29
Examination of witnesses
Matt Brittin and Dr Samir Shah.
Q79 The Chair: Good morning. I welcome everyone to this meeting of the Communications and Digital Committee. As many of you will know, the committee has been running a short series of evidence sessions focused on certain topics raised by the Government’s review of the BBC royal charter. We know that both of you recently met the CMS Committee in the Commons, but it is likely that most of our questions will be slightly different to theirs. This is the final session in this piece of work for us, and we are delighted to have you with us, Dr Samir Shah, the BBC’s chair, and its new director-general. Mr Brittin, thank you for coming and welcome to your first session with the committee. Dr Shah, it is good to see you again. Thank you both for being here.
I will start with you, Mr Brittin. The BBC’s response to the Government’s Green Paper sets out ambitious plans to keep transforming the BBC for future success. As the new director-general, what is your overall vision for the BBC in the next charter period?
Matt Brittin: Thank you for making me welcome. I am just short of two months in and obviously my job is with the team at the BBC to develop a vision that will take the BBC successfully into the decades to come. As I said to the committee last week, it is a moment of jeopardy for the BBC and for public service media, given what is happening in the world. Therefore, the onus on us is to reinvent the BBC for the world we are now in. That requires us to focus on the audience value, the public service value of the BBC. What does that mean today? I am sure we will talk about that.
As to the economic impact, last week we published sort of an updated report that shows the scale of that impact. In this moment of geopolitical and international disruption by the scale of technology and innovation to come, there is also the sovereignty impact regarding British values, how they are portrayed in the world, and how the world sees us. On that third one, we also published last week a report that shows that the BBC is reaching over half a billion people around the world, something we should be really proud of.
So the opportunity for us is to reinterpret the BBC’s mission with today’s technology and setting. That will imply quite a lot of change and, as we discussed last week, a rethink of the funding mechanism if we are to have a BBC that has sufficient universality, scale and sustainability.
Q80 The Chair: Could you tell us, too, how your experience at Google has shaped your view of the challenges and opportunities facing the BBC? I particularly have in mind that, for many of our sessions, it is difficult for us to engage with the tech platforms. They are not always willing to engage with us, and we do not often get to the heart of the issues there. There could be a perception that you were a long time at Google and that has shaped you. Could you could you take us through that?
Matt Brittin: Yes. Certainly, when I was there—obviously, I am here in this role rather than that—my view was always to try to go and listen to critics and engage with policymakers. I did that in the UK and across Europe many times. The perspective I bring to this role is around the opportunity of technology and its risks. Technology is neutral. But when the BBC began, the pioneers of the BBC in 1920s were pioneering the technology and the content of broadcast radio. Then the BBC was pioneering both the technology and the content of broadcast television. Then the BBC, in launching iPlayer, was pioneering streaming. It launched iPlayer before Netflix launched in the UK.
It used to be the case, even when I was growing up in the 1970s, that to reach the world, you needed the infrastructure. The BBC had transmitters in the Ascension Islands. Today, 6 billion people are online and could access BBC content. We mentioned half a billion people as the latest number last week, but that could be 3 billion or 4 billion. The BBC is just one aspect of the creative industry powerhouse that the UK has. When you think across music, literature and the arts—we will come on to talk about some of those areas—as well as education, we have an incredible reputation internationally. I was often sitting in the UK as a Brit but seeing this global scaling as a huge opportunity.
There is also a threat, and we talked about this in terms of the huge investments in large language models. Trillions of dollars are going into data centres, energy and datasets to build these models. We do not have a large language model that is British or a foundation model of scale that is European at this point. That is a challenge because those things will disrupt in positive ways health, education and science, but they are also disrupting the world of content creation and distribution. So on the one hand, there is a huge opportunity of technology; on the other, there are risks of disruption and we can come on to talk about misinformation. So, I bring that perspective and probably a perspective around running a large and complicated organisation through change, which is something that the BBC has to do as well.
Finally, one of the reasons for success in the world of technology is when organisations really focus on what the technology company would call their user, but what the BBC would call their audience and the public. That is one of the things that we have to do together at the BBC: focus on the public value and the sovereign values that we bring to the world.
The Chair: We spent a long time looking at the copyright issue for the creative industries, and it is arguable whether many people in the creative sector really see technology as neutral in their lives. I do not think they do.
Matt Brittin: I am happy to return to that when you want to.
Q81 Lord Kirkhope of Harrogate: Good morning. You have been in post only for a short time, so obviously there is an awful lot of work to be done. But in the context of looking at the future, I am wondering whether time is on your side. I am not going to pre-empt other questions, but large numbers of people are no longer paying their licence fee to the BBC. The media outside the BBC is taking an even greater interest. The ITV sale, for instance, is going on. People are starting to get really interested in what might happen in future. What I really want to know from you is: do you feel that your organisation is equipped to deal with the situation, the pressures that are going to arise and the public relations that are going to be so necessary here in moulding and developing the new, reinvented BBC for the future? Are you going to be up to it, frankly? Because there are concerns generally that the reputation of the BBC is so important that anything that goes wrong here is going to count against your plans for the future. I just want to know whether you feel confident about that, or whether you are going to make a lot of changes to make sure that the BBC has a face to the public, to government and so on that will allow it to have a successful outcome to its renegotiations.
Matt Brittin: There was a lot in your question. I joined because I believe in the BBC and its mission. I believe it is in jeopardy, as is public service media more broadly, as is the media industry globally, as you referenced. But I think it has the potential to be reinvented successfully for the future. I believe that because I spent six weeks prior to taking the role travelling the country, seeing the impact of the BBC’s move across the UK, which is compelling, seeing the world-class talent that is making our programmes. I also felt welcomed by people who understand the need for change.
So as I went through the front door on the first day, having spoken to people for six weeks previously from Northern Ireland, Scotland, Wales and Salford, including local radio, drama production and so on, I felt it was important to start with three priorities. The organisation had been through some disruption and challenges in the months preceding and so I set out three priorities. The first is to make the case for the BBC, which we are doing partly today and through the charter process. We need to make the case for the relevance of public service broadcasting and the BBC’s role within it in a renewed way. You alluded to that.
The second is editorial excellence. The BBC is at its best only when it is bold and brave in its storytelling and journalism. It has taken some hits. It is also the case, however, that the BBC is the most trusted news brand internationally and the most trusted news and media organisation in the UK, despite that.
Trust has been falling in all institutions globally, as we all know. And it certainly has fallen a little bit further in the BBC in the last year or so, but it is still the most trusted.
The third priority I said we had to look at was velocity. I think the biggest challenge to the BBC is the pace of change in the world around us, and in viewing habits, which is at the heart of the licence fee funding issue and the need for us to reinvent that. The BBC has not been as fleet of foot as it could be on change, adoption of technology, experimentation and partnerships. I hope that, in the charter, we can look at how we can increase the BBC’s ability to contribute. We will come on to things such as education. We should be incredibly proud of what the BBC has done, and there is a lot more we can do: think about the scale of the World Service. I think this is a moment where, if others agree, we can really do something special for decades to come, but it will involve a lot of change.
Dr Samir Shah: May I respond to that question? You raise a really important point, which goes to the heart of it. We, this Government and this country face a choice about where we want the BBC to be. There are two paths we could take. We could manage decline, get smaller and just disappear under the weight of the scale of the other organisations in this space—the American ones are huge. If we take that path, in 10 years’ time, all our access to video content will be owned by the Americans or Chinese.
If we take the right path, in my view, we will create what I would call cultural sovereignty. We need a media platform that belongs to the British, is owned by the British and is about British storytelling, which can give access to our content—and we are not just covered by the big players. It is a really important point you are making. We need a funding model that will underpin our purposes and a new charter that enables the BBC to grow in scale, so we can say, as a country, that we have our own sovereignty in media platforms. It will not just be the BBC, but the BBC will be at the heart of it.
