A contestable public service content fund

David Elstein proposes a new way of commissioning public service content
David Elstein
29 March 2010

The publication of the BBC’s Strategy Review, on 2 March, has triggered a broader debate: how should the BBC’s role be seen in the context of the broader crisis in the provision of public service content?

In recent years, public service broadcasting has been defined quite widely, both by Ofcom and the BBC, so as to cover a range of public purposes and values.

However, Ofcom, the BBC and Channel 4 also adopt definitions of “core” public service content, which constitutes what might be called the “endangered species” in a rapidly expanding market-place of programmes. These are documentaries, current affairs, children’s, arts, regional news, innovative drama and comedy, education and religion.

The supply of these categories is a reliable indicator of our success in meeting the broader objectives of public service broadcasting, and these are the areas where the market by itself is least likely to meet all society’s needs.

A great deal of valuable content – innovative, of high quality, stimulating, entertaining and educative – will be available to the public in the digital age, without any intervention by the state. However, our distinctive British contribution to broadcasting has been to create a structure that enables various broadcasters to deliver rather more than “what the market would anyway supply”.

Ofcom’s most recent review of public service broadcasting, covering the period 2004-8, revealed that the commercial terrestrial channels – ITV, Channel 4 and Five – had responded to the growing pressures of audience fragmentation and advertising decline by reducing the value and volume of their supply of these core genres. More worrying was that BBC1 and BBC2 had reduced their supply by an even larger percentage, despite being immune to these commercial pressures.

Most commentators recognize that funding the BBC through a near-universal licence fee imposes potentially conflicting obligations: to make up for shortfalls in market supply, but also to provide a sufficiently attractive set of services to justify a compulsory household fee.

The Strategy Review understandably concentrates on the scale, scope and distinctiveness of BBC services. It leaves unresolved the tension between broad appeal content that competes with the market, and public service content that complements the market, whilst implying that the BBC needs in future to emphasize the latter much more.

Nor, unsurprisingly, does it address the dramatic and continuing decline in the supply of public service content by the commercial terrestrial channels. Plural supply of public service content – that is, not just from the BBC – is an important aspect of a healthy democracy. A single source of current affairs programmes, for instance, would raise serious concerns about gatekeeper power.

The BBC has resisted re-allocation of licence fee proceeds to support any of the endangered genres on commercial channels. However, given that the licence fee is the only certain source of funding for public service content in the near future, it must at least make sense to explore how using some of it to fund plural supply of PSB could be managed.

Various groups have put forward models of a contestable fund dedicated to public service content.  A common feature of those models is a public service content commission (PSCC), tasked with securing and distributing public service content in a transparent and efficient manner.

Under one version of this concept, Parliament could propose a division of the licence fee: the greater part to the BBC, the smaller part to the PSCC to pay for the production and distribution of public service content by a wide range of suppliers and outlets.

The BBC Strategy Review proposes to release £600m of resources annually, to reinforce its own delivery of public service broadcasting.  Half of that should be more than enough to fund the PSCC.

The PSCC would then seek out such content from potential providers, and negotiate with broadcasters and other platforms the necessary scheduling and distribution arrangements that would optimize the impact of public service commissions.

The PSCC would continually evaluate commissioned projects, to ensure value for money, maintenance of quality and achievement of desired audience impact.

The PSCC would develop and maintain a continuing dialogue with the public and parliament on the purposes of public service broadcasting, the extent to which those purposes were being met without public intervention, and the need for – and success of – public service content funded from the licence fee.

The PSCC would retain rights and acquire necessary licences that would enable it to create and manage an online archive of past and present public service content that could be readily accessed within the UK.

The PSCC would maintain an open exchange with the BBC (and any other broadcaster delivering public service content of its own volition) so as to optimize the impact of the public funds it had at its disposal.

A PSCC focused solely on delivering a plural supply of public service content, in a fully transparent and accountable fashion, could in theory be a re-modelled version of the BBC Trust, which would allow the BBC to revert to an integrated governance body, comprising executives and non-executives.

In any event, the PSCC should ensure that its operating budget – as distinct from its commissioning budget – never exceeded 10 percent of its commissioning budget, with a ceiling of £30m.  This would be sufficient for the hiring of up to 50 staff to deal with the commissioning and delivery of content, and 40 staff to deal with finance, legal and business affairs, administration and marketing.

When a contestable public service fund was first proposed, six years ago, Ofcom was initially sceptical. More recently, Ofcom has explored contestability further, and is currently engaged in a process whereby potential suppliers of regional news to the ITV1 schedule bid for access to a contestable pot of money. The PSCC is this process writ large.

The structure outlined here would provide a logical counterweight to Ofcom, which has a statutory duty to monitor and report on public service broadcasting, but lacks any continuing mechanism or funding to remedy perceived deficiencies.

Ofcom would in this scenario still be responsible for regulating broadcast output, including the BBC’s, in terms of taste, decency, fairness and, perhaps, impartiality.  Meanwhile, the PSCC would pro-actively engage with the full range of tasks involved in maintaining and delivering a rich mix of public service content in a flexible, plural and accountable fashion.

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