THE BBC TRUST’S REVIEWAND ASSESSMENT
The Trust exists to get the best out of the BBC
for licence fee payers. It is the governing bodyof the BBC and sets the strategic direction,measures performance and holds the Executive
to account.

BBC Annual Report and Accounts 2012/13

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CHAIRMAN’S FOREWORD

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SETTING STRATEGY ANDASSESSING PERFORMANCE

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SETTING STRATEGYQUALITY AND DISTINCTIVENESSVALUE FOR MONEYSERVING ALL AUDIENCES
OPENNESS AND TRANSPARENCY

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UNDERSTANDING AUDIENCES

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INSIDE THE TRUSTPART ONEPART ONEBBC TRUSTEES
GOVERNANCE
TRUST FINANCES

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CHAIRMAN’S FOREWORD

It was the best of times, it was the worst of times. The opening
words from Dickens’ A Tale of Two Cities perfectly sum up theBBC’s year in 2012/13. The unparalleled success and quality of theBBC’s Olympics coverage was rapidly followed by some of thedarkest days in our recent history, with the revelations about theappalling crimes of Jimmy Savile and all that came after them.

The failings of the BBC were significant – the original flaweddecision not to pursue the Savile Newsnight investigation; the initialchaotic handling as the saga unfolded; the inaccurate blog that I
myself relied upon to explain events in public; the unforgivably
poor journalism in the Newsnight child abuse investigation in
North Wales. Reports by Nick Pollard and the Trust were rightly
unflinching in exposing the BBC’s failings, and Acting DirectorGeneral Tim Davie, and then Tony Hall, both made addressing
them a priority. One positive point that I did take from the whole
episode is the BBC’s willingness to tell the truth about itself,
however horrible or uncomfortable that truth may be, as
evidenced through our very substantial coverage.

But first the high points. The BBC’s Olympics coverage, like theGames themselves, surpassed all expectations. As Danny Boyle’s
mesmerising opening ceremony unfolded, it became clear that
this was going to be a moment that brought the nation together
and would hold its place in our collective memory. The quality of
the BBC’s coverage and the professionalism of presenters such as
Clare Balding, Gabby Logan, and Gary Lineker, supported by
Away from Savile, the BBC continued to focus on value for money.
experts including Denise Lewis and Michael Johnson, helped make Senior management and talent pay at the BBC continued to fallthat possible.
this year, and it is encouraging that the Government is now
following our lead in publishing comparisons between top and
The Olympics also provided a signpost as to how the BBC canaverage pay. Of course there is much more to do on this agenda,
serve audiences in the future. You need only look at the recent
particularly tackling the excessive severance payments of the past.
coverage of Glastonbury, which has encompassed more of theThat’s why the Trust asked the National Audit Office to look into
BBC’s channels and platforms than ever before, for evidence of
this and why the Director-General has introduced a cap on such
how the Olympics has influenced the way we reach audiences.
payments. We have also asked PricewaterhouseCoopers to help
Of course it wasn’t all just about the Olympics in 2012/13.
us get to the bottom of what went wrong with the BBC’s Digital
Amongst much other wonderful output, The Hollow Crown
Media Initiative technology project, which wasted huge sums of
Shakespeare season was film-making of the highest ambition,
licence fee payers’ money, and have asked the Director-General
shown on a prime time slot on BBC Two. Similarly, Britain in a day to provide the necessary assurance that the right measures are in
was another programme that encapsulated all that is best about the place to make sure that there are no similar problems with
BBC, as did BBC Radio 4’s Bloomsday Ulysses-in-a-day coverage.
current major projects.
As for the low points, the details of the Newsnight crises and thedeparture of George Entwistle as Director-General are set out
elsewhere in this report, so I don’t intend to recount them indetail here. But the BBC seriously let down both itself and licencefee payers. Trust in the institution took a hit as a result, although it
has begun to recover.

‘‘One positive point I takeis the BBC’s willingness totell the truth about itself,
however uncomfortablethat truth might be.’’08

PART ONE: CHAIRMAN’S FOREWORD

Finally, I would like to pay tribute to Tim Davie for steadying theship during the turbulent events of the autumn, and to say that,in Tony Hall, we have appointed a new Director-General who
combines passion for the BBC with vast experience gained both
inside and outside the organisation. My fellow Trustees and I lookforward to working with him as we seek to build on the successes
and learn from the failings of a year like no other.

Lord Patten of Barnes CH
Chairman
20 June 2013

BBC Annual Report and Accounts 2012/13

Reporting on the
BBC’s progress: quality anddistinctiveness; value for money;
serving all audiences; openness
and transparency

BBC Annual Report and Accounts 2012/13

09

PART ONE: SETTING STRATEGY AND ASSESSING PERFORMANCESETTING STRATEGY ANDASSESSING PERFORMANCESETTING STRATEGY

FOCUSING ON WHAT MATTERS
To get the best out of the BBC for licence fee payers,
in 2010, the Trust set four strategic objectives forthe organisation.
QUALITY ANDDISTINCTIVENESSVALUEFOR MONEY

We have always been clear that the BBC
should aim higher in terms of programme
quality, and that its services should enjoy
the freedom from commercial pressure
to take creative risks and try new things.
We work to ensure that the BBC meets
its audiences’ very high expectationsof impartiality.

The BBC has continued to meet Trust
efficiency targets having generated some£2billion cumulative savings between
2008/09 and 2012/13. Early indications
suggest that this has been achieved without
a detrimental impact on performance but
this is continually and closely monitored.
We have set the BBC a target to deliver
11% efficiency savings by 2016/17.

The Trust identified areas in which the
BBC should aspire to be more distinctive
and addressed these by pressing for
greater range and ambition on BBC
Television (which we now see clearly on
BBC Two in particular), more funding
for BBC children’s services, and more
distinctive editorial strategies for manyof the BBC’s radio services. We haveensured that BBC Online plays a distinctiverole in its newer and more dynamic
online markets.

Whilst this provides a good indication that
overall value for money is improving, thecostly failure of the BBC’s Digital Media
Initiative (DMI), shows that there is stilla need for significant improvement.
We are extremely concerned about
the failure of this technology project toproduce anything of value in return forthe £98.4million spent on it, and havecommissioned an external review into
what went wrong to ensure that nothing
like this ever happens again.

In 2007, we set out how the BBC could
strengthen its approach to impartiality byreflecting greater breadth of opinion andmoving away from the notion of there
being only two sides to an argument. This
year, we assessed progress in this area andfound that, whilst audiences are broadly
content with the BBC’s coverage of a range
of opinion, there are still gaps where public
attitudes and concerns should be
addressed more in BBC output.

A failure on this scale has naturally
prompted us to ask whether similar
problems exist elsewhere and we haveasked the Director-General to provide us
with the assurance that all current major
projects are both adequately controlled
and accurately reported.
We will expect the BBC and, if appropriate
the Trust, to implement the agreed
recommendations of the review and to
co-operate in any follow up studies by the
National Audit Office.

‘‘The BBC has made significant overallsavings, but the costly failure of the
DMI is a serious cause for concern.
We have commissioned a review toensure that there can be no repeatof a failure on this scale.’’‘‘We have been consistent in statingthat BBC television should takemore creative risks and innovate.’’‘‘The BBC can strengthen its
approach to impartiality byreflecting the full breadthof opinion.’’Anthony Fry

David Liddiment and Alison Hastings
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BBC Annual Report and Accounts 2012/13

OPENNESS AND
TRANSPARENCY

Through its role in setting BBC strategy,
the Trust tries to ensure that audiences
can access BBC content at times and inways that suit them.

PART ONE: SETTING STRATEGY AND ASSESSING PERFORMANCESERVING ALL
AUDIENCES

The BBC is incredibly fortunate that its
licence fee payers feel a strong sense ofownership of the organisation, with aunique degree of curiosity about
everything it does.

BBC iPlayer is available on more platforms
and devices than ever, and demand frompeople of all ages and backgrounds for BBC
on-demand content continues to increase.
The Trust has supported improved access,including the 24 temporary TV channels
that enabled the BBC to offer the mostcomprehensive Olympics coverage ever.

The Trust expects the BBC to respondby being transparent about the way itworks, open to enquiry, forthcoming in
its answers, and ready to own up when
it makes mistakes – as all organisations
do from time to time.
The BBC now routinely publishes detailsof senior pay and expenses, and the costof presenters and performers. It has also
relaunched its website, which provides
more information about the runningof the BBC than before.

The Trust has also sought to ensure thatthe BBC is always trying to meet theneeds of a more diverse audience, notonly through being at the forefront of
new technology, but also through its workout of London, or improved portrayal ofdifferent parts of the UK in dramas, or abetter understanding of how the news
needs to serve the devolved nations.

The Trust now wants it to consider otherinitiatives. For example, in our review
of BBC Online, we encouraged the
Executive to make performance data
available to licence fee payers,
stakeholders and industry.

‘‘The Trust has supported better
access to BBC content, including
the 24 temporary TV channels
that allowed the BBC to offer themost comprehensive Olympics
coverage ever.’’‘‘To be the creative powerhousethat it is, the BBC needs toguard its editorial freedom andindependence jealously. But, inthe way it runs its business, it can
only gain by being ever more
open, in a way that none of its
competitors would ever
dream of.’’

Diane CoyleRichard Ayre
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QUALITY AND DISTINCTIVENESS

ENSURING STAND-OUT CONTENT
We assess the performance of BBC services bylooking at how audiences use and appreciate them,and we ensure BBC editorial standards remain high.

Use of BBC Online on tablets and mobile devices became mainstream in 2012/13

Overview
The public expects a different, higher standard of content fromthe BBC. So, increasing the distinctiveness and quality of all its
services is a particular priority for the Trust. Maintaining higheditorial standards is one key aspect of distinctiveness, because
the BBC is committed to impartiality, as enshrined in the Editorial
Guidelines. Although a very serious editorial breach occurred in
BBC News during the year, the public’s trust in the BBC’s output
has since recovered and the Trust will continue to focus on higheditorial quality.

Service performanceThis year, the BBC maintained its strong position as the nation’s
most popular broadcaster, with all services performing well, andreaching 96% of the UK population each week. The BBC reachednearly everyone in the UK with its coverage of the London 2012
Olympics on TV, radio and online, and audiences were
overwhelmingly positive about the coverage.

Audience perceptions of quality were very strong this year for all
services, despite the start of budget cuts in line with the Delivering
Quality First plans (DQF). The budgets for many services will go
Here we report on how well BBC services performed in terms
down more in coming years, so we will continue to monitor
of audience appreciation and consumption, and then on the BBC’s quality of output very carefully.
editorial standards.
One of our priorities is that BBC services find ways to be more
distinctive from other broadcasters and this year we continued tosee progress on this front. We will use our continuing programmeof service reviews to drive further progress.

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PART ONE: SETTING STRATEGY AND ASSESSING PERFORMANCE

BBC Annual Report and Accounts 2012/13

PERFORMANCE SUMMARY

How we measure up

What’s next?
The Trust will consider how BBC
television can maintain and increase
its quality in our television service
review in the coming year

Fresh and new
Viewer perceptions of BBC television
being fresh and new has remained stable
but high, but the public still want morefrom the BBC.

How we measure up

What’s next?
We see BBC television’s ability totake creative risks as key to its
distinctiveness and will examine
this in detail in our service
review this year

67.8%

70.4%

70.6%

2010/112011/122012/13More
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Radio – audience appreciation
Audience appreciation of BBC radiois very high and has remained stable.

How we measure up

PART ONE: SETTING STRATEGY AND ASSESSING PERFORMANCE

Television – audience appreciation
Audience appreciation of BBC television
is very high and continues to rise each year.

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What’s next?
We will continue to monitor how
BBC radio can maintain its very
high quality whilst making efficiency
savings and budget cuts in the
coming years

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BBC Online – audience appreciation
Audience appreciation of our online
services increased slightly this year.
The previous year’s lower score wasattributed to website relaunches
in that year.

