Professor Richard Collins, Honorary Visiting Professor at the University of Exeter and City University London – written evidence (BBC0019)

              Introduction and context.

1. The UK media environment is changing radically; this means that the BBC should no longer be considered as an issue and institution divorced from the wider UK context. Consumption of radio and TV like services is increasingly “pulled” by users rather than “pushed” by broadcasters, as James Harding, the BBC Director of News and Current Affairs stated (June 25, 2015):

By 2025, most people in the UK are likely to get their television programs over the internet (speech at the Association for Journalism Education conference” at bbc.co.uk).

2. The Oxford Internet Institute foreshadowed Harding’s view when, in 2013[1], it found that 35% of Internet users say the Internet is “essential” for information, compared to 15% who say the same for television, 6% for newspapers and 6% for radio and that internet users trust internet news more than newspapers and about the same as broadcasting (OII Annual Survey 2013 at http://oxis.oii.ox.ac.uk/blog/themes/use-and-non-use/).

3. Media consumption and user trust are not the only major changes in the UK ecology. The economics of the media have been profoundly re-shaped by the internet: advertising revenues have migrated away from “legacy” media to the web - eBay now does what newspaper classified advertisements used to do and display advertising has, to a lesser degree, migrated to search engines notably Google. As a consequence, newspaper have closed and merged, pagination has been reduced, fewer journalists are employed, coverage of key institutions and processes (council meetings, court cases etc) has been dramatically diminished and so on. Such changes are experienced widely within and beyond the UK; for example, Communic@tions Management Inc. (Winnipeg, Canada on 20.8.2015) predicted that:

In 2025, it is likely that there will be few, if any, printed daily newspapers in Canada. And it is also likely that their transition to online digital formats will not match their current scope in print.

4. As “legacy” media decline, the relative size of the BBC grows and thus, if the objective of securing for the UK a pluralistic, independent and diverse media is to be achieved, first, the size, shape and remit of the BBC and, second, the claims of other entities and activities to support from public resources come increasingly into question.  In this new context, it is inconceivable that the BBC should not continue to exist. But new circumstances require a new BBC – one that will doubtless be first among others but will no longer bear the chief weight of mitigating growing media market failure.

Mission, purpose and values.

5. What should the BBC do? Should it provide programmes and services which are different from those offered by largely commercial alternative providers? Should they be distinctive? Innovative? Or should the BBC continue to attempt universality of coverage of the UK’s population (the stance endowed by a tradition nourished during its monopoly of UK broadcasting services)? By and large, the BBC has chosen to attempt the latter – believing that maximising its reach best legitimises its claim on public finance. But, unfortunately, this strategy has too often had the BBC echoing its commercial rivals in “Me too” programming which serves not to legitimise the BBC’s claims on public funding, by it providing different (and better) services, but rather to make the BBC’s claims on public funding appear only to keep the BBC in being as an end in itself. Instead of fulfilling public service purposes the BBC is in danger of seeming to exist to exist.

6. The BBC’s current self defined six public purposes are insufficient to discriminate between what should be included and what should be excluded. It’s hard to imagine a programme that did not satisfy at least one of the defined public purposes. True, it’s notoriously hard to define public service broadcasting/public service media, but the BBC’s current six public purposes are risibly inadequate in this respect – as has formerly been stated, they are so general as to exclude nothing. But this is not a problem unique to the media or to the BBC. Universities struggle to define scholarly rigour – yet this is an intrinsic and indispensable part of academic life and educational quality. In the past the BBC was suffused by sense of professional values – of vocation if that is too prissy a term. Its own ethos and internal culture was devoted to engendering the ability to, as Gavyn Davies’ enquiry once put it, to knowing (and thus being able to practice) public service broadcasting when it was seen. Of course there were difficulties:  notably, as has been widely testified, complacency, inward looking-ness, ossification. Any such a professional regime needs to run together with a readiness to give a public account of itself, to strive to adapt and change and so on.

