Speech to the Westminster Media Forum by Culture Secretary Tessa Jowell

30 March 2006

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Introduction

Good afternoon, thank you David for inviting me to speak to you today.

We've called the White Paper "A Public Service for all: the BBC in the digital age". It sums up our ambition. The BBC is unique; there's nothing else quite like it in the world.

Throughout the Charter Review our aim has been clear; to provide the public with the best broadcasting and online content in the world.

I want to talk about the underlying themes of our proposals. What I also came to do is lift the corner of the carpet on the next stage of the process of setting the level of licence fee. A process that is already under way. I'll come to this in more detail shortly, but we are clear that the input of the public and industry in determining the level of the licence fee is of absolute importance.

It is an example, if you like, of public value in practice.

Consultation and Research

This Charter Review has been the most ambitious ever. Those who pay for the BBC should have the opportunity to shape its future. So we have put the licence fee payer in the driving seat. I hope you realise that the proof is in the White Paper.

For example, there was an overwhelming public view, in contradiction to the rather worthy views of ministers, that entertainment should be at the heart of the BBC's mission. We addressed this in the White Paper. Just as the BBC itself is unique, the BBC's programmes and services should provide something new, innovative and distinctively BBC.

White Paper – Key Messages

The BBC is highly valued not only here but also around the world; the BBC's combined services have a global weekly audience of around 190 million. Many see the BBC as a national institution – indeed, as one participant from Edinburgh said during a research workshop;

"It's part of the heritage of this country".

Our starting point was a strong BBC, independent of Government. Within this framework, we've had 3 fundamental objectives.

Firstly, to reconnect the BBC with the licence fee payers it serves. If the BBC is to remain relevant in an era when audiences can choose between a myriad of different services it must generate a deep and broad consensus on the value that it creates. The best way for the Corporation to do this is to engage in a meaningful and sustained conversation with licence fee payers.

Secondly, to ensure that the BBC is strong enough to adapt to, and often lead change. The BBC has always kept pace with new innovations, after all it was set up to exploit an exciting new technology – the wireless – and we think that in an era when the pace of change has never been more rapid it is important that it continues to set that lead.

Finally, to ensure that the BBC does not prevent the rest of the market from flourishing. We recognise that today's landscape is very different from that of 1927 when the BBC was established and that the public have benefited enormously from the drive, innovation and commitment to quality that's demonstrated on a daily basis by the commercial broadcasting industry.

So the White Paper sets out a vision for a BBC strong enough to thrive in the new environment, with the public at the core of its activities, and a new relationship with the rest of the broadcasting landscape.

In relation to these objectives, why do I think that we have achieved what we set out to achieve in the White Paper?

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Governance and Accountability

For too long the BBC Governors have been both jury and defendant. This is why we are introducing a radically different system of governance. There will be a clear line of accountability to those who pay for the BBC – licence fee payers.

We are abolishing the existing board of Governors and creating two completely new and separate bodies: the Trust and the Executive Board. The Trust will be the voice of the licence fee payer

The membership of the Trust needs the right blend of expertise to represent all licence fee payers. Not the Great and the Good, but the diverse and the good.

The unprecedented obligation to openness and transparency, the duty to have regard to competition issues, the system of purpose remits, service licences and the public value test will all put licence fee payers and stakeholders at the heart of the decisions that are made about the BBC.

One only needs to compare the existing Charter with the new draft Charter to see how different the new arrangements are.

Key changes for the BBC

Our vision for the future puts the BBC firmly in the role of a 'trusted guide', bringing the benefits of new technologies to its audiences. The BBC must have the flexibility to deliver its content in new ways. However, a complex and competitive market exists in today's world and we are clear that that market, in order to maximise choice for licence fee payers, must also continue to prosper.

To achieve the right balance there's a need to provide certainty and assurance to the industry.

This is why we have defined the BBC's public purposes more clearly than ever before. The BBC will have to consult on and develop new "purpose remits", setting out its priorities within each of the new BBC purposes. In doing so, it will have to work with the grain of what others have to offer.

We've put in place a new triple-lock system to embed transparency and certainty into its decision-making.

Every BBC service will require a "service licence" from the Trust. The licence should set out key characteristics of the service, and what the public can expect from it.

All BBC content must display at least one of five characteristics: you should be able to tell BBC content because it is high quality, challenging, original, innovative or engaging.

It's the double helix of purposes and characteristics that is the BBC's digital DNA.

The final part of this system is the introduction of a public value test to look at the market impact and public value created by new services and significant changes to existing BBC services.

As a result of the Green Paper consultation we've confirmed that market impact assessments will be carried out by Ofcom in all cases. Ofcom has the expertise, experience and the widespread trust necessary for this important role. A joint steering group drawn jointly from the Trust and Ofcom will oversee the work.

I am pleased that the BBC has confirmed that its proposed interactive media player will be the first project to be subject to the new public value test. This will provide an important test of the new arrangements and I - and I am sure others - will be watching the new developments with interest.

