5 Content |
70. As well as assessing the additional responsibilities
that the BBC has taken on as a result of the settlement, we have
also looked at BBC content.
Strategic Review: Initial conclusions
71. In summer 2009 the BBC Trust decided to undertake
a major strategy review to determine how the BBC could most effectively
deliver its public service mission for the rest of the Charter
period until 31 December 2016. This decision was announced through
an open letter to licence fee payers in September 2009. The BBC
Trust initiated the first stage of this review by tasking the
BBC Executive to conduct its own review and put proposals to the
Trust. The BBC's proposals were published in March 2010. The Trust
then undertook a three-month consultation period before publishing
its initial strategy review conclusions in July 2010. The Trust
published its final conclusions in December 2010, just before
our second evidence session.
72. By the time of our first oral evidence session,
the Trust had already endorsed the central components of the Director
General's proposals, so the broad outline of the strategy review
had already become clear. The key outcomes included commitments
- putting quality first;
- doing fewer things better;
- making the licence fee work harder; and,
- setting new boundaries.
73. Mark Thompson had also used his MacTaggart
lecture of 27 August 2010 to expand upon his future vision for
the BBC. He stated first that there was much to be proud of in
the existing provision of services:
I believe that the real dirty little secret about
British television is about how good it is, not how bad.
Highlighting how important it was that the BBC spent
as much of the licence fee as possible on high quality content
"at a time when other broadcasters are struggling to maintain
their origination budgets", he went on to stress that the
BBC needed to rededicate itself to this central mission, arguing
for a "further significant shift towards distinctiveness"
and a need to "create more room for other players".
This may be read, perhaps, as a tacit admission that the BBC
had strayed into areas that it should not have done.
74. We explored these themes further in our first
oral evidence session, pressing for examples of areas where the
BBC intended to do less in order to concentrate on higher quality
and distinctiveness elsewhere. Here Mark Thompson mentioned in
particular fewer leisure programmes, fewer repeats and reducing
the amount spent on acquired programming (programmes neither commissioned
by the BBC nor made in-House but brought in a finished state from
another supplier) given that there are plenty of other channels
catering for this demand.
We subsequently obtained from the BBC the information that it
spent £93 million on acquired television programming in 2009/2010,
and intends to spend between £75-85 million on acquired programming
in 2010/2011. This appears to represent a reversal of the previous
trend as spending on acquired programming grew from £88
million to £101 million between 2006/2007 and 2008/2009.
A balance must be struck
between BBC-generated and acquired programming, as there is clearly
a place for the BBC acquiring distinctive, high quality programmes
when other terrestrial broadcasters do not wish to bid. Generally,
however, we welcome the shift of emphasis away from acquired programming,
and trust that the downward trend will continue.
75. We looked at the emerging plans for radio,
where the BBC Executive's proposal to close the BBC digital music
channel 6 Music and the Asian Network had been overturned by the
Trust. Sir Michael Lyons told us that "the arguments didn't
stand up as a result of the consultation analysis we've done"
but felt that the proposal had helpfully brought to the fore:
] the two big strategic issues sitting behind
it. The first of those the greater distinctiveness of
Radio 1 and Radio 2 [
] the second issue [
] is the
absence of a coherent digital strategy not an issue for
the BBC alone.
Mark Thompson accepted that he needed to go back
and look at the broad radio strategy.
76. Aligning with our predecessor Committee,
we intend to take a keen interest in the BBC's commitment to spending
in the nations and regions. During the first oral evidence session,
we also took the opportunity, therefore, to question the BBC on
its commitment to fulfilling production quotas in the three nations
of Scotland, Wales and Northern Ireland, receiving reassurances
The BBC's commitment to it is evidence of the Director
General taking up issues that the Trust gave a strong direction
on but here you have targets set by the Trust being progressed
and being met and a very real and palpable outcome for licence
fee payers in the three nations.
