Culture, Tourism, Europe and External Affairs Committee

Meeting date: Thursday, November 8, 2018

Official Report 778KB pdf

---

BBC (Annual Report and Accounts)

Our second item of business is an evidence session with the BBC. I welcome the witnesses: Anne Bulford, deputy director general of the BBC; Donalda MacKinnon, the director of BBC Scotland; and Steve Morrison, the member for Scotland on the BBC board. I invite Steve Morrison to make a short opening statement.

Good morning. Thank you for inviting us here today, convener. I hardly need to make introductions, but for those of you who have not met us I will do so. I am Steve Morrison and I am the member for Scotland on the BBC board. I have worked in television for 45 years, predominantly at Granada, where I was the chief executive. I went on to found All3Media, which became the largest independent group of television production companies in the UK and currently has 20 companies around the world.

I am joined by colleagues who have appeared before the committee on previous occasions. Anne Bulford is the deputy director general of the BBC and is responsible for finance, human resources, operations, design and engineering, marketing and audiences, and much more. You all know Donalda MacKinnon, who is the director of BBC Scotland and is responsible for its strategic direction and the programmes and services produced in Scotland.

The role of the Scottish member on the BBC board is to ensure that the views of the Scottish population are represented and reflected in the BBC’s output and to engage with stakeholders and licence fee payers in Scotland to ensure that the BBC assesses and meets the needs of our diverse community. As a member of the board, I am also involved in discussion and decision making on the global issues facing the BBC. Anne Bulford also sits on the main BBC board.

I chair the Scotland committee, which oversees and monitors BBC Scotland’s strategy and output. I also see it as part of my role to help BBC Scotland wherever I can and to encourage it to be bold and ambitious in growing its output, both in Scotland and the UK and in the wider world.

Before I was appointed, the BBC director general, Tony Hall, announced plans for significant growth in the BBC’s output in Scotland, including a new BBC channel that is launching in February 2019 and will create 900 hours of original content a year, and an enhanced BBC Alba, with new weekend news and an ambition to create an additional 100 hours of original programmes. After February, Scotland will be the only nation in the UK with two of its own dedicated BBC channels.

That growth will bring significant new jobs: 80 extra roles in journalism, 50 of which have already been appointed; 88 new jobs in digital and engineering by the end of March 2019; and additional posts to support the new channel and growth in other parts of the organisation. That will take us to around 270 new posts by the end of March 2019, including 10 trainee journalists and 10 apprentices. That also includes the BBC funding of 21 local democracy reporters, who work on local newspapers around Scotland.

When I was appointed, I was struck by the new charter responsibility for the BBC to help grow the creative industries in the nations and regions. Consequently, I have played a part in engaging with Creative Scotland and encouraging it to strengthen its television and screen content strategy and to form a successful partnership with the BBC. A new memorandum of understanding between the BBC and Creative Scotland is nearly ready to be introduced. I was pleased to see the Scottish Government put an extra £10 million into Creative Scotland’s budget to help drive that new strategy.

As the committee will know, at the same time, Channel 4 is setting up a new hub in Glasgow, and the National Film and Television School Scotland has been set up in Pacific Quay, with help from the BBC and the Scottish Government. Speaking as the National Film and Television School’s first graduate, I am delighted about that new development, which you will hear more about from Donalda MacKinnon.

Overall, I am very proud to be the board member for Scotland at the point of the BBC’s biggest investment in programmes and services for Scotland in a generation.

Thank you for that comprehensive opening statement. I welcome you to your position on the board.

As you will be aware, the committee has raised the issue of the amount of the BBC licence fee that is spent in Scotland. We raised it in our recent report on the screen sector in Scotland and said that it is too low, and we have raised it when the BBC comes before us annually to talk about its accounts.

This year, the percentage amount of the licence fee spent in Scotland has actually fallen compared to last year and remains way behind the percentage of the fee spent in Wales and Northern Ireland. Just over 68 per cent of the fee is spent in Scotland, compared to 92.3 per cent in Wales and 88 per cent in Northern Ireland. Given that the issue comes up repeatedly when the BBC comes before this committee, why is the situation not improving?

In fact, the situation is improving. In 2015-16, the percentage of the licence fee spent in Scotland was 65.9 per cent; in 2017-18, it will be 68.8 per cent; and in the year that we are in, 2018-19, it will be 76.7 per cent. By the time that the new BBC channel has transmitted for a year, the percentage will be nudging towards 80 per cent.

The reason for a network drop in television spend in 2017-18 is largely because of delayed transmissions of two programmes: “Ordeal by Innocence”, which you will remember was due to go out at Christmas, was delayed due to recasting and was transmitted at Easter; and “Still Game”, because we did not have as many episodes in the calendar year as were scheduled. However, our calculation is that over the three years that the DG promised till April 2019, the BBC will have spent an annual average of £20 million in Scotland by the end of March 2019. It might be useful to hand over to Donalda MacKinnon to give you an illustration of the kind of programmes that we are making.

That might be useful, but I would rather stay on this point, if you do not mind, because the difference between Scotland, Wales and Northern Ireland is very striking. Just to repeat: the percentage figure for Scotland is 68.8 per cent and that for Wales is 92.3 per cent.

I can answer that point very clearly. There is no real comparison between Scotland, Wales and Northern Ireland. Wales has been chosen by the BBC as a federal centre for drama, so you will know that programmes such as “Casualty”, “Doctor Who” and “Sherlock” are now all produced out of Cardiff. Those programmes are not portrayal programmes about Wales; they are regular programmes and standards that the BBC has made for many years. The BBC chose to establish a major drama production centre in Cardiff; previously, those programmes were made elsewhere. That is why Wales has a disproportionate amount of spend.

Northern Ireland is totally different. It has a much smaller area than Scotland but is still obliged to make local news and current affairs programmes, which cost roughly the same to make whatever the size of the population. It is therefore quite natural that the percentage of spend would be higher in a smaller area.