Q82 Viscount Colville of Culross: Thank you very much for coming. I declare an interest, having worked for the BBC for 27 years. Dr Shah, you have just talked about a media platform owned by the British; however, at the moment, we are seeing the BBC doing a partnership with YouTube. Mr Brittin, do you think that is a model for future distribution of BBC services? If so, you must be aware of the concern of many people in this country that it means that BBC content will then be dependent on the algorithms and tech structures of the US tech companies, and that their terms will underpin the values of the PSB system. Dr Shah, you have said in the past that the BBC and the Government cannot roll over because of an algorithm.
Matt Brittin: Let me take that head-on. It is completely correct. That is why we think it is important to have a BBC of scale, with sufficient funding to create a media platform of our own. Here is what is happening with behaviour changes, as you will know. Yesterday, you bought a television, you watched it, you paid your licence fee because you had a television, and the only use of that device was for watching live television. Previously, you bought a licence for listening to radios. Today, you pay your licence fee when you are watching live television or iPlayer, but the audience is already watching streaming services, YouTube and so on—particularly the younger audience. I think under-24s are watching five times as much YouTube, let alone other platforms, as they are watching linear television across all providers.
You are facing a choice: do you stay with your platforms and dwindle into irrelevance as the audience habits change, or do you go where the audience is and try to be successful on those platforms? It was before I joined the BBC and after I had left YouTube that the BBC struck a deal with YouTube, so it is nothing to do with me, but I think it is right to be there. When we are there—and I really welcome the DCMS Green Paper on this—we need to fight for our prominence and the value of public service media. The first way you do that is by being there and understanding the technology. On the point on whether technology is a friend or foe, you have to use it to understand the opportunities and the risks, whether you are a musician, a content creator or a scientist. It is right for us to explore being on other platforms and for the Government to look at the rules and regulations around those platforms, but the scale of change has already happened, so just asking people to come to iPlayer alone is not going to work.
Dr Samir Shah: I would say it is not an either/or. We do need our own media platform, but we also need to go to places where people are consuming content—we cannot just sit there. As Matt points out, as we distribute our content on other platforms, we must make sure that we have proper guardrails on our values and what we do and that we have attribution and prominence. I do not think we can ignore the fact that a lot of our audience are going to other platforms, and we need to have proper engagement with them.
Q83 Viscount Colville of Culross: I quite understand why you are there, because you have to go where the audiences are. However, you talk about the Government looking at regulations and guardrails to preserve the public service values of BBC content when it is on these platforms. How can we do that? All these decisions are really made in the US by tech companies, as you know only too well.
Matt Brittin: There are few things I would say. It is not just about YouTube. If you think back in history, the BBC went on to Sky’s platform, and I think we need to be looking at all the platforms: Spotify, iTunes, Netflix, YouTube and TikTok. We need to understand how to be on a portfolio of platforms in a way that serves our audience, and we need to argue for rules that support those things.
I have worked with algorithms and engineers for some time, and they are trying to make recommendations of content that people will enjoy watching. Some would say that they are rewarding sensationalism, argument and heat, and, in some cases, I think algorithms have skewed in that direction—I saw the DCMS decision to come off X, which I understand—but they also reward entertainment, surprise and delight. The BBC found—again, prior to my joining—that its news service on YouTube is the most subscribed English-language news service on YouTube, with 20 million subscribers. That could go a lot further.
There is an important public service role for us here: to act as a counter to misinformation that might exist in some of these places. I think part of the mission of the BBC is to do that and go to those places. For example, I think it is right that the BBC remains on X, despite concerns about the changing algorithm. We will keep all these platforms under review, but I think it is right to do that, because we provide an antidote.
I was talking this morning to a colleague who grew up in Canada, who told me that BBC Verify was a huge source of support for her and her friends there, because they were trying to understand what they could believe about the news, and the BBC’s brand and trust, as mentioned, are global—so there is also an opportunity for us to play that role internationally. By the way, when people consume BBC services internationally, they are more likely to come to the UK for education, tourism and trade.
Q84 Viscount Colville of Culross: Is one of the problems that we are seeing young people dissociated from the BBC and not aware that the content they are viewing is the BBC’s, and, as a result, they are not bothering to pay the licence fee or do not even understand the value of the BBC?
Matt Brittin: That is some of it.
Viscount Colville of Culross: That is what we keep hearing. Would it not be better if, on YouTube or any of the other VSPs that BBC content is on, you put a promo—a sizzle of some sort—and had a link through to the main BBC website, so that you would draw people into the main BBC and make them aware of the provenance of the content?
Matt Brittin: We should do that. We should have content that is made for the platforms and we should have content that is there to tease people to come and subscribe to iPlayer. There is a whole playbook of how to do this, which the streamers have used to launch and scale their businesses successfully and which we need to do more of. In some cases, it is content made for a platform; in others, it is content that is a promotion for iPlayer. Absolutely, we would love people to come to the BBC, sign in and notice us.
We need to do more around making sure that the branding works: if you have noticed BBC News on YouTube, it has the red, which we are all familiar with as the colour of BBC News. It is quite prominent: when you scroll past it, you can see that it is BBC News. I think we will need to do some things to make sure that the prominence and the brand attribution are there as well.
Q85 Viscount Colville of Culross: Prominence is obviously crucial. We all know from the Media Act that there was prominence put in for digital TV sets, but it does not cover video-sharing platforms or future AI interfaces. Would you call on the Government to extend legislation so that public service broadcasters are given prominence on those particular platforms?
Matt Brittin: This is obviously a live debate with the Green Paper. We should not underestimate the importance of prominence on devices. Many people have a connected television. There is a row or tray of apps on that, just as there is on a smartphone. Legislation, just like for your electronic programme guide, to ensure that public service media is there, would make a big difference. It being in the repertoire would help. The same applies to screens in cars. Many of us now have cars where our Apple or Android phone will drive the screen. We want to ensure that there is prominence there and for remote controls. There is a devices piece to prominence, which is important.
Then there is a platforms piece to prominence. That is harder to deliver. The platforms will argue that their algorithms are, in effect, equivalent to our BBC1 schedule back in the day. Making the choices about what to schedule was what made BBC1 able to draw in audiences. It was not just the shows themselves, but what came next. They will argue that you cannot interfere with that, because that is the heart of their operation. There are some things that could be done there, and we will be discussing those with DCMS, around the transparency of how ranking works and a possible shelf for news stories. When somebody is searching for something about the news, you can show a set of providers that are deemed to be appropriate. All of that is part of the Green Paper discussion.
The Chair: Thank you, we need to move on now.
Q86 Lord Knight of Weymouth: There is a clear logic around going where the audience is. The Government announced that they want to ban social media for under-16s. If you, as a public service broadcaster, are going to go with the spirit of that ban, how will that affect your distribution and gaining an audience share among under-16s if you then cannot use YouTube as the platform for that?
Matt Brittin: We are starting from a position of greater strength than I anticipated before I started at the BBC. “Newsround” is viewed by 3.5 million children a week in term time in schools. It is a phenomenal product, and it means that under-16s trust their parents and the BBC more than other information sources. I would love us to partner more with the Department for Education and others to look at how we can go further with that.
In secondary schools, Bitesize is used by 80% of pupils, and I think we could go further with that. I have talked to colleagues about the big structural problem we have in the UK about the 1 million young people not in education, employment or training. We ought to be working with government and others to try to equip those people with the skills they need to get the jobs of the future, just as the BBC did back in the day, around the time of the Microcomputer’s introduction. There is an array of things we can do.
On the social media band specifically, the answer is that we do not know yet how that is going to pan out. It is in discussion. We can look at Australia and learn some things, but in general, the principle of velocity that I tried to lay out on day one was about being closer to the audience, simpler to navigate and faster to the future. We therefore need to be more about experimenting and learning as these social things change.
