Source · Select Committees · Public Accounts Committee
Recommendation 2
2
Deferred
Set timeframe for digital licences and outline plans to enhance customer engagement and reduce evasion.
Conclusion
The BBC has not adopted opportunities to digitise the licence fee, resulting in missed opportunities for cost efficiency and more customer engagement. The cost of collecting the licence fee is rising, partly because of the BBC’s reliance on postal correspondence and its increasing cost. Around 40% of households still receive a paper licence by default, yet the BBC has not set any target to increase take-up 2 of paperless licences. Enforcement also depends heavily on letters sent to households without a licence or declaring they do not need one, which adds to costs and is a less efficient way of engaging with customers. We are concerned that delays to Capita’s IT upgrade programme, intended to improve the website and customer experience, have further limited progress towards digital engagement. Although the BBC has now moved this contract to a “payment by milestone” basis, we note that the change was made late and that this approach has not been used more widely with the BBC’s contactors. The absence of meaningful incentives in the Capita contract, and in other contractual arrangements, may have contributed to slow progress in increasing digital delivery, improving customer engagement, increasing sales and reducing licence fee evasion. recommendation To achieve cost savings and improve customer engagement, the BBC should in its response to this report: • set a timeframe for moving to digital licences to further reduce reliance on costly paper licences and letters • set out its plans to capture and use customer email addresses to enhance digital engagement and streamline customer communications • outline the lessons learned from managing the Capita licence fee contract and how it will establish clear milestones and incentives in all areas of the business to increase income and reduce evasion.
Government Response Summary
The BBC partially agreed, explaining its existing processes for Capita contract management and rejecting the use of incentives for income or evasion reduction as inappropriate. It did not commit to setting a timeframe for digital licences or outlining plans to capture customer email addresses.
Government Response
Deferred
HM Government
Deferred
The BBC partially agrees with the recommendation. Lessons learned from the Capita contract are shared across TVL and the wider BBC through a joined up strategic approach to procurement and contract management. The main Capita contract delivers well on service levels for TVL, and a regime of continuous improvement is in place across the range of services. The IT upgrade element of the contract has experienced delays, leading to the project being rated as a red risk. However, the contract provided for escalation to executives of the respective companies, and this occurred regularly over the last year. The NAO report stated, ‘the BBC has continued to monitor Capita’s IT upgrade work closely and to renegotiate payment schedules based on delivery of contracted commitments.’ As part of milestone payments there is a detailed set of acceptance criteria that are agreed and closely monitored. As the upgrade programme progresses and other work is carried out; payment is on delivery and there is strong governance and oversight. External expertise is brought in where helpful to setting milestones to incentivise delivery. Other contracts include payment based on success measures, also related to deliverables of projects and programmes of work. However, the BBC does not believe that incentives on income or evasion reduction would be appropriate. Past contracts where this has been the case have led to concerns about fairness and proportionality of collection.