s online servicesand consider serviceshow need to adapt and change in response to new technologies. bepublished. The report into talent costs is available on our website. TheTrustalso acknowledged that whilst not alltalent wo BBCshould offer something value of allto audiences.There were,areas however, whereBBC performance couldbeimproved andwhere better value couldbeachieved licencepayersforfee someitsin of talent deals.The Trustbelieves there needs beto morea consistent and systematic approach gatheringto independent data and subjecting dealsmoreto rigorous challenge. The BBC shouldbeprepared and equipped walkto fromaway deals that donotoffer goodvalue. Thismeans it needs domoreto bringto on newtalent. The report also highlighted areas suchas some parts network of radio and newsand current affairs where the Executive will be considering their talent strategy. TheTrustUnit will carry out reviewa of progressJ by The in improvements

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fees – andfees– has strengthened these systems in recent years. Therewas evidenceno the BBCof paying abovethe marke Therewas evidenceno that the BBC wassystemat talentmarket. Where high rates inflation of docurrently seem existto thein BBC, this largelyreflects marketforces work at in rapidlychanging UK media markets. TheBBC has systems ensureto it achieves valuemonfor talentwhen competing with rivals. Insome casesthe BBC might wellbepaying less than themarket price.

Limited,reported Junein 2008. Itsmain findings were: * * * BBC TAlenT C Inaddition ourtoformal programme value of moneyfor reviews, Novemberin 2007 the Trustcommenced studya the coston-airof of andon-screen talent. Concerns hadbeen raisedthat the BBC was using its guaranteed incomeoverbidto talent,for thereby raising coststhefor industry aswhole a and the publicwere also asking questions about the feesbeing paidsome to BBC performers. Thestudy, carried out independent by consultants websiteand summaries are included in theshaded thison boxes and pageon31. Additionally we commissioned a review in-house of commissioning that– is, making programmes using the BBC’s own staff. We thisreview thein summer publishing be will 2008and will report iton next year. During2007/08 completedwe three suchreviews

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“ Sir Michael Lyons, BBC Chairman, discussing the May 2008, andarewe content that the Executive’s appropriateresponse.an areactions We accepted the NAO’s recommendations. recommendations. NAO’s the accepted We discussed We t However, the review However, made some recommendations for change. These included continuing to develop the use technology of cutto administrative costs;getting better deals from suppliers negotiating by more central contracts andreducing the number suppliers of where spending is low of value; and strengthening the way the BBC assesses itsprocurement performance starting by to measure user satisfaction. Thefound thatNAO overall the BBC hadvery goodp ThemillionBBC goodson spent £531 andservices 2006/07in andasked we examinetothe NAO the thisway spendingmanaged.is vFm S vAlUe FoR money RevIeWS Licencepayersfee rightly expect the BBC to spendevery poundtheir of licencewisely,fee dutya andhave we under the Charter to ensurethe BBC achieves value moneyfor in theitway fulfil spends thethis licencefee. To dutycommissionwe and publish independent (VFM)money valuefor reviewsconsultationin withComptrollerthe AuditorGeneraland – NationaltheAuditOffice of headthe (NAO). reviewsTheare carriedor NAO the outby other independent agencies.

BBC PERFORMANCE 30 BBC PERFORMANCE 31

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and it has achieved this by offering the best possible signal and picture quality. However, established, well now is Freeview that given (partly growing is spectrum for demand and the Freeview), of success the of result a as should BBC the that concluded review suggested review The policy. this reconsider that the BBC should be prepared to make and capacity spectrum between trade-offs picture quality in order to ensure that competing for effectively used is spectrum demands. service responseInBBCthe Executive hasoutlined in its to plans spectrum of use new throughof use the technologyhasagreedcarryand to out consumer research on the picture quality BBCservices of DTT. on The vFm Spectrumvaluablea is resource and the BBCuses significant amount to transmit its analogueand digital terrestrial television andradio services across the UK. asked We Deloittelooktoefficiently athow Touche & andeffectively the BBC uses spectrum withthe main Digitalfocuson Terrestrial Television (DTT) also known as Freeview. waspriority BBC’s the that noted review The to encourage vie Cumbria, in 2007.

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workthrough independent representation theon project governance board; putto in placeindicators measureto the value for themoney BBC’sof £200 million funding for Digital UK; and to incorporate the lessonsfrom the Copeland switchover in theprocurement the nationalof Digital Switchover Help Scheme. with recommendations these discussed We Executive the vFm Digitalswitchover, which began Copelandin with Ulster, 2007in and will end 2012 in and London, Tees Tyne is a lengthy and complexproject involving other public and privatesector organisations. It will affect almostevery home thein UK andtake we ourduty ensureto its successvery seriously. Inorder assureto ourselves that the BBC theinis best state fulfilto this duty, we askedexaminetothe NAO the BBC’s preparedness for digital switchover. recommendations key three made NAO The – all which of the BBC accepted. These were:strento proposed actions are an appropriate response.BBC’s the scrutinise to continue will We will we and switchover digital for preparations commission a review the of Digital Switchover Help Scheme around 2009 to monitor the operational value for money the of scheme. DIgITAl DIgITAl Over go digital over the period to 2012.

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FReeSAT Thelaunch Freesat of 2008Mayin marked an importantstep forward makingin choicein accessdigitalto services available everyoneto thein UK. Freesat satellitea is platform venturejointbetween a developedinBBC the andother UK broadcasters, offering widea rangedigital of radio,TV, interactive services andHDTVone-off a for – payment for equipment and installation. It should increase digitaltake-up analoguein homes including thoseoutthe Freeviewof coverage areas, andoffer free-to-viewa digital service in perpetuity.expect We the number services of availableviaFreesat riseto rapidly moreto than200 2009.Early by indications suggest that the service will be popular. TheTrust’smain role relationin theto Digital SwitchoverHelp Scheme holdinginis the BBC Executiveaccounttoensuring for that value moneyachievedfor is thein operation the of that end,scheme. Februaryin To 2008 the Trustset success criteria thefor scheme whichit will usemonitorto and assess the scheme’sperformance throughout the of life thescheme, to ensure that licence fee payers’ money is spent in the most cost-effective way. Thehelp scheme designedis helpto those groupsmost likelydifficulty have to makingin theswitch digitalto television. The scheme openis anyonetowho agedover, oris 75 seriouslydisabled, blindor partiallyor sighted. Itfundedis ring-fenceda by allocation of theBBC’s TV licence(estimatedfee costs million), £603 and run the by BBC through 100% BBC-ownedsubsidiary. a Limited, DSHS TheBBC responsibleis deliveringfor the scheme,although day-to-day operation is contractedoutthird a to party, eaga plc. Member of public at Trust workshop discussing the BBC. 32 BBC AUDIENCE VIEWS AUDIENCE BBC 7 The number of formal public consultations the Trust held during 2007/08 on issues ranging from new service proposals to a new complaints framework for the BBC.

Even though we’ve made real progress in giving a greater voice to the public we need to do more. The public want to know they can get involved and they want to know what action has been taken by the Trust as a result, so they can assess whether it’s worth their time and effort.

Sir Michael Lyons Chairman, BBC Trust, speaking at the Voice of the Listener and Viewer’s annual conference 29 November 2007 BBC Annual Report and Accounts 2007/08

BBC AUDIENCE “I f people had more of a say, 33

VIEWS they’d feel more content with VIEWS AUDIENCE BBC the licence fee.”

