BBC Annual Report and Accounts 2012/13
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BBC Annual Report and Accounts 2012/13 The multiplatform games – BBC 2012 Olympics coverage on TV, radio, PC, mobile, tablet and connected TV BBC Annual Report and Accounts 2012/13 PRESENTED TO PARLIAMENT BY THE SECRETARY OF STATE FOR CULTURE, MEDIA AND SPORT BY COMMAND OF HER MAJESTY JULY 2013 Extended versions of the financial statements provided in Part Two of this report were also laid before Parliament on 16 July 2013 and are available online at bbc.co.uk/annualreport © BBC Copyright 2013 The text of this document (this excludes, where present, the Royal Arms and all departmental or agency logos) may be reproduced free of charge in any format or medium provided that it is reproduced accurately and not in a misleading context. The material must be acknowledged as BBC copyright and the document title specified. Photographs are used ©BBC or used under the terms of the PACT agreement except where otherwise identified. Permission from copyright holders must be sought before any photographs are reproduced. You can download this publication from bbc.co.uk/annualreport Designed by Further™ furthercreative.co.uk Prepared pursuant to the BBC Royal Charter 2006 (Art. 45) CONTENTS OVERVIEW OVERVIEW 02 THE BBC AT A GLANCE 02 OUR ROLE AND PURPOSE The BBC exists to serve the public, 03 TRUST IN THE BBC and its mission is to inform, educate 04 UNDERSTANDING OUR FINANCES and entertain. 117 ADDITIONAL INFORMATION 117 GLOSSARY 118 INDEX IBC CONTACTS Cross referencing More Use the cross-reference boxes to find related PAGE PAGE information elsewhere in the report. 00 00 PART ONE 08 CHAIRMAN’S FOREWORD PART ONE 09 SETTING STRATEGY AND THE BBC TRUST’S REVIEW ASSESSING PERFORMANCE AND ASSESSMENT 10 SETTING STRATEGY 12 QUALITY AND DISTINCTIVENESS 20 VALUE FOR MONEY The Trust exists to get the best out of the BBC 26 SERVING ALL AUDIENCES for licence fee payers. It is the governing body 30 OPENNESS AND TRANSPARENCY of the BBC and sets the strategic direction, 32 UNDERSTANDING AUDIENCES measures performance and holds the Executive to account. 37 INSIDE THE TRUST 38 BBC TRUSTEES 40 GOVERNANCE 44 TRUST FINANCES PART TWO 48 DIRECTOR-GENERAL’S INTRODUCTION PART TWO THE BBC EXECUTIVE’S 49 DELIVERING OUR STRATEGY 50 OUR FOUR STRATEGIC OBJECTIVES 52 QUALITY AND DISTINCTIVENESS REVIEW AND ASSESSMENT 54 VALUE FOR MONEY 56 SERVING ALL AUDIENCES The BBC Executive is responsible for the 58 OPENNESS AND TRANSPARENCY operational delivery of BBC services and the 59 PERFORMANCE direction of BBC editorial and creative output 60 PERFORMANCE BY CONTENT AREA in line with the framework set by the Trust. 66 PERFORMANCE BY SERVICE 71 PERFORMANCE BY GENRE 73 WORKING TOGETHER 74 PEOPLE (INCLUDING HEADCOUNT AND TALENT SPEND) 77 DIVERSITY 78 TRAINING AND APPRENTICESHIPS 79 PARTNERSHIPS 80 CORPORATE RESPONSIBILITY 81 GOVERNANCE 82 EXECUTIVE BOARD 84 RISKS AND OPPORTUNITIES 87 NOMINATIONS COMMITTEE 88 SENIOR INDEPENDENT DIRECTOR’S REPORT 90 REMUNERATION REPORT 97 AUDIT COMMITTEE REPORT 100 FAIR TRADING REPORT 103 MANAGING OUR FINANCES 104 CHIEF FINANCIAL OFFICER’S REVIEW 106 HOW WE USE THE LICENCE FEE 108 COMMERCIAL ACTIVITIES 115 LOOKING FORWARD 116 SUMMARY FINANCIAL STATEMENT 116 AUDITOR’S REPORT BBC Annual Report and Accounts 2012/13 01 OUR ROLE AND PURPOSE OUR PUBLIC PURPOSES AND STRATEGIC OBJECTIVES The BBC serves the public interest through the promotion of its six public purposes. Sustaining citizenship and Representing the UK, its nations, civil society regions and communities The BBC provides high quality The BBC reflects the UK’s many news, current affairs and factual communities, promoting awareness programming to engage its of different cultures and viewpoints, audiences in important current but also brings audiences together events and ideas. for shared experiences. Promoting education and learning Bringing the UK to the world Education and learning lie at the and the world to the UK heart of the BBC’s mission and The BBC supports a global have a part to play in the delivery understanding of international of all its public purposes. issues and broadens UK audiences’ experience of different cultures. Stimulating creativity Delivering to the public the benefit and cultural excellence of emerging communications, The BBC encourages interest, technologies and services engagement and participation In promoting its other purposes, in cultural, creative and sporting the BBC helps audiences to get activities across the UK. the best out of emerging media technologies. The Trust set four strategic objectives for the BBC which focus on things that matter most during this Charter period. QUALITY AND SERVING ALL DISTINCTIVENESS AUDIENCES All BBC services should offer high quality The BBC should reflect the diversity