The future of the BBC World Service

We welcome the undertaking by the Director of News at the BBC to maintain the budget for the World Service up until the end of the current licence fee period, and his assurance that the next two years of funding will use the 2014-15 budget as a baseline. We urge the BBC to announce detailed funding allocations for 2015-16 and 2016-17 as soon as possible, to enable not just the World Service but also other divisions of the BBC to plan over the longer term.

We have clear differences with the BBC on governance of the World Service. We respect the arguments made by the Director of News in defence of the new arrangements, but it remains to be seen whether they will indeed safeguard the distinct nature of the World Service. We regret that the BBC has moved from a position where the Director of the World Service was a very senior person within the organisation to one where the World Service has no direct voice on the Executive Board or the Management Board, and where the Director is just one of many competing voices on the News Group Board which will take decisions on how the World Service should meet its objectives and targets under the Operating Licence. We do not depart from the reservations which we have expressed in the past about the transfer of funding responsibility and the consequential changes in governance, and we recommend that the BBC should at least allow for direct representation of the World Service at the Management Board—and preferably the Executive Board— on a temporary basis, for five years, while the new funding arrangements for the World Service settle.

We will continue to speak up for the BBC World Service and its role in projecting the values and interests of the UK across the world. We urge the Foreign Secretary to do the same. We are encouraged to hear that frequent contact between the BBC and the FCO is likely to continue. We were pleased to hear the Foreign Secretary say that he would always “hold the BBC’s feet to the fire” in protecting the interests of the World Service. We urge him and his successors to honour that commitment.

On 1 April 2014, the BBC Trust assumes responsibility for approving the budget of the World Service. In doing so, it must have regard to the need to provide sufficient funding for the delivery of the World Service as defined in its Operating Licence,3 and to the interests of licence fee payers.4 In June 2013, the Trust announced that the budget for the World Service for 2014-15 would be £245 million (up from £238.5 million in Government Grant in Aid in 2013-14). We have strongly welcomed the increase.5

No budget has yet been announced for years beyond 2014-15. Mr Horrocks, Director of BBC Global News, was optimistic that funding levels for the World Service beyond 2014- 15 would not fall, at least in cash terms.6 We invited Mr Harding, Director of News at the BBC, to comment on future funding for the BBC World Service. Although he could not tell us exactly when an announcement of precise figures would be made, he gave an assurance that the budget for 2014-15 would be maintained until the end of the current BBC licence fee period (2016-17);7 and, in addition, funds would be sought to invest in future innovation, over and above the £245 million. When we asked whether he could assure us that the 2014-15 budget of £245 million would be a minimum until the end of the licence fee period and perhaps beyond, he replied “Yes”.8

We note that this undertaking is being made at a time when the financial environment is tough. In October 2011, the BBC announced plans to achieve £700 million in savings—or 20 per cent of its total budget—over the four-year period from 2013-14 to 2016-17. Just over £60 million of annual savings were to come from the News and English Regions division. Mr Harding has announced the closure of 75 posts across News and English Regions and has warned that “we will need to find further substantial savings over the following two years”.9

We welcome the undertaking by the Director of News at the BBC to maintain the budget for the World Service up until the end of the current licence fee period, and his 2 Paragraph 80, Sixth Report from the Committee, Session 2010-12, http://www.publications.parliament.uk/pa/cm201011/cmselect/cmfaff/849/84902.htm 3 The Operating Licence defines the characteristics of the BBC World Service and sets out how the World Service contributes to the BBC’s public purposes. The Trust issued an Operating Licence on 30 January 2014. 4 Agreement between Her Majesty’s Secretary of State for Culture, Olympics, Media and Sport and the British Broadcasting Corporation, Command Paper 8170, September 2011, https://www.gov.uk/government/uploads/system/uploads/attachment_data/file/78441/Ammended-BBCAgreement- Cm8170-SEPT2011.pdf. 5 FCO performance and finances 2012-13, Sixth Report from the Committee, Session 2013-14, HC 696, paragraph 76, http://www.publications.parliament.uk/pa/cm201314/cmselect/cmfaff/696/69602.htm 6 Q 2 and 3 7 The current BBC Charter runs until December 2016 and the licence fee as currently set (£145.50) will fund the BBC’s spending until the end of the 2016-17 financial year. 8 Q 40 to 42; Q 50 9 Press Gazette 19 September 2013, http://www.pressgazette.co.uk/harding-announces-75-bbc-news-job-go-possible- compulsory-redundancies-and-more-cuts-come 6 The future of the BBC World Service assurance that the next two years of funding will use the 2014-15 budget as a baseline. We urge the BBC to announce detailed funding allocations for 2015-16 and 2016-17 as soon as possible, to enable not just the World Service but also other divisions of the BBC to plan over the longer term. Governance

