Lord Inglewood
Main Page: Lord Inglewood (Non-affiliated - Excepted Hereditary)BBC Governance and Regulation: Communications Committee Report
Lord Inglewood Excerpts
Lord Inglewood
That this House takes note of the report of the Communications Committee on the governance and regulation of the BBC (2nd Report, HL Paper 166).
Lord Inglewood
My Lords, in opening this debate, before introducing the Communication Committee’s report on the governance and regulation of the BBC, I pay tribute to my predecessor chairman of the committee, Lord Onslow, who died on 14 May last year during the report’s preparation. Michael William Coplestone Dillon Onslow, 11th Baronet of West Clandon, 7th Earl of Onslow, Viscount Cranley, 10th Baron Onslow and Baron Cranley, was the kind of Member of this House that we no longer get these days. But he always made a contribution and added to the gaiety of life in doing it. His work on the Communications Committee was no exception, and I doubt that we shall see his like again here.
Why did the Select Committee on Communications decide to inquire into the regulation and governance of the BBC? There were two main reasons. First, we consider it part of our purpose to assist the House in advance of the plethora of policy initiatives and legislative and regulatory changes that we are going to see in the next few years as a result of the technological revolution currently under way across the media, which is radically changing the world in which we live. Secondly, 12 months ago the BBC was acquiring a new chairman, and we hoped that our work would be of help to the new incumbent, the noble Lord, Lord Patten of Barnes, whom I am delighted to see here this afternoon. He will no doubt advise us on whether we have been successful, and we certainly welcome some of the changes that he has brought about.
It was also five years since the last review of the charter and the establishment of the BBC Trust, so the moment was timely to consider some of changes that have ensued. However, it is disappointing that it has taken nearly nine months for the report to be debated when at least some of its topicality has been lost. After all, relevance should be a crucial aspect of the House’s work.
The report itself comprises a number of distinct recommendations which group into a number of general categories. The first consists of those that relate to the internal workings of the corporation. The second relates to its outward-looking relationships with the Government, Parliament and the licence-fee payers, who are defined somewhat more widely than the literal meaning of the words might suggest. The third is much more general and relates to the wider changes going on in and around the media, to which I have already alluded.
I turn to those aspects that principally relate to the BBC’s own modus operandi. We concluded that one of the biggest practical shortcomings of the way in which the BBC conducted itself was in respect of complaints, both internally and as regards the overlap between itself and Ofcom. It was overly complicated and convoluted. During the 15 years preceding our inquiry, four pieces of legislation have been passed that had implications for the handling of complaints about BBC programmes and services, and new regulatory bodies had been given different and sometimes overlapping tasks. This resulted in a system described by the noble Lord, Lord Grade, as “absolutely hopeless”. The complication and confusion surrounding the complaints process was such that it took the committee and its advisers a considerable effort fully to understand it and, in an attempt to make it clearer, it was set out in one chart, which was published in our report, with possible options for complaining about the BBC. The result is startling and shows how confusing and complicated the complaints process has become. We believe that this is probably the first time that the entire complaints system has been documented for public use on a single page.
We then moved on to examine how current systems could be improved in a short time without amending the charter or existing legislation. We recommended the creation of a one-stop shop within the BBC where complaints could be registered and either dealt with directly or passed on to the relevant department.
We encouraged the BBC executive, BBC Trust and Ofcom to work together to ensure that people wishing to complain about a BBC television or radio service understood the process through which their complaint was to be handled. Furthermore, we recommended the drawing up of a new memorandum of understanding between the BBC and Ofcom, which would require that all complaints about BBC programmes and services should first be considered by the BBC, using an improved version of the existing internal process. In its response, Ofcom explained that it did not think it would be appropriate to oblige audiences to contact the BBC first, or to reject or transfer complaints without investigation. This is because, in line with its statutory duty, Ofcom treats complaints about the BBC under the same established procedure as for all other broadcasters.
However, Ofcom informed the committee that in the light of the report it had begun working with the trust to ensure that complaints to either body have consistent advice and guidance on the current process and options available. It is difficult to judge the effect of this work that Ofcom and the BBC have done together, because we have no concrete examples of exactly what has been achieved, but the committee welcomes any work that will make the complaints process more efficient and user-friendly.