May I give my personal opinion on this? I do not believe that the BBC should end up trying to invest or put on the screen 100 per cent of the licence fee in a form of quota. I believe that we are progressing towards a percentage in Scotland that will probably be around 80 per cent, but I think that people in Scotland appreciate big national and international services and programmes such as the BBC World Service, the Commonwealth games, the European athletics championships and “Blue Planet”; none of those programmes count in the funny way in which programme hours are calculated, even if, as in the case of the European athletics championships, half of the programmes were actually produced in Scotland. We have to allow for certain major programmes to be funded throughout the UK, which includes Scottish participation. This is a creative business, and I think that it is important to give the commissioners some headroom, so that they can commission the best ideas, the best drama and the best comedies, from wherever they come.

Having said that, I think that we are all pleased to develop the percentage and increase the investment in Scotland, as I said in my opening remarks, because in the end what we all want is a larger, sustainable, indigenous creative industry of television production in Scotland. I think that later in this interchange we should come back to that aim and the ways in which we achieve it, because we are all really working in the same direction.

I was really surprised when you said that the reason for the high spend in Wales is returning network dramas. This committee, the screen sector leadership group and just about every major commentator in Scotland has commented on the lack of returning high-quality drama, which is pushing spend down in Scotland, so I was surprised that you used that issue as a justification for the figures. The figures in Scotland are poor because we do not have those kinds of production here, and we should have them.

I am all in favour of our having more returnable dramas in Scotland. The point that I was making was that if we take three bankers—“Casualty”, “Sherlock” and “Doctor Who”—and put them in one place, we will get high numbers. Those dramas could be made anywhere, because they are not particularly local to Wales.

It should be our objective to find dramas that are returning, as Northern Ireland did with “Line of Duty”. “Shetland” is about to go into its fifth series. It should be—and I am sure that it is—our drama commissioner’s objective to find long-running returning series. That is the gold dust of all television commissioning.

In our inquiry into the screen sector, we found that returnable dramas create many jobs in the creative economy. You now have an obligation in your charter to develop the creative economies of the nations.

The figures for BBC head count as a share of total population of each nation are interesting. In Scotland the head count is exactly the same as it is in Wales, but it is lower as a percentage of the population, so the BBC employs a much lower proportion of the population in Scotland than is the case in Wales.

As I said in my introductory remarks, the BBC in Scotland is adding 270 new posts. That is a very large percentage of the existing head count and will increase it dramatically.

As I explained, the reason why Wales has a disproportionate number is that it has a very large UK drama centre, which requires a lot of people to work on those programmes.

I am perfectly happy to share with you the objective of finding long-running, successful dramas and comedies for Scotland and from Scotland for the UK network—that is what we are all keen to do. In fact, there has been a growth in drama coming out of BBC Scotland over the past three or four years.

I would have thought that your job on the BBC board would be to keep pushing for more spend in Scotland, rather than justify the disparity, as you are doing.

As you can imagine, I am quite a pushy person.

The overall context is very challenging. As you know, the UK Government has transferred to the BBC the responsibility for the over-75s’ free licences, and if that concession continued it would take up 20 per cent of the BBC’s licence fee. I cannot really comment on that, because we are going to go into a public consultation on the matter and the board will then discuss it. However, in that overall context, the fact is that over the past three years Scotland has received an extra £40 million a year, when other nations and regions have had to cut their resources.

10:15  

But our percentage of the licence fee spend has gone down, and we raise considerably more licence fee than they do in Wales—

No. As I have explained, it has gone down only as a result of timing issues in 2017-18. It went up from 65.9 per cent in 2015-16 to 72.4 per cent in 2016-17. In 2017-18, the figure is 68.8 per cent; in 2018-19, it is forecast to be 76.7 per cent.

We will be able to talk to you about that next year.

When we meet next year.

Yes.

I will initially focus on BBC news and current affairs output and on a couple of instances that indicate a wider issue. Earlier this year, “Newsnight” ran a package from the Institute of Economic Affairs, where a member of its staff advocated the privatisation of the national health service. The IEA is one of the least transparent think tanks in Europe. It is registered as an education charity, but there is deep scepticism about that. We know that the institute is funded by big tobacco companies, for example, which advocate against public health measures and clearly have a vested interest in policies related to healthcare. We know that the head of the IEA gave £32,000 to the now Secretary of State for Health and Social Care in the UK Government. Its head of health policy claimed:

“All doctors are communists”.

It was allowed to run a package, through the BBC, advocating the privatisation of the NHS. Given that the IEA has no donor transparency, why was the BBC giving it a platform to do that?

I did not see that item. If you wish, I could examine it and write back to you about the circumstances.

That would be helpful, but I want to stick with this issue now, because it is indicative of a wider issue. I would like you to explain to me—perhaps Anne Bulford can explain it—why the BBC offers platforms to organisations that have no donor transparency when, as is the case here, there is clear suspicion that private healthcare companies that have a vested interest in what the package advocated are funding the organisation that was given the platform. What are the BBC’s rules on those that it has on—either as guests or, in this case, as advocates—when there is no transparency in who funds them?

As I said, I have not seen the item, so I cannot really comment on it. In general, the BBC has very long-standing, robust processes for ensuring impartiality and balance, particularly in news and current affairs. We have a rigorous system if anything comes up that goes outside those rules—

I am asking you to explain why organisations that have no transparency in their financial arrangements are allowed on to the BBC to comment on issues of public policy that are clearly related to the organisations that are widely believed to be funding them.

Ross, I did not see the item; I have no idea—

We are not talking about the specific item anymore.

No. I do not want to comment on the general issue, because I have not seen that particular item.

In that case, I ask Anne Bulford to comment on the general issue.

The editorial guidelines on the selection of guests is an area that we can deal with in more detail, but I am not able to comment on the specific. Bringing organisations on and challenging their views is an important part of what we do. I do not agree that we invite organisations on to our news programmes to give them a platform; they are brought on to our programmes for their views to be challenged, for them to be interviewed and to bring out what they are advocating. If the context of those views is felt not to be sufficiently clear or is not made clear to our audience, and if the challenge seems to be inappropriate in some way, we have channels to enable people to raise complaints about that, and we would consider such complaints properly.

What about before it gets to the complaints process? What I am asking, again, is why the BBC, as a general rule, allows organisations that have no transparency in their financial arrangements, such as the IEA and the TaxPayers Alliance—that is not a membership organisation that represents tax payers; it is just a company owned by two guys—to comment on issues of public policy that are clearly related to those who are widely believed to be funding them?