We urge the BBC to increase still
further its efforts to support the production of quality programmes
in the nations and regions when a strong case for doing so can
Strategic Review: Outcome
77. By the time of our second oral evidence session
the BBC Trust had just published the final outcome
of the Strategic Review. As expected, it put the focus on increasing
the distinctiveness and quality of programmes and services while
improving value for money. One issue which did strike us was how
long it was taking the BBC to implement changes in areas that
had long been identified both by the BBC and outside commentators
as requiring attention, such as the strategy review itself,
which had taken well over a year to complete.
78. As a further example of this tardiness, Mark
Thompson confirmed the intent to reduce the amount spent on the
BBC website while making it more distinctive. This is not before
time. BBC Online expenditure rose by 12% from £178 million
to £199 million in 2009/2010. From financial year 2003/2004
through 2009/2010, the BBC spent around £1 billion on BBC
online services. This growth has continued despite growing concerns
from the commercial sector about the scale of the BBC's online
activities. As far back as 2004, a Government review (The Graf
Review) concluded that the BBC should redefine the remit and objectives
for its online service; include more consistent and transparent
links to all relevant commercial and public sources; increase
distinctiveness; and introduce a deliberate, precautionary approach
to investment. The BBC Trust conducted its own service review
of BBC Online in 2008, concluding then that it required firmer
editorial control and clarity of purpose. It is striking that,
although the Strategic Review confirmed a 25% budget cut for BBC
online, the Trust still did not feel able to sign off proposals
for change at this time. The Trust finally agreed a new BBC online
strategy on 24 January 2011. This is a good example, then, of
an area where the BBC has allowed itself, for too long, to depart
quite substantially from its public mission.
79. While we are content with
the broad thrust of the BBC Trust's strategic review, we have
concerns that the BBC remains slow to implement necessary change.
We will monitor closely the extent to which the BBC increases
the speed with which it fulfils its strategic review commitments,
including implementing improvements to the distinctiveness and
quality of its services.
The Strategic Review and the
80. There was one alarming feature of the final
strategic review documents; the strategy review and the new settlement
are not fully aligned. Although the BBC has sought to portray
the strategic review as a necessary roadmap for the settlement
deal, it can equally be argued that the scope of the settlement
has derailed the strategic review in a number of respects. Most
strikingly, perhaps, while the strategic review argues strongly
for the BBC to deliver better value to its audiences by doing
fewer things better, the settlement requires the BBC to take on
additional tasks, some of which, as we have seen, are of debatable
relevance to its core mission and public purposes.
81. Slightly more hidden is a further concern.
The BBC Trust's December 2010 The BBC's Strategy Putting Quality
First document, which summarises the conclusions of the strategic
review, contains the following statement:
The BBC's new licence fee settlement changes the
picture somewhat. [
]In the course of the next two years,
the BBC Trust and Executive will therefore need to agree a realistic
target for productive efficiencies in the period from 2013/2014
to 2016/2017, and how any remaining gap in funding is best met.
That is likely to require a more fundamental review [our
italics] of the cost base and the shape of BBC services than was
undertaken in the course of the strategy review.
It sometimes appears as if the BBC is in a state
of permanent review. We took the opportunity in the second oral
evidence session to clarify the extent to which more radical changes
to the BBC lay just round the corner. Sir Michael Lyons expressed
regret that he had used the term "review" again, but
admitted that there was a lot of work still to be done to determine
how the priorities identified in the strategy review were going
to be delivered against the 16% reduction in budget. Mark Thompson
] I think we have the direction of travel.
