Department for Culture, Media and Sport Review of the BBC’s Royal Charter A strong BBC, independent of government March 2005 7263-K BBC charter pp01-79 25/2/05 5:39 pm Page 1 A strong BBC,independent of government 1 Contents page Forewordby Tessa Jowell, Secretary of State for Culture, Media and Sport 2 Summary 4 Key proposals and questions for further consultation 8 The process of Charter Review 16 How to respond to this Green Paper 18 Section I: Foundations of a 21st Century BBC 1. The role of the BBC 20 What should each public purpose mean for the BBC? 31 2. A changing landscape – building digital Britain 47 3. The BBC’s constitution 54 4. Funding 58 5. Governance, regulation and accountability 64 Section II: Detailed issues of scale and scope 6. Principles 80 7. Organisation and infrastructure 82 8. The scope of the BBC’s publicly-funded services 89 9. The scope and regulation of commercial services 99 Section III: Beyond the BBC 10. The system of public service broadcasting 104 Annexes AAshort history of the BBC 107 BThe existing arrangements for BBC governance and regulation 111 CThe BBC’s Fair Trading Commitment 113 7263-K BBC charter pp01-79 25/2/05 5:39 pm Page 2 2Review of the BBC’s Royal Charter Forewordby Tessa Jowell, Secretary of State for Culture, Media and Sport The BBC is as much a part of British life as the NHS. There for everyone, free at the point of use, striving for the highest standards. And like the NHS it faces the need to change so that it can be as effective in the future as it has been in the past. Since the BBC was founded as a public corporation in 1927 it has been through seven reviews of its Charter, but the review currently underway is truly unique. Until 1955 there were no other TV stations, and there were no other legal UK radio stations until 1973. Since the BBC’s current Charter began, in 1997, the number of TV channels available has more than doubled – there are now more than 400. The number of radio stations has also increased by nearly 50% in the last decade – to over 300. There are also new ways to watch and listen to programmes – through computers and mobile phones as well as radios and television sets. In particular, digital development lends a new interactive element that is changing the viewing or listening experience. It is already possible, with the right equipment, to rewind or replay programmes. People with personal video recorders spend nearly half their viewing time watching pre-recorded programmes. In future the internet, which already provides access to a wealth of information and services, will allow direct access to an increasing range of audio-visual content. In that world, viewers will be able to piece together their own schedules from a vast online archive. So we had to ask the question – what kind of BBC do the British people want, when there is now so much content available from so many other sources? And we decided that the people whose opinion mattered the most were the licence fee paying public. They own the BBC and they pay its bills, so they, we decided, should call the shots. Through opinion polls, focus groups, public meetings and our website we got the views of thousands of listeners, viewers and online users. Their views – your views – were very clear. The BBC is liked and trusted by millions. Its services are valued and enjoyed. It is seen as having a vital role to play in news and in sustaining and informing our democracy. The principles of public service broadcasting (PSB), with the BBC at its heart, are widely understood and widely supported. And although people in their millions are embracing the rapidly expanding choices offered by digital broadcasting they still see the BBC as having a key role in the multi-channel future. If anything, people see maintaining PSB as more important, not less, as more and more commercial services crowd on to the scene. But people are not uncritical. They often feel that the BBC is remote, too metropolitan, its accountability unclear, its programmes too dull, or too copy-cat of formats working perfectly adequately on other channels. They are worried about value for money. They often think that the BBC is struggling to be properly in tune with the times and is not in touch with younger people or with people from diverse cultural backgrounds. Some commercial competitors feel that the BBC is too free to expand into areas already well-served, and so stifles new and existing businesses and limits creativity. Government recognises the enormous contribution that the BBC has made to British life and culture, both at home and abroad. We also agree with the majority of British people who want to see that contribution maintained into the multi-channel future. And we also agree that the BBC needs to change 7263-K BBC charter pp01-79 25/2/05 5:39 pm Page 3 A strong BBC,independent of government 3 to adapt itself to the rapidly changing demands of that future. The nation needs a BBC that delivers high standard, innovative broadcasting that nurtures British talent, that reflects the nation to itself, and that respects the contributions made by the other players in the media world. This Green Paper embodies the decisions that we have taken so far, and sets out the areas where we are continuing to consult. Our main decisions are: •A Charter, more than any other vehicle, continues to give the BBC real distance and independence from Government and so the BBC will be granted a new Charter, beginning on 1 January 2007, and running until 31 December 2016. We believe that a ten year Charter is right, given that the BBC, the public and the wider industry need stability during the period of switchover to digital television. We intend that the BBC should take a major role in assisting the whole country to move into a fully digital environment. •Despite its weaknesses, there continues to be, as yet, no viable alternative to the licence fee. People recognise this and by and large support its retention, especially when they are asked to consider the other options. We have therefore decided that the licence fee should continue. There should be two reviews, towards the end of the switchover process, one to examine the possibility of alternative means of funding the BBC after 2016 and the other to consider whether any wider funding might be needed for PSB. •The BBC should continue to be a broadcaster of scale and scope, active in all the main genres and with the ability to adapt to new technologies and new consumer developments. However, it needs to recognise its obligations to concentrate on PSB, to avoid unnecessary overlap with other providers and to be distinctive, creative, reliable and focused on British talent. It should retain the sort of commitment to new talent that has made Radio 3 the largest commissioner of new music in the world and Radio 4 one of the largest commissioners of new writing. •The BBC’s governance needs to be modernised to meet the demands of the modern world. The BBC Governors, with their dual role of directing the BBC but also holding it to account, will be replaced by what we have called a BBC Trust (a working title), more accountable to the licence fee payers, and the custodians of the BBC’s purposes and the licence fee. We will also create a formally constituted Executive Board, accountable to the Trust for the delivery of the BBC’s services. The functions of the two bodies will be clearly separated, enabling the Trust to judge the management’s performance clearly and authoritatively. In reaching these conclusions we have been greatly assisted by Lord Burns and his panel of independent experts, and I am very grateful for the quality of their work. I am also grateful to the work done by the Select Committee, in its recent inquiry and report on the future of the BBC, and to the BBC itself for the positive contribution it has made to the debate. I believe that these proposals will deliver to the nation the BBC that they want. A broadcaster of quality, driving up standards across the whole industry. A BBC that is strong, well-funded, independent of Government and responsive to the public. TESSA JOWELL Secretary of State for Culture, Media and Sport 7263-K BBC charter pp01-79 25/2/05 5:39 pm Page 4 4Review of the BBC’s Royal Charter Summary This Charter Review has been a public debate – with the BBC, with the broadcasting industry, but most of all with those who fund the BBC, the licence fee payers. We have listened very carefully and, for the first time, have ensured that the licence fee payer has had a real voice in the journey towards renewing the BBC Charter. Everything in this Green Paper is based on the widest possible consultation with the public. We asked viewers and listeners what they value about the BBC, what they want it to do for them and how they want it to be run. Our goal, in line with what the public want, is a strong BBC, independent of Government, setting world-class standards. We will give it a new Charter and a licence fee settlement that will last ten years. But to remain strong the BBC also needs to change. Digital technology is transforming broadcasting.