Our job is to enable a range of views to be put forward and for those views to be challenged through our journalism. We can look at the very specific point that you raise and reply on that. It is not an issue that has been raised with me before. My clear understanding of what we seek to do in our journalism is to challenge, not to provide a platform.

I do not regard that as a satisfactory answer, but I do not think that we are going to get any further.

On a related but non-financing issue, you will be aware of the controversy around the invitation of the white nationalist Steve Bannon to a BBC European Broadcasting Union event that the First Minister has withdrawn from.

At what point do you have to balance what you would regard as the public interest in challenging views—arguments which have been rehearsed and which I would accept—with the issue of views that are beyond the pale of acceptable public debate, no matter how wide you try to have the spectrum for that.

The First Minister said that the BBC’s response to her described Mr Bannon as a

“powerful and influential figure . . . promoting an anti-elite movement”.

He promotes a pro-white movement. He is a white nationalist. At what point is someone beyond the pale? The BBC would not have someone on who advocates Holocaust denial. Steve Bannon has associated with Holocaust deniers. Where does the line get drawn?

First, we respect the First Minister’s decision not to participate in the News Exchange conference. It was reported in the press that BBC Scotland had invited Steve Bannon. That is not the case. The conference, as Mr Greer rightly pointed out, is an EBU conference, and the BBC is a member. A News Exchange committee extends invitations to a variety of speakers and panellists.

It was decided that it was important in a conference about journalism that we go to the heart of our journalistic practice, which is about holding people to account, interrogating and scrutiny. The committee felt that, as Steve Bannon was an adviser to the President of the United States, it was right to invite him. That is why he will be there.

Do you recognise the concern about this, based not just on Mr Bannon’s history as a white nationalist but the long history of the platforming of those who hold extreme far-right views under the guise of challenging them on those views, which has resulted in the opposite. We have a solid century’s worth of evidence of that being the case.

I recognise the concern. It is not the BBC’s intention to offer platforms to people who have particularly extreme views. It is about holding them to account, interrogating, scrutinising and explaining to others what they are about.

That is not the game that they play, and I think that in this case you are being played.

Might I ask a supplementary on that point?

It will have to be very quick.

Is it not the case that Nick Griffin’s appearance on “Question Time” ultimately led to the effective destruction of his political party by exposing his ludicrous views to the rest of the United Kingdom, who were perhaps not directly aware of them? The party went into a precipitous decline as a result.

Hear, hear.

It did not.

I am not sure that that was a question. We will move on.

Mr Morrison referred to BBC Alba in his introduction and said that there were plans for a new weekend news programme and an additional 100 hours of programming, although I do not know over what period or whether it will be a one-off.

In the report before us, we can see that during the past year, there has been an overall decrease of 8.6 per cent in genres such as drama, comedy, entertainment, music and art. There has also been a reduction of 8.7 per cent in children’s programmes. Why is that? Are the plans that Mr Morrison referred to just bringing us back to where we were? That seems a considerable drop in those genres.

Donalda MacKinnon can talk in more detail about BBC Alba.

During the past three years, we have increased our investment in BBC Alba from £5.5 million a year to £7.9 million last year, and we will spend £9.1 million this year. I know that the committee’s current brief is concerned with last year’s figures, not this year’s.

I recognise that you have referred to the weekend news and the extra hours of programming, particularly for children. I ask Donalda MacKinnon to elaborate on that.

In any given year, there will be fluctuations in the numbers of repeats of programmes that are transmitted on BBC Alba in the genres that Annabelle Ewing has identified. As Steve Morrison said, we have continued to increase our investment in BBC Alba. We introduced weekend news on television and Radio nan Gàidheal, to coincide with BBC Alba’s 10th anniversary in September. As I said when I appeared before the committee more than a year ago, I am delighted that we are working very hard and doing everything in our power to ensure that there is read-across from the new investment in BBC Alba in the shape that I intended, which is another 100 hours. Margaret Mary Murray, who heads up—

I am sorry to interrupt. We are talking about 100 hours but what does that mean in practice?

Two hours a week.

I do not know. Could Donalda MacKinnon explain what 100 hours means? Are we talking about a week, a month or a year?

Broadly speaking, there might be more hours in one week than in another.

But over what period?

Over a year.

One hundred hours over a year. That means four days and a bit over a year. Have I got my arithmetic right?

It is two hours a week of original programmes.

Okay. I just wanted to put that in some context. Please continue.

We are significantly increasing the amount of origination on BBC Alba, which has been a worry and a cause of concern for the Gaelic-speaking audience who want more originated programmes rather than repeats.

We have also been working hard with others across the BBC to extend the value of what we do elsewhere. For example, our children’s department, which is based in Salford, has introduced new children’s programmes and originations—again, to coincide with the 10th anniversary of BBC Alba—which will come up in next year’s figures. We are looking at roughly 60 hours a year of additional children’s originations. Over and above that, there will be some reversioning in that area. One of BBC Alba’s strategic ambitions is to concentrate on children and young people, given the growth in the number of Gaelic speakers in that age group.

We have not seen the figures, but Steve Morrison referred to the overall budget increase of £2 million or so over the past year. I imagine that that increase represents a couple of years’ salary for some of the BBC’s highest-paid presenters and executives. Be that as it may, I am concerned about the potential impacts on the screen sector in Scotland and on all the excellent technicians and production teams. What analysis does the BBC in Scotland carry out before making decisions about output and so forth? In this instance, we are talking about BBC Alba. What analysis is done on the potential impacts of such decisions on the screen sector in Scotland?

We are working with about 75 different companies on BBC Alba and the new Scotland channel. That will ensure a lot of job creation in the market, over and above the job creation that comes from what we do in the BBC, which Steve Morrison mentioned. BBC Alba commissions about 75 per cent—sometimes more than that—of its output from independent production companies. Aside from the spend on the programmes, there is the multiplier effect—every £1 that is spent translates into at least £2 of value. The investment is significant.

We have lots of training schemes, so we are encouraging people to learn skills. Aside from the National Film and Television School, which Steve Morrison mentioned, we also have apprentices and journalism trainees. We have recruited for about 51 of the 80 new journalism positions that are needed for the new nine o’clock news programme.

