Governments of various persuasions have seen it as the pace-setter of public service broadcasting but they have also wanted to clip its wings or even to destroy it. It has been attacked by newspapers, politicians, governments and business interests. At times it has seemed to drift, to lack creative spark or competitive edge or to exhibit an arrogant abrasiveness. But like the cat with nine lives it has returned again and again to please and to challenge audiences, and to present a variety of political beliefs and values with skill and elegance. As a large corporation it has seemed (at least since the 1970s) relatively human, open to criticism and able to criticise itself. In difficult circumstances it has attracted and retained a large measure of public trust.

1. Citizenship and Public Service
1.1. In the multi-channel, internet-enabled world many households in Britain have access to a wide range of sources of information and entertainment, this includes a significant number of homes (around 50%) with access to digital television services and a smaller number with access to broadband. However, the take-up of new channels and services has also meant considerably increased monthly costs for consumers and, for a significant number of homes, either the cost is too high or there is a reluctance or resistance to taking up new services. In this situation the provision of a basic package of high quality services for all homes becomes a high priority for reasons of social equity, cultural cohesion, educational development and employability.

1.2. High quality, imaginative and cost-effective programmes - and other services - are currently provided by the BBC on the principle of universal availability and on a 'free to air' basis throughout the United Kingdom. And the programmes are not only for the adults who pay the licence fees but for the children who do not. Without these services our general levels of knowledge, understanding, literacy and well-being would be considerably lower. And as an example of what economists have referred to as 'merit goods' they contribute to the general well-being of society as a whole, as well as meeting the needs of individuals

1.3. Like the national health service, the BBC makes a considerable contribution to our general quality of life. But it also contributes, mores specifically, to life-long learning, to economic development and to the 'creative industries' in Britain. If we were looking at a blank sheet of paper and identifying a need for the universal provision of information, education and entertainment, for people of all ages, this would prove a very costly undertaking. As it is, we have inherited an institution and a service that has invested considerable human and material resources over the years in the creation of a nation-wide communicative infrastructure. With some exceptions this infrastructure has delivered services as much focused on future developments and needs as on comfortable repetitions of the tried and the tested.

Taken as a whole the BBC's services seem to enjoy a kind of 'Citizen's Charter' kitemark for innovation and reliability. In political terms they make voting more informed and democratic participation more possible and they do this for everyone at an affordable cost. In a period when national newspaper-buying is in slow decline they provide a rich and varied source of well-researched information combined with judicious and sometimes provocative comment.

2. Finance, Ownership and Accountability
2.1. Since the 1920s the BBC has been funded by its users and stakeholders (the licence fee payers), though it has never been directly controlled by them. It has also escaped direct control by government. Unlike some public broadcasters in other European countries, the BBC has never been located within a government department or grant-aided by a minister with money drawn from general taxation. And it has been accepted, by both government and BBC, that the corporation should be independent, operating at a distance from the government of the day. Although in the eighty years of the BBC's history there have been examples of government interference, or attempted interference, in the content of programmes.

2.2. The basis for the BBC's independence has, arguably, been the method of its funding. Since 1922 all households in Britain have been required by law to pay a flat rate licence fee, as a condition for receiving broadcast signals into the home. This has given rise over time to the argument that it is inequitable for all households to pay the same amount, regardless of household income. The amount currently stands at £116 per year and these licence fees continue to provide the BBC with its main source of income. The licence fee method of funding has also given rise to two other criticisms. The first is that households that do not wish to use the BBC but do wish to receive other broadcasting signals are unfairly required to pay for the BBC. The second is that licence-fee funding is anti-competitive, since commercial providers find themselves unfairly disadvantaged in competition with a government supported (if not government-funded) service.

