Constitution, Europe, External Affairs and Culture Committee

Meeting date: Thursday, September 9, 2021

Official Report 620KB pdf

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BBC Annual Report and Accounts

Under item 2, we will take evidence from Steve Carson, director of BBC Scotland, and Leigh Tavaziva, chief operating officer at the BBC, on the BBC’s annual report and accounts. I welcome our witnesses to the meeting and invite Mr Carson to make a brief opening statement.

Good morning, convener and members of the committee. It is a pleasure to return to give evidence at the Scottish Parliament to this new committee with culture in its remit. I am sorry that, once again, we are speaking via video rather than meeting in person, but I am pleased that joining me today from Pacific Quay in Glasgow is the BBC’s group chief operating officer, Leigh Tavaziva.

The period covered by the annual report and accounts saw the BBC as a public broadcaster find itself at the heart of the global pandemic, not just in that we served audiences in Scotland, but in that we continued to operate and ensured that our teams were safe in delivering critical public services at an unprecedented time.

Like other industries in Scotland, the broadcasting sector has continued to adapt and change at speed. In BBC Scotland, we produced daily educational content on television while schools were closed; increased our news coverage; televised religious services while places of worship were shut; and commissioned lockdown-specific content from the sector, including working in partnership with the National Theatre of Scotland and Screen Scotland.

The on-going shadow of Covid impacted greatly on broadcast production in the year covered by the accounts. Many productions that were planned for filming last year have only recently restarted. “Swashbuckle”, a major children’s series, had to stop production in March 2020. I am delighted to say that it is now back in the studio. Two series of “Shetland” are shooting back to back this year to make up for delays last year.

The impact of not being able to film regular and planned content for a number of months is clearly seen in the accounts, with a drop in network spend below the target level that was set for us for Scotland. We expect that to be a one-off impact in the year of Covid, with spend returning to meet or exceed its target in the current year and beyond.

That snapshot of what was paused from March 2020 onwards in a way serves to illustrate the momentum that has been building in the screen industry in Scotland in recent years. Since launch, the BBC Scotland channel has established itself as the largest digital channel in Scotland, ahead of many household names. It has just been nominated as channel of the year at this year’s Broadcast Digital Awards, and BBC Scotland content has picked up several significant industry awards over the past year.

The nominations and awards are a reminder of the important role that the BBC plays in building and growing the screen sector here. In 2017, we appeared in the Parliament to give details of the biggest single investment in broadcast content in 20 years, in a move that created the channel, increased investment in news and current affairs and provided uplifts in network TV programming.

This year, our strategy “The BBC Across the UK” commits the BBC to spending an additional £700 million on screen and radio outside London. We know that we have a role to play here, and our partnership with Screen Scotland has been instrumental in growing the creative sector. Partnership is also at the heart of our Gaelic services. We are delighted that, alongside MG Alba, we will soon launch SpeakGaelic, a multiplatform language-learning course with programming across BBC Alba, Radio nan Gàidheal and other services.

Despite the profound challenges of the past months, this is once again a moment of hope for the sector as we start to emerge from the pandemic. Leigh and I look forward to discussing the annual report and accounts, and associated matters, throughout this morning’s session.

Thank you very much, Mr Carson. We will shortly be moving to questions from members—and it would be helpful if they indicated whether their questions are being directed to Mr Carson or Ms Tavaziva. First, though, I have a general question. You mentioned the launch of the new channel. Do you feel that it has met its initial objectives? I note that, in April 2018, Ofcom raised concerns about a lack of new programmes and the removal of potential opportunities for independent producers. Will you reflect on that, the channel’s other objectives and how successful you think that it has been?

It is not just our view but the view of the wider creative sector that the channel has been, as I mentioned, a success with regard to audience performance. From a standing start two years ago, it has established itself as the largest digital channel in Scotland, well ahead of other household names that have been established for a considerable time. In the year shown in the accounts, the BBC Scotland channel grew its reach—or the amount of people tuning in each week—to 21 per cent. In other words, more than one in five Scots were watching the channel, and for an average of one and a half hours a week. To put that into context, I point out that, typically, a successful digital channel has about a 1 per cent share of viewers, with many household names getting less than that. The BBC Scotland channel has achieved a 2.5 per cent share.

The reach of the top five terrestrial channels—BBC One through to Channel 5—is often considerably in excess of the digital channels, but our reach is not far behind that of Channel 5. In fact, on regular evenings, you will find that the BBC Scotland channel has had more viewers across the evening than Channel 5, Channel 4 or even BBC Two.

As far as the creative sector is concerned, the investment in the channel has meant that we have worked with more than 80 production companies, many of which are new to the industry, and we have also worked to bring in investment with other parts of the BBC, Screen Scotland and others that are a big and important part of the sector here. As for the industry’s response, the clearest example that I can give is the fact that, at last year’s Royal Television Society Scotland awards, the channel was awarded a special jury prize. Obviously, the society is made up of members of the industry in Scotland.

Thank you. I now move to questions from members.

