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July 14th, 2015

BBC’s licence fee settlement eclipses the real problems PSB is facing in the UK


Estimated reading time: 5 minutes

Blog Administrator

July 14th, 2015

BBC’s licence fee settlement eclipses the real problems PSB is facing in the UK


Estimated reading time: 5 minutes

256The third Ofcom PSB review (‘Public Service Broadcasting in the Internet Age’, 2 July 2015) has been somewhat eclipsed in broadcasting circles by controversy over the settling of the BBC licence fee. Christopher Dawes, an LSE Visiting Senior Fellow who retired from a long career leading on media policy in DCMS, discusses the report findings and argues for looking at real problems, such as children’s programming, for the future of Public Service Broadcasting (PSB) to be secured.

The deal was clearly wrong in principle: for Government to push a backdoor deal saddling the BBC with the welfare responsibility and policy responsibility for free licences for the over-75s. It is high-risk for the BBC, as emphasised by Enders Analysis, but it could lead to a better long-term position in that (a) the whole of the licence fee is again linked to BBC services; (b) the inflation link is re-instated; and (c) the fee will cover on-demand services.

To sustain its services, the BBC has the challenge of ending the free over-75 licence as soon as it can (after the end of this Parliament, so that the Government can maintain its promise to protect pensioner benefits). This was only ever a Chancellor’s lollipop, as it makes no sense to use a regressive (flat rate) tax to fund a completely untargeted welfare benefit: it’s worse than the winter fuel allowance.

A key aim now must be to secure during Charter Review a cross-party commitment to settling the future scope of BBC services and level of the licence fee in as transparent and non-partisan way possible.

So, in practice, the outcome could be good. And probably better than total confrontation with the present Government.

The BBC’s independence is fragile and has been sustained by political and civil society commitment. Until 2007 it rested on a Charter and Agreement lasting at least 10 years (covering at least two parliaments); a licence fee set every 5 years in what was an increasingly transparent way; “Nolan”-principles appointments to the Board of Governors (now Trust); and, to provide clarity to licence fee payers, the whole of the licence fee funding BBC services, collected, since 1991, by the BBC itself. Sadly, that didn’t last.

Chopping at the licence fee

First, we had the raid on the licence fee to deliver digital switchover, a Government policy bringing a State windfall from selling spectrum. The BBC received £200 million of ring-fenced funds for a marketing programme and £603 million in the January 2007 licence fee settlement to 2012-13 to fund the help scheme to assist those whom the Government deemed needed assistance. The rot had set in. Then we had broadband roll out, funded from the surplus of the digital switchover moneys, then the atrocious last minute “austerity” deal of 2010 which lumbered the BBC with foreign policy and security objectives (the World Service and monitoring) and further broadband spend. But Tony Hall’s deal now provides an opportunity to aim for a more transparent future with more BBC autonomy.

Let’s hope and work for that coherent BBC licence fee again.

By Zizzu02 (Own work) [CC BY-SA 3.0] , via Wikimedia Commons
The BBC Photo by Zizzu02  [CC BY-SA 3.0] ,
As for BBC Governance, the Board of Governors worked fine for most people. It bothered parliamentarians who complained that the BBC was judge and jury in its own court, principally when the BBC appeared not to share their prejudices, and it bothered students of business regulatory structures; both these playing into the hands of BBC rivals who simply wanted to chill BBC activity and waste licence fee moneys. But Ofcom already parallels the Trust in most decisions, on content and new services. We need the slimmest structure to defend the BBC’s independence, especially of editorial content.

Having got that off my chest: well, what a surprise! Ofcom have concluded that Public Service Broadcasting appears to have pulled itself up from being on its last legs.

One thing predicted at the time of the 2003 Act is that in the multi-channel and Internet age, PSB would become more important, and Ofcom have found that, given the opportunity for PSBs to innovate, that has indeed been the case, and public satisfaction with PSB has increased in parallel.

How we got here: the PSB Reviews

But how did we get here? The Communications Act 2003 was enacted at a time of great turbulence when the internet was developing dynamically and unpredictably. We authors of the Act were told that it would not last – for heaven’s sake, the Act didn’t even mention the internet (actually it did, but in terms less ambiguous than “the Internet” – it was law after all).

The Act created a structure which did not assume a particular future, but has remained remarkably resilient – so much so that DCMS’s proposed revision under the last Government moved from grand promises or threats through various phases of unfulfilled promise to – zilch.

But, however flexible the structure we created, we did expect that commercial PSB would decline and Ministers sought through the legislation principally to manage and inhibit the speed of decline. Ofcom’s PSB reviews were a principal part of that.

Anticipating decline, Ofcom’s first review of PSB (2004-5) concluded that there would be a gap in provision and proposed a Public Service Publisher – a proposition which was a little backward-looking for a supposedly forward-looking organisation, as it picked up principles from the Peacock Committee of 1986, and similarly posed a threat to the BBC by postulating a new institution to fund PSB content with money which it seemed could only realistically come from the licence fee. The second Ofcom PSB review was more modest in its aspiration. No new institutional structure was proposed: just new money, some £145-235 million, the lower figure serendipitously only marginally higher than the £130 million for digital switchover within the licence settlement; the amount that was at that time expected would not be needed after 2012.

Ofcom’s Third Review of PSB continues on the path of increasing modesty and abandons new institutions and resources and, while Ofcom always deserves deep respect for the quality of its research, the succinctness of the third review itself is most welcome.

The real problems

Yes, there are real problems.  The loss of children’s programming, especially from ITV, but also from the BBC despite CBeebies and CBBC, and weakness in C4’s expected provision for older children, has led to a real diminution. Ofcom’s job is of course to look at relative decline in PSB provision, not absolute need. I recall when television was widely considered unsuitable for children, who were more than indulged by Watch with Mother, then Blue Peter, then Crackerjack – before we were off into Doctor Who and the margins of grown-up programmes. Perhaps the real loss, especially among older children, is the social cohesion deriving from common experience of high quality UK programming.

There is a lack of arts and religious programming. But, to supplement arts broadcasting, we have wonderful innovations such as NT live, albeit at extra cost.

There is a also the perceived lack of diversity that Myria Georgiou has recently pointed out.

Key challenges for PSB are achieving visibility and ease of discoverability across an increasing range of platforms. This has significant cost implications, taking money from programming.

Many of these challenges will have to be addressed in the BBC Charter Review. However, there is also a real need to address the extent to which Channel 4 needs to secure wider PSB advantages for its portfolio if it is to contribute in new ways to future PSB.

This post gives the views of the author and does not represent the position of the LSE Media Policy Project blog, nor of the London School of Economics and Political Science.

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Posted In: BBC Charter Review | Guest Blog | LSE Media Policy Project | Public Service Media

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