Three-D Issue 25: Actions not words: the BBC, the Charter and the Money

Sylvia Harvey
University of Leeds

Once every ten years or so the British Broadcasting Corporation faces an existential crisis. Without its Royal Charter it has no right to exist, to broadcast or to receive funds. The Privy Council, a pre-democratic body that advises the Monarch, manages the process of awarding and renewing Charters. In the case of the BBC the senior Minister with responsibility for broadcasting manages the renewal and connects this to the formal democratic process – allowing the pale light of participation to glimmer in the course of one or two public consultations. Occasionally the Corporation has been allowed a lifespan of more than ten years. During the premiership of Margaret Thatcher, not a natural friend of the BBC, her Home Secretary William Whitelaw generously allowed the Corporation a fifteen year Charter allowing it to sail safely if not boldly into the future after the resignation of the Prime Minister.

Charter Renewal, like a lightning conductor, carries the electrical currents of the political desires and frustrations of the day. What is distinctive about this one?

One conundrum at the heart of the 2015 process is that the consultation document or ‘Green Paper’ – BBC Charter Review Public Consultation , issued on 16 July – contains a Section 2 that asks questions about the scale and scope of the BBC followed, apparently quite logically, by a Section 3 which asks about how these activities might be funded. Section 3 refers to the level of the licence fee as an issue on which ‘no decision has yet been taken’. And yet some two weeks before the appearance of the Green Paper and just before the Government’s Summer Budget , an agreement affecting the future funding of the BBC was hammered out very quickly, under pressure and behind closed doors and only subsequently reported by the press.

The single most important element of these negotiations was the Government’s determination that the Department of Work and Pensions would no longer bear the cost of the licence fees for the over 75s (introduced in 2001 when Gordon Brown was Chancellor of the Exchequer) and that the BBC would be required to take over this cost amounting to something like £650 – £750 million, approaching 20 per cent of the value of the BBC’s licence fee income. In partial mitigation of this arguably game-changing move the BBC understood that they were being offered some valuable inflation-proofing of the licence fee – linking it to the Consumer Price Index (Snoddy, 2015). The details of this deal were subsequently made public when the letter from Chancellor George Osborne and Secretary of State John Whittingdale summarising the arrangements was published.

It seems that things can only get worse for the BBC partly because the Green Paper says that ‘no decision has yet been taken’ on the level of the licence fee and partly because the letter from the two senior politicians points out that the mitigating, inflation-proofing part of the deal is subject to the satisfactory outcome of the Charter Renewal process. There is a kind of double jeopardy here since the mitigation offer can be withdrawn at any point and the level of the licence fee could also go down. There is little point in asking members of the public to discuss ‘scale and scope’ if a course has already been set to reduce significantly the BBC’s income.

This matters not only because the way the chips fall (or have already fallen) determines the range and quality of services that the BBC can provide, but also because the process of secret and hurried negotiations could be seen as a threat to the independence of the BBC. Something similar happened to the Corporation in 2010. Back then Parliament’s Select Committee for Culture, Media and Sport stated: ‘We believe that the current means of setting the licence fee is unsatisfactory. The 2010 settlement demonstrated that the BBC’s independence can be compromised by negotiations with the government of the day that lack transparency and public consultation.’

References

House of Commons (2011) BBC Licence Fee Settlement and Annual Report. HC454.

Osborne, George and Whittingdale, John (2015) Arrangements for Over 75s TV Licence Concession from 2017-18. At: https://www.gov.uk/government/uploads/system/uploads/attachment_data/file/443735/Letter_from_George_Osborne_and_John_Whittingdale_to_Tony_Hall_FINAL.PDF

Snoddy, Raymond (2015) ‘How bbc Warnings of Financial Meltdown brought Government to Negotiating Table’ in The BBC Today. Future Uncertain, (eds) John Mair, Richard Tait and Richard Lance Keeble. Bury St. Edmunds: Abramis.