MINUTES OF THE BBC TRUST MEETING Held on Thursday 17 March 2011 in the BBC Trust boardroom, Great Portland Street, London Present: Michael Lyons Chairman Richard Ayre Trust member Diane Coyle Trust member Anthony Fry Trust member Alison Hastings Trust member for England Patricia Hodgson Trust member 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 In attendance Nicholas Kroll Director, BBC Trust from the Trust Alex Towers Deputy Director, BBC Trust Unit: Phil Harrold Head of Governance Mark Devane Head of Communications Christine Mulryne Business and Events Co-ordinator Items 30 – 34, Alison Bexfield Head of Finance and Compliance 36 and 37 Items 30 – 34 Jon Cowdock Head of Business Strategy and 38 Items 30 - 34 Alison Gold Head of Public Services Strategy and 39 Item 33 Peter De Val Head of Legal Item 33 Meredith Cook Project Manager, Governance Item 38 Bronwen Roscoe Senior Strategy Adviser Item 40 Andrew Young Diversity Adviser From the Executive: Items 35 - 42 Mark Thompson Director-General Items 35 – 42 Mark Byford Deputy Director-General Items 35 – 42 Caroline Thomson Chief Operating Officer Items 35 – 42 Zarin Patel Chief Financial Officer Items 35 – 42 Mary Wilkinson Acting Head of Director-General’s Office Items 36 and 37 Chris Day Group Financial Controller Items 36 and 37 Ed James Head of Group Reporting and Analysis Item 38 John Smith Chief Executive Officer, BBC Worldwide Item 38 Anna Mallett Controller, Business Strategy Item 38 David Moody Director, Strategy, BBC Worldwide Item 40 Hamida Ali Policy and Performance Manager, BBC People AGENDA 30 Minutes and matters arising 31 Committees and Audience Councils 32 Director’s report 33 Licence fee settlement – implementation 34 BBC Trust work plan 2011-12 35 Director-General’s monthly report 36 BBC Budget for 2011-12 37 Executive finance report 38 The BBC’s strategy for BBC Worldwide 39 Performance dashboard 40 BBC diversity strategy 2011-14 41 Executive items for noting 42 Mark Byford 43 Other business 44 Trust items for noting 45 Business handling and communications 46 Conflict of interest 30 MINUTES AND MATTERS ARISING 30.1 The Trust approved the minutes of its meeting on 17 February 2011 as an accurate record of proceedings, with minor drafting amendments. The Trust approved the publication of the minutes with no redactions. 30.2 The Trust noted the matters arising from previous meetings. 31 COMMITTEES AND AUDIENCE COUNCILS 31.1 The Trust noted the reports from each of the committees and Audience Councils. The chairmen of each committee and council updated members on the major outcomes of their respective meetings. 31.2 The Chairman of the Editorial Standards Committee (ESC) said that the committee had approved the Election Guidelines and Guidance relating to the forthcoming elections for the Scottish Parliament, the Welsh Assembly, the Northern Ireland Assembly, and local government in England and Northern Ireland. 31.3 The ESC commended the television audibility research project, undertaken by BBC Vision together with the Voice of the Listener and Viewer and the Royal National Institute for Deaf People (RNID), which investigated the factors that cause audibility problems for viewers. In response to the key findings of the report, the BBC would publish best practice guidance for producers, which would be publicly available on the BBC Academy’s College of Production website. 31.4 The Chairman of the Finance and Compliance Committee said that the committee had scrutinised the BBC’s budget for 2011-12, prior to consideration by the Trust later in the meeting. She reported that the committee had taken part in helpful and wide-ranging discussions with KPMG, the BBC’s external auditors, on budget and finance issues. 32 DIRECTOR’S REPORT 32.1 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. 32.2 He noted that the House of Lords Communications Committee had launched an inquiry on BBC governance and regulation. The Chairman would give evidence before the Committee, as would other Trust members. 33 LICENCE FEE SETTLEMENT – IMPLEMENTATION 33.1 The Deputy Director, BBC Trust sought approval for the proposed amendments to the Agreement between the BBC and the Secretary of State for Culture, Olympics, Media and Sport following the 2010 licence fee settlement. The amendments would define the funding and governance arrangements for the BBC/S4C partnership, the BBC World Service, BBC Monitoring, support for local television and support for broadband, once these activities were funded from the licence fee. 33.2 The Trust approved amendments to the Agreement, noting that these would also need the agreement of the Secretary of State. Trust members noted that the Executive Board had agreed that the amendments as drafted would be workable from an operational perspective. Members discussed the Trust’s position relating to new access arrangements for the National Audit Office (NAO) and endorsed an approach to ongoing negotiations with the Government in this area. 33.3 The Trust delegated authority to the Chairman for any further decisions required and for approval of the final text of the Amending Agreement. 