MINUTES OF THE BBC TRUST MEETING

Held on Wednesday 21 March 2012 in the BBC Trust boardroom, Great Portland Street, London

Present: Lord Patten Chairman Diane Coyle Vice Chairman Richard Ayre Trust member Anthony Fry Trust member Alison Hastings Trust member for England Rotha Johnston Trust member for Northern Ireland David Liddiment Trust member Bill Matthews Trust member for Scotland Mehmuda Mian Trust member Elan Closs Stephens Trust member for Wales Lord Williams Trust member

Apologies: Suzanna Taverne Trust member

In attendance from the Trust Unit: Nicholas Kroll Director, BBC Trust Alex Towers Deputy Director Phil Harrold Head of Governance Fran O’Brien Head of Editorial Standards Mark Devane Head of Communications Christine Mulryne Business and Events Co-ordinator Items 35 – 41 and 43 Alison Head of Public Services Strategy Items 35 – 41, 44 and 45 Gareth Tuck Chief Financial Adviser Items 35 – 41 and 46 Georgina Hodges Chief Research and Audiences Adviser Item 38 Wendy Bryant Research Manager Items 39 and 43 Stephen Callow Senior Strategy Adviser Item 43 Ann Bastow Adviser, Strategy Items 44 and 45 John Balcombe Finance Analyst Item 46 Natalie Rose Senior Editorial Strategy Adviser Item 46 Kate Hawkins Research Manager

From the Executive: Items 42 – 47 Mark Thompson Director-General Items 42 – 47 Caroline Thomson Chief Operating Officer Items 42 – 47 Zarin Patel Chief Financial Officer Items 42 – 47 Jessica Cecil Head of the Director-General's Office Items 42 – 43 Helen Boaden Director, News Group Item 43 David Holdsworth Controller, English Regions Item 43 Gautam Rangarajan Controller, Public Service Policy and Strategy Items 44 and 45 Beverley Tew Director, Finance, Procurement and Revenue Management Items 44 and 45 Ed James Head of Corporate Performance Item 46 David Jordan Director, Editorial Policy and Standards Item 46 James Holden Head of Audiences

AGENDA

35 Minutes and matters arising

36 Committees and Audience Councils

37 Director’s report

38 Purpose Remit Survey – 2011-12 findings

39 Delivering Quality First

40 Trust work plan 2012-13

41 Director-General’s objectives

42 Director-General’s monthly report

43 Delivering Quality First

44 Executive finance report

45 BBC Budget 2012-13 - 2014-15

46 Impartiality of the BBC – data publication

47 World Service Broadcasting Agreement

48 Items for noting

49 Business handling and communications

50 Conflicts of Interest

35 MINUTES AND MATTERS ARISING

35.1 The Trust approved the minutes of its meeting on 16 February as an accurate record of proceedings. The Trust approved the publication of the minutes with no redactions.

35.2 The Trust noted the matters arising from previous meetings.

36 COMMITTEES AND AUDIENCE COUNCILS

36.1 The Chairman of the Audiences and Performance Committee said that members had discussed the Trust’s commitment to increasing the distinctiveness and quality of BBC output. The Trust would have further discussions on this topic at its annual Services Day, which would take place the following day.

36.2 Trust member Rotha Johnston reported that the Finance Committee had scrutinised the BBC budget for 2012-13, which would be considered by the Trust later in the meeting. She noted that, as part of its consideration of the budget, the committee had discussed the TV licence collection strategy based on the new contract with Capita, which would come into force in July 2012. She reported that the committee had approved the terms of reference for the BBC’s fair trading audit which, following the conclusions of the Trust’s 2011 governance review, would be commissioned by the Executive.

36.3 The Chairman of the Strategy and Approvals Committee noted that the committee had received an update on the progress of YouView, the joint venture between the BBC, ITV, BT, Channel 4, TalkTalk, Arqiva and Channel 5, which would provide subscription-free internet-connected television within the UK. She noted that the service was due to launch later in the year. The committee would continue to receive updates on the BBC’s participation in the venture.

36.4 The Chairman of the International Services Committee reported that the committee had met for the first time. The committee had been established to help the Trust develop the strategy for and assess the performance of the BBC’s international public services, following the conclusions of the governance review.

36.5 The Trust member for Scotland reported that Audience Council Scotland had held its annual conference, which had been attended by the Director-General and the Director, News Group. He said that the Council had discussed current affairs broadcasting in Scotland and issues around BBC Two HD in Scotland.

37 DIRECTOR’S REPORT

37.1 The Director, BBC Trust presented his report, which provided an overview of activity undertaken by the Trust and previewed the key issues to be considered by the Trust at the meeting.

37.2 The Trust noted the communication from Mark Thompson that he intended to resign from the post of Director-General. The Director, BBC Trust updated the Trust on the proposed approach to succession planning.

38 PURPOSE REMIT SURVEY – 2011-12 FINDINGS

38.1 The Trust’s Chief Research and Audiences Adviser presented the findings of the Purpose Remit Survey for 2011-12, which was conducted in order to explore annually the public’s perceptions of the BBC’s performance in promoting the six public purposes set out in the Royal Charter. The Trust also considered the draft findings from a piece of qualitative research on the public’s view of the distinctiveness of programmes and services.

