Official Report 488KB pdf
Good morning. I open the fifth meeting in 2011 of the Education, Lifelong Learning and Culture Committee. I remind all those present that mobile phones and all other electronic devices should be switched off for the duration of this morning’s meeting. No apologies have been received, but I understand that Margaret Smith hopes to join the committee at approximately 10.30.
It is a great pleasure to talk to the committee again. I will make just a couple of brief remarks, as I am sure that there will be many questions.
Thank you for that opening statement, Mr Jenkins. I hope that we will cover many of the points that you made in our questioning. First, I will ask about governance. You made key recommendations about good governance for the new network—that is important—including the radical suggestion that appointments should not be made by ministers, but agreed by a committee of the Parliament. Why is that important? It would be a very different way of making a public appointment and is not something that has happened before. Why is that important and what improvements would that make to the governance of the network?
That was a suggestion that we put out there, rather than a firm recommendation, but there is something in it that is worth thinking about. Without going into particular appointments or naming names, there have been times when appointments have been made at UK level to significant broadcasting positions when there was perhaps an underlying hint that a degree of political consideration might have been applied—if I can put it that way.
Would that ensure that the public would take a little more interest and have a little more confidence in the new network, because they would be able to see from the start who would be responsible and accountable for the new network?
One would hope that that might be part of the impact. To be honest, I think that we will have very little difficulty in getting pretty wide public interest and engagement in the process of setting up the SDN as we get closer to that point. For the first time ever, we will have a distinctively Scottish broadcaster—a Scottish national broadcaster, if you like. I have said previously that if broadcasting had been invented this week, there would not even be a discussion about this—we would be building in a dedicated Scottish public service broadcaster from the start. In a sense, what we are trying to do now is retrofit the right kind of broadcasting to the evolving UK, given how it is changing culturally, politically and structurally. You are right that there would be a benefit and I am sure that there will be a high degree of public engagement on what the new network could and should be.
How confident are you that the SDN will receive a channel on Freeview, satellite and cable?
The key to that is its being designated as a public service broadcaster. If the new service is designated as a PSB, it is guaranteed carriage on all the main platforms. That is one of the important reasons why it ought to be designated as a PSB, which, if it is set up in the way that we are talking about, is to some extent a formality. No one at the Office of Communications, the Department for Culture, Media and Sport or anywhere else has suggested to me that if we get the SDN up and running it will not receive that status, which guarantees prominent carriage on Freeview, satellite and cable. It is important that it guarantees carriage with a high degree of prominence, which might be what you will ask me about next. Members might or might not be aware that, in Wales, S4C gets position 4—button 4, if you like—and page 104 on Freeview and satellite. I very much hope that the SDN would get an equivalent degree of prominence. It might not be in position 4, because Channel 4 is in that position in Scotland, but something like channel 6 in Scotland would be appropriate.
You have partly answered my second question. I was going to ask how certain you are that the SDN will be classed as a public service broadcaster.
We spent quite a lot of time talking about the consequences for other media if the new network were to pursue commercial revenue. That is quite an important point. I have no doubt that the SDN would attract significant audiences, which means that it would take audiences away from other players, such as the BBC, Channel 4, STV and the other broadcasters. That is to be expected with any new arrival.
Even if the SDN does not pursue advertising revenue, it would still have an impact, as it will take audience share. Aside from the pound, shilling and pence issues, do you think that the existence of the SDN might encourage the other media entities to be more Scottish in terms of their outlook, content and production processes, or might the SDN be seen as the Scottish channel, which might have a slightly negative effect on the Scottish outlook and content of the other channels? I do not think that that would be the case, but I would like to hear your professional opinion.
That is an interesting question. To some extent, as the situation is untested, my answer will be based on speculation.
You have given us a breakdown of how the figure of £75 million for the cost of the Scottish digital network was arrived at. Could you expand on the thinking behind that figure?
Rather than give you a detailed analysis of the costs, which I would be quite happy to do, I will answer your question a different way.