I thank the witnesses for joining us. I am not sure whether my question is for Ms Tavaziva or Mr Carson, but I want to hear your views on the long-running issue of spend in Scotland. We all welcome the fact that there has been more spend on big network productions involving Scotland, but are we not talking about two slightly different things? On the one hand, there is the part played by Scotland in big network-wide productions and, on the other, the discretion that the BBC in Scotland has to spend its money on the things that it feels to be important to it instead of putting that money into something else. Can you tease out those differences, and tell us where we are going with regard to the latter point about local spend?

Thank you for your question, Dr Allan, and thank you for having me here today.

Focusing more broadly on the group, I think that you are right about the choices and decisions that we make on where we spend and invest licence fee payers’ money with regard to the productions and TV programmes that we make and the radio that audience members listen to. The group’s very clear strategy, which we announced earlier this year, is to continue to shift more money, power and decision making outside London and across the United Kingdom into our nations and English regions. That is critical.

We will be moving £700 million of additional spend outside London over the next five years, which will give an economic benefit of approximately £850 million to the UK. We are also shifting the level of TV and video programmes being made outside London to 60 per cent and video and audio to 50 per cent. Those are significant changes.

We are also moving people across the UK. We continue to support having the majority of our employees in the public service working outside of London and we will continue to work towards that. That includes ensuring that the money that we spend is well and thoughtfully invested.

I am sure that Steve Carson would like to comment more specifically on some of the choices that we are making in Scotland, too.

I should point out that the BBC’s overall spend in Scotland is a mixture of what we call network spend on our network channels, stations and services, and spend that is directly controlled by BBC Scotland, which we use to provide our own services and special programming, including news on the BBC One Scotland channel, our contributions to iPlayer and our digital services, Radio Scotland, Radio nan Gàidheal, and our partnership with MG Alba on the BBC Alba channel.

It is fair to say that Scotland has been leading on increasing the amount of co-commissioning between different parts of the BBC, including, potentially, other nations such as Wales and Northern Ireland, or with those network services. We have seen a sharp uptick in co-commissions between ourselves and network services, and that will continue to be an important part of our strategy of delivering across the UK.

One example of that is “Guilt”, the BBC Scotland channel’s launch drama, which was co-produced with funding from BBC Scotland and BBC Two. I am delighted that “Guilt” will return to our screens this autumn with a second series—it, too, was delayed by Covid. Other examples are “Murder Case” and “Murder Trial: The Disappearance of Margaret Fleming”, and some other big premium factual titles. Such co-commissions and co-productions enable us to use the resources that we have and tap into other investment to create projects of scale and impact for our audiences in Scotland and, through iPlayer, across the UK.

You mentioned some of the economic benefits of the dispersal of work. I am interested in the point that you made about the cultural benefit. For example, one of the long-running questions about broadcasting in Scotland is what can be done to commission more drama here. I seem to remember hearing a rumour when the new BBC Scotland channel was established that we were going to get a dramatisation of Sir Walter Scott’s “Waverley”—I live in hope of that.

What can you say about new writing and a focus on drama? Everyone looks back to programmes such as “Tutti Frutti” as great examples of new writing and drama. Does the BBC in Scotland have discretion to produce something like that?

As I mentioned in my opening remarks, I think that a momentum has built in the creative sector in Scotland over the past number of years.

On our ability to support new writing and drama, I very much see BBC Scotland as working in partnership with others to create a series of pipelines to nurture and bring through talent. We have our own discrete digital spaces and channels. For example, in comedy, we have short comedy development in the form of “Short Stuff” on Facebook. We have the social—a digital platform—which is targeted at bringing in new talent and young people. We also have pan-BBC initiatives such as BBC Writersroom, which enables us to support the development of new drama, scripted comedy and scripted writing. A current example of that is a short series on iPlayer called “Float”, which is co-funded with Screen Scotland. That came from an initiative through the BBC Writersroom, and I think that it was the first broadcast piece for the writer, Stef Smith.

We very much see ourselves as having the ability to try new things, experiment and bring things through from our digital services on to platforms such as the BBC Scotland channel, which has a strong remit to experiment and innovate, and, through the rest of the pipeline, to co-commission projects that can go to network services and beyond Scotland and the UK.

The upcoming drama slate, which was partly interrupted by Covid, features season 2 of “Guilt”, which I mentioned, and “Vigil”, which is a network drama that is on air this week. Further, “Control Room”, another drama, is currently shooting in Scotland. The comedy slate features “The Scotts”, which I was delighted to see on Monday on BBC One Scotland. That came out of an initiative that we ran last year to pilot new situation comedies, and it was the one that went to series. That, too, was delayed, but it is now on air.

If you look forward six months, you will see work coming through that has been done over the past three years on the development of that pipeline.

I take your point about “Waverley”. We will look at that.

Thank you.

The BBC Scotland channel is very much focused on modern Scotland, but there is room to cover a range of subjects.

09:15  

I will ask some questions—I think that they are probably for Mr Carson, but I am not entirely sure—to dig into the issue of the BBC Scotland channel’s value for money. You said that it is the largest digital channel in Scotland, but how do you define that?