10:30  

One of the first things that I was fortunate to do when I was appointed involved being taken by Margaret Mary Murray to Inverness and Skye. They were making the Gaelic drama “Bannan” in the Gaelic-speaking further education college in Skye. It has been very successful and was, for the size of that channel, a very significant undertaking and much more expensive than you would expect.

We hear what you are saying today, but obviously the proof will be in the pudding. Again, we look forward to seeing where we will be next year.

I would also like to say—

We will have to move on, Ms MacKinnon, because a lot of members wish to come in.

The witnesses have talked about being ambitious and bold. However, we have heard on a number of occasions that there seems to have been a decrease in some areas, particularly in local content. Why have things been prioritised in that way?

The local spend for this year is £0.9 million down from that in 2016-17 and 2017-18. In 2016-17, the figures benefited from two series of “Two Doors Down” being transmitted in that financial year, compared to one series being transmitted in 2017-18. The cost of comedy is such that not having a series of comedy would easily take up such a sum of money. In addition, the transmission of series 8 of “Still Game” crossed the two financial years, with two episodes transmitting in financial year 2018-19. That is not the year that you are referring to, but it was just an accident of timing. The availability of talent just pushed two episodes out of one financial year into another. There is therefore no intent to reduce the local spend—in fact, quite the opposite.

You talk about the availability of talent. One of the biggest issues that the BBC has faced of late is the gender pay gap, which has rocked the BBC, shocked the community at large and damaged the BBC’s reputation. How is BBC Scotland tackling that issue to ensure that we here in Scotland are seen as managing the crisis that the BBC now faces?

I ask Anne Bulford and Donalda MacKinnon to respond to that, because they have strong responsibilities in that area.

In the financial year that we are looking at, we reported a reduction in the gender pay gap across the whole BBC from 9.3 to 7.6 per cent. That is still not where we want to be and we are working to drive it down further, but it represents some good progress in the year.

The gender pay gap in Scotland was a bit lower when we reported in the previous year. We do not collect, audit and take the gender pay gap figures right down to every part of the organisation because it is a statutory reporting mechanism that reports at a point in time. However, the gender pay gap in Scotland was a bit lower than that of the overall BBC, based on our internal estimates, and it has similarly come down over the years. That is therefore the position on the gender pay gap.

As in many organisations, the majority of the gender pay gap is a result of structural issues. There are two big drivers of that, one of which is that there is still an imbalance in the number of women who are in senior leadership roles. Overall, the representation of women at the BBC is at about 48 per cent, but the figure for women in senior leadership groups is lower at about 42 or 43 per cent.

The second structural issue is that there are not enough women in some of the higher-paid jobs, particularly in science, technology, engineering and mathematics-based technology jobs. We have that challenge, along with everybody else.

One of the things that I think is very encouraging is the new jobs in Scotland that Steve Morrison referred to at the start of this evidence session. Approximately 90 of those jobs are in technology, which is great, because new technologies and digital technologies at BBC are growing. About 40 per cent of the roles that have been recruited for so far have been given to women, which is a really good improvement.

The BBC is therefore working hard on all issues that drive the gender pay gap. The structural issue regarding what we need to do to encourage women to progress through the organisation into more senior roles and into areas of the BBC in which they are underrepresented—in some cases, where they are higher paid—was at the heart of the career progression study that Donalda MacKinnon led from Scotland on behalf of the whole BBC.

That was one of five studies that we did with our staff, through which we consulted widely on barriers to progress. We have completed similar studies in other areas. This week, we published our review of disabilities, which is a project that I led on. We carried out a review of social inclusion, which was led by my colleague Alan Davey, who runs Radio 3; we did a review of black, Asian and minority ethnic people, which was led by Tim Davie, who is responsible for BBC Studios, and who sits on the main board with me; and we did a review of lesbian, gay, bisexual and transgender.

The most important work, which is pertinent to your question, was that which was undertaken successfully by Donalda MacKinnon. Perhaps she could talk about that and about some of the local initiatives on progression in Scotland.

As Anne Bulford said, I undertook that piece of work on behalf of the BBC. I consulted widely across the BBC, and not just in this country but around the world. We came up with 33 recommendations, which loosely fall under three themes. One theme is how we support career progression. When we were working out how we do that, we first had to identify why there is such attrition at particular levels or times in people’s careers. Usually that happens around the time when women are having children and leaving for maternity leave and either not returning or, indeed, not applying for senior leadership positions. We have recommended that leadership and management training are offered at every level.

Another theme is flexible working. We want to offer flexible working not just to women but to men, so that we make it the default position across the BBC.

Another theme is recruitment. We have a particular opportunity in Scotland to experiment and pilot how we go about recruiting. With colleagues elsewhere in the BBC who were also looking at the issue, we have undertaken to increase our targets for all the protected characteristics to which Anne Bulford referred, particularly in respect of gender balance, in relation to all the new positions. In our news recruitment so far, 52 per cent of the roles have gone to women. Someone recently asked me whether we are in danger of harming quality or whether we are recruiting the right people by making such interventions. Our approach adheres to all kinds of equality legislation; furthermore, we are sourcing excellent women, who will be brilliant in the jobs to which they have been appointed.

You have identified that you are tackling the issue. You have been late to the table in some respects, and in comparison with other organisations. You are learning from other organisations about what you can achieve and how you can progress. How will that work eventually be audited and scrutinised, so that you can measure whether your actions last and are not just a blip in the system or an attempt to support a mechanism to enhance the position for a short time?

We have already set our targets for 2020.

There are a few levels. The statutory pay gap is published annually, and it is audited. That is a hard measure. We disclose the people who are paid the most from the licence fee, and that measure is also monitored. We can speak more about that, if that would be helpful.

The executive board also has recommendations for each of the studies and a consolidated view of them, so that we can regularly monitor progress against those actions. The BBC board can take additional assurance on that as needs be. Ultimately, the measure will be that our targets for representation are achieved.

We are all curious to know how many women at BBC Scotland are paid less than their male counterparts across the BBC as a whole for doing effectively the same job? What is the scale of the problem? What is the pay gap at BBC Scotland?

The gender pay gap in BBC Scotland is around 7.4 per cent.

Yes, but we are talking about individual people’s salaries. How many women are affected?