How we measure up

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61

What’s next?
Our review of BBC Online
highlighted the BBC Knowledge &Learning sites and the BBC’s local
sites as key areas for improvement
We will monitor overall progress
and these sites in particular

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BBC Annual Report and Accounts 2012/13

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QUALITY AND DISTINCTIVENESS

Television
The BBC has retained a very strong position with audiences in ayear which marked the end of the switchover to digital TV andwith catch-up services now widely available. Television remains
very popular with the public, no doubt helped by more people
buying large screen, HD-enabled TV sets and the availability ofcatch-up TV via PVRs and online players. With that caveat,
audiences rated BBC Television increasingly highly for its quality
and for being ‘fresh and new’.

BBC TwoThis year BBC Two performed very well, as was recognised by thechannel and its programmes winning a large number of industry
awards. Audience perceptions of quality increased, with dramas
such as Parade’s End and Line of Duty performing very well. Factual
entertainment such as The Great British Bake Off attracted
very large and appreciative audiences.

BBC OneBBC One remains the nation’s most watched channel, with 78%
of people watching each week. The channel contributes moreto the BBC’s overall audience reach than any other service.

Audience reach overall was down this year, but this was mostly
due to some key programmes, such as Match of the Day 2, moving
onto BBC One and the recent changes to daytime output(see below). We believe it is essential for BBC Two to continue tobring high quality and distinctive programmes to large audiences,and it is playing an important role for the BBC in this respect.

BBC One offered a range of successful programmes thisyear, which contributed to its higher scores for both audienceappreciation and being ‘fresh and new’. In comedy, Miranda andMrs Brown’s Boys were seen by more than 10 million viewers over
Christmas and were highly appreciated. In drama, Call the Midwife
was watched by large audiences and also scored highly forappreciation. A number of other new dramas have been very
successful, including Last Tango in Halifax and Prisoners’ Wives.
Factual programmes such as Africa also achieved large audiencesthat rated them highly.

Daytime on BBC One and Two
A number of changes were made to daytime schedules on
BBC One and Two. The daily blocks of children’s programming
moved to CBBC and CBeebies. BBC One is now the primarychannel for new daytime programming. BBC Two continues tofeature international news and current affairs at lunchtime, withother parts of the schedule consisting of repeat programmingand live sports periodically. Whilst BBC Two has lost somedaytime viewers as a result, this is an inevitable outcome of thechanges being made to achieve cost savings.

We are keen that, whilst it must offer something for everyone,
Despite lower budgets, it is still vital for the daytime schedules to
BBC One should also showcase distinctive types of high quality
demonstrate creative ambition through the range and quality ofcontent that audiences expect from the BBC. The new drama The their programming.
Village demonstrated considerable and welcome ambition. We
believe BBC One has scope for more of this kind of
ambitious programming. In the coming year’s service review,
we will be examining how much further it can go.

Clare Balding presented The Queen: A Passion for Horses, a single documentary in peak time on BBC One

14PART ONE: SETTING STRATEGY AND ASSESSING PERFORMANCE

BBC Annual Report and Accounts 2012/13

BBC Four
BBC Four had a very successful year, helped by its ‘seasons’ of
output, including Shakespeare and London seasons linked to the2012 Cultural Olympiad. Average audience appreciation rose andwas higher than for any other BBC channel. Audiences were also
more likely to think BBC Four programming was fresh and new.
Many other digital channels have been losing viewers but BBC
Four bucked this trend. Its weekly reach increased to 14%,
almost twice as high as in 2007. With this much higher reachand a growing reputation, it has now clearly addressed theissue of impact we raised in our service review in 2010.
Children’s – CBBC, CBeebies
CBBC and CBeebies had a strong year and continue to be themost watched children’s channels amongst their target audiencesby some margin, with 35% and 48% reach respectively.
Daily blocks of children’s programming were moved this year
from BBC One and Two, to CBBC and CBeebies. However,
BBC One and Two still have a responsibility to serve children
and family audiences through some of their programming, andwe have asked the Executive to ensure children are catered foron these channels.

BBC ALBA
BBC ALBA has increased its audiences significantly and is highly
appreciated by both fluent Gaelic speakers and Gaelic learners. It
increased weekly reach to more than 16% of the Scottish
population, and reached 75% of the Gaelic community.
Radio
The BBC’s radio stations performed well this year, with listening
levels and audience appreciation remaining high. Hours of listening
amongst younger adults have continued to decline, however,which remains a challenge for all radio stations. The BBC’s radio
stations continued to play an important role for UK music bypromoting new music of all genres.
BBC Radio 1 and 1Xtra
BBC Radio 1’s remit is to serve a younger audience and we havepressed Radio 1 to ensure it does serve this audience. This year
there were a number of changes to its schedule and programming
designed to attract younger listeners. There has been someincrease in the proportion of the station’s audience that are aged
15-24, but the median age of listeners has remained stable.
Lowering it is a tough challenge as young people overall are notlistening to the radio as much as they used to. We fully support
the Executive’s efforts to focus on younger listeners, and agree
that the station’s digital strategy is important for remaining
relevant to this audience.
BBC 1Xtra’s audience grew slightly to reach more than 1 million
listeners each week.

We are currently conducting a service review of children’s
programming, and will publish our findings in summer 2013.

The ‘Proms’ underpins Radio 3’s ongoing commitment to offering the widest range of live classical music

BBC Annual Report and Accounts 2012/13

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PART ONE: SETTING STRATEGY AND ASSESSING PERFORMANCE

BBC Three
BBC Three, now ten years old, plays an important role in serving
younger viewers, reaching around 29% of its target audience of
16-34 year-old viewers each week. The channel continued todeliver high quality, factual and current affairs programming,
notably a new series of Our War (which received a particularlyhigh appreciation score of 93). It also had some very successful
new comedies, such as Cuckoo and Bad Education. Overall,audience appreciation remained high, whilst perceptions of thechannel being ‘fresh and new’ increased.

QUALITY AND DISTINCTIVENESSBBC Radio 2
BBC Radio 2 had an exceptionally successful year as the nation’s
most popular radio station, with reach growing to 14.7 million
weekly listeners. Perceptions of quality increased too, thanks to
distinctive content throughout the schedule, such as 500 words,
2 day, People’s Songs and Titanic – minute by minute. The station
also maintained its unique and valued mix and range of music
across its schedule.

BBC Asian Network
We were pleased to see that BBC Asian Network continued togrow, despite the changes it was making following the conclusionsof last year’s service review. Whilst it is too soon to assess withcertainty the impact these changes have had on audiences, wenote that the station appeared to be holding on to its distinctiveedge and its target audience of British Asians under the age of 35,
whilst increasing overall listening.

BBC 6 MusicBBC 6 Music performed very well again this year, continuing to
attract more listeners whilst retaining a very distinctive role in
the BBC’s music radio portfolio. Some 1.7 million people tuned
in each week. In the final quarter of 2012, it became the UK’s
(as well as the BBC’s) highest reaching digital-only station.
Audiences’ appreciation of the station remained strong.

Nations radio – BBC Radio Scotland, BBC Radio nan Gàidheal,
BBC Radio Wales, BBC Radio Cymru, BBC Radio Ulster/Foyle
In our 2011 review of the BBC’s national radio stations, wechallenged the Executive to give each station more distinct roles
within the BBC’s radio portfolio, focusing on their particularaudiences and editorial strengths. We have considered thestations’ progress in refocusing this year and think some progresshas been made, with more to do on some stations.

BBC Radio 3
BBC Radio 3 made a number of programming changes in
response to our review of the service in 2011. The review
had concluded that Radio 3 should look for ways to be moreaccessible and welcoming, but without reducing its high degreeof quality and distinctiveness, nor alienating its core audience.
Around 2.1 million listeners continue to tune in to the stationeach week, and we think the priority now should be to ensurethat distinctiveness is maintained, despite pressure on budgets.
We will continue to monitor this area closely.
BBC Radio 4 and 4 extra
BBC Radio 4 had another very strong year. More than 10 million
people tuned in each week and perceptions of quality remained
high. Listeners to the station continue to listen on average forlonger each week than to any other BBC radio station.
In our service review two years ago, we asked the Executive tolook at ways to reach more people outside the south of England,
including the devolved nations. However, Radio 4 continues tostruggle to do so, and therefore, we have asked the Executive
to do more to extend reach across the whole of the UK.
BBC Radio 4 extra was listened to by around 1.7 million people
each week and perceptions of its quality remained high.
BBC Radio 5 live and 5 live sports extra
We concluded our review of BBC Radio 5 live and 5 live sports
extra in early 2012, setting out a number of actions which we
believed would enhance Radio 5 live’s strength in news andincrease its coverage of a wider range of sports, including thoseof minority interest.
We have been impressed by the progress made against theactions we set, including the station’s renewed focus on highquality news. The strong coverage of the London Olympics set a
good example of how a wider range of sports could be covered
and this has continued since the Games. We recognise there ismore to do in both areas, but we believe they are going in theright direction.

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PART ONE: SETTING STRATEGY AND ASSESSING PERFORMANCE

BBC Radio Scotland has found a more distinctive editorial
approach and BBC Radio Ulster/Foyle continued to perform
strongly in Northern Ireland, reaching 35% of adults each week,
and with 55% of its audience not listening to any other BBC
station. It plans to refresh its schedule, and we will assess theimpact of this when it happens.
It is too early to assess the effect of recent schedule changes at
BBC Radio Wales, although we support the underlying aims.
We also support BBC Radio Cymru’s review of its programming,
given that listening to the station has been declining.
BBC Local RadioOur review of BBC Local Radio last year highlighted the aspectsof the service most valued by listeners, and the Executive
responded by reducing the budget cuts in the DQF plans. The
effect of the changes that have been made as part of the revisedplan for savings is not yet apparent, but we support the aim to
maintain editorial focus on local news and issues even inprogramming networked across England. We will monitor thechanges as their effect becomes clearer.
BBC Online and Red Button
BBC Online and Red Button were central to the BBC’s highly
popular and high quality coverage of the London Olympics. The
BBC’s ‘four screen’ strategy allowed audiences to access BBC
Olympics content on computers, mobiles, tablets and televisions.
Take up was large and highly appreciated.
Growing use of smartphones and tablets in recent years has had amajor effect on how people use BBC Online, with more frequent
access from more devices. This year, whilst the number of people
accessing BBC Online grew slightly, the number of different
devices used grew significantly.
Reach grew for many parts of BBC Online, including news, sport
and iPlayer. Perceptions of the quality of BBC Online improved
after a significant drop last year, following the relaunch of two of
its most popular sites, Homepage and Sport. Appreciation is now
close to pre-relaunch levels, and our service review research thisyear showed that audiences hugely value BBC Online for its
quality of content.

BBC Annual Report and Accounts 2012/13

The BBC Red Button reaches around 17 million people eachweek. Its users value the news and sport headlines, weather
and other information. Some cuts were made to Red Button’s
broadcast offer this year as part of DQF cost savings, but we areconfident that it will remain an important service for licence fee
payers. We expect it to become an increasingly importantgateway to BBC Online.

Big news stories drive higher levels of audience interest. Whilst
there were fewer big stories than in 2011, reach remained very
high on TV and radio, and grew online. Audiences to the BBC
News Channel and BBC Parliament were broadly stable.
Current affairs programmes are an important way in which
the BBC helps audiences understand important topical issues
in greater depth than on the news. We are concerned about
the gradual decline in audience numbers for current affairs
programmes on television in recent years and about the degreeof ambition and quality of current affairs programming. We will
be using our review of BBC Television to understand more
about how the BBC can serve audiences better with thisimportant genre.
Sport
The BBC had exclusive rights to show coverage from the London
2012 Olympics so this was a vital year for BBC Sport. The BBC’s
Olympic output on TV reached 90% of the UK population – thehighest audience for any event since measurement began – andthe audience’s reaction was overwhelmingly positive.

