BBC (Audit Arrangements and Publication of Invoices)

Alun Cairns Excerpts

Wednesday 21st November 2012 Commons Chamber

[Alun Cairns (Vale of Glamorgan) (Con)]

I beg to move,

That leave be given to bring in a Bill to require the British Broadcasting Corporation to publish all invoices for amounts in excess of £500 each quarter; to allow unrestricted access to the Corporation’s accounts by the National Audit Office; and for connected purposes.

I wish to state at the outset that I am a friend, strong supporter and advocate of the BBC. My original request for this Bill stems back to May, and was preceded by protracted communications with the previous director-general, Mark Thompson, seeking to gain voluntary agreement on this Bill’s intentions. The events of recent weeks have nothing to do with my motivation in seeking to bring about greater transparency in how the licence fee is spent, although some issues that have arisen help to demonstrate the need for more openness, along with the need for a cultural shift to respond to demands from the public. The first element of the Bill would require the BBC to publish all invoices for more than £500 on a quarterly basis. That would bring the corporation in line with local authorities and, although it would meet the aspirations of the Government’s public transparency agenda and the Efficiency and Reform Group objectives, it should not be interpreted as political interference. The Bill merely follows public expectation.

The licence fee is the UK’s biggest regressive tax: the poorer one is, the greater the proportion of one’s income is spent on it. That places a strong moral obligation on the BBC to demonstrate that it is using money in the most prudent manner. Under the Bill, the BBC would allow the public to see exactly how their money was being spent, and that would encourage participation and scrutiny. That would lead to innovation, procurement and, ultimately, savings. The BBC would be better informed, and new opportunities could lead to better feedback and a change in its priorities. Naturally, the BBC’s special independence must be protected with appropriate safeguards, but they need to be set as an absolute minimum and seen as the exception rather than the rule.

There are several examples of questionable expenditure that could be cited: business consultants, retirement dinners, accommodation charges, and the cost of sending 100—or even, in 2008, 175 staff—to cover US elections. I am sure that all hon. Members have enjoyed BBC hospitality in some way or another, but we need to know how much money is being spent. One constituent asked me how much was spent on after-show parties, after a successful series or even after every episode of “Strictly Come Dancing” or similar programmes. There are concerns about how some journalists compete personally and refuse to share resources. Why does the BBC pay to advertise through other media, when it already reaches nearly all the population? It is not that these activities are necessarily wrong, but the public have a right to know how much they cost.

Publication of invoices would also provide an ongoing report on how many people are paid through personal services companies in their efforts to reduce income tax liability. The National Audit Office was originally refused access in this area, yet on 2 May BBC News was all too keen rightly to expose the fact that Ed Lester, the former chief executive of the Student Loans Company, was paid through such an arrangement. The irony is that that has been standard practice in the BBC for many years; it is just that it has been hidden.

Public statements made by senior BBC figures suggest that the organisation would be among the strongest supporters of the Bill. Unfortunately, there has been significant evidence of a lack of action on those statements. Sir Michael Lyons and later Lord Patten have continued to resist unrestricted access for the Comptroller and Auditor General. There is a series of correspondence between the Secretary of State and the chairmen on gaining an agreement on the extent of access. The case of personal service companies is an example, because we still do not know the details of the policy.

BBC talent is another area that needs investigation. It has become a catch-all title that extends well beyond known personalities, arguably in an effort to block publication of more newsworthy data. I simply do not accept that there should be a blanket ban on the publication of BBC talent details. In this day and age, it is difficult to believe that the NAO does not have unrestricted access. How many other bodies are allowed to dictate the terms and timing of audit investigations and publications?

It is to the credit of the previous Secretary of State for Culture, Media and Sport that he secured a significant agreement earlier this year dramatically to improve the CAG’s access. However, there continues to be no right of access—it remains by agreement only. Nor does it cover the whole scope of NAO activities. The correspondence suggests that respective BBC chairmen frustrated the calls by the Secretary of State, the Culture, Media and Sport Committee and the Broadcasting Committee in the other place. Restrictions remain, and the time has come to legislate.

Current arrangements mean that the BBC must agree to the area the NAO wishes to investigate. The NAO needs to give 12 months’ notice of its plans, which can only be amended at stated quarterly intervals. This is hardly unrestricted access; nor does it allow investigations into controversial news developments to take place. Recent concern surrounding the terms of departure of the director-general have led to calls for the NAO to investigate. Unfortunately, the agreement means that it is powerless to look into such matters. Even after the Secretary of State said in the House that the NAO would investigate, the latter stated that it could not do so immediately unless the BBC Trust referred itself for such scrutiny.

The publication arrangements are also worrying. By contrast to the NAO, which reports to Parliament and the public, the BBC reports to the BBC Trust, which then considers the matter and responds. That is followed by a BBC management reaction, with rebuttals, and it is only then that the NAO investigation is passed to the Secretary of State for publication. The BBC decides on the timing. I am absolutely sure that all other bodies would welcome such a privileged position in relation to auditing. It puts considerable power and influence over reporting in the hands of the BBC, compared with every other body. That situation has been questioned by the Select Committee and the Government, and efforts have been made to improve the situation.

Over recent years, there has rightly been increasing demand for greater transparency from the public. Some bodies, including this place, took longer to recognise it. Now all details are published, including potential conflicts of interest. It is important that the BBC, like all bodies, responds to these demands and reacts to the Bill by voluntarily publishing invoices of £500 and over, and opening all elements of its operations to the NAO. That would underline the special role that the BBC plays in our nation.

In closing, I suggest that the BBC could go even further by voluntarily publishing registers of interest of key people to highlight potential conflicts of interest, and it could truly embrace the spirit and the letter of the Freedom of Information Act. Unless the BBC responds positively, I fear that it could be the subject of future legislative demands.

Question put and agreed to.

Ordered,

That Alun Cairns, Mr David Amess, Mr Richard Bacon, Guto Bebb, Stephen Barclay, Dan Byles, Philip Davies, Robert Halfon, Dr Phillip Lee, Ian Paisley and James Wharton present the Bill.

Alun Cairns accordingly presented the Bill.

Bill read the First time; to be read a Second time on Friday 25 January 2013, and to be printed (Bill 92).