In our 2011 report on The Implications of Cuts to the BBC World Service, we were concerned about arrangements for future governance of the BBC World Service, consequential upon the funding transfer. We proposed that the following steps be taken to protect the interests of the World Service: We further recommend that, if the transfer of funding takes place, the Foreign Secretary ensure that the World Service is adequately represented at the top levels of BBC management; and in particular that the Director of the World Service should have a place ex officio on the new Executive Board of the BBC, and that the International Trustee of the BBC Board of Governors should be given the specific responsibility of representing the interests of the World Service.10 Our recommendations on governance, both in 2011 and since,11 have been founded on our doubts that the distinct interests of the BBC World Service can be fully represented at the BBC’s Executive Board by a member who holds a wide range of responsibilities, encompassing not just the BBC World Service but also other elements of the Global News division (which includes the commercially-funded BBC World News), the BBC’s news and current affairs services in the UK, and services in the English regions.12 Mr Horrocks, the Director of Global News, does not sit on the BBC’s Executive Board; nor does he now sit on the Management Board, which is responsible for “managing pan-BBC issues delegated to it from the Executive Board”.13 10 Paragraph 83, Sixth Report from the Committee, Session 2010-12, http://www.publications.parliament.uk/pa/cm201011/cmselect/cmfaff/849/84902.htm 11 Departmental Annual Report 2010-11, Eleventh Report of Session 2010-12, HC 1618, http://www.publications.parliament.uk/pa/cm201012/cmselect/cmfaff/1618/161802.htm; FCO performance and finances 2011-12, Fifth Report of Session 2012-13, HC 690, http://www.publications.parliament.uk/pa/cm201213/cmselect/cmfaff/690/69002.htm; FCO performance and finances 2012-13, Sixth Report of Session 2013-14, HC 696, http://www.publications.parliament.uk/pa/cm201314/cmselect/cmfaff/696/69602.htm 12 See Fifth Report from the Committee, FCO performance and finances 2011-12, HC 690, paragraph 82, http://www.publications.parliament.uk/pa/cm201213/cmselect/cmfaff/690/69002.htm 13 http://www.bbc.co.uk/aboutthebbc/insidethebbc/managementstructure/bbcstructure/management_board.html. Mr Horrocks told us last year that he used to sit on the BBC Direction Group, which was “in effect the equivalent of the Management Board” but that he had ceased to do so after a decision by the then Director-General, George Entwistle, to reduce the number of people who sat on the Group “to make it a more effective, smaller decision- making body”. Q 25, evidence given on 5 November 2013, HC 696. The future of the BBC World Service 7 BBC Trust

In reply to our concerns, the Government and the BBC accepted the case for a member of the BBC Trust to have specific responsibility for overseeing the BBC’s international services, and Lord Williams took up the post of International Trustee and Chair of the Trust’s International Services Committee on 1 December 2011.