The final point is that this whole conversation is driven by the pace of change in behaviour. That is what has driven ITV and Sky to merge. That is what has driven consolidation in the TV production sector. That is what has driven big reductions in local journalism over time. It is all about how consumers, citizens and audiences are changing their behaviour, and that is only going to accelerate.
Q87 Lord Knight of Weymouth: In Australia, they did not list YouTube, but there is now discussion that they should. The indications are that it would be listed here. I am interested in whether or not there is any conversation going on, particularly with 16 year-olds being enfranchised, as the current legislation that is in the House of Commons suggests, around whether there is a role for the BBC in creating a platform specifically for teens to keep them informed about what is going on in the world in a way that is compliant with where public policy has now landed.
Matt Brittin: I have spoken to our team who deal with children’s and education, and that is an important part of our mission, and adapting to these changes is important. To do that, we will need to look at the funding, and that is part of the discussion on the charter. We will also need to look at partnerships: how do we partner more deeply with educators, NGOs and potentially even with tech companies on how you train people on digital skills? In my previous life, I began a programme on training people in digital skills. We ended up training 100 million people across the world and over 1 million in the UK. There was a big focus outside London. We found that the main issue people have is a degree of confidence about how to use this and how it could be useful. We are going to need to do that as a country for the jobs of the future as well. I absolutely agree with you, and subject to the opportunity for funding and partnership, I would love for us to be accelerating work there.
Q88 Baroness Owen of Alderley Edge: We have heard about the increased collaboration between public service broadcasters and the need to enable them to respond to the challenges posed by global platforms. The Government have proposed giving the BBC a specific duty to partner with public service providers, which you obviously support. What practical difference would this make?
Matt Brittin: There is plenty we can discuss around public service media more broadly in the UK. We touched last week on discussions about iPlayer becoming a sovereign media platform. You could imagine, whether it is iPlayer or structured in a different way, a destination where homegrown storytelling and the quality of journalism that the BBC and other public service broadcasters aspire to can be found and where we are not subject to third-party algorithmic decisions.
One thing that I have talked to our technology team about at the BBC is that iPlayer could be better at recommendations. It is not as good as YouTube or Netflix, candidly. We have great shows that people do not necessarily discover. But we should have a public service values recommendation engine at the heart of what we do.
I read the 100-year history of the BBC. In the early days of broadcast radio, the schedule would include incredibly challenging classical music next to a popular drama. TV schedules would often introduce something that you needed to be seduced into watching, or when you read a paper newspaper, you will see an article that you might not otherwise have chosen to read. That is what an algorithm can do for us, if we tune it in the right way, so that we are encouraged to explore things.
We just launched a brilliant new show called “Evolution” with Chris Packham hosting. It explains how a cell became an elephant. That type of content might not be something that somebody seeks out, but if they come to watch a comedy and they see that suggested afterwards, that is the kind of thing we should be looking at.
Q89 Baroness Owen of Alderley Edge: Can we pin down specifically whether the BBC would do anything differently under a strengthened duty that it is not already free to do?
Matt Brittin: There are lots of things. We have the charter, the agreement, the Ofcom code and the terms of trade we have with the industry. Many things have changed since those things were put in place. One example we have talked about is I think that licence fee payers believe that the BBC owns its whole archive. People expect that everything we have produced is owned by the BBC. I get so many people asking, as does Samir, “Why we do not have iPlayer globally? Surely we could make that available to the world. Would it not be an amazing thing to do? People would pay”. We have BritBox in the US, which is doing very well, but has a smaller selection because of the rights ownership, and that is a challenge.
It is also an opportunity, because of the way we do rights. First, since 2003, the Communications Act has opened up all of our commissioning outside of news to third-party independent producers, and it has created a huge industry of independent production, but they have now largely consolidated into scale players. So we should think again about how those things work. That is another example. Secondly, there is broadcasters and platforms piece. There is the creative side of it. We have got a creative powerhouse, but the dynamics are changing. How do we do that?
Thirdly, we have invested across the UK. I was in Cardiff, and 25 years ago in Cardiff, aside from producing the daily soap, “Pobol y Cwm”, for S4C, there was no drama production. The BBC chose to put “Doctor Who” there; 26 years later, I visit Cardiff, and I can see shows being made at BBC Studios and an independent studio, with productions from six streamers and networks, including the BBC, being made. I go to the Bad Wolf studios, where we made “The Other Bennet Sister” and Doctor Who’s TARDIS sits waiting for the next Doctor, and a big Netflix show is being made there. All that is because of the investment that the BBC made in creating those skills in the industry. You have to zoom out and look again at the structure of competition, where we are today and how to do something bigger in the future.
The final point I will make is Steven Knight, the creator of “Peaky Blinders”, among other things, spoke to the Commons Select Committee recently in the charter meeting. He talked about how when he makes a show for Netflix or for Amazon, they might come and hire talent, which is helpful—jobs are created or careers continue—but they do not leave behind any of the profit. That is something we should be thinking about in how we structure our industry for the future. People want to come and work here because we have great talent and incredible storytelling capabilities like Steven’s, but we should think again about the intellectual property and the value.
Dr Samir Shah: May I add to and reflect on the question you raised, particularly about iPlayer and the desire for people to watch it around the world? Matt mentioned the point about rights. We know that the Communications Act 2003 gave the rights to independent producers; I benefited from that, having been an independent producer. It was a very successful strategy, and we now have an incredibly strong and talented independent sector. But the rights question—the terms of trade—falls into the same bucket as many of the other things we will discuss, such as the funding model, the governance structure and the regulatory structure. They are all terrific, but they were made for a period in the past, which is disappearing in the rearview mirror. We need to rethink all those areas as we create a new charter for the future. That means that everything should be rethought. What will enable the BBC to thrive and survive in the future and to compete with the forces we have talked about in all these areas? Should we revisit the terms of trade? We must revisit the licence fee and the way we are regulated: those have done their job and have been very successful, but we need a new vision for them.
I make one other point about that new vision, which has come through in some of these conversations, and I cannot emphasise it enough: the BBC is much more than a broadcaster. It is a public good. It has a role to play in the civic and cultural life of the nation. That is why we talked about what we do with under-16s. It is a role we have to play. In all the roles, we have to ensure that everything that we do in our new charter supports that central idea that the BBC is much more than just a broadcaster. The £180 from every household pays for the great content, but it also pays for reaching schools and for skills and training. It pays for a whole lot of things, quite rightly, because that is what the licence fee payer wants. That is why our relationship to licence fee payers is much more than just transactional, as it is with subscriptions. It is important; it is to do with our role in civic life.
The Chair: Thank you. Lord Storey?
Q90 Lord Storey: Good afternoon, and thank you for joining us. By the way, your licence fee does not pay just for your iPlayer or television but for local and national radio, which is hugely important. My question is to you, Matt. When you gave evidence to the Culture, Media and Sport Committee last week, you pointed out the recent market consolidation. We know that, of the public service broadcasters, Channel 5 is owned by Paramount; Sky is owned by Comcast; and, some might say bizarrely, Sky is now bidding or is in the frame for ITV. We are left, in a sense, with only two national public service broadcasters. Comcast has ambitions to take on Netflix as a streamer. How do you see that situation evolving, or is it a crystal ball you do not really want to look into at the moment?
Matt Brittin: A key point I would like to get across—and if I have not done that clearly, then I give my apologies—is that, globally, changes in audience behaviour are driving all this change in the industry. The challenges the BBC faces are not different from the challenges that Sky, ITV, Comcast and so on face. Changing behaviours mean that people need to have more scale in order to invest in reaching those audiences and, in the case of the commercial players, monetising them. Changing behaviours is one of the reasons that we have a shortfall in the licence fee funding versus where it was previously.
By the way, you are right to mention some of the things we have not, such as local radio and radio more broadly, which is not covered—you listen to radio and it is free; there is not a licence fee connection there, which is a slight anomaly as well, but we reach 30 million people a week through our local radio services and the Scottish, Irish and Welsh services.
