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| Report urges end to 94 years of BBC self-regulation Report urges end to 94 years of BBC self-regulation | |
| (about 4 hours later) | |
| An end to 94 years of BBC self-regulation by scrapping the BBC Trust has been proposed by an independent report calling for “fundamental reform” of the way the corporation is governed. | An end to 94 years of BBC self-regulation by scrapping the BBC Trust has been proposed by an independent report calling for “fundamental reform” of the way the corporation is governed. |
| The Clementi report, published on Tuesday, the day before the culture secretary, John Whittingdale, is set to give a keynote speech on the BBC, forms part of the government’s review of the BBC’s royal charter. It recommends that the communications regulator Ofcom should handle all regulatory oversight of the broadcaster. | The Clementi report, published on Tuesday, the day before the culture secretary, John Whittingdale, is set to give a keynote speech on the BBC, forms part of the government’s review of the BBC’s royal charter. It recommends that the communications regulator Ofcom should handle all regulatory oversight of the broadcaster. |
| In his speech to the Oxford Media Convention on Wednesday, the culture secretary is expected to set a date for the publication of a white paper on charter renewal. Originally expected to be published in March, the white paper is now thought most likely to appear after the local elections on 5 May and before a period of purdah for the EU referendum in June. Any later and MPs believe the 10-year charter will have to be extended. | In his speech to the Oxford Media Convention on Wednesday, the culture secretary is expected to set a date for the publication of a white paper on charter renewal. Originally expected to be published in March, the white paper is now thought most likely to appear after the local elections on 5 May and before a period of purdah for the EU referendum in June. Any later and MPs believe the 10-year charter will have to be extended. |
| With widespread consensus about the failures of the BBC Trust, the culture secretary could still suggest that the BBC cut its services to allow commercial rivals room to grow. | With widespread consensus about the failures of the BBC Trust, the culture secretary could still suggest that the BBC cut its services to allow commercial rivals room to grow. |
| David Clementi, the former chairman of Virgin Money and Prudential, and previously a deputy governor of the Bank of England, said in a statement that there should be “fundamental reform of the system of governance and regulation” for the BBC. | David Clementi, the former chairman of Virgin Money and Prudential, and previously a deputy governor of the Bank of England, said in a statement that there should be “fundamental reform of the system of governance and regulation” for the BBC. |
| “The BBC Trust model is flawed. It conflates governance and regulatory functions within the trust. The BBC should have a unitary board charged with responsibility for meeting the obligations placed on it under the royal charter and agreement, and responsibility for the interests of licence fee payers. | “The BBC Trust model is flawed. It conflates governance and regulatory functions within the trust. The BBC should have a unitary board charged with responsibility for meeting the obligations placed on it under the royal charter and agreement, and responsibility for the interests of licence fee payers. |
| Clementi said the BBC Trust has been successful in some areas, such as the work of its editorial committee and reviewing BBC service licences, but points to its oft-criticised role as “cheerleader and regulator”. | Clementi said the BBC Trust has been successful in some areas, such as the work of its editorial committee and reviewing BBC service licences, but points to its oft-criticised role as “cheerleader and regulator”. |
| The report cites specific examples of “confusion” about where responsibilities lie between BBC Trust and corporation management, such as accountability over executive pay and the bungled £100m Digital Media Initiative IT project. | The report cites specific examples of “confusion” about where responsibilities lie between BBC Trust and corporation management, such as accountability over executive pay and the bungled £100m Digital Media Initiative IT project. |
| DCMS response | DCMS response |
| In a departmental tweet, culture secretary John Whittingdale thanked Clementi for his “detailed analysis”, which he said would make a valuable contribution. | In a departmental tweet, culture secretary John Whittingdale thanked Clementi for his “detailed analysis”, which he said would make a valuable contribution. |
| Culture Secretary @JWhittingdale on Clementi Review looking at how the BBC should be governed and regulated #yourBBC pic.twitter.com/TEbob5F4G8 | Culture Secretary @JWhittingdale on Clementi Review looking at how the BBC should be governed and regulated #yourBBC pic.twitter.com/TEbob5F4G8 |
| When Clementi was appointed last September, Whittingdale blamed the BBC system of governance for some of the “bad mistakes” of the past that “have all contributed to a widespread view that the governance structure needs reform”. | When Clementi was appointed last September, Whittingdale blamed the BBC system of governance for some of the “bad mistakes” of the past that “have all contributed to a widespread view that the governance structure needs reform”. |
| He cited the scandal over Jimmy Savile, the misidentification of Lord McAlpine, and editorial lapses over Jonathan Ross and Russell Brand. | He cited the scandal over Jimmy Savile, the misidentification of Lord McAlpine, and editorial lapses over Jonathan Ross and Russell Brand. |
| Last week, the Dame Janet Smith report into the Savile scandal made damning reading for the BBC and its governing body. | Last week, the Dame Janet Smith report into the Savile scandal made damning reading for the BBC and its governing body. |
