The Secretary of State for Foreign and Commonwealth Affairs (William Hague):
In line with the Government’s response to events in the Middle East and North Africa and following the debate on 19 May, the FCO will provide some additional funding for the BBC World Service beyond that provided for in the 2010 Spending Review (SR10).
The context for the Spending Review was the fiscal legacy left by the previous administration. This meant that the Foreign and Commonwealth Office, in line with other Government Departments, had to make difficult decisions. I therefore agreed total funding levels for BBC World Service of £253m/£242m/£238m over the first three years of the SR10 period. After this time funding of BBC World Service will be transferred to the Licence Fee.
The original settlement was both fair and proportionate. A 16% real cut in funding over the period, while challenging, is consistent with the settlements provided to other publicly funded bodies. It kept the BBC World Service’s share of the FCO family’s overall budget at or above its 2007-8 level: in 2007/08 the proportion was 13%, and by the time the funding for the World Service transfers to the Licence Fee it would have been slightly under 14.4%. The World Service settlement was also proportionate to the savings the BBC will make as a whole under the licence fee settlement.
The settlement did present difficult challenges for the BBC World Service. It meant that the World Service has faced some hard choices and decisions, as have the FCO and the British Council. The government has been looking carefully at what we can do to help. In March 2011 I announced a one-off contribution of £3m towards World Service restructuring costs.
The BBC itself has also underlined their long term commitment to the future of the BBC World Service through contributing significant funds, totalling £20m over three years, towards World Service restructuring costs. I also welcome the BBC’s recent agreement that the World Service will be able to reinvest the reduction in their planned contribution to the overall BBC pension deficit to mitigate the impact on services of the reduction in budget. I understand from the BBC that this should release an extra £9m over three years for investment in services. One area they have identified as a priority for such funding is the continuation of the Hindi shortwave service. I was pleased that the BBC World Service had itself identified savings earlier in the year to enable a reduced Hindi shortwave service to continue, and I strongly welcome this additional support.
In line with the Government’s response to events in the Middle East and North Africa and following the debate in the House of Commons on 19 May, I asked the FCO to look again at whether there were other options open to us to provide support. We recognise that the world has changed since the settlement was announced in October last year - indeed since the World Service announced the subsequent changes to services, including some closures, on 26 January. In the debate on 19 May, a number of Members of Parliament highlighted the impact of the reduction in World Service funding on the BBC Arabic Service. It is right that we should look at ways in which we can assist the BBC Arabic Service to continue their valuable work in the region. So I have agreed that we will provide additional funding of £2.2m per annum to enable the World Service to maintain the current level of investment in the BBC Arabic Service. This will increase the World Service’s funding as a proportion of the FCO’s budget to just over 14.5%.
In addition the FCO is discussing providing funding from the Arab Partnership Initiative for specific projects proposed by the BBC Arabic Service or World Service Trust. Discussions are continuing about a number of projects which are designed to support the development of the media and wider civic society in the Middle East and North Africa region which taken together may mean an additional investment of up to £1.65m over the next two years.
My Rt Hon Friend the Secretary of State for International Development has recently stated that his Department is discussing placing its relationship with the BBC World Service Trust on a longer term and more strategic footing. Any support to the World Service Trust provided by the Department for International Development (DFID) will be classed as Official Development Assistance (ODA) in line with the internationally agreed standard laid down by the Development Assistance Committee of the Organisation for Economic Co-Operation and Development (OECD). I believe that a proportion of the activities carried out by the World Service itself may also be eligible to be classified as ODA. The FCO is working with DFID to agree that any future ODA spend reported by the World Service is fully consistent with the OECD definition.
I have discussed this overall approach with the Chairman of the BBC Trust and we have agreed that we will continue to work together to ensure that the World Service retains its global influence and reach in a rapidly changing world.