7. But it’s very hard to imagine that such professional values can pervasively be engendered, lived and practiced in a BBC (or other public service media institution) where so much commissioning, programme making and other creative activity is either outsourced or sub-contracted to freelance and short-contract staff who spend most of their careers in the commercial sector. The problem of living and practicing the values of public – not commercial – purposes ultimately rests with those engaged to do so – not with an oversight body. This is a problem which is not susceptible to solution through referring upwards and outwards of responsibility to an oversight body. Rather it calls for the cultivation of an esprit de corps – a sense of existing to do something different - within the public bodies – notably the BBC - charged with fulfilling a public service media mission. It is simply that the BBC has strayed too far from its public service mission and has increasingly come to exist for its own sake.

Scale and scope.

8. In arguing for building on the precedent of the licence fee being used to fund non-BBC broadcasting and other public purposes (local TV, Digital Switchover Help Scheme, S4C, broadband rollout etc) so as to support a range of public service media institutions and activities I may be thought to advocate reducing the BBC’s public service role. Not so, for in an important respect it’s important to increase the BBC’s public service character. There is truth in the charge that the BBC has “dumbed down” (despite the necessary longitudinal content analysis research, required to make this proposition watertight, not having been undertaken) but even if that was not so the increase in range, character and quality of non-psm (public service media) services point to the need for the BBC to do more public service programming rather than chasing ratings through “me too” quasi commercial offerings.

9. However, it’s not surprising that it doesn’t. Changes to employment in programme making and commissioning - short term contracts, outsourcing etc – mean that programme makers and commissioners spend most of their careers in the commercial sector: their professional norms and values are thus those of commercial, not public service, media. What’s needed is a re-vivification of professionalism within the BBC; the fostering of a sense – a vocation – that working for the BBC is and should be different. That BBC programmes and services should be different from those in the commercial sector. This points to the re-establishment of a cadre of long term BBC employees, re-engendering a sense of public service vocation among BBC employees and extensive, systematic, development of partnerships with other UK institutions such as universities, museums and galleries, sites of expert knowledge such as Chatham House, Royal United Services Institute etc.

10. Thus far outsourcing, through the independent production quota, the WOCC and the like, has been justified on grounds of efficiency and economy in production; diversity and plurality in programming; and of promotion of innovation and “thinking outside the box”. But the striking concentration of ownership that has taken place in the independent production sector (see Broadcast magazine’s annual surveys of the sector) has weakened all these arguments and points towards a policy of insourcing in a re-vivified public service orientated BBC and to public support for other public service media institutions (again, the example of S4C comes to mind).

Funding.

11. Until the 1950s, licence fee revenues were “topsliced” annually to the Treasury’s credit (and collection fees probably exceeded the Post Office’s costs thus there was a further “topslicing” in the Post Office’s favour). After a period in which the BBC enjoyed exclusive access to licence fee revenues, more recently, the licence fee has supported wider public initiatives such as the Digital Switchover Help Scheme, local television and S4C. These precedents of funding a plurality of public media providers should be extended so that the licence fee, or whatever alternative method of public funding for media is adopted, is used to mitigate media market failures, which undoubtedly exist and are likely to grow, more widely.

12. The Perry Review recommended against changing the status quo of BBC funding: accordingly, it is hard to enjoin change to the licence fee despite the desirability of a system of public finance devoted to mitigating media market failure and which took into account both individuals’ differing abilities to pay and the desirability of reducing burdens on the justice system and keeping non-licence fee payers out of jail. However, declining use of BBC services and of the growing public discontent with the perceived profligacy of the BBC do point to change in both the allocation of public funding for the media and to better financial oversight and governance in and of the BBC. Profligacy is not surprising given previous Government’s generosity to the BBC, endowing it with what a Director General (albeit before he took office) indelicately referred to as a “Jacuzzi of cash”. Public funding for the BBC rose by 63%[2] between 1997 and 2010 despite a growing body of evidence to suggest that the BBC was not a good custodian of public resources (see, inter alia, NAO reports on the websites of the BBC Trust and its predecessor the BBC Governors as well as the succession of lurid tales testifying to the generous salaries, benefits, payoffs and pensions enjoyed by BBC senior managers. The scale of this mismanagement is evident when it’s realised that the cost of writing off the BBC’s failed digital media initiative cost the equivalent of the annual income of c 3 medium sized UK universities).

