Independent Radio Production

Baroness Chisholm of Owlpen Excerpts

Thursday 1st February 2018 Lords Chamber

[Baroness Chisholm of Owlpen (Con)]

My Lords, this has been an interesting but short debate. The noble Lord, Lord Stevenson, told me that he was going to step back, do much less and spend more time at home. All I can say is that I have seen him on either the Front Bench or the one behind more than ever before. I am not quite sure what “taking more time” actually means. I thank him for bringing forward this debate on independent radio production, and all those who contributed.

The independent radio production sector is a growing and exciting industry. Many of us will be familiar with its offerings, particularly on BBC Radio, with programmes such as “Diplo and Friends” on Radio 1, and two of my favourites, “Sounds of the 60s” on Radio 2 and “Gardeners’ Question Time” on Radio 4, which I am afraid slightly shows my age. With the high quality of programmes provided by the independent radio production sector, it is important that those within the industry are supported to grow their businesses and to secure commissions for programming, as the noble Lord, Lord Stevenson, mentioned.

In June 2015, the BBC reached an agreement with the Radio Independents Group, known as RIG—I agree with the noble Lord, Lord Griffiths, that it is a slightly unfortunate name for the trade body for the sector—which sought more opportunities to pitch its independent radio production ideas to the BBC. This agreement was then written into the BBC framework agreement and provides a level playing field for independent and in-house producers.

RIG represents the independent radio/audio production sector in the UK, which comprises around 150 companies. This agreement established that the BBC will move from the limited quota-based arrangements to a new commissioning structure, which subsequently opens up 60% of eligible hours—all radio hours except for news and current affairs—to competition by 2022. Prior to this, independent radio producers were able to pitch ideas for only around 20% of BBC programmes, which meant there were relatively few opportunities to offer new ideas for many parts of the BBC’s schedule.

Although the Government are not party to this agreement, we continue to support this change. The agreement from 2015 provides many more new opportunities to the growing independent radio production sector. This sector has a track record of producing high-quality content and gives BBC Radio audiences access to the best ideas and productions available.

However, I emphasise that increasing the competition between independent and in-house productions does not automatically guarantee that the independent sector will receive more commissions. Both independents and BBC in-house will be eligible to bid for work and the best ideas will win commissions. There will still in effect be an in-house guarantee, consisting of 40% of all programmes, reflecting the BBC’s continuing importance to radio.

As far as the timetable is concerned, the new BBC charter sets a firm timescale for the implementation of this change. The timescale for the transition by 2022 was set by the agreement between the BBC and RIG. Following on from that, since 2015 the independent radio production sector has remained strong and continues to thrive.

The noble Lord, Lord Griffiths of Burry Port, talked about quality. With the possibility of more independent radio productions being commissioned by the BBC, we expect that the high quality of programmes should be maintained or even increased by offering a wider choice of programmes to licence-fee payers.

The changes to BBC Radio continue to take place within a broader strategy called “compete and compare,” as mentioned by the noble Baroness, Lady Grender. It aims to extend competition, where it works, across the BBC’s output and, where this is not appropriate, to make greater use of comparisons with best practice in the market to ensure that we are given universal access to great quality content. I am pleased to be able to share an update from the BBC on the progress that this strategy has made. As of January 2018, 70% of “compete and compare” hours have already been awarded, with a further 6% to be awarded by March 2018. That means that in the first full year of “compete and compare”, BBC Radio will have put up 23% of eligible hours for tender, which equates to around 10,800 hours of content. So far, there has been a marginal shift of hours from BBC in-house production to indies totalling 89 hours, and competition is working with commission going in both directions.

I acknowledge that there may be concerns about the possible implications for BBC staff, such as possible job losses. These changes are being introduced with a long transition, and both the BBC and RIG are taking steps to ensure that the transition is as smooth as possible. As of now, no BBC in-house redundancies have resulted through the “compete and compare” strategy.

The noble Lords, Lord Griffiths of Burry Port and Lord Stevenson, talked about skills, training and contracts. The independent radio production sector strives to support all its members and advocates skills training, adequate employment conditions and the training of new entrants into the sector. As part of its remit, RIG offers advice, resources and training to its members to ensure that all those working in the sector have the essential skills required and can access further development opportunities as their careers progress.