104 people from across the UK provided us with Member of public at Trust workshop discussing their views. the BBC.

lISTenIng To AUDIenCeS were as follows: the strength of the relationship between The Trust has a duty to stay in close contact different audiences and the BBC. with licence fee payers, and to take their views * Some aspects of BBC values and content into account when making decisions. A good are highly regarded: people trust the BBC This confirmed that the BBC continues to part of our work is driven by the extensive more than its commercial competitors do best among better off older audiences. audience research we commission1, as well – the independence of BBC news is Conversely the BBC has more challenges as by personal contact with licence fee payers particularly highly valued – and the BBC reaching younger audiences, especially less at events around the UK and by such things is considered educational. Audiences can well off younger audiences, and this problem as Trust members taking part in local radio identify distinctive content in BBC drama appears to have worsened over the past five phone-ins. We also carry out regular public and factual – either because of its high years. The BBC also faces a challenge to reach consultations on key issues affecting the BBC, quality, or because other broadcasters do less well off middle aged audiences. Black and we are assisted in our work by four not provide this output to the same extent. and Asian audiences are less likely to feel the Audience Councils – one for each of the Audiences want more family programming, licence fee is good value for money than white nations of the UK. more originality, and better provision for audiences – to some extent this may reflect young people. age as well as ethnicity, as black and Asian mAKIng AUDIenCe vIeWS CoUnT audiences are, on average, younger than the In addition to the work described above, and * Audiences were upset and disappointed population as a whole. our annual survey of licence fee payers, this by the BBC’s breaches of trust but also year, we also asked the public to contribute felt that the BBC’s transparency in dealing The research also showed that levels of directly to our annual assessment of BBC with the problems had limited the damage, approval vary according to where people performance. We did this through a deliberative and it was not seen as doing the BBC live in the UK. Although the BBC’s share of research workshop held in Birmingham permanent harm. While they valued the television viewing is much the same in all parts on 7 April 2008. In deliberative research, BBC as an institution and for some of its of the UK, people living in Scotland are much participants are given an insight into the content, they did not feel the value was less likely to feel the licence fee is good value background of particular issues and then increasing – this reflected their concerns for money than other UK audiences, and asked to come to conclusions. over trust and originality, coupled with people in Northern Ireland and Wales are the rising cost of the licence fee and the less likely to feel the licence fee is good value We brought together 104 people from across proliferation of choice elsewhere. than audiences in England. the UK, who together formed a representative sample of the population, and asked them to You will find quotes from people who took On the positive side the BBC does better give their assessment on a range of issues. part in the research throughout the report. than other broadcasters on measures of These included how the BBC is performing audience affinity: nearly 77% agree they against its strategic priorities and objectives; SeRvIng All AUDIenCeS would miss the BBC if it were no longer how far it has succeeded in increasing the It is an important principle for us that the BBC there, compared with just over 71% for ITV, originality and quality of its output; how far must deliver something of value to everyone and 64% for Channel 4. However, looking it has been able to restore trust in its output; in the UK. However, we know that the BBC at the results in more detail, it is clear that and how far it has managed to convince does better with some audiences than with younger audiences and black audiences also sceptical audiences of its value while maintaining others. One of the main objectives we have feel a strong affinity with Channel 4 and Sky. the affection of those who value the BBC set the Executive is to increase the value the Our research will feed into the Executive’s highly. Before coming to their conclusions, BBC is seen to provide for those who plans to increase approval among audiences participants heard presentations from the currently place a low value on the BBC while who do not place a high value on the BBC. Trust, took part in discussions, and were able maintaining the position with those who value to put questions to the Trust Chairman, the BBC highly. To help us understand these Sir Michael Lyons. The main conclusions issues better, we commissioned research on

1 Results of our research can be found on the BBC Trust website. 34 We will always explain the

BBC AUDIENCE VIEWS VIEWS AUDIENCE BBC reasons for the decisions we make and how we used the information provided by % the public in reaching our decisions. 95 BBC Trust promise to audiences. Vice chairman Chitra Bharucha finding out The percentage of respondents who wanted what children in Northern Ireland thought the BBC Trust to report back on its activities about the BBC. to the public.

our Promise to you Other advice from the public that we have AUDIenCe CoUnCIl englAnD In 2007, after an extensive public consultation, adopted includes being open and transparent Audience Council England commended the we published Our Promise to You1, which sets when reporting back to the public the content and sense of identity in much of BBC out how we will engage with audiences. outcomes of our engagement; writing our English Regions’ output, which has built public Our consultation showed that only a small consultation documents in plain language; value and engaged strongly with audiences. proportion of people are actively interested and not placing too much reliance on online in giving feedback to organisations – this is a methods of consultation. People also told However, the Council criticised the impact of widespread challenge, not something that just us they only wanted to take part in our the BBC’s reprioritisation plans on BBC English affects the BBC. What participation there is consultations if it was clear what might Regions. Plans for four new local radio stations tends to be at a local level on issues affecting change as a result, and we have undertaken had been abandoned, and it was felt that everyday life such as local council services, to make the exact scope of our projects clear this decision, together with other cutbacks, schools and hospitals. Only 8% had ever given at the start. There was also concern that we would reduce the BBC’s ability to reach out feedback to the BBC. should not give interests groups too great an to communities and underserved audiences. influence, and we have promised not to allow It was hoped that the BBC Local proposition However, most people we consulted felt such groups to dominate discussions and to would, if approved, help regain lost ground. that the Trust, because it represents consider their views alongside what we learn audiences, should nevertheless create as from open consultation and research. The Council felt there was still much to be many opportunities as possible to encourage done to ensure that England in all its diversity the public to get involved with its work. Building on this work, we are developing a was reflected at the national level. The BBC Unsurprisingly, we found a much greater series of measures to assess the effectiveness networks were also criticised for continuing willingness to take part in decisions directly of our engagement work and we will report to draft in network presenters to report on relating to value for money and services progress in future annual reports. regional matters, often inaccurately. than to be involved in compliance and regulatory matters. AUDIenCe CoUnCIlS There was high praise for BBC Local Radio The BBC Charter provides for four Audience for its strong links with local communities The consultation revealed low awareness of Councils – one for each nation. The Councils and its ability to reach audiences sometimes the Trust and its work – but also a desire for advise the Trust on how well the BBC is underserved by other BBC services. BBC greater understanding, which in turn, it was promoting its public purposes in their Local Radio’s Connecting in a Crisis work felt, might encourage more people to take respective nations. during the summer and autumn floods of part. We have taken this on board and will 2007 prompted particular appreciation. work to increase the visibility of what we do Key parts of the Trust’s work over the past in order to encourage public participation. year were stimulated by concerns raised by The Council’s audience engagement work People also told us that we should make it as the Councils. These included the Nations’ events included a series of meetings with easy as possible for people to engage with the Impartiality Review (see page 18) and the young people which gave Council members Trust, and we have undertaken to make our Network Supply Review (see page 19). The a deeper understanding of young people’s methods of engagement practical, convenient, Councils also made important contributions expectations of the BBC and of other and easy for those taking part. to Trust consultations in the course of the year, broadcasters. Council members also engaged informed by the many audience engagement with family groups to explore what they look events that each Council carries out. for in entertainment programming – this will be a focus for further work in the coming year. Each Council presents its annual report – briefly summarised below – at a special meeting of the Trust at which the issues that the Councils wish the Trust to progress over 1 the following year are considered. 1 The Councils’ reports are published as part of each nations’s Annual Review document and appear on their websites. BBC Annual Report and Accounts 2007/08

The Audience Councils bring the 35

diverse views of communities VIEWS AUDIENCE BBC from throughout the UK to the Trust’s attention. 8 An Audience Council Scotland event in The number of events held by the Audience St Andrews, Fife. Council for Scotland when seeking views during the Gaelic Services’ public value test.

AUDIenCe CoUnCIl SCoTlAnD AUDIenCe CoUnCIl WAleS AUDIenCe CoUnCIl noRTheRn IRelAnD Audience Council Scotland reported that BBC Audience Council Wales commended BBC Audience Council Northern Ireland has Scotland had performed strongly against the Cymru Wales for its success in gaining identified enduring concerns about the Public Purposes in a year of many challenges, Network commissions, especially in factual, treatment and priority given to coverage including the Scottish general election and music and drama. However, the Council felt of the devolved administration and the the move into the new BBC Scotland HQ at much remained to be done before Wales wider political, legal, economic and cultural Pacific Quay in Glasgow. was adequately reflected in Network output. arenas. The Council has welcomed the The Council continues to be concerned Nations’ Impartiality Review, in which it BBC Scotland provided comprehensive, about the inadequate reflection of devolution participated fully. It considers there is more high-quality coverage of the general election in Network news and current affairs and progress to be made in this area for audiences and played a useful role in explaining the new will monitor action to address these in Northern Ireland. PR voting system introduced for the Scottish concerns once the Nations’ Impartiality council elections. However, the Council Review is published. The Council also remains concerned about remains unconvinced that network coverage the low number of hours and spend of local of Scottish affairs is always sufficiently accurate, The Council welcomed the launch of Freesat, commissions for network television. In the comprehensive, or given due weight. which greatly increases the availability of coming year it will work to increase the digital television in Wales; but serious concerns volume, value and sustainability of locally BBC Scotland produces strong output across remained about the availability on DAB of produced network programming, taking a range of genres, including learning, the arts, Radio Cymru and Radio Wales, especially account of cultural representation issues, drama, comedy, sport and factual. Audience in north-west Wales and the South Wales audience benefits and the development needs use of new technology, especially the internet valleys. The lack of a good FM signal for Radio of the creative industries in Northern Ireland. and broadband, has clearly been stimulated Wales made this an even more serious issue by new BBC Scotland content in news, sport, – one consistently raised by the public at The The Council continues to be concerned about education and music. Council’s accountability and outreach events. the limited representation in network output of life in Northern Ireland. The Council will Approval of the Gaelic Digital Services (see The Council was pleased by the success of work to ensure that high-quality, creative and page 45) was an important step forward. the first year fo the three-year BBC-S4C distinctive content, relevant to and reflective Progress was made in addressing other key strategic partnership. The BBC is obliged to of the needs of diverse audiences in Northern issues – particularly the level of network provide ten hours a week of Welsh language Ireland and across the UK, is available on commissions from Scotland, and coverage programming for transmission by S4C paid all platforms. of Scottish affairs on network news – but, as for from the licence fee. The Council considers delivery has not yet begun, these will remain the fulfilment of the BBC’s PSB Welsh language The Council recognises audience concerns priorities for the coming year. New priorities responsibilities central to the renegotiation about the limited availability of digital services for audiences in Scotland include coverage of of the BBC-S4C strategic partnership. as well as the acknowledged digital divide national football and improved radio in Northern Ireland. The Council will work to reception in the Highlands. The Council considers it vital that any develop digital access, ensuring that the needs successor service to BBC jam provides of Northern Ireland audiences are met. Much of the Council’s audience engagement material in the Welsh language as well as work was concerned with the Gaelic Services’ English language material tailored to the public value test. Eight events were organised curriculum in Wales. and awareness of the Trust is now high in the Gaelic world. 36 BBC GOVERNANCE GOVERNANCE BBC 25% The percentage of the public who say they know at least a little bit about what the Trust does. (Holden Pearmain.)