BBC World Service and BBC World News
BBC World Service reached 192 million adults around the world
this year, an increase of 12 million from last year.
Short-wave radio services maintained audience figures, and there
was strong growth in TV with 42 million people watching World
Service language programming each week, up from 27 million lastyear. Particularly strong was the performance of non English
language television, with BBC Arabic television reaching 28 million
viewers (up from 20.7 million last year) and BBC Persian television
with 11.5 million (up from 6.1 million last year). The World Service
website was accessed by 14 million people, 2 million more thanlast year. Audiences continued to rate the service highly for trustand quality and for being unbiased and objective.
In the UK, World Service reached some 2.5 million people eachweek on radio and online, including around 200,000 to services
in languages other than English.
From 2014/15 onwards, the BBC World Service will be fundedby the licence fee which will lead to a change in how it is governed.
The Trust will be consulting on its planned governanceframework in summer 2013.
The Trust welcomes the step change in quality and depth of
output on BBC World News, following increased investmentin this commercial service. It has allowed a visibly improved
service to be offered.

Aung San Suu Kyi came to New Broadcasting House to speak on the BBC World Service in June 2012

BBC Annual Report and Accounts 2012/13

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PART ONE: SETTING STRATEGY AND ASSESSING PERFORMANCE

News and current affairs
Due to the editorial crises at Newsnight, audience perceptionsof accuracy, trustworthiness and impartiality fell significantly inautumn 2012, although BBC News performed strongly in both
quality and reach terms overall this year. By the start of 2013,
audience perceptions had recovered, and most licence fee payers
continued to believe that the BBC is ‘best for news’.

This success demonstrates the BBC’s ability to serve everyone
with high quality output and it shows how BBC television, radio
and online services can work together for the benefit of theaudience. We hope that the huge success of this collaboration
will encourage BBC services and departments to work together
more often, not only on big events, but also on regular output.
This will be essential for the BBC in order to meet audiences’
expectations as media platforms converge.

QUALITY AND DISTINCTIVENESSEDITORIAL STANDARDSOne of the Trust’s main responsibilities
is to set the BBC’s editorial standards.

Editorial complaints
Editorial complaints and reports about serious editorial breaches
are considered by our Editorial Standards Committee (ESC).
The most serious issue this year was the grave breach ofstandards in a November 2012 Newsnight report, which led to
Lord McAlpine being wrongly identified online as the subject ofchild sexual abuse allegations. The Trust found the allegations
broadcast were not based on sound evidence and that audiences
had been misled. The Trust put on record an apology to Lord
McAlpine for this serious failure of BBC journalism.
This came on top of the posting, in October 2012, of an inaccurate
blog, by the then Newsnight editor, about the programme’s
decision to drop its investigation into allegations of child sexual
abuse made against the late Jimmy Savile; that decision was the
subject of an independent review commissioned by the BBC andconducted by former head of Sky News, Nick Pollard. Trustees
expressed deep concern and asked him to look into these
inaccuracies during his review. He concluded that significant
failings of managerial oversight, and a lack of clear leadership, had
contributed to the errors. In our response to his review, we said
we would ask the incoming Director-General, Tony Hall, to makereform of management culture his top priority – and we havedone so.

BBC editorial complaints
Number of complaints received by the BBC in 2012/13

Stage 3: Appeals to
the Trust’s Editorial
Standards Committee
91% answered on time*

Other serious breaches
In October, the Executive reported a serious breach of privacy
and of requirements to get consent before certain filming. During
the making of a programme, a member of the production team
had used a phone to film an adult who was not in a position to
give informed consent. Although the film reportedly consistedof a bland verbal exchange, nonetheless the ESC agreed thatthe filming was a serious breach. However, it was satisfied that
the Executive had taken appropriate action, which included
terminating the contract of the person who had recorded
the video.

Appeals received by the Editorial Standards Committee

Complaints not upheld by the
Editorial Standards Committee(on appeal from the Executive)

285

30%

19%
Stage 2: Editorial
complaints to the
Editorial Complaints Unit
86% answered on time

500
21%

Stage 1: Editorial
and general complaints
94% answered on time

Not considered by the
Editorial Standards Committee
because there was no reasonable
prospect of success

60%
10%

Upheld or partiallyupheld by the Editorial
Standards Committee

217,532
14%*Some complicated appeals could not be answered within the target time frame.
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BBC Annual Report and Accounts 2012/13

Recently, the BBC published the results of a new survey(to be conducted annually) of perceptions of the impartiality andtrustworthiness of BBC News compared with other media. The
results were encouraging, with 49% of respondents saying that
BBC News was the one source they were most likely to turn tofor impartial news coverage, compared to 14% for ITV and 6%
for Sky News.

Other work during the year included an impartiality review
on ‘breadth of opinion’ in news, current affairs and factual
programmes, led by Stuart Prebble, former Chief Executive
Officer of ITV. His report focused on three topics: religion andbelief; the EU; and immigration. The Trust concluded that, whilst
there have been problems in the past and some remain, on thewhole, the BBC goes to great lengths to provide a breadth ofopinion. Nonetheless, we felt that the range of opinion may benarrowed in some subject areas by too great a focus on aWestminster agenda. We have, therefore, asked the Executive
to ensure it has effective systems in place to monitor opinion
more widely.
The Trust held an impartiality seminar during the year, with guests
from inside and outside the BBC. The seminar, on economics
reporting, reflected the importance of challenging and explaining
the issues across all economic sectors, given the complexity andlack of certainty inherent in this area.

BBC’s economics editor Stephanie Flanders presented Stephanomics, a series
on the economics of our times, on BBC Radio 4
Public perceptions of the impartiality of news providers
Of all news sources, which ONE source are you most likely
to turn to if you want impartial news coverage?

Source: Ipsos Mori for the BBC, UK adults 16+ who follow the news (1,873)
interviewed face-to-face February 2013.
BBC Annual Report and Accounts 2012/13

19

PART ONE: SETTING STRATEGY AND ASSESSING PERFORMANCE

Impartiality
Impartiality is at the heart of the BBC’s commitment to audiences.
The Trust is committed to making sure that the BBC retains the
public’s trust and fulfils its obligations to ensure its output achieves
due impartiality.

VALUE FOR MONEY

MAKING THE LICENCE FEE WORK HARDER
The BBC has made significant overall savings this year,
but the costly failure of the BBC’s Digital Media Initiative(DMI) project has rightly generated public concern.

Jenny Culshaw presenting from the BBC Sport Centre in MediaCityUK

Value for money
This year, the BBC continued to generate significant efficiency
savings and early indications suggest that this has been achieved
without a detrimental impact on overall audience numbers orappreciation scores.
Whilst this provides a good indication that value for money isimproving overall, the costly failure of the BBC’s digital media
initiative (DMI) shows that further improvements are needed.
When it became apparent, during the course of the year, theproject was failing, the BBC temporarily put a halt on further
expenditure, and we agreed that a new business case, basedon a fundamental review, should be presented to the Executive
Board and the Trust for approval. This review showed that the£98.4million which the BBC has spent on DMI had generated
little or no assets. On the basis of this review, we approved
the Executive’s proposal that the DMI project should be
halted permanently.

Research
Our research this year shows that 57% of people think that the
BBC represents good value for money, which means around fourin ten do not. Audience opinion in this area is driven by the qualityof BBC programmes, the range of services and perceptions of
how well the BBC is run.
We will continue to monitor the quality and range of BBC services
to ensure they do not suffer as an unintended consequence of ourdrive to make the BBC more efficient. We will also continue tofocus on improving the way the BBC is run, and in terms of value
for money, this means focusing on the following areas:
the BBC’s long-term financial strategy and annual budget
how the BBC pays its staff, performers and presentersin-depth reviews of the BBC’s activities and services
licence fee collection arrangements

significant financial proposals from the Executive
We are deeply concerned about the money lost and the way the
project was managed and reported to us. We have commissioned
trading fairly.
an external review by PricewaterhouseCoopers into what went
In the following sections, we summarise our work in each ofwrong to ensure that there can be no repeat of a failure on thisthese areas over the past year.
scale. We will publish the results in due course.

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PART ONE: SETTING STRATEGY AND ASSESSING PERFORMANCE

BBC Annual Report and Accounts 2012/13

PERFORMANCE SUMMARY

How we measure up

This means the BBC exceeded the 3% year-onyear efficiency savings target set by the Trust.

£580m

Early indications suggest that this has beenachieved without a detrimental impact onoverall audience numbers or appreciation scores.
Perceptions of value for money
Nearly six in ten people perceived the BBC
to represent good value for money (57%).
This score has remained stable over the
past five years despite the BBC making
significant efficiency savings.

What’s next?
We set the BBC a new target todeliver a further 11% efficiency
savings by 2016/17

PART ONE: SETTING STRATEGY AND ASSESSING PERFORMANCE

Savings
This year, the BBC delivered £580m efficiency
savings under the continuous improvement
programme, contributing to the £2bn
cumulative savings delivered over 2008/09
to 2012/13.

Significant risks remain, we will,
therefore, continue to monitor
performance to ensure that theBBC’s savings programme does nothave an unintended impact on thequality or range of BBC services

efficiency savings

How we measure up

57%

What’s next?
Although we acknowledge thataudience opinion in this area has
tended to be unresponsive to change,
we will continue to challenge the
Executive to make further savings
and improve the way the BBC is run

Source: Purpose Remit Survey

Reducing the pay gap
The pay multiple shows the difference
in median earnings of BBC staff, and the
Director-General.
The Trust has reduced the pay multiple
over the past year by significantly
reducing the remuneration paid to the
Director-General.

How we measure up
Director-General
pay multiples

What’s next?
We are pleased that other public
sector organisations will now also
be publishing this multiple, which willallow for comparisons to be madeacross publicly-funded organisations

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54

BBC Annual Report and Accounts 2012/13

21

VALUE FOR MONEY

Financial strategy and annual budget
The BBC met those targets by the end of 2011, as described
The Trust approves the BBC’s high-level strategy and budget and in last year’s annual report. Since then, the BBC has focused its
holds the BBC to account for its financial and service performance. efforts on consolidating those reductions in senior managers andensuring that the remuneration of Executive Board members
Efficiency savings
is in line with the overall strategic direction for pay at the BBC.
We set the BBC a target to deliver 3% year-on-year efficiency
New senior managers appointed from outside the BBC do notsavings over the period 2008/09 – 2012/13, and over the five years
receive private medical insurance or a car allowance benefit.
of the programme the BBC has exceeded this target delivering
3.7% year-on-year efficiency savings. This year, the BBC delivered In line with the overall strategy, the Trust has also significantly£580million on-going savings (£499million in 2011/12). After the
reduced the amount paid to the Director-General. The new2010 licence fee settlement, we set the BBC a new target tosalary for the Director-General is now set at £450,000 (£613,000
deliver a further 11% efficiency savings by 2016/17 in the Delivering in 2011/12). Whilst this is a significant amount of money, it is a
Quality First strategy (DQF). Looking ahead, we will continue tosubstantial reduction in the amount previously paid and wemonitor the quality and range of BBC services to ensure they dobelieve it represents value for money for licence fee payers.
not suffer any unintended consequences of the BBC’s DQF plan.
The Director-General is the Chief Executive and Editor-in-Chiefof the BBC, with responsibility for a significant global workforce
Performance against service licence budgets
and the organisation’s services across television, radio and online.
We issue each of the BBC’s 27 services with a service licence,setting out what we expect it to achieve and its budget. If theLast year, the BBC was one of the first public organisations inservice over or underspends by more than 10%, we consider
the UK to publish the ‘pay multiple’, which compares the pay
whether the character of the service has changed significantly.
of the chief executive officer with median pay of staff. With
This year all services performed within the budget limits set by
the significant reduction in the remuneration of the Directorthe Trust, except for BBC Parliament and BBC Asian Network,
General, this multiple has decreased from 16.5 to 11.0.
which underspent by more than 10%. We have investigated the
Earlier this year, the Trust proposed that the NAO should
reasons for these under spends and are satisfied that neither
look at severance arrangements for senior executives as
the quality or the scope of the services has been compromised.
explained overleaf.
Ensuring the licence fee supports the wider economy
We welcome the new Director-General’s proposal of a cap
The BBC, through the way it spends the licence fee, plays anof £150,000 on total severance payments.
important role in supporting the UK’s wider creative economy.
This year, spending on the UK’s creative economy was
Presenters’ and performers’ pay£1,098million (£1,095million in 2011/12). The BBC commissioned
We recognise the significant contribution presenters and
36% (37% in 2011/12) and 20% (19% in 2011/12) of eligible television performers make to the quality and distinctiveness of ourand radio content respectively from external producers. In
programmes. At the same time, it is vital that deals for pay
a challenging economic climate, the security of the licence fee
represent value for money. In 2009, we asked the BBC to reduce
enables the BBC to provide an important source of funding
the amount it spends on presenters and performers, focusing infor smaller businesses and independent producers.
particular on the highest paid, without compromising the quality of
programmes. The BBC is continuing to meet this commitment andPaythis year spent some £200million, £30million less than in 2009.
The BBC’s approach to pay – particularly the amount paid to
Employing freelancers
senior executives and to presenters and performers – plays
In response to public concern over the use of personal service
a significant part in people’s perceptions of whether or not thecompanies in the public sector, the BBC commissioned Deloitte
BBC delivers value for money. We have seen good progress in
to carry out a review of the way the BBC pays freelancers. In
reducing the amount paid to the most senior people, but there
November, Deloitte reported that it had found a high standard ofis further to go.
compliance and no evidence of tax avoidance in this complex area.
Senior executive pay
Nonetheless, we consider the BBC’s responsibilities in this area go
The approach we agreed with the Executive Board on seniorbeyond legal compliance. We therefore welcomed the Executive’s
pay is to balance the need to attract high calibre people toplans to ensure that those people whose working arrangements
manage the BBC with the need to provide value for money
mean they have the characteristics of employees, will be treated
for the licence fee payer.
as such, in future contracts. Where service companies are used,
the BBC will provide more information to HMRC to help it achieve
The BBC’s senior management pay strategy also reflects oureffective compliance. We intend to request a follow-up review
objective of spending more of the licence fee on programmes
next year to confirm whether Deloitte’s recommendations haveand content and less on administration. The Executive Board
been implemented.
is responsible for the delivery of this strategy, and for individual
decisions on remuneration and severance packages (except
for the Director-General). In 2009, the Trust set demanding
targets to reduce both the number of senior managers within
the organisation and the amount paid to those managers.