When the crucial issue of funding was discussed in the Parliament, we skirted around it because there was a bit of disagreement about the source of the funding. I noticed that the section of the Scottish digital network panel’s report on funding states:
That statement reflected the fact that the previous United Kingdom Labour Government identified the licence fee as the source for funding the continuation of regional news on ITV, and it proposed to use quite a sizeable chunk of the licence fee for that purpose. However, that proposal was interrupted by the general election. When the chairman of the BBC trust spoke about the BBC licence fee, the then secretary of state quite sharply reminded him that it is not the BBC licence fee; rather, it is the television licence fee, which has historically been used for other purposes. As some people know, it has part funded the Welsh language service S4C for 30 years, and it will fully fund the Welsh language channel. That is an interesting development.
You referred to
As you will know from your background, one of the reasons why the licence fee has always looked like the best way of funding public service broadcasting is that it has been kept at arm’s length from direct running opportunities and political interference in funding levels. Long-term settlements with guaranteed levels of funding that are not part of general public expenditure have been seen as a key part of maintaining independence from the political framework.
I want to explore the arrangements with S4C. What is your understanding of how that arrangement was reached and of why no similar arrangement has been reached here, given that we are already talking about a Scottish digital network? We have funding for MG Alba; why are we now going in two different directions?
I was not privy to the discussions that took place in the autumn. Like everybody else, I was interested in and a little surprised to see how quickly the deal was put together, as was S4C, which was not in the room when the deal was done. I spoke to its chairman not long after that. It would be fair to say that he was still somewhat surprised then.
Finally, did you look at other possible sources of funding? The most obvious to my mind is to take a mixed approach. The report has a big section on why the sector is worried about the mixed approach and using advertising revenues. Perhaps another idea would be to ask for a contribution from either or both the Scottish and UK Governments. The Scottish Government funds MG Alba. I can imagine approaching the UK Government and being told to ask for a contribution from the Scottish Government.
We gave it some thought and it seemed to the panel that, as far ahead as it is sensible to look, the pressures on financing public services and the public sector will be very severe. As you know, I would be the very first person to argue and fight for more funding for broadcasting but, in the current climate, we are struggling to afford what we would like to have in health, education, housing and transport. Public broadcasting gets an annual sum of £3.6 billion so it seemed that that was where we should look, rather than compete with other public services.
I will stay with that point. In your opening statement, you mentioned economic benefits and I am interested in looking at the publicly funded model and the commercial model. What would be the impact of those models on jobs and income? Could you add a wee bit about your disappointment that it is still the case that only 2 per cent of the licence fee is spent in Scotland and how that ties into the choice of funding model?
I think that I am right in saying that it is not that 2 per cent of the licence fee is spent in Scotland. We said that to fund the SDN would require 2 per cent of the current licence fee income. I think that the BBC probably spends a bit more than that, although I do not have the number to hand.
It is 4 per cent.
Yes, it is a higher number.
Do you have any examples of how the digital economy would be a game changer for the Scottish economy?
I have quite a few. We quoted Channel 4, which is very enthusiastic about the idea. For example, if there are new Scottish writers that Channel 4 wants to help develop or to work with, there is the notion of co-funding drama. Drama is the most expensive part of broadcasting. It can be done at a lower cost than the current average, but decent drama still comes in pretty expensive, so it becomes much more possible if it is done in partnership. Nowadays, all the broadcasters are looking to do things in partnership. I see the digital network working in partnership with the likes of Channel 4 and BBC Alba, and with broadcasters such as RTE and other European broadcasters, to collectively fund programming that would be difficult to fund on a stand-alone basis.
You mentioned the Shott review, which found that local television could be commercially viable in the long term with a low-cost model based on broadband distribution. The review did not state what it meant by “long term”. What is your opinion on what it meant? What would the timescale be?
I think that the review imagined that local television would develop in a phased and staggered way. There would be a first wave of 10 to 12 local stations, which would get a certain amount of public support for their set-up costs in their initial few years. Largely, those stations would be focused on big cities—probably the 10 or 12 biggest cities in the UK, because it is a commercial model, although the review left a bit of room for manoeuvre.
In your report, you say that the Scottish digital network “would reinvigorate democracy”. As politicians, we are quite interested in reinvigorating democracy. How would the network do that?
Politicians are marvellous people, but they benefit from a high level of scrutiny. As a programme maker, I have wrestled for years with the issue of how we can engage people more in the democratic process and get them more interested in politics by coming up with programme types and formats that would stimulate greater involvement.