The position in terms of looking at pay and questions of equal pay, which is of course different from the gender pay gap issue that is at the heart of your question as I understand it, is that we have undertaken fundamental reform of the way in which we manage pay in the BBC.

I have listened to what you have said about that, and it is all positive, although it should be speeded up, but I am asking another question. Do you not know how many women are affected at BBC Scotland?

I can tell you how many women have outstanding questions with us about their pay that we have not yet worked through. At the moment, 12 women at BBC Scotland have asked us to look at their pay in the way that we are seeking to do. Our mechanism is to audit and check, and if we find issues, we correct them. That is at the heart of the reform of our pay and conditions that we have undertaken.

In addition, anybody across the BBC—men or women—can raise questions about their pay, name comparators and ask us to look at those. Many queries have come up across the whole of the BBC about that. The vast majority are very straightforward—“Please check my pay”—but some involve much more serious questions about equal pay that date back over many years, as everyone will be aware. We deal with those questions as they come up and seek to resolve them.

I look at the progress on cases every week in an effort to progress and speed them up because I want those cases to be dealt with as quickly as possible, just as everyone does. When I looked at the figures at the end of last week, 12 people in Scotland—I believe that they are all women—have asked us to look at their pay through the informal resolution stage. I do not know whether some of those will result in pay increases, either forwards or backwards, until that work is complete. Four women in Scotland have asked us to move on to the more formal grievance stage, in which an independent person sits alongside a BBC case manager from outside of the division looking at the case.

That does not answer your question, because I do not know the outcome of those cases. However, those are the cases where the question is being raised right now.

We will wait and see what happens. Obviously, it is a shame that the BBC has taken so long to deal with the muddle that has been created.

Can you clarify that there are 16 cases at the moment?

Yes. There are 16 cases under review at the moment.

Thank you.

They are at different stages. I know that you want to move through the agenda, convener, but I want to be clear that when we speak about informal resolution, we are not talking about something that lacks rigour; it is a serious piece of work with HR professionals and legal advice is taken when necessary to consider the issues carefully, however the question is framed. When the case moves on to the formal stage, it goes under the BBC’s internal formal grievance policy and an independent person is brought in to look at the questions that have been raised.

Thank you.

Good morning, panel. I think that the value for money that UK audiences get from the licence fee is tremendous. That is not said enough. I subscribe to all manner of commercial content providers—Netflix, Sky, Virgin, and so on—and I think that £150 for the breadth of content that we get is excellent value.

That said, however, Ofcom and others have criticised the BBC for its inability to reach out to new and younger audiences. In fact, one in eight young people in the UK accesses no BBC content whatsoever, although they are, I presume, still liable for their share of the licence fee. I appreciate that there have been developments for BBC 3 and that there is a targeted push with new technical developments such as the BBC Sounds app, but those will not on their own address the fundamental—or existential—problem that the BBC has of younger audiences shifting to commercial content providers. What are you doing to address that?

The main board was the first part of the organisation, because we get monthly audience reports, to begin to examine that situation. We announced in our annual report that that shift is, as Jamie Greene said, one of the biggest issues that we are considering and working out how to correct. We agree that the dropping off of young viewers is a very important challenge for the future of the BBC. That said, the BBC is actually first among media organisations in that young viewers spend most time watching it. We are losing viewers, but we are also still retaining viewers.

10:45  

Last week, we took the Scotland committee to Dundee. After the committee meeting, we had an audience engagement session with about 25 18 to 34-year-olds, whom we asked why they are not watching the BBC. It turned out that they had watched BBC programmes that they had forgotten about, or had absorbed and liked but had not watched on a BBC screen—they had watched them on Netflix or a social media screen. There is a question about attribution, because some people do not know that they—

I presume that those programmes would be BBC Worldwide content that had been sold on a commercial basis, so they would not really be part of the public sector delivery of—

No. They are public service programmes that had been transmitted by the BBC and then transmitted on another screen.

We need to take a bold view. The board has discussed the options that are available to us to capture more younger viewers. Basically, two categories of programmes are affected: mass popular programmes that attract a large quotient of young people and which tend to be on BBC One, and targeted programmes that are designed for young people and which get through to that age group, but have smaller audiences and are largely seen online.

We need to examine the relationship between our television service and our online service, in order to make programmes more famous so that they are caught by younger viewers. For example, when “Killing Eve”, which was a BBC Three programme, premiered on BBC One on a Saturday night it created a degree of fame such that there was a huge response from people who wanted to watch it on the BBC iPlayer. We have tasked our executive, including our marketing, content and audience management to come up with options on how we could address the problem in order to garner more young viewers.

Jamie Greene has raised a question that we consider all the time and on which we have a relentless focus. It is important to set the issue in the overall context: 75 per cent of young people to whom we speak support the BBC’s mission, and 70 per cent of them believe that we do that job effectively. There is still a great deal of support for the BBC among younger audiences.

As Steve Morrison said, we are the largest media provider for young adults. For example, 16 to 34-year-olds still watch eight hours of BBC programmes a week, which is well ahead of the next provider, and nine in 10 young people visit BBC Online in any month.

The other thing that is interesting—we pick this up through qualitative discussions such as the session to which Steve Morrison referred—is that, when something happens, young people still come to the BBC for their news because they feel confident about it. Trust scores for the BBC among young people are well above 50 per cent, whereas for Facebook, for example, the figure is in the low single digits.

Our view is that there is not a single answer to the problem; we need to work on everything. We need to think about casting, tone of voice, how we manage the schedule breaks and how we reach out to young people through the tone of our programming. At the heart of the issue is using BBC Online services, the sign-in mechanism and the opportunity to personalise and direct, in a very focused way, material from the whole BBC catalogue that we think will be right for audiences. We now have 33.5 million signed-in users, of whom very many are young people. “Market” is not a word that we use a lot, but we have an opportunity to market our services, to show young people the BBC’s breadth and range of programmes and to encourage them to come to us.

Alongside all that, another area into which we have redirected resources is children’s programming. We have increased our focus on it and balanced our investment in linear and digital services in order to encourage children to come to the BBC so that they will know us and love us in the way that previous generations have done.

Overall, Jamie—if I may address you that way—we are with you on this. We are looking very hard at providing more space and at making that space more visible and more famous for young people.

