The governance and regulation of the BBC - Communications Committee Contents


CHAPTER 2: A history of governance and regulation at the BBC

10.  Lord Patten told BBC staff when he took up his post in May 2011 that there has been no 'golden age of governance.'[7] For the past decade the way in which the BBC has been governed and regulated has been a matter of debate and sometimes controversy. All three major UK political parties believe that further reforms to the governance of the BBC are needed; albeit they do not seem to agree on what these reforms should be. Lord Patten told us that: "I think there is an interesting disjuncture between attitudes to programme content and attitudes to its governance, which is something I would be keen to bridge during my time as Chairman of the Trust."[8]

11.  During the first 80 years of the BBC's existence there was comparatively little change in the way in which it was governed. From 1927—when the BBC was established by Royal Charter to be the monopoly broadcaster in the UK—until 2006—when the Royal Charter was last reviewed—the BBC had a Board of Governors which acted as trustees of the public interest. The BBC's monopoly lasted until 1955 when Independent Television began broadcasting a regional commercial broadcasting service on Channel 3. This heralded the start of an era when a separate regulatory regime was established for commercial television. It is also worth noting that there has been a wider change in the public attitude to regulation and governance. Whilst in the past governance was often carried out quietly and without much public scrutiny there is now a much greater desire for consistency and transparency when large sums of public monies are being expended. As the BBC spends £3.5 billion of public licence fee money each year it is of no surprise that there have been calls for further clarity over its governance procedures.

BOX 1

The Governors of the BBC, 1927-2007
The BBC Governors were set up when the BBC was first established in 1927. They were constitutionally part of the BBC but were independent of management. They were responsible for:
  • appointing the Director-General;
  • approving the BBC's strategic direction;
  • ensuring that the BBC management implemented its strategy; and
  • overseeing complaints.

Each of the twelve Governors, including the Chairman, was appointed by the Secretary of State. The BBC required the permission of the Secretary of State before it was able to launch a new service. The Governors were accountable to Parliament through periodic Charter reviews and by appearing before Parliamentary Select Committees.

Why the Trust was created

12.  The BBC Trust[9] was established at the time of the last Charter renewal in 2007. The solution drew upon different options put forward at the time. According to the evidence presented to us there were two main reasons for reform. One was the existence of what had become long-term issues in BBC governance. A former Chairman of the BBC Governors, Lord Grade, told us that there had been a lack of separation between the management of the BBC and the Governors. He said "by 'lack of separation' I mean that the Governors' evidence—papers that the Governors required—were prepared by the management and the Governors only saw what the management wanted them to see."[10] Lord Grade said that this caused real tension inside the BBC and mutual distrust between the management and the Governors. He identified another long-term problem as "the fact that the BBC was incapable of patrolling the borders between the private sector and the public sector."[11]

13.  The second reason given for reform was the events of 2003-2004. In May 2003 BBC Radio 4's Today programme transmitted a report by Andrew Gilligan which claimed that Downing Street had 'sexed up' a dossier on alleged Iraqi weapons of mass destruction in the run-up to the invasion of Iraq. He alleged that the Government 'probably knew' that a key claim in the dossier was wrong. The report led to a dispute between the Government and the BBC.

14.  In July 2003 the BBC Governors held a special meeting and declared that they were "wholly satisfied that the BBC journalists and their managers sought to maintain impartiality and accuracy during this episode."[12] The following month the Deputy Chairman of Channel Four, Barry Cox, wrote an article for the Guardian in his personal capacity criticising the Governors' statement as "the action of a champion and not a regulator. A regulator would have taken the time to inquire into the matter."[13] The proposition that there is a dichotomy between the roles of 'champion' (or cheerleader) and 'regulator' has been a key theme in the debate about BBC governance for many years. In January 2004 Lord Hutton's report on the death of Dr David Kelly (also linked to the earlier report on the 'Today' programme) strongly criticised the BBC's management and governors. He said "the Governors should have recognised more fully than they did that their duty to protect the independence of the BBC was not incompatible with giving proper consideration to whether there was validity in the Government's complaints."[14] Tessa Jowell, the Secretary of State for Culture, Media and Sport at that time, told us that "the fallout from the Hutton inquiry revealed insufficient independence and clarity about the Governors' role in relation to the executive."[15]