The BBC Trust, the governing body of the BBC, exists to represent the interests of the licence fee payers and to make sure the BBC is run in their interests, not those of its managers. We guard the editorial independence of the BBC and make sure it is beholden to no outside interest, whether political or commercial.

Sir Michael Lyons Chairman, BBC Trust BBC Annual Report and Accounts 2007/08

BBC “ As Trustees we do not run the 37

GOVERNANCE day-to-day operations of the GOVERNANCE BBC BBC. Our job is to make sure that the Director-General and his staff have clear priorities and that they use their resources well.”

Chitra Bharucha, Vice chairman, BBC Trust.

Delivering value for money

The BBC Trust began work on 1 January 2007 As Trustees we oversee the BBC’s financial ThE TruST uniT – part of the wide-ranging BBC governance and business performance. We have ultimate The Trust is supported in its work by the changes introduced by the new Charter. responsibility for the BBC’s stewardship of Trust Unit, which provides independent The Trust, as the governing body of the BBC, its resources including, most importantly, and objective advice, calling on outside is quite separate from the Executive which the money the public pay for their television experts when necessary. The Trust Unit manages day-to-day operations. The Trust licences. We keep a close eye on the financial is independent of BBC management, its represents the public and makes sure the needs of the BBC and ensure that the BBC Director is appointed by the Trust and its Executive delivers the high-quality public delivers value for money in the way it spends staff are outside the BBC management service programmes and services the public its income. chain. The Unit is made up of professional want, and also ensures that the BBC is staff with expertise across a range of accountable and open. The Trust protects We do this in two ways. We keep overall disciplines who advise Trustees on the the independence of the BBC from high-level budgets and plans under continual conduct of their duties and support their commercial or political influence. review. Each year we take a strategic look at work in key areas. the BBC’s finances and, once our questions As BBC Trustees we are committed to have been answered and any changes we BBC management chain. The Unit is made up upholding the highest standards of corporate want have been made, we approve the BBC’s of professional staff with expertise across a governance. In this section we set out our budget and its long-term financial plans. We range of disciplines who advise Trustees on assessment of our own performance and also may set management financial objectives to the conduct of their duties and support their how our governance activities have served guide the way they manage their operations. work in key areas. the public: The Trust’s Finance and Strategy committee plays a key role here. The committee’s We set out on the next page the Trust’s Delivering value for money (page 37) membership is set out on page 48. expenditure and the external auditor’s report on this. This year the direct expenditure Serving all audiences (page 42) We also regularly look in detail at particular incurred by the Trust represents 0.34% of the areas to ensure they deliver value for money. BBC’s public service expenditure. The Trust Ensuring impartiality (page 43) We have summarised the findings from our has set itself the target of keeping expenditure specific value for money reviews undertaken at or below 0.35% of the BBC’s public service BBC’s economic power (page 45) in the past year on page 30. expenditure over the next five years.

Other regulatory information (page 48) The duty of the BBC to deliver value for The Trust reviewed its own performance to money applies to the Trust too. To help ensure consider how effectively it is operating and Part Two of the BBC’s Annual Report this, the Finance and Strategy committee meeting its aims. The results of the review provides more information on how the oversees the Trust’s own financial affairs are set out on page 39. Executive has undertaken its corporate and manages any conflicts of interest governance responsibilities. involving Trustees. The Trust oversees the policy that sets the pay and benefits of the Executive. The Trust The Trust is supported in its work by the manages this through its remuneration and Trust Unit, which provides independent and appointments committee, membership objective advice, calling on outside experts of which is shown on page 48. The Trust’s when necessary. The Trust Unit is independent report on remuneration, including Trustees’ of BBC management, its director is appointed own fees, is on pages 39–41. by the Trust and its staff are outside the 38 “ The cost of the licence fee just

BBC GOVERNANCE GOVERNANCE BBC keeps going up and up and the programmes are still the same, which means the value % is getting worse.” 0.34

M ember of public at Trust workshop discussing Dermot Gleeson, Trustee, listening to the calls to The proportion of the BBC ’s public services the BBC. BBC Information in Belfast. expenditure which is incurred by the Trust.

STaTEmEnT Of TruST ExpEnDiTurE TruST hEaDCOunT Our responsibility, in accordance with the terms of our engagement letter, is to form an 12 months 3 months 31 March 31 March independent opinion, on the basis of the work 2007/08 2006/07 Note 2008 2007 Note £000 £000 1 EFT No EFT No performed, and to report our opinion to the Trust. Our examination was substantially less Trustee remuneration 1 642 209 Trustees 2 12 11 in scope than an audit. Staff costs 2 4,526 865 Trust Unit staff 3 61.0 42.0 Other operating costs 3 6,741 1,564 Other staff 4 9.8 21.5 Our report has been prepared for the Trust solely in connection with the Charter. Direct Trust expenditure 4,5 11,909 2,638 Notes Our report was designed to meet the agreed Trust expenditure as 1 EFT means equivalent full-time numbers. requirements of the Trust and particular % of BBC UK public 2 The current chairman was appointed on 1 May 2007. features of our engagement determined by services spend 0.34% 3 T rust Unit staff are those employed directly by the Trust the Trust’s needs at the time. Our report Unit. Of these, 12 are based outside London providing should not therefore be regarded as suitable Ofcom regulatory fees 6 3,253 875 support to the work the Trust undertakes in Wales, to be used or relied on by any party wishing Ofcom MIA fees 7 491 620 Scotland, Northern Ireland and the English Regions respectively. These 12 staff transferred to the Trust to acquire rights against us other than the Total Ofcom fees 3,744 1,495 Unit’s payroll on 1 April 2007. Previously the Trust was Trust for any purpose or in any context. Any reimbursing the cost of these staff. party other than the Trust who obtains access 4 O ther staff are staff who provide support to the Notes 12 regional Audience Councils but who are not direct to our report or a copy and chooses to rely 1 T he remuneration for previous period includes five employees of the Trust Unit. The costs of these staff are on our report (or any part of it) will do so at months of remuneration for the eight trustees who were reimbursed by the Trust. These staff are all based outside its own risk. To the fullest extent permitted appointed with effect from November 2006. Prior to the London. (The prior year number includes the 12 staff formation of the Trust the BBC had a Board of Governors. by law, KPMG LLP will accept no responsibility who transferred to the Trust Unit payroll on 1 April 2007 or liability in respect of our report to any The remuneration of the Governors for the first nine referred to in Note 2 above.) months of 2006/07 is shown within the remuneration other party. tables in Part Two. rEpOrT Of KpmG LLp TO ThE BBC TruST 2 Staff costs include wages and salaries, social security In our opinion, the expenditure as shown in costs and employer pension contributions. (‘ThE TruST’) the Trust expenditure statement, has been 3 O perating costs include direct expenditure on activities In accordance with the terms of our accurately extracted from the books and such as research, legal advice and other specialist engagement letter dated 3 June 2008, advisory services. records of the Trust on the basis of the stated we have examined the above expenditure 4 The expenditure shown above for the Trust represents assumptions included within the Notes to the direct external spend by the Trust. Additionally the statement (‘the Trust expenditure statement’) Trust expenditure statement. Trust made use of shared services provided by the BBC for the year ended 31 March 2008 which has which included the use of property, finance, HR and been prepared, further to the requirements information services. KpmG LLp of the BBC Charter dated October 2006, 5 O f the Trust expenditure, £1,595,000 relates to spend Chartered Accountants by the Trustees of the Trust and is their on the Trust’s activities in the four nations which primarily Registered Auditor, London covers support for the four Audience Councils and the sole responsibility. The Trust expenditure 19 June 2008 12 regional Audience Councils (2006/07 £244,000). statement has been prepared by the 6 O fcom allocates its costs of television and radio regulation Trustees of the Trust applying the recognition between the BBC and the commercial channels. The Trust Unit pays the BBC’s share of that allocation. and measurement requirements of UK 7 O fcom MIA fees cover Ofcom’s direct and indirect costs in Generally Accepted Accounting Practice. undertaking the Market Impact Assessment for the Public Value Tests undertaken in the period. Market Impact Assessments completed in the year included HDTV and the Gaelic language service. BBC Annual Report and Accounts 2007/08