We have two main metrics for looking at the performance of services. Share is the share of the audience watching during broadcast hours aggregated across a year. BBC Scotland’s share of viewing is now 2.5 per cent. As I mentioned, other digital channels—I can talk about BBC portfolio channels such as BBC Four or BBC News—have shares of around 1 per cent or so. Channels outwith the BBC have shares of between 1 and 2 per cent. Therefore, 2.5 per cent by audience share makes us the biggest channel in Scotland in the year to date.

Reach is the other thing that we measure, which is the amount of people tuning or listening in to a service across a week or a month. The annual reporting account shows that our reach for the BBC Scotland channel is 21 per cent. That is just one of our services on TV and iPlayer—we also have BBC One Scotland and BBC Alba. So, by reach and share, it is the largest digital channel in Scotland. We are not allowed to discuss other channels’ performance, but that reach figure is close to those of terrestrial channels, and that is very unusual for a digital channel.

You said that the share is 2.5 per cent, but what is the number of actual viewers?

It depends on the programme. We can get audiences of more than 100,000 on the channel and we can get smaller audiences. That is partly what the channel is online for. In relation to audience value, we are not necessarily always talking about, as a publicly funded broadcaster, mass audiences. We can have smaller audiences that highly value the content—we also find that in relation to channel content on our other services such as BBC Alba.

You should bear in mind that the channel viewing figures are only one part of the consumption. The channel also has its own dedicated space on BBC iPlayer, and since the channel’s launch in 2019, requests to view BBC Scotland-commissioned content on iPlayer have more than doubled. In the year that we are talking about—2020 to 2021—we have had 70 million requests to view that content on iPlayer. A significant number of those come from Scotland, but they also come from other nations of the UK.

That is not 70 million people; it could be a smaller number of people accessing—

Seventy million would be a significant number of people—I do not think that it is one person making 70 million requests to view.

No, of course not—I am being a bit ridiculous. I am trying to get a sense of whether the channel is good value for money and what the cost per viewer is of the £34 million that we are investing in the digital platform.

If you consider the overall investment that the BBC makes in Scotland, that is part of it. It is important for serving audiences. It is also important for the creative sector that we have a dedicated service on TV and iPlayer for Scotland. It is a complementary service to the rest of the BBC portfolio. I mentioned “The Scotts”, which premiered on BBC One Scotland, and we have important news programme such as “Reporting Scotland” on BBC One Scotland, so the BBC Scotland channel is part of the overall mix.

I have to say—and this is the industry view—that having gone from launch to a position in which the channel has established itself as the largest digital service in Scotland has been a real achievement. For the creative sector in Scotland, the investment announced was a challenge. Could the creative sector in Scotland rise to making a significant volume of new programming in a host of genres from comedy-drama to documentary? I think that that challenge has been met, which is a real tribute to the sector in Scotland.

Digital viewing is at 2.5 per cent, which is higher than the figure for other digital channels, but what is your ambition? What are you trying to achieve over the next three, five or 10 years?

The ambition is to be creative. We want to help to establish and grow the sector in Scotland, and to make great programmes for audiences in Scotland and throughout their distribution. We also want to have co-commissions with network services across the UK. We are public broadcasters; we are here to serve audiences, and the way to do that is to work with our teams in BBC Scotland and elsewhere in the wider creative sector. As I said, we work with more than 80 suppliers to make great content. We want to make sure that enough people are watching the channel. As I said, some programmes might not have high audiences, but if they are very highly valued, that is also important.

We move to questions from Sarah Boyack, who joins the meeting remotely.

I will ask two questions, one of each witness. The first question follows up on the issue of commissioning the programmes in Scotland. Steve Carson talked a bit about rebooting after coming through the pandemic. You have different types of new projects, such as drama, comedy and factual content. Can you give us the numbers as well as a sense of how you are retaining and increasing employment opportunities not just for actors but for all the staff who are involved in making new content?

I will take that one first. As I said, production for a number of planned pieces was paused last year. Scripted productions, such as comedy and drama, needed an insurance underwriting position to allow them to happen. That has now gone through, so production is returning in those sectors. Specifically when the pandemic hit, BBC Scotland and the rest of the BBC introduced a number of measures to support the wider creative sector and the crafts and skills that Sarah Boyack cites. The small indie fund, which is operated by the BBC, more than doubled and 18 Scottish indies were supported through that. Directly through BBC Scotland commissioning, we got a number of Covid-specific productions—mainly in the factual entertainment area, including “Socially Distant with Susan Calman”—up and running. There was a desire to serve audiences but also to get cheques to writers, artists and performers.

There were a number of sector supports from Screen Scotland, which put a freelance bursary stream in very early. However, the best support that we can give is working with people to get productions back safely. Again, I pay tribute to our teams in BBC Scotland and other independent producers for working out ways to get productions back safely. One example is “Scotland’s Home of the Year”, a very successful title that came through the BBC Scotland channel and was made by IWC Media. They managed to work out production protocols so that the programme could be made last year, and I pay tribute to everyone who worked through ways to do it safely.

