UK Culture, Media and Sport Committee sees no long-term future in BBC Licence Fee

DetailsEditor | 26 February 2015

In a damning assessment of not just the corporation but the body designed to ensure it delivers value, the UK's powerful Culture, Media and Sport Committee has called for major changes to the BBC's funding and governance.

What makes the highly critical report more contentious is its timing, coming less than three months before the UK general election where all state funding is a red-hot topic. The BBC has traditionally had many enemies in the Conservative Party, the major partner in the ruling coalition government, and the last Licence Fee settlement saw the BBC endure huge cut-backs. More are expected, especially if the Conservatives retain their hand on the tiller of government.

In the report, the Culture, Media and Sport Committee, made up of MPs from a variety of parties, came to the conclusion that even though it regarded the BBC as a valued and important feature of national life, it could see no long-term future in the Licence Fee and said the corporation was in need of stronger governance and more challenging, independent oversight if it is to be held accountable.

Moreover, and in the context of a rapidly evolving media environment and following several years where the corporation has been "at times beset by mistakes", the committee said that there were major questions to be answered by the BBC as to what justifies the close to 4 billion of public money spent on the corporation, and on what the scope and scale of its activities should be.

Despite conceding that there was in the short-term at least currently no better alternative funding model, the committee said the Licence Fee was becoming harder and harder to justify and sustain. It recommended that as a minimum the Licence Fee must be amended to cover catch-up TV, that is essentially the on-going development of the hugely popular iPlayer, as soon as possible.

In what would be a hugely controversial move, the committee stated that its preferred alternative would be a broadcasting levy on all households but a degree of subscription for BBC services could be a possibility in the future. The BBC had, in the committee's opinion, tried for too long to provide something for everyone and should reduce provision in areas where others are better placed to deliver excellence and better value for money, and make bigger, braver decisions on its strategy.

Turning its attention, and fire, to governance, the committee called for the abolition of the BBC Trust, the body designed to ensure that Licence Fee payers receive best value for money. It called for new arrangements to be made for the governance, regulation and oversight of the BBC, with the establishment of a new and independent Public Service Broadcasting Commission (PSBC) with the role of scrutinising the BBC's strategic plan, assessing the BBC's overall performance and determining the level of public funding allocated to the BBC and others.

Commenting on the report in what would be his last such statement before quitting in the new parliament, committee chairman John Whittingdale said: "Over the last few years the BBC has suffered from a succession of disasters of its own making, yet it remains a widely admired and trusted institution, and fulfils many important functions both at home and abroad. However, when an organisation is in receipt of nearly 4 billion of public money, very big questions have to be asked about how that money is provided and spent, and how that organisation is governed and made accountable ... The BBC should tailor its output to what it does best, and not stray into areas that can and should be left to commercial providers to do well. It is pointless and wasteful having an organisation receiving that kind of public funding competing with and potentially crowding out other providers."

"The BBC Trust has failed to meet expectations and should be abolished. It remains far too close to the BBC and blurs accountability of the BBC rather than it being a sharp and effective overseer of the BBC's performance as a public service institution."

In a statement forming the initial reply to the condemnation, the BBC said: "This report confirms the importance of the BBC in national life and recommends maintaining and modernising the Licence Fee, something we have said is necessary. We're grateful to the committee for endorsing our record for efficiency and maintaining the quality of programmes and services, and note members overwhelmingly voted against moving to a subscription funding model."