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PART ONE: SETTING STRATEGY AND ASSESSING PERFORMANCE

BBC Annual Report and Accounts 2012/13

Report on Executive Board remuneration
This is the report of the Trust Remuneration and Appointments
Committee on Executive Board remuneration in 2012/2013.
The amount paid to members of the Executive Board for2012/13 is detailed in the Executive Board’s Remuneration
Committee report in Part Two of this Annual Report.

The Director-General’s remuneration consists of a base salary
and a pension, on standard BBC terms. The Director-Generalis also provided with a car and driver. There is no bonus scheme
for the Director-General.

Each non-executive director receives a base fee; there is anadditional fee for chairing a committee of the Executive Board;and the senior non-executive director also receives an additional
fee. Non-executive directors are reimbursed for expenses, andany tax arising on those expenses is settled directly by the BBC.
In 2011/12, the non-executive directors took a voluntary
reduction in their fees, and in November 2012, the Trust agreed,with a proposal from the non-executive directors, that their fees
be permanently lowered to reflect the reduced rate. We will
next review the fees of non-executive directors in December
2013. Further information on the amount paid to non-executive
directors can be found in Part Two.

Executive directors
The Executive Board’s Remuneration Committee sets the
remuneration package for individual executive directors, within
Following Mark Thompson’s resignation, the BBC Trust set thea strategy agreed by the Trust. Each year the Trust considers
salary for the Director-General at £450,000 p.a. This salary was a formal report assuring us that our strategy is being followed.
provided to George Entwistle and Tim Davie for the periods in
Throughout the year, we have reviewed information from thewhich they were in post; it is also the remuneration paid to
Executive and are content with the approach being taken. As
Tony Hall.
there have been changes in executive directors during the year,
the Trust has ensured that decisions on remuneration over time
George Entwistle left the BBC under the terms of a compromise
meet the Trust’s commitment to decrease gradually the ‘pay
agreement, in which the Trust agreed a payment of £450,000;
multiple’, which is calculated by comparing the median earnings
Mr Entwistle agreed to ongoing co-operation in the inquiries
of BBC staff with the median earnings of executive directors.
commissioned by the BBC. Further information on the amountFurther information on the remuneration packages forpaid to those occupying the post of Director-General thisexecutive directors – including the current ‘pay multiple’ –year, including the full amount paid to George Entwistle as
can be found in Part Two.
compensation for loss of office, can be found in Part Two.
We have agreed to publish the multiple of the median earnings
of BBC staff and the Director-General’s earnings. In 2012/13,
once the Director-General’s remuneration was set at £450,000,
this multiple was 11.0 (16.5 in 2011/12). We are pleased that
other organisations will now also be publishing this multiple,
which will allow for comparisons to be made acrosspublicly‑funded organisations.

BBC Annual Report and Accounts 2012/13

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90

23

PART ONE: SETTING STRATEGY AND ASSESSING PERFORMANCEThe Director-General
During the 2012/13 financial year, three people occupied thepost of BBC Director-General: Mark Thompson was in post
until 16 September 2012, when he stepped down after eight
years in the role; George Entwistle was the Director-Generalfrom 17 September until 10 November 2012; Tim Davie was
the Acting Director-General from 11 November 2012 until
1 April 2013. Tony Hall was appointed by the Trust as
Director‑General on 22 November 2012 and started in therole on 2 April 2013, outside of the 2012/13 reporting period.

Non-executive directors
The non-executive directors receive a fee determined by theTrust. Fee levels are set with reference to rates paid by otherUK corporations, but at a level such that the non-executive
directors are not financially dependent upon the BBC.

VALUE FOR MONEY

In-depth reviews
We commission in-depth reviews of the BBC’s activities andundertake our own reviews of BBC services. The National Audit
Office (NAO) also carries out value for money reviews andreports its findings to us. We work with the Executive to ensure
the BBC acts on the recommendations made in these reviews,
and the Executive reports back to us on its progress.
Trust-commissioned reviews
This year, we commissioned a review of the BBC’s arrangements
for distributing its UK services. The review is expected to conclude
this summer when we will publish the findings.
NAO reviews
Since our previous annual report, the NAO has reported on its
review of financial management at the BBC and on the BBC’s
move to Salford. For both reports, we have confirmed that the
Executive will implement the recommendations and we will
monitor progress closely. The NAO will also report on severance
and wider benefits for senior BBC managers this summer.
Financial management at the BBCThis report examined whether the BBC’s finance function wasfit for purpose. The NAO concluded that the BBC’s approach
to financial management provided effective support to thebusiness in delivering value for money, and has helped it to meetpast savings targets consistently. It also concluded that the BBC
exhibited strong financial leadership and governance, witheffective challenge at senior levels including from the Trust andnon-executive directors. However, it noted that limitations to theBBC’s financial reporting systems have meant that information has
not always been managed in the most efficient way and that the
BBC should align its financial planning and reporting more closelywith its strategic priorities.

The BBC’s move to Salford
This report examined the progress of the BBC’s move to Salford
and concluded that the project was delivered on time and on
budget, whilst maintaining broadcast continuity. The report also
found that whilst the BBC retained skills and reduced redundancy
costs by offering London-based staff relocation packages toencourage them to move, it did not apply sufficient rigour inmanaging the allocation of some allowances and may, therefore,
have incurred some unnecessary costs.
Severance and wider benefits for senior BBC managers
This year, the BBC came under particular scrutiny over the levelof severance payments made to senior executives, particularly theamount paid to the departing Director-General. We therefore
suggested that the NAO should review severance arrangements
for BBC senior staff, and its report is due to be publishedaround the same time as this annual report. The BBC has
already announced that it proposes to cap severance payments
at £150,000 and that it will consult on this proposal with staff.
We will consider the NAO’s report carefully, and ensure that
the Executive takes the appropriate actions to address any
recommendations made.
Licence fee collection
The Trust is responsible for the BBC’s licence fee collection
arrangements and we aim to ensure they are efficient andappropriate. Compared with last year, the amount of the licencefee spent on collection decreased to 3.0% (3.4% in 2011/12). The
combined cost of collection and evasion remained broadly stable
at 8.5% (8.6% in 2011/12).

BBC North at MediaCityUK, Salford

24

PART ONE: SETTING STRATEGY AND ASSESSING PERFORMANCE

BBC Annual Report and Accounts 2012/13

Significant financial proposals
The Trust scrutinises key BBC financial proposals that would havea significant impact on the BBC’s finances. This year, we approved
the sale of Television Centre as part of the BBC’s long-termplan to reduce the size of its property portfolio and movedepartments from west London. The BBC secured a profitof £78million from the sale.

The Executive is responsible for ensuring compliance with the fairtrading policies and framework and for commissioning an annual
independent audit of the BBC’s fair trading activities. The fairtrading auditors’ report can be found in Part Two.
As well as setting the fair trading policies and framework, theTrust is the final arbiter for fair trading complaints which cometo the Trust on appeal. This year, we did not hear any appeals.
In the year ahead, the Trust will begin the triennial process ofreviewing its fair trading policies and framework which will include
a public consultation.

BBC Worldwide commercial strategy
BBC Worldwide exploits the value of the BBC’s intellectual
property on the licence fee payer’s behalf. It acquires thecommercial rights to such programmes as Doctor Who,
Top Gear and Dancing with the Stars and earns money fromthe rights across different media and markets. Throughdividends and direct investment in programmes, it makes
a significant contribution to the funding of the BBC and thisyear, returned £156million to the Group (£216million in 2011/12).
The prior year figure includes a return arising from the sale of
BBC Magazines.
During the year, BBC Worldwide reviewed its strategy, guided
by the Trust, to ensure that its activities are more closely alignedwith the BBC’s public service remit. As a result of a greater focus
on core BBC activities and programming, in March 2013, BBC
Worldwide sold its travel guide business, Lonely Planet, for£51.5million. The transaction, which was approved by theTrust, represented a loss of around £80million on the original
2007 purchase.
Whilst the disposal of Lonely Planet was the right decision given
the new direction that had been agreed for BBC Worldwide,
the scale of the financial loss was significant. And, whilst, the newstrategic direction means that BBC Worldwide will not make anacquisition like Lonely Planet again, the Trust has nonethelessdecided that the original purchase and subsequent managementof the business merit further scrutiny. It has, therefore, asked
the Executive to commission a review of lessons learnt andreport to the Trust with its findings.

BBC Annual Report and Accounts 2012/13

25

PART ONE: SETTING STRATEGY AND ASSESSING PERFORMANCE

Trading fairly
The Trust sets the BBC’s fair trading policies and framework toensure that the BBC has regard to its impact on the market in all
its activities and, in doing so, observes high standards of openness
and transparency. The Trust is satisfied that this year the BBC hascontinued to operate fairly within its fair trading framework .

Doctor Who remains one of BBC Worldwide’s most successful exports

SERVING ALL AUDIENCES

CREATING DIVERSE CONTENT ON ALL PLATFORMS
FOR ALL AGES AND COMMUNITIESThe BBC’s services reached 96% of the UK’s population
across a range of platforms. It still has some way to go,
however, in reflecting the growing diversity of its audiences
in both its content and in the organisation itself.
The Olympics provided
something for everyone
In total, 47.4 million accessed
the BBC’s games coverage
online, including 32 million in
the UK.

32m
90%
UK browsers

TV reach
The BBC’s coverage of the 2012 Olympics broke all records

Serving all audiences means ensuring that the BBC provides
something for all licence fee payers in the UK, the Channel Islands,
and the Isle of Man; making the BBC’s content widely available toeveryone in a convenient way; and ensuring that BBC
programmes, and the make-up of its workforce, reflect fully its
diverse audiences. We say more about how the Trust represents
audiences through consultation and research in the Understanding
Audiences section later in this report.
Serving audiences through technology
The BBC should make content available on a range of platforms
that are convenient for audiences whilst remaining cost-effective
for the BBC. With digital convergence, people’s expectationsof how they should be able to access BBC content are changing
fast. We believe the BBC must keep pace with technologicaldevelopments as well as audience expectations. It needs to do so
as efficiently as possible and with regard to the fact that audiences
expect as much of the licence fee as possible to be spent on
programmes. It also needs to do what it can to help as many
people as possible gain access to new digital services, and thatis why we support the investments that are being made fromlicence fee funds over the next few years in digital radio andin the roll-out of broadband.