More broadly, we support the BBC writersroom, and we have our own talent development initiatives such as “Float”, which I have mentioned. Again, iPlayer and the BBC Scotland channel give us a chance to try things out that could go further.

Over the years to come, is there scope for increasing the number of new productions in Scotland?

Yes. As I said, the direction of travel in the BBC strategy is clear: across the UK, we will move more decision making and spend content being outside London, and we can see the direction of travel—excepting Covid—in Scotland over a number of years. The co-commissioning initiative that I mentioned is across Wales, Scotland and Northern Ireland, and £25 million-worth of business is being co-commissioned. As I said, BBC Scotland has been trialling how to do that, so that brings more investment from other parts of the BBC into Scotland to create the content.

Yes. It would be useful to get a sense of job numbers as well. Maybe you could write to us with those numbers after the meeting.

I have a different question for Leigh Tavaziva, about what the BBC is doing to address the challenges for different types of broadcasting, particularly the important role of public sector broadcasting, given that viewing figures for private online streaming services have rocketed during the pandemic. What consideration are you giving to accessibility and different ways of accessing BBC products? I am thinking of younger and older people in relation to the costs of accessing services through connectivity and broadband. What is being done about that at the UK BBC level?

Of course, the BBC is absolutely clear on its public responsibilities with regard to our universality, because we bring a range of our services across watching, listening and, of course, our news programmes to all audiences across the UK, and that is critically important to us. I come back again to working across the UK and the focus on portrayal. Not only do we move money, power and decision making outside London; we also portray local communities across the UK. As a large public service broadcaster in the UK, the BBC has an ability to do that, which none of the global media organisations has.

We have colleagues in communities across the United Kingdom telling local stories. We need to do more of that and have more of that representation across all our programming and storytelling. That is what makes the BBC unique: it can be distinctive and different and tell these local stories. That is absolutely in line with our strategy and, fundamentally, that is what we believe that our audiences want from us as a public service broadcaster. Putting audiences at the heart of everything that we do and really understanding those needs must drive our decision making and, therefore, where we spend our money in meeting those needs.

What is the impact on your future role of that shift and people’s opting out and moving to private sector online streaming services, for example? What will the impact of that be on the BBC? It is hugely important with regard to accessibility. As I mentioned, the viewing habits of younger people, in particular, and perhaps older people as well—not to get into the detail of the licence fee—is an important issue with regard to cost and accessibility.

I will use two examples that focus, in particular, on our younger audiences aged 16 to 34. Over the past year—comparing 2019-20 to 2020-21—despite the pandemic, we have absolutely seen a shift in our younger audiences moving from linear television to our digital channels. The growth in iPlayer use among those younger audiences more than offsets the loss of some of our linear TV watching among those younger audiences. However, your point about accessibility is correct and one that we accept: we have a digital divide in the UK. We have audiences who are unable to access those streaming services in the way that many others can.

A good example of our strategy to focus on that is our taking BBC Three back into the linear channels. We recognised the huge success and popularity of BBC Three and, very early on, we moved it to being an online channel. However, we feel strongly that taking it back to being part of linear television enables those who are unable to access streaming and download services through a broadband provider on their mobiles or any other device to access the channel. Bringing that channel back to linear television is an important example of how we are addressing the digital divide and ensuring that we can continue to deliver across the UK for all our audiences.

Access to a digital connection is a crucial issue for people on low incomes and for older people, who might not have access to that. It is important that that is prioritised.

It is great to welcome both of the witnesses to the committee. I want to make a voluntary declaration that I worked for BBC Scotland—I left 11 years ago.

Steve Carson, you commented on the reduction in spend in BBC Scotland on production last year, which was due to Covid. However, if I have read the figures correctly, I understand that the number of hours of production still hit the target. Therefore, I am interested to know about the mix of commissioning. Were cheaper programmes commissioned in Scotland? You also note in your report—and you have said—that the BBC has committed to exceeding network spending targets in future years. Therefore, can you give us an indication of the programming types and timescales?

Steve and Leigh Tavaziva have mentioned on several occasions the plan to move commissioners out of the London metropolitan area. Again, I would like to know the timescale for that, if possible, please.

I will address your middle point first. The projection that we are making this year is that the BBC as a whole will meet or exceed the network spending target for Scotland. We cannot be completely certain because we cannot be certain about what is going to happen with the pandemic that we are still experiencing. The commitment is to meet the target, which we believe we will meet or exceed this year and in future years. We saw that increase happening in the pre-Covid years.

Commissioning power is being actively worked on through the across-the-UK strategy. We are in close conversations with the BBC content division, which handles network TV, and the radio division about increasing the number of network commissioners we have who are based in Scotland—we already have a number of those. The co-commissioning work that I talked about is another way of increasing commissioning decision making without adding extra posts. We have a team of very talented commissioners in Scotland, and co-commissioning them has enabled them to make creative decisions that will have an impact on our services and across the BBC.

