Annual Report and Accounts 2004/2005 Purpose, vision and values Purpose Our purpose is to enrich people’s lives with programmes and services that inform, educate and entertain Vision Our vision is to be the most creative organisation in the world Values I Trust is the foundation of the BBC: we are independent, impartial and honest I Audiences are at the heart of everything we do I We take pride in delivering quality and value for money I Creativity is the lifeblood of our organisation I We respect each other and celebrate our diversity so that everyone can give their best I We are one BBC: great things happen when we work together Contents 02 54 Chairman’s statement Building public value 04 58 Director-General’s Being accountable report and responsible 06 How the BBC is run 66 Governors’ review of 08 commercial activities Board of Governors 10 68 Executive Board Performance against Statements of 12 Programme Policy Governors’ review commitments of objectives 2004/2005 20 The BBC at a glance 78 Compliance Governors’ review of services 94 22 Financial review Television 96 30 Financial statements Radio 136 38 Broadcasting facts New Media and figures 42 14 7 News Getting in touch 46 with the BBC BBC World Service 14 8 & Global News Other information 50 Nations & Regions BBC Annual Report and Accounts 2004/2005 1 Chairman’s statement As we approach the end of the current clear about the principles underlying any BBC Royal Charter at the end of 2006, new governance arrangements: the plans to replace it are becoming independence; rigorous stewardship of clearer.The Government’s Green Paper public money; accountability to licence fee set out the new framework and paved payers; clarity of roles; and practicality.The the way for a White Paper later this year. Government’s plans for a BBC Trust meet We put forward our own vision for the these five principles, and we accept them. future of the BBC in Building public value, and we have also published a comprehensive The key issue ahead is how to make the response to the Green Paper. BBC more responsive and accountable to the licence fee payers who own and On behalf of the licence fee payers the fund it. Changes already in place include Board is pleased by the decision to a Governors’ website, and an annual general grant a new Charter for a further ten meeting to discuss the issues raised in this years and to maintain funding via a licence report with licence fee payers.This is only fee – although we have made clear our the beginning. Future plans include regular opposition to any suggestion that the ‘question times’ with Governors, regular licence fee might be fragmented to fund research tracking of public attitudes to the other broadcasters. At a time when BBC, and more consultation with the Government – and we as Governors – Broadcasting Councils and the English are seeking greater accountability to National Forum on our strategic plans. licence fee payers, ‘top slicing’ of the fee runs counter to this objective. We have also worked hard to ensure, on behalf of licence fee payers, that the Our task now is to ensure a smooth BBC lives up to the highest standards, both transition to the new governance system editorially and fiscally. Ensuring the BBC announced in the Green Paper, in which the delivers value for money is always a priority Board of Governors will be replaced by a and we asked the accountants Ernst & Young BBC Trust. to review the BBC’s system of financial controls. As a result some areas were As BBC Governors, we had made it clear strengthened. Our decision to ask an that radical change to the governance independent panel of experts to examine of the BBC was both necessary and the impartiality of BBC coverage of the overdue. In particular we wanted much European Union resulted in changes to the clearer separation between Governors and organisation and training of BBC journalists. management.We set up a Governance Unit Impartiality is the cornerstone of the BBC’s to provide us with analysis and advice editorial mission and we will conduct independent from management (for more further reviews of this crucial area. We details, see How the BBC is run on page 7). are pleased that the Director-General We also approved big changes to the BBC’s is responding to audience expectations accountability mechanisms – an area where with his new Creative Future programme we plan further reform. strategy review to address a wide range of editorial issues. Our own research In an ideal world we would have liked to with audiences has highlighted concerns have been given the time to demonstrate about quality issues and we have taken that our own reforms were effective. But account of this in setting our objectives time was against us. We were, however, for management in the coming year 2 BBC Annual Report and Accounts 2004/2005 (see Governors’ objectives for 2005/2006, would carry little or