I appreciate your warm words and the actions that you are taking. I wish you the best of luck, because that audience is a competitive environment in which to operate.

I think that one of my colleagues will ask about the new channel, but I will open up that discussion by asking a short technical question. Why has the BBC taken the decision not to broadcast the channel fully in high definition on digital terrestrial, and chosen to deliver it only in an evening slot? I presume that that is to do with capacity on the transponder and the multiplexes. However, is it because there is simply no capacity available or have you taken the financial decision that it is too expensive?

I will park that question for the moment, because I have a second question, which is perhaps for Mr Morrison—or Steve, if I may. You have an interesting background, in that you have worked in the commercial production sector. Do you genuinely think that the introduction of a new BBC Scotland channel will create real opportunities in the independent production sector? If so, can you quantify them?

Should we start with the technical question?

Yes.

You are right to identify that the spectrum is very expensive. I believe that to have purchased it would not have been particularly good value for money, given that the BBC will ultimately want to migrate to internet protocol transmissions. What we have secured is HD on all the platforms, except Freeview between midday and 7 o’clock, but it will transmit in HD in the evenings. CBBC forfeited some of its HD spectrum to allow us to do that, for which we are very grateful.

With the greatest of respect, I ask whether that means that daytime audiences are forced to watch programmes in standard definition, while evening audiences—the people who are working during the day—can enjoy them in HD? In the modern day and age, when you are trying to compete with commercial operators, as we have just discussed, do you really think that people are content with SD broadcasts on big screens?

There is a balance to be struck. The answer also depends on the nature of the programming. Striking a balance between investment in distribution across multiple platforms, which is very expensive, and investment in content is one of the judgments that we have had to make in setting up the new channel. Our view was that we wanted HD but wanted to balance affordability, the audience—given what we are putting on—and investment in content. I think that the balance that we struck is pretty good. Of course, HD is available through IP during the day, as well.

I hope that you do not think that nobody will watch during the day so it does not matter.

No, I do not think that at all.

To be clear, the hours of the channel are 7 o’clock to midnight, so it is mainly an evening service, other than when we wish to schedule First Minister’s question time, for example, or sporting events.

Or something special.

Going back to your—

Excuse me, but we have three other members who need to ask questions and our time is quite limited.

I am sorry, but if Neil will allow me, can I just answer Jamie’s bigger question?

Very quickly, please.

Jamie is right that I have launched four channels myself over the years. Launching a channel is very difficult because we have to get the public to be aware that it has been launched—we should not assume that they are aware—and to know the channel’s button or spot on the electronic programme guide on whichever system they are watching television on; then they have to feel that it is a channel for them. Those are all big issues when we are launching a new proposition.

However, the progress so far suggests that the independent production community in Scotland, which Jamie mentioned, has responded very well to the new channel. Steve Carson, who is in charge of the overall commissioning team, has explained to us that they have engaged in programme commissions with 75 independent production companies and have published programme tariffs. There was a lot of debate at the beginning about whether the programme tariffs would be high enough, but the production community has responded very well to the commissioning briefs.

Secondly, they are trying to include higher-cost genres—which they will not be able to do all the time—including drama and comedy. For that, partnerships and co-commissioning between the channel and other parts of the BBC or other co-producers will be very helpful. We cannot produce a drama now without co-production.

With regard to the question, we are on it, and the guy who runs the channel is very confident about it. He has presented to the Scotland committee twice and we have seen the schedule develop. I have great hopes for it, but we should not underestimate the difficulty of launching a completely new channel into the ether. We should not imagine that a mass audience will suddenly turn up; we will have to give it time to build. All the signs are good—

I am sorry, Mr Morrison. We need to move on.

Feel free to call me whatever you like. [Laughter.] I answer to many things, occasionally even my name.

Will the new channel broadcast five hours a day, from 7 until 12?

Yes. After—

Our information is that 50 per cent of the shows will be repeats or archive programmes. How long will the nine o’ clock news programme run for?

It will run for one hour.

Okay—so two and a half hours a day will be unique new programming, because 50 per cent will be repeats, and an hour of that will be the main news programme. There will be shorter news bulletins throughout the day, so we could take maybe another half hour out of that. Therefore, we are paying £32 million for one hour of new production a day.

In the first phase of commissioning, 77 per cent of the programmes will be new. The rate will not necessarily be the same throughout the year. We are learning as we go. We have discovered—

Over the piece, 50 per cent will be archive or repeated programmes. Am I correct in my analysis that, over the longer term, there will be one hour of new production a day?

No.

If the channel broadcasts for five hours a day, and half of the schedule is repeats—

That was the rule, or term, that was laid down by Ofcom. In the beginning, through various means we have found that we are commissioning more than 50 per cent of originated hours. It may turn out that we end up with considerably more than 50 per cent—I do not want to say what the number will be; we do not know. We will have to see how the money and programmes bed down.

According to the contract—

What you are describing is the minimum.

Yes; right. So let us go on the basis—

The £31 million also funds the news hour, so the news hour has to come out of that. There will be 900 hours of new content a year on the new service.

According to our information, there would be one hour a day. If you put the archive and repeated programmes on your online service, would that not free up money for more original material?

The question is how much you can reasonably spend on the new channel. Do not forget that Scotland is the only country that has two national channels; in no other part of the UK does the BBC do that. We are exploring as we go. We have archive programmes on the iPlayer, but there would be little point in taking all the archive programmes off the channel—a lot of people want to see them—if that meant that we could not afford to pay the programme tariffs for original programmes and just ended up with more quantity and less quality.

When a new channel is launched, it is quite normal to have a balance such as you described. On some of the smaller channels in the digital sphere, there is an hour of new original programming at nine o’ clock and around those peak programmes are other programmes including acquisitions or programmes that people will have seen before. The new channel is better set up financially than virtually any digital channel in the rest of the UK. The balance between original and acquired or archive programming will be monitored very closely; at the moment, the original-programme rate is much higher than 50 per cent.

11:00  

The issue will come down to the quality of what we see and the lessons that are learned from STV2. At times, nobody was watching its programmes, which were repeats of repeats of repeats, to be frank. We do not want the channel to become like the channel Dave, on which we can watch “Top Gear” 24 hours a day if we are so minded. We do not want to watch “The Singing Kettle” 24 hours a day.