15.  In his farewell public speech at the London School of Economics before standing down as Chairman of the BBC Trust at the end of April 2011 Sir Michael Lyons said that changes to the governance structure of the BBC were inevitable following the Hutton Report. Sir Michael described these events as "the greatest existential threat the BBC has faced in recent times."[16] Gavyn Davies, Chairman of the Governors at the time, described the events as "a once-in-a-lifetime assault on the independence of the BBC."[17]

16.  There is a wealth of literature setting out the variety of options for the governance of the BBC which were considered in the days leading up to the creation of the Trust at the time of the last renewal of the BBC Royal Charter. The literature includes proposals put forward by the BBC;[18] by a Committee in the House of Lords;[19] and by a panel chaired by Lord Burns.[20] The Department for Culture, Media and Sport (DCMS) also consulted on proposals at the time of the BBC Charter Review and published its findings in a Green Paper.[21] We commend their reading but do not seek to advance any opinion on them. Further details about the history of the BBC Trust and how the regulatory landscape has changed over the past eighty years are shown in the timeline in Appendix 4.

The BBC Royal Charter

17.  When the BBC was first established in 1927 it was considered that a Royal Charter was the most suitable structure through which to establish an institution which was funded by public money but which was editorially and journalistically independent of political control. It was felt that this would also ensure the independence of the BBC from both Government and Parliament. Subsequent Charter reviews have concluded that a Charter continues to be the most appropriate way in which to secure the editorial and institutional independence of the BBC.[22]

18.  The arguments in favour of a Charter were put to us by Tessa Jowell MP (Shadow Cabinet Office Minister and Shadow Minister for the Olympics) who was Secretary of State at the time of the last Charter renewal. Ms Jowell told us that "a BBC governed by an Act of Parliament would be a different entity from a BBC governed by a Charter." She continued: "I do not think that its identity as a body governed by a Charter impedes parliamentary scrutiny or parliamentary debate when there are issues that Members of Parliament or Members of this House want aired."[23] Gavyn Davies told us that an Act of Parliament would be "far easier to change at will." He said: "I think we are very lucky to have a Charter and we should stick with the Charter until it is renewed and leave it at that."[24] Media commentator Steve Hewlett said that "the fact that the BBC has a Charter separates it from the political process, in so far as there is a full-on debate and so on only every 10 years. Generally speaking, I think people understand that the Charter denotes or signifies a degree of independence."[25]

19.  On the other hand, previous Parliamentary reports from the House of Lords[26] and by the Culture, Media and Sport Committee in the House of Commons[27] have called for the BBC to be established by an Act of Parliament. We believe that a Charter is as susceptible to Parliamentary and Government interference as an Act of Parliament, since a Charter may easily be changed by agreement by the Privy Council, whereas a change in statute requires the agreement of both Houses of Parliament.[28]

20.  We recommend that before 2016, when the current Charter is due to expire, as part of the preparations for the next communications bill the Government considers not only whether the content of the Charter should be amended, but also whether a Royal Charter remains the best mechanism. We consider the Royal Charter, which is subject to review every ten years as specified in the Charter, to be a suitable process for incorporating the BBC. If this is to be followed in future then enhanced transparency in the renewals process should be sought. We acknowledge that Charter renewal may not be the only appropriate method of ensuring the continuity of the BBC.