| ‘Clear separation’ | ‘Clear separation’ |
| Clementi said it would be difficult to “achieve a clear separation” of BBC Trust and BBC, noting that even if it was possible, there would still be the issue of “two organisations sitting in one legal entity”. | Clementi said it would be difficult to “achieve a clear separation” of BBC Trust and BBC, noting that even if it was possible, there would still be the issue of “two organisations sitting in one legal entity”. |
| “Not surprisingly, best practice requires regulator and regulatee to be in different legal entities,” he said. “Regulatory oversight should pass wholly to Ofcom, which is already the public service regulator for the UK’s broadcasting industry and has the ability to look at the BBC in the context of the market as a whole. Ofcom would be a strong regulator to match a strong BBC.” | “Not surprisingly, best practice requires regulator and regulatee to be in different legal entities,” he said. “Regulatory oversight should pass wholly to Ofcom, which is already the public service regulator for the UK’s broadcasting industry and has the ability to look at the BBC in the context of the market as a whole. Ofcom would be a strong regulator to match a strong BBC.” |
| Clementi also recommended that the BBC’s day-to-day operations be run by a unitary board, headed by a majority of non-executive directors. | Clementi also recommended that the BBC’s day-to-day operations be run by a unitary board, headed by a majority of non-executive directors. |
| His recommendation that full responsibility for regulation be handed over to the media regulator Ofcom is no surprise , given the almost universal consensus that the trust is not fit for purpose. Ofcom, which already handles a fraction of the necessary BBC oversight, regulates other public service broadcasters. | His recommendation that full responsibility for regulation be handed over to the media regulator Ofcom is no surprise , given the almost universal consensus that the trust is not fit for purpose. Ofcom, which already handles a fraction of the necessary BBC oversight, regulates other public service broadcasters. |
| The BBC Trust, a system of governance that replaced the board of governors 10 years ago, has been blamed for several management failures with its dual nature of both champion and regulator seen as ineffective. | The BBC Trust, a system of governance that replaced the board of governors 10 years ago, has been blamed for several management failures with its dual nature of both champion and regulator seen as ineffective. |
| ‘No hiding place’ | ‘No hiding place’ |
| In a press conference, Clementi blamed the “flawed” model of BBC governance for several failures over recent years including excessive pay and a botched IT project. He said there would be “no hiding place” for BBC failures in his proposed model and called for the role of chairman of the BBC unitary board to be full time. | In a press conference, Clementi blamed the “flawed” model of BBC governance for several failures over recent years including excessive pay and a botched IT project. He said there would be “no hiding place” for BBC failures in his proposed model and called for the role of chairman of the BBC unitary board to be full time. |
| “High pay, the remuneration issues, IT issues, are things that I have in mind because ... when they go wrong ... there is the question about which board is responsible. Who’s actually responsible for these?” | “High pay, the remuneration issues, IT issues, are things that I have in mind because ... when they go wrong ... there is the question about which board is responsible. Who’s actually responsible for these?” |
| “No good governance system will ever guarantee good outcomes, but if you have a a single board with a good governance system, you know who’s responsible. One of the difficulties in those cases was it wasn’t quite clear if the trust were dealing with it or whether the executive board were dealing with it. It fell to both of them and neither of them. | “No good governance system will ever guarantee good outcomes, but if you have a a single board with a good governance system, you know who’s responsible. One of the difficulties in those cases was it wasn’t quite clear if the trust were dealing with it or whether the executive board were dealing with it. It fell to both of them and neither of them. |
| “I think in what I propose, it’ll be entirely clear that the unitary board will be responsible for the activities of the BBC. There will be no hiding place.” | “I think in what I propose, it’ll be entirely clear that the unitary board will be responsible for the activities of the BBC. There will be no hiding place.” |
| On the BBC Trust, he said “the model was a mistake”, adding that the original trustees were “given an impossible task 10 years ago”. | On the BBC Trust, he said “the model was a mistake”, adding that the original trustees were “given an impossible task 10 years ago”. |
| Clementi added that the “most important principle” of his proposal was to split governance and regulation: “A muddle of overlapping principles is clearly confusing rather than clarifying where responsibilities lie.” | Clementi added that the “most important principle” of his proposal was to split governance and regulation: “A muddle of overlapping principles is clearly confusing rather than clarifying where responsibilities lie.” |
| Asked about the issue of independence, Clementi said the BBC’s editorial independence should be enshrined in the next charter and governed by the new unitary board.However, under his proposals, the government would appoint half of the BBC board of 12 to 14 people as well as the head of Ofcom. | Asked about the issue of independence, Clementi said the BBC’s editorial independence should be enshrined in the next charter and governed by the new unitary board.However, under his proposals, the government would appoint half of the BBC board of 12 to 14 people as well as the head of Ofcom. |
