The much anticipated BBC White Paper, published this month, heralds fundamental changes. On the basis that almost £5 billion of our annual revenue (including £3.7 billion from the licence fee) goes into funding the BBC's activities, transparency over its decision-making is clearly vital. On the other hand, over-interference may damage the BBC's commercial competitiveness and hinder its ability to innovative and erode the BBC's independence. The commercial and legal implications of the proposed changes are discussed below.
Five themes emerge from the White Paper:
- Support of the creative sector; and
- Funding stability.
The proposals emphasize the importance of "distinctiveness", which they define as 'output in many different genres and across a range of platforms'. A proposed new "mission statement" provides that the BBC will:
"act in the public interest, serving all audiences with impartial, high-quality and distinctive media content and services that inform, educate and entertain".
This will be achieved through the provision of impartial news reporting; supporting learning; representing the communities of all the UK's nations and regions; and reflecting the UK's values to the world.
Rhetoric aside, at this stage in the negotiation of the Royal Charter the methods by which these aims are to be implemented remain unclear and quantifying the extent to which they are achieved – a nigh impossible task. It certainly doesn't take a genius to work out how the BBC's commercial rivals will use the "distinctiveness" objective as a stick to beat it when it comes to programme acquisition, commissioning and scheduling.
It is proposed that the BBC Trust and Executive be replaced by a unitary board "the BBC Board". This, according to the White Paper, would allow 'at least 50% of the appointments to be made by the BBC itself', with the balance appointed by Government ministers. The new board will also possess greater responsibility for defining management and staffing levels throughout the organisation. The increased influence of the Board combined with growing Governmental involvement will no doubt prove to be the subject of much debate and opinion amongst legal commentators.
The White Paper proposes that the National Audit Office has greater access to information about BBC spending. Furthermore, Ofcom will be appointed as the BBC's external regulator and will be empowered to initiate investigations without a requirement for prior authorisation from the BBC Board. The roles of board members will be more clearly defined and information relating to all employees receiving salaries of more than £450,000 per year will be disclosed.
While these changes do herald greater transparency and regulation, there are dangers that they might hinder the BBC's ability to attract and recruit talent. Further, the powers awarded to Ofcom might prove problematic where competition and fair trading are concerned. For instance, how will the BBC's proposed new subscription based services interact with market competitors, given its receipt of public subsidy? And how will Ofcom respond when BBC commercial services, provided abroad to global competitors, negatively impact on the profitability of Britain's commercial competitors?
In terms of the enforcement, further clarity is awaited in relation as to whether:
- damages actions against the BBC would be available for breach of statutory duty; and
- Ofcom will have any enhanced powers to fine (and the implications of these on the flow of public money).
Support of the Creative Sector
The BBC's responsibility to the creative sector is stressed in the White Paper with an emphasis on external tendering and redirected funding to support other industry players. No longer will there be any guarantee of in-house production, except for news content; the BBC is encouraged instead to outsource, or partner with outside production companies. Whilst, to a certain extent, this is already done by the BBC, it will be interesting to see whether new content will largely be dictated by profitability rather than diversity as previously suggested. What is clear is that the BBC's spending policy is to become a much more difficult beast to manage.
A £20 million contestable public service content fund "will be established for the purpose of creating new opportunities for other broadcasters and producers to make public service broadcasting content". In doing so, the White Paper aims to reposition the BBC as a benign player in the field of national broadcasting; however, it is unclear as to how this fund will be managed and regulated. The merits of creating further competing publicly funded content are unclear. Perhaps instead, ring-fencing and better protecting the diversity aims already discussed might be given greater weight in the final review of the Paper.
The licence fee is due to increase in line with inflation for the next five years starting from 2017/2018. Tighter regulation will be introduced in relation to the way that the licence fee is reviewed and implemented, and this will be limited to once every five years. Perhaps by contrast, the BBC will be freer to manage its own budgets once the funds have been marshalled. It will be interesting to watch the interplay between allowing the BBC greater independence on the one hand and the subsequent investigative and enforcement structures which have been proposed by the White Paper on the other.
Clearly the White Paper contains significant provisions relating to the fundamental constitution of the BBC. The legal implications which stem from this proposal are myriad – yet difficult to distil until the details of accountability and enforcement are further developed. Considering the finish line of January 2017, this will no doubt be a key area of government focus in the coming months and further clarity is awaited with interest.
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