While not addressing these recommendations specifically, the BBC Trust response to the report explained that it was sympathetic to many of our recommendations in this area, and announced the appointment of a chief complaints editor. In an update sent on 22 February this year, the BBC Trust said:
“After a significant amount of work over the last few months with colleagues in the BBC Executive, the Trust has recently approved the proposals for changes to the BBC’s complaints processes that it believes will bring about improvements. It is a requirement that we consult the public on these changes and the Trust will launch this consultation in early March. Many of the specific changes your Committee suggested—including a single-page guide to complaints, and more systematic recording of complaints—are being progressed as part of this work. We hope that once this consultation launches that your Committee will agree that good progress is being made in this area”.
We very much welcome this. We will no doubt have a close look at what transpires.
The final issue relating to complaints that I wish to mention is that of complaints relating to impartiality and accuracy. This is the sole remaining major area of BBC UK television and radio content which is not subject to external regulation, and we judged it to be inappropriate that the BBC should remain its own judge and jury in these matters. The trust told the committee in its response that it did not believe that the current situation was inappropriate, arguing that having the trust as sole regulator was fundamental to securing the independence of the BBC. In its response, Ofcom said that giving Ofcom responsibility to consider impartiality and accuracy complaints would require changes to the agreement between the Secretary of State and the BBC. Ofcom therefore could not take this recommendation forward without the Secretary of State changing the agreement first.
In his response, the Secretary of State said that the Government were not seeking to change the existing allocation of regulatory responsibilities between the BBC and Ofcom, although no reason is given for reaching this conclusion. Notwithstanding this response we remain of the view, expressed in our report, that the Secretary of State and the BBC should consider granting Ofcom the right to regulate the BBC in respect of impartiality and accuracy. We would therefore be grateful if the Minister would explain the Government’s thinking about this matter, and request that it be reviewed.
All content produced by the BBC must comply with the editorial guidelines. Concerns were raised by the committee that the attempt to ensure that the BBC meets the highest standards in adhering to the rules on issues such as impartiality, accuracy, fairness, harm and offence has led to the growth of a compliance culture which is endangering the creativity of its employees and stifling innovation. This is a delicate balancing act between ensuring on the one hand that what Sir Michael Lyons, the predecessor of the noble Lord, Lord Patten, described in his farewell public speech as “memorable cock-ups” do not happen, and on the other ensuring both that BBC staff understand the compliance system and that the system is as light-touch and minimally bureaucratic as it can be.
The BBC's original response to our report informed the committee that the trust was assured by the director-general that this issue was being tackled, and that the trust had confidence that a sensible solution would be found which ensured that the editorial compliance process could be simplified while retaining integrity. Subsequently, it was explained that the aim of this exercise was to find the right balance between ensuring that the BBC meets the highest editorial standards expected by licence-fee payers and ensuring that the compliance process in place does not unnecessarily impede creativity.
It is reported that progress has been made on this front. Since last year the BBC has been piloting new compliance procedures throughout the organisation that are simpler and place clearer responsibilities on editorial leaders. The pilots, which are overseen by the BBC executive, are being spread to other parts of the organisation, and where appropriate will be rolled out permanently. Again, we very much welcome this and will watch developments with interest.
The committee also considered the issue of non-executive directors on the BBC executive board. We were concerned that the fact that executives had senior City and business roles might inflate the level of salaries awarded by the non-executives to BBC staff. We concluded that where possible candidates from the public and third sectors should also be considered alongside senior business figures when vacancies occur. Furthermore, we believe that the non-executives should be regarded predominantly as advisers on corporate and management responsibilities, advising on business or organisational issues and supporting the corporation’s public service remit on issues such as IT, project management, market conditions, facilities and human resources.
In its response to our report, the BBC confirmed its intention that future appointments to these roles would include candidates from the public and third sectors. Furthermore, in its update it says that since the committee’s report the BBC has made three non-executive director appointments to the executive board; that the non-executives now have clearer roles and responsibilities and are working with their executive colleagues to oversee the delivery of BBC services and operations on the executive board; and that it has cemented this new direction by publishing its expectations of those non-executive directors in a revised protocol that is available on its website. Again, we welcome that.