“I didn’t realise the Trust In its first year the Trust 39

existed. Who pays their has started to establish GOVERNANCE BBC salaries?” itself as an independent, evidence-based and open body representing licence fee payers.

Member of public at Trust workshop discussing Young people giving their views on the BBC to the BBC. Trustees in Belfast.

TruST pErfOrmanCE aSSESSmEnT reviewing the Trust’s business calendar. from home to work. Any tax arising on The Trust formally reviewed its own The Trust also felt that it could develop Trustees’ expenses is settled directly by the performance and the performance of more ways of engaging with stakeholders. BBC. The higher taxable benefits for the its committees following its first full year Chairman and Vice Chairman reflect their of operation. This is in line with its own Another evaluation exercise will be carried additional time commitments and duties, Standing Orders and with best practice out in early 2009 by external advisers and the their home locations and the requirements as set out in the Combined Code on results will be published in next year’s report. to travel to their main BBC place of work. Corporate Governance. TruST rEmunEraTiOn rEpOrT Since July 2007, the Chairman has had The review, led by the Chairman, Sir Michael This report sets out the remuneration part-time access to a BBC driver and car Lyons, looked at how effectively the Trust is received by the members of the Trust, the when working in London on BBC business. fulfilling its remit and how well its business operation of the Trust’s Remuneration and processes are operating, and assessed the Appointments committee and its duties in The table on page 40 shows the fees and contribution of individual Trustees. The respect of Executive Board remuneration taxable benefits received by the Trustees process involved a structured questionnaire strategy, the Director-General’s remuneration during 2007/08. completed by all Trustees, individual and the remuneration of the non-executive performance evaluation by the Chairman and Directors. The BBC is exempt from the pensions discussions at Trust meetings. Trustees were requirements of the Directors’ Remuneration Under the terms of his appointment, the also able to comment on the Chairman’s Report Regulations 2002 and those of the Chairman is eligible to participate in a pension performance. The Chairman gave each Trustee Financial Services Authority, but this report scheme with benefits which mirror those of the results of their performance evaluation has been prepared as if those requirements the BBC Pension Scheme. Sir Michael Lyons and presented a report to the Trust bringing apply wherever the disclosure provisions has elected not to participate in this scheme, together the main themes, alongside an are relevant and applicable. The section hence the BBC has made no pension analysis of the questionnaires compiled by the on remuneration received by the Trustees contributions. The Chairman instead receives Trust Unit. Ways to improve performance is audited. life assurance at a similar level of cover to were agreed and are being implemented, and that of pension scheme members. In addition progress will be monitored during the year. mEmBErS Of ThE TruST: rEmunEraTiOn he receives private medical insurance cover pOLiCy at the same level of cover as BBC senior The Trust has made progress in its first full The members of the Trust receive a fee managers. Other than the Chairman, Trustees year of work in establishing the Trust as an determined by the Secretary of State for are not eligible to participate in the BBC independent, evidence-based and open body Culture, Media and Sport which is generally Pension Scheme. representing licence fee payers across the reviewed annually. On 1 April 2007, all UK. Meeting and committee structures Trustees in post received an increase to their are generally functioning well and enabling fees of 0.66% (rounded to the nearest £5), Trustees to contribute their individual skills as recommended by the DCMS. and experience effectively. All Trustees have demonstrated their commitment to the role, Trustees are additionally reimbursed for although the demands the work of the Trust expenses incurred on BBC business, for makes on their time are often extensive. example on travel or accommodation, in line with the Trust’s Code of Practice. Some of The Trust has identified areas where some these out of pocket expenses, together with changes could improve its effectiveness. some support services booked centrally by These included setting aside more time for the Trust Unit, are classed as taxable benefits strategic discussions at Trust meetings and by HM Revenue and Customs, such as travel 40 “T he Trust has already proved The value of the remuneration

BBC GOVERNANCE GOVERNANCE BBC that it has an important role fees received by the Trustees to play in maintaining the high is fixed by the DCMS but paid standards of public service out of BBC funds. broadcasting in Britain and I am glad to serve on it for another two years.”

Richard Tait, Trustee, on being reappointed by Richard Tait, Trustee, in Glasgow. the DCMS for a further two years, 11 April 2008.

rEmunEraTiOn rECEivED The remuneration of the members of the Trust during the year is shown below:

Total Taxable Total 1 Nov 06 – Appointment term Fees benefits 2007/08 31 Mar 073 £000 £000 £000 £000 Start date End date

Trustees Chairman Sir Michael Lyons1, 5 128 35 163 – 1 May 2007 30 Apr 2011 Vice chairman Chitra Bharucha2 81 22 103 65 1 Nov 2006 31 Oct 2010 National Trustees Alison Hastings (England) 40 2 42 19 1 Nov 2006 31 Oct 2010 Rotha Johnston (Northern Ireland) 40 – 40 17 1 Nov 2006 31 Oct 2010 Janet Lewis-Jones (Wales) 40 1 41 18 1 Nov 2006 31 Oct 2010 Jeremy Peat (Scotland)4 40 1 41 11 1 Jan 2005 31 Dec 2008 Trustees Diane Coyle 35 1 36 16 1 Nov 2006 31 Oct 2010 Dermot Gleeson4 35 1 36 9 1 Nov 2000 31 Oct 2008 Patricia Hodgson 35 – 35 15 1 Nov 2006 31 Oct 2010 David Liddiment 35 – 35 15 1 Nov 2006 31 Oct 2010 Mehmuda Mian Pritchard 35 – 35 15 1 Nov 2006 31 Oct 2010 Richard Tait4 35 – 35 9 1 Aug 2004 31 July 2010 Total Trustees 579 63 642 209

1 Sir Michael Lyons was appointed as Chairman on 1 May 2007 and his fees relate to the period 1 May 2007 – 31 March 2008. 2 Chitra Bharucha was Acting Chairman until Sir Michael Lyons was appointed and received fees for acting in that capacity from 1–30 April 2007. 3 The comparator figures for 2006/07 relate to the period 1 November 2006 – 31 March 2007 only as Trustees were appointed on 1 November 2006. 4 For their services as BBC Governors from 1 April 2006 to 31 December 2006, Dermot Gleeson, Jeremy Peat and Richard Tait were paid £26,000, £34,000 and £19,000 respectively as disclosed in the 2006/07 Annual Report and Accounts. The figures shown above for their fees for 2006/07 relate to the period January – 31 March 2007 only. 5 The chairman also received life assurance at a cost of £3,951 for the period. His private medical insurance cost £1,792 for the period; this is a taxable benefit and is included in the taxable benefits figure within the table.

Members of the Trust are not eligible for payments in respect of termination or compensation for loss of office.

Trustee terms of appointment The remuneration table also shows the terms of appointment for each of the Trustees. Richard Tait’s term was due to end on 31 July 2008 but in April DCMS announced that it had been extended until 31 July 2010. BBC Annual Report and Accounts 2007/08

The Trust decides the Remuneration should take 41

remuneration of the Director- into account the unique GOVERNANCE BBC General and sets the fees opportunities that working at for the BBC’s non-executive the BBC can offer. Directors.

