Thank you very much for the invitation to appear before the committee today. You will recall that Kevin Bakhurst and I came to the committee in February, when we discussed some of the main features of Ofcom becoming the first independent regulator of the BBC. We touched then on the separation of governance and regulation and on our role in setting the formal regulatory requirements. We also set out some of our early thinking on how we would hold the BBC to account.
Between March and July this year, we consulted on those principles in our draft operating licence and performance measures. The end result was our statement, “Holding the BBC to account for delivering for audiences: Performance Measures”, which was published on 13 October. The statement sets out the first operating licence and accompanying performance framework for the BBC and covers the processes for setting and amending the licence in the future. There are some detailed annexes that explain how we took account of consultation responses and of the BBC’s interim annual plan, which it published at the beginning of July.
We also published a document called “The BBC’s services: audiences in Scotland”, in which people can find in a single place all the regulatory conditions as they apply to Scotland. I think that members have it in your papers for today’s committee meeting.
Under our performance measurement framework, we will publish an annual research report that will look at how the BBC has been delivering the mission and public purposes through the United Kingdom public services. The evidence that is gathered for the preparation of the report will ensure that any future changes to the licence are fully evidenced. We are committed to updating the audiences in Scotland document as the licence evolves and the regulatory conditions relating to Scotland change.
The BBC has a responsibility to deliver content that meets the needs of audiences across all of the United Kingdom. As was noted in the Scottish Parliament information centre’s briefing for today’s session, two principal areas of the BBC’s public purposes are for it to provide
“output and services that meet the needs of the United Kingdom’s nations, regions and communities”
and to
“invest in the creative economies of each of the nations and contribute to their development”.
We have set objectives for the BBC in relation to the nations and regions. It must accurately represent and authentically portray all audience groups. It must also distribute its production resources and support creative industries across the UK. Our approach is intended to provide a greater focus on production in each nation of the UK, and on guaranteed levels of programmes for the nations and regions, including Scotland.
At February’s committee meeting, we discussed Ofcom’s out-of-London production guidance. We have now committed to reviewing the guidance in the light of our new BBC duties and broader developments in the UK production landscape. We are in the middle of scoping the project and recently had two very helpful sessions in Glasgow with representatives from broadcasters, the independent production sector in Scotland and our own advisory committee for Scotland. Our intention is to publish a fuller call for evidence in the first quarter of next year.
Our new responsibilities have also required us to consult on procedures for enforcement of BBC competition requirements. The committee will be well aware of the proposals for a new BBC Scotland channel. We discussed that in February, after the BBC itself gave evidence. It will be the first test of our approach and processes, whereby Ofcom must consider whether
“the public value of the proposed change justifies any adverse impact on fair and effective competition”.
We will conduct our assessment in two phases. In the first, which we will complete in the first half of January 2018, we will decide whether we agree with the BBC’s view that its proposal represents a material change to its public services. Last week, on the announcement of our first phase, after the BBC had published its public interest test, we had some initial conversations in Edinburgh with key stakeholders who may be affected by the proposal. That will inform our decision about materiality.
There are two types of assessment that we could undertake in phase two. Both involve public consultation. The first is called a BBC competition assessment, which can take up to six months, and is conducted if we decide that the BBC’s proposal raises large, complex or particularly contentious issues. The second is called a shorter assessment. We will generally conduct one of those if we think that the BBC’s proposal involves a more targeted set of issues that we would expect to be resolved in a shorter period.
I will close by touching briefly on diversity. Ofcom expects the BBC to lead the way in addressing underrepresentation. In our new operating licence we have set a range of requirements to ensure that the BBC is publicly accountable for achieving its workforce diversity targets. Those include that 15 per cent of staff are to be from ethnic minority groups and 50 per cent of all staff and leadership roles are to be held by women by 2020.
Under the licence, the BBC must also measure and report annually on its on-screen and on-air diversity. We will scrutinise the BBC’s performance to assess whether it is making sufficient progress in serving the UK’s diverse communities, and whether audiences themselves are satisfied.
I hope that that is a useful update for the committee on the current state of play. Kevin Bakhurst and I look forward to discussing those issues with members.