Independent Radio Production

Baroness Grender Excerpts

Thursday 1st February 2018 Lords Chamber

[Baroness Grender (LD)]

My Lords, I congratulate the noble Lord, Lord Stevenson of Balmacara, on securing the debate. He has championed broadcasting issues here in the Lords for longer than I have been in this place, and I look forward to hearing even more from him on this.

I also thank all those organisations that provided briefings for the debate. There is clearly strong interest in the progress of building a sustainable radio production sector for the future. It is important today that we continue to review whether or not the current arrangements will achieve just that. Indeed, as a member of the Artificial Intelligence Committee, I am only too aware of the significant changes we are facing in the media and almost every other walk of life. Some suggest that Al will bring us the next industrial revolution. Changes are coming, particularly to platforms for media, changes that will require vibrant, creative and innovative approaches to all forms of media production, including radio. Yes, great change is coming, but there is a constant too. Radio continues to reach 90% of adult audiences. Radio was condemned long ago. The advent of TV was thought to be its death knell. As eloquently described by the noble Lord, Lord Berkeley of Knighton, radio is woven into people’s lives. It is conversational rather than just informational. It establishes a unique one-to-one relationship with the listener. Radio has adapted well to new lifestyles through the use of apps, podcasts and access to Freeview. The BBC’s global news service, the World Service, is the most trusted news source in the world and reaches a quarter of a billion people every week, more than any other international broadcaster.

The background to this debate is all-important, as the noble Lord, Lord Stevenson, set out in his opening remarks: the new charter and what followed, the “compete or compare” speech by the noble Lord, Lord Hall, in 2014. On these packed Benches, we welcomed the opening up of competable radio hours—as many as 27,000 by the end of 2022, a minimum of 60%. We believe that external commissioning is a good way to grow a strong and creative independent production sector.

We also believe that, for this to work, the process has to be as described by the noble Lord, Lord Stevenson: a level playing field and transparent. However, we wonder whether it is a bit early in the process to assess progress. Although the BBC Radio “compete or compare” strategy was initially set in place in 2015, the BBC’s new radio commissioning framework started only in April 2017, and there have not been many commissioning rounds since. For example, there has not been a full Radio 4 commissioning round so it is early to assess the overall impact, as the Radio Independents Group explains in its briefing.

There are encouraging anecdotal signs from both the independent production side and commissioners at the BBC. The BBC believes that “compete or compare” opens up BBC Radio to the best creative ideas, in turn driving up standards and getting value for money. There is anecdotal evidence that commissioners believe that the process so far has raised the game. RIG has been encouraged by the new Radio 2 schedule changes that were put out to competition, and remains in regular dialogue with the BBC over any teething troubles regarding the overall strategy. I therefore support the call of the noble Lord, Lord Stevenson, for other discussions to take place—in particular, about whether in-house staff are having equal teething troubles.

RIG remains convinced that these changes will revitalise BBC radio production, both in-house and independent. If both the BBC and RIG are right and this heralds a transformative period for independent radio production, I wonder what the potential is for this open competition to increase in the commercial sector, which is sometimes a little more conservative about some of these things.

There are examples of where it has been working. For instance, companies such as Somethin’ Else and TBI Media work with stations such as Classic FM, Absolute Radio and Virgin Radio. Is there potentially a day when the radio industry could learn from the experience of Sky and BT, which have shared content in recognition of their need to compete in what is now a new world of streaming and YouTube?

Perhaps the BBC can lead the way, if the positive feedback so far proves accurate. As the noble Lord, Lord Stevenson, explained, this view is in sharp contrast to other reports. I refer in particular to the NUJ report, and look forward to hearing the Minister’s response to some of those concerns. I should like to hear the Minister’s view of the need for some kind of public value test for this process and what discussions have been held with the BBC Trust on that undertaking.

Fostering independent production in all parts of the country, rather than the current media centres, is also an important objective. We therefore hope that the new BBC Radio commissioning arrangements result in more opportunities for companies outside the normal media centres. Does the Minister believe that there is any scope for local radio to be included within eligible hours? I recognise that lack of finance and resource may be the main challenge to such an undertaking, but wonder whether the potential has been considered.

I hope that radio is not one of the casualties from an across-the-board percentage cut, when the BBC has to fund licences for the over-75s from this dodgy smash-and-grab policy that was imposed on the BBC. The budgets in radio are so much lower than those in TV that it could ill afford that kind of cut.

As one of our greatest global assets, the BBC should, and often does, lead the way, which is why the equal pay issue, raised by the noble Lord, Lord Berkeley, is such an outrage. As we saw yesterday, when Carrie Gracie gave evidence to the culture Select Committee, she is a women promised equal pay for equal work who has been treated badly—and she is not alone in that. Many other women sitting behind her, and many of the BBC women, now 200 strong, have similar stories. Indeed, there are other stories much beyond the 200 women who have signed up to this. The noble Lord, Lord Berkeley, is an example in having shown the way and taken the pay cut that he described. The issue has shamed the BBC, and the sooner that it puts this right the better. Until people know what different jobs are worth, and where they sit on salary bands, the culture of secrecy and an environment where unfairness can fester and breed will sadly continue.

While the deregulation issue was not in the wording of the debate, I would like to touch briefly on two areas. First, we in the Liberal Democrats remain convinced that we should retain existing local news requirements and commit to this principle being extended to DAB services in future, in line with the current rules for FM and AM. Seventy per cent of listeners say that they trust radio for national and local news. In a world of fake news, where President Trump can denounce the New York Times from Davos—a paper featured in the film “The Post” for publishing the Pentagon papers —the need to protect and preserve news has never been greater.

Secondly, we support greater freedom for radio stations to choose the music they want to play, to cater for their own listeners. Music consumption and distribution through streaming has moved on, and so should we. So we support the Government’s intention to reform in this area but ask them to examine with care what impact that may have on minority genres, such as the Asian Network.

Digital switchover is well overdue. The Communications Minister at the time, Ed Vaizey, said as far back as 2010 that 2015 remained the target. A commitment was made to lead in the drive to overcome the remaining barriers to switchover. While it is also true that he wanted to wait for the listeners to move, surely we are now close enough to 50% to simply get on with it. If we want to encourage this sector, we need to ensure they are not being charged to be on two radio bands rather than one.

If the future of radio is to be secured, I hope that the meeting next week with the DCMS and the industry will go well when they discuss the new contestable fund for public sector broadcasting. As the Minister is aware, my noble friend Lady Benjamin successfully campaigned for greater funding for children’s content, particularly on TV. Children’s TV has needed this boost for some time but, at the same time, it was noted that it might be possible to use some of this fund for radio. We hope that that is the case, if relevant to children. We also hope that additional funding above the £60 million is found, if that is applied to radio, for adults. We look forward to hearing reports of those discussions.

Radio in the UK is a great asset. We need to keep it that way and ensure that future generations continue to use this wonderful medium.

--- Later in debate ---

[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.