The governance structure of the BBC

21.  At present there are three bodies which have some role in either running, governing or regulating the BBC:

  • the BBC Trust, now chaired by Lord Patten of Barnes;
  • the BBC Executive Board charged with managing the Corporation, chaired by the Director-General Mark Thompson; and
  • Ofcom, the communications regulator, which regulates many aspects of BBC content within the scope of its codes with powers outlined in the Communications Act 2003.

BOX 2

The BBC Trust

The BBC Trust is the sovereign body responsible for the BBC as outlined in the Charter. In technical legal terms it is not a trust at all but a part of the BBC which is both separate and within the BBC as a whole. The role of the Trust is to be the guardian of the licence fee and the public interest.[29] The roles of the Chairman and the Trustees of the BBC Trust are of the utmost importance and constitute a public duty of the highest order.

The BBC Trust has 12 Trustees. Each year the Trust publishes an annual work plan outlining its strategic priorities for the coming year. As well as the main BBC Trust, which meets monthly, the Trust has a number of sub-Committees such as the Editorial Standards Committee and the Remuneration and Appointments Committee. These Committees are made up of smaller groups of Trustees that each report to the full Trust. An organogram showing the governance structure of the BBC is available in Appendix 5.

22.  There is no doubt that the BBC has a singular role in the life of the country and that the Corporation provides an extraordinary public benefit. David Henshaw, an independent programme maker, told us that: "I think that it [the BBC] is a very important institution. It may not always run terribly efficiently, which is one of the reasons why we are here today, but I want to leave the Committee with no doubt about my affection and respect for the BBC."[30] We share Mr Henshaw's affection and respect for the BBC. In order to enable the BBC to continue to develop it is important that the BBC is appropriately governed and in particular that its processes are clear and transparent. The remainder of this report examines what improvements could be made to the way in which the BBC is governed and regulated, both in the short and longer term.


7   BBC Ariel, Patten 'delighted' to be Chairman, 3 May 2011: http://www.bbc.co.uk/ariel/13272030  Back

8   Q 554 Back

9   See Box 2 Back

10   Q 168 Back

11   Q 168 Back

12   Press statement from Gavyn Davies released following the Governors' Meeting on 6th July 2003: http://www.bbc.co.uk/pressoffice/pressreleases/stories/2003/07_july/06/gavyn_daives_statement.shtml  Back

13   The BBC governors can't be champions and watchdogs, Barry Cox, The Guardian, 7 August 2003  Back

14   Report of the Inquiry into the Circumstances Surrounding the Death of Dr David Kelly C.M.G. by Lord Hutton, 28 January 2004, HC 247 Back

15   Q 54 Back

16   The BBC Trust-Past Reflections, Continuing Challenges, speech by BBC Trust Chairman Sir Michael Lyons at the London School of Economics, 9 March 2011 Back

17   Q 30 Back

18   Review of the BBC's Royal Charter: BBC response to A strong BBC, independent of government, May 2005 Back

19   The House of Lords Select Committee on the BBC Charter Review, 1st Report of Session 2005-06, The Review of the BBC's Royal Charter, HL 50 Back

20   Lord Burns' letter to the Secretary of State and the Independent Panel's Final Advice to the Secretary of State, 27 January 2005:
http://webarchive.nationalarchives.gov.uk/+/http://www.bbccharterreview.org.uk/publications/in_pubs/pub_final_advice.html  
Back

21   Review of the BBC's Royal Charter, A strong BBC, independent of government, DCMS, March 2005 Back

22   Ibid. Back

23   Q 75 Back

24   Q 52 Back

25   Q 10 Back

26   The House of Lords Select Committee on the BBC Charter Review, 1st Report of Session 2005-06, The Review of the BBC's Royal Charter, HL 50 Back

27   House of Commons Culture, Media and Sport Committee, First Report of Session 2004-05, A Public BBC, HC 82 Back

28   BBCGR 21 Back

29   Section 22 of the BBC Charter 2006 Back

30   Q 260 Back


 
previous page contents next page


© Parliamentary copyright 2011