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SoS speech to the IPPR Oxford Media Convention

20 January 2005

Speech By Tessa Jowell, Secretary Of State For Culture, Media And Sport

Good afternoon to you all.

It’s a great pleasure to be invited to round off the day here at the Oxford Media Convention.

One of the many side benefits of being the SoS for CMS is the opportunity to attend the media industry’s regular get-togethers, and the Oxford Convention has clearly established itself in that calendar.

Earlier today you heard from Michael Grade. He reminded you of the very simple point that is often obscured by the detail of the Charter Review debate – that is that the BBC exists to pursue excellence, and to make great programmes. That point is absolutely crucial to the whole Charter Review process, and we will not lose sight of it.

BBC Charter Review

The Green Paper, which as you know I promised in the first quarter of this year, is currently close to completion, but I know that you will all understand that Parliament must be the first to hear what it contains.

The whole review process has been conducted in the open, with full public and industry consultation at every stage. Unlike previous Charter renewals the licence fee payer has been given a voice. There has been no secret plotting (as far as I’m aware) behind the scenes and there have been no off-the-record briefings. And I’d like to pay tribute to the BBC which has also set out its position in public, in publishing Building Public Value and the various speeches that Mark and Michael have given, developing those themes and ideas in more detail.

So I promise you that although we are close to the final decisions about the content of the Green Paper, no final decision has yet been taken and you can disregard any speculation you may read to the contrary. And it’s important to remember that the Green Paper is not the end of the story. There is a White Paper still to come, there will be debates in both Houses, and at each stage we will consult widely.

Today however I can tell you what the key principles, the key tests, are for formulating our proposals.

In the area of governance and regulation I can tell you what the broad range of options is, from which our recommendations will be drawn.

And I can also tell you what are the fixed points, in what must seem to many like a constantly shifting landscape.

I hope that when people come to write the history of this Charter review, they will recognise that it was built around three key objectives of change:

• A strong BBC. A broadcaster of scale and range. Committed to the highest quality programming. Independent of Government and independent of commercial pressures.
• A BBC with an unprecedented clarity of purpose; and very much not least.
• A genuine sense that the BBC is owned by and accountable to the people who pay for it.

In achieving this we will also establish:

• A BBC with a system of governance and regulation geared up for the challenges of 2007, not 1927 – and with the flexibility to adapt to those of 2027
• A BBC even more capable of achieving high benchmarks, especially in News, that the rest of the industry has to live up to, and clear that it should compete on grounds of quality not just share;
• A BBC which applies the benefits of the licence fee more fairly across the UK;
• A BBC that delivers real innovation and distinctiveness;
• Positioning the BBC as a force for good in the market, for example through training, and through promoting a strong independent sector – with the aim of getting the best material on air and putting the interests of viewers and listeners first every time
• A BBC that structures itself to make sure licence fee payers get maximum value for money.

I don’t think any of those principles are in any way inconsistent with what Michael Grade told you this morning. And I agree with him that Building Public Value represents a real and important programme of internal reform. It is an important foundation stone for the rest of the process of Charter Review.

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Fixed points

We are not working with a blank sheet. The BBC is much loved by the public and it is an outstanding broadcaster. It is as Ofcom say in their Public Service Television review, the centrepiece of PSB in the UK. We will do nothing to undermine this.

There are some other fixed points too:

• The Burns Panel review process indicated yet again that there seems to be no credible alternative to the Licence Fee immediately available to us – but this needs to kept under review as technologies and consumer behaviour develop over the next few years.
• The next Charter – or even the Select Committee’s idea of a BBC Act of Parliament– should ensure certainty and stability to the BBC and the competition as the nation goes into DSO.
• But that doesn’t mean that the BBC should stand still during the next charter. Because the world around the BBC will continue to change rapidly, not least through the process of switchover itself. There needs to be some flexibility to adapt to change and to plan for the fully-digital, post-switchover world.
• We are also committed to PSB as a powerful force in the wider ecology, with the BBC as the main player, but recognising the need for competition in PSB
• We are agreed that the BBC should be present in each main area of output – radio, television, online and emerging platforms – and in each main genre. There should be no “ghetto” of PSB – but there must be clear remits focused on outputs and on the core PSB objectives, and a willingness by the BBC to consider leaving that part of the field where no longer adding value
• We recognise the importance of service remits and licences, now being developed as part of BPV, building on the role a service remit had in changing the BBC3 service. We believe the remits should be drafted to give the licence fee payer and the BBC’s commercial competitors some certainty.
• Ensuring the BBC plays an active role in helping to build and develop digital Britain. In particular the BBC has a crucial role to play in achieving digital switchover – indeed it is already doing so. I very much welcome its willingness to do this, expressed in Building Public Value.
• And we also believe that the BBC must always be aware of its competition obligations and pay due regard to market impact.