34 BBC TRUST WORK PLAN 2011-12 34.1 The Trust’s Head of Governance presented the draft Trust work plan for 2011-12, which set out the key elements of the Trust’s programme of work for the year ahead. 34.2 Members noted that the work plan set out the delivery of the new BBC strategy, Putting Quality First, within the licence fee settlement as the main priority for the Trust in 2011-12. The Trust approved the work plan, which would be published in April, with the option to publish an updated plan later in the financial year, following the arrival of the new Chairman and the publication of the Executive’s business plan. 35 DIRECTOR-GENERAL’S MONTHLY REPORT 35.1 The Director-General outlined recent highlights on BBC services including World Book Night and Wonders of the Universe on BBC Two and noted the announcement of Ambridge Extra, a 13 week spin-off series from The Archers, which would be broadcast on digital station Radio 4 Extra. He commended the way in which Comic Relief had been embraced across the BBC, and highlighted contributions from Radio 3’s Big Red Nose Show at the Royal Albert Hall and Radio 1’s 52 hour ‘Longest Show’ with Chris Moyles. 35.2 The Director-General noted the range of BBC output recognised at the recent Royal Television Society programme awards. Winners had included BBC Two’s Miranda and Wonders of the Solar System, BBC Four’s The Secret Life of the National Grid, CBBC’s Sarah Jane Adventures and BBC One’s EastEnders, in addition to individual awards for Professor Brian Cox and Miranda Hart. 35.3 The Deputy Director-General outlined key stories covered recently in BBC journalism output, including the natural disasters in Japan and the political crisis in Libya, commending the reporting by BBC journalists in exceptionally challenging circumstances. 35.4 The Director-General briefed Trust members on discussions regarding the Government’s proposals for public service broadcasters to broadcast a daily “community minute” with the aim of encouraging people to get involved in their local communities. Trust members were supportive of the Director-General’s position that it would not be appropriate for the BBC to be involved in this proposal. 35.5 Trust members discussed recent reports on the BBC’s use of private investigators. Members received assurances from the Director-General and Deputy Director- General that the occasional use by the BBC of private investigators complied with the Corporation’s Editorial Guidelines. 35.6 The Trust noted the managerial arrangements that the Executive had put in place to take effect following the departure of the Deputy Director-General. The post of Deputy Director-General would be closed as part of the senior management review, which had targeted a 25% reduction in senior management costs by the end of 2011. 36 BBC BUDGET FOR 2011-12 36.1 The Chief Financial Officer presented the draft BBC budget for 2011-12, which had been prepared to reflect the priorities agreed in the new BBC strategy, Putting Quality First, and in the context of the new licence fee settlement. In addition, the budget proposals covered major infrastructure projects (including BBC North and the W1 building), an update on the Continuous Improvement Programme targeting efficiency savings of 3% per year, and plans for coverage of the sporting and cultural events in 2012: the London Olympics, Festival 2012 and the Queen’s Diamond Jubilee. 36.2 Trust members discussed the budget proposals, which had undergone scrutiny at the February Trust meeting and by the Trust’s Finance and Compliance Committee. Members noted the additional information supplied by the Executive on key budget risks (such as inflation and licence fee evasion), indicative financial projections for the next six years, incorporating the BBC’s extra obligations under the licence fee settlement, and how the strategic priorities set by the Trust had been reflected in the budget. Members noted that this was an interim budget that enabled the BBC to continue its core activities while the Executive worked further on its Delivering Quality First proposals. 36.3 The Trust approved the BBC budget and the Trust Unit budget for 2011-12. The Chief Financial Officer undertook to return to the Trust with further information about inflation risks, as requested by the Trust. 36.4 The Chief Financial Officer presented an update to the Trust on the valuation of the BBC Pension Scheme.