The BBC Trust is arguing that a proper process for setting the BBC’s funding should be built into the new Charter for the first time.

To protect the BBC’s independence, the Trust believes the process needs to be fairer, more transparent, and more accountable, and give the public a formal say in setting the BBC’s funding in future.

An independent report commissioned from the Policy Institute at King’s College London shows that over time, there have been successive risks to the independence of the BBC or to the perception of its independence, most recently in the process by which the July 2015 funding agreement was made. It suggests practical ideas to protect independence in the future.

The Trust also commissioned reports from Oxford University economist Professor Dieter Helm CBE, and City University’s Dr Xeni Dassiou, to look at the role that independent regulators play in determining funding requirements in other sectors and if there is any possible read-across to the BBC.

In its analysis of these reports, the Trust sets out its support for a range of measures suggested by King’s that could be incorporated into the next Charter:

• A more regularised and formal process for setting the level of BBC funding;
• Giving the public more say in future licence fee settlements, such as through public consultation; and
• Should the BBC be governed by an independent regulator in future, for that regulator to have a specific role in assessing the BBC’s funding requirements and in advising the Government on the level of BBC funding and the level of the licence fee.

According to BBC Trust Chairman Rona Fairhead, the public strongly supports the independence of the BBC. “As the BBC’s funding is an important part of that independence, funding decisions need to be made on a fair and transparent basis. In future we want the process to be put on a much more formal footing, including involving the public in decision-making and building these requirements into the Charter. We will be urging the Government to include these changes in the coming months.”

In its analysis of the reports by Professor Helm and Dr Dassiou, the Trust notes that pure economic regulation of the BBC would be a very radical change and would not take account of the BBC’s unique cultural and social value. However, some aspects from other regulatory systems could be read across. In particular, consideration should be given to a formal role for any future independent BBC regulator in decision-making about the BBC’s funding.

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