PART ONE:

Annual Report andAccounts 2007/08

The BBC Trust’s review and assessment

07 08Chairman’s introduction

02

The BBC Trust

04

Overview
The BBC in 2007/08

06

Performance overview

08

BBC outlook

14

BBC performance
BBC content

21

BBC purposes

23

BBC services

24

BBC finance and business29

BBC audience views

32

BBC governance
Overview

37

Delivering value for money

37

Serving all audiences

42

Ensuring impartiality

43

BBC’s economic power

45

Other regulatory information

48

The Trust ’s plans for 2008/09

50

Contact the BBC Trust

52

BBC Annual Report and Accounts 2007/08

01

This is the public’s BBC and the public
pays for it with the licence fee. They havemade it absolutely clear they want quality,
value and something a bit special in return.
The plans we have approved for the
future direction of the BBC will safeguard
the core values of the BBC at a time ofradical change in technology, markets andaudience expectations.
Sir Michael Lyons
Chairman, BBC Trust
October 2007 (on approval by the Trustof the BBC’s new six-year strategic plans)

02

CHAIRMAN ’ S INTRODUCTION

This has been a year when I have been privileged
to make contact with licence fee payers aroundthe UK and to begin to understand the strengthof their feelings – positive and negative – about
their BBC.
Sir Michael Lyons
Chairman, BBC Trust
19 June 2008

BBC Annual Report and Accounts 2007/08

The Trust works for the public who own andpay for the BBC. For them, we ensure the
BBC is independent, efficient and firmly
focused on its public purposes.
To do this, we must equip the BBC properly:
we set the strategic direction, the priorities,
and the budgets. We make sure the editorial
framework is robust and all the boundaries
within which the BBC must operate are clear
and firmly in place. And most of all, we set thechallenge of delivering – as efficiently as possible– quality programmes and services which standout from the crowd to justify the licence fee.
In short, we make sure the BBC is clear whatis expected of it, and then we satisfy ourselves
it is meeting this expectation. And we aim to
do our job armed with a clear understandingof what licence fee payers – in all their diversity– expect and think about their BBC.
This report covers our first full year as BBC
Trustees and how we’ve started to approach
our task. You’ll see from this report that our
focus has centred on three main themes:reaching everyone; increasing the quality anddistinctiveness of BBC programmes and services;and rebuilding trust amongst audiences.
The last of these was not originally on our
agenda. But as can sometimes happen, theunexpected reordered our priorities somewhat.
Editorial integrity and trust in the BBC isfundamental to the contract between the BBC
and its audiences. The events of last summer
were serious, but we have been reassured by
the progress made so far by management inresponding to them and the signs of recoveryof the public’s confidence.
As to ‘reaching everyone’ and ‘quality anddistinctiveness’, these objectives arose directlyfrom what we heard from licence fee payers
and are now cemented within the BBC’s
long-term strategy.
On page 17 we lay out these and the four otherobjectives we set the management last Octoberwhen we approved the Director-General’s
strategic plans for the next six years. These
objectives seek to ensure that the BBC meets
all the public’s priorities and addresses thoseareas where it is not performing as strongly as
it needs to. This includes reaching those who do
not currently value the BBC highly, but without
jeopardising the loyalty of those who do.
This is because much of what the BBC does –on television, radio and online – is already of an
extraordinarily high standard and highly valued.
The public frequently remind us that it’s their
BBC and, whilst they are not shy in highlighting

