Today the cross-party Commons Culture, Media and Sport Committee, which I chair, publishes its first report on the BBC Charter Review. We have concluded that the BBC needs a radical overhaul of its governance arrangements; and that the Charter review process itself needs to be significantly improved.
As George Orwell said, “To see what is in front of one's nose needs a constant struggle.” One of those things is the BBC. To Britons, it’s just the Beeb, or Auntie: a slightly old-fashioned member of the family whom they love to grumble about but secretly rather adore.
To foreigners, it’s much more: a beacon of enlightened values of openness, freedom of thought, toleration and diversity, more vital than ever today in a world of ideological and sectarian division. It's one of the things that make the UK a soft-power superpower.
Both views are right. But as the BBC comes under ever-increasing commercial and technological challenge, so questions of how it can be sustained, meet its public service remit and justify the licence fee become more urgent.
Effective governance of the BBC requires a balance between public accountability and independence from political and other influence. At present, however, there is too much distance between the BBC Trust, charged with oversight, and the BBC’s Director General. At the same time, the Trust’s non-executive directors lack adequate powers of scrutiny, while the BBC’s own non-executives are not fully independent.
The result is that the DG, Lord Hall, is operationally accountable to no-one, but also lacks the close support of a Chair in his declared project of cutting costs and streamlining the organization from ten to seven layers of management.
To address these issues, we are recommending that the BBC Trust should be abolished, and its role in holding the BBC to account absorbed by a new body located within Ofcom. This would act as an active guardian of the public interest, assessing value for money and scrutinizing BBC proposals to change services. It would also have a new power of investigation. Ofcom itself would continue to act as industry regulator, as well as keeping the convergence between broadcasting and telephony under review.
The BBC’s current board should be reformed as a unitary board and strengthened by the addition of an independent Chair. It should contain a group of newly tasked and properly supported non-executive directors. And the BBC as a whole should be independently audited by the National Audit Office.
One early item of business for the new board will be to review the transparency, business model and pay structures in BBC Worldwide, the BBC’s international arm. Another will be to oversee the transition of the BBC’s production facilities across to a new arm’s length BBC Studios, an idea which unnerves many independent producers because of the risks of conflicts of interest with BBC commissioners.
The Committee has also highlighted the vey abrupt way in which the licence fee settlement was reached last July, which prevented proper public and parliamentary scrutiny. It recommends that in future the timing of Charter renewals should be kept separate from general elections, to avoid undue political pressures, delay and uncertainty; and measures should be put in place to ensure an orderly and fully considered review.
These proposals are largely in line with the excellent report on the BBC of the previous Committee under its Chairman, now the Secretary of State. They are radical and far-reaching, and they can help keep Auntie fit for another decade or more.