26

PART ONE: SETTING STRATEGY AND ASSESSING PERFORMANCE

Completion of digital switchover
The completion of TV digital switchover in October 2012 marked
the end of the biggest change to broadcasting in the UK for ageneration, in an impressive technical and logistical switchoverprogramme. More than 26 million homes have now replaced theiranalogue TV with digital terrestrial TV. Digital UK, which is ownedby the BBC, ITV, Channel 4 and Arqiva, successfully completed
the project on time and on budget, and the BBC-run Digital
Switchover Help Scheme helped over 7 million households
continue to access television services.

BBC Annual Report and Accounts 2012/13

PERFORMANCE SUMMARY

How we measure up

96%
2011/12: 96%

What’s next?
The BBC’s ability to offer somethingof high quality for everyone willremain key to its success incoming years

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66

Source: BBC Cross Media Insight Survey

Digital switchover
The completion of television digital
switchover on time and on budget wasan impressive technical and logistical feat.

How we measure up
26 million homes have now replaced
their analogue TV with digitalterrestrial TV

26m
homes

PART ONE: SETTING STRATEGY AND ASSESSING PERFORMANCE

Reach of BBC services
The BBC maintains near universal reachdespite its audiences having a huge choiceof other channels and services.

What’s next?
The Trust will continue to support
the BBC’s investment in digital radio
and the roll-out of broadband to help
as many people as possible gain
access to new digital services

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57

Out of London – % of network spend
The BBC is making good progress with
its plans to produce more television
outside London including in Scotland,
Wales and Northern Ireland. However,there remains more to do to develop
sustainable production communities
across the UK.

How we measure up

What’s next?
The Trust will closely monitor theBBC’s progress towards our target ofmaking 50% of our network televisionby spend outside London by 2016
In doing so, we will consider how
the BBC is supporting production
centres outside London so they arein a position to thrive

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64

Representing the nations and regions
The BBC has made some progress in
improving audience perceptions in thenations and regions, but viewers andlisteners around the UK still want to bebetter represented in programming.

How we measure up
48% of UK adults
believe the BBC
performs well in
representing theirnation or region

What’s next?
Through our audience research wewill continue to monitor how BBC
programming is reflecting the UK
as a whole

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Source: Purpose Remit Survey
BBC Annual Report and Accounts 2012/13

65

27

SERVING ALL AUDIENCES

Serving a more mobile audience
Accessing content through a mobile device is becoming the norm
for many – for example, over half of adults in the UK now own asmartphone and audiences increasingly want to watch and listen
to content ‘on the go’. The Trust, therefore, supports the BBC’s
investment in new online platforms, particularly mobile, since they
help the BBC maintain the reach and relevance of its services.
The benefits to audiences of the BBC’s investment were clear
during the Olympics. The Trust approved the plans to launch
temporary Olympic services and extend online coverage
including through 24 video streams. This extended coverage,
providing some 2,500 hours of live sport, was watched eagerly.
The BBC received 12 million requests for video on mobile as well
as 9.2 million browsers accessing the dedicated mobile site andOlympics app over the course of the Games.
In September 2012, BBC iPlayer launched mobile downloads,
enabling audiences to watch downloaded content without a
Wi‑Fi or a mobile signal. Around 64% of all BBC TV downloads
are now to smartphones or tablets. In October 2012, the BBCRadio iPlayer app was launched, and by the year end, had been
downloaded more than 1.8 million times. The BBC Sport app
launched in January 2013 and was downloaded 1.4 million times
by the year end.

Evolution of Red Button
Following the Olympics, the BBC reduced the number of video
streams on the Red Button from five to one. The Trust supported
this change, which will be more efficient and free up resources tosupport the development of a better experience for Connected
Red Button, the alternative service for web-based TV. Connected
Red Button was piloted on Virgin Media’s TiVo boxes from
December 2012.
Launch of YouView
In July 2012, YouView, a joint venture between the BBC, ITV, BT,
Channel 4, Channel five, Arqiva and Talk Talk, launched in the
UK. It offers audiences a free-to-air, web-connected TV service
combining Freeview with on-demand content such as iPlayer.
The partnership aims to encourage demand for television overthe internet.
The Trust imposed several conditions on the BBC’s participation,
including guaranteeing a subscription-free offer, and ensuringother content providers have access to the platform. YouView
launched in a very competitive marketplace. The Trust has been
regularly updated on its progress with a view to protecting theBBC’s investment and licence fee payers’ interests, and also
because of its duty to have regard to the impact the BBC’s
participation may have on competition in the wider market.

BBC Red Button kept viewers up to date throughout the Olympics with 24 streams of coverage

28

PART ONE: SETTING STRATEGY AND ASSESSING PERFORMANCE

BBC Annual Report and Accounts 2012/13

Representing the whole of the UK
The BBC produces output around the UK, both to ensure its
activities spread their economic benefits in the UK’s nations andregions, and to enhance its ability to represent all audiences in
its programming.

Part of the aim of making more content out of London is toreflect audiences from across the UK better in BBC output.
We have seen some success this year in improved perceptionsof the BBC amongst audiences in the North West of England,
which might be linked to the establishment of BBC Northin Salford.
In this year’s Purpose Remit Survey, audiences in the devolved
nations continued to say that they would like to see their nation
represented better in both news, drama and entertainment
programming. We have seen examples of good co-ordination
between the nations and English regions and those in London,
and there may be further opportunities for BBC staff to buildon this. However, the challenge for the BBC of providing‘something for everyone’ will get tougher as the UK becomes
more diverse and the internet provides ever greater choicefrom other media providers.

In January 2013, the Executive published a report, Developing Our
Story: Equality and Diversity at the BBC in 2012. The Trust notes thatthe BBC almost met its 12.5% target for black and minority ethnic(BME) staff by December 2012, with 12.4% of BBC staff from BME
backgrounds. However, the Trust is concerned by the continuing
pattern of decline in the representation of disabled staff. The BBC
fell short of its 5.5% target; as at December 2012, only 3.8% ofstaff were registered disabled. We note the Executive’s recent
engagement activity amongst disabled staff to address this decline.
We have asked the Executive to continue its work on recruiting
and retaining disabled staff and will monitor progress over the
next year.
The Trust expects every part of the BBC to take an active rolein considering the diversity of its workforce. From January 2013,
the Executive introduced a new method of measuring employee
diversity, setting targets for ethnicity and disability in each BBC
division and region. The Executive also set targets to increase thenumber of women in some divisions. We also support the BBC’s
initiative to provide media training to female external experts
to increase the proportion of women contributors in news andfactual programming.

The BBC aims to have more women in its output and the BBC Academy offered a free day’s training for aspiring female presenters and contributors

BBC Annual Report and Accounts 2012/13

29

PART ONE: SETTING STRATEGY AND ASSESSING PERFORMANCEThe Trust set the BBC a target of making 50% of network
television by spend outside London by 2016, with 17% spent in
Scotland, Wales and Northern Ireland. We were pleased to seethat this year the BBC is ahead of schedule, with 46% made outof London and just under 16% made in the devolved nations.
However, there remains more to do to enable sustainable andthriving production communities in each location, particularlyin those where spending is quite low in total and it is, therefore,difficult to create a critical mass of expertise in particular
programme types.

Representing the diversity of the UK within the BBC
To represent licence fee payers effectively, the BBC itself shouldreflect the diversity of the UK in its workforce and the Trust iscommitted to ensuring that it does so.

OPENNESS AND TRANSPARENCYOPERATING TRANSPARENTLY, ENGAGING OPENLYThe BBC has made progress in some areas –publishing more information and working openly
with industry – but it could do more.

Gemma Cairney, Radio 1 weekend Breakfast Show presenter, answers questions from the audience at ‘Access All Areas’ session

The Trust is determined the BBC should lead the public sector
in openness and transparency.
The Executive has made progress in this area over the last few
years. On pay, it now routinely publishes details of senior pay
and expenses because the public expects transparency about
executive pay. The Executive is also transparent about what it
spends on talent (artists, presenters and performers), details of
which can be found in Part Two. In addition, the BBC website now
provides more information about the running of the BBC than
before and it includes some corrections and clarifications.
Compliance with the Freedom of Information Act 2000 (FOIA)
also contributes to greater transparency. Last year, the BBC
handled approximately 1,700 FOIA requests, whilst at the sametime, protecting the creative and editorial space and theconfidentiality of sources.

There were some good examples of this last year. BBC Radio 1
and 1Xtra opened their stations to the public in an unprecedented‘Access All Areas’ initiative. The BBC, in partnership with Arts
Council England, launched the website thespace.org as a way toprovide free online access to thousands of works from UK artists
and art institutions. We strongly support initiatives like thesewhich promote openness and transparency at the BBC.
The Trust is also committed to open engagement. This helps us
to take into account the interests of the broadcasting and creative
industries when making decisions.

For example, in 2012/13, our service review of BBC Online and
Red Button enabled Trustees to explore a range of issues with the
UK digital industry, including its relationship with the BBC fosteredthrough partnerships or commissioning relationships. During theWindow of Creative Competition review we talked to the
However, the Trust believes the BBC could do much more toindependent television production sector to ensure that theirdemonstrate commitment to ‘setting new standards in openness views about the BBC competitive commissioning arrangements
and transparency’, the strategic objective set by the Trust. This
were considered. We also worked closely with stakeholders inincludes encouraging a culture of openness inside the organisation Wales to develop the historic S4C Operating Agreement, andand taking other initiatives. For example, in our review of BBC
met other broadcasters and interest groups during the current
Online, we encouraged the Executive to consider how it canreview of BBC Children’s services. Finally, for each of the past
make some of the performance data about BBC Online available three years, the Trust has sought to bring together a small number
to licence fee payers, industry and stakeholders. We wouldof the most senior figures from the media industry for an open
expect the same from other parts of the BBC.
and frank discussion about the BBC and its performance, in lightof the objectives the Trust has set.
Trustees also expect the Executive to work openly andconstructively with the broadcasting and creative industries.
30

PART ONE: SETTING STRATEGY AND ASSESSING PERFORMANCE

BBC Annual Report and Accounts 2012/13

PERFORMANCE SUMMARY

How we measure up

Engagement with:	U K digital industry

What’s next?
We will continue to hold annual
industry engagement events with
the industry

PART ONE: SETTING STRATEGY AND ASSESSING PERFORMANCE

Engagement with industry
We worked constructively with thebroadcasting and creative industries
to take their views into account.

The BBC will continue to engage
with the creative industries

Independent television
production sector
Wider media industry

Publications and disclosures
We published a range of information
about the running of the BBC, andresponded to 1,700 disclosures under
the Freedom of Information Act 2000.

How we measure up

Publishedin 2012/13
	Senior manager
pay and expenses
Talent costs

What’s next?
The BBC will make information moreaccessible and easier to find
The BBC will explain more clearly
when information is not available
and give reasons
We will work with the Executive tocreate a stronger culture of openness
within the BBC

Hospitality	Declarationsof personal interest

Bringing the audience in house
A way of showing audiences how
the BBC is run is to invite audiences
into the BBC.

