An influential group of UK MPs has said it sees no long-term future in the BBC licence fee and set out advantages of a broadcasting levy. It considers the BBC still a valued and important feature of national life but in need of stronger governance and more challenging, independent oversight if it is to be held accountable.

In a major report published ahead of its launch on the floor of the House of Commons February 26th 2015, the Commons Culture, Media and Sport Committee calls for major changes to the BBC’s governance and for reforms to its funding, in the context of a rapidly evolving media environment and following several years where the Corporation has been “at times beset by mistakes”.

The report notes that the BBC makes a valuable contribution to many people’s lives as the nation’s broadcaster reaching 96 per cent of the population on a weekly basis and many millions more overseas through the provision of its international services. Its continuing importance as a provider of impartial news and its capacity to bring the country together where its output remains universally available are aspects which many people continue to associate with and value in the Corporation.

However, the Committee says there are major questions to be answered about what justifies the close to £4 billion (5.5bn Euros) public money spent on the BBC, and on what the scope and scale of its activities should be. Moreover, there is a danger that the BBC will, by accident or design, crowd out smaller rivals and inhibit their ability to prosper. Charter review allows an important opportunity to review all aspects of the BBC—the BBC’s current Royal Charter expires at the end 2016.

Committee conclusions:

• In the short-term there is currently no better alternative to the licence fee but as a minimum the licence fee must be amended to cover catch-up television as soon as possible.

• Criminal penalties and enforcement for non-payment of the licence is anachronistic and out of proportion with responses to non-payment for other services. However, decriminalisation needs to be accompanied by measures to prevent increased evasion.

• A broadcasting levy on all households is the preferred alternative but a degree of subscription for BBC services could be a possibility in the future.

• The BBC has tried for too long to provide “something for everyone”: it should reduce provision in areas where others are better placed to deliver excellence and better value for money, and make bigger, braver decisions on its strategy.

• The BBC should seek to do more in partnership with others. It should also support local media through extending the indie quota to include local news.

• The BBC must demonstrate transparency to eliminate suspicions of cross-subsidy of its commercial work if it is to produce content for others.

• The BBC Trust should be abolished and new arrangements made for the governance, regulation and oversight of the BBC.

• The BBC should have a unitary board with a non-executive Chair, who would be known as the BBC Chairman.

A new rigorous and independent Public Service Broadcasting Commission (PSBC) should be established with the role of scrutinising the BBC’s strategic plan, assessing the BBC’s overall performance, and determining the level of public funding allocated to the BBC and others. A small amount of public funding should made available for other public service content priorities.

The National Audit Office (NAO) must now be given unrestricted access to the BBC to provide assurance that the Corporation is spending money wisely.

Committee Chairman John Whittingdale said that over the last few years, the BBC had suffered from a succession of disasters of its own making, yet it remained a widely admired and trusted institution, and fulfilled many important functions both at home and abroad. “However, when an organisation is in receipt of nearly £4 billion of public money, very big questions have to be asked about how that money is provided and spent, and how that organisation is governed and made accountable. In the short term, there appears to be no realistic alternative to the licence fee, but that model is becoming harder and harder to justify and sustain,” he stated.

“We also consider it anachronistic that it is a criminal offence to evade the licence fee, it is completely out of step with non-payment of other services and penalties. Decriminalisation of the licence fee should be linked to other measures to prevent an increase in evasion, possibly by introducing controls for access to television services and a move to a German-style household broadcasting levy,” he suggested.

“The BBC has tried for too long to be all things to all people—with the rapid changes in communication and media technology and markets and changing audience needs and behaviours this no longer works. The BBC should tailor its output to what it does best, and not stray into areas that can and should be left to commercial providers to do well. It is pointless and wasteful having an organisation receiving that kind of public funding competing with—and potentially crowding out—other providers,” he said.

Whittingdale said that the BBC Trust had failed to meet expectations and should be abolished. “It remains far too close to the BBC and blurs accountability of the BBC rather than it being a sharp and effective overseer of the BBC’s performance as a public service institution. “An organisation of the size and cost of the BBC must be subject to the most rigorous independent scrutiny. A single BBC Board would be fully and transparently accountable for its governance and spending. We recommend the establishment of a new Public Service Broadcasting Commission with wide powers to scrutinise the BBC’s strategic plan, assessing the BBC’s overall performance, and determining the level of public funding allocated to the BBC and to others.”

In conclusion, Whittingdale said that given the importance of the BBC, its position in the nation’s psyche and the size of its public funding, it was vital that a full and frank debate takes place now on all aspects of the broadcaster. So that this might happen, we are calling on Government to seek cross-party support for setting up an independent review panel now on the 2017 Charter, so that the process is as thorough, open and democratic as it can be. Our conclusions and recommendation set out the terms of reference for this panel.”

Responding to the report, the BBC noted that it confirmed the importance of the BBC in national life and recommends maintaining and modernising the licence fee, something it had said is necessary.

“We’re grateful to the committee for endorsing our record for efficiency and maintaining the quality of programmes and services, and note members overwhelmingly voted against moving to a subscription funding model,” said the BBC.

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