Over the next 10 days, the BBC will, once again, be at the heart of the nation’s communal life. For the millions of people watching the coronation on Saturday, and the concert on Sunday, most will take the broadcasts and their quality for granted. Why wouldn’t they? It’ll be the same again next week as Liverpool yet again becomes a global capital of music, hosting the inimitable Eurovision song contest.
As with the funeral of Queen Elizabeth, or with the additional public services provided during Covid, the BBC keeps on demonstrating its crucial role as part of this nation’s infrastructure. But, like many issues to do with infrastructure, problems are often ignored until it’s too late and the cracks have begun to show.
Of course it was right in the past few months for attention to have concentrated on the future of the former chair of the BBC, Richard Sharp. The perception of the BBC’s editorial independence is as important as the reality of it. At the moment the government is carrying out the midterm review of the way the BBC is governed and regulated.
It should make two changes right away. The makeup of the panel supervising the appointment of the new chair should be made public along with its members’ political allegiances, if any. And second, the board of the BBC should be asked to approve the proposed candidate alongside the MPs on the Department for Culture, Media and Sport select committee. After all, she or he has to have the confidence of the board in order to be effective.
But although this is important, a debate about the future of the BBC, its future role and its funding should also be taking place. And it is not. Last week, while all eyes were on the future of the chairman, the Commons public accounts committee (PAC) published a short paper on the funding issues facing the BBC. Those issues are tough, to put it mildly – and, to my mind, point to a potential diminution by stealth of what the BBC does.
The licence fee, which pays for the BBC, yields £3.8bn a year – for all the TV channels, radio stations, online products and world and local services, it’s about 44p a household each day. The latest licence fee settlement means the BBC‘s funding is held flat for two years at a time of high inflation. That will leave the BBC having to find, by its own calculation, about £400m a year by 2027-28 simply to stand still. And there’s an even higher inflation rate, it’s generally agreed, in the media. But, of course, it can’t stand still. So in addition it needs to find up to another £500m a year to invest in its plans for a world that is totally digital. That is quite a challenge.
When you’re running the BBC, you realise your room for manoeuvre is limited. Of course, you can be more efficient. But the National Audit Office praised the BBC for overachieving against its savings targets in the period up to 2021, and said that overhead costs – at about 5% of the budget – “now compare well against comparable organisations”. But it also cautioned that from now on only about a third of annual savings could come from productivity. The rest will have to be from cuts in programmes and services.
Can you grow commercial income? When I was director general, I set up BBC Studios as a programme-making arm of the corporation, allowing it to sell programmes to all comers. That’s why the brilliant and genuinely world-beating Natural History Unit can make programmes not just for the BBC but for others, such as Discovery or Apple. Studios turnover has grown from about £1.2bn when we started to a bit under £2bn now.
But however fast you grow revenues, the profits you can return to the public service can never match the funding gap the corporation is facing.
And then there’s the fact that, as the PAC reported, you can’t move too quickly to a digital-only future, which could be cheaper for the corporation in the long term, because of the risk of leaving behind people with poor or no access to the digital world. After all, everybody pays for the BBC, therefore everybody should get something of value from it. But it’s also interesting that people rather like services on TV and radio – today, the majority of the time audiences spend with the BBC is through traditional means. So, like many longstanding media organisations, the BBC has to continue riding two horses.
Yet I would argue that what we want from the BBC is needed now more than ever. Amid the noise and mayhem of an increasingly polarised and fragmented world, every person, whoever they are, wherever they live, rich or poor, has a fundamental right to information on which they can base their lives; information and news that they can trust. The BBC also provides local services that others increasingly do not, giving identity to communities, regions and nations. And of course, there’s one of Britain’s greatest soft-power assets, the BBC World Service, where the total reach globally is just under half a billion people each week.
The BBC is also one of the country’s major cultural assets and anchors. That’s why there was so much anger and bewilderment at the proposal to axe the BBC Singers. From the Proms, to dramas like Happy Valley, to entertainment shows like The Traitors or my own particular favourite, Race Across the World, the BBC gives expression and helps to bring cohesion to our national identity. And as a newly minted grandparent, I’m delighted that my granddaughter, as she grows up, will be able to watch children’s services free from ads, and eventually join the 75% of secondary schoolchildren who use BBC Bitesize.
The BBC needs to carry on playing a central role in the future economic growth of this country. There’s no doubt it’s a critical reason why the creative industries are world class here. The BBC is the biggest single investor in original UK content. Every £1 of the BBC’s economic activity generates a total of £2.63 in the economy. About half of the BBC’s total economic contribution is generated outside London – far higher than the industry average of 20% – and it’s growing.
None of what the BBC does should be allowed to diminish or wither away without proper debate and discussion. Of course the BBC needs to change and adapt. The way of paying for it also needs to be fairer. But all of this should be in the context of what we, the people who pay for it, want it to do. And that debate needs to begin now.
Tony Hall is a crossbench peer and a former BBC director general