Members of public at Trust research workshop. One of the principles governing executive remuneration set by the Trust ’s remuneration committee.

rEmunEraTiOn anD appOinTmEnTS ExECuTivE BOarD: rEmunEraTiOn * The remuneration framework should COmmiTTEE: COnSTiTuTiOn anD STraTEGy reflect the different labour markets OpEraTiOn The Trust’s remuneration and appointments for different posts The Trust’s Charter gives the Trust and the committee sets the remuneration strategy Executive Board specific responsibilities for the for Executive Directors which is operated * Executive remuneration should be remuneration of the Executive Board members. by the Executive Board’s Remuneration considered alongside remuneration committee. The strategy is intended to strategy for the BBC as a whole The remuneration and appointments offer rewards that attract, motivate and committee is a sub-committee of the Trust retain the key talent required to lead the The Trust’s remuneration and appointments and is responsible for setting the remuneration BBC and to deliver outstanding public committee will receive an annual report strategy for the Executive Directors, and for service broadcasting while recognising from the Executive Board’s Remuneration making recommendations to the Trust on the the BBC’s status as a publicly funded committee to assure itself that the salary remuneration (including the base pay and any corporation which must deliver value to and bonus awards made are in line with bonus) for the Director-General, and fees for the licence fee payer. The main elements the strategy the Trust has approved. the non-executive Directors. The committee’s of remuneration are base pay, annual bonus membership is shown on page 48. and pension. The Trust has responsibility nOn-ExECuTivE DirECTOrS: for setting the Director-General’s base rEmunEraTiOn pOLiCy The Executive Board also has a remuneration salary and bonus accrual in line with this The Charter gives the Trust the responsibility committee and its constitution and strategy and has assessed his performance for approving the appointments of the responsibilities are set out in Part Two. over the year. The salary and bonus non-executive Directors and setting the awards for the Executive Directors for policy for, and level of, their fees. In The meetings of the Trust committee are 2007/08 were decided by the Executive December 2007 the Trust approved the advised by members of the Trust Unit. Board’s Remuneration committee. The appointment, including the terms of the As required, the Director-General, the remuneration strategy and remuneration appointment, for an additional non- Director, BBC People, the Reward Director received are set out in Part Two. executive Director to join the five who and the Chairman of the Executive Board’s were already members of the Executive remuneration committee, attend for matters The Trust’s Remuneration and Appointments Board. The fees received by the non- relating to other members of the Executive committee has set a number of principles executive Directors during 2007/08 are Board. The Director-General is not present against which the strategy should deliver set out in Part Two; the level of these fees when matters concerning his own in the coming year. These are that: has not changed since they were initially remuneration are considered. appointed. In line with best practice, the * Remuneration should take into account Trust will review the level of fees every Complying with the 2006 Combined Code, the the unique opportunities that working other year. The first review will take place committee takes specialist advice from external at the BBC can offer in 2008 and take effect from January 2009. professional advisers on remuneration matters. The Trust committee has appointed Towers * The BBC should follow and not lead the Perrin to provide advice on remuneration market for executive pay strategy and market information as required. 42 As trustees we are responsible

BBC GOVERNANCE GOVERNANCE BBC for ensuring the BBC delivers high-quality services to all the people and all the communities of the UK. 13 Janet Lewis -Jones, Trustee for Wales, talking The number of phone -ins undertaken by Trustees with attendees at an Audience Council Wales on local radio during 2007/08 to hear local event in Cardiff. audience views.

Serving all audiences

The public is made up of many different Council members are licence fee payers who discrimination, promoting equal opportunity, groups reflecting such things as age, have an informed interest in the work of the and promoting good relations between geography, interests, religion and ethnic BBC, and an understanding of the interests, people of different racial groups. For each background. As Trustees representing the concerns and diversity of the audience in their area the BBC publishes an equality scheme public we work to understand everyone’s nations. Members are volunteers and do not and reports on its performance. The race, opinions and expectations. Informed by this have any professional link with the BBC. Each gender and disability schemes have recently work, we use our judgement to make the national Audience Council is chaired by the been updated and will be published on the decisions that set the BBC’s course. Trust member for that nation. A summary of Trust website. each Council’s annual report is on pages 34–35. One of our key priorities is to ensure the BBC The BBC has made good progress in delivers fresh, high-quality services to all the CEnTraL rELiGiOuS aDviSOry meeting its equality duties. Examples include people and all the communities of the United COmmiTTEE (CraC) consultations with disabled people and with Kingdom. We do this by looking in detail at In the previous governance arrangements, people from differing ethnic and cultural how the BBC is performing among different the CRAC advised the BBC and Ofcom backgrounds to ensure their needs are taken audience groups and using what we discover on religion-related polices and coverage. into account in digital switchover. TV Licensing to set challenges for the BBC in the future. Membership was drawn from the main has improved the accessibility of its television Christian denominations and other religions publicity through subtitling, and is making We use extensive audience research to prevalent in Britain. The Trust considered efforts to ensure that its marketing materials inform our work, and we have also consulted the future of CRAC at the end of 2007, and accommodate the needs and issues the public about the service licences and agreed that it did not sit well with the new experienced by different groups of people. purpose remits in which we set out what we governance arrangements. The only formal The Trust now conducts diversity monitoring expect from the BBC. You can find out more advisory bodies that the Trust has under the when it holds public consultations or stages about the licences and remits and how they Charter are the four Audience Councils; and public meetings; and we now also carry out help us govern the BBC on our website. under the new consultative model of the Trust, equality impact assessments when considering all stakeholders can have their say through work of a public nature. The Trust’s Audiences and Performance consultations on purpose remits, service committee oversees this work. In the past reviews, public value tests and other matters. EnSurinG a DivErSE wOrKfOrCE year it has discussed the performance of the CRAC may continue in some form as an in ThE BBC BBC’s public services with the Executive, advisory body to programme makers – this is As Trustees we are committed to ensuring and it has also had detailed oversight of the currently being discussed on the Executive side. the BBC develops a diverse workforce. in-depth service review of bbc.co.uk (see The 2007/08 report from the Executive page 28). The committee’s members are prOmOTinG EquaLiTy anD DivErSiTy on its arrangements for promoting equal listed on page 48. The BBC has duties under equality legislation opportunities shows that although progress in relation to its ‘public functions’ – such things is being made in some areas, there is still auDiEnCE COunCiLS as television licensing, the arrangements for work to be done, particularly where black Audience Councils are one of the key digital switchover, and some of the regulatory and minority ethnic staff are concerned. ways we ensure the views of the public are functions of the Trust. The legislation – the We will monitor developments closely. represented at the highest levels of the BBC. Race Relations Act, the Disability Discrimination There are four Audience Councils – one each Act and the Sex Discrimination Act – means in England, Scotland, Wales and Northern that in these public functions the BBC must Ireland – with the work of the Council in have due regard to eliminating unlawful England assisted by a network of 12 regional Audience Councils (see map on page 19). BBC Annual Report and Accounts 2007/08

As trustees we have “ Ensuring impartiality is a key 43

responsibility for guarding the priority for us. We have asked GOVERNANCE BBC editorial independence of the all programme areas – not BBC and making sure it is just news – to consider this.” beholden to no outside interest, whether political or commercial.

Trustee Mehmuda Mian Pritchard, member of Editorial Standards committee (Manchester September 2007).

