BBC Trust

A proper process for setting the BBC’s funding should be built into the new Charter for the first time, the Trust argues today.

To protect the BBC’s independence, the Trust believes the process needs to be fairer, more transparent, and more accountable, and give the public a formal say in setting the BBC’s funding in future.

An independent report commissioned from the Policy Institute at King’s College London shows that over time there have been successive risks to the independence of the BBC or to the perception of its independence, most recently in the process by which the July 2015 funding agreement was made.  It suggests practical ideas to protect independence in the future. 

The Trust also commissioned reports from Oxford University economist Professor Dieter Helm CBE, and City University’s Dr Xeni Dassiou, to look at the role that independent regulators play in determining funding requirements in other sectors and if there is any possible read-across to the BBC.

In its analysis of these reports, the Trust sets out its support for a range of measures suggested by King’s that could be incorporated into the next Charter:

• A more regularised and formal process for setting the level of BBC funding;
• Giving the public more say in future licence fee settlements, such as through public consultation; and
• Should the BBC be governed by an independent regulator in future, for that regulator to have a specific role in assessing the BBC’s funding requirements and in advising the Government on the level of BBC funding and the level of the licence fee.

BBC Trust Chairman Rona Fairhead said:

"The public strongly supports the independence of the BBC.  As the BBC’s funding is an important part of that independence, funding decisions need to be made on a fair and transparent basis.  In future we want the process to be put on a much more formal footing, including involving the public in decision-making and building these requirements into the Charter.  We will be urging the Government to include these changes in the coming months."

In its analysis of the reports by Professor Helm and Dr Dassiou, the Trust notes that pure economic regulation of the BBC would be a very radical change and would not take account of the BBC’s unique cultural and social value.  However some aspects from other regulatory systems could be read across.  In particular, consideration should be given to a formal role for any future independent BBC regulator in decision-making about the BBC’s funding.   

The Trust’s analysis published today can be found below.

Notes to Editors

1. The Trust commissioned three independent pieces of work as part of its contribution to the BBC Charter review:

• Better protecting BBC financial independence: an exploratory report for the BBC Trust – Policy Institute at King’s College London
• Charter Review price setting models: A rail and road comparison study – Dr Xeni Dassiou
• Price setting in regulated utilities and the potential application to the BBC – Professor Dieter Helm

2. The Policy Institute at King’s College London acts as a hub, linking insightful research with rapid, relevant policy analysis to stimulate debate, inform and shape policy agendas. Their vision is to enable the translation of academic research into policy and practice by facilitating engagement between academic, business and policy communities around current and future policy needs. Their aim is to combine the academic excellence of King’s College London with the connectedness of a think tank and the professionalism of a consultancy.

3. King's College London is one of the top 20 universities in the world (2015/16 QS World University Rankings) and among the oldest in England. King's has more than 26,500 students (of whom nearly 10,400 are graduate students) from some 150 countries worldwide, and nearly 6,900 staff. The university is in the second phase of a £1 billion redevelopment programme which is transforming its estate.