In 2007, public value tests, or PVTs as they are known, were introduced as a way for the trust to evaluate BBC proposals for new services or significant changes to existing services, to ensure the propriety of what is being proposed. The committee welcomed this mechanism in principle, but some witnesses explained to us that there is a lack of clarity about what constitutes a service and should therefore be subject to a PVT. That confusion arises because a decision about what constitutes a service remains at the discretion of the BBC Trust. We suggested that the trust and Ofcom should work together to agree on a suitable definition of a BBC service. In its response, the BBC told us that it was discussing with Ofcom ways in which it could assist the trust in deciding whether a potential change was significant, and pointed out that in particular there was probably scope for Ofcom to provide advice to the trust on the factors that it should take into account when considering the impact on third parties of change to a service or non-service.
In its response to us, the BBC accepted that it could be clearer when the BBC will apply the public interest test, and in its most recent update it has told us that the trust agrees with the committee’s view that the dividing line between what constitutes a service and other activity classed as a non-service activity was not clear, and that to avoid future confusion the trust has decided that it should simply seek to apply the PVT to non-service activities as well as to services. Here, the determining factor for the trust in deciding whether or not to conduct a committee is the significance of the proposal, not the question of whether or not it is technically a service or a non-service. That approach provides certainty and clarity, both within the BBC and to its external stakeholders.
The trust has now put in place all the new arrangements to secure independent advice from Ofcom on the potential significance of BBC plans from a market perspective, and now seeks this advice as a matter of course when considering the significance of proposals in order to decide whether to apply the PVT. The change was implemented in time to apply to the plans under consideration by the trust as part of the Delivering Quality First initiative, and already several elements of that initiative have been submitted to Ofcom for its advice. Once again, we welcome this change.
We then turned our attention to the licence-fee settlements, and concluded that under the recent settlement money from the licence fee is going to be used to fund important activities such as the BBC World Service, S4C and Broadband Delivery UK, which sit outside the BBC’s core activities. It was therefore necessary that the trust worked together with the relevant bodies in order to identify a governance framework through which the bodies overseeing these activities, particularly BDUK, would be accountable for the way in which they used this money. We welcome the BBC’s response that the trust was sorting through some of the issues at the time that it advised us of this. We also welcome its agreement with this recommendation and the fact that it is making progress in this area, including through a formal amendment to the BBC’s agreement with the Secretary of State. Again, I would be grateful if the Minister could advise us of exactly what progress has been made in this regard.
We also looked at the current relationship between the BBC and the National Audit Office, which can be succinctly summarised roughly as follows. Under the current arrangements, agreed between the trust, the NAO and the Government, the NAO conducts reviews of BBC services as requested by the BBC Trust, although it is not the BBC’s auditor. The BBC Trust is responsible for determining which areas the NAO should investigate and the NAO then reports its findings directly to the trust, which adds its own and the executive’s comments to the report before presenting it to the Department for Culture, Media and Sport, which in turn then lays the report before Parliament. This is a different process from the NAO’s dealings with most other publicly funded organisations. Its rationale was to safeguard the BBC’s editorial independence but, at the same time, to ensure parliamentary scrutiny of the spending of public money.
In its report, the committee recommended reform of these arrangements. We think that the NAO should agree on a work plan with the BBC Trust in advance. This is the case with many other organisations that are audited by the NAO. The period to which these work plans apply and the extent to which there are opportunities for work-plan review are matters to be agreed between the trust, the Government and the NAO. The BBC accepted that the NAO’s work plan should be set in advance. The Government told us that they were committed to ensuring that the NAO had full access to the BBC’s books in order to ensure greater transparency. They told us that they were in discussion with the BBC and the NAO about the detail of how this commitment could be achieved, and that the revised arrangements were to be implemented by November last year.
On 15 September last year, the Secretary of State for Culture, the Olympics, Media and Sport and the BBC agreed arrangements for the NAO’s work at the BBC so that the Controller and Auditor-General will now have discretion over the subject matter of the reviews that the NAO undertakes. These reviews will continue to be reported to the BBC Trust, which is responsible for the BBC’s accountability to licence-fee payers. We welcome this development.
In our call for evidence, we signalled our interest in the issue that underlies the governance and regulation of the BBC—the accountability of the BBC in general and the BBC Trust in particular. Therefore, we examined and explored what are regarded as the basic tenets of the BBC: the significance of licence-fee payers, the supremacy of the royal charter and the BBC’s independence from the Government. We discovered that all three are more complex than is commonly understood. We concluded that, while the BBC Trust cannot be directly accountable to individual licence-fee payers, it should continue to consider how it might provide further transparency and continue to consult viewers, listeners and users of BBC services. The aim of this should be to ensure that those who pay for and use the BBC have more of a voice on the sort of services that it provides and its strategy for the future.