Ensuring impartiality

Impartiality is one of the cornerstones of these accounted for just 0.045% of complaints format, it would have been impossible to BBC editorial values. The public value it and received by the BBC. avoid some degree of product prominence for demand it. It underpins the public trust in the West End show. Although some mistakes the BBC without which the BBC cannot The committee considered a number of had been made initially, the production team function. Impartiality depends on accuracy, impartiality complaints. Three of these related had taken steps to address them and it was balance, context, distance, even-handedness, to Horizon: Nuclear Nightmares, broadcast appropriate to give some latitude to innovative fairness, objectivity, open-mindedness, rigour, on BBC Two in July 2006, in which scientific programmes to put mistakes right. self-awareness, transparency and truth. It is evidence of the effects of nuclear radiation about breadth of view and completeness. was discussed without sufficient reference The committee receives reports from the to alternative opinions. The committee noted Executive on those breaches of the guidelines Ensuring the impartiality of BBC output is a the importance of ensuring the impartiality that the Executive itself has acknowledged. key priority in our work of upholding editorial of all output – not just news – and asked all This allows the committee to determine standards. This work includes overseeing programme areas to give consideration to this. if any further action is required. Last year the way the BBC sets and meets its own the Executive reported breaches of the editorial standards and the way it complies The committee also upheld a number of impartiality and accuracy guidelines in two with Ofcom’s broadcasting standards. complaints about editorial inaccuracies in BBC editions of Newsnight broadcast in January online journalism. While these did not amount and June 2007 and as a result the committee We approve the Executive’s editorial guidelines to serious editorial breaches, they highlighted asked to see new guidance on polls, votes setting out the values and standards we expect the need for web teams to acknowledge and straw polls, and published its findings of all BBC content. We are also responsible errors pointed out by users and make on the breaches. for ensuring the Executive deals properly corrections promptly. The committee asked with complaints. Where appropriate, we hear the Executive to encourage web teams to The Executive also reported a breach of appeals. From time to time we commission respond more effectively to these initial the guidelines regarding the use of the most research to inform our editorial standards complaints to prevent their escalation through offensive language pre-watershed during the work. In the past year we have commissioned the complaints process. Live Earth concert broadcast in July 2007. a review of the impartiality of the BBC’s The committee was concerned that following network news and factual coverage of the four Ensuring editorial integrity and independence similar editorial breaches during the Live 8 nations of the UK (see page 18). We have also can pose particular challenges for BBC concert in 2005, Ofcom had noted that the reviewed the Executive’s response to last year’s programme makers when they work with BBC had offered to consider using a delay serious editorial failures (page 11). external partners. One of BBC One’s most in future to prevent similar breaches, but successful programmes in 2006 was How a delay was not used for Live Earth. The This work is managed through the Trust’s Do You Solve a Problem Like Maria? – a talent committee decided that any such further Editorial Standards committee, which is also contest in which viewers helped choose the breaches of the guidelines would be the body that hears appeals on editorial star for a commercial West End production unacceptable. The committee also noted complaints. The members of the committee of The Sound of Music. In July 2007 the that the explanation for not using time delay are listed on page 48. committee considered a complaint that the provided by the Executive on the complaints programme had breached BBC guidelines. website was inaccurate in detail, and Editorial compliance The complaint cited the involvement of requested changes. Every six months the Executive reports to the producers of the West End show, the Trust on editorial compliance issues and Andrew Lloyd Webber and David Ian, Swearing on air during Live Earth was also the the committee scrutinises these reports. In in the BBC production. subject of a sanction issued by Ofcom against 2007/08 the committee noted 56 breaches the BBC in April 2008. Ofcom required the of editorial compliance upheld either by BBC In deciding not to uphold the complaint, the BBC to publish an on-air finding. Ofcom management or by the committee itself. This committee noted that as this was the first upheld a total of 17 programme standards compares with a total of 38 in the previous programme of its kind it was likely to test the complaints against the BBC and resolved year. While this represents a 47% increase, guidelines and that, given the programme three others. These included a sanction 44 The BBC can afford to be

BBC GOVERNANCE GOVERNANCE BBC neutral because they do not have to pander to commercial organisations. 57

Member of public at Trust research workshop. The number of editorial appeals heard by the Trust – of which two were upheld and seven partially upheld.

against the BBC regarding a competition on The Editorial Complaints Unit received volume of editorial complaints received at Blue Peter in November 2006, for which Ofcom 270 complaints in 2007/08, up from 187 in Stage 1 fined the BBC for the first time. The Editorial 2006/07, and upheld 47 of these in full or Standards committee noted that a number part. The committee was pleased to note Complaints answered of breaches related to matters of fair dealing that despite the rise in complaints, the unit and consent, and is looking to the Executive improved its turnaround times and dealt with 05/06 to ensure that programme makers deal 74% of complaints within the target time 150,143 straightforwardly with contributors. compared with 42% last year. 06/07 123,693 In 2008/09 the committee will continue to The committee itself heard 57 appeals in 07/08 scrutinise the Executive’s efforts to ensure 2007/08, of which two were upheld and 123,529 editorial compliance of all output. There seven partly upheld. The increase in appeals, is a particular need to ensure that in secret as well as the complexity of the complaints, recordings any obscuring of identities is affected the committee’s own turnaround findings of editorial appeals heard by the effective. The Executive must also continue times. It regrets this and is seeking to improve Editorial Standards committee to monitor prominence across BBC television its performance in 2008/09. The ESC has output to ensure the BBC’s editorial always measured the time it takes to consider Upheld independence and integrity. The committee a complaint from the date a request for an 06/07 will continue to monitor the work of the appeal has been received to the date the 2 Executive’s Complaints Management Board. finding was posted to the complainant. Under 07/08 This board, which is chaired by the Deputy this measure the ESC dealt with 16% of 2 Director-General and has senior management appeals within its 16-week target turnaround representation from each programme time. The committee’s published terms of Partially upheld division, has the authority to order changes in reference, however, calculate turnaround 06/07 programme areas and to put in place corrective times from the date the committee agrees 4 measures to prevent repetition of mistakes to take an appeal to the date it hears and 07/08 decides the matter. This measure of the 7 EDiTOriaL COmpLainTS time taken to hear complaints disregards Not upheld The BBC process for handling editorial preparatory work necessary to determine 06/07 complaints has three stages. At the first stage whether a complaint falls within the ESC’s 26 complaints are dealt with by the programme remit as well as administrative procedures 07/08 team or by BBC Information. Complainants following the hearing involved in publishing 48 dissatisfied with this Stage 1 response can the finding. On this basis the ESC determined take their complaint to either the independent 67% of appeals within 16 weeks. Training Editorial Complaints Unit or to a senior member The Executive reports to the Trust annually of the appropriate BBC division. Complainants improving complaints handling on how its arrangements for training staff who dispute this Stage 2 ruling can appeal to During 2007/08 the editorial standards help deliver the public purposes, as well as the Editorial Standards committee (ESC), committee developed a new complaints contributing to the wider broadcasting which hears those complaints it considers framework (see panel on facing page), industry. We welcome the investment made appropriate and which are of substance. which will be published in July 2008. The in the last year to training a highly skilled committee will monitor the effectiveness workforce, particularly the focus on editorial The BBC received 123,529 Stage 1 complaints of the new processes, which are designed standards where we believe the BBC can in 2007/08, and the target of responding to to make complaints handling more efficient have a key role in supporting standards 93% of them within 10 days was met. The and transparent. across the industry. The full report, and the ESC was pleased to note the improvement Trust’s commentary, are available on the from 90% last year. Trust’s website. BBC Annual Report and Accounts 2007/08

“ The Trust believes this service The Trust has a duty to take 45

will offer public value and be account of the competitive GOVERNANCE BBC culturally significant for both impact of the BBC’s activities Gaelic speakers and Scotland on the wider market. as a whole.”

Jeremy Peat, National Trustee for Scotland, Jeremy Peat, National Trustee for Scotland. speaking at the time of the Trust ’s approval of the Gaelic digital service, 28 January 2008.

BBC’s economic power

The BBC is a major presence in the UK * Fit with the BBC’s public purposes activities nEw SErviCES apprOvED By media sector. It spent £3.5 billion in 2007/08 ThE TruST (£3.3 billion in 2006/07), including £1.2 billion * Exhibit commercial efficiency high definition services spent outside the BBC on independent In November 2007 we approved the productions, artists and other programme * Not jeopardise the good reputation of the launch of a BBC high definition television resources (£1.1 billion in 2006/07). The BBC BBC or the value of the BBC or the value channel. The channel is available on Freesat, is spending more outside London – £994 of the BBC brand and it will launch on cable and Sky satellite million was spent in the nations and regions in as soon as possible, and on Freeview as 2007/08 (£856 million in 2006/07). We know * Comply with BBC fair trading guidelines and soon as this is feasible. that the public places a high value on the in particular avoid distorting the market breadth of choice that springs from a thriving We were satisfied that the public value UK media market and it is clear that the public While the Trust sets the framework and generated by the new service would be interest lies in maintaining this breadth of choice. requires reporting against it, under the sufficiently high and that there was framework most operational decisions are unlikely to be a negative impact on the Some BBC activities may produce a positive taken either by the Board of BBC Worldwide market. We concluded that when the public value, but have a negative impact (the BBC’s main commercial subsidiary) or service launched on Freeview it would be elsewhere – for example on commercial by the Executive Board. In a small proportion best if this could be done in collaboration broadcasters or media suppliers. In order of cases Trust approval is required for new with other public service broadcasters. to ensure that the right balance is struck service proposals. In October 2007 the Trust when there are competing interests, we approved proposals to launch bbc.com, a Gaelic digital service apply a public value test before we consent commercial venture to offer advertising on In January 2008 we gave conditional to the BBC starting a new service or making the BBC’s international-facing website for approval to the launch of a Gaelic digital a significant change to an existing service. users outside the UK, and BBC Worldwide’s service. The service – a partnership The test considers both positive or negative acquisition of a 75% stake in the Lonely Planet between the BBC and the Gaelic Media market impact. travel guide business. Service – will launch later this year on cable, satellite and broadband but not yet on The BBC undertakes some activities on a We are also responsible for approving the Freeview. We concluded the service would commercial basis. The aim is to generate BBC’s policy on fair trading and for holding the create value for audiences, particularly in revenue to reinvest in the public services to Executive to account for compliance with this Scotland, although we asked for the service the benefit of the public. Commercial activity policy. Where appropriate we hear appeals to have a greater educational focus. It was cannot take place directly within the BBC on fair trading complaints. too early to judge whether the public value Corporation but must be carried out through created would justify carriage on Freeview, commercial subsidiaries. It is our duty as The Trust’s public value and fair trading taking into account the cost and the Trustees to make sure the BBC conducts committee plays a key role in this work. potential audience. its commercial trading activities fairly and This committee was formed in January 2008 to prevent the BBC from using its economic when it took over the duties of the previous We will, however, carry out a performance power in ways that might stifle enterprise fair trading committee and public value review before digital switchover in the or initiative from elsewhere. We set the steering group. In particular the committee main Gaelic speaking regions of Scotland in framework in which new BBC commercial is responsible for monitoring fair trading 2010/11. Carriage on Freeview will be one services are approved and overseen. There compliance, hearing appeals and undertaking option we will consider then. The review are four criteria BBC commercial services public value tests. The members of this will examine whether the service is providing must meet. They must: committee are listed on page 48. value for money for licence fee payers and delivering to the intended audience in the best way. 46 All BBC trading activities are