09:30  

Covid played an extremely significant part in the drop in what we call BBC Scotland spend over the past year. In addition, some savings were made across the BBC, but Covid was the key factor there. You noted that, despite that, the number of hours that we delivered increased slightly. As you said, there were some genres that we could not maintain in production, such as the comedy “The Scotts”—it simply was not possible to film that last year. I am delighted to say that it is back now.

We expanded a range of other services. I pay tribute to the production teams involved for that. For example, we did things that we had not done before in religion. As you know, mosques, churches and temples closed. We quickly identified—it was great that it was done quickly—the spiritual need that existed. We put “Reflections from the Quay” on really quickly. For the first time, we live broadcast the service on the BBC Scotland channel.

On education—this goes back to the digital divide—when the schools in Scotland shut, within a week we put “Bitesize Scotland” on television to address that need. We knew that not every child in Scotland had access to a laptop or broadband, so feed over linear TV was part of that provision.

We also expanded the provision of news briefings and so on. As the figures in the annual report show, although the numbers on some genres, such as drama, comedy, entertainment, music and the arts, went down—that was purely Covid driven—provision in other genres expanded.

I think that we learned some useful lessons for the future. There was very strong public demand for the religious output, which complements what we do on Radio Scotland and through our religious programming.

I have some anecdotal evidence of that. Friends of mine and my mother were very appreciative of the religious output that the channel provided during lockdown.

You touched on what you have learned through the pandemic. On production, you mentioned quicker commissioning. I would be interested to hear you expand on what you said about that.

The BBC Alba channel started about 10 to 12 years ago—in fact, I think it was longer ago than that. Several times, you have mentioned BBC Alba’s involvement in co-productions. I am interested in looking at the different ways in which BBC Alba commissions. It commissions pasgan agreements for bundles of programmes from producers, followed by top-up commissioning rounds. That allows economies of scale to be achieved for the broadcaster and the programme producers, and it allows them to plan their output. You could argue that it also reduces risk on producer and broadcaster. I would be interested to hear your thoughts on that model for the BBC Scotland channel and more widely across BBC Scotland.

You are right in the point that you make. The BBC Alba channel is an extraordinary achievement, which has been led by our partners in MG Alba and our BBC Scotland team, headed by Margaret Mary Murray.

You are right that BBC Alba has a slightly different commissioning model in that it tends to do larger output deals with a smaller number of companies. I think that that has been an important part of developing what was a small Gaelic-speaking creative sector.

BBC Alba is a service within our portfolio that is provided in partnership. One of the things that we have done over the past number of years in BBC Scotland is integrate our radio, TV, online and social output so that our services are much more closely connected than they used to be. We used to have BBC Alba as a service, along with our other services. Through co-commissioning and co-production, there has been a significant increase in pieces that can run on either service. For example, traditionally, the TRNSMT festival was broadcast through our English language services, but it now also appears on BBC Alba for Gaelic speakers. We have increased the production of children’s programmes on BBC Alba by more than 50 per cent, and we have increased news provision at the weekends—I think that the figure is 25 hours a year.

It is a mixed ecology. Output deals have their place and provide underpinning for some parts of the sector. Through our other services, it is good to work with a plurality of suppliers—we work with about 80 suppliers. We want the best ideas for the audiences, first and foremost, and I think that we have managed to find a model, with partners such as Screen Scotland, which has been an incredibly successful screen agency for Scotland since it began a few years ago, that people are working well with and that brings a significant amount of co-production funding.

We recently looked at figures since the year in which the channel was launched. Some £10 million of licence-payer BBC Scotland investment has leveraged £14 million of investment from other sources. Therefore, £10 million from BBC Scotland creates a £24 million pot for content. That has been a very successful model.

I have a brief final question. I am interested to know whether the BBC Scottish Symphony Orchestra’s performances have perhaps been impacted by the inability to get performers over from Europe. I appreciate that, with the Covid situation, there will not be many live performances, but what are you doing to alleviate any issues there for the future?

I am glad that you pointed that out. Obviously, the BBC Scottish Symphony Orchestra was unable to perform for audiences over the worst of the lockdowns, but I am delighted to say that it is back performing now. I am looking at some requests this week. There have been requests to bring people in to do that. Obviously, the protocols on that are carefully worked through. Things have proven to be more complex during Covid, but we have found ways to work within Scottish Government regulations to do that. The SSO is now performing again. It had a very successful run at the Proms, and I think that it is performing later this month as well.

The SSO is an important part of what the BBC is there for in Scotland. It found ways to keep performing remotely through the worst of the lockdowns, and I know that it is delighted to be back and to have an audience.

Good morning to the panel. I have a question about the future and public service broadcasting in general.

Ofcom produced a report this year that said that public service broadcasting faces considerable challenges and threats and that the situation has been exacerbated by Covid. In particular, those relate to rapidly changing consumption patterns and markets as well as competition, especially internationally. Ofcom made several recommendations to the UK Government in relation to modernisation. From a BBC Scotland perspective, do you agree with Ofcom’s diagnosis? What observations do you have to make on the cure?