2.3. There are two answers to the last two criticisms noted above. The first is that citizens can expect to pay, through taxation, for a range of services that do not directly or immediately benefit them. For example, tax payers without children (or those who choose private education) are still required to pay for the costs of state primary and secondary schools and those who have made no use of the national health service are still required to pay towards its general costs. By extension, those who receive heart operations are still expected to pay for those who receive hip operations and those who oppose particular wars or even all wars are required to pay towards all military costs. Taxation operates on the principle that there is some kind of 'general good' supervised by elected politicians and funded by general taxation. A similar argument can be advanced in the case of the BBC as long as enough people believe that there is sufficient general benefit to be derived from it, and even where particular people or households do not make use of it.

As regards the second criticism and the general issue of business competition, the European Union has accepted that governments may wish to make a case for the existence of 'public service broadcasting' and may wish to fund or provide funding mechanisms for it. Thus the Amsterdam Treaty of 1997 acknowledges the importance of a 'common interest' in public service broadcasting, and notes that this must be given due consideration in the context of trade and competition issues The existence of the BBC licence fee is clearly a matter for political decision and some national newspapers (particularly in the period before the 1996 Charter renewal) and some politicians and commentators have argued against it. However, it is the contention of this submission that the public benefit that derives from licence fee funding of the BBC far outweighs the arguments of individuals not wishing to fund the BBC or of companies arguing the competition case. The very existence of the multi-channel environment provides evidence that the existence and funding of the BBC has not prevented newcomers from entering the field.

2.4. The licence fee which in part insulates the Corporation from political control also hands some element of control to government, since it is the government of the day that has the power to set the level of the annual licence fee payment as well as having, in effect, the final say in the appointment of BBC governors. The appointment of governors is considered in Section 3 below.

2.5. In the light of the history and arguments outlined above, this submission proposes two changes to the current licence fee system. Firstly, it is proposed that a BBC Council be established, outside the BBC and consisting of independent experts and other members broadly representative of society at large. This Council would have two main tasks: setting the level of the annual licence fee and supervising the process of election of BBC governors. The two appendices below give some indication of how these proposals might be implemented. Secondly, the welfare support system of income support to individuals and households should be adapted to make recipients who have been in receipt of this support for a minimum of six months eligible for an appropriate payment towards the cost of their television licence fee.

2.6. The Royal Charter should be renewed. However a new statute should be set by Parliament confirming the existence and role of the BBC in the long term. This statute will ensure appropriate accountability to parliament while protecting the BBC from unacceptable forms of political interference.

2.7. This statute will recognise the licence-fee payers as effectively the owners of the BBC but ensure that their control is exercised within a framework of parliamentary accountability. Parliamentary accountability will ensure that the licence fee payers could not decide to sell the BBC and that the BBC's role in contributing to the good of society as a whole is preserved.

2.8. Section 3 on governance, below, clarifies some of the ways in which this new sense of licence fee payer ownership can be expressed and developed.

2.9. It is recommended that the Department of Culture, Media and Sport:
(i) explore the feasibility of creating an independent BBC Council
(ii) prepare draft legislation designed to provide a legal framework for the existence and role of the BBC as a non-party-political institution serving the interests of British society as a whole.

3. Governance
3.1. At present the governors, as well as the Chair, of the BBC are appointed by the Crown. In practice this means that appointments are controlled by the government of the day, by the Prime Minister or by his or her designated representative.

The Chair and members of the governing body are seen as public appointments subject to the Nolan Committee's recommendations on standards in public life. The public appointments process in general has been improved following the work of this committee, and there is now greater transparency in the process (including the advertisement of posts, formal applications, interviews and selection according to merit and competence-based criteria). Nonetheless the process of senior appointments clearly remains subject to political influence and government control.

3.2. It is the contention of this submission that licence fee payers are the BBC's stakeholders in more than a metaphorical sense and that their sense of ownership should be established through the process of electing members of the governing body. Two options are suggested in Appendix B below. But both options are based on the principle of 'one licence fee, one vote'. Elections would be conducted approximately every three years with a built in continuity principle (that is, not all seats would be up for election at the same time). The election would be by postal ballot, with ballots and election addresses probably sent out at the same time as the licence renewal notices. The BBC Council proposed above would supervise the election and the nominations process and ensure that there were an adequate number of candidates standing for election to each seat.