no weight. As guardians and therefore more money for content. page 19).This work is already bearing fruit of the public interest we must be as We approved these plans because we in new investment in comedy and drama sensitive to the concerns raised by a single concluded, after rigorous analysis and and in moves to reduce the volume of complainant as to those raised by well- debate, that they are in licence fee payers’ repeats in peak time on BBC One. organised campaigns. interests.We will ensure that during this difficult time staff are treated sensitively The responsibility of representing licence The Freedom of Information (FOI) Act and fairly. fee payers’ interests also includes making came into force in January and the clear when we believe the BBC is getting Governors are fully committed to meeting This has also been a year of great sadness. things right.The BBC remains one of the both the spirit and the letter of the Act. Two BBC journalists were shot dead while most successful creative institutions in the We have made it clear that we want to on duty. Simon Cumbers was killed in Saudi world and it is a matter of great pride for publish the maximum amount of information Arabia. Kate Peyton was killed in Somalia. every Governor that we are able to without, as the Act says,“prejudicing the Neither was known to the public – Simon contribute to its creative success in an effective conduct of public affairs”. a cameraman, Kate a producer – but they increasingly competitive world. were widely respected among their peers The Board has approved important and their shocking deaths left a profound Given the inevitable distractions of this changes to the governance of the BBC’s mark on their colleagues in BBC News. period of intense scrutiny, I’m happy to commercial activities, to bring it into They remind us that the professional report that the Corporation has continued line with the recommendations of the commitment of BBC journalists to reflect making many fine programmes. It is unfair Combined Code on good corporate the world back to the UK can sometimes to pick out specific programmes but the governance. A new board structure will carry a great human cost. coverage of the Asian tsunami and of the be created for BBC Worldwide.This will Olympics on radio, television and online separate the role of chief executive and BBC listeners lost John Peel too. John was, showed the scope and ambition the BBC chairman. An independent non-executive simply, a truly original broadcaster.Whether can bring to bear on the reporting of chairman and non-executive directors will you knew him as the drolly passionate major events. be appointed. Radio 1 DJ always opening your ears to new sounds, or as the tactful interviewer The most contentious programme the BBC This has been a period of great change on Radio 4’s Home Truths gently revealing broadcast was undoubtedly Jerry Springer – for the BBC. I would like to take this the extraordinary lives of ordinary people, the Opera. BBC Governors are not, and opportunity to thank those Governors or simply as the mildly exasperated never should be, pre-transmission censors. who have helped steer the organisation contributor to BBC Television’s Grumpy Old Before broadcast, I sought assurances from through a difficult period and have now Men, you knew you were in the company the Director-General that he had satisfied concluded their work for the BBC: of a man of honesty, integrity and humanity. himself that the programme complied with Richard Ryder, Pauline Neville-Jones and His audiences felt he respected them, and all the relevant codes of practice – I was Robert Smith all performed valuable as the thousands of tributes sent to the given those assurances. After broadcast, service. I would like to welcome aboard BBC after his death showed, they loved the Governors’ Programmes Complaints Jeremy Peat, the new National Governor him for it. Committee dealt with the complaints. for Scotland, Richard Tait and Anthony Salz, The Committee was not unanimous – but the new Vice-Chairman. the clear majority agreed that, despite the offence caused to some viewers, the We appointed Mark Thompson as arguments for broadcast were sound. Some Director-General in June 2004 following say we should have taken more note of the an open and competitive process. exceptionally large number of complaints received, but in my view the number of The year ahead brings further change. Michael Grade complaints is not the central issue. If it The Director-General’s plans to reshape Chairman were, it would mean that a single complaint the BBC will create greater efficiency 16 June 2005 BBC Annual Report and Accounts 2004/2005 3 Director-General’s report “From the heart – may it go to the heart!” television and format documentary to As I write this, we are celebrating generate real public value – The Apprentice Beethoven week at the BBC.