BBC GOVERNANCE GOVERNANCE BBC covered by the BBC’s fair trading regime. 3

Diane Coyle, Trustee, listening to calls to BBC The number of fair trading appeals commenced Information, Belfast. during 2007/08.

TruST OvErSiGhT Of fair TraDinG The Trust believes the BBC’s Fair Trading inDEpEnDEnT fair TraDinG auDiTOrS’ arranGEmEnTS Commitment, the BBC Trust’s Fair Trading rEpOrT TO ThE BBC TruST fOr ThE yEar All BBC trading activities are covered by the Policy and Competitive Impact Codes and EnDED 31 marCh 2008 BBC’s fair trading regime which is designed BBC Management’s Fair Trading Guidelines We have audited, in our role as the BBC’s Fair to ensure that the BBC’s commercial and are consistent with the requirements of the Trading Auditors, the system of internal controls trading activities are conducted fairly. The Charter and Agreement. Through the established within the BBC to provide the BBC recognises it plays a unique role in the work of its committee, the Trust has gained BBC Trust with reasonable assurance that the media market and has chosen to abide by reasonable assurance that the controls and BBC has complied with its published Fair constraints additional to those imposed on procedures designed to ensure these policies Trading Commitment during the period from it by UK and European competition law and are applied throughout the BBC have been 1 April 2007 to 30 June 2007 and with the by European law on state aid. operating effectively throughout the year. requirements of its Fair Trading Policy, The Trust will continue to review the policies Competitive Impact Codes and the Fair Trading The Trust is required by the Charter to in the context of the dynamic media market. Guidelines for the period from 1 July 2007 to adopt a statement of policy on fair trading The BBC Executive reports in Part Two 31 March 2008 (‘Fair Trading arrangements for and to hold the Executive Board to account on its own measures to ensure compliance. the year ended 31 March 2008’). for compliance with it. The BBC Trust’s Fair Trading Policy and BBC Trust’s Competitive In 2007 the Trust considered one appeal Our instructions for this engagement, including Impact Codes came into effect on 1 July 2007. and upheld it in part. In the current financial the scope of work to be undertaken, were year the Trust is considering three fair trading agreed with the BBC Trust’s fair trading policy Prior to 1 July 2007 the Trust continued to appeals – as these are ongoing we cannot and appeals committee which in January 2008 operate under the rules of the previous fair report on the findings. Findings of all appeals was succeeded by the BBC Trust’s public value trading regime. For the period covered by the are published on our website. and fair trading committee. These instructions report the BBC complied with its published include agreement that our audit should be Fair Trading Commitment for the period from The Trust is advised by independent conducted in accordance with International 1 April 2007 to 30 June 2007 and with the fair trading auditors and advisers. The Standard on Assurance Engagements (ISAE) requirements of the BBC Trust’s Fair Trading independent auditors conduct an annual 3000, agreement on the limit of our liability in Policy and Competitive Impact Codes and fair trading audit to determine whether the respect of this work and agreement that our BBC Management’s Fair Trading Guidelines for BBC has established and applied a system of duty of care in respect of this work is solely to the period from 1 July 2007 to 31 March 2008. internal controls which provides reasonable the BBC Trust, as a body. We are satisfied that assurance that it has complied with its the agreed scope of our audit was sufficient to Responsibility for day-to-day fair trading published Fair Trading Commitment during enable us to express the opinion set out below. compliance by the BBC and for handling fair the period from 1 April 2007 to 30 June 2007 trading complaints lies with the Executive and with the requirements of its Fair Trading respective responsibilities of BBC Trust, through its fair trading compliance committee. Policy, Competitive Impact Codes and the management and auditors Fair Trading Guidelines for the period from The BBC Trust is responsible for ensuring Responsibility for monitoring fair trading 1 July 2007 to 31 March 2008. The audit that the BBC meets all the requirements of compliance and for handling fair trading includes a wide programme of reviews, tests competition law and trades fairly. They are appeals lies with the Trust’s public value and and evaluations across all BBC divisions. also responsible for preparing the section fair trading committee. This began work within the BBC’s Annual Report entitled in January 2008 succeeding the Trust’s fair ‘Trust oversight of fair trading arrangements’ trading policy and appeals committee, which includes a statement on fair trading. which formerly handled these matters. The members of both committees are listed on page 48.

BBC Annual Report and Accounts 2007/08

The auditors’ opinion on the External auditors provide an 47

BBC’s system of fair trading opinion on whether the BBC GOVERNANCE BBC controls is unqualified. has established and applied a system of internal controls to ensure compliance with the fair trading regime.

Members of public at BBC Trust research workshop.

The BBC’s management is charged by the Our approach Opinion BBC Trust with establishing and operating We have performed a reasonable assurance Based on the results of our procedures, a system of internal controls designed to engagement as defined in ISAE 3000. in our opinion the BBC has established and ensure compliance with the BBC’s Fair Trading The objective of a reasonable assurance has applied a system of internal controls arrangements for the year ended 31 March engagement is to perform such procedures as that provide reasonable assurance that 2008 including identifying and assessing risks to obtain information and explanations which it has complied, in all material respects, that could threaten fair trading and designing we consider necessary in order to provide with the requirements of the Fair Trading and implementing responses to such risks. us with sufficient appropriate evidence to arrangements for the year ended express a positive conclusion on the BBC’s 31 March 2008. As the BBC’s Fair Trading Auditors, it is our compliance with its Fair Trading arrangements responsibility to form an independent view, for the year ended 31 March 2008. Emphasis of matter – Transition to new based on our audit work, as to the extent to fair trading regime which the BBC has established, and applied, Our work consisted of enquiry and testing We draw attention to the section of the a system of internal controls which provide to enable us to form a view as to whether BBC Annual Report headed the ‘Executive reasonable assurance that it has complied an appropriate system of internal controls Statement on Fair Trading’ which explains that with the requirements of its Fair Trading was in place. We also reviewed the processing a revised Fair Trading regime came into effect arrangements for the year ended 31 March of a sample of material transactions to provide on 1 July 2007 and that during the period 2008. We have reviewed specific decisions us with reasonable assurance that the system 1 July 2007 to 31 March 2008 the BBC reached by the BBC on fair trading issues of internal controls had been applied. has applied a combination of both old and only in so far as this is necessary to form an updated procedures rather than implementing opinion on the application of the system of inherent limitations the revised regime as at 1 July 2007. Having internal controls. Our audit was not designed As with any system of control it is not reviewed the matter, the BBC is satisfied this to express an opinion on the quality of the practicable to ensure that no errors or approach has operated effectively to ensure specific decisions taken by the BBC on fair irregularities have occurred without being that its Fair Trading obligations have been met trading. We have also reviewed whether the detected. Our audit work was designed to for this transition period. Our opinion is not BBC Trust’s statement on fair trading reflects give the BBC Trust reasonable but not absolute qualified in relation to this matter. our findings of the BBC’s compliance with its assurance as to the adequacy of the system system of internal controls, and we report of internal controls which were in place and if it does not. being applied to deliver compliance with the pricewaterhouseCoopers LLp requirements of its Fair Trading arrangements Chartered Accountants Our opinion has been prepared for and only for the year ended 31 March 2008. Further, 19 June 2008 for the BBC Trust, as a body, in accordance because Fair Trading issues require judgements with our instructions which were agreed with which ultimately might be tested in a court of the Trust Unit of the BBC on behalf of the law, competition authority or elsewhere, there BBC Trust’s fair trading policy and appeals is always a risk of challenge even where the committee (which in January 2008 was system of internal controls has been followed succeeded by the BBC Trust’s public value and and decisions have been taken with the fair trading committee). We do not, in giving greatest care. this opinion, accept or assume responsibility for any other purpose or to any other person to whom this report is shown or in to whose hands it may come, and no other person shall be entitled to rely on our opinion, save where expressly agreed by our prior consent in writing. 48 The full BBC Trust usually The Trust does much of its

BBC GOVERNANCE GOVERNANCE BBC meets once a month and work through a number of minutes of these meetings are committees which report to published on our website. the full Trust.