How we measure up
BBC Radio 1 and BBC Radio 1Xtra
opened up stations to their audiencesin an ‘Access All Areas’ initiative

What’s next?
The BBC will hold more ‘access allareas’ initiatives so licence fee payers
can see the BBC at work

More
PAGE

58

BBC Annual Report and Accounts 2012/13

31

32

PART ONE: UNDERSTANDING AUDIENCES

BBC Annual Report and Accounts 2012/13

PART ONE: UNDERSTANDING AUDIENCESUNDERSTANDING
AUDIENCES

Consultations, research andAudience Councils: those weheard from and what they said

BBC Annual Report and Accounts 2012/13

33

UNDERSTANDING AUDIENCES

ENABLING EVERYONE TO HAVE THEIR SAY
We heard from a range of audiences, in particularthrough our Purpose Remit Survey and nine public
consultations linked to major pieces of research.
The Trust’s duty is to represent all licence fee payers and itaims to ensure that the BBC serves all audiences. We make key
decisions that affect audiences and other stakeholders, and so
it is important that these decisions are informed by their views.
The main ways in which we get their views is throughconsultations, research and direct engagement through our
Audience Councils. We aim to reach as many people as possible
with our public consultations, and we use targeted researchwhen we need the views of particular groups or stakeholders ona specific issue. When relevant, we take our public sector equality
duty into account when making decisions. Our Audience Councils
in England, Scotland, Wales and Northern Ireland augment our
understanding of issues that matter to licence fee payers, in eachof the nations.
Public consultations
Public consultations enable anyone to have a say, and areparticularly important in our service reviews, where we aim
to get the greatest breadth of opinion possible. To this end,
we promote all our public consultations on BBC TV and radio
stations and on BBC Online.
In the last year, we carried out nine public consultations linked
to our major pieces of work, including service reviews for BBC
Online and Red Button, and the Children’s services, CBBC and
CBeebies. We also ran consultations as part of BBC policy
reviews on the purpose remits, service licences and the Election
Guidelines for Police and Crime Commissioners. In total, we heard
from over 10,000 people across the UK, and received responses
from a range of organisations including industry bodies, voluntaryorganisations and other interest groups. As part of the Children’s
services review, we designed a consultation for children, giving
them the opportunity to tell us themselves what they thought.
Responses to consultations make an important contribution to
our findings and recommendations. For example, one of our key
recommendations in the review of BBC Online, that navigation
should be improved so that people can explore the sites moreeasily, came from the public consultation.
Research
Our main piece of research is our annual Purpose Remit Survey
measuring the BBC’s performance in delivering its six public
purposes (see details overleaf). We also commission a mix ofquantitative and qualitative research which, together with our
public consultations, gives us a detailed picture of what ouraudiences think about the BBC’s services.

This year, for our service reviews, we commissioned researchamongst users of BBC Online and Red Button and used a
specialist research agency to speak to children, as well as parents,
for our review of Children’s services.
Qualitative research also played an important role in our
impartiality review on breadth of opinion. Audiences were asked
to watch and listen to a range of BBC news and current affairs
output, and comment on whether they had seen, read and hearda breadth of opinion.

Members of Audience Council England discuss the Trust’s service review of BBC Online

34

PART ONE: UNDERSTANDING AUDIENCES

BBC Annual Report and Accounts 2012/13

Sustaining citizenship and civil society
This purpose continued to be important to audiences and, overall,
expectations were met. However, the score relating to the BBC’sdelivery of high quality, independent journalism was 65%,
compared with 70% in 2011.

Representing the UK, its nations, regions and communities
This year, we split the representation question, asking people
about whether they felt represented in a) news, and b) dramaThis year, over 2,000 adults from across the UK participated in the and entertainment. Scores for both were around the same, andSurvey, enabling us to understand the views of a diverse group of similar to the previous, single question in 2011. Both were below
licence fee payers. As in previous years, eight in ten adults felt that average, with only about half considering they were represented
they would miss the BBC if it were not there, and the BBC wasby either genre; both measures were lower in Scotland andonce again more likely to be missed than any other broadcaster.
Northern Ireland. This remains a priority for the Trust.
Also in line with previous years, nearly six in ten (57%) thought
Promoting education and learning
the BBC represents good value for money, a perception which is
Audiences continued to see the BBC’s contribution to education
driven by the quality of BBC programmes, online content, and theas a key strength of the BBC, and it met their high expectations.
range of BBC services.
Bringing the UK to the world and the world to the UK
Following, is a summary of audiences’ views on each of the purposes:
We asked a new question this year with regard to the extent to
Stimulating creativity and cultural excellence
which the public felt that the BBC was good at presenting a positive
As in previous years, providing a wide range of entertaining andimage of the UK to the rest of the world; two thirds said that it did.
enjoyable content continues to be a strength of the BBC. Three
As in 2011, about eight in ten felt that the BBC helped them toquarters felt BBC programmes were high quality – the second
understand what was going on in the wider world.
highest result of all questions asked in the Survey. However,
Delivering the benefit to the public of emerging communications,audiences were less positive about the BBC having many fresh
technologies and services
and new ideas. To find out more about distinctiveness, we
YouView was successfully launched in 2012, and enhancements wereasked whether the BBC provides programmes that no othermade to iPlayer. Therefore, we were pleased to see that this purpose
broadcaster would make, and this score was lower than most,continued to score increasingly highly this year, with teenagers
at 47%. This supports our view that increasing distinctivenessand young adults giving higher than average scores. However, theshould continue to be a key strategic priority for the BBC.
public does continue to consider this purpose to be less important
than the others, although its importance has been rising.

Stimulating creativity
The BBC could do morein this area because there
is a large performance gap.

79% of audiences thought that freshand new ideas were important
But only 56% of audiences
thought that the BBC hadlots of fresh and new ideas

-23%

79%
56%

Representing life
in Scotland, Wales,
Northern Irelandand England
The map shows the% of people in eachnation who think
the BBC is good atrepresenting their life
in news and current
affairs content.

48%

50%
52%

58%

2011/12: -21%
Fallen short
BBC Annual Report and Accounts 2012/13

35

PART ONE: UNDERSTANDING AUDIENCES

Purpose Remit Survey
This Survey asks audiences for their views on how importanteach public purpose is to them, and on the BBC’s performance inrelation to each. It also includes some general questions. Although
the Survey is usually annual, we did not carry it out in 2012
because we were reviewing the purpose remits and updating theSurvey to ensure its questions remain relevant to the public. The
results here for 2013 are, therefore, compared with those of 2011.

UNDERSTANDING AUDIENCES

Audience Councils
It is essential that the BBC properly represents all nations of theUK, and we, therefore, have an Audience Council for each nation,
as well as a National Trustee. The Audience Councils play animportant role in gathering insights from audiences in theirrespective nations, including how well the BBC is serving
these audiences and delivering its public purposes.
Members are volunteers and are recruited to reflect the diversityof audiences across the UK. They advise the Trust on matters of
topical concern and help shape service reviews by ensuring thataudiences’ issues are highlighted from the earliest stages. This
year, Councils contributed to reviews of BBC Online andChildren’s programming.

Priorities for 2013/14
Audience Councils report emerging issues to the Trust so thatthey can be included in the annual workplan. This year, audiences
asked for more drama and documentary programmes on themain networks, to appeal to audiences across the UK, and to
more diverse groups – they want the BBC to move more quickly
to reflect fully the four nations’ political and cultural
distinctiveness. They also raised concerns that local programmes
are not available on BBC One HD in England, or on BBC Two HD
in Northern Ireland, Scotland and Wales, and asked that DAB
radio be made more widely accessible.
For more information, see the four Audience Councils’
annual reviews published on the Trust’s website.

How the BBC performed this year
The revelations about Jimmy Savile and concerns over editorial
decision-making at the BBC were a significant issue for audiences
across the UK, and Councils urged the BBC to undertake every
step necessary to restore audiences’ trust in its journalism.
As well as reporting on performance specific to each nation,Councils reported on other common issues. These included: theneed to take more creative risks; the need to maintain the quality
and range of local programming in spite of the need save money;
and that, although BBC Radio 4 reached over 10 million people, itslisteners are concentrated in the South of England. The Audience
Councils felt that the BBC could do more, in this and otherservices, to reflect fully the diversity of the UK.
The Councils also reported that the BBC’s coverage of the
London Olympics and the Queen’s Diamond Jubilee was hugely
popular, and noted how effective it was in bringing people
together from across the UK.

Members of Audience Council England’s North West panel meeting at MediaCityUK, Salford

36

PART ONE: UNDERSTANDING AUDIENCES

BBC Annual Report and Accounts 2012/13

PART ONE: INSIDE THE TRUST

INSIDE THE TRUSTThe governing body of the BBC:who we are, how we operate
and how much it costs

BBC Annual Report and Accounts 2012/13

37

BBC TRUSTEESGETTING THE BEST OUT OF
THE BBC FOR LICENCE FEE PAYERS
Trustees are part-time and come from a variety of backgrounds,
bringing a wide range of experience to the BBC. Trustees areappointed by the Queen on advice from ministers following an
open appointments process.

Sonita Alleyne OBE

Lord Patten of Barnes CH, Chairman

Diane Coyle OBE, Vice Chairman

Chairs Remuneration
and Appointments Committee.

Chairs Strategy and Approvals Committee Trustee from 1 November 2012.
and Audience Councils Committee.
Lead Trustee on diversity and equality
Lead Trustee on commercial issues.
(with Richard Ayre).

Other roles
Chancellor, University of Oxford;
Co-Chair, UK-India Round Table;
non-executive director, Russell
Reynolds Associates; International
Advisory board member, BP;
Stakeholder Advisory Panelmember, EDF Energy; European
advisory board member, Bridgepoint.

Other roles
Director, Enlightenment Economics;
Stakeholder Advisory Panel member, EDF
Energy; board member, Social Impact Lab.

Other roles
Founder, Yes Programme Ltd; nonexecutive director, Archant; member,
British Board of Film Classification;member, London Legacy
Development Corporation.

Richard Ayre

Anthony Fry

Alison Hastings

Chairs Complaints and Appeals Board.
Lead Trustee on diversity and equality(with Sonita Alleyne), transparency
issues, and the complaints framework.

Chairs Trust Finance Committee.
Lead Trustee for fair trading andvalue for money reviews.

Trustee for England, chairs Audience
Council England; chairs Editorial Standards
Committee. Led Trust’s review ofChildren’s services.

Other roles
Freedom of Information Adjudicator,
The Law Society.

38

PART ONE: INSIDE THE TRUSTOther roles
Chairman, Premier League; Chairman,
Dairy Crest; Chairman, CALA; senioradviser to Board, Espírito Santo UK;
non-executive director, Control Risks.
Anthony will step down as a Trustee
in the autumn of 2013.

Other roles
Vice President, British Board of Film
Classification; non-executive director,
Clatterbridge Cancer Centre; consultant
and trainer, Press Complaints Commission.

BBC Annual Report and Accounts 2012/13

PART ONE: INSIDE THE TRUSTDavid LiddimentBill Matthews

Aideen McGinley OBE

Chairs Audiences and Performance
Committee.
Led Trust’s review of service licences.

Trustee for Scotland, chairs Audience
Council Scotland. Chairman,
BBC Pensions Trust.

Trustee for Northern Irelandfrom 1 November 2012,chairs Audience Council Northern Ireland.

Other roles
Non-executive director, All3Media;
associate, Old Vic Theatre Company;
chair, Hepworth Wakefield Gallery.

Other roles
Director, M2M2 Limited; Chairman,
Crimestoppers Scotland; Acting Chair,
Security Industry Authority;
member for Scotland, British Transport
Police Authority.

Other roles
Jury member, UK City of Culture 2017;
trustee, Fermanagh Trust;governor, St Michael’s College, Enniskillen.

Elan Closs Stephens CBE

Suzanna Taverne

Lord Williams of Baglan

Trustee for Wales, chairs Audience
Council Wales.
Member, S4C Authority.

Led Trust’s review of BBC Online
and Red Button.

Chairs International Services Committee.

Other roles
Other roles
Non-executive director, Ford Credit
Emeritus professor, Aberystwyth University; Europe; trustee, StepChange Debt
non-executive director, Welsh Government Charity; trustee, Shakespeare Schools
Board; Member S4C Authority;
Festival; advisory board member,
non-executive director, BFI IMAXManchester Business School.
Waterloo; High Sheriff of Dyfed, 2012-13.

BBC Annual Report and Accounts 2012/13

Other roles
Distinguished Visiting Fellow, Chatham
House; member of the international
advisory board, Toledo CITPAX,
Toledo International Centre for Peace;
member of governing board, Schoolof Oriental and African Studies.