what they don’t like, they expect us as Trustees
to be supportive of what they do like.
We’ve therefore sought to understand what
programmes audiences define as quality or
distinctive, particularly on television, and haveused those to illustrate to management what
the public wants, as well as what they don’t.
The range of programmes audiences havemarked high for quality this year is wide – fromthe more obvious examples, such as Cranfordand Life in Cold Blood; to the classics like Question
Time and Panorama; and to the new and morerisky, such as The Mighty Boosh and The No 1
Ladies Detective Agency. We cover this topic
in more detail later in the report.
The annual efficiency savings of 3% we haveset are stretching, but we are confident they
are deliverable without affecting quality. Indeed,
the only purpose of the money released isreinvestment to increase quality and to serve
the public better.
Reaching everyone in the 21st century requires
investment in new technology. That the BBC
has maintained its overall reach and grown its
television reach is a remarkable achievement.
Even so, the arrival of the BBC iPlayer has beena landmark event and an important illustrationof the public’s appetite for on-demand.
BBC iPlayer was of course the subject ofour first public value test, and this year we’ve
applied the same to the HD channel and Gaelic
Digital Service. In doing so we’ve held open
meetings for others in the industry at the
beginning of the process, during the process
to discuss our initial conclusions, and after wehave reached our final decisions – to explainthem and how we have taken on board their
input. We’ve also encouraged the public to giveus their views and we’ve canvassed them via
formal research. This robust scrutiny and input
from outside the BBC to our independent
decision-making processes is a real strength andI believe means we are serving the public better.
This year bbc.co.uk was the subject of our firstextensive service review. We found a service
strongly appreciated by its users, but one where
the financial management needed urgent
attention. We will not approve additional
investment until satisfied that the right controls
are in place and until
we have scrutinised in further detail the
management’s proposals.
The public’s influence has been strong
throughout the year. Their comments andconcerns prompted our review of the networknews coverage of the changing United Kingdom,which has led BBC management to introducechanges. The BBC’s new commitment to make
50% of its programmes outside of London by
the end of this Charter was sparked by what
we learned about audience dissatisfaction in
those parts of the UK some distance from thesouth-east. And the public’s concerns about starsalaries led us to review the BBC’s role in how
the media industry decides what to pay those
who appear on-air and on-screen. While wefound the BBC was generally not paying morethan other broadcasters for the top names,
it is clear there’s some scope for the BBC to
do more to keep these fees down. We’ll be
reviewing progress on this next summer andreport again.
Overall, we want to see a BBC that operates
in an open and accountable way. We want the
public to feel more reassured that the BBC is
working for them. The Trust has been struckby management’s constructive and positive
response to the increased scrutiny they have
faced. It has sometimes been uncomfortable,
but we believe that the benefit of this rigour
is starting to be recognised by those on thereceiving end of it.
We want the BBC to be a good corporateneighbour to others in the UK media sector.
We also believe that cooperation with othermedia providers – which implies a degree ofcommercial caution by the BBC – may provide
a better way of protecting long-term audienceinterests than increased regulation. This is an
important issue and one which we will explore
further in the year ahead.
In the months ahead we will complete ourreview of the BBC’s services for children, andwill start the same for those aimed at young
people. Also this year we will review thearrangements for collecting the licence fee.
Speaking personally, this has been a year when
I have been privileged to make contact withlicence fee payers around the UK and to begin
to understand the strength of their feelings –positive and negative – about their BBC. It’s also
been a year when I have been able to meet
more of the people who make the BBC thecornerstone of public service broadcasting in
the UK. I recall in particular attending the Sony
Radio Academy Awards earlier this year andthe delight in the faces of World Service staff asthey won award after award – a well- deserved
industry accolade for a service that brings great
credit to Britain around the world.
We will continue to set testing challenges so
the BBC can demonstrate it is value for money,
is high in quality, and distinctive from what elseis on offer. Achieving all this is essential for it
to remain the cornerstone of public service
broadcasting in the UK.

Sir Michael Lyons
Chairman
19 June 200803

CHAIRMAN ’ S INTRODUCTIONCHAIRMAN’SINTRODUCTION

04

BBC TRUST: THE TRUSTEESThe BBC Trust
The Trustees
The BBC Trust is the sovereign body of the
BBC – 12 independent Trustees acting in the
public interest. The Trust ensures that the BBC
remains independent and delivers public value
by providing distinctive services of the highest
quality for everyone in the UK.
The Trust is responsible for ensuring that the
BBC delivers its Public Purposes as set out in theCharter and Agreement, which gives the Trusta set of governance tools to perform this task.
These tools include purpose remits, service
licences and public value tests.
The Trust sets priorities for the Executive,
which manages the day-to-day operations of the
BBC and is headed by the Director- General,
who is appointed by the Trust.