I will lead from a BBC Scotland perspective; I am sure that Leigh Tavaziva will be able to give an overall picture as well.

Ofcom has rightly pointed out, and it is evident, that competition for screen time—that includes everything from gaming to watching subscription video on demand, such as on Netflix and Amazon Prime—is going only one way. There will be more and more competition, and the way to address that is to make really good programming on all services that appeals to all audiences. One of the key things about being licence-fee funded with a near universal fee is that something has to be provided for everyone. In the BBC model, all audiences are of equal value. Commercial broadcasters and subscription broadcasters cannot say that. Some audiences are more commercially valuable than others. The BBC’s licence-fee-funded remit means that we look hard at serving all audiences in Scotland.

I think that Ofcom has also pointed out that, despite the competition in the market, so-called traditional broadcasting is still a very important part of the market. There are streamers such as Netflix and Amazon, but BBC iPlayer is a very successful and large Scottish and UK streaming service. I think that its future will be increasingly protected by technical rights issues. Members may recall that, under the rights agreement, we used to delete iPlayer content after 30 days. We can now keep content up for a year or longer, and that has already made a huge contribution to iPlayer viewing.

Linear TV is still very important. Ofcom’s “Media nations: Scotland 2021” report, which was published in August, showed that people in Scotland watch an average of 3 hours and 39 minutes of broadcast TV every day. Young audiences also consume BBC content in large numbers, including in Scotland. Our reach for 16 to 34s across the BBC is still at 80 per cent per week.

There is more competition in the market. The licence fee funding model promotes universality and makes us think hard about all audiences all the time. I worked for semi-commercial broadcasters in the past and, as I said, some audiences were more commercially valuable than others. One of the wonderful things about working for the BBC is that we believe that all audiences have equal value.

I will add a group perspective to Steve Carson’s excellent comments. We absolutely recognise the challenging competitive environment in which the BBC now finds itself, competing against global media organisations that have much deeper pockets and far more money to invest than we have, and those organisations are investing considerable amounts of money. The BBC’s strategic priorities are set with that clearly in mind. We must reform the BBC to enable us to optimise what we do and tackle that challenging environment.

We have set clear guidelines on impartiality, which makes us different and stand out. That is what you would expect from a large public service broadcaster in the United Kingdom. The BBC invests in great content, particularly content that is distinctive and that tells local stories across the UK. We are building our digital services. Steve Carson talked about iPlayer, which is doing incredibly well in its own right against large technology and media corporations. We must also build our commercial business in that competitive environment, which will, of course, lead to money being returned to the public service.

We welcome the discussions that the UK Government is entering into on how we ensure that public service broadcasters across the UK retain prominence. It is really important that people who pay the licence fee are able to access the services that they pay for. We also welcome the discussions on providing a level playing field so that public service broadcasters in the UK are able to compete successfully with their global competitors.

I will wrap up on a couple of points that have been made. The Ofcom review suggests that there should be more of a spread of public service media across different providers. How would that affect the BBC’s relationship with such providers? Its relationship with some online providers has certainly been a bit frosty. Would spreading public service media across different providers improve the relationship, or would it provide a challenge? Would there still be partnership, or would that lead to more competition?

In any market, competition is incredibly important. It is important across the public service broadcasting ecology, so we value the fact that we have a range of public service broadcasters in the UK. That has been essential for some of the work that has driven the growth in the creative sector, particularly when it has involved working with independent production companies across the UK. Steve Carson spoke about BBC Scotland’s relationship with more than 80 independent production suppliers in the UK, which we welcome.

We need to understand our priorities as a public service broadcaster in that environment. We must ensure that we focus on what our audiences want from us, on what makes us distinctive and on the role that we play in providing universal services to all audiences.

I echo what has been said. I firmly believe that, from the Scottish creative sector’s point of view, the more people investing money in content creation, the better. It is better for audiences and better for the sector that we are building together. For example, it is brilliant that Amazon is now shooting dramas in Scotland. The streamers say that they value the public service broadcasting ecology in Scotland and in the rest of the UK. They cannot do what they want to do without the broader public service media infrastructure that already exists.

One part of that ecology, as you call it, is the Kelvin hall studio. What contribution do you think will be made through that capacity? How will it enhance the entire sector’s ability to produce content in Scotland?

09:45  

Five or more years ago, there was a problem with broadcast infrastructure in Scotland, with productions unable to be brought in because of, for example, the lack of studio space for scripted productions. The Kelvin hall initiative, which, as you know, is funded by Glasgow City Council, Screen Scotland and others, will be developed over the next year, and the BBC’s commercial studio production arm, called BBC Studioworks, is in very advanced discussions with the owners of the development to become the operator. Again, the BBC’s intention is to go to the creative sector in Scotland as a whole. If, through our commercial arm, we can facilitate the addition of more studio infrastructure and encourage more productions to come in, that is a good thing. However, the Kelvin hall is being developed outwith the BBC. Broadly speaking, though, we have seen in the past few years the way in which new studio infrastructure has attracted additional content and demand into the sector.

So the Kelvin hall has very much been factored into your strategic development.

