On 23 March 2023, Ofcom published a new operating licence for the BBC that came into effect on 1 April 2023. It sets out the regulatory conditions that the BBC must comply with, as well as how Ofcom intends to hold the BBC to account for delivering this remit.
This blog explains Ofcom’s role in the scrutiny of the BBC, the key points of the new operating licence, and how this may relate to BBC programming and work in Scotland. While the licence is reserved, the Scottish Parliament plays a role in scrutiny of the BBC and this blog also links the new licence to recent evidence taken by the Constitution, Europe, External Affairs and Culture Committee.
The Royal Charter is the constitutional basis for the BBC and it is produced and reviewed by the UK Government. It sets out the BBC’s Object, Mission and Public Purposes. The Charter also outlines the Corporation’s governance and regulatory arrangements, including the role and composition of the BBC Board.
The current Charter began on 1 January 2017 and ends on 31 December 2027. This is the first Charter that has appointed Ofcom as an independent regulator of the BBC.
The first operating licence for the BBC was published by Ofcom in 2017, and the new licence replaces this. The role of the operating licence is to hold the BBC to account for delivering its remit. It is designed to ensure that the BBC:
“effectively fulfils its Mission and promotes its Public Purposes: to provide impartial news and information; to support learning; to show creative, high-quality and distinctive output; and to reflect, represent and serve the UK’s diverse communities and support the creative economy across the UK.”(Page 8 of Statement: Modernising the BBC’s Operating Licence)
The BBC also publishes documents setting out their plans for the future of the organisation, including an Annual Plan. Other relevant background documents include The BBC Across the UK, which sets out the BBC’s plans to move more of its services and output away from London and the South East, and a speech to staff by Director-General Tim Davie that announced the need to build a digital-first BBC.
The new operating license covers the period from 1 April 2023 to 31 December 2027. It provides details of the objectives and regulatory conditions that the BBC is expected to meet, as well as detailing how Ofcom holds the BBC to account for these.
The Statement: Modernising the BBC’s Operating Licence notes that the new licence comes amid a backdrop of a changing UK media landscape. It states the need for the BBC to ‘transform and modernise’ to remain relevant and that it “is critical that the BBC serves all audiences and continues to provide a broad range of high-quality UK content.”
The statement summarises the details of the new licence into three main categories:
- the BBC must continue to provide content and services valued by audiences as it modernises and transforms
- the new Licence requires the BBC to be much more transparent with audiences about changes to its content and services
- Ofcom will scrutinise the BBC’s plans and performance and will step in if they are concerned that the BBC is not delivering for audiences.
Role of Ofcom
The licence provides Ofcom with a clear role to not only scrutinise the BBC’s performance against the Charter and the operating licence, but also to step in if there are concerns.
An element of this scrutiny includes the reporting requirements placed on the BBC as well as a requirement for Ofcom to publish an annual report setting out their assessment of the BBC’s compliance with the regulatory conditions of the licence.
The following powers are also conferred on Ofcom as part of the licence:
- to consider complaints made to Ofcom by any person, and carry out such investigations as Ofcom considers appropriate
- to require the BBC to provide information for the purpose of the carrying out by Ofcom of its functions
- to direct the BBC (or accept undertakings from the BBC) to take such steps Ofcom consider will remedy the failure to comply, and ensure that the BBC complies with their requirements properly in future
- serve on the BBC a notice requiring it to pay to Ofcom, within a specified period, a specified penalty up to a maximum of £250,000.
Providing content and services
Quotas are a key feature of the operating licence, and there are over 70 of them in total. These are used by Ofcom to ensure that the BBC delivers a minimum volume of certain content. There are also several requirements detailed in the licence including: criteria for the BBC’s online services; the need for services to cover a broad range of content; and an expectation that niche areas are covered even if they attract smaller audiences.
Some of the quotas and requirements specific to programming in Scotland include:
- In relation to each of BBC iPlayer, BBC Sounds, the BBC Website, BBC One Scotland, BBC Scotland, BBC Alba, BBC Radio Scotland and BBC Radio nan Gàidheal, the BBC must provide content of interest and relevance to audiences in Scotland, including a broad range of content which reflects Scotland’s culture.
- BBC Scotland must show original productions for a minimum of 75% of programming hours.
- In Scotland, Northern Ireland and Wales, programming should include indigenous language content and a broad range of genres.
- The BBC must ensure that in each calendar year at least 8% of the hours of network programmes made in the United Kingdom are made in Scotland and at least 8% of the expenditure of the BBC on network programmes made in the United Kingdom is linked to programme production at different production centres in Scotland.
Another key feature of the new licence is the focus placed on the need for transparency in decision-making and an emphasis on improving communication with audiences. This is a similar theme to that picked up by the Constitution, Europe, External Affairs and Culture Committee in their recent evidence sessions on the BBC: Impact of the Digital-first Agenda.
At its meeting on 23 February 2023, the Committee gathered evidence on changes to the programming of BBC Radio Scotland, and the possible impact of these changes. Several concerns were raised about how decisions were made, as well as the perceived lack of consultation and subsequent communication by the BBC with audiences. As part of his evidence, Professor McKerrell, professor in media and music, Glasgow Caledonian University told the Committee that:
“This really is a question about the public good. I would like to see far more transparency from the BBC about how decisions are reached.”
His comments were supported by the evidence provided from other witnesses. The theme was brought up by the Committee the following week in the evidence session with Steve Carson and Louise Thornton from BBC Scotland. The witnesses noted that decisions on BBC programming were based on a number of factors including audience data, trends and financial considerations, as well as overall BBC strategies such as digital-first.
The new licence includes transparency requirements throughout the document that the BBC is expected to comply with. It sets out areas that must be included as part of annual planning, as well as a requirement to subsequently report on the performance of these areas. The statement accompanying the licence notes that:
“The BBC needs to improve how it explains its transformation plans to audiences, and whether or not they are successful. As the BBC looks to modernise how it delivers on its remit, it needs to do much more to engage in a meaningful and transparent way with the public, other stakeholders, and with Ofcom. Too often, there is a lack of detail and clarity in the BBC’s announcements about proposed changes to its services. So we are expecting a step-change from the BBC to ensure more open, detailed and proactive communication. The BBC also needs to be clear and open about whether its changes are successful.”(Page 4 of Statement: Modernising the BBC’s Operating Licence)
It is worth noting that while the licence requires a change in how the BBC announces and reports its proposed changes, there is not an explicit requirement to consult on these changes.
Laura Haley, SPICe Researcher