39

GOVERNANCE

MAKING WELL INFORMED,
FAIR AND TRANSPARENT DECISIONSThe BBC Trust is the governing body of the BBC. We aresupported by the Trust Unit, a team of professional staff
who report directly to us.
The Trust sets the strategic direction through four strategic
objectives for the BBC and issues a service licence to every BBC
service, stating what we expect it to deliver and how much it canspend. We uphold the BBC’s editorial standards and protect theBBC’s independence. The Trust is separate from the Executive,
which is led by the Director-General and manages the operationaldelivery of the BBC’s services.
The functions and duties of the Trust are outlined in the BBC’s
Royal Charter and the BBC’s Agreement with the Secretary ofState. The Trust operates in accordance with published protocols
and the way we make decisions is governed by our standingorders. As Trustees, we commit to acting in accordance with
our Code of Practice.
Our regular business is undertaken in monthly meetings of
the Trust and its sub-committees. At these meetings we makedecisions relating to our duties and responsibilities and consider
proposals from the Executive Board.
We publish the minutes of our monthly Trust meetings on our
website. We also publish the evidence and research on which ourdecisions are based, the findings of all editorial appeal decisions,the outcomes of value for money and service licence reviews.
Trustee changes during the year
Rotha Johnston’s and Mehmuda Mian’s terms ended on
31 October 2012. Sonita Alleyne’s and Aideen McGinley’s terms
began on 1 November 2012.
The trustees listed on pages 38 and 39 reflect the membershipof the Trust at 20 June 2013. There were no vacancies at this time.
Trustees’ attendance at Trust meetings (1 April 2012-31 March 2013)
Chairman
Lord Patten

26/27

Vice Chairman
Diane Coyle

27/27

National Trustees
Alison Hastings (England)
Rotha Johnston (Northern Ireland)Bill Matthews (Scotland)
Aideen McGinley (Northern Ireland)
Elan Closs Stephens (Wales)

25/27
11/13
26/27
10/14
23/27

Trustees
Sonita Alleyne
Richard Ayre
Anthony Fry1
David Liddiment
Mehmuda Mian
Suzanna Taverne
Lord Williams

13/14
25/27
23/27
25/27
12/13
25/27
23/27

Notes
1 Anthony Fry sent apologies to the Trust meeting on 22 November 2012, as he was giving
evidence at the Public Accounts Committee (PAC) on behalf of the Trust.
40

PART ONE: INSIDE THE TRUST

Trustees’ attendance at Audience Council meetings(1 April 2012-31 March 2013)
Alison Hastings

7/7

Rotha Johnston

5/5Bill Matthews

9/9

Aideen McGinley

3/3

Elan Closs Stephens

8/8

Assessing our own performance
Every year we review the way the Trust and its committees
have worked and publish the results in the annual report. Thisis a commitment we set ourselves in the Trust’s standing orders.
The events of the past year – revelations about sexual abuseby Jimmy Savile, the departure of a newly-appointed DirectorGeneral, and wholesale changes in senior management – putstrains on the Trust, as they did on the entire BBC, and we haveneeded to learn lessons. We recognise the need to clarify, bothinternally and externally, the distinct roles of the Trust and the
Executive as they are laid down in the Charter; to ensure better
communication between the two, especially at times of crisis;
and to be transparent about the measures we take on behalfof licence fee payers to hold the Executive to account for its
management of the BBC.
We continued our full programme of strategic and regulatory
work, including service and impartiality reviews, scrutinising theBBC’s budget proposals, assessing the case for new investments
and major projects, and listening to audiences across the UK,
despite the Savile affair having dominated the final months of 2012.
The Trust Unit
We are supported in our work by the Trust Unit, which provides
independent and objective advice, calling on outside experts
when necessary. The Unit is made up of BBC staff who are
independent of the Executive and report directly to us. It includes
professional staff with expertise across a range of disciplines,
including corporate governance, policy development, audience
research, financial and performance analysis, economics and law.
The Trust Unit advises Trustees on their duties, manages theTrust’s supervisory and regulatory functions, and provides theTrust with independent assessments of proposals from the
Executive Board. Most Unit staff are based in London; others
are based in offices in Belfast, Birmingham, Cardiff and Glasgow.
Register of interests
Our Code of Practice requires us to maintain and publish aregister of all external interests that might be seen to affectour ability to perform our duties as BBC Trustees. This register
includes declarations of all positions of employment, directorships
and voluntary positions as well as interests of close family
members, if relevant. The Trust’s register of interests is publishedon our website.

BBC Annual Report and Accounts 2012/13

Expenses
We are reimbursed for expenses incurred on BBC business,
which include travel, accommodation, work-related meals andhospitality. Trustee expenses are governed by the Trust’s Code ofPractice, which is published on our website. Every six months wepublish a full list of all expenses incurred by each Trustee, as wellas the services booked centrally for Trustees by the Trust Unit.
Some of our expenses and support services are classed as taxable
benefits by HM Revenue & Customs, and this figure is published in
the remuneration table; any tax arising on expenses incurred issettled by the BBC.

Chairman’s benefits
Trustees are paid for a part-time role at the BBC Trust. The
Lord Patten is not eligible to receive any benefits other than his
Chairman is expected to spend 3-4 days a week on Trust business,fee, and has elected not to make use of a BBC driver.
and the Vice Chairman about 2.5 days. Other Trustees are
expected to work for about 2 days a week. Trustees work longer
as needed.

Trustees’ remuneration
Fees £0001

Taxablebenefits
£000

Total
2012/13£000

Total
2011/12£000

Appointment
term
start dateAppointment
term
end date

Chairman and Vice Chairman
Lord Patten2

110

1

111

101

11 May 1130 Apr 15

Sir Michael Lyons3

_

–

–

15

1 May 0730 Apr 11

Diane Coyle

71

–

71

67

1 Nov 0630 Apr 15

Alison Hastings (England)*

38

–

38

38

1 Nov 06

31 Oct 14

Rotha Johnston (Northern Ireland)4

22

–

22

38

1 Nov 06

31 Oct 12

Bill Matthews (Scotland)*5

38

–

38

38

1 Jan 1131 Dec 14

Aideen McGinley (Northern Ireland)*6

16

–

16

–

1 Nov 12

31 Oct 16

Elan Closs Stephens (Wales)

38

–

38

38

1 Nov 1031 Oct 14

Sonita Alleyne6

14

–

14

–

1 Nov 12

31 Oct 16

Richard Ayre

33

–

33

33

1 Aug 1031 Jul 14

Anthony Fry7

33

–

33

33

1 Nov 08

31 Oct 15*2

National Trustees

Trustees

Dame Patricia Hodgson3

–

–

–

6

1 Nov 06

6 Jun 11David Liddiment

33

–

33

33

1 Nov 06

31 Oct 14

Mehmuda Mian4

19

–

19

33

1 Nov 06

31 Oct 12

Suzanna Taverne2

33

–

33

8

1 Jan 1231 Dec 15

1 Dec 1130 Nov 15

Lord Williams2

33

–

33

11

Total8

531

1

532

492

Notes
1	Trustees took an 8.3% voluntary reduction in pay in September 2010.
The Chairman’s fee was reduced by 23% from £142,800 to £110,000 at the start of Lord Patten’s term. Full details are available on the Trust’s website.
2 Lord Patten, Suzanna Taverne and Lord Williams began their appointments during the financial year 2011/12; accordingly their fees for 2011/12 only relate to their time in officeand do not cover the full year. Diane Coyle began her term as Vice Chairman in May 2011; accordingly her fee as Vice Chairman for 2011/12 does not cover the full year.
3 Sir Michael Lyons and Dame Patricia Hodgson ended their appointments during the financial year 2011/12; accordingly, their fees only relate to their time in office and do not cover
the full year.
4 Rotha Johnston and Mehmuda Mian ended their appointments part-way through the financial year 2012/13; accordingly their fees only relate to their time in office and do not cover
the full year.
5 Bill Matthews is the Chairman of the Board of the BBC Pension Trust Ltd, the corporate trustee of the BBC Pension Scheme. He is separately remunerated for this role.
Further details are available in the BBC Pension Scheme Annual Report and Accounts.
6 Aideen McGinley and Sonita Alleyne began their appointments part-way through the financial year 2012/13; accordingly, their fees only relate to their time in office and do not cover
the full year.
7 Anthony Fry will step down in the autumn of 2013.
8 In 2012/13 the total fees were higher as there were no vacant posts. In 2011/12 there were three vacant posts: a one-month vacancy for the Vice Chairman post and two Trustee
vacancies (six and eight months respectively).
* These Trustees all had taxable benefits less than £500 which have been rounded to nil. The total amount incurred by Trustees was £1,430.48.

BBC Annual Report and Accounts 2012/13

41

PART ONE: INSIDE THE TRUST

Trustees’ remunerationFees
Our fees as Trustees are determined by the Secretary of State forCulture, Media and Sport. In September 2010, Trustees took avoluntary 8.3% pay cut (equivalent to a month’s salary), in parallelwith the Director-General and other Executive Board members.
The reduced fees for Trustees will remain in effect until 31 August
2014 and are reflected in the table below. The one exception
to this is the Chairman, where the level of fees was reduced by
23% when the post was last advertised and, therefore, a further
discount has not been applied. Trustees do not receive severance
pay or other compensation for loss of office.

GOVERNANCE

Trust committees
We do much of our work through committees, which can makecertain decisions on behalf of the Trust as a whole. The membersof each committee and their attendance during 2012/13 are set
out below. The terms of reference for each committee are on
our website.
Audience Councils Committee
Chair: Diane Coyle
The Audience Councils Committee (ACC) brings together theVice Chairman and the four National Trustees to oversee andco-ordinate the contributions of the BBC’s Audience Councils
as advisory bodies to the Trust. Its role is to ensure that issues
identified by the Audience Councils are dealt with appropriatelyby the Trust and that the Councils work within their remits.
The ACC also approves membership of the Audience Councils.

Complaints and Appeals Board
Chair: Richard Ayre
The Complaints and Appeals Board (CAB) deals with complaints
about the Trust and appeals to the Trust concerning fair trading,
Television Licensing and other matters apart from editorial
appeals. In 2012/13, CAB received 145 requests for appeals
relating to TV Licensing, fair trading and general complaints.
Thirty-eight were heard by CAB; one was partially upheld andthere were no others upheld. Ninety per cent were dealt withwithin the target time. CAB is responsible for reviewing theComplaints Framework, revised in June 2012. Early evidence
suggests users now find the system more joined-up, flexible andresponsive. All Trustees are members of CAB. The two standing
members are supplemented by other Trustees as needed.
Meeting attendance (1 April 2012-31 March 2013)
11/11

Richard Ayre (Chair)*

Meeting attendance (1 April 2012-31 March 2013)
Diane Coyle (Chair)

3/3

Alison Hastings

3/3

Rotha Johnston

2/2Bill Matthews

3/3

Aideen McGinley

1/1

Elan Closs Stephens

2/3

Committee membership changes: Rotha Johnston (until October 2012); Aideen McGinley(from November 2012).

Diane Coyle

4/4

Anthony Fry

1/1

Alison Hastings

2/2

David Liddiment

1/1Bill Matthews

2/2

Aideen McGinley

1/1

Mehmuda Mian*

4/5

Elan Closs Stephens*

4/5

Suzanna Taverne

1/1* Indicates standing members. Committee membership changes: Mehmuda Mian (until
October 2012); Elan Closs Stephens (from December 2012).

Audiences and Performance Committee
Chair: David Liddiment
The Audiences and Performance Committee (APC) is
responsible for developing the strategy for, and assessing theperformance of, the BBC’s UK public services on behalf of theTrust. It monitors how the BBC is delivering its public purposes.
The APC assesses the performance of the BBC’s services against
their service licences, including overseeing the Trust’s programmeof service reviews. The Trust undertakes a service review of eachof the BBC’s UK public services at least once every five years. The
APC is also responsible for the Trust’s programme of audience
research and public consultation.
Meeting attendance (1 April 2012-31 March 2013)
David Liddiment (Chair)

11/11

Sonita Alleyne

Editorial Standards Committee
Chair: Alison Hastings
The Editorial Standards Committee (ESC) is responsible, on
behalf of the Trust, for establishing the BBC’s editorial standards
and overseeing the BBC’s services for compliance withthese standards.
Editorial standards are enshrined in the BBC’s Editorial Guidelines.
The Trust asks the Executive Board to prepare draft Guidelines
and, if content, the Trust then formally approves them. The ESC is
the final appeal body within the BBC in determining whether the
Editorial Guidelines have been followed. The ESC also manages theTrust’s programme of impartiality reviews and seminars.