13. The licence fee is time honoured and has helpfully provided a way to identify clearly the public resources devoted to public service media. But the combination of the BBC’s poor stewardship of public resources and the regressive effect of a flat rate levy funding (and the consequential disproportionate penalties inflicted on those who should pay but do not) point towards an independent body (the Burns Panel in 2005 recommended such a body and the German KEF is the nearest analogous established body) assessing the level of public funding required by each public service media institution (notably, but not necessarily exclusively, the BBC and S4C) to discharge their public purposes, and, in conjunction with the National Audit Office, monitoring the cost efficiency of delivery. After publication, by laying before Parliament, of the grounds on which such funding recommendations were made, funding should be provided by the Treasury in the same way that public funding for other institutions independent of Government – notably universities – is provided.  To foster and preserve the editorial independence of public service media from Government, setting the aggregate level of (but not the distribution between institutions) should be considered and decided explicitly by Parliament. The House of Lords’ Select Committee review of the BBC’s Royal Charter published in 2005 recommended that the BBC should be established by statute, not by Charter, so as to foster independence and transparency.  This still seems a very sensible proposal.

Governance.

14. The BBC’s governance structure is widely perceived not to be working well. In proposing change to BBC governance, I stress the importance of fostering and preserving the BBC’s (and other media’s) independence from Government. This can never be complete for Parliament is ultimately responsible for the sound and proper use of public resources – notably public finance and the radio-frequency spectrum. But to state that there is a dilemma here is not to endorse present arrangements as optimal or to stymie proposals for change.

15. Nonetheless, it’s important to distinguish between the BBC’s (and other media’s) editorial independence – which is vital - and an undesirable and unwarranted - independence from financial accountability. Too often in the past the flag of an undifferentiated “independence” has been waved to insulate the BBC from appropriate and proper financial scrutiny.

16. The proposals of the House of Lords’ Select Committee review of the BBC’s Royal Charter (published in 2005) coupled with the Burns Panel proposals (also of 2005) promise improvement on existing arrangements and arrangements likely to be better future proofed. The Lords’ Select Committee recommended a unitary board with a majority of non-executive members (i.e. not the BBC Trust or its predecessor the Governors); a separate management committee chaired by the Director General and regulatory functions discharged by Ofcom. This still seems a very sensible set of arrangements. However, the pluralisation of the institutions and functions funded by the licence fee which have recently, do now and will/should in the future prevail points to the innovatory establishment, as the Burns Panel recommended in 2005, of a Public Service Broadcasting Commission (now better called a Public Service Media Commission), above and beyond the BBC, charged with defining public service media remits and apportioning funding between approved institutions and activities.

Conclusion.

17. Finally, it’s important to note that subscription funding is unlikely to provide a satisfactory solution to the conundrum of public service media funding. Subscription funding involves a welfare loss, nor does it mitigate market failure, notably the undersupply of merit goods and it is hard to imagine the re-vivification of a public service ethos within the BBC being achieved in a subscription funding environment. However, the BBC (and other public service media) should continue to exploit its intellectual property commercially. Welfare is increased if public assets are more intensively used. But to inhibit the commercial tail from wagging the public service dog innovatory programme formats developed in public service media (including the BBC) should, after their first – relatively brief – exploitation by their parent institution – be licensed on commercial terms to commercial media organisations. Thus incentivising public service media to continue to innovate, foster diversity and eschew “me too” commercial type programming.

29 September 2015