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Brexit is actually far worse news for those commercial rivals than it is for the apparently beleaguered Corporation. In the current context, Lord Hall’s much criticised licence fee deal last year now looks a pretty shrewd bargain – while all UK broadcasters will struggle with the impact of the devaluation of sterling and potential recession, only the BBC has a guaranteed, inflation-proof, income for the next five years, protecting it at least from the forecast rise in RPI.
The main commercial broadcasters, on the other hand, are facing a significant drop in advertising income – Claire Enders of Enders Analysis recently told the Lords Select Committee on Communications that it could be as much as five to ten per cent. At the same time rising inflation and the weakness of sterling will put pressure on their production and acquisition costs. The slump in the share price of ITV, one of the great UK media success stories of the last few years, tells you everything you need to know about where that may end. But if the BBC is (comparatively) insulated from the economic fallout from Brexit, there is still some crucial unfinished business to be settled around the Charter.
The most important issue is governance and the BBC’s independence – which still hangs in the balance. The erosion of the BBC’s independence over the last Charter period had been relentless – top slicing of the licence fee to fund government pet projects; two indefensible licence fee settlements where the public interest was noticeably absent; and a flawed governance system imposed on the BBC against its wishes at the end of the last Charter renewal process which left the BBC’s ability to defend itself weakened by confusion over who was really in charge and which contributed to a series of pretty catastrophic management mistakes. At the same time the licence was cut in real terms each year, while commercial rivals continued to grow.
Sir David Clementi’s review came up with a sensible proposed new structure for the BBC – a unitary Board to run the Corporation and an external regulator (Ofcom) to regulate it. Even those of us who would have preferred a bespoke regulator accepted his proposals as a workable solution and far better than the hapless Trust. The crucial issue is: who appoints the members of that powerful new unitary Board? Clementi envisaged a Board with, as a minimum, a majority of independent members appointed by the BBC itself – six to seven non-executives and two to three executives out of a Board of 14 to 15. The report sets out two options for the appointment of the rest of the Board: ‘a specially devised system which is independent in all respects’ or ‘appointment by the government, subject to certain safeguards’.
Clementi set out his safeguards if the government chose the second option. The chair and deputy chair would be appointed from a very short shortlist and subject to parliamentary scrutiny: the other four board members, representing the interests of the Nations and the English Regions would be appointed by the government both for their relevant expertise and for their understanding of the issues in the Nations and English Regions. The politics of Scotland, Wales and Northern Ireland are so different from those of Westminster that Clementi envisaged assessors from the nations having a role in the appointments. The government duly went for this option in the White Paper.
In his evidence to the House of Commons culture committee in June, the BBC’s director-general Tony Hall accepted that the government was going to appoint the six – and put his faith in a public appointments system that he hoped would provide independent-minded people with the right skills. The committee members were less sanguine about escaping government interference – they had had un uncomfortable argument in an earlier session with John Whittingdale, the former culture secretary, over what some of the committee saw as his interference in an appointment at the National Portrait Gallery.
John Whittingdale argued that because the new BBC board would have no editorial role pre-transmission, there was no threat to BBC independence. The Charter would make explicit the convention that the director general is editor-in-chief and the Board only gets involved in programme matters after the programme has been broadcast. While this is a useful safeguard, its value should not be exaggerated. In practice, no BBC Board has intervened pre-transmission since the disastrous decision of the Governors in 1985 to pull a controversial documentary – Real Lives: At the Edge of Union – under pressure from Margaret Thatcher and her government. That BBC Board was notoriously packed by the government of the day with people of a similar point of view to it and went on in 1987 to fire the director-general, Alasdair Milne, after years of miserable conflict between the Board and the management. Even so, when I was on the BBC Board from 2004 to 2010, the Governors and later the Trustees found themselves lobbied strongly on occasions to intervene ahead of transmission – on the controversial Jerry Springer The Opera, for example – and had to remind themselves why, although theoretically they could, that it was a terrible idea.
But even if it does not intervene ahead of transmission, the new Board will have a big say in editorial policy – through the complaints system, the editorial guidelines and the general processes of review and budget allocation. On top of that, the new structure will give Ofcom the final word on the impartiality and accuracy of the BBC’s journalism. So far, Ofcom has proved itself to be an effective, independent and fair-minded regulator of commercial broadcasting – but regulating the BBC is a much bigger and more fraught job and Ofcom will find its staff (and its own, government-appointed, Board) under far more pressure and scrutiny.
And the proposed structure leaves the BBC with a Board with some potentially very dangerous fault lines – between non-executives chosen (by the BBC) for their expertise and independence and those chosen (by the politicians via the public appointments process) for what might be seen as their political acceptability. Given the complexities of post-devolution politics, you could also envisage tensions between the political appointees from the Nations and the political appointees from the Westminster government. Although there is general agreement that the non-executives representing the Nations should not be ‘shop stewards’, lobbying for their part of the UK, that may be easier said than achieved.
The only positive development in recent weeks has been the decision to allow the current Trust chair, Rona Fairhead, to continue as chair of the new unitary board. We should all wish her and Peter Riddell, the new Commissioner for Public Appointments, the very best of luck in ensuring – through these crucial board appointments which will need to be made over the next few months – that the BBC retains what really makes it, as the White Paper promises, distinctive – the fact that it is a public, rather than a state, broadcaster.