We now have the fairly considerable task of turning these broad
themes and direction into practical plans for genre and services
82. We pressed further on whether future reviews
would produce evolutionary change or a rather more fundamental
rethink of what the BBC does. We detected a difference in emphasis
from the Director General and the Chairman of the Trust. Mark
Thompson appeared to us to favour an evolutionary approach. He
pointed out, with reference to the opposition to the BBC's earlier
proposal to close 6 Music, that:
] the public do not want any diminution of
the services offered by the BBC [
] So our challenge is that
the public want a broad range of services from the BBC; there
isn't a single service from the BBC that has not got a powerful
constituency out there. They want a broad range of high quality
content from the BBC, and our challenge, if you like, is can you
meet that public expectation in the context of the reality of
the funding the BBC will have over this period?
The risk is that by trying to retain all its services,
the BBC ends up spreading itself too thinly, so that quality and
distinctiveness suffer. Our predecessor Committee questioned the
value provided by BBC Three, including its effectiveness in reaching
young people. Mark
Thompson was, however, rather dismissive of the suggestion that
the BBC might need to reduce its number of channels, arguing that,
as a fully digital UK approached, so the underlying value of all
the BBC's digital channels increased. He also suggested that the
logic for reducing a broad portfolio of channels lay many years
in the future.
In sum, he thought that the number of digital channels operated
by the BBC was a second order issue:
Having ambitious, outstanding content is the key
issue. How to make sure the licence is going into the best possible
content of course, there are some costs in having an extra
digital channel, the last marginal digital channel. But they are
very small economic questions when you compare them to the underlying
point, which is making content. That's where the money goes, in
the making of content.
83. Sir Michael Lyons, on the other hand, appeared
to us to be more conscious of a need for radical change in order
to work within the constraints imposed by the settlement. He noted
that the strategy review had concluded that it would be premature
to look at the current portfolio of television channels as the
public's viewing patterns had not changed significantly. He observed
however that the BBC could no longer afford to put off this type
of fundamental review:
In the context of a 16% budget reduction, the Trust
is clear that we don't have the luxury of that [the portfolio
of channels]; it has to be looked at, as indeed does all BBC activity
84. On 12 January Sir Michael Lyons wrote to
Mark Thompson on the subject of implementing Putting Quality
First and the new licence fee settlement.
The letter noted that they were in agreement that:
] the scale of this challenge requires the
BBC to undertake a fundamental review of its cost base and shape
of services and activities.
He expected the BBC Executive to bring proposals
to the Trust in the summer and that, thereafter, the Trust would:
] lead a programme of external consultation
with licence fee payers and wider industry to test our understanding
of their likely impact. We will aim to finalise our conclusions
by the end of the year.
He went on to emphasise that savings "should
be targeted in those areas where the BBC's public value is lower"
and that there should be no compromising of the pursuit of greater
distinctiveness on BBC One, BBC Two, Radio 1 and Radio 2. Finally,
he observed that:
We have also previously signalled that this process
is a good opportunity to assess how the shape of the BBC's television
portfolio as a whole might develop after digital switchover is
complete in 2012.
Media reporting interpreted these statements as a
clear message that the future of digital channels BBC Three and
BBC Four was in doubt.
85. The main outcomes of the
BBC Trust's strategy review are largely underwhelming in that
they simply repeat verities such as the importance of putting
quality first, ensuring value for money and having boundaries
appropriate to its publicly-funded status. Our sense is that the
hard choices on content are yet to come, but that they should
not be avoided any longer. We will await with interest any indication
that the new Chairman of the BBC Trust and the Director General
can give us on the future shape of BBC services and their content
during our next annual oral evidence session, and look forward
to comparing the options considered and the choices made against
the values of the strategy review.
92 James MacTaggart Memorial
Lecture, speech by the BBC Director General Mark Thompson at the
Media Guardian Edinburgh International Television Festival, 27
August 2010 Back
Culture, Media and Sport Committee, Fifth Report of Session 2009-10,
BBC Annual Report 2008-09, HC 515, paras 55-63 Back
Trust publishes licence fee settlement commissioning note, BBC
Trust Press Release, 12 January 2011 Back
The Guardian, BBC Trust chair : we may cut back digital channels,
John Plunkett, Wednesday 12 January 2011 Back