Trust meeting May 2007, Council Chamber, Broadcasting House, London.

Other regulatory information

The full Trust usually meets monthly but we do much of our work in small committees of Trustees who report back to the full Trust. These committees have decision-making powers. The members of the committees, their chairmen and their attendance during the year are shown in the table below.

TruSTEE mEETinG aTTEnDanCE 1 April 2007 to 31 March 2008

Fair Public Public Trading Finance Remuneration Audiences Value and Value Policy Editorial and and and Audience Fair Test and Nations Standards Strategy Appointments Performance Councils Trading Steering Appeals3 Audience Trust Committee Committee Committee Committee Committee Committee Group3 Committee Councils†

Number of meetings 14 14 13 3 8 3 3 8 4 Chairman Sir Michael Lyons1 12/12 3/3 Vice chairman Chitra Bharucha 13/14 11/14 3/32 7/84 3/32 National Trustees Alison Hastings (England) 12/14 2/3 6/8 3/3 6/8 6/62 Rotha Johnston (Northern Ireland) 13/14 12/13 3/35 3/3 4/4 10/102 Janet Lewis-Jones (Wales) 14/14 13/13 3/3 3/3 10/102 Jeremy Peat (Scotland) 13/14 13/13 3/3 3/3 7/8 4/4 11/112 Trustees Diane Coyle 13/14 10/11 3/32 8/8 3/4 Dermot Gleeson 13/14 13/132 2/3 7/8 Dame Patricia Hodgson 14/14 13/13 6/6 3/3 8/8 David Liddiment 14/14 14/14 8/82 Mehmuda Mian Pritchard 11/14 11/14 4/4 2/4 Richard Tait 13/14 14/142 3/3 4/8

1 Appointed 1 May 2007. 2 Committee chairman. 3 In January 2008 the Public Value and Fair Trading committee replaced the Fair Trading Policy and Appeals committee (chairman: Jerermy Peat) and the Public Value Test Steering Group (chairman: Diane Coyle). 4 Chitra Bharucha was chairman until April 2008. 5 Rotha Johnston was chairman until May 2008.

† The Audience Councils in each Nation are not committees of the Trust but separately constituted advisory bodies, chaired by the respective National Trustee. BBC Annual Report and Accounts 2007/08

“ The Trust wants to ensure Under the new complaints 49

that complaints are received system the Trust will consider a GOVERNANCE BBC via a system which is open far greater range of complaints to everyone, consistent in on appeal than previously. its fairness to all, and simple to follow.”

Chitra Bharucha, when launching the BBC Trust Young people giving their views on the BBC to consultation on complaints, 29 October 2007. the Trustees in Belfast.

STaTEmEnT Of TruST rESpOnSiBiLiTiES STaTEmEnT Of DiSCLOSurE Of COmpLainTS framEwOrK in rESpECT Of ThE annuaL rEpOrT infOrmaTiOn TO auDiTOrS An open and fair BBC must respond anD aCCOunTS effectively and justly to complaints, and The Charter requires that an annual The Trustees who held office at the date the Charter requires the Trust to set and report and statement of accounts is of approval of the Annual Report and publish a framework and procedures prepared and audited. The Executive Accounts confirm that, so far as they are setting out how the BBC will do this. Board’s responsibilities are detailed in its each aware, there is no relevant audit responsibility statement on page 95 of Part information in respect of the Trust During 2007/08 we adopted a new Two of this Annual Report. In summary, the governance disclosures, remuneration complaints framework. This sets out a Executive Board is responsible for preparing disclosures and Trust statement of general complaints process, as well as the financial statements and statements expenditure of which the BBC’s auditors specific procedures for complaints about of compliance with applicable corporate are unaware; and each Trustee has taken editorial, licence fee and fair trading issues, governance codes and remuneration all the steps that they ought to have taken as well as for complaints about the Digital regulations and delivering these to the as a Trustee to make themselves aware Switchover Help Scheme. There is also a Trust within Part Two of the Annual Report. of any relevant audit information and to process for complaints against the Trust. establish that the BBC’s auditors are In preparing its associated corporate aware of that information. Before adopting the new framework governance disclosures the Executive we consulted the public and as a result Board has elected to comply with the 2003 This statement was approved by the Trust made a number of changes to our Financial Reporting Council Combined on 19 June 2008. original proposals. Code and the disclosure provisions of the Companies Act 1985 and, where applicable, The new system will mean that appeals the Financial Services Authority Listing to the Trust can be taken more quickly Rules which apply to a company listed on and that, for the first time, the Trust an EU regulated market. will consider appeals about licence fee collection. Overall the Trust will consider In order to comply with those requirements a far greater range of complaints on appeal the annual report must also include than it has done in the past. This will disclosures on the governance arrangements strengthen our ability to ensure that the of the Trust as well as those of the BBC responds effectively to complaints. Executive Board. These disclosures, which are audited, are included in Part One of the Annual Report and are the responsibility of the Trust.

Additionally, the Charter requires the Trust to prepare a statement of its expenditure and include this within Part One of the Annual Report.

o help the BBC deliver quality, high hing we do – for example, do – for we consulting hing by shed open and transparent systems; set plans plans

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THE TRUST ’S PLANS FOR 2008/09 50 THE TRUST’STRUST ’S PLANS 2008/2009FOR 2008/09 51

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The BBC welcomes comments or queries on any BBC operations Head of Governance and Accountability Wales aspect of its operations. Comments or queries about the BBC’s operations BBC Audience Council Wales are best dealt with by the relevant BBC Room E5108 BBC Trust department. Contact: BBC Broadcasting House Any comments or questions you have about the BBC Information Llandaff work of the Trust should be sent directly to: PO Box 1922 Cardiff CF5 2YQ BBC Trust Unit Glasgow G2 3WT Room 211 Telephone: 08700 100 222* Head of Governance and Accountability 35 Marylebone High Street (24 hours a day, seven days a week) Northern Ireland London W1U 4AA Textphone: 08700 100 212 BBC Audience Council Northern Ireland Telephone: BBC Information Fax: 0141 307 5770 BBC Broadcasting House line 03700 103 100* Website: bbc.co.uk/info Ormeau Avenue Textphone: 08700 100 212 Belfast BT2 8HQ (Lines open Monday to Friday between 9.30am * Calls to this number may be monitored or recorded and 5.30pm) for training purposes. Head of Governance and Accountability England Email: [email protected] BBC Audience Council England BBC Audience Councils BBC Birmingham Programme and editorial complaints The Audience Councils in England, Northern The Mailbox If you think a BBC programme or website has Ireland, Scotland and Wales help the BBC Trust to Birmingham B11RF fallen below the BBC’s editorial standards you understand the needs, interests and concerns of should contact: audiences throughout the UK, and to identify ways Other information BBC Complaints in which the BBC can better serve its audiences. This BBC Annual Report and Accounts PO Box 1922 If you want to contact the Audience Councils you is available in public libraries throughout the UK Glasgow G2 3WT can write to them at the addresses below: and on the BBC Trustees’ website at bbctrust.co.uk. Telephone: 03700 100 222 It is also available in Welsh, in an audio version and Textphone: 08700 100 212 Head of Governance and Accountability Scotland in Braille. Annual Reviews for BBC Scotland, BBC Website: bbc.co.uk/complaints BBC Audience Council Scotland Wales, BBC Northern Ireland, BBC English Regions Zone G.11 and the BBC World Service are also published. 40 Pacific Quay Glasgow G512 1DA OTHER INFORMATION

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The BBC is required under the terms of its Charter to produce an Annual Report and Accounts in two parts. The BBC Trust prepares the first part, the BBC Executive prepares the second and each reflects the different roles and responsibilities of the two bodies. Together the two parts make up the BBC’s review and assessment of its year. British Broadcasting Corporation Broadcasting House London W1A 1AA bbc.co.uk © BBC 2008