All these structures will provide more clarity and certainty to the market, and it will also ensure that the BBC is aware and vigilant about potential impact.

New competition framework

The White Paper also strengthens Ofcom's competition role. As well as the part it plays in the public value test, it will also have a role in the new system of ex-ante competition codes. In setting the codes, the Trust will take account of Ofcom's views in both the areas that should be covered, and in the content of the codes themselves.

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Production

The White Paper also requires the BBC to operate a new "window of creative competition", a commissioning system that encourages greater competition between in-house and independent producers. Programmes like Hustle, Ideal, and Who do you think you are? may not have been made by the BBC, but they are all quintessentially BBC.

The WOCC enables competition on quality that provides audiences with the best programmes from both in-house and the independent sector.

Digital Switchover

Digital switchover is obviously a key part of the backdrop against which this White Paper has been written. It will help to shape the role of the BBC up to 2012 and beyond.

And, without being for one moment complacent, we have a good story to tell here. We lead the world in Digital TV. More than 70% of homes in the UK now have access to it. We are probably more developed than any other European country in our plans for digital switchover.

It's a product people want and like. But we do have a duty to ensure that no one is left behind in the switch to digital. That's why digital switchover cannot simply be left to the market.

As one of our most trusted public institutions, the BBC is uniquely placed to deliver the benefits of digital to every viewer.

And that's why we've put it at the heart of our plans for switchover.

We are asking the BBC to set up and fund a scheme from the licence fee that will ensure that the most vulnerable members of society - the elderly and those with severe disabilities – get the help they need to switch to digital.

To enable us to define the type and degree of this help, we have, with the BBC, been running a trial in one ward in Bolton.

While it is too early to publish the full results, there are some encouraging emerging findings.

For instance, two thirds of those who selected Freeview boxes were able to "self-install" themselves or with the help of family and friends; in addition to the advice and support provided by the scheme call centre.

While participants needed time to adjust to their new set-top-boxes, more than 80% had "no problems", as they defined it, with their box after less than two months. Once they were used to it, people were delighted with their digital TV and did not want to revert back to analogue. In that respect this trial very much confirms the trials that took place in Wales.

And the trial has shown that people want clear graphics, well-designed remote controls and good understandable information - 92% of participants said that the one page help sheet had been "helpful".

So, we should not underestimate the ability of even the people who are most vulnerable in society to adapt to new technology.

And both the Bolton trial and the earlier one we conducted in Wales show that once people get digital TV they value it. Beyond providing mere entertainment, the TV provides a real, tangible link to the outside world. It is not a luxury, it's a necessity.

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Licence fee and funding

A key theme of the White Paper is accountability to the licence fee payer.

The continuing discussions on the licence fee level from April 2007 will provide the first example of this strengthened accountability.

And, as part of the process of determining the level of the licence fee, we will carry out willingness to pay research shortly – where a sample of licence fee payers will be asked their views on the licence fee and what they are willing to pay for the BBC.

The publics' views will have a material impact on the final judgement we make on the level of the licence fee.

This is an example of public value in action, in setting the level of the licence fee.

And in reaching our decision, it is also vital for us to remember that the BBC is not the only player in the market. It doesn't operate in a vacuum. When it flexes its muscles, the rest of the market feels it.

But by the same token it's important that we never forget that the BBC is not some aberration that landed by circumstances out of our control and continues to persist in occupying the broadcasting environment. The BBC is there as a deliberate act of public policy.

In addition to the willingness to pay research, Terry Burns will also chair a public seminar on the licence fee on Friday 5 May. The seminar will examine issues like the BBC's current settlement, cost pressures, efficiency, technological development and the BBC's own future funding proposals.

I know that Terry will want to focus on the facts and the evidence. I look forward to receiving factual submissions that will help us understand the issues for the rest of the market as we move into the next Charter period and determine the level of the licence fee.

Conclusion

By granting a ten-year Charter and confirming that the licence fee will continue to fund the BBC, some people have accused us of looking back to a world which will no longer exist by 2016.

In fact the opposite is the case. The new purposes that we have set out will remain as relevant in 2016 as they are today. But the growth of broadband, wireless networking, IPTV and technologies not even thought of yet will require very different means. The framework that we have set out in the White Paper enables the BBC to adapt and innovate to continue to create value for licence fee payers over the whole course of the Charter.

I look forward to hearing your comments on the draft Charter and Agreement as we work with you over the coming weeks.

Looking forward, I believe the challenge for the BBC is that by 2016 we shouldn't be returning to that age old question of - "To BBC or not to BBC?" - but for it to have generated the kind of deep and broad consensus around its value to the public and the wider media sector that is enjoyed now by the NHS or indeed by state education.

I believe the new public value focus that we have set out in the White Paper, which creates a new kind of democratic accountability for the BBC, will be one of the greatest challenges the BBC will face and also the best way of safeguarding and guaranteeing its long term sustainability.

Thank you.

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