The Trust will set the overall strategic direction for the World Service and will approve the budget proposed by the BBC Executive. The Operating Licence published by the Trust sets out the remit, objectives and framework by which the Trust will assess the World Service’s performance each year. The Trust will agree with the Foreign Secretary the languages in which the World Service is to be provided, and any proposal to start a new language service or to cease a service will require the agreement of both the Trust and the Foreign Secretary.14 BBC Executive

In response to our arguments on representation of the BBC World Service on the BBC Executive, the Government said that the make-up of the Executive Board of the BBC was a matter for the BBC, and the BBC has twice rejected our arguments. The first time, in June 2013, it said merely that “the whole of the Executive Board, which includes the Director of News, is accountable to the Trust for delivering the strategy of the World Service”.15 The second time, in February 2014, it said that the World Service is championed at the highest levels of the BBC and is represented on the Executive Board by the Director of News and Current Affairs ... This collective commitment to the World Service should be measured by what we promise to deliver–growth in World Service audiences, a better, richer news service for both global and UK audiences, and a sustained reputation for the BBC as the most trusted news provider in the world–rather than by representation on the Board or management committees.16

Since we received that response, it has been announced that the World Service Board (which takes operational decisions on the World Service’s output and on allocation of resources) will cease to exist, and decisions regarding World Service operations will in future be made by the News Group Board. Mr Harding told us that the News Group Board was formed of representatives from across the news division, including those responsible for newsgathering across the BBC, for the newsroom (with oversight of all news bulletins), 14 Q 60. See Clause 64A(6), Agreement between Her Majesty’s Secretary of State for Culture, Olympics, Media and Sport and the British Broadcasting Corporation, Command Paper 8170, September 2011, https://www.gov.uk/government/uploads/system/uploads/attachment_data/file/78441/Ammended-BBCAgreement- Cm8170-SEPT2011.pdf. 15 Committee’s First Special Report of Session 2012-13: Responses from the British Council and the BBC to the Committee’s Fifth Report, on FCO performance and finances 2011-12, http://www.publications.parliament.uk/pa/cm201314/cmselect/cmfaff/381/38102.htm. 16 Second Special Report from the Committee, Session 2013-14, HC 1196. 8 The future of the BBC World Service and for political programming.17 He also told us that there were no plans to dispense with the post of Director of the World Service.18

We discussed with Mr Harding and with Lord Williams the representation of the World Service’s interests at Board level. Lord Williams did not accept that a lack of representation at Executive Board level meant that the World Service was not protected, and Mr Harding stressed that the Executive Board had been scaled down in order to make it a more effective decision-making body. He argued that the World Service did have a voice at the ‘top table’—his own—and that to provide separate representation specifically for the World Service would generate claims for similar treatment from other parts of the BBC. He strongly favoured integration of the World Service within the BBC, saying that the “worst outcome” for the World Service would be for it to be considered as an “adjunct to the BBC” or a “ghetto”.19

The move to licence fee funding for the BBC World Service is likely to increase the challenges from inside and outside the BBC to the level of resources allotted to the World Service. Strains within the BBC are already evident. The BBC Executive has agreed to submit a proposal to the BBC Trust to close BBC Three as a television channel in autumn 2015 and to replace it with an online service. In an interview on Radio 5 Live on 6 March, Danny Cohen, the BBC’s Director of Television, said that the requirement for the BBC to fund the £245 million World Service from the licence fee had contributed to the need to move BBC Three online.20

We expect that the integration of the World Service within the BBC will in due course encourage the public and the media to be more searching in questioning the value of the World Service in relation to parts of the BBC’s domestic services. When giving evidence to us in November 2011, Lord Patten, Chairman of the Trust, cited evidence from polls which suggested that the British public gave the World Service “a high rating” and that it recognised the World Service’s role in “explaining this country to the world, and the reverse”. He accepted, though, that to build on that perception would “need argument” and would occasionally mean “taking on some of the more popular tabloids”.21 Conclusion on governance

We have clear differences with the BBC on governance of the World Service. We respect the arguments made by the Director of News in defence of the new arrangements, but it remains to be seen whether they will indeed safeguard the distinct nature of the World Service. We regret that the BBC has moved from a position where the Director of the World Service was a very senior person within the organisation to one where the 17 Q 71 18 Q 70 19 Q 63 20 http://www.telegraph.co.uk/culture/tvandradio/10681687/BBC-Four-at-risk-of-being-scrapped.html 21 Q 112, evidence taken on 22 November 2011, HC 1618, http://www.publications.parliament.uk/pa/cm201012/cmselect/cmfaff/1618/111122.htm The future of the BBC World Service 9 World Service has no direct voice on the Executive Board or the Management Board, and where the Director is just one of many competing voices on the News Group Board which will take decisions on how the World Service should meet its objectives and targets under the Operating Licence. We do not depart from the reservations which we have expressed in the past about the transfer of funding responsibility and the consequential changes in governance, and we recommend that the BBC should at least allow for direct representation of the World Service at the Management Board—and preferably the Executive Board—on a temporary basis, for five years, while the new funding arrangements for the World Service settle. The role of the Foreign and Commonwealth Office