From what I have seen of the schedule—

—good though “The Singing Kettle” is.

Exactly: a lot of people watch it. From what I have seen of the schedule, it will not be a repeats channel; it will be an originated channel. The question is how to use the £32 million wisely to get an audience and to show them original material alongside material that they already like.

We have an opportunity to do things that we have never done before, including experimenting in the nether regions of the schedule. We are trying to target a younger audience, but not in the earlier hours, so there will be a lot of new, innovative and possibly risky stuff at that end of the schedule. I am confident that it will offer something for everybody.

I do not watch those types of programme.

He watches “The Singing Kettle”.

Given that young people are watching less television, it seems to be quite a gamble. We want the channel to succeed. As I said, we have been conducting a long-running inquiry into the screen sector in Scotland. Everybody in the industry to whom we have spoken has said that not enough money is going into the channel. The responses Neil Findlay’s questions from Mr Morrison seemed to suggest that. The programmes that will be made include no high-end drama, which is clearly for financial reasons. What have you done to argue for more money for the channel, in your position representing Scotland on the BBC board?

First, we have argued with our executive—of which one of the most important members is sitting on my right—that the channel should have adequate funds for a good launch. I am happy to say that it has.

So do you—

Excuse me; let me finish the point. You asked me about what I was doing. The BBC’s network, financially and in collaboration on programmes—some of which will be co-commissioned by the channel and the network—is being extremely supportive in helping us to get programmes that the channel could not otherwise afford on its own. I cannot say what those are. I hope that they will be a pleasant surprise to viewers; they have not yet been announced. However, I can tell you that there will be drama on the channel, which you said there would not be.

I did not say that there would not be drama; I said that there would not be high-end drama.

There will be high-end drama on the channel.

Will it be original drama?

It will be original drama.

Where will it fall in the tariffs for drama? The BBC—

It will be much more expensive than the normal tariff, and we will have to find partners, because this is very complex—

Has the drama been commissioned?

I do not want to go into too much detail.

I just ask for yes or no; has it been commissioned?

No. Just let me answer the question. We have persuaded our network colleagues to help us financially and to help us in co-commissioning programmes in order to give the channel the best possible lift-off. All the time, we are persuading colleagues on the board and the executive to regard it as a priority to support the channel—which they are all doing.

However, there is not more money. I will move on to Kenneth Gibson.

No doubt; that is why it has been delayed a few months.

The public are concerned about the colossal salaries that are paid to people in the BBC, from football pundits to Radio 2 presenters. One way by which the BBC is reducing the average male salary, and therefore the gender gap, is by replacing people like Chris Evans with females who earn a lot less money, such as Zoe Ball.

The Ofcom report that was published on 25 October concluded that viewers in Scotland watch 13 per cent more BBC TV than the UK average but only 52 per cent of people in Scotland have a favourable overall impression of the BBC, compared with 64 per cent of all UK adults. Why is there that significant difference? Will the new channel close that gap?

Can I divide the answer into two?

Yes.

The first question was about pay, so I will ask Anne Bulford to speak about pay policy in the BBC. Your second question was about how we can deal with portrayal and representation, to encourage more viewers to watch the BBC and to feel good about it.

People in Scotland are watching 13 per cent more of the BBC, but they have a lower opinion of it. How are you trying to close that gap?

There is a combination of diagnoses around that issue. I hope that the new channel will go some way to address it, as that was an underpinning reason for creating it. I think that an hour-long news bulletin at the heart of the schedule for audiences in Scotland will improve those general impression figures. The case has long been made by many people that an hour-long news bulletin is wanted and required. It is also about portrayal, representation and relevance among audiences in Scotland, which is a big and diverse country with a sizeable population.

We have an opportunity to address that geographic and cultural diversity in a way that we have not hitherto been able to do. It is about working very closely with network colleagues to ensure that BBC One and BBC Two in Scotland are as strong as they possibly can be. The new channel cannot replicate what they do, but the drama that has been commissioned of late that has come through Scotland, some of which has yet to appear on our screens, is heartening, and some of it is produced by brilliant indigenous companies. I agree whole-heartedly with the convener that a returning drama would be fantastic. It could be argued that “Shetland” is that, but we want to see something that is on more frequently.

We now have the wherewithal to address the perception that exists and that Kenneth Gibson rightly points out. We have just transmitted “The Cry”, a co-production that was made by the Scottish company Synchronicity Films, and we have a six by 45-minute drama called “Clique”, which is aimed at younger audiences. “Shetland” series 5 is coming up, and a sixth series is in development. We have “Trust Me” series 2, which is a four by 60-minute drama shot in Scotland, and we recently announced another commission, “The Nest”, which is six hours. Those will all make a difference with regard to people feeling that they are seeing familiar surroundings and hearing accents that reflect their reality. It is important to have that critical mass, not just on the new channel but on the other channels, too.

The journalists who are recruited for the new news hour at 9 will go all over Scotland. We want to position reporters and other journalists in different parts, so that everybody will be focused on what has just been described: how we make a channel that reflects modern Scotland and attracts viewers from all over Scotland because they see themselves, or people like them, on it.

Convener, I know that you are short of time. Would you like to me answer briefly on top pay?

Very briefly.

When we survey, we find that viewers and listeners expect us to have top talent on BBC programmes and they understand that we have to pay market rates for some of those people. It is helpful that we employ 25,000 to 30,000 on-air presenters over a year. The top talent list that is published, which is about people who are paid more than £150,000 from the licence fee, represents 0.2 per cent of those individuals and 1.4 per cent of our overall spend. The programmes that they present or appear on make up 40 per cent of our overall viewing across radio and TV. That gives a sense of the job that they do.

In recent years, we have had a rigorous programme of managing down the overall talent bill and the proportion of our talent that is paid at the highest level, by bringing on more people, looking for more of a mix and, in many cases, managing down the cost of talent over time—that is in the annual report in the talent pay section.