38.2 The Trust discussed the findings of the survey and noted that the overall impression of the BBC across the UK had remained positive. The Trust discussed the ‘performance gaps’ highlighted by the survey; this was where the BBC was perceived as underperforming in relation to particular public purposes. In particular, the Trust discussed the survey’s findings in relation to the two public purposes, ‘representing the UK, its nations, regions and communities’ and ‘stimulating creativity and cultural excellence’.

38.3 The Trust discussed the draft findings of the research on distinctiveness, which had been commissioned in the light of previous years’ surveys, and noted the finding that the BBC had a strong place within a complex and changing broadcast environment. The Trust would consider the final report later in the year.

38.4 The Trust would review the format and approach of the Purpose Remit Survey later in the spring, in line with its commitment to review the survey after five years. The results from the Purpose Remit Survey would be published alongside the BBC’s Annual Report and Accounts in July.

39 DELIVERING QUALITY FIRST

39.1 The Trust’s Deputy Director provided an update on the implementation of the new BBC strategy, Delivering Quality First. Trust members agreed the proposed structure of the final conclusions document, which would be published in May.

39.2 The Deputy Director reported that work was being undertaken by the Strategy and Approvals Committee and the Audiences and Performance Committee on the various regulatory implications and service licence changes arising from the proposals. Members noted that the Trust’s service reviews on BBC Local Radio and the Asian Network were ongoing, and that proposals relating to these services were undergoing regulatory testing.

39.3 The Trust considered a request by the Executive to announce a small number of changes in the Journalism Division. The Trust agreed that the Executive’s proposals in this area were consistent with the strategy set by the Trust, and were shaped by the aim of making the necessary savings on the required timetable while sustaining the BBC’s commitment to its core journalistic output. On this basis, the Trust agreed that it would be appropriate for the Executive to announce those changes which were not subject to further regulatory activity, in advance of the publication of the Trust’s final conclusions in May.

39.4 The Trust would consider its final conclusions on Delivering Quality First together with regulatory conclusions and proposed amendments to service licences at its April meeting.

40 TRUST WORK PLAN 2012-13

40.1 The Trust’s Head of Governance presented the draft work plan for 2012-13, which provided an overview of the Trust’s work in the coming year for licence fee payers and the wider media industry.

40.2 The Trust’s work plan was structured around the four strategic objectives which had been set by the Trust in 2010 as part of the BBC’s strategy, Putting Quality First. These objectives were: o increasing the distinctiveness and quality of BBC output; o improving the value for money the BBC provides to licence fee payers; o setting new standards of openness and transparency; and o doing more to serve all audiences.

40.3 The Trust discussed the work plan, which also included the Audience Councils’ priorities for the year, and considered issues arising from its annual board evaluation. The Trust approved its work plan for 2012-13 subject to minor drafting amendments. The work plan would be published in April.

41 DIRECTOR-GENERAL’S OBJECTIVES

41.1 The Trust discussed an approach for establishing objectives for the Director- General for 2012-13. The Trust had traditionally set objectives for the Director- General, in line with good corporate governance. In September 2011, the Trust had agreed to align the setting of the Director-General’s objectives with the budget and business plan.

41.2 The Trust agreed the proposed approach and agreed to delegate authority to the Chairman to approve the final objectives.

42 DIRECTOR-GENERAL’S MONTHLY REPORT

42.1 The Director-General outlined recent highlights from BBC services, including Empire on BBC One and Lucian Freud: Painted Life on BBC Two. He noted the upcoming launch of singing competition The Voice on BBC One, and the awards won by BBC programmes at the 2012 Royal Television Society awards, which included Eric & Ernie (BBC Two), Tracy Beaker (CBBC), and The Scheme (BBC One).

42.2 The Director-General noted the recent 80th anniversary of the BBC World Service; the re-launch of the BBC Sport website ahead of the Olympics and Paralympics; and the decision to rename part of the newly refurbished in London as the ‘John Peel Wing’, after the late broadcaster. The Director-General noted the recent formal opening of the new drama studios, , in Cardiff Bay, which would be home to , Casualty and Welsh language drama, .

42.3 The Director, BBC News Group reported on key stories covered recently in the BBC’s journalism output, including the coalition government’s healthcare proposals; the Russian and American presidential elections; and the ongoing conflict in Syria. In the light of the recent deaths of reporters in Syria, she updated the Trust on the safety measures that were in place for BBC journalists. The Trust discussed the BBC’s coverage of international business, and noted the plans to appoint a new chief business correspondent, based in East Asia.

42.4 The Director, News Group updated the Trust on the success of the recent School Report News Day, which had involved 30,000 children and over 1,000 schools in creating live news reports for BBC audiences.

43 DELIVERING QUALITY FIRST

43.1 The Director-General presented updated proposals on the implementation of the new BBC strategy, Delivering Quality First. This was in response to a request from the Trust to reconsider the proposals in a few specific areas, to ensure that they did not have a detrimental impact on the BBC’s journalistic aspirations and reputation.