3.3. Governors would, as at present, be part of the BBC but would function in a way that is independent from the day-to-day management of the organisation. Their primary duties will be to maintain the independence of the BBC, to ensure that the BBC has sufficient resources to invest in making radio and television programmes and on-line resources of high quality and to represent the interests of listeners and viewers. The governors will engage with strategic issues, meet regularly with the senior management of the BBC, be supported by an independent secretariat and research competence, receive reports on and act as the final court of appeal for the BBC's complaints process, and have a duty to represent the interests of viewers and listeners

4. Public Service Content
4.1. Impartiality The internet and the privately-owned newspaper and magazine press are characterised by the expression of a wide variety of views. However, there is a tendency to concentration of ownership in the media field and companies and individuals are (rightly) free to express their own views and to pursue their corporate interests. Most importantly, they are under no duty of 'due impartiality' in commenting on major matters of contemporary public concern and interest.

There are also some unpopular or minority views (and reflections of minority or non-market-active interests) that may not be adequately reflected in those media that are well-advertised and promoted and which reach the largest numbers of people.

The theory and practice of democracy require a well-informed electorate, and an inclusive and civilised society requires some shared norms or, at least, some shared understanding of differences and disagreements. It therefore continues to be of critical importance that viewers and listeners, considered as citizens, have access to sufficient sources of impartial news and current affairs information. Impartiality, therefore, will continue to be a key requirement of BBC programming combined with a generous scope for personal view programmes and opinionated comment.

4.2. Pluralism It follows from these arguments about the continuing importance of impartiality that the BBC, as a public service broadcaster, must support and encourage a pluralism of ideas, approaches and aesthetic forms in its programmes and on-line information. It is also important to note that pluralism must be a characteristic of fictional as well as factual programmes, and that drama as well as documentary should reflect a wide variety of experiences, beliefs and values. The principle of pluralism should also include an adequate coverage of international issues in mainstream, peak-time programmes.

4.3. Diversity The BBC must continue to provide a wide variety of types or genres of programmes and to be at the cutting edge in creating new genres or sub-genres. Programmes should continue to be offered in the following areas: news, current affairs, documentary, drama, entertainment, children's programmes, sport, arts, education, science, philosophy, religion, international affairs and programmes of interest to particular nations or regions within the United Kingdom.

4.4. Quality The BBC should continue to provide programmes of high quality across the range of genres and with sufficient financial investment to ensure that its output is fully competitive with other providers. The emphasis on quality should also support opportunities for innovation and experiment and the 'right to fail'.

4.5. Nations and Regions The BBC is an important supplier of radio and television services in Scotland, Wales and Northern Ireland as well as in the many and varied regions of England. The BBC should continue to make adequate budgetary and training provision for the development of these services and to provide appropriate competition with ITV in the provision of regional news, current affairs and programmes of regional or local interest. The recommendations of the Lyons report regarding the further devolution of BBC facilities and staff should be implemented. Existing centres of production in the English regions should be strengthened and new plans should be brought forward for working with independent producers located within under-represented regions and sub-regions. The commissioning process should ensure that under-represented voices and values in the English regions are recognised and resourced as part of the network as well as regional commissioning process.

4.6. Community Media The Communications Act of 2003 has enabled the creation of a new sector of community media in both radio and television. The BBC should be required to find appropriate ways of supporting and working in partnership with community media initiatives, and a code of practice should be agreed with community media organisations. It should be the responsibility of the BBC governors and the DCMS to ensure that this code of practice, designed to outline effective ways of partnership working, is acceptable to those working within the community media sector.