Mr Morrison said earlier that there is a “disproportionate” amount of spend by the BBC in Wales, although it is actually 92.3 per cent of what is raised from the licence fee there, whereas your figures show that 350 per cent of what is raised from the licence fee in London is spent there, and that that is 48 per cent of the total. Do you agree that more programmes should continue to be made in other parts of the UK? For example, is there any reason why Scotland cannot become the kind of drama hub that produces “Dr Who”, “Sherlock” and “Casualty”, such as you have in Cardiff?

You might have noticed that the BBC has an out-of-London policy, and that is going to gather pace. We now commission more programmes from out of London and we are establishing bases in different parts of the UK. In Scotland, we established a factual base, as it happened. The next step for the Scottish industry, in my opinion, is to work out a way to build a sustainable scripted base.

As Donalda MacKinnon said, we have renowned drama companies in Scotland, but only a small number. Therefore, in partnership with organisations such as Creative Scotland, the task is to build up the indigenous scripted company base in Scotland. Because of the size of the projects, that would increase the size of the TV production industry dramatically.

Scotland’s share of BBC spend went down from 10.3 to 9.1 per cent over the past year, whereas London’s share only went from 49.4 to 48.9 per cent. Clearly, we are still in a—

Having started such a policy, it takes literally years to establish a serious amount of production in out-of-London bases. Salford took some years to build up, as did Cardiff. Now that Creative Scotland is changing its strategy from an arts council independent-talent strategy towards a more creative-industries strategy and more money has come in from the Scottish Government, there is an opportunity to build up our scripted base together with Creative Scotland and other partners, which would genuinely allow Scotland to get more serious drama contributions on to the screen.

As Donalda MacKinnon says, the number of drama series has gone up over the years, but there is still a lot of mileage to go. I tend to agree with you, but it will not happen by tomorrow; it will take two or three years to build that up. However, as I said right at the beginning, this year, 76.7 per cent of the licence fee in Scotland will be spent here and, next year, when the channel will run throughout the year, the figure will nudge towards 80 per cent—it is growing all the time. In the end, the quota system is not the answer; the answer is attracting the right kind of talented companies to work in Scotland and to present ideas that the network commissioners want, so that we end up with more things on merit and not just by quota.

No one who I know of is calling for a quota.

It is actually 68.8 per cent of the licence fee in Scotland that you are spending here. Many people would be surprised that we have been talking about the lack of scripted drama from Scotland for a long time in this committee and predecessor committees. This committee has been clear in its reports that the responsibility lies with the commissioners, notwithstanding the pressure that we put on Creative Scotland. The commissioners are responsible for the decisions that they make.

I first want to emphasise the point that Mr Morrison made at the beginning about programmes such as “The Blue Planet”. The BBC should push what it is doing in Scotland a little more, because a lot of the questions that you have heard today indicate an inability to get your point across. Frankly, all of you need to do a bit more to say what the benefits of “The Blue Planet” are across Scotland. I would pay the licence fee for that alone. If you did not put “Match of the Day” on in Shetland, there would be outrage in our household, never mind anywhere else. All the arguments that you made at the start about spend and the importance of UK productions right across the UK are really important. You should do a controller live slot now and again and take viewers’ questions.

Meet the controller.

Yes, exactly—meet the controller. It would be like that piece on the news channel recently when a senior BBC executive said why Farage had appeared on a package about 700,000 people walking through London a few weeks ago. I thought that you were wrong about that, but that does not matter; at least a BBC executive had to answer the question. If I may say so, you need to push your agenda so that the questions about numbers are balanced by the fact that you produce programmes that we all want to watch. I wanted to get that off my chest, because I get fed up of listening to that argument every time.

11:15  

My question is about impartiality, about which Mr Morrison and Donalda MacKinnon have made the same point. BBC Scotland produced a documentary called “The Dark Side of Dairy”—I do not know whether you saw it—in which three things were wrong. First, it did not explain the rigorous inspection that protects calves in transport; secondly, it was not explained that Scottish Government vets inspect and monitor the system; and it used footage from another part of the world and implied that what was happening was going on in Scotland. That documentary failed the test of impartiality. Have you had a look at it? Will BBC Scotland hold up its hands and say, “We did not quite get that right”?

I will give that question to Donalda MacKinnon, because she knows a great deal about the programme.

Bad luck.

Not at all; I know that we have had correspondence on that programme, in which I have defended quite robustly its journalism. You probably know that a formal complaint has been lodged with our executive complaints unit. As that process is on-going, I would rather say nothing more until it deliberates.

I assume that its determination will be published at some stage.

If that is not satisfactory, there will be an option to take it to Ofcom.

How many formal complaints does BBC Scotland get in an average year? I believe that it is not that many. We all complain, but there is a difference between a formal complaint and just moaning, which we have heard this morning.

It is fair to say that we get very few, which again says something about the robustness of our journalism.

Quite.

Before we wind up, I ask Donalda MacKinnon to pick up on the points about the high-end scripted drama that has not yet been commissioned for the new channel but that we have been told will be commissioned at some point. What will the tariff rate be for that?

I cannot tell you that because, as you rightly identified, to achieve a commission would need a cocktail of funding. I know of on-going discussions about one commission, which I would absolutely regard as high end.

Does that mean that the tariff would be between £650k and £1,000k an hour?

It will be around that.

When will you announce that commission?

We do not intend to have that for the channel launch. It will possibly have an autumn launch.

Finally, to go back to Neil Findlay’s point about original content, there will be an hour of news at 9 o’clock, but Mr Morrison made the point that most channels put commissioned new content at 9 o’clock. Everyone who I have spoken to in the industry says that news at 9 o’clock is a big mistake, because you will not attract viewers with news at the peak time. Is there any possibility of that decision being changed?

No. We have undertaken qualitative focus group research and there is a body of opinion out there that says that a news hour at 9 o’clock would be valued as an alternative to what is on elsewhere, particularly among women and parents with young children. It is true that we do not want to compete directly with dramas that are on offer elsewhere, and people will have the opportunity to consume the dramas via catch up or on demand. Obviously, everything that we plan for the new channel has an element of risk. We do not know how it will work. You have asked whether we would ever revise the decision; we might have to, but at this stage we do not intend to do so.

The look of the news, from what I have seen, will be quite different from a normal news bulletin. It will be more like a programme than a bulletin.

It is an hour, so it is hardly a bulletin.

Thank you very much for coming to give evidence.

11:19 Meeting continued in private until 11:26.