4/4

Diane Coyle

7/7

Alison Hastings

10/11

Meeting attendance (1 April 2012-31 March 2013)
Alison Hastings (Chair)

18/18

4/4

Sonita Alleyne

6/6

Mehmuda Mian

5/6

Richard Ayre

17/17

Suzanna Taverne

9/11

David Liddiment

18/18

Bill Matthews

6/6

Mehmuda Mian

8/8

Lord Williams

8/9

Aideen McGinley

Committee membership changes: Mehmuda Mian (until October 2012); Diane Coyle(until November 2012); Sonita Alleyne (from December 2012); Aideen McGinley(from December 2012).

Committee membership changes: Mehmuda Mian (until October 2012); Lord Williams(until November 2012); Bill Matthews (from December 2012); Sonita Alleyne (fromDecember 2012).

42

PART ONE: INSIDE THE TRUSTBBC Annual Report and Accounts 2012/13

International Services Committee
Chair: Lord Williams

Strategy and Approvals Committee
Chair: Diane Coyle

Meeting attendance (1 April 2012-31 March 2013)

The Strategy and Approvals Committee (SAC) considers
proposals from the Executive Board, including for new services
or changes to existing services, except those proposed as part ofa service review (which are considered by the APC). It considers
whether a public value test (PVT) is required and advises theTrust accordingly. The SAC manages any PVT or otherconsideration of a proposal from the Executive, and makes
recommendations to the Trust on possible outcomes. The SAC
also oversees the BBC’s commercial strategy and individual
proposals, where these are of strategic significance or ofhigh value.

Lord Williams (Chair)

4/4Richard Ayre

4/4

Diane Coyle

4/4

David Liddiment

3/3

Aideen McGinley

1/1

Meeting attendance (1 April 2012-31 March 2013)

Elan Closs Stephens

4/4

Diane Coyle (Chair)

8/8Richard Ayre

5/5

Anthony Fry

7/8

Bill Matthews

5/8

Suzanna Taverne

8/8

Lord Williams

3/3

Committee membership changes: David Liddiment (until November 2012);
Aideen McGinley (from December 2012).

Remuneration and Appointments Committee
Chair: Lord Patten
The Remuneration and Appointments Committee (RAC)
manages the Trust’s responsibilities concerning Executive Board
remuneration and appointments. The RAC oversees executive
remuneration strategy and makes recommendations to the Truston the pay and benefits of the Director-General and the nonexecutive directors of the Executive Board. However, pay andbenefits of the executive directors are determined by the
Executive Board’s Remuneration Committee, which consists
entirely of non-executive directors.
Meeting attendance (1 April 2012-31 March 2013)

Committee membership changes: Richard Ayre (until November 2012); Lord Williams(from December 2012).

Trust Finance Committee
Chair: Anthony Fry
The Trust Finance Committee (TFC) helps the Trust to
set the financial strategy for the BBC. It examines the BBC’sannual budget and holds the BBC to account for its financial
performance. It scrutinises significant financial proposals, andoversees the Executive’s internal control and risk management
arrangements. The TFC also manages the Trust’s programme ofvalue for money reviews, working with the Executive to ensure
the BBC acts on any recommendations made.

Lord Patten (Chair)

1/1

Diane Coyle

1/1

Anthony Fry

1/1

Rotha Johnston

0/0

Meeting attendance (1 April 2012-31 March 2013)

David Liddiment

1/1

Anthony Fry (Chair)Committee membership changes: Rotha Johnston (until October 2012); David Liddiment(from December 2012).

The RAC met only once this year as matters related to theappointment and remuneration of the Director-General wereconsidered by the full Trust.

10/10

Richard Ayre

3/3

Diane Coyle

3/3

Rotha Johnston

5/6

Elan Closs Stephens

10/10

Suzanna Taverne

10/10

Lord Williams

6/7

Committee membership changes: Rotha Johnston (until October 2012); Lord Williams(until November 2012); Diane Coyle (from December 2012); Richard Ayre (fromDecember 2012).

BBC Annual Report and Accounts 2012/13

43

PART ONE: INSIDE THE TRUSTThe International Services Committee is responsible for helping
the Trust to develop the strategy for, and assess the performanceof, the BBC’s international public services. They consist of the
BBC World Service, BBC World News, bbc.co.uk/news and
BBC Monitoring.

TRUST FINANCESHOW THE TRUST SPENT ITS BUDGET
We aim to run our operations as efficiently as possible.
Our direct expenditure for 2012/13 was consistent withthat for the previous year.
In line with the rest of the BBC, we are committed to making
savings. Specifically, we are committed to keeping our direct
expenditure below 0.31% of total licence fee income. This year,
direct expenditure represented 0.24% of total licence fee income(0.25% in 2011/12).

Reporting regulations
The Royal Charter requires the annual report and accounts tobe externally audited. We, therefore, asked KPMG LLP to confirm
that we have accurately presented the Trust’s expenditure,including Trustees’ remuneration, in Part One.
KPMG LLP’s report is included next to the statement ofTrust responsibilities on page 45. The BBC is exempt from therequirements of the Large and Medium-sized Companies andGroups (Accounts and Reports) Regulations 2008 and those of
the Financial Services Authority, but, where relevant, we have
prepared this report as if those requirements apply.

Director and senior management remuneration
Nicholas Kroll, Director, BBC Trust, is the Chief Officer of theTrust as specified by the Royal Charter. He is the principal adviser
to the Trust and Chief Executive of the Trust Unit. His basepay for 2012/13 was £238,680 (£238,680 in 2011/12) and theaggregate of his emoluments to 31 March 2013 was £246,480(£246,480 to 31 March 2012). Nicholas is a member of the BBC
Pension Scheme.
The Trust Unit has six senior managers as well as the Director,
and our website provides an analysis of their remuneration, split
into £5,000 salary bands.
See page 43 for the Trust’s Remuneration and Appointments
Committee, and page 41 for Trustees’ remuneration which
is audited.

Trust people

Trust expenditure statementNote2012/13£000

2011/12£000

Trustee remuneration

1

589

546

Staff costs

2

4,496

4,473

Other operating costs

3

3,548

3,855

4, 5

8,633

8,874

Ofcom regulatory fees

6

3,276

2,976

Ofcom market impact assessment fees

7

–

21

Ofcom significance test fees

8

–

26

Direct Trust expenditure

Total Ofcom fees payable by Trust

3,276

3,023

Total Trust expenditure

11,90911,897

Average for year

2012/13

2011/12

Trustees

12.0

10.8

Trust Unit staff (EFT)1,2

65.9

67.3

Notes
1	Trust Unit staff are employed by the Trust underarticle 42 of the Royal Charter.
2 Of the 65.9 average equivalent full-time (EFT) Trust
Unit staff for 2012/13, 15 EFTs were based outside
London and supported the work the Trust undertakes
in the four nations (19.4 in 2011/12). 12.9% came from a
black or minority ethnic background (13% in 2011/12),
3.9% were disabled (3.1% in 2011/12) and 65.2% were
women (68% in 2011/12).

Notes
1	The remuneration received by each Trustee is shown in the table on page 41. The figure in the table above also includes
social security costs.
2 Staff costs include wages and salaries, social security costs and employer’s pension contributions.
3 Operating costs include direct expenditure on activities such as research, legal advice, other specialist advisory services
and the Trust’s consultation activities and stakeholder events.
4 This represents direct external spend by the Trust. The Trust also made use of shared services, which included property
provision, finance, HR and information services, that were provided by the BBC public services.
5 Of direct Trust expenditure, £998,409 relates to spend on Trust activities in the four nations (£999,691 in 2011/12).
This primarily covers support for the four national Audience Councils and the 12 regional panels in England.
6 Ofcom allocates its costs of television and radio regulation to the BBC and the other UK broadcasting channels.
The Trust pays the BBC’s share of that allocation.
7 Ofcom market impact assessment (MIA) fees cover Ofcom’s direct and indirect costs in undertaking MIAs for public
value tests. No MIAs were undertaken in 2012/13 or 2011/12; costs in 2011/12 related to Ofcom’s management of the
MIA programme.
8 Ofcom significance test fees cover Ofcom’s direct and indirect costs in undertaking work to give input into the Trust’s
significance tests.

44

PART ONE: INSIDE THE TRUSTBBC Annual Report and Accounts 2012/13

Our responsibility, in accordance with the terms of ourengagement letter, is to form an independent opinion, on thebasis of the work performed, and to report our opinion to theTrust. Our examination was substantially less in scope than an
audit or a review.
We were not required to, nor have we, verified thecompleteness of the Trust expenditure statement.
Our report has been prepared for the Trust solely in connection
with its obligations under the Royal Charter. Our report was
designed to meet the agreed requirements of the Trust andparticular features of our engagement determined by theTrust’s needs at the time. Our report should not, therefore, beregarded as suitable to be used or relied on by any party wishingto acquire rights against us other than the Trust for any purpose
or in any context. Any party other than the Trust who obtains
access to our report (or any part of it) will do so at its own risk.
To the fullest extent permitted by law, KPMG LLP will accept
no responsibility or liability in respect of our report to any
other party.
In our opinion, the expenditure as shown in the Trust
expenditure statement has been accurately extracted from thebooks and records of the Trust on the basis of the notes to theTrust expenditure statement.

Scott Cormack
For and on behalf of KPMG LLP
Chartered Accountants
15 Canada Square
London E14 5GL
20 June 2013

Statement of responsibilities in respectof the annual report and accounts
The BBC’s Royal Charter requires that an annual report andstatement of accounts is prepared in two parts, Part One by
the Trust and Part Two by the Executive Board. The Executive
Board’s responsibilities are detailed in the Governance sectionof Part Two of this annual report. In summary, the Executive
Board is responsible for preparing the financial statements andstatements of compliance with applicable corporate governancecodes and remuneration regulations, and delivering these to
the Trust within Part Two of this annual report. The Executive
Board has prepared the financial statements in accordance with
International Financial Reporting Standards as adopted by the
EU (EU IFRS), reflecting the fact that EU IFRS are widely used in
the UK, are being adopted in the public sector, and that their use
would be permitted under the Companies Act 2006. These
financial statements are audited by external auditors.
In preparing its associated corporate governance disclosures, theExecutive Board has elected to comply with the UK Corporate
Governance Code, and, where applicable, the Financial Services
Authority Listing Rules which apply to a company quoted on an
EU regulated market.
In order to comply with those requirements, the annual reportmust include disclosures on the governance arrangements of theTrust as well as those of the Executive Board. These disclosures,
which are audited, are the responsibility of the Trust, and areincluded in Part One of this report.
The Charter also requires the Trust to prepare a statementof its expenditure and include it within Part One of theannual report.
Statement of disclosure of information to auditors
The Trustees who held office at the date of approval of thisannual report and accounts confirm that, so far as each isaware, there is no relevant audit information of which the BBC’s
auditors are unaware; and each Trustee has taken all the steps
that he or she ought to have taken as a Trustee to make himself
or herself aware of any relevant audit information and toestablish that the BBC’s auditors are aware of that information.
This statement was approved by the Trust on 20 June 2013.

Lord Patten of Barnes CH
Chairman
20 June 2013

BBC Annual Report and Accounts 2012/13

45

PART ONE: INSIDE THE TRUST

Report of KPMG LLP to the BBC TrustIn accordance with the terms of our engagement letter dated
13 May 2013, we have examined the expenditure statement on
page 44 (the Trust expenditure statement) for the year ended
31 March 2013 which has been prepared, further to therequirements of the BBC Royal Charter dated October 2006,
by the Trustees and is their sole responsibility.