The consolidation is all driven by the same forces. What does that mean for the UK? As you rightly point out, Sky-ITV will be owned by an American company. I am impressed with the commitments they have laid out on supporting local news and PSB content and two separate news services, but they are already some way behind the BBC. We are the biggest funder of domestic content: we fund something like 86% of public service broadcast children’s content. We are in a world of jeopardy in the British media ecosystem as well, and I believe those forces will get only more powerful. We will need public service media and regulation, and our brilliant creative skills, to be able to succeed in that world.
That is what I am trying to get across: this is not just about the BBC, and not just about it as a broadcaster, but about national values, sovereignty and trust. What the BBC has always done well is show us, and the world, who we are. The evidence from the World Service and our international reach and growth is that people around the world want that: they want that storytelling and that journalism.
Q91 Lord Storey: That is important. I slightly worry that we could follow what people want, or we could lead people to what we think they should have in what we offer them. It is not just a question of sitting back and saying, “Oh, people want to spend all their time streaming now”. There are other things that, through innovation and change, we should ensure that people perhaps do want. I am a great advocate of local news; I worry about the fact that, in 20 years, local news in my city has virtually gone, and we have sat back and allowed that to happen, as a nation.
Matt Brittin: I share your concern, and I think you are absolutely right. We need to continue to be bold and brave in our journalism. That is why I said that one of my three priorities was editorial excellence—making sure that we continue to innovate and be brave in what we are investigating but also in the storytelling.
I actually worked in local press 20-plus years ago. Ahead of the Select Committee last week, I looked this up: when I was working in local press, there were around 9,000 journalists employed by the biggest three local press companies, and there are now only 3,000. Why is that? Well, the economic model has changed. Advertising, particularly recruitment advertising, which is high-margin, shifted online—thanks to Craigslist in particular—at zero cost. The margin just collapsed. It was the same with motors advertising and property advertising. That led to an inability to fund local journalism. The funding of the BBC and its journalism is really important.
I have been impressed by seeing what colleagues at the BBC have done over recent years across the UK. Some 60% of the BBC’s network spend and 55% of staff are outside London. Although we are wedded to the historic transmitters in terms of our local radio network—there are 39 local radio stations in England alone—they have broadened the offer to ensure that there is digital content online in terms of local news and local services as audience habits shift. One of the challenges is to continue to support all those linear services as well as supporting audiences where they are. It is not just young people: I suspect these are habits around the room, with many of us going online for BBC News or enjoying local video and other reporting services.
Q92 The Chair: Could I ask a follow-up question? In that session with the Commons Select Committee, you talked about how the BBC could use its scale and platform to ensure that Channel 4’s content could cut through—you specifically talked about Channel 4—but Lord Storey is quite rightly raising the issue about local news, and that is of concern. Would there be scope for the BBC to use the BBC News app and website—your own platforms—to ensure that news content from a range of different news publishers could reach audiences? Is that something you would consider?
Matt Brittin: We already have the Local Democracy Reporting Service, which I visited in Birmingham and spent some time with. It is an intervention that has produced over half a million stories, which have been carried by 1,000 local media organisations and about 165 journalists as part of that collaboration with the industry. That leads to stories surfacing on their apps and on BBC platforms. More could be done there. Obviously, the BBC’s charter, its editorial guidelines and the standards to which it is rightly held by government differ from the standards to which other media organisations are held, so one would have to be thoughtful about further developments in standards and editorial.
Aside from those traditional media publishers, there are many local creators who are working with the platforms we mentioned earlier and want to work with the BBC. My colleagues have had meetings across the country with many of those creators, and there are things that the BBC could learn from them, and there are things that they can learn from the BBC. I would be excited to extend that further. With the right scope of charter and funding, I think we could go more local. You no longer need a capital-intensive model to do the kinds of things that we used to do with studios and offices, as we saw during the pandemic. We had people broadcasting from home, and the technology keeps advancing, so we can make very high-quality video and audio content with much less investment. A capital-light model that allows us to get closer to the audiences where they are geographically is one that I would see having real promise.
My last point: every pound that we spend in the UK returns three and a half times that to the UK economy, because it creates that market. We have over 7,000 suppliers that we support outside the independent production sector. There is real value for money for the Exchequer in continuing that investment. Equally, there is jeopardy, because for us to keep that investment out across the country has costs. There is duplication and so on; we try to minimise that, but it has some cost.
Q93 Baroness Elliott of Whitburn Bay: As you know, the Government have proposed the need to make economic growth a distinct public purpose in the next charter. Your recent economic impact report demonstrates that the BBC already supports growth across the creative industries through its existing remit. What difference do you think making that a distinct purpose would make and, if they did it, what could you do that you cannot do now?
Dr Samir Shah: I will ask Matt to pursue that. First, though, as we have mentioned, the BBC has been committed to growing the economy, especially the cultural industries, for a long time now. We have done a great deal of work there. In some ways, I can say that it almost does not need the public purpose because we are already doing it. We have a lot of data on this. Our spend out of London is huge. My personal interest when I first started as chair was that I was keen that we turbocharged the Across the UK strategy, which we had had in place for some time. We have been very successful in moving programmes and production, and I am keen now that we also move power because it is important that power does not just stay in London but gets closer to the communities that we reach. That drives growth. It is important to look at the data about how much growth we drive by pushing out from London to all around the country. So we are doing a great deal here. If it is to be a public purpose then I personally am open to that, but I would say we are already doing that.
There are other elements of the public service we could talk about. Media literacy, for example, could be part of it in terms of our public purpose of supporting learning. That is a really important role for the BBC to play. It is new because of the rise of disinformation and misinformation. So my own view is that we do this a great deal. We do not necessarily need a further public purpose for us to do it because it is good for the BBC, it matters and it is part of our role.
Q94 Baroness Elliott of Whitburn Bay: Is there anything, if it becomes a public purpose, that you will be able to do that you cannot do now?
Matt Brittin: That depends on the detail. Before my time, the BBC declared in the response to the Green Paper, as Samir said, that it was very open to this.
Personally, I would be a bit more cautious. Growth is an outcome but the purposes of the BBC are about its purpose. Impartial news and information, supporting learning, creative industry, community representation and reflecting the UK feel to me like a different order of magnitude. Having worked in business, I was always concerned when I found a business that said its purpose was shareholder value. Actually, your purpose should be delighting your customers, serving your audiences, serving your readers and so on, and shareholder value is an outcome from doing that well. So I am a bit more concerned about that. As Samir says, we are seeing an outcome in terms of growth that is really positive, and reporting on that is good, but my concern would be that we were diluting the focus that we need to have at the moment—and possibly adding bureaucracy and reporting, but we could agree how best to do that. So we are open to it, but we should bear in mind that it is of a different order from the central purposes that are so critical to public service today.
Q95 Lord McNally: I think a number of us agree with you that a blanket commitment to growth could just end up as a stick to beat the BBC with, that achieving growth is an objective for the Government and for the nation that the BBC will report and reflect on and that your scepticism is justified. We are all in favour of growth, so why make it one of the things that the BBC is failing on or not?
I am much more in favour of the whole concept of supporting growth. I agree with what the Chairman just said: the licence fee is not just a subscription to the broadcaster; it is the broad contribution to our activities as a liberal democracy, with the access to debate underpinned by a trust in the news services that you provide.
In another part of the forest, this committee is looking at the impact of artificial intelligence. This seems to be an area where the BBC, using its old Reithian mantra to educate, could be very useful. The implications of artificial intelligence—
The Chair: I think we are coming on to that in a moment with further questions, if you could leave that.
Lord McNally: I am not sure what else I need to ask, though there is a specific question. Matt rightly mentioned the importance of journalism, and a number of our colleagues are very interested in that. Something that we often hear from critics of the BBC is, “I know all about the BBC. I was trained by it”. That pipeline of trained journalists has been a victim of some of the cutbacks. I wonder, in your vision of the BBC, how far it is willing to look at the skills and the development of the broader, sustainable pipeline of journalism talent across the UK.
