Future of the BBC

Debate between John Whittingdale and Baroness Jowell

Monday 21st October 2013 Commons Chamber

[Mr Whittingdale]

I hope that my hon. Friend will forgive me if I do not follow him in talking about the legal liabilities that may flow from the various cases. He made the point earlier that the BBC has been fined for breaches of the broadcasting code. If a publicly funded organisation such as the BBC is required to pay a fine, it of course comes out of the licence fee. It may be that we have to consider other measures. A fine is not necessarily the best way or even a sufficient way to punish failures by the corporation.

Although the severance payments are a serious issue, the amounts of money involved were relatively small. By far the worst financial failure of the BBC is the digital media initiative, which has cost the licence fee payer £100 million, to no benefit whatsoever. It angers people in the BBC, as much as people outside, that they have been required to deliver savings in front-line programming, when they see huge amounts going on senior management salaries and pay-offs, and the huge waste of money in the digital media initiative. It worries me that, in making efficiency savings, the BBC has made cuts in some of the areas that it is most important for it to invest in, such as news and current affairs and local radio. It is no wonder that there is serious anger throughout the BBC when its employees have been told that investment in certain types of programming cannot be afforded, but they then find that £100 million has essentially been thrown away on the digital media initiative. That reflects a failure of governance.

I listened carefully to what the right hon. Member for Dulwich and West Norwood said. She recognised that the existing model is flawed and that there needs to be change. That is clear to me. There is a conflict between the two roles of the trust, even though I hear what she says about the trust being the cheerleader for the licence fee payer. I was interested in her idea about a mutual status. Perhaps she would like to expand on that further when the Select Committee considers the future of the BBC in the new year. It is certainly something that we would consider.

My view has always been that the BBC needs to be properly regulated from outside. It already is in some areas by Ofcom. I have always found the argument that Ofcom is well equipped to carry out the regulatory functions persuasive. Perhaps the BBC should have a more traditional model of corporate governance. Those are issues that we need to consider. What is clear is that the existing model is not working.

I welcome the announcement by the Secretary of State that the National Audit Office will have full access to the BBC. That has been called for by successive Chairmen of the Public Accounts Committee over the past 20 years. The BBC has said repeatedly that that would be a dangerous intervention and that it might interfere with editorial independence. That is absolute nonsense. There is no reason why the NAO should not examine the accounts of the BBC—that does not represent editorial interference. In my view, what has come out over the past year, particularly with the DMI, makes it plain that the NAO needs that full access. I therefore very much welcome my right hon. Friend’s announcement.

[Dame Tessa Jowell]

I agree with the hon. Gentleman about the NAO and think that arguments against that view are insubstantial. I take issue with him, however, about his assertion that the present model is flawed. It is not the present model of governance that is flawed, but the failure of individuals within that to make the right decisions and intervene sufficiently early. For example, the trust could have conducted an investigation into levels of pay-off, but it did not do so quickly enough. Many lessons have been learned, but it is a mistake to conclude from that that the model itself is flawed.

[Mr Whittingdale]

I certainly agree that there have been failures by individuals, both in BBC senior management and in the trust. Whether we can draw from that a more fundamental problem with the model of governance is open for debate. I was opposed to that model of governance when the right hon. Lady created it some time ago, so I can at least claim consistency. It is clearly something we will need to consider and debate in the run-up to charter renewal.

I hope that this discussion and the Select Committee inquiry will begin a debate about the role of the BBC today. The BBC is good at displaying all it does. It has a huge range of TV channels and radio stations, and it is expanding online and launching more services on the iPlayer. However, the world has changed—and is changing—so much in the media. There has been an explosion in the past few years in the number of different content outlets, and that is continuing. We now have a successful ITV commissioning really good content.

Olympics and Paralympics (Funding)

Debate between John Whittingdale and Baroness Jowell

Monday 27th February 2012 Commons Chamber

[Mr Whittingdale]

I am grateful to the right hon. Gentleman. As I said, although perhaps not as eloquently as he did, that is my view as well. This is a unique opportunity. The alternative—that we put on a poor show that was watched around the entire world—would be so damaging that it is right that we invest in it and make sure that we get it right. I am confident that, under the leadership of Danny Boyle, that is exactly what we will achieve. As I said, the budget for the staging of the games will be tight, but I hope that it can be achieved without cost to the taxpayer. Our initial hopes proved to be rather less accurate as regards the cost of building the facilities. The original candidature file put the cost of preparing for the games at £3.4 billion, of which £2.375 billion was to be spent by the Olympic Delivery Authority. In March 2007, the right hon. Member for Dulwich and West Norwood came to the House and said that the public sector funding package would actually be £9.325 billion.

[Tessa Jowell (Dulwich and West Norwood) (Lab)]

The hon. Gentleman will also recall that when I came to the House in May 2005, before we went to Singapore, I made it clear that in the event of our winning the games, a complete review of the budget would have to be undertaken because of a number of uncertainties, such as the VAT status, the degree of contamination at the site and the extent of our regeneration ambitions. We made that review between 2005 and 2007. The budget as I published it in 2007 remains the budget.

--- Later in debate ---

[Mr Whittingdale]

Indeed it does. I was not seeking to criticise the right hon. Lady, but merely making an observation. She is right that one of the two main reasons given for the increase was that, rather surprisingly, VAT had been left out of the original calculation and there was some uncertainty over that.

[Tessa Jowell]

May I just deal with that point, which is tediously technical? When we compiled the budget, the status of the delivery organisation had not been settled. The definition of status could have placed the delivery authority on one side or the other of liability for VAT. If it had been, in effect, a local authority, it would not have been liable for VAT. It was judged not to be a proxy body for a local authority and was therefore liable for VAT. That was not clear until, having won the bid, we were able to nail down the role and function of the delivery authority.

[Mr Speaker]

We are now clear.