UK government orders independent BBC review

BBC director general Tony Hall

The UK government has appointed former Virgin Money and Prudential chairman and former Bank of England deputy governor Sir David Clementi to head up an independent review into how the BBC is governed and regulated.

The review will form part of the ongoing BBC Charter renewal process.

Clementi has been tasked with coming up with proposals for a new model of governance and regulation of the pubcaster, including specific mechanisms to enable both, and proposals about the way the BBC and the bodies that govern it should engage with licence fee payers and the industry.

Clementi will submit his report, setting out proposals for a new governance structure, early in 2016.

The current regulatory and governance regime, based on the tripartite responsibilities of the BBC Executive, which runs the organisation, the BBC Trust, responsible for the licence fee and overall strategic direction and for holding the Executive to account, and Ofcom, which regulates broadcast content and looks at how the BBC affects the wider market, has been subject to intense criticism.

A green paper published earlier this year proposed three alternative models: one based on the Trust; one based on a new standalone regulator; and one giving Ofcom more responsibility.

“Television is of huge importance to the nation – and the BBC lies at the heart of British television. However no-one could deny that the BBC has made some bad mistakes in the last few years. Savile, McAlpine, Ross-Brand, severance payments and excessive salaries have all contributed to a widespread view that the governance structure needs reform,” said Secretary of State for Culture, Media and Sport John Whittingdale.

“As part of the Charter Review process, I am pleased to announce that I am setting up an independent review into the governance and regulation of the BBC. It will be conducted by Sir David Clementi, whose experience – including being Deputy Governor of the Bank of England and reviewing the regulation of legal services in England and Wales – makes him uniquely placed to undertake this review.”

Clementi said: “The BBC is a world class broadcaster and requires effective governance and regulation. I look forward to conducting this review.”

UK producers body PACT expressed its dismay that the ‘terms of trade’ that govern the rights broadcasters and producers are entitled to are also under review. The industry group said it will use “every means possible to defend the interests of the British indie sector”.

Pact chair Laura Mansfield said: “Ofcom’s very recent PSB Review found that ‘overall, the system appears to be functioning effectively’, so it is utterly astonishing that the Culture Secretary should call for them to yet again review the terms of trade.

“Given that the terms of trade are there to help and support qualifying indies and entrepreneurs who need it – such as my indie Outline – and do not apply to the non-qualifying indies, I just don’t understand why a government that champions small businesses would want to create such instability”.