The FCO’s responsibility for funding the BBC World Service, while respecting its editorial independence, has allowed it to exercise discreet influence. Mr Harding described the past arrangement as “quite a subtle contract”, but he believed that the move to licence fee funding, by removing any sense that the World Service might be run by the FCO, would “probably only enhance respect” for the World Service.22

The FCO is already demonstrating a greater detachment from the World Service. In its response to our recommendations on protection of the World Service’s interests through change in governance structures at the BBC, the FCO avoided making any substantive comment. Instead it made a general statement of support for the World Service and concluded: “It is for the BBC to comment on internal management structures and processes”.23 The FCO has also consistently deferred to the World Service on whether to establish a Korean Service, despite the potential value of such a service in helping to open up North Korea to external influence.24 The World Service does not propose to go ahead with a Korean Service at this stage, as it is not convinced that such a Service would be cost- effective.25

The FCO’s reluctance to be seen to influence the World Service is understandable, but we believe that it would not be in the interests of the UK for the BBC to lose sight of the priorities of the FCO, which relies upon the World Service as an instrument of ‘soft power’. The Chairman of the BBC Trust will meet the Foreign Secretary annually to discuss the performance of the World Service.26 We asked the Foreign Secretary whether he would “hold the BBC’s feet to the fire” in protecting the interests of the World Service, and he 22 Q 60 23 Government Response to the Committee’s Sixth Report of Session 2013-14, on FCO performance and finances 2012- 13, published as Command Paper 8797, https://www.gov.uk/government/uploads/system/uploads/attachment_data/file/287941/37679_Cm_8797.pdf 24 See for instance response by the Deputy Prime Minister HC Deb 12 March 2014 col 316, http://www.publications.parliament.uk/pa/cm201314/cmhansrd/cm140312/debtext/140312-

htm#14031257000019, (clarification in HC Deb 19 March 2014 col 629W, http://www.publications.parliament.uk/pa/cm201314/cmhansrd/cm140319/text/140319w0002.htm#14031981000053) 25 Q 19, evidence given by Mr Horrocks on 5 November 2013, HC 696, http://data.parliament.uk/writtenevidence/WrittenEvidence.svc/EvidenceHtml/3450 26 Q 59 10 The future of the BBC World Service replied: ”I will always do that”.27 We also note that, although there is no express provision under the new Agreement between the BBC and the Government for quarterly meetings between the FCO and the BBC World Service at Director level,28 Lord Williams was confident that meetings in future would “probably be as regular as they have been in the past”.29

This Committee has in the past challenged the FCO on cuts to the FCO’s grant funding for the World Service, and we have succeeded in reversing some of those cuts. With the transfer of funding responsibility from the FCO and the consequent loss of direct accountability of Government to Parliament for that funding, we will no longer have the same leverage on behalf of the World Service, although we recognise that the Culture, Media and Sport Committee will have an active role in scrutiny of the BBC as a whole.

We will continue to speak up for the BBC World Service and its role in projecting the values and interests of the UK across the world. We urge the Foreign Secretary to do the same. We are encouraged to hear that frequent contact between the BBC and the FCO is likely to continue. We were pleased to hear the Foreign Secretary say that he would always “hold the BBC’s feet to the fire” in protecting the interests of the World Service. We urge him and his successors to honour that commitment. 27 Q 51, evidence given on 18 March 2014, HC 1150, http://data.parliament.uk/writtenevidence/WrittenEvidence.svc/EvidencePdf/7747 28 https://www.gov.uk/government/uploads/system/uploads/attachment_data/file/78441/Ammended-BBCAgreement- Cm8170-SEPT2011.pdf 29 Q 59 The future of the BBC World Service 11