| Clementi pointed out that the government had always appointed trustees and, before that, governors. Although set up by statute, staff at Ofcom, he said, “see themselves acting independently”. | Clementi pointed out that the government had always appointed trustees and, before that, governors. Although set up by statute, staff at Ofcom, he said, “see themselves acting independently”. |
| The Clementi report also found: | The Clementi report also found: |
| BBC response | BBC response |
| A BBC spokesperson said: “Sir David Clementi has delivered a thorough and insightful report. We share his view that external regulation and a unitary board for the BBC will bring greater clarity to the corporation’s governance. If delivered, these proposals will bring about the most significant change in governance and regulation of the BBC in its lifetime. That is why it is important they are implemented in a way that strengthens the BBC’s editorial independence and ensures that future decisions about the corporation are made very clearly in the best interests of audiences, who own the BBC. | A BBC spokesperson said: “Sir David Clementi has delivered a thorough and insightful report. We share his view that external regulation and a unitary board for the BBC will bring greater clarity to the corporation’s governance. If delivered, these proposals will bring about the most significant change in governance and regulation of the BBC in its lifetime. That is why it is important they are implemented in a way that strengthens the BBC’s editorial independence and ensures that future decisions about the corporation are made very clearly in the best interests of audiences, who own the BBC. |
| “A move to a single external regulator with strong powers will provide assurance to the market that the BBC is independently regulated. It will also provide an opportunity to look at the type of regulations in place for the BBC – with the opportunity to move from detailed, prescriptive rules to a greater and proportionate focus on audience outcomes and service quality.” | “A move to a single external regulator with strong powers will provide assurance to the market that the BBC is independently regulated. It will also provide an opportunity to look at the type of regulations in place for the BBC – with the opportunity to move from detailed, prescriptive rules to a greater and proportionate focus on audience outcomes and service quality.” |
| The BBC Trust chairman, Rona Fairhead, said: “Sir David Clementi proposes a strong BBC board and a strong external regulator – a change we have argued for. It will be important to get the details right and we now want to work with the government to ensure roles are clear, the structure is effective and the BBC’s independence protected.” | The BBC Trust chairman, Rona Fairhead, said: “Sir David Clementi proposes a strong BBC board and a strong external regulator – a change we have argued for. It will be important to get the details right and we now want to work with the government to ensure roles are clear, the structure is effective and the BBC’s independence protected.” |
| Almost exactly a year ago, Fairhead suggested the body she led was not fit for purpose, with a lack of clarity over governance for some of the financial and editorial management failures of recent years. | Almost exactly a year ago, Fairhead suggested the body she led was not fit for purpose, with a lack of clarity over governance for some of the financial and editorial management failures of recent years. |
| However Fairhead and several others have argued that the BBC needs a “bespoke regulator”, as Ofcom, which already has some regulatory oversight, is responsible for the BBC’s commercial rivals as well. | However Fairhead and several others have argued that the BBC needs a “bespoke regulator”, as Ofcom, which already has some regulatory oversight, is responsible for the BBC’s commercial rivals as well. |
| Other critics of the BBC Trust include the BBC management and, before the last election, a report chaired by the current culture secretary. | Other critics of the BBC Trust include the BBC management and, before the last election, a report chaired by the current culture secretary. |
| At the Oxford Media Convention in 2015, Fairhead said there was a “faultline in the blurred accountabilities” between the trust and the BBC management it was supposed to oversee. | At the Oxford Media Convention in 2015, Fairhead said there was a “faultline in the blurred accountabilities” between the trust and the BBC management it was supposed to oversee. |
| Ofcom responds | Ofcom responds |
| An Ofcom spokesperson said: “We note Sir David Clementi’s review, which has considered a range of different options. We await the government’s decision on the future regulation of the BBC.” | An Ofcom spokesperson said: “We note Sir David Clementi’s review, which has considered a range of different options. We await the government’s decision on the future regulation of the BBC.” |
| Ofcom’s chief executive, Sharon White, said in July that the watchdog could take on the wider regulation of the BBC but ruled out absorbing the governance role of the trust, saying she would “draw a line in the sand” over the issue. | Ofcom’s chief executive, Sharon White, said in July that the watchdog could take on the wider regulation of the BBC but ruled out absorbing the governance role of the trust, saying she would “draw a line in the sand” over the issue. |
| She warned there would be resourcing implications for the regulator, which deals with about 25,000 complaints a year, a 10th of the 250,000 complaints received by the BBC on an annual basis. | She warned there would be resourcing implications for the regulator, which deals with about 25,000 complaints a year, a 10th of the 250,000 complaints received by the BBC on an annual basis. |