01

02

03

04

05

06

07

08

09

10

11

12

The Trust exercises supervisory and regulatory
functions. These include approving the BBC’s
high-level strategy and budgets; approving theBBC’s editorial guidelines; setting the frameworkfor dealing with complaints and, whereappropriate, hearing appeals; and ensuring the
BBC complies with its fair trading policies.
A key principle of the Trust is to act in an
open and transparent manner, and always tounderstand and take into account the viewsof the public before making decisions.
Full details of the Trust’s role and functions
can be found on the Trust website: bbc.co.uk/
bbctrust
Nicholas Kroll
Director, BBC TrustBBC Annual Report and Accounts 2007/08

01 SIR MICHAEL LYONS

05 ALISON HASTINGS
TRuSTEE fOR ENGLAND

Chairman since 1 May 2007. Chairmanof the English Cities Fund. Non-executive
director of Mouchel plc; Wragge & Co;
and SQW Ltd. Former Deputy Chairman
and Acting Chairman, Audit Commission.
Former Chief Executive of Birmingham
City Council; of Nottinghamshire
County Council; and of Wolverhampton
Borough Council. Led the Lyons Inquiry
into the functions and funding of local
government. Former Professor of Public
Policy, Birmingham University. Former
non-executive director, Central Television
Limited; former Chairman ITV Regional
Advisory Council. Governor, Royal
Shakespeare Company. Former Chairman
City of Birmingham Symphony Orchestra.

Chairman, Audience Council England;Media consultant. Former Editor,
Newcastle Evening Chronicle. Former
member, Press Complaints Commission.
06 DAME PATRICIA HODGSON DBE

Principal, Newnham College, Cambridge.
Governor, Wellcome Trust; member ofthe Higher Education Funding Council
for England, and of the Committee onStandards in Public Life. Non-executive
director, Competition Commission. Former
Chief Executive of the Independent
Television Commission. Former BBC
executive, who held many senior positions
including Director of Policy.
07 ROTHA JOHNSTON

02 C HITRA BHARuCHA
VICE CHAIRMAN

Acting Chairman to 30 April 2007;
Chairman, BBC Trust Audiences Councils
Committee and Remuneration andAppointments Committee. Former
Consultant Clinical Haematologist and
Deputy Director, Northern Ireland
Blood Transfusion Service. Former
member, General Medical Council;
former Chairman, GMC Fitness toPractise Adjudication Panels. Former
Northern Ireland member, Independent
Television Commission; former member,
BBC Broadcasting Council for Northern
Ireland; former member, AdvertisingStandards Authority (Broadcasting).
Chairman, Advisory Committee on Animal
Feedingstuffs for the Food Standards
Agency. Trustee, Marie Curie Cancer Care.
03 DIANE COYLE

Chairman, BBC Trust Public Value andFair Trading Committee. Economic
consultant specialising in new technologies
and globalisation. Member, Competition
Commission. Former Economics Editor of
The Independent. Widely published author
and broadcaster on economics.
04 DERMOT GLEESON

Chairman, BBC Trust Finance and Strategy
Committee. Former BBC Governor.
Chairman, M J Gleeson Group plc.
Former Chairman, Major Contractors
Group; former director of the Housing
Corporation, and of the Construction
Industry Training Board. Former Head,Home Affairs Section, Conservative
Research Department; former memberof Christopher Tugendhat’s cabinet in theEuropean Commission.

