This article is from the source 'guardian' and was first published or seen on . It last changed over 40 days ago and won't be checked again for changes.

You can find the current article at its original source at http://www.theguardian.com/media/2016/jan/19/bbc-trust-george-osborne-licence-fee-deal

The article has changed 2 times. There is an RSS feed of changes available.

Version 0 Version 1
BBC Trust was 'steamrollered' by George Osborne over licence fee deal, says MP BBC Trust was 'steamrollered' by George Osborne over licence fee deal, says MP
(7 months later)
The BBC Trust has been accused of allowing itself to be “steamrollered” by George Osborne over the agreement to take on the £750m cost of funding free TV licences for the over-75s.The BBC Trust has been accused of allowing itself to be “steamrollered” by George Osborne over the agreement to take on the £750m cost of funding free TV licences for the over-75s.
Appearing before MPs on Tuesday, trust chair Rona Fairhead was forced to defend the decision to agree to pick up the bill, which was said to be tantamount to funding a Conservative party manifesto pledge.Appearing before MPs on Tuesday, trust chair Rona Fairhead was forced to defend the decision to agree to pick up the bill, which was said to be tantamount to funding a Conservative party manifesto pledge.
During her appearance before the Commons culture, media and sport select committee, Fairhead said the BBC Trust’s lawyers had advised her that she could not simply refuse for the corporation to shoulder the burden.During her appearance before the Commons culture, media and sport select committee, Fairhead said the BBC Trust’s lawyers had advised her that she could not simply refuse for the corporation to shoulder the burden.
Related: BBC scraps BBC1 and BBC2 controller roles after more than 50 years
In future, she said, decisions on BBC funding should not be taken at the same time as the charter renewal negotiations. Instead, Fairhead told MPs, there should be a fixed five- or six-year funding term and a “long charter that is not in any period of the election process”.In future, she said, decisions on BBC funding should not be taken at the same time as the charter renewal negotiations. Instead, Fairhead told MPs, there should be a fixed five- or six-year funding term and a “long charter that is not in any period of the election process”.
The government told the BBC last summer that it would be expected to take over the funding of free licence fees for the over-75s from the Department for Work and Pensions. Doing so will cost of almost a fifth of the corporation’s current annual income by 2020.The government told the BBC last summer that it would be expected to take over the funding of free licence fees for the over-75s from the Department for Work and Pensions. Doing so will cost of almost a fifth of the corporation’s current annual income by 2020.
In return, the BBC was allowed to increased the licence fee in line with inflation and close the “iPlayer loophole” , which allows viewers who only use catchup TV to watch for free.In return, the BBC was allowed to increased the licence fee in line with inflation and close the “iPlayer loophole” , which allows viewers who only use catchup TV to watch for free.
The continued provision of the free licence fees for older people had been a Tory manifesto pledge, Fairhead told MPs. That, however, did not place any responsibility on the BBC, suggested Labour’s Paul Farrelly, a member of the committee.The continued provision of the free licence fees for older people had been a Tory manifesto pledge, Fairhead told MPs. That, however, did not place any responsibility on the BBC, suggested Labour’s Paul Farrelly, a member of the committee.
He told Fairhead: “You ... said you could not ultimately obstruct any decision that [the government] made, but that is not exactly true, is it? Because you could have said ‘Fair enough, you have taken the decision to cease the funding of the over-75s’ licence fee but we are not going to pick up the bill.’He told Fairhead: “You ... said you could not ultimately obstruct any decision that [the government] made, but that is not exactly true, is it? Because you could have said ‘Fair enough, you have taken the decision to cease the funding of the over-75s’ licence fee but we are not going to pick up the bill.’
“You could have said, ‘It is your Conservative manifesto promise, if you cease the funding, then you are left with a broken promise. It is not up to the BBC and the trust to fund a Conservative manifesto commitment.’”“You could have said, ‘It is your Conservative manifesto promise, if you cease the funding, then you are left with a broken promise. It is not up to the BBC and the trust to fund a Conservative manifesto commitment.’”
Fairhead answered: “Our understanding was we could not, that there was no protection from the end of the charter and it is for the government to decide what the level of the funding is. Our legal advice [was] that we could not.”Fairhead answered: “Our understanding was we could not, that there was no protection from the end of the charter and it is for the government to decide what the level of the funding is. Our legal advice [was] that we could not.”
Farrelly pressed Fairhead on whether she had considered following the example of previous trustees who – under the leadership of Sir Michael Lyons – threatened to resign during that last set of negotiations, rather than accept the cost of funding free licences for the over-75s.Farrelly pressed Fairhead on whether she had considered following the example of previous trustees who – under the leadership of Sir Michael Lyons – threatened to resign during that last set of negotiations, rather than accept the cost of funding free licences for the over-75s.
“The threat last time was enough to stave it off,” Farrelly said. He quoted a letter from Fairhead, in which she wrote that the trust had a “specific duty to represent the licence fee payers”.“The threat last time was enough to stave it off,” Farrelly said. He quoted a letter from Fairhead, in which she wrote that the trust had a “specific duty to represent the licence fee payers”.
Farrelly told her: “But you had [one], on their behalf ... and you allowed yourselves – in a way that the trust and Michael Lyons did not allow themselves – to be steamrollered by the chancellor and you didn’t stand up for the licence fee payer.”Farrelly told her: “But you had [one], on their behalf ... and you allowed yourselves – in a way that the trust and Michael Lyons did not allow themselves – to be steamrollered by the chancellor and you didn’t stand up for the licence fee payer.”
Fairhead said she had considered various options but that, in the circumstances, she felt it was better to stay and try to “get the best possible negotiation and set of mitigations for the licence fee payer. We were assured by the BBC executive that the settlement agreed would do just that.”Fairhead said she had considered various options but that, in the circumstances, she felt it was better to stay and try to “get the best possible negotiation and set of mitigations for the licence fee payer. We were assured by the BBC executive that the settlement agreed would do just that.”
Asked if she stood by the decision, she said: “Yes. This was a set of mitigations that would create a strong BBC. In the circumstances, it was – in our judgment – the best outcome for the licence fee payer.”Asked if she stood by the decision, she said: “Yes. This was a set of mitigations that would create a strong BBC. In the circumstances, it was – in our judgment – the best outcome for the licence fee payer.”