The Chair: I think you are straying into the questions that other people are going to ask. I think that we are going to come on to that in a moment.
I want to ask a different question about purpose. We were trying to get to the point, with regard to what Lord McNally just said, where the growth purpose pushes you to prioritise commercially exportable content or measurable economic impact, but I think you have given us your answer.
Matt Brittin: That would be the concern. If you are focused on growth then “Newsround”, local journalism and investment in things such as training might be deprioritised in favour of bigger shows that you could sell internationally, the larger-scale productions. I do not have all the economics for every type of show that we do, but you would be at risk of losing some of the key public purpose things that Samir talked about.
Q96 The Chair: You mentioned music and musicians, which I was glad to hear. The BBC has an important role as the largest employer of musicians and the biggest commissioner of new music in the UK, and it has always played a role in championing new talent with Young Musician of the Year, BBC Introducing and the music education initiative. However, when I read your economic impact report, that important role just did not seem to be covered.
Matt Brittin: I noticed that as well.
The Chair: There is a mention of it in what you have just published. I was an MP in Salford and when the BBC moved there, having the BBC Philharmonic there, working with our communities, working with our schools, opening itself up with its concerts was a remarkable thing. It has a lot of impact on a community to have those musicians there. It makes a difference to what can be achieved locally. So why do you not mention it? You need to play it up.
Matt Brittin: The report was written before I joined but I can tell you that I went to Salford in the first week that I started to tour the country before taking the role. One of my greatest joys was when I had the opportunity to sit in a rehearsal of the orchestra and see the talent. The commitment there was phenomenal. I, like many licence fee payers, had not realised the BBC was perhaps the second-biggest employer of musicians.
The Chair: No, the largest.
Matt Brittin: After the military, I think. It is pretty big and most licence fee payers would have had, as I had, little idea of that. This is an important part of what the BBC has done incredibly well. I also went to join the Radio 3 breakfast programme hosted by Tom McKinney in Salford, and it was a joy. I discovered, “Not the Nine O’clock News”. If anyone is stressed and at 9 o’clock they want an antidote to the news, then that is a wonderful, relaxing piece of classical music. So, I absolutely agree with you. By the way, this week we kick off the world’s largest and longest-running classical music festival in the Proms. The impact of our music operations shapes the UK and it is a big and important intervention. Again, we need to ensure that it can be funded and protected under the licence fee.
Of course, it is not just classical music. I think about Radio 1’s Big Weekend that was in Sunderland recently, and Radio 2 In the Park, which is going ahead in Stirling in September. These things bring people together. An important public purpose in these divided times is the role that we and other public service broadcasters play in bringing people together. Music is a key part of that. It creates economic value. Those “In the Park” and “Big Weekend” events typically generate £3 million to £6 million for the local economy, as well as obviously a huge moment of togetherness. As does sport—we are facing some sport later today. I was staggered. Samir and I had a bet on what the overnight audience for the Mexico-England game would be.
Dr Samir Shah: I won, by the way
Matt Brittin: He won. It was 9.1 million. Another 5 million watched it on catch-up. Another one point something million watched it replayed on BBC2—with fingers in ears, do not hear the score beforehand. These moments are really important in a fragmenting world. That is one of the things that could be in jeopardy if we are at the mercy of other platforms and are not able to continue that sort of investment.
The Chair: We hope it does get some attention and priority.
Matt Brittin: It definitely gets the priority from the BBC to continue the impact. That is part of the concern within charter, because we will need to make difficult choices in every area.
Dr Samir Shah: Gathering the nation, bringing the country together is an important role the BBC plays in our civic life. We can all guess how many are going to turn up tonight and it will be quite something. It is true. We cannot lose it. It is a really important part of it.
The Chair: I think most of us are sold on that.
Q97 Lord Knight of Weymouth: I will be getting away from debating the Sporting Events Bill to watch the match later. I want to reflect on R&D and the role of the BBC. I want to start with you, Dr Shah, because I am going back into the past briefly, before handing over to Lionel to take us into the future. The Green Paper tells us that under the current charter the BBC’s R&D spend has fallen. The previous one had a public purpose on emerging technologies. Has that removal played a part in the decline in the role of the BBC in emerging technologies?
Dr Samir Shah: I do not think they are connected. When you refer to decline in the BBC, we have already discussed why licence fee payers are leaving—because of changing audience behaviour. The latest statistics say that 94% of the British population consume the BBC every month. I challenge “decline”. The key thing is that only 80% of households pay for it. So there is a gap we need to bridge. Matt can talk more authoritatively about the technology. In our history, we were leaders in technology and innovation. Right from the start, we led it, from radio to television. I lived through quite a bit of it myself—when we went to colour. We all remember Wimbledon in colour. The world has changed.
Lord Knight of Weymouth: BBC computers played a huge part in the computer science capability.
Dr Samir Shah: We talk about this a lot but the world really has changed. If you look at the money that is being put into artificial intelligence, we cannot match it. Seriously, we are talking trillions of dollars being poured in by the big tech players. We do not have anything like that. The technology is going to be very important, and I am an optimist about AI. We can harness it to human creativity. I do not think it is an evil thing that we need to contain but we need to be realistic. We do not have the money to develop AI to compete. Matt can talk about the role we can play in modern technology and how we can harness it. But the days when we could develop our own large language model—I do not think so.
Matt Brittin: We will perhaps come on to AI. Perhaps I might address the first part of your question. Samir is right to say the BBC harnessed technology and creativity together, with radio, television and then with streaming. In recent years, as the challenges of funding have appeared—we have lost £1.3 billion of public service funding in the last 10 years—the management team has focused on content, channels and services, and keeping the content as high-quality as possible, which you can see in the BAFTA wins, audience responses and so on, and keeping as many channels and services active as possible. That is been at the expense of technology investment. There are some great people in the BBC who are brilliant technicians and engineers but, as I mentioned, things such as recommendations, the news app and so on could be better. A choice has been made in that respect.
Q98 Lord Knight of Weymouth: Does that imply that that decline in R&D meant that perhaps the BBC might have dropped the ball on AI?
Matt Brittin: Well, let us move on to AI. There has been less investment in some of the technology areas than there could have been to maintain the user experience part of it. If you move on to AI, it is a very broad field. I am wary of experts in the room but I have worked with Google DeepMind and many colleagues over many years in this field. It is the application of AI to specific areas that will be both risky and beneficial to society. As Samir rightly says, we in the UK are not going to suddenly magic up a multi-trillion-dollar foundation model or anything of that scale. What we have the opportunity to do, and what I am keen for us to try to do at the BBC, is to pioneer in the application of AI to improve what we can offer in public service. Your Lordships will be looking at this in the public sector completely. We also want to understand the risks of AI. There are really serious risks around information integrity, data security, media literacy, the corruption of content and the generation of fakes. We have to use these technologies, and our teams do, but we are going to need to do more in order to benefit our audiences and to maintain the integrity of our journalism.
Q99 Lord Tarassenko: What a long lead-in to AI. I will come on to AI but I have a couple of general questions first. But before that, even, what I wanted to say is I worked in AI research for the past three decades as a professor of electro engineering in Oxford. The reason why I mentioned that is, as the Department of Engineering Science at Oxford, we are proud that one of our alumni is a former director-general, John Birt. He trained as an Oxford engineer. He was in the House yesterday and spoke in the Cyber Security and Resilience (Network and Information Systems) Bill Second Reading debate. So it is nice to have two directors-general in the House of Lords on consecutive days. Indeed, in the three decades I have been a professor, we have trained many engineers who have gone on to work in the R&D department of the BBC—perhaps fewer in the past few years, as we have just discussed. But, looking forward, obviously I am biased in terms of R&D, but in terms of your commitment to R&D innovation should it be included in the BBC’s public purposes? If so, how should it be framed so that BBC innovation serves public interests and how will you make sure that it does that?
