Source · Select Committees · Public Accounts Committee
Recommendation 5
5
Outcomes-based regulation comes with benefits, but also presents challenges for regulators in measuring their influence...
Conclusion
Outcomes-based regulation comes with benefits, but also presents challenges for regulators in measuring their influence and compliance by industry. In general, setting goals and facilitating business to meet them can be both a more effective and a less burdensome approach to meeting regulatory objectives than laying down lists of rules. A focus on outcomes can be important to enable innovation, as seen in the MHRA’s review of vaccines during the COVID-19 pandemic. The regulators’ and the Department’s focus on outcomes is welcome, but where such approaches are used, it is also important for a regulator to be able to measure the outcomes themselves and the extent of its influence over them. A regulator’s influence over the Principles of effective regulation 7 industry it regulates—for example, how well businesses comply with standards— can be difficult to measure, particularly if there are not specific rules that can be easily monitored. It is therefore crucial that regulators identify what data they need, collect this robustly and systematically, use it to monitor progress and have the power to act on it effectively. Recommendation: Government and regulators should work together to build in proper consideration of the right balance between outcomes-based and rules-based regulation in their sectors, to ensure regulatory objectives are not compromised and non-compliance by regulated entities does not go undetected. 8 Principles of effective regulation 1 Responding to challenges in the external environment
Government Response
Acknowledged
HM Government
Acknowledged
1. The BBC appears complacent about the threat it faces from declining audiences. Each year people spend less time watching BBC TV and 200,000 more households choose to opt out of paying for the licence fee. Yet when pressed, the BBC seem unconcerned by the decline, maintaining that overall the number of users it reaches is high compared to other broadcasters. Nor was the BBC able to demonstrate to us a clear understanding of why increasing numbers of households are forgoing the TV licence. The BBC recognises that the rapid shift to online media and changes in consumer habits during the pandemic has seen people discover more choice elsewhere. However, it does not appear to have a sufficiently detailed plan for how to address this; it was, for example, unable to articulate why bringing BBC Three back to terrestrial TV would help stop viewers moving away. Addressing audience decline and better understanding the value it can bring is critical to the BBC’s financial health: as the BBC’s own research has shown, people are less likely to pay the licence fee if they do not view licensable content. We would like to reiterate to the Committee that there is no complacency at the BBC. We have taken great pains to stress that we recognise the jeopardy for the BBC is high. We have also explained very clearly how the challenges we face are directly driving our strategy to deliver more value to all audiences. In relation to households choosing not to pay the licence fee, we would like to draw the Committee’s attention to the Director-General’s answers that highlight we are monitoring this closely1, given the licence fee represents the majority of our income. While there can be reductions in numbers of households paying for a licence, there is also forecast growth in the overall number of households. We would also like to highlight that the BBC has a coherent strategic plan on how to face the challenges posed by a shift to online media and the changes to consumer habits. We are acutely aware of the shifts in the market and ensuring that we serve all audiences in this more competitive landscape is central to the BBC’s decision-making. We are grateful to have the opportunity to articulate this again to the Committee, and draw the Committee’s attention again to the findings of the NAO report that for example credited how the BBC has “introduced new initiatives to capitalise on the opportunities offered by this new marketplace, including BBC Sounds and improvements to the iPlayer service”. This includes the expansion of online TV services, making content available on iPlayer for 12 months instead of 30 days, and the Britbox partnership with ITV. We detailed the key planks of our strategy to the Committee, including focusing the power of our big brand content to reach underserved audiences, growing BBC Sounds and making iPlayer a destination in its own right. This approach is working. More than 900,000 16-34 year-olds used BBC Sounds for the first time in the last six months. iPlayer has set new records in the past year, with 6.1bn requests to stream programmes in 2020/21 - up 28% on the year before. Our evidence also highlighted how rapid growth in iPlayer co