One issue that is of interest to the committee, not least because we do not fully understand it, is the expected method of delivery for the new network. Have you considered internet protocol television as a means of delivery and, if so, to what extent?
Absolutely. I should point out, though, that there are different views in the industry on how quickly IPTV will become mainstream. One view is that, over time, it might become the sole method of distribution. However, there is no agreement about how quickly that will happen. I come down slightly on the cautious side of the argument; I certainly do not think that it will happen within the next five to 10 years and I think that traditional broadcast distribution will still be there. Nevertheless, IPTV is a very important method of distribution and more and more content will be consumed by that means.
You mentioned some of the cultural shift that might be necessary. Are there any regulatory issues that might arise?
Do you mean from the move to IPTV?
Yes.
Yes, there are. In the UK, we have pretty clear regulations that apply to mainstream broadcasting, including those governing the watershed, what is appropriate at different times of the day and so on. A quite active debate has begun over whether the same considerations can—or should—be applied to broadband on-demand services and whether it is, in fact, possible to have the same kind of regulatory structure and framework that we have had for traditional broadcasting. That debate is going to become important over the next couple of years.
There has been some media discussion about what has been said about BBC Alba—and what it meant—and you have provided some clarification in that regard this morning. What is your understanding of the debate over whether BBC Alba’s programming should form part of a new network?
That is an interesting question. In reviewing the possible options and funding models for setting up a new Scottish digital network we took the view that we would be negligent if we did not take account of Gaelic language programming. If you are trying to envisage and describe a new service that is intended to fully reflect Scottish culture, history and heritage and the different strands of our national life, you must realise that Gaelic has to form a part of all that. Of course, given that a publicly funded Gaelic language network already exists, one has to ask whether there are opportunities for synergy or collaboration and how far such an approach can go. There would, in any case, be a high degree of synergy and collaboration between the two networks if they were separate entities, but we felt that it was worth raising for discussion whether BBC Alba’s Gaelic language programmes might find a natural home in the Scottish digital network.
Those comments will be very welcome. What instinctively perhaps provoked some of the reaction was the issue of scheduling. I do not know whether you have any insight into that. People were possibly thinking back to STV’s rather grudging use of Gaelic television programmes at two in the morning. Is it possible to devise a schedule that would make possible the union of BBC Alba’s Gaelic language programmes and the SDN?
Yes. To be honest, I am interested in your reference to the media reaction to that possible integration. Funnily enough, from my point of view, though I may be too central-belt focused, that notion or suggestion was picked up less in the media and there was much less discussion of it in any of the broadcasting or press things that I did. I had thought that it would trigger more of a debate.
Christina McKelvie picked up on questions about the possible economic advantages of an SDN. I think that you covered quite a lot of areas in relation to that. Do we have the skills base in Scotland to respond to an SDN? What kind of partnerships would be needed to ensure the creation of the projected thousands of important new jobs? Do we have the capacity at the moment to respond to the challenge of creating such jobs? If not, what needs to be done to build such capacity?
That is an interesting question. We do have the capacity. For instance, the Scottish independent production sector has found itself to be capable of coping with the expansion in BBC network production, which is one of the things that has happened over the past few years as a result of the broadcasting commission and the attention that has been given to the issues by this Parliament, I should say. If you talk to the production sector in Scotland and, indeed, to the broadcasters, they would say that the production sector is capable of significantly expanding and that it could cope with quite a substantial increase in activity, if I can put it that way. There is quite a lot of underutilisation of people and resources in the sector in Scotland at the moment, so I am pretty confident that it can expand.
You made an interesting point about the fact that, post devolution, the reaction of the industry has not been what you would have expected. You said that that has been because it is difficult for the BBC and STV to get beyond scheduling constraints. Is that the only reason, or are there other reasons?
There are other reasons—that is a fair point. It is like the point that I made about Gaelic. Serious programming, in general, has disappeared from the ITV schedules—I include STV in that. Many people would say that that shows a lack of ambition or too much of a commercial focus; the people who work in those companies would say that there is nothing else they can do. At UK level, there is no doubt that commercial pressures have played a part in “World in Action” and “The South Bank Show” no longer being shown on ITV. The ITV system has found it impossible to sustain the programmes that all of us would regard as having been hugely important in our younger years, in terms of our learning about the world and culture. Arguably, the burden of that content has fallen quite heavily on the BBC, which is one of the reasons why BBC4 came along.