Matt Brittin: The application of technology in the fields in which we work should be critical to the BBC’s future. On the purpose, I may be in a different place from the Green Paper response. It feels to me that this is a means, not an end. The purpose is having clarity. In a time of uncertainty, the greater clarity you have, the easier it is for an organisation to galvanise behind it.
Just as growth is an output, harnessing technology well is a question of how we fulfil our purposes—it is not a purpose in and of itself. I am open to debating that, because I think we are a part of critical national infrastructure. The BBC, subject to sufficient funding, should be working with the security services and the Government on information integrity. There are questions about identity and logins and all the kinds of things we encounter in our everyday lives. There is a question about who we should trust to do these things. So there is a big opportunity to think strategically as a nation at this moment.
Q100 Lord Tarassenko: The Government have proposed to house this with a new purpose on driving growth, but maybe you have already discussed that. Do you think it makes sense or not?
Matt Brittin: As I say, we should be open to discussing the modernised remit for the BBC, and we absolutely are. We have lots of pretty intensive detailed sessions with the department coming up in the summer.
I personally believe that an enduring purpose, one of the five that we have, of serving audiences is a helpful and clear purpose for the BBC. Harnessing technology, delivering growth, delighting audiences and enhancing our reputation internationally are all outcomes we achieve by doing that well. If we fulfil our purposes well, we will automatically be embracing these things. The cost implications and the capability would need to support that. I would want to understand how that would impact Bitesize, classical music and all the other services we need to provide.
Q101 Lord Tarassenko: Bitesize will feature in my next question, because we finally come to AI. I disagree with you on the claim about trillions of dollars for models, because it is becoming increasingly clear that there are, in fact, three types of AI models: there are the ones you mentioned, the frontier AI models; the ones that Mr Brittin will be familiar with, such as Gemini from Google. It takes trillions of dollars to train them and keep them in the frontier. There are the open-source or, more likely, open-weight models, such as Gemma and so on. There is third category, which has very much been discussed in the House of Lords recently, which is sovereign AI models. They are not at the frontier; they are maybe six to eight months behind the frontier. It would take in the order of millions of dollars or pounds to train. Indeed, as a senior adviser to our national AI institute, the Alan Turing Institute, I have been discussing that, and I have been to see the BBC, Peter Archer specifically, to discuss that with you. Where does the BBC play in that spectrum? Would you want the capability to own it, or would you want to partner, procure or adapt?
Matt Brittin: That is why I intervened when Dr Shah was talking about this. You are right; it is not common public parlance to talk about these things in these ways. When I am talking about the application of AI, I am talking about the area that you mentioned there. There are already things that the BBC is doing. I talk to colleagues in other newsrooms around the world, using tools, such as NotebookLM, that allow you to upload and research documents using large language capabilities but without the hallucination concerns. There are tools off the shelf that we can and should use, and we should do more. I have begun conversations on partnering with other members of the European Broadcasting Union and other big newsrooms around the world.
I think your implication is “Buy or build?” in some of these things. There is an opportunity for us. It would need to be in partnership to participate in building a sovereign model. That would have impact for the UK only if it was to partner with a programme around skill development. What would a 21st century version of the BBC microcomputer project look like? Is there a sovereign model and a programme of education, training and exploration? Who would you need to work with in order to do this? What sovereign infrastructure would one need in order to promote it? The other day, I spoke to the CEO of BT. We were talking about digital switchover and IPTV—all these things come together. This is a moment of jeopardy but also opportunity for us in the UK to be brilliant at bringing our engineering, scientific and creative industries together around sovereign AI and the application of other AI models, as you suggest, Lord Tarassenko.
Q102 Lord Tarassenko: I think that we are all on the same page. You mentioned sovereignty and trustworthiness. The key thing, which is important to remember about these and would be different from Gemini or Gemma, is that you would have full control of the training data set and you would train the model according to UK law. Trustworthiness is very much part of what the BBC does, so it needs to be in the conversation, without necessarily designing the model itself.
Matt Brittin: I agree. One of the things that we are concerned about with the BBC is that the public tell us they want us to be independent of Government, so part of charter is about that. One would need to think, in a project such as that, about the role of government and other bodies in building and earning that public trust. It is a big opportunity.
Dr Samir Shah: I would hesitate to interrupt a conversation between two people who know a great deal more about AI than I do, but on acting in the public interest, your point about trustworthiness is central to it. The public rely upon the BBC to help them through this new world of technology, and we need to maintain that. Whatever our relationship and whatever partnerships we make, that central value that the BBC has in being trusted by the public needs to remain there. That is important.
The Chair: We need to move on to the next questions. Baroness Caine has some questions on skills.
Q103 Baroness Caine of Kentish Town: Yes, and on nations and regions. Hello. Obviously, the BBC—you say it, and others say it too—is recognised as the venture capital for the creative industries and as the cornerstone of the creative industries. The current charter requires you to serve the UK’s nations and regions and to support the creative economy across the UK. It also requires you to work collaboratively with a wide range of organisations, where that is in the public interest. In many ways, arguably, that is your growth agenda within the charter. Is that one that you would still see as being relevant to your future? I know you said to the Commons that you were terribly excited about it, and you both articulated the progress and the work with the nations and regions.
Matt Brittin: Yes, absolutely. I mentioned a couple of things that had surprised and delighted me about travelling around the country, and one was the real progress that had been made. We are in a world where, rightly, we are looking at devolution in order to respond to uncertainty and to serve people by understanding their needs better, wherever they may be.
The BBC is actually doing incredibly well, with, as I said, 60% of network spend and 55% of staff outside London. Since I joined, we have another two commissioners who will be based outside London. I have appointed a deputy director-general who is based outside London. The leadership team and the people making decisions about commissioning content being more decentralised is important. That is what gives you the Cardiff story, the Salford story and similar stories in Glasgow and elsewhere.
To sustain that, we need the funding. The other part of our growth strategy needs to be BBC Studios and our commercial growth. We need to complement the public funding with as much commercial revenue as we can, within the scope of the charter and remit.
Q104 Baroness Caine of Kentish Town: In relation to that success in the nations and regions, to what degree do you feel that has been powered by your partnership with independent producers and their ability to have scaled and grown as a result of your investment?
Matt Brittin: Hugely, because since 2003, producer choice and its successive changes to terms of trade mean that we are commissioning out to tender all the time. Samir mentioned that he and others have benefited from that, and it has created an incredibly vibrant production sector. That sector has consolidated. We see Banijay and All3Media coming together to create a £5 million revenue business, and that is partly because the funding for original content had a boom as the streamers invested heavily in the acquisition of new subscribers; that has fallen away a bit. We face the same situation in BBC Studios, which is our commercial competitor.
I am excited about the next generation of independent producers as well as the fantastic skills within the existing producers: smaller content creators in audio, video, drama and music that we can work with. We have seen that when we have run sessions across the country. That could allow us to operate in a capital-lighter way, as I mentioned earlier. I hope that we can do that.
Baroness Caine of Kentish Town: Obviously, owning rights allows those companies to scale up and, therefore, to succeed, move on and move forward. I think you also mentioned in the Commons session that you were potentially looking at size as a variant in relation to the rights issues going forward. It seems to me that there might be a tension between growing the economies in the nations and regions and removing rights from independent producers. I am just giving you the opportunity to clarify because I think there is potentially concern and confusion about some of what has been said.
Matt Brittin: Absolutely, it is not from an intention to sow any concern and confusion, but probably from answering a lot of questions briefly, so thank you for the chance to do that.
First, we should recognise the huge success of that sector. We partner with it, we work with it every day and we really support it. We do not want to disrupt that in any way. The point I was trying to make was that, if you zoom out and look at the UK, as we have tried to do on a number of the questions that your Lordships have asked, we need to think strategically about our industry and how we can together make changes to how the economics, rights and opportunities work so that we can continue to punch above our weight as a creative industry as a whole.