The Kelvin hall is being developed by Glasgow City Council and others, but the BBC’s very clear cross-UK strategy is to move content creation to Scotland and other parts and nations of the UK outside London. That is part of what has attracted BBC Studioworks, the BBC’s commercial studio production arm, to engage in very close discussions with the Kelvin hall developers.

Finally, the metrics for the BBC Scotland digital channel that you have talked about this morning, such as the 2.5 per cent viewing share, compare very well with those for other digital channels, but does the fact that you are doing pretty well compared with those channels act as something of a comfort zone in which you think, “Everything’s great”? What are your long-term aspirations for the channel? If, as I hope, they are about substantial growth, what will trigger that? Will it require a big drama such as the major hit “Keeping Faith”, which originated on S4C and then went on to the BBC? Is it that type of trigger that will get more people to watch BBC Scotland or will it be, say, a big news event such as indyref 2? What drives that kind of aspiration? Is it more about slow, continual, moderate growth instead?

You might well say, “Well, you would say that, wouldn’t you?” when you hear this, but I would not underestimate the scale of the challenge that was given to Scotland and the wider creative sector in 2017 with the huge expansion to a very significant volume of hours—around 900—of original programming a year. We went from the previous boutique content creation system, in which we made a limited amount of hours for insertion into BBC1 and BBC2, to having a channel of its own standing. Other channel launches over the past few years have not gone so well, and the fact is that the channel was able to stand up, operate successfully and, as I have said, attract significant audiences. The audience shares of some of the terrestrial channels might be between 5 and 6 per cent, so our 2.5 per cent share is in industry terms a genuinely very strong performance.

You are absolutely right to suggest that nothing succeeds like success, and it has been important to have a number of big high-profile hits. In the factual genre, we have had big hits such as “Inside Central Station” and “Scotland’s Home of the Year”, and the drama-comedy “Guilt”, which debuted on the BBC Scotland channel, has been an enormous creative success, attracting a significant audience on BBC Two and iPlayer and coming back for another series. The ambition is to ensure that we keep helping creative people in Scotland by backing their ideas and providing a pipeline so that we are not just starting off with, say, a network TV commission. We have eyes and ears on the ground all over Scotland to identify new talent and, with different initiative schemes and services, we can help that talent work through.

If the channel was a stand-alone service, you could argue that the fact that it was being viewed in Scotland was important in itself, but its availability on iPlayer, which is the distribution platform of the future, means that many people not only in Scotland but in the other UK nations can watch it. The overall ambition is to get as many people watching as possible or to reach small groups of people who very highly value a bit of content and then, through our very talented commissioning team led by Louise Thornton, to back talented people in making good programmes.

So what will success look like? Is it about maintaining the 2.5 per cent viewing share?

We have already exceeded Ofcom’s reasonable projections. Ofcom had one projection for a channel with bigger budgets. I would like as many people as possible to watch channel content, either on the linear service or on iPlayer. As I mentioned, on our iPlayer performance, BBC Scotland-commissioned titles have more than doubled since channel launch and again grew strongly last year. It needs to have a certain scale and size to stand up as a service, which it does. Equally, as you say, it is about generating stuff that has high impact and means a lot to people.

I would say this but, if you look at awards picked up over the past number of years, in the broadcast digital awards last year, BBC Scotland titles won best drama and best documentary, which are the big competitive categories.

My question is again for either or both of the witnesses. You rightly mentioned that a public service broadcaster can do certain things—such as providing a variety of programmes—that, for example, Netflix cannot or does not do. How much pressure is the BBC feeling from the competition with platforms such as Netflix, and how does that apply to different age groups, particularly younger age groups? On a related point, how does Scotland compare with other parts of the UK for people in essence opting out of the BBC altogether?

I will start by speaking about Scotland, and Leigh Tavaziva can give you the overall BBC picture. As Leigh said, competition in any market is good, and creative competition is really good, because it keeps everyone on their toes. We have seen a rise in production values in Scottish and British broadcasting over the past decade.

It is not just young audiences who are accessing subscription video on demand in large numbers—that middle cohort of 35 to 54-year-olds is increasingly adopting the same patterns. However, 16 to 34-year-olds still turn to the BBC and BBC Scotland in significant numbers. As the annual report points out, 16 to 34-year-olds still spend seven and a half hours a week with the BBC, although that is lower than the number for over-55s.

In Scotland, we have a distinctive story to tell. We have unique services for young people such as “The Social”, “Short Stuff” and other things that I have mentioned. Forgive me for being slightly wonky, but the channel has a significant 16 to 34-year-old age profile. It has a unique reach of 1.7 per cent of 16 to 34-year-olds, which means that 1.7 per cent of 16 to 34-year-olds in Scotland watch the BBC Scotland channel and no other BBC TV service. That means that we are bringing people into the BBC portfolio.

There are challenges with young audiences, and they have been there since I started in broadcasting 30 years ago. We fight hard at this, and we still have reach into and relevance with young audiences.

