With permission, Mr Speaker, I should like to make a statement.
Today I am laying before Parliament a draft of the Royal Charter for the continuance of the BBC, together with the accompanying draft Framework Agreement between the Government and the BBC. The latter sets out the detail behind the Charter, including how the BBC will operate in the new Charter period.
These drafts set out the policies contained in the White Paper, A BBC for the Future: a Broadcaster of Distinction, which was published in May.
This White Paper was the culmination of one of the largest public consultations ever. More than 190,000 members of the public - as well as industry stakeholders and experts - gave their views on how the Government could enable the BBC to continue to deliver world-class content and services over the next eleven years.
The consultation served as a reminder that the BBC matters deeply to this country – as it does to people right across the world. Far from diminishing the BBC, our changes strengthen it.
I am very grateful to my predecessor – the Rt Hon Member for Maldon – for all his brilliant work on the BBC.
My department has worked very closely with both the BBC and Ofcom – who have taken on the job of being the BBC’s first independent regulator - to develop and agree these draft documents.
I am a huge fan of the BBC, Mr Speaker. At its best it is peerless. Our aim is to ensure that a strong, distinctive, independent BBC will continue to thrive for years to come – and also to improve the BBC where we can.
The new Charter and Agreement will enable a number of improvements, Mr Speaker.
They enhance the distinctiveness of BBC content – and the BBC’s Mission and Public Purposes have been reformed to reflect this requirement.
The governance and regulation of the BBC will be also reformed. The new BBC Board will be responsible for governing the BBC, and Ofcom will take on the regulation of the BBC. The Charter and Agreement sets out functions and obligations that the BBC and Ofcom must follow in order to deliver this.
The Charter explicitly recognises the need for the BBC to be independent - particularly in editorial matters - and the BBC will appoint a majority of the members of the new Board - with strict rules to ensure all appointments are made fairly and openly.
The Charter also provides financial stability for the BBC – by making clear that the licence fee will remain the key source of funding for the BBC for the next Charter period.
Obligations for the BBC to consider both the negative and the positive market impacts of their activities are set out in the Charter. Ofcom must always keep these in mind when reviewing new and changed services. The BBC is obliged to work closely with others and share its knowledge, research, and expertise for wider public benefit.
The Government wants a BBC that is as open and transparent as possible. The Charter sets out new obligations in this regard, including publishing the salaries of those employees and talent who earn more than £150,000.
The BBC serves all nations and regions. It needs to be more reflective of the whole of the United Kingdom and the new Charter requires this through the Mission and Public Purposes.
This will be supported by specific Board representation, including the appointment of nations members - which for the first time will be agreed with the administrations of Northern Ireland and Wales – as well as for Scotland as is currently the case.
Provision for the nations will be regulated by Ofcom through a new operating licence regime, which will include continuing the approach of production targets for making programmes outside of London.
One of the BBC’s many responsibilities is to bring people together, Mr Speaker, supporting and encouraging greater cohesion, not least among the nations of the United Kingdom.
Mr Speaker, we have made considerable progress since the publication of the White Paper and resolved a number of important areas with the BBC – allowing us to go further in the key areas of transparency, fairness, and securing independence for the BBC.
In addition to the principle of a mix of public and BBC-made appointments, all made in line with best practice, I can confirm that the Charter sets out that the BBC will appoint 9 board members - including 5 Non-Executive Directors - and that an additional 5 will be public appointments. This means that the BBC will appoint the majority of members to its new Board. This ensures the independence of the BBC board and that each nation of the UK will have a voice. This will strengthen the BBC’s independence, from the position where all the BBC Trustees were appointed by the Government.
The National Audit Office (NAO) will become the BBC’s financial auditor. In addition, the Charter will enhance the NAO’s role and access - and allow it to conduct value-for-money studies on the BBC’s commercial subsidiaries. This money subsidises the licence fee, so the public has every right to expect value-for-money.
And there will be greater transparency, with a full, fair and open competition for the post of Chairman of the new BBC Board.
This is in line with the Culture select committee’s recommendation, Mr Speaker. It is a significant new post, and transparency and fairness in making the appointment is vital, not least so that industry and the public have confidence.
I am grateful to Rona Fairhead – who has decided not to be a candidate for this new post - for the work she has done as Chair of the BBC Trust and in particular for her help in reforming the governance of the BBC.
Mr Speaker, the fundamental reforms set out in the draft Charter will take time to implement - given the complexity of the changes, the need for a smooth transition, and the importance of consulting on some elements of the new regulatory structures.
There will be a short period of transition before the BBC Board and Ofcom take on their new governance and regulatory roles on 3 April next year. The BBC will continue to operate under current arrangements during this transitional period.
Further details about the transition will be confirmed in the coming months as we work closely with the BBC and Ofcom to ensure all elements of transition are managed as smoothly as possible, including the process by which the new BBC Board will be established.
Mr Speaker, Members of both Houses will now have a chance to consider the proposals in detail. To aid them in that endeavour, I have today deposited a series of information sheets in the libraries of both Houses.
I have also sent the draft documents to the devolved administrations in order that the devolved legislatures will be able to debate them over the coming weeks.
My DCMS ministerial colleagues and I look forward to Parliamentary debates on the draft Charter and Agreement in due course. Following these debates, the Government will present the Charter to the Privy Council, in order that the new Charter is in place by the end of the year.
Mr Speaker, the BBC is one of this country’s greatest achievements and greatest treasures. These reforms ensure that it will continue to be cherished at home and abroad for many years to come.
I commend this statement to the House.