I am conscious that the BBC has a role as one of the key cornerstones of that industry, but it is only a part of the industry; commercial competition and innovation is part of it. Also, coming from where I come from, I think we should see it as not just those players but all the new types of content creators. There is lots of innovation in local journalism as well, as you will know. We should be rather expansive in our thinking, but we need to think about scale and how we introduce the next generation of production success as well.
Q105 Baroness Caine of Kentish Town: Okay, great. I will move on in terms of next generations to the skills and training issues, because, again, we have heard from witnesses and it is known that the BBC is an incredibly important part of that training and skills infrastructure. Everybody recognises that but, interestingly, nobody seemed to pick up on the difference and the mistake made in the DCMS Green Paper, which said that the BBC spent £10 million on training and your response to that paper, which said it was £45 million. In effect, the DCMS Green Paper is wrong. My point is that nobody picked up on it. In a way, that relates to the focus that potentially is given to the skills and training agenda, in terms not of investment but of purpose and strategy.
We have talked to other public service broadcasters. They identify it as an area where they collaborate across the industry with you, but nevertheless, there are still huge skills gaps and shortages within the workforce, even though there is underemployment at the moment. In your response to the charter review, you talk about 1,000 apprentices, which is marvellous, but what is the missing link? Where is the strategy? Is the strategy being developed in partnership with others in the industry? Is it actually addressing the skills gaps and shortages that are there?
Dr Samir Shah: Let me just begin on that and I will let Matt follow up. The first thing to say is that I am very pleased that you have raised this, because we have discussed before, and I have said quite often, that the BBC is much more than a broadcaster, and one of its key roles is this: skills and training. I, the board and the BBC see it as absolutely central to our purpose to develop the workforce that underpins the creative industry. That is central to what we do, in addition to being a broadcaster.
At a general level, I am aware that our skills and training go across the board. We go to schools in what are called taster days, where we try, especially in disadvantaged schools, to get them to enter the pipeline. We have the apprentice scheme for older people, and it is worth saying, although we have 1,000 places, last year, 47,000 people applied for it. You can see that the demand is much greater. Later on, when you enter the industry, we have a whole load of training, master classes, all sorts of writers’ workshops to try to develop skills. So we have a great commitment to skills and training, because we want to create the next generational pipeline. It is a really important part of what we do.
The number I have here is £47 million, but I think we could do more. Let me just address those 1,000 apprentices and 47,000 applying. Training costs, and we have to have a funding model. I am sorry it goes back to money, but we need to continue. We cannot take the talent pipeline for granted. We need to develop it, to build it and to build it around the country. But that will cost. It is part of our civic duty to do that. I have a little thing about other streamers that fly in and fly out, live off our talent and do not contribute. But we have to do this.
Matt Brittin: First, I apologise for the error in the report. It is unforgivable, because the work that goes on is big and—
Baroness Caine of Kentish Town: It is not your report that made the mistake, it was DCMS’s.
Matt Brittin: Maybe we should have spotted it in the draft anyway. The good news is it is bigger than the report says; the bad news is that there is still a big skills gap. I know you have a lifetime of working in skills, and I share your passion personally, as I have mentioned.
As Samir says, I would love us to do more. It requires funding, but it also requires collaboration and partnership. I am struck by the fact that we have 45 different industry schemes ongoing. On arrival, when I started to look at this, I worried that we were subscale in a number of areas and actually we need to think again about the scale of our intervention. I would love to talk to you and other experts about this. I am only just short of two months in, so it will be a priority.
Another thing we will have to do, I think, as we reinvent the BBC for the future, is the fact that we have to make savings and that means job losses means it is harder for us to employ people. But the size and shape of the BBC for the future needs to be one which will attract young and rising talent and offer them the chance to build and grow their careers. So we have to sort of deal with that conundrum as well. That is why I am encouraging us to think at an industry level collectively with government so that we can think about how we create those jobs of the future together.
The Chair: We have to move on.
Q106 Baroness Caine of Kentish Town: I just want to pick up something that witnesses have talked about, which is very good to hear. You talk about partnerships and collaboration. It used to be said for many years that the BBC did partnership to people rather than partner with people. That is a critical difference. As you rightly say, a number of these things require the BBC to do that without necessarily reinventing wheels or not working with existing organisations such as ScreenSkills, which you may or may not have heard of, Matt. I am very happy to come and talk about all of this, but it is key to the regional clusters as well, and witnesses have talked really positively about those clusters.
Matt Brittin: I have had conversations with a couple of the mayors already about exactly that.
The Chair: We have a couple more areas. I will touch on funding. You have mentioned it as we were going through, but I will come back to that just before we finish the session. Veronica, you have a question around editorial standards and impartiality.
Q107 Baroness Fleet: Thank you so much for the time and detail that you have given us today. It really is very helpful to us. I will start with Dr Shah, the chairman, because I know it is something we have as a shared interest and lifelong activity in journalism. You have talked about trust, and I think we all believe that trust is an absolute bedrock of the BBC. Whether you are talking about anything that is new, that is old, the future, or AI, you are also talking about journalism.
You have recently—I think, in fact, yesterday—acknowledged again that there have been some recent and very serious failings of BBC journalism. Obviously, we are also aware of the very important report that was produced by Michael Prescott last year. We do not need to go into that now, but I would like to know how your thinking has been refreshed with the arrival of the new DG. You did, after all, lose your last DG and head of news as a result of a failure in journalism. What steps will you, as a new team, take to bolster journalistic standards and impartiality? What is your current thinking?
Dr Samir Shah: Thank you for that. As I said before, it was a difficult year last year, and we had a number of failings, which I acknowledged publicly. Since then, we have taken a number of steps. We have changed both personnel and policies. I will not go into great detail, but I can let you know the detail if you wish. We have changed the leadership of the Arabic service, which has always been an issue. We have changed the leadership of long-form journalism. We have a new deputy director-general in charge who can focus on it, and soon Matt is going to be appointing a new director of news. So there has been quite a big change just in personnel to address the question. We have also had a great deal of change in policies and practices in that to try to address it. For example, we have a new system of oversight of high-risk long-form journalism, which has always been an issue at the BBC, pre-dating last year. You mentioned Michael Prescott, and I note that the standards committee has been reshaped. It has a new remit, a new purpose, new membership and a new chair. With the changes we have made, I feel confident now that, should such instances arise again, we will be able to deal with them with greater speed.
Speed was one of the big questions that arose, because most of the issues that came up were as a result of the BBC’s own investigation into our journalism. We were slow to act, and we need to be faster. But I feel confident that, under our new leadership, along with Matt, we will address issues that come up, as they will, with speed and decisiveness.
Q108 Baroness Fleet: That is encouraging, and we all hope that that is the case. You will be aware that, only today, the former director of BBC Television, Danny Cohen, has written an important piece, and I am sure you are up to speed on that. I will quote it because it is important. He says: “The prevailing culture at the BBC—long denied—is more sympathetic to Left-of-centre perspectives ... We have seen this in coverage of a range of issues from trans rights to the Gaza War, Reform, immigration and US politics”. For him to say that now, when we have a new team in place, is quite significant. What is your reaction to that? How confident are you? You still have the same board and many of the same systems. You may have one or two new people, and you have to appoint a new head of news. But have you really got to the root of the problem? It is not just about structures; it is about judgment, is it not?
Dr Samir Shah: I understand the question and I understand Danny, whom I have known for a long time. He is a close watcher of our journalism, and he makes these points. My reflection on this is that we have done a pretty good job in trying to tackle this and make sure that our journalists understand what it is to be impartial, fair and accurate.
We are talking about the newsroom, journalists as a whole and indeed the BBC and our recruitment. It is not a surprise to learn that we tend to recruit liberal arts graduates, who tend to have a metropolitan outlook, which they bring to the culture of the organisation. Everybody has a political position; that does not bother me. What matters is that we do not see that in the journalism we do. We need to be constantly vigilant on that, and we will be.
