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The 2005 Green Paper on BBC Charter renewal promised ‘A strong BBC, independent of government’. Sadly, the charter period which is about to end has been one where the BBC has got weaker, not stronger, and its independence has been significantly compromised in a number of important areas.
The licence fee has been cut in real terms and top sliced to pay for other areas of government expenditure. In an expanding UK media world, the BBC is a much smaller player than a decade ago and will be smaller still by the end of the next charter. The governors, who despite their flaws had a key role as the sovereign body to ensure the BBC’s independence, were replaced in 2006 by the Trust. The new structure was cruelly exposed by the Jimmy Savile scandal and the row over executive pay-offs. Its vulnerability has made the BBC itself less able to resist the erosion of its independence.
This summer’s DCMS consultation document was clear that ‘ the independence of the BBC is absolutely central to its mission’. But it was less clear how that should be achieved by the different options. In part this is because the focus in the consultation document and in much of the debate so far has been about the regulation of the BBC – Ofcom, OfBeeb or Trust? – whereas most of the BBC’s worst problems over the last ten years have been over governance, not regulation.
If the consensus is that the new model should be a unitary board and an external regulator, the powers, composition and responsibility of that unitary board are absolutely central to whether this, the third model for BBC governance in a decade, will work. The new unitary board could and indeed should be powerful and effective. It should be the sovereign body of the BBC; it should hire, fire and set the pay of the senior management; it should determine the annual budget; it should be accountable to government, parliament, the NAO and the public for its core responsibility which is to ensure that the BBC fulfils its public purposes.
The board should have a non-executive chair and a majority of non-executive members. It will need a range of relevant skills and experience - in areas such as media, digital technology and fair trading – but also to have an understanding of and empathy with the diverse and devolved nature of the society the BBC serves. The non-executives will need the skills to help manage what is still a massive media operation but also be aware that the BBC is part of the public sector and is spending the public’s money. They will need to want the BBC to be creative and innovative but also be conscious of the BBC’s market impact.
Over time a unitary board should encourage the development of a new BBC management culture that should incorporate more sensitivity to the outside world into its decision-making, but the non-executives will need independent advice to avoid the danger of management capture. One option would be to have a committee structure to review and test management proposals before they come to the main board for decision. As well as areas such as audit and risk, the committees could cover new technology and new services, where the BBC management may be planning what are for it quite small changes but ones which could have significant market impact on competitors. Those committees could be of non-executive and executive members (to avoid the tension that sometimes existed between the management and the Governors and later the Trust in my time there) and have access to an in-house unit which could commission, as required, external advice, research and analysis.
If the board has the job of delivering the public purposes of the BBC, it surely must have the final say on how it does that in terms of new services, while taking full account of market impact. The current Public Value Test (PVT) system has worked pretty well. It could migrate to the new unitary board, with Ofcom continuing to provide an independent market impact assessment which in reality no BBC board is going to ignore. The BBC’s competitors would have the added security of being able to appeal to the new regulator on all fair trading and competition complaints, big or small, so they would always have access to an independent, judicial-review type, adjudication on the BBC’s processes.
Once the scope of the board is agreed, the role of the regulator (or regulators) is comparatively easy to define. My own preference is for a single standalone regulator which takes on most of the responsibilities currently spread between Ofcom and the Trust. As well as commercial complaints, the new regulator would review the BBC’s programme performance on a regular basis, assess the BBC’s delivery of its public purposes, commission research into areas of public concern and provide final and independent adjudication on all editorial complaints. It could assume responsibility for all content regulation, both harm and offence, which are currently with Ofcom, and impartiality and accuracy, which are currently with the Trust.
The regulator could have sanctions such as fines but in reality it is more important to create a culture in which the BBC board accepts the regulator’s judgements and takes action on them without demur. The regulator should not have the right to block BBC proposals, cut the BBC’s budget or hire or fire the director-general – otherwise we are recreating the muddled responsibilities of the current settlement.
Such a structure (together with a reformed, transparent and evidence-based system for setting the BBC’s income in future) could go a long way to giving the BBC the clarity of accountability which is the first step towards maintaining and perhaps even restoring its independence. The elephant in the room in all these areas is ensuring that the government of the day resists the temptation to try to control the BBC by packing board and regulator with like-minded people with a particular agenda. But if we can devise strengthened appointment structures to avoid that, the new system should be a big improvement on the last decade. If the BBC is not independent, it is no use to any of us.