of its content that is distinctive in terms of its audiences in both its programmes and its creative ambition, high editorial standards work force. All audiences should have and its range and depth. access to relevant BBC services. More More PAGE PAGE PAGE PAGE 12 52 26 56 VALUE OPENNESS AND FOR MONEY TRANSPARENCY The BBC should improve value for money The BBC should enable the public, and open itself to external scrutiny of this and the market in which it operates, to area. It should become more efficient and understand how it spends its money, how increase investment in content whilst it performs and what it plans to do next. reducing overheads. More More PAGE PAGE PAGE PAGE 20 54 30 58 02 OVERVIEW BBC Annual Report and Accounts 2012/13 TRUST IN THE BBC JIMMY SAVILE, NEWSNIGHT AND THE AFTERMATH: OVERVIEW A CHALLENGE TO BBC CULTURE AND MANAGEMENT In October 2012, ITV’s programme, Exposure, revealed former Court of Appeal judge Dame Janet Smith is currently widespread sexual abuse by Jimmy Savile, former TV presenter examining the culture and practices of the BBC during the and DJ. Separately, questions had previously been raised years that Jimmy Savile worked here. Dame Linda Dobbs will about whether a Newsnight investigation into allegations of investigate the series of sexual assaults recently admitted this abuse had been halted due to scheduled Jimmy Savile by Stuart Hall and the conclusions will feed into Dame Janet tribute programmes. Smith’s report. While the BBC’s prime concern was, and remains, the impact On 2 November 2012, the BBC broadcast a Newsnight report on on his many victims, the issue also led to a significant series of historic child sex abuse in North Wales care homes that claimed events for the BBC, culminating in the departure of the that two victims had been abused by a ‘leading Conservative Director‑General, George Entwistle. politician from the Thatcher years’. Online speculation prior to Newsnight’s broadcast identified the subject of the report as Following the revelations about Savile, the BBC commissioned Lord McAlpine. After the broadcast, information emerged that three reviews: Lord McAlpine had been mistakenly identified by a victim and Nick Pollard’s independent review was published on he strenuously denied any involvement. This led to Newsnight 18 December 2012. It examined the original Newsnight broadcasting an apology a week after transmission. The investigation and a blog written by the editor of Newsnight, Director‑General George Entwistle departed the following day. which was later found to contain inaccuracies. The Pollard The Trust subsequently investigated the November Newsnight Report concluded that the decision to drop the original report and concluded that there had been a serious breach of the investigation was flawed and the way it was taken was wrong, BBC’s Editorial Guidelines relating to accuracy, that the allegations but that it was taken in good faith and not done to protect in the Newsnight report were not based on sound evidence, and the Savile tribute programmes, or for any improper reason. that the audience had been misled. He also concluded that there were serious failings in editorial oversight and management control. Conclusions the BBC’s Respect at Work Review was published on The BBC is determined to learn from these reviews and to ensure 2 May 2013. Dinah Rose QC oversaw and provided independent that we do not let down licence fee payers in this way again. These challenge to the review. Initially, this review focused on the extent events have affected audiences’ trust in the BBC, which is at the to which sexual harassment is an issue at the BBC, but its remit heart of everything that we do. Rebuilding that trust will continue was later expanded to include broader behavioural issues. to be the focus for the entire organisation in the year ahead. The review found that, whilst incidents of sexual harassment are rare, there is evidence of bullying which often appears to go unchallenged by senior managers. BBC Annual Report and Accounts 2012/13 03 UNDERSTANDING OUR FINANCES HOW WE SPEND YOUR MONEY The licence fee supports the greatest volume and range of original television and radio programming and public service online content to be found in the UK. Our income explained 2012/13 Cost per household Licence fee Commercial operations Grant income A six‑year licence fee The BBC is established by Our commercial operations BBC World Service is settlement was agreed in Royal Charter and our UK include BBC Worldwide, currently funded by the 2010 which, in effect, has public service broadcasting BBC Studios and Post Foreign and Commonwealth frozen the licence fee at activities are funded by UK Production and BBC Global Office. BBC Monitoring is £145.50 until 2016. households. News Ltd. funded by the Cabinet