43.2 The Director-General reported that the Executive had responded to the Trust’s interim findings, including the results of the public consultation, and had also taken into account the report commissioned from John Myers, who was asked to examine working practices and potential savings within local radio.

43.3 The Trust discussed the revised proposals, covering changes to local radio, English regional current affairs on television, and current affairs output on Radio 5 Live. The Controller, English Regions reported that the revised proposals relating to local radio sought to protect newsgathering at a local level, and prioritise the most distinctive aspects of local radio. The Trust received an update on the additional funding for these amendments to the proposals.

43.4 The Trust discussed the Delivering Quality First proposal to close Medium Wave as a way of distributing local radio in areas where coverage duplicates FM. Before final consideration, the Trust asked the Executive to provide additional information on the cost and impact of the proposals in each transmission area.

43.5 The Trust endorsed the revised approach to current affairs output and welcomed the revised proposals on local radio. The Trust would consider its final conclusions on local radio and Delivering Quality First as a whole, together with regulatory decisions, at its April meeting. The Trust approved a proposal to extend the hours of the West Dorset opt-out from Radio Solent.

44 EXECUTIVE FINANCE REPORT

44.1 The Chief Financial Officer presented the Executive finance report which updated the Trust on the financial performance of the BBC for the nine months to December 2011, which had previously been scrutinised by the Trust Finance Committee. The Director of Finance, Procurement and Revenue gave an oral update with headline figures for January and February 2012.

44.2 The Trust discussed the report which informed the year end forecasts on which the 2012-13 budget process had been based. The report covered information on income and expenditure, service licences, strategic contracts, the continuous improvement programme, and included consideration of the key risks facing the BBC.

45 BBC BUDGET 2012-13 - 2014-15

45.1 The Trust noted the conflicts of interest process in place for discussion related to the BBC budget (see note at minute 50).

45.2 The Chief Financial Officer presented the draft BBC budget for 2012-13, which had been prepared in the context of the new BBC strategy, Delivering Quality First.

45.3 The Trust noted that the budget had been scrutinised at three previous meetings of its Finance Committee. The Trust acknowledged the work that had been undertaken by the Executive to involve the Trust Finance Committee at an earlier stage than in previous years.

45.4 The Trust noted that the 2012-13 budget marked the last year of the continuous improvement programme, and the first year of the five-year Delivering Quality First plan. The Trust noted that the implementation of Delivering Quality First savings had been included in divisional budgets within the three-year budget proposals. The Trust discussed the budget for 2012-13, which included the Olympics and cultural events of 2012, and the completion of a number of major strategic projects, including the move to Salford and the redevelopment of Broadcasting House in London. The Trust discussed key budget risks (including licence fee evasion, household growth, inflation and commercial income), and the action taken by the Executive to mitigate these risks.

45.5 The Executive would report to the Trust Finance Committee on its new proposed metrics for assessing Delivering Quality First savings in order to ensure that efficiency savings were adequately monitored and reported. The Trust approved the budget for 2012-13, including the baseline budgets for service licences.

46 IMPARTIALITY OF THE BBC – DATA PUBLICATION

46.1 The Director, Editorial Policy and Standards introduced the Executive proposals around reporting the public perceptions of the impartiality of the BBC, which had previously been scrutinised by the Editorial Standards Committee.

46.2 The Trust’s governance review included a commitment to continue and strengthen its work in ensuring the impartiality of the BBC. The review included a commitment to annual reviews of the impartiality of the BBC’s output, and to introduce impartiality seminars that explored current and emerging topics.

46.3 Members discussed the Executive’s proposals to publish the results of a market context survey. The survey had been conducted to assess the UK public’s perceptions of the impartiality of the BBC’s news output, in order to inform its journalism. The survey also covered the public’s trust in BBC news output, compared to the full news market.

46.4 The Trust approved the proposal to publish the data from the market context survey on an annual basis, alongside the audience performance information, which was usually published in February.

47 WORLD SERVICE BROADCASTING AGREEMENT

47.1 The Trust noted the new Broadcasting Agreement between the BBC and the Foreign and Commonwealth Office for the provision of the BBC World Service. The Agreement had been updated to reflect current operational arrangements and would last until 31 March 2014, after which time the World Service would be funded by the licence fee.

48 ITEMS FOR NOTING

48.1 (a) BBC Worldwide Governance – offline approval (b) Report of other offline approvals (c) Quarterly performance briefing (d) Minutes from committees and Audience Councils (e) Documents for sealing

49 BUSINESS HANDLING AND COMMUNICATIONS

49.1 The Trust discussed the handling and communication of items considered at the meeting.

50 CONFLICTS OF INTEREST

50.1 For discussion on the BBC budget (item 45), Bill Matthews noted that, as Chairman of the BBC Pension Trust, he was potentially conflicted on matters relating to the financial position of the pension scheme. This is declared in Mr Matthews’ register of interests, which is publicly available on the Trust’s website. Mr Matthews received redacted versions of the relevant papers. It was not necessary for Mr Matthews to leave the room for the Trust’s discussion on this item.