5. Investment in the Creative Industries
The BBC has been the primary source for original radio and television production in Britain and it has given some support to feature film production, both through direct investment and by developing the talent and skills of some of those who have gone on to work in feature films. More recently it has become a pace-setter for innovative work in on-line services and web-based learning. It has also acted as a patron of and investor in the arts (including music and drama) since the 1920s. The governors must ensure that the BBC plays a strategic role in the continuing development of the creative sector of the British economy with due attention paid to regional and national interests and opportunities.

6. Broadcasting and Beyond
The wide range of expert knowledge and the creative abilities of BBC staff (as well as of its commissioned producers and writers) means that the BBC is well-placed to contribute to and to even to affect the culture and ethos of the internet. While the BBC's primary duty must inevitably be towards British licence fee payers it should be encouraged to continue to take appropriate initiatives at an international level.

Appendix A: Draft Outline for a BBC Council
A.1. The Council would be independent of both the government and the BBC. The two principle duties of the Council would be:
(i) to set the level of the BBC licence fee for the coming year, based on the level of resource required by the BBC to fulfil its remit
(ii) to supervise the nominations and election process for the BBC's governing body.

A.2. The Council would be independent of both the government and the BBC. It would consist of communications experts with demonstrable knowledge and understanding of the principles of public service broadcasting and of the economics of broadcasting, together with a range of other members, broadly representative of British society.

A.3. Nominations to the Council might be made by professional associations, political parties, faith-based organisations, voluntary sector bodies, organisations seeking to represent the interests of viewers and listeners and those representing viewers and listeners with special needs (for example, for the deaf and hard of hearing, for the blind and partially sighted).

A.4. Detailed research will be required to identify appropriate bodies and the overall balance of the membership.

A.5. The expert members of the Council would have the duty to make recommendations regarding the level of the licence fee to members of the full Council.

A.6. The Council would have a modest capacity to conduct original research in connection with its two duties.

A.7. The Council would be funded by the Department of Culture, Media and Sport.

A.8. The Council would have powers to fund independent organisations whose specific objectives were to represent and support the interests of viewers and listeners considered as citizens rather than as consumers.

A.9. The annual report of the Council would be presented to Parliament.

Appendix B: Draft Outline for the Election of the BBC Governors
B. 1. In both Option 1 and Option 2 (below) the basic principles and method of election remain the same:
(i) each licence fee payer would have the right to cast one vote;
(ii) the new and independent BBC Council would be responsible for supervising the election and managing the nominations process;
(iii) governors would have the right to stand for a maximum of three continuous terms of office;
(iv) elections would take place every three years, but not all seats would be up for election at the same time;
(v) governors would normally elect their Chair and Deputy Chair on a three-yearly cycle; there would also be provision for appointing a new chair from outside the board;
(vi) there would normally be twelve seats on the governing body.

Option 1: Election of All Members of the Governing Body
B.2.1. In this Option the independent BBC Council would supervise the election of 100 per cent of the seats on the governing body (a total of twelve seats).

B.2.2. The normal period of office would be three years (with the possibility of re-election as indicated above)

B.2.3. The elections would be phased so that not all seats would be up for election at the same time.

B.2.4. The Council would consult with the DCMS and the public on drawing up the constituencies of governorships. There would be a requirement for at least four governors (one for each nation/region) to take a special interest in matters of concern to licence fee payers in Scotland, in Wales, in Northern Ireland and in England.

Option 2: Election of Fifty Per Cent of the Members of the Governing Body
B.3.1. In this option the new, independent BBC Council would supervise the elections for half of the seats on the BBC governing body. Arrangements would be as above but with a total of six seats to be elected.

B.3.2. The Council would consult with the DCMS and the public on drawing up the constituencies for the elected governorships.

B.3.3. Un-elected governor posts would be subject to the existing public appointments process.

Contact:

Sylvia Harvey
Professor of Broadcasting Policy
Principal Associate Director
AHRB Centre for British Film and Television Studies
Faculty of Media and Humanities
University of Lincoln
Brayford Pool
Lincoln LN6 7TS

Tel: 01522 886431
Email: sharvey@lincoln.ac.uk