Do you see it as a structural issue rather than a cultural one that, for one reason or another, the companies are not picking up Scottish politics or current affairs? Are they not particularly interested, or do they feel that there is no relevant demand for such programmes?
It is both. They feel that such subjects do not achieve the audience level that they think they are required to deliver, especially at peak times. There was a period—I do not know whether we are coming out of it—when there was almost a national switching off from politics, if I can put it that way. That infected large parts of the media, and broadcasting was not immune to that. I return to the point that I made earlier. One of the most disappointing things in the post-devolution era—if that is the correct way in which to describe where we are now—is the fact that there have been no imaginative editorial responses to the new arrangements and the new level of debate in Scotland.
Are you confident that the new set-up could change that?
I would write that in as absolutely the first thing in the remit.
I have a supplementary question about where we go next. It probably comes back to costs. A deal has been done regarding the licence fee settlement, although I do not think that it has been totally signed off. I am trying to work out whether the whole network depends on the licence fee being top-sliced. The UK Government does not seem to be particularly enamoured of the proposed arrangement. What do you suggest we do? Where does the solution to that lie?
We are now moving firmly into the political arena. Do I dare to predict what might happen next? Let me think.
Are there thoughts about a gradualist approach to the issue? I do not know whether we should start with the assumption that no money will be available until 2017. However, if we start with that assumption, are other options open to us? The issue is being driven in Scotland, but it feels as though we are looking elsewhere for funding. It is politically difficult to argue that we want a Scottish broadcast network but we want someone else to pay for it. We can make a more convincing argument if we are willing to put some money up ourselves—in other words, if the Scottish Government or some other source closer to home is willing to put money up. Has the idea been considered or pursued?
When the Scottish Broadcasting Commission reported, we were fairly neutral on the matter. We thought that a publicly funded model looked like the right model, for all the reasons that we discussed at the time and, to some extent, repeated in the panel’s report. I have no philosophical difficulty with funding coming from another source, but in reality that looks like an awfully difficult thing to achieve in the current context.
Because we all pay for it—
Yes. The licence fee is a UK resource. That is why the precedent of S4C is so interesting. There is no suggestion that the fact that S4C will be fully funded from the licence fee in any way reduces the BBC’s commitments and intentions in relation to audiences in Wales; the BBC’s commitments and intentions in that regard remain the same. Public money goes into local television, which will have a differential presence and impact around the UK, and there is no suggestion that that is somehow unfair. We take the position that we all pay into a big pot of money and then decide what is the best public use of the money. The funding of the Scottish digital network is a perfectly legitimate use for the licence fee. As I said, I encounter less and less resistance to that notion. However, timing is an issue that must be addressed.
Scotland has 9 per cent of the UK’s population, and 4 per cent of the licence fee is spent here, so surely if an additional 2 per cent were spent here, the BBC would still be able to use a significant amount of Scottish taxpayers’ money to help to fund the entire UK network.
I have never taken the view that there should be an absolute match between the amount of licence fee money that is raised in Scotland and the amount that the BBC spends in Scotland, because we benefit from things that are UK wide.
I am not disagreeing with that, because there has to be central funding as long as the BBC remains a UK organisation in its current form. However, there is still room for manoeuvre.
In the end, everything is a negotiation. For a long time, the BBC said that every pound was a prisoner, that it could not afford to lose any of the licence fee because it needed it all and it was uniquely the beneficiary of that form of income. Now, however, a deal has been done to take a substantial part of the licence fee and use it for other purposes. The BBC, rightly, has seen that as being a good deal for it. The director general, Mark Thompson has said that he thinks that he can deliver not only the 16 per cent saving that the comprehensive spending review requires him to deliver over the next four years, but a 20 per cent saving, with the additional 4 per cent being available to be used for other purposes.
In the light of Mr Gibson's anti-BBC remarks, I should clarify that what we are doing is trying to get the network off the ground. I am a bit worried that we are in a period in which we might have to wait. There might be other avenues and opportunities open to us.
I never made any anti-BBC comments. That is total nonsense.
I do not want this meeting to degenerate into an argument between two committee members. We have had a constructive session with Mr Jenkins this morning.
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