David Hutchison: Cause for concern raised by hasty agreement between the BBC and the Government

IN 1986, the Peacock Report on the future financing of the BBC was published. It recommended that the Corporation begin to move towards replacing the licence fee by subscription, which has not happened, and that ITV licences should be offered to the highest bidder, which – with some modification – did happen, and began the process which led to ITV becoming not a public service broadcaster financed by advertising but a commercial broadcaster anxious to slew off all PSB responsibilities. It took four years from Peacock till the Conservative government’s Broadcasting Act of 1990.

In 1992, that government went on to publish a Green Paper on the future of the BBC and, two years later, a White Paper which began the process of Charter renewal, the new Charter coming into effect at the beginning of 1997.

So, from Peacock to Charter renewal took over ten years and there was much public discussion, lobbying, and debate in both houses of parliament along the way.

The contrast with the events of October 2010 is extraordinary.

Because so much is happening as a consequence of the Coalition Government’s deficit reduction plan, and because fundamental changes are underway on several fronts – the finance of higher education in England, the overhaul of the benefits system in Britain as a whole, to take only two examples – what has occurred in the broadcasting arena has been noticed but has not been given the attention it deserves. Fundamental change has taken place there too.

The BBC is presided over by a Trust, a part-time board drawn from the ranks of the ‘great and the good’.

“We support the BBC and guard its independence – and we work to get the best out of the BBC for licence fee payers.” That is a quotation from the Trust’s website. The BBC Charter, in distinguishing between the internal executive board and the Trust, states that the latter’s role consists “…in setting the overall strategic direction of the BBC, including its priorities, and in exercising a general oversight of the work of the executive board. The Trust will perform these roles in the public interest, particularly the interest of licence fee payers.”

In early October, Jeremy Hunt, the Culture Secretary, appears to have informed the BBC Trust and senior management that the cost of free television licences for the over-75s (£560 million per year and rising) would in future come out of the licence fee. 

The Trust and management resisted this proposal not only because of the impact on the Corporation’s finances but also because a social services obligation was being imposed on the BBC. 

Frantic negotiations then took place but, at the end of the two-day process, Hunt was able to write a memo to Sir Michael Lyons, the Trust chair, indicating that the licence fee would be frozen until 2017, and the BBC would now be responsible for financing, among other things, the World Service (currently paid for by the Foreign Office out of general taxation) and a substantial part of the cost of the Welsh language channel, S4C. It would also be obliged to make £25 million available in three years’ time for up to 20 local non-BBC television services (such as local TV) and to buy £5 million worth of material annually thereafter from them.

There is nothing objectionable about any of these services per se. Nobody is going to argue that S4C should be reduced to penury, that the World Service should cease broadcasting or that local television – possibly providing the regional news which ITV companies say they can no longer afford to provide – is a bad thing.

What is totally objectionable is the process. The timescale from Peacock on was not ideal, far from it, but it did allow for public input. 

How on earth can the Trust and its members argue that they have carried out their responsibilities on behalf of the licence payers when there has been no public discussion whatsoever of these changes, which in effect mean that the BBC now looks, not like the arm’s-length organisation some of us have been telling our students for years that it is, but a department of state which can be ordered to undertake whatever responsibilities the government of the day wishes it to undertake without even a debate in parliament?

It may be argued in reply that the Trust and the Corporation had no choice. Furthermore, allowing executive remuneration and performer fees to hit stratospheric levels was insane (the chair of the Trust does not do so badly either, although the recent advert for a replacement for Sir Michael Lyons offers a reduced salary), and could only encourage politicians to ‘do something’ which they can justify by citing the general belt-tightening which is taking place. 

The Prime Minister’s own throwaway remark at a press conference after an EU meeting that it was ‘delicious’ that the BBC was having to make cuts was an unguarded indication of government thinking.

The Trust did actually have a choice. Its members could have told the government that if it wished to push through these fundamental changes then it should go to parliament forthwith with emergency legislation which would then be subject to scrutiny in both Houses. That process would have allowed some public discussion. If the government had refused to follow such a course, then the option of mass resignation should have been considered.

Who knows? Perhaps then the government might have hesitated.

David Hutchison, Visiting Professor in Media Policy, Glasgow Caledonian University.

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