Secondly, since the BBC spends public money, Parliament—particularly the House of Commons—should have oversight and be able to scrutinise that expenditure from a value-for-money perspective. That process must not intrude on the BBC’s editorial and journalistic independence. From time to time, Members of both Houses express concerns about aspects of the BBC’s output. It is obviously open to them to express their opinions but the way to approach any specific concern must be through the complaints procedures that are in place for everyone.
Equally, as the events of the past decade have shown, the relationship with the Government of the day can be fraught with danger and tension. This is probably unavoidable in a free society but the Government must be clear as to the distinction between their role as midwife to the corporation and the financial arrangements surrounding it, where they have a legitimate locus standi to intervene, and the BBC’s obligation to editorial and journalistic independence, where they cannot do so.
For the relationship that has evolved between the BBC, the Government, the licence-fee payers and Parliament to be sustained, all involved must understand and adhere to these basic underlying principles, which maintain a degree of balance and equilibrium between them. These relationships and the balance inherent in them are an almost archetypal British compromise. Nobody would design a system like this but it has evolved and it more or less works much, if not all, of the time. As a result, it is tinkered with at our peril. Above all, it is part of the law of the land.
One of the curiosities of the BBC is that it has its own legal code within English law. That is not unique but it is most unusual. During its deliberations the committee wondered, like many before it, whether this legal idiosyncrasy was actually justified. We recognise that the existing arrangements work but are unconvinced by some of the arguments advanced to support them. We therefore feel that the Government should look carefully at the legal structure of the BBC before their proposals for the next charter and agreement are brought forward, and do so from the perspective of whether these are the best arrangements for an independent national broadcaster paid for from public money. We very much hope that the noble Baroness will be able to confirm that this will occur.
At the start of my remarks I commented that the committee sees an important part of its role as assisting the House in the work it is shortly going to have to undertake in response to the policy initiatives and legal and regulatory change that the next few years are going to bring. Therefore, in conclusion, I reiterate paragraph 136 of our report:
“We welcome the Government’s consultation as the ‘first step’ to the communications bill and support the wide-ranging review ahead of the Green Paper which is due to be published later this year”.
That means last year; it has not yet been published. The paragraph continues:
“We see this as a useful start to discussions on the content of a future communications bill. We invite everyone in the industry and in particular the BBC Trust to respond to this review. We encourage the Government to conduct a comprehensive overview of the broadcasting industry to link the preparation of the next communications bill to the renewal of the Channel 3 and channel 5 licences in 2014 and the expiry of the current BBC Charter in 2016. Unless this is done the sector risks additional complexity and confusion”.
As your Lordships will know, since then the entire media world has been shaken by the hacking scandal, which in turn, in the era of convergence, will bring about further legal and regulatory change which certainly will not be confined to the printed word but extend across the entire sector. When to this is added the ceaseless flow of innovative and technological development currently taking place, the immediate future threatens to be one of almost permanent revolution. This is an enormous challenge.
Finally, I thank our specialist adviser, Professor Stewart Purvis, for his wide-ranging and significant help, and Audrey Nelson and Emily Davidson, clerk and policy analyst respectively, both of whom have moved on to pastures new.
Lord Inglewood
My Lords, the hour is late and the debate has been long and comprehensive. It has been defined by expertise, a breadth of understanding and differing and varying perspectives, which together have made a bubbly cocktail and a good debate. I thank everyone who has taken part. Normally in your Lordships’ House we have one respondent to a debate, but today in practice we have had two: the noble Lord, Lord Patten, on behalf of the BBC, and the Minister. Particular thanks go to each of them.
If this Chamber were a TV channel, I fear that this debate would not be showing in prime time. Very much the opposite, in fact; late on a Thursday afternoon is a graveyard slot. It is proof positive of the importance of the topic and the interest of the House that so many people have taken part, and I know that a considerable number of others would have liked to have done so, had their diaries permitted.
Finally, as chairman, I feel a responsibility for the integrity, purposes and work of the Communications Committee, and I am very grateful for the support indicated for it on all sides of the House. We have done a good afternoon’s work.