Governance

These all combine to impose heavy obligations on the BBC’s system of governance and regulation.

There is general agreement that the old structure is not adequate for the demands of the rapidly changing broadcasting environment – you will all know my views that this system is unsustainable.

It is complicated and difficult to understand. It is not sufficiently trusted by the BBC’s commercial rivals. Nor is it widely understood by licence fee payers. 85% of people we surveyed did not know who was responsible for the day-to-day running of the BBC.

To its great credit, the BBC has itself suggested that the current system lacks transparency, accountability and openness. They have also accepted that there is some tension between the two broad roles that they are being asked to fulfil, namely devising strategy and delivering services; and scrutinising that strategy and measuring the performance of those services. They have already begun to reform the governance system from within, and this morning Michael Grade described how he wanted to go beyond the original BPV proposals, by instituting new governance protocols, virtual AGMs and performance appraisal systems for Governors.

The question is – how much further does reform need to go?

At present, the Governors are still being asked to perform different sorts of regulatory role. In some areas they are simply responsible for ensuring compliance with Ofcom codes and quotas. In other areas they are required to institute their own codes and quotas, and beyond that to make their own qualitative judgements about the quality and range of the BBC’s public service broadcasting.

And the shortcomings of the existing system have been thrown into sharp relief by the fact that the world has changed quite a bit since 1927. Terry Burns’ panel highlighted some of the changes that have taken place in the wider corporate world:

• Increased accountability and external scrutiny
• Greater openness and more consultation in handling major decisions
• A move away from self-regulation where regulation is required
• Processes and structures that minimise conflicts of interest

And – as I know only too well – the days are long gone since people automatically deferred to institutions. The old BBC system seems more suited to some kind of golden age of patrician government than to a time where – thankfully – people are ready and willing to challenge authority.

 

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The new BBC will need to look and feel different from the outside, not just from within.

So what should the governance structure be required to achieve, and what form should it therefore take? There has been no shortage of opinion, and we are very grateful for the all the contributions we have had, most recently from the CRCA yesterday. Although I have to say that it sometimes seems as if on the back of “OfBeeb”, “InBeeb” and “OurBeeb”, we might reasonably expect an “OutBeeb” and a “ShakeitallaboutBeeb”.

That said, Terry Burns has moved the debate a long way on by setting out the key characteristics that any new form of governance and regulation must demonstrate. With some revision in the light of the final public seminar Terry held on 3 December, we think those characteristics are that any new system:

• Should be founded unequivocally in the public interest
  
• Should be appropriate for an organisation built on creativity
  
• Should protect the independence of the BBC from Government – but not from the licence fee paying shareholders
  
• Should be genuinely open, transparent and objective
  
• Should ensure appropriate accountability for the public’s money
  
• Should command public confidence, and involve the public adequately in decision-making
  
• Should provide adequate protection for those outside the corporation who may be affected by the BBC’s activities (principally, although not confined to, its private sector competitors)
  
• When conducting assessments of impact, should use criteria which allow direct comparisons with the rest of the broadcast market
  
• Should be clear about the distinction between governance and regulation and has arrangements which support both.
  
• Should be clear about the respective roles of executives and non-executives and embody this in ways of working
  
• Should incorporate effective mechanisms for audit and complaint handling
  
• And it should be flexible enough to adapt to changes in the wider broadcasting market – “future proofing”

Our task now is to make sure we get the mix right. In shaping the debate, Terry and the panel marshalled, from a variety of sources, not least the extensive and excellent programme of public seminars they ran, a number of models of Governance and regulation. They put forward three possible options that represent different points on a spectrum:

• At one end, BPV – the BBC’s own proposals for creating greater transparency and objectivity for its governance and regulation
• At the other end of the spectrum, oversight by Ofcom or by an Ofbeeb – an external body that focuses on “pure” regulation, or acting as a “court of appeal” beyond the BBC;
• In-between those two, the idea that there might be some form of BBC Trust or Commission, embodying the BBC’s values, the custodian of the Licence Fee, but separate from the BBC management structure.

All are workable. All have strengths and weaknesses. All have variations of one sort or another. The Burns Panel’s work in identifying options in this way has been very helpful in clarifying the choices before us.

We now need to decide which model will do the most to guarantee the best experience for the BBC’s audiences across all its media. We are now doing some road testing of the options, and testing further the public’s views.

Because I want to end on the most important point of all.

The BBC belongs to the public, they own it through their investment of the licence fee. Whatever outcome we arrive at must meet this, the ultimate test – it must create a BBC that is independent of Government, and feels to the core of its being that it exists only to serve the public interest.

20 Jan 2005: SoS speech to the IPPR Oxford Media Convention PDF (45kb)

 

This documents is available online in Adobe Acrobat (.pdf) format.

 

 

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