The noble Lord, Lord Berkeley of Knighton, talked about wages. Independent production companies contracted by the BBC are obliged to comply with all legal requirements and the BBC’s living wage policy, with many firms employing a standing staff with the rest employed on freelance rates set by the market.

The noble Lord, Lord Stevenson, mentioned diversity and training. Independent radio producers are heavily involved in training the next generation of producers. Through the RIG training programme, they have so far provided 1,959 learning days involving 1,089 individual learners, including a diversity mentoring scheme. Around 60% of learners have been women, around 15% BAME and 5% disabled—I hope that last statistic will rise—showing the industry’s commitment to promoting diversity within the workforce.

Noble Lords raised several points, which I hope I can answer. The noble Baroness, Lady Grender, raised a couple of points that I will have to write about because the inspiration that normally appears over my left shoulder was not here until five minutes ago, so I probably did not pick up everything. Inspiration is appearing now, though.

The noble Lord, Lord Stevenson, mentioned a meeting, and we are of course more than willing to ensure that that happens. Perhaps we can talk about how we can go ahead with that. Several noble Lords, including the noble Lord, Lord Stevenson, mentioned a report and a review. The Government do not plan to produce a report on the BBC’s new strategy but, as I think several noble Lords mentioned, we have the opportunity to review this at the mid-term review of the BBC charter. That is when many concerns raised today by noble Lords can probably be discussed further.

The noble Lord, Lord Berkeley, talked about HMRC. The original IR35 or intermediaries legislation was introduced in 2000 but the legislation has now been changed regarding the engagement of individuals through personal service companies for all public sector bodies. There are two main areas of change. First, it is now the BBC’s obligation as a public body to deduct the right amount of tax and NIC for all those whom it engages. To do so, it must assess individuals’ employment status. Secondly, the employment test that we previously used to indicate employment status has been replaced by a new one-size-fits-all test called the CES tool, designed by HMRC, which is intended to apply to all industries. This is being used to assess the status of all on-air contributor engagement, new and current, which extend beyond 6 April 2017. The CES tool provides HMRC’s view of the employment status of a worker; if the outcome of the new tool deems the engagement to be one of employment, we will deduct the appropriate tax via PAYE and NIC at the point of payment.

The noble Baroness, Lady Grender, talked about digital. We are making steady progress towards reaching 50% of listings on digital platforms and the radio industry expects this figure to be reached in 2018. Decisions on future switchover are not simple or straightforward. It is important for the Government, the BBC, commercial radio and other stakeholders to take time and care in how we approach any decisions. A review by government, following the reaching of 50%, will need to carefully consider the key factors that will need to be in place, including issues in relation to cars, DAB coverage for all those parts of the country without digital services and the potential timing and approach to switchover. The noble Baroness also talked about extra funding. I do not know if she was thinking about the contestable fund.

[Baroness Grender]

My understanding is that there is a meeting at DCMS next week. It sounds like an excellent idea; it is about whether some of the contestable funding is available for radio. As the noble Baroness will be aware, that is something that was hard fought for. The £60 million is going towards children’s TV content and maybe some radio, but we would like to know that it will still be directed towards children’s content, even if some is allocated to radio. If it becomes adult radio, we would ask for there to be additional funding to the £60 million.

[Baroness Chisholm of Owlpen]

The noble Baroness is right; that is for children’s television. In fact, we want to engage with the radio industry to explore whether there might be alternative options, so as to use a small proportion of the funding marked for the contestable fund to support the radio sector in a more bespoke way, but that would not take away anything from children’s programmes.

I have now been inundated with papers, including on public value tests, which I thought I would have to write to the noble Baroness about. No review is planned, but we are confident that the compare or compete strategy is working. We have the power to review this midway through the charter, should there be any worries. When the BBC wishes to launch a new service, Ofcom may have a role in asking about its public value and the market impact that it may have. It equally may apply when the BBC wants a major change to how it provides its services. I may well not have answered all the questions. I apologise to noble Lords but I will certainly write if I have not.

To conclude today’s debate, independent radio production remains a strong industry and the agreement made between RIG and the BBC will ensure that the best programming is made available to BBC radio listeners. I look forward to the new and exciting programming that the independent radio production sector will continue to offer in the future. Like the noble Lord, Lord Berkeley of Knighton, I, too, am looking forward to listening to the radio on my long journey home tonight.

House adjourned at 4.49 pm.