You dismissed the changes in leadership, but I would not dismiss them that much. I think both leadership and policies needed to change, and they have changed pretty significantly. I ask Danny and you to have a look at our journalism and see how we go forward. We have a new team in place, and the deputy director-general will be an important factor in that. So we shall see. I am confident that we will address the questions that Danny raises with me and generally.
The Chair: We need to move on.
Q109 Baroness Fleet: Very briefly, can I ask Matt Brittin what exactly he means by a “satnav for bias”? Do you think that judgment is a technical issue?
Matt Brittin: It is hard to answer that question briefly, because you quoted a small fragment of what I said, but I would be happy to talk more broadly about it. One of the issues we face with the criticism of journalism is understanding the volume and character of the output. I have suggested that we can use technology to help us to understand and guide where we might be covering more or less, because there is a huge volume of output and it is right that we hold ourselves to the highest possible standards. But that is only one element of the ingredients we need.
Obviously, you have huge experience in journalism, so you will understand that standards, structures, culture, training, behaviours and management are all parts of what we need. In answer to a question, I suggested that we could also use technology so that, when there are criticisms, we have the data to help us to investigate them better. The team has begun to do that.
The Chair: We need to move on because we are nearly out of time. We have a couple of questions about funding.
Q110 Viscount Colville of Culross: Obviously, the BBC positions itself as a trusted source of information, and I am concerned that some of these big cuts that are being made will affect that. Getting rid of “The World Tonight”, for instance, and reducing the funding for the “Today” programme—the absolute flagships of information for Radio 4—seems to me to be a retrograde step in trying to push the BBC forward for the future as the place for the most trusted news information.
Matt Brittin: And the question is?
Viscount Colville of Culross: The question is: why are you doing that?
Matt Brittin: The answer is that we have to make £500 million of savings. That is a huge number. It is in excess of the budget for drama and sport, and for news. So we have to make some tough choices. You are absolutely right: trust is earned. As we just discussed, it is earned through the story selection, the way those stories are told, where they appear, and the expertise and eyewitness nature of the journalism. In journalism, it has to be earned, because we are accountable for due impartiality across all our outputs.
When you look at what we have to do and the scale of those changes, which are driven by the challenges in funding that we talked about, we have to make some tough choices. So we try to focus on audience value, reducing duplication and making sure that we are going closer to the audiences. I do not want to get drawn into individual programme choices, but the example you gave is about two similar, but not identical, programmes. By the way, all our programmes are there only because they have audiences, many of which love them—sometimes, they angrily shout at the radio—and brilliant people working on them, so it is always a tough call. Those are two somewhat similar programmes and, if we zoom out to the scale of what we have to do, some choices have to be made. We cannot just salami slice.
There is more to come, because the savings that we have announced so far and that the teams have worked on over recent months amount only to the beginning of the total that we need to save. So we will need to look further at programmes and services, and at how we get the balance of trying to preserve audience. That may mean that, in some cases, we focus on doing less but raising the quality. We have to understand how to do that in the context of the charter. The BBC at its best is bold, brave and innovative, as we have discussed, whether creatively, journalistically or through technology. Whatever the size of the funding, we need to reinvent the BBC for that world.
Q111 The Chair: We can end by talking about funding, given that we have touched on the cuts. In your session with the Culture, Media and Sport Committee, you discussed the possibility of a household levy as an alternative funding model for the BBC. I wanted to give you a final chance to comment on that. In that session, there was discussion about a household levy being taken off the table, but since then Lisa Nandy has said that no options have been taken off the table. So how would a household levy work in practice? Have you done any economic modelling to understand how it would affect the BBC’s finances?
Matt Brittin: As we were saying to the Select Committee last week: how do we come to be in this situation? We have touched on that in terms of the drop in public funding. The majority of the drop came from licence fee freezes and the increases in scope to cover the over-75s and so on. So the majority of the drop came from interventions. Some came from behaviour change. That is why we are where we are.
With Dr Shah and colleagues, I have asked: what do you need to maintain that universal remit under charter with a level of funding that is sustainable? It is very hard to run an organisation that can attract and develop the best creative, journalistic and technical people if you have to cut costs every year in an unpredictable but downward spiral. So we need universality, sufficiency and the scale to be able to do whatever set of purposes the charter sets us in the best possible way—we have talked about that—whether it is at a programme level, a genre level such as music, or a technology level. You have rightly illustrated some of those choices. That is what we need centrally.
There are many mechanisms and variants that could achieve that. We talked particularly about the household levy because the committee had heard from various witnesses who had pointed at that as something that might be a solution, and I think we should be open to all options that could deliver that set of outcomes.
I have spoken to the European Broadcasting Union, and I know that this is in place in a number of European countries in different ways. There are advantages in some areas. In some cases, it is collected through a utility bill payment and, generally, evasion reduces significantly. There are obviously some people who absolutely do not want to pay for those services, so there is a question about enforcement there. But, generally, collection costs are lower and universality increases. Those who favour that solution would say that, if the BBC licence fee is £15 a month today, could it be £12 a month if it was more universal? Would that allow the Government to consider social interventions around people with lower incomes, older groups and so on? So there is some merit in that, particularly in the cost of collection, evasion and universality.
There are also questions, obviously, about the willingness politically from a leadership standpoint. People are facing a real income challenge in their homes, and we are very conscious of that—that is our audience as well. So that is one of the options and, through the summer, we will engage intensively to look at those different alternatives with the department.
Q112 Lord McNally: Do you expect, by the time you have finished this exercise, to be able to say, “This is what the BBC thinks it needs to fulfil the commitment asked for in the charter”?
Matt Brittin: Obviously, we have built models of the cost of the BBC and its services. It is hard to answer that question specifically because we have to deliver against the charter. So there is a question of what the charter asks us to do and what the funding model for that is. Within that scope, we would like to do more across the UK, to do more in education and in technology, and to be more confident in our contribution to growth and skills. There are an awful lot of things we would like to be able to do more of, but it depends on where we get to on scope.
There is also a load of the industry factors that we talked about. If we are able to collaborate more with other parties, can we do more to protect the UK’s incredible creative industries as part of this? There is an awful lot of detail to work through. It is welcome that, here and in the Commons Select Committee, the sense of the moment we are in and its importance are well understood by the department and the industry. I have been struck, on my way into this job, by how many people from the industry—whether from news publications that are critical of the BBC but understand its role, from technology companies, from broadcasters, or from production companies—have a will for us to continue to play a key part in the UK. That is very much there. So I hope we can find a solution that allows us to do exactly that.
Dr Samir Shah: I would just add to that. I welcome the Secretary of State’s thinking about the funding model, opening up issues such as the household levy and extending scope. We will be in negotiation or discussions with them, because it is for the Government to decide. One point that is really important to note is that, apart from universality and scale, we need stable funding because, right now, funding income is going down. It is very difficult to run a major and complex organisation if you do not know what your incomes are. Obviously, a household levy would achieve that. Stability—being guaranteed a level of income—is critical to this to be able to deliver our purposes.
Q113 The Chair: We are just about out of time. We had a couple of points and questions that we did not fully put to you, and I will just state what they are. Could you let us know afterwards, rather than have us try to extend the session? One is about opening iPlayer and BBC Sounds to other public sector broadcasters. We wanted to know how that would work in practice, given that other PSBs have their different funding models. We were talking about Channel 4.
Matt Brittin: In short, the answer is: yes, in principle, but ad serving and the ad technology is something we do not have.
The Chair: If there is anything extra to add to that, could you write to us? On skills development work, it is important that the BBC continues to support and sustain that pipeline of journalism talent across the UK. There are real concerns about that. I know it all hinges on the funding.
Matt Brittin: It is absolutely on the priority list.
The Chair: I am glad it is. It is useful to end on that point about funding. You have answered a very wide range of questions for us. Thank you for your time.
