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| Report urges end to 94 years of BBC self-regulation | Report urges end to 94 years of BBC self-regulation |
| (35 minutes later) | |
| An end to 94 years of BBC self-regulation by scrapping the BBC Trust was proposed on Tuesday 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 was proposed on Tuesday by an independent report calling for “fundamental reform” of the way the corporation is governed. |
| The Clementi report, which forms part of the government’s review of the BBC’s royal charter, recommended that communications regulator Ofcom should handle all regulatory oversight of the broadcaster. | The Clementi report, which forms part of the government’s review of the BBC’s royal charter, recommended that communications regulator Ofcom should handle all regulatory oversight of the broadcaster. |
| David Clementi, 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, 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. |
| Related: Lords committee: no compelling case for scaling back BBC | Related: Lords committee: no compelling case for scaling back 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. | |
| 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. | |
| When Clementi was appointed last September by the culture minister, John Whittingdale blamed the BBC system of governance for some of the “bad mistakes” of the past which “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 Ross-Brand. | |
| Last week, the Dame Janet Smith report into the Savile scandal made damning reading for the BBC and its governing body. | |
| Clementi said that 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.” | |
| The banker also recommends that the BBC’s day to day operations be run by a unitary board, run by a majority of non-executive directors. | The banker also recommends that the BBC’s day to day operations be run by a unitary board, run by a majority of non-executive directors. |
| Clementi recommends that full responsibility for regulation should be handed over to media regulator Ofcom is the real surprise in Clementi’s report 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. | Clementi recommends that full responsibility for regulation should be handed over to media regulator Ofcom is the real surprise in Clementi’s report 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 which 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 which 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. |
| In response to the Clementi report on Tuesday, 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.” | In response to the Clementi report on Tuesday, 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, the current chair of the trust, Fairhead, suggested that 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, the current chair of the trust, Fairhead, suggested that 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. |
| The Clementi report also found: | The Clementi report also found: |
| 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 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 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 tenth of the 250,000 complaints that are 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 tenth of the 250,000 complaints that are received by the BBC on an annual basis. |