TRuSTEE fOR NORTHERN IRELAND

Chairman, Audience Council Northern
Ireland; Entrepreneur in commerce andproperty. Non-executive director of Allied
Irish Bank (UK) plc; Vice Chairman of
Invest Northern Ireland; non-executive
member, Northern Ireland Office Board.
Pro-Chancellor, Queen’s University, Belfast.
Chairman, BBC Trust Audience Council
Committee until March 2008.
08 JANET LEwIS-JONES
TRuSTEE fOR wALES

Chairman, Audience Council Wales;
Vice President, British Board of Film
Classification; Trustee, Baring Foundation;
Chairman, Membership Selection Panelof Glas Cymru (Welsh Water). Former
member, Welsh Fourth Channel (S4C)
Authority; and former Commissioner,
Postal Services Commission. Served on
the boards of the Strategic Rail Authority
and of British Waterways.
09 DAVID LIDDIMENT

Chairman, BBC Trust Audiences andPerformance Committee; Non-executive
Director, All3Media; Associate, The Old
Vic Theatre Company. Broadcasting career
includes Director of Programmes, ITV;
Deputy Managing Director, LWT; Directorof Programmes, Granada TV; Head ofEntertainment Group, BBC Television.

10 MEHMuDA MIAN PRITCHARD

A Commissioner of the Independent
Police Complaints Commission, London
and South East Region. Board member,
Independent Safeguarding Authority.
Former non-executive director ofNorthern Birmingham Mental Health
Trust and of the NHS Litigation Authority.
Former solicitor in private practicein Birmingham.
11 JEREMY PEAT
TRuSTEE fOR SCOTLAND

Chairman, Audience Council Scotland;
Chairman, BBC Pension Scheme Trustees.
Former BBC National Governor for
Scotland. Member of the Competition
Commission. Director of the David
Hume Institute. Columnist for the Heraldand Holyrood magazine. Former Group
Chief Economist at the Royal Bank of
Scotland. Former economic adviser to theGovernment of Botswana, HM Treasury,
and the Scottish Office.
12 RICHARD TAIT

Chairman, BBC Trust Editorial Standards
Committee. Professor of Journalism andDirector of the Centre for Journalism
Studies, Cardiff University. Former Editor­
in-Chief, ITN; former Editor, Channel 4
News. At the BBC edited Newsnight, The
Money Programme and the 1987 General
Election results programme. Former BBC
Governor. Fellow, International Press
Institute; Fellow of the Society of Editorsand of the Royal Television Society.

05

BBC TRUST: THE TRUSTEESCHAIRMANThe issue of trust

was quite upset when I found that the“ IBBC
was involved in the phone

06

THE BBC IN 2007/08

scandals. I lost a lot of faith in them…” *17,000S TA F F

attended the BBC’s Safeguarding Trusttraining in six months

Launch of BBC iPlayer

BBC iPlayer is a real step forward.
“ The
It’s quite easy to use… my parents use it.”

42*

The BBC’s reputation for editorial integrity is its mostvaluable asset. That reputation was eroded during theyear and we took urgent action to restore public trustin the BBC and prevent any repetition of the events
that did the damage.

MILLION

programmes were accessed using BBC
iPlayer in the first three months of 2008

THE BBC IN 2007/08:
A BBC adapting for the future

The BBC Trust only allows new BBC services to launch
if it considers the service will deliver public value
and the positive benefits will outweigh any negative
impacts. We approved the BBC iPlayer after a public
value test and it has become a highly valued addition
to BBC services.

an institution – you rely on it being“ It’sthere…
I think we would miss it morethan we think.” *50%

is the new target for the proportion of BBC
staff to be based outside London by 2016

The BBC must always be thinking about how to
respond to changes in technology, in the way people
live and in how they use media. This year we approved
a new six-year plan for the BBC to ensure it continues
to provide something for everyone and good value forall licence fee payers.

BBC Annual Report and Accounts 2007/08

A more open and accountable BBC

that they’re being more
“ It’sopenexcellent
and transparent…”

07*

THE BBC IN 2007/08

53,