We care passionately about our audience reach, and digital services provide some challenge to that. However, we need to remember that 90 per cent of adults, and 80 per cent of 16 to 34-year-olds, use the BBC services on average every week. If we look at that over a month, we are getting much higher figures for that. Therefore, we remain the most used media organisation in the UK.

Through the pandemic, we were able to further demonstrate the absolute core essential of our mission, which is to inform, educate and entertain. We were able to maintain that broadcast resilience at a time when we were seeing unprecedented closures in the economy. It was essential for us to continue to inform; we had our lockdown learning for children who were no longer at school; and we continued to entertain. I am sure that many of us will remember the great entertainment that we received from “Strictly Come Dancing” at the end of last year. Those things were important to the public and to audiences.

However, we are not at all complacent about the challenges of the global media organisations in the digital environment. As I have explained, we believe that our strategy is the right one. We have a clear plan, and if we follow through on it, which we absolutely intend to do, that should put the BBC in a brilliant place for its future.

I have a quick question that follows on from what Steve Carson said about the audience age range target for the BBC Scotland channel. How is BBC Scotland progressing on its diversity targets, both in front of and behind the mic or camera? I am also interested in the other big news story that hit the BBC, which was about equal pay.

On equal pay, the BBC as a whole, over a number of years, had hundreds of cases, but we are now down to low single figures. It is difficult to talk about that in any more detail without running the risk of identifying individuals, but the overall gender pay gap—that is not the same issue as equal pay—has been reduced to, I think, 5.1 per cent. There should not be any pay gap, but that is a lower figure than that in the wider industry.

Diversity is incredibly important. Looking at everything through the audience lens—many of us can identify with this—we can see that we cannot properly serve audiences if they do not see or hear on screen people who live near them, look like them and sound like them. Crucially—this has been the key thing—the people who are making the programmes need to follow that. Many of us grew up in a time when there was not many people from Manchester, Northern Ireland or Scotland being represented as often as they could have been on local services.

The BBC has announced what is called the 50:50 initiative. BBC Scotland is working through that and modelling carefully how we get more people from black, Asian and minority ethnic backgrounds and disabled people, and how we make sure that our gender split is 50:50. We are starting from a position of strength in some of those categories. It is a challenge, but it is an important one, because the people who make the programmes—the people who work directly with the BBC—reflect the audience as a whole. That is a very targeted programme which, working with our head of human resources, Joti Singh, over the next few years, and all our hiring managers, will make sure that we achieve that target.

I will finish with a final question on the back of Ms Minto’s. The BBC strategy says that one of the BBC’s purposes is

“To reflect, represent and serve the diverse communities of all of the United Kingdom’s nations and regions and, in doing so, support the creative economy across the United Kingdom”.

The creative economy is very important in Scotland. As we move towards a wellbeing economy, culture will be at the heart of that. BBC Radio Scotland made some big changes in approach to some of the lunchtime programmes. Popular segments such as the newspaper review were removed. There was a change in the make-up of programmes, particularly phone-in ones. This is a personal observation, but it seems to me that, quite often, the ordinary members of the public who are on such programmes are the same people over and over again and are not a very diverse group.

I also want to ask about the opportunities for new programming. Dr Allan was talking about programmes such as “Tutti Frutti”. In the past, many of the BBC’s drama productions and other screen productions came from radio. Will there be opportunities for new talent? Will new music talent be showcased? Will there be new drama and new opportunities for people on BBC Radio Scotland?

You are right that we have made several significant changes to schedules. We changed programmes at breakfast, lunch time and drive time early last year, just before lockdown. From the audience response, you can see that our services, including digital streaming, have been important. During Covid, all those services have been so vital, including our online services. We had 37 million requests to view our page on Covid in Scotland.

Unfortunately, we cannot measure our normal radio figures, because during lockdown the RAJAR—radio joint audience research—measurement tool, which involves contact, had stopped. I am delighted that it has started back up again.

I will take away your comments about the contributors on our phone-ins and discuss them with the production team.

As you said, radio drama has been a very good place to develop new drama. We have a very successful radio drama team in BBC Scotland, which makes a lot of networked radio dramas. It has recently won a significant podcast award.

There are other pipelines in which to develop; iPlayer is a new pipeline for the development of TV drama that obviously was not there a few years ago. The series “Float” that I mentioned came through BBC writersroom and is made in partnership with Screen Scotland.

Music is an incredibly important part of our radio portfolio. We have “BBC Music Introducing”, for new music. How we are organised is that we have multiplatform production teams. In our digital strand, “Loop” and “TUNE”, which are about the arts and music, exist for younger audiences in the social digital space. We can put such programmes on TV on the BBC Scotland channel.

Arts and culture are incredibly important to all audiences in Scotland, not just the wealthier audience. There is fantastic innovation in Scottish music and the arts, and we have a range of services that cover that. We are always looking at that and seeing what we can do to identify and nurture talent at all levels.

I thank you and Ms Tavaziva for your contributions this morning. I suspend the meeting for five minutes while witnesses are swapped over.

10:01 Meeting suspended.  

10:05 On resuming—