House of Lords Communications and Digital Committee inquiry into BBC future funding
Submitted in a personal capacity.
I am a Fellow of the Chartered Institute of Management Accountants (FCMA), and a former practising management consultant and financial management specialist. At City, University of London, I completed doctoral research into the management and leadership of profit and not-for-profit creative industries sectors. I currently write articles on current affairs, broadcasting, cultural aspects, amongst other subjects. My purpose in providing this submission is to offer a further insight into the wider BBC debate and offer a solution for the future funding of the BBC.
1. Executive Summary
2. Background
2.1 In this submission, I will present a discourse on relevant BBC issues and public perspectives that have a bearing on the future of the BBC and its future funding.
2.2 There is much debate about the direction of the BBC, and there have been widespread calls for the TV licence fee to be scrapped. There are serious concerns about the BBC’s 'woke' agenda and there have been threats to scrap the TV licence. In my 2021 article ‘BBC or BBC PLC?’ I suggested that scrapping the TV licence fee would lead to the BBC becoming a commercial broadcaster; it would become the BBC PLC (Public Limited Company).
3. The Issues and Debate
3.1 In 2010, I wrote about the importance of 'trust' as a BBC core value, and the failure of editorial control. My article 'The BBC Trust' emphasised the need for the BBC to address the issues of management, leadership, audience trust and effective governance. I stated that in the long run, public service broadcasting would be harmed if the issue of audience trust was not addressed.
3.2 The original three principles of public service broadcasting that were deeply embedded in the BBC's culture for many years were: i) to inform; ii) to educate; iii) to entertain. These principles or 'Reithian' values were established by Lord John Reith, the first BBC Director-General, and they would be achieved through creativity, good editorial, and quality programmes – amongst other elements. The BBC was also required to keep abreast of technological developments, changing audiences, community and societal issues, and yet had to be fair and reasonable to TV licence fee holders.
3.3 There have been questions, as to what extent does the BBC compete against commercial media and bid for broadcasting rights whilst providing a PSB role. The BBC was also required to provide a value-for-money service within budgetary parameters, and to be independent of political influence and control.
3.4 The current BBC Royal Charter began on 1st January 2017 and set out five public purposes: i) provide impartial news and information to help people understand and engage with the world around them; ii) to support learning for people of all ages; iii) to show the most creative, highest quality and distinctive output and services; iv) to reflect, represent and serve the diverse communities of all of the United Kingdom’s nations and regions and, in doing so, support the creative economy across the United Kingdom; v) to reflect the United Kingdom, its culture and values to the world.
3.5 This is a big ask, given the limitations of the TV licence fee. I believe that the current Charter's wide remit has led to a lack of overall vision, contributed to the rise in counterculture, and furthered left-wing bias within the BBC's internal culture. When it comes to mainstream audiences and predominant culture, not all of these public purposes are of equal weight or value. Budgetary restraints do not allow the BBC to be all things to all people, it has to prioritise. It may well be that the current BBC Royal Charter has aided the BBC's decline, a demise seen in the eyes many people. On a positive note, in more recent years, the BBC has embraced major technological developments, the digital revolution and faced competition from many new broadcasting companies. Notably, the BBC's commercial activities through its subsidiary the BBC Studios have been successfully developed and provide additional income. The digital revolution, availability of over-the-top (OTT) streaming services and technological developments has created new opportunities for audiences, especially audience choice. Nevertheless, these opportunities have also facilitated the move of disenchanted and disaffected audiences away from the BBC, despite its other successes.
3.6 The BBC continues to produce many world-class quality programmes; however, despite achievements, it has continued to decline in public esteem. There continues to be public disquiet about the strength and quality of the BBC’s news reporting. In a world of 'fake’ news, 'dodgy dossiers', ‘misrepresented’ news, audiences are now becoming increasingly concerned about the 'truth' and impartial news reporting. In an open democratic society, reporting the truth and impartiality go to the very heart of broadcasting trust.
4. Funding and Public Service Broadcasting
4.1 It is against this backdrop that BBC future funding choices need to be made. Funding is dependent on whether BBC income continues to be funded by the present TV licence fee and whether it continues as a PSB. Currently, the BBC income for 2020/21 is £5.06 billion, of which £3.75 billion is received from the TV licence fee and £1.31 billion came from commercial activities and other revenue.
4.2 There is no doubt that if the BBC changes its funding model to be a subscription service, or a fully commercialised broadcasting service, it will eventually need to be privatised. The BBC is to some extent a hybrid organisation because of its substantial commercial income. It is doubtful if a competitively priced subscription service would provide sufficient alternative funding. The level of funding required could only be raised where the BBC to become a public limited company. As a privatised company, it is doubtful whether the BBC could fulfil the role of public service broadcaster. Moreover, an unpopular and unfocused BBC, one that seems to promote countercultures and fashionable left wing 'woke' ideology, would certainly not appeal to investors? There is a risk a BBC funded by a subscription ‘Flix’ service or advertisement revenue will see audiences spurn the BBC.
4.3 Governance and structure of the BBC's board of directors will need to adapt to reflect the particular funding model.
5. A Funding Solution
5.1 The funding of the BBC is dependent on whether or not the BBC continues its PSB role. As a PSB, public funding through a TV licence fee could still be necessary. There are fortunately other sources of funding that could be found, the Gambling industry is one such source. In 2019/20 the Gambling industry had a total Gross Gambling Yield (GGY) of £14.2 billion. Over a five-year period, from April 2015 – March 2020, GGY averaged £14.2 billion. For example, a 10% 'special' GGY levy could provide a further £1.4 billion annually in income for the BBC, thereby lessening the requirement to substantially raise the TV licence fee.
6. Conclusion
6.1 The Government needs a clear policy, does it want the BBC to be a public service broadcaster or not? The BBC must not be allowed to drift into either a partly or fully-privatised commercial company, which would inevitably see the demise of its PSB role.
6.2 It is possible that a competitively priced subscription service would not provide an adequate level of funding.
6.3 New sources of additional funding by way of a Gambling industry levy could support the current licence fee model.
6.4 For its part the challenge for the BBC is to provide a valued, trusted, quality PSB service to the public, and manage its public funding effectively, openly and transparently. The BBC must re-establish the highest traditional standards and values in keeping with its core values. It must once again become a trusted mainstream broadcaster of international repute which will ultimately reflect on how the BBC, a pre-eminent organisation, and how British values are perceived around the world.
3 March 2022
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