FUNDING THE BBC

mediawatch-uk response to a

Department of Culture, Media & Sport Consultation

INTRODUCTION

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he BBC has a very high reputation around the world for providing a wide variety of programmes that are generally of a high quality. The BBC gains its identity as a public service broadcaster because a compulsory licence fee provides the funding. As such the Corporation is the steward of more than £2 billion of public money each year. The BBC's identity is inextricably linked to the programmes it provides. It is a mistake, therefore, for a review of funding to exclude this from its consideration.

It is undoubtedly true that the provision of two national television services, new digital services, its new online service, as well as five national radio services and numerous local and regional radio services is a very costly enterprise that should rightly be the subject of regular parliamentary and public scrutiny.

At home and abroad the BBC is expected to provide programming that educates, informs and entertains. The BBC is also trusted to set and maintain high standards, not only in terms of technical quality, but in general moral tone as well. Throughout its history the BBC has played a key role in the life of the nation bringing us great state occasions, national and international events, sporting tournaments from around the world and many hours of priceless entertainment. The BBC has a very rich heritage indeed and it is surely this that makes it such a valuable asset at home and abroad.

AUDIENCE SHARE

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ince the introduction of Independent Television, all of these broadcasting activities are undertaken by the independent companies too. In more recent years, the whole broadcasting environment has changed irrevocably as new digital technology has brought multi-channel television to the consumer. The BBC faces intense and unprecedented competition for audience share, which, this year, fell for the first time to below 30%. Moreover, the BBC has also allowed standards of taste and decency to deteriorate by adopting a falsely constructed policy of catering for all tastes no matter how extreme or bizarre. Admittedly, the BBC is certainly not alone in this process but, because it is not a commercial enterprise, this Association would argue that the public interest is not best served if the BBC follows the trends of the commercial competitors. It is significant that earlier this month (March 1999), the Corporation stated that it was to abandon the ratings war and "remind people of what the BBC is here for".

Because of its unique funding arrangements, the BBC does not have to be part of the inexorable scramble for audience share. This Association believes that maintaining high standards would bring with it benefits in terms of high programme appreciation, loyalty and, above all, a willingness among viewers and listeners to support the BBC financially, even though other broadcasters are able to provide programming at no direct cost to them.

LICENCE FEE

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he TV licence, which has been in place for many years, is widely regarded as a form of taxation. As such, many people resent having no option but to pay the fee. The justification for such a fee, to finance only the BBC, is based on the assumption that the Corporation is a public service broadcaster and will remain so. The case for licence fee funding was made in the past when the BBC was a monopoly. This case is weakened by the existence of other competing TV channels. Competition has meant that alternative commercial broadcasters, funded by advertising revenue, have divided the audience and, until relatively recently, average audience share has been broadly similar. BBC2, Channel 4 and, more recently, Channel 5 have provided alternative viewing and all are regarded as minority channels that do not command high audience share.

The growth of cable and satellite channels, as well as ownership of videocassette recorders, has provided far greater choice of programming and a consequent fragmentation of audiences. This trend is bound to continue as more people avail themselves of the new services. In such circumstances the imposition of a licence fee is less and less tenable. It would be interesting to discover, perhaps by means of a questionnaire circulated with the annual licence renewal, how much public support there would be for the licence fee if it were optional rather than compulsory. It could then be established how far the public really values the programmes and services offered by the BBC and whether people would voluntarily pay an annually increasing licence fee. It is noteworthy that, at the time of an external funding review commissioned by the Government, the BBC is again transmitting lengthy self-promotional features calculated to convince the public that it is worthy of continuing financial support ("You make it what it is"). Such promotions are patronising in the extreme and fail to convey their real purpose or the complexities of the issues involved.

The level of the licence fee and the annual increment is a matter for negotiation between the Corporation and the Government of the day. Over the years various formulae have been devised to ensure financial stability and security. More recently, above-inflation increases have been approved in order to enable the costs of new digital services as well as BBC OnLine to be met.

If the BBC is to continue unchanged in the future, it can only do so with public support. The public service commitment and requirement means that parliamentary support is also required.

CONCESSIONS

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his Association is also aware that pensioners and their lobby groups continue to press for a concessionary licence fee. Whilst this may seem well intentioned, the fact is that many pensioners are relatively well off with levels of disposable income higher than younger people who still have mortgages, children at school or university, and generally higher living costs. If concessions were granted, the shortfall in total revenue would have to be made up somehow. People who are already hard-pressed financially would no doubt resent concessions, especially to those who are better off.

ACCOUNTABILITY

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his Association welcomes moves by the BBC to become more open and accountable in its affairs. It is right and proper that the Corporation should be so and we believe that there is still room for improvement. It is mystifying why the Chairman of the Governors and the Director General rarely appear on television to acquaint licence fee payers with policy decisions that affect how the money is spent. Much more could be done to canvass public opinion on programming and to set and maintain standards.

ALTERNATIVE WAYS OF FUNDING

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n the assumption that every household in the United Kingdom owns at least one TV set, we believe that sufficient revenue to fund the BBC's annual running costs could only be raised through direct taxation if the licence fee were to be abolished. However, since increases in income tax do not enjoy popular support and go against the current trend of reducing income tax, this would probably not be an acceptable solution. Moreover, those who do not own a TV set or radio would rightly be aggrieved that they would have to pay extra tax for services they do not use.

We believe that insufficient revenue would be generated by subscription or by pay-per-view schemes unless they were extortionately high. As such they would be very unpopular and, since this would be voluntary, viewers and listeners would be driven away from BBC services.

Some people suggest that the BBC should be funded by advertising revenue. Analysis by this Association at the time of the Peacock enquiry into the funding of the BBC concluded that there simply is not enough revenue available to sustain the Independent Television network as well as the BBC. Even if such funding were available, the viewing public may be relieved of this direct cost but would still pay indirectly through the increased costs of goods and services advertised.

It is true that the BBC continues to attract income from the sale of programmes abroad and from the sales of magazines associated with programmes, the sale of books, audio and video tapes. None of these commercial ventures, good though they may be, can be expanded to the extent that the overall operational costs could be funded from the proceeds.

This Association can see no good reason why additional funding could not be made available from the abundant proceeds of the National Lottery. The Lottery owes its huge success to its promotion by the BBC. The twice-weekly draws, which have been strategically placed to secure high ratings, are aided by Lottery promotions throughout the schedules. Available statistics show that over £4 billion has already been raised for the five categories of good causes and that this figure is anticipated to reach £9 billion by the year 2001. It would not be unreasonable, therefore, to expect a proportion of these funds to be diverted to the BBC in order to progressively reduce or at lease stabilise the licence fee.

Although the money raised is used to fund a wide range of projects in all areas for many different types of people, many people have been highly critical of the way Lottery funds have been distributed and questions have been raised over some of the "good causes" that have benefited. As a public service corporation, the BBC could be said to benefit almost every household in the country. For this reason we think the BBC could qualify as a "good cause" that should benefit from Lottery profits.

CONCLUSION

The BBC stands or falls on the quality and content of its programmes. If these fail to be distinctive or fall short of expectations then there can be no justification for continuing to maintain its unique funding advantage. If, however, the public were confident that the BBC could be trusted to honour its commitments and its requirements, then this Association could reasonably recommend that the licence fee continue as a means of funding. This would be on condition that the programmes are of a high standard in every respect. Otherwise, we would recommend that the Corporation obtain funding from the National Lottery and/or by competing in the commercial sector.

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BBC Licence fee must be axed, says Blair aide

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ne of the Government's key advisers has called for the BBC's licence fee to be axed. Barry Cox, who is close to both Tony Blair and Culture Secretary Tessa Jowell, has also branded the Corporation a 'cultural tyranny'. The BBC's Charter - which allows it to collect the licence fee - is due to be renewed in 2006. Mr Cox, who is also deputy chairman of Channel 4, said that instead of all the cash going to the BBC, there should be a pot of money for all broadcasters to dip into. At present, the Corporation receives £2.9 billion from the licence fee each year. Daily Mail 28/1/2003

Penalise BBC on fee, says TV chief

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n ITV executive has argued that the BBC should lose 10% of its licence fee to fund public service programmes on commercial channels. Charles Allen, the chairman of Granada, told the Royal Television Society last night that the public service elements of the BBC should continue to be funded through the licence fee. "However, the Government should consider top-slicing 10% of the licence fee and earmark that £250 million or so for new, additional public service programming on commercial channels," he said. The Times 7/2/2003

Jowell lets the BBC raise licence fee to £116

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inisters have approved a £4 increase in the BBC's licence fee to £116, despite a legal threat to the compulsory levy. After two months of delay Tessa Jowell, the culture secretary, will brush aside a looming test case to announce the increase this week. The rise - 1.5% above the rate of inflation - will give the BBC at least £100 million extra revenue in the next financial year. Sunday Times 9/2/2003

BBC receives record number of complaints

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he BBC has received a record number of complaints about its programmes this year. Viewers lodged 1.596 grievances, more than double the 794 received in the previous 12 months. The proportion of complaints about sexual conduct almost quadrupled - rising from 3.5 per cent to 13.5 percent in the year ending in March. The programme 'The Virgin Mary' attracted 174 complaints and the gay kiss scene in 'Casualty' attracted 114 complaints. The BBC's Programme Complaints Unit ruled that there was nothing wrong with these two programmes. Greg Dyke blamed the record number of complaints on email facilities, which opened last August and made it easier to register protest. Entertainment programmes drew 22.5 per cent of complaints and news and current affairs drew 22 per cent. Daily Mail 30/4/2003

John Beyer Director of mediawatch-uk welcomed the figures which demonstrate that licence fee payers are becoming more vocal and not prepared to accept everything without question. It is particularly significant that there has been a huge increase in complaints about sexual conduct. This proves that the claim that everybody has become more relaxed about this type of TV content is just not true. The challenge for Ofcom in the future will be to acknowledge legitimate grievances about unacceptable content and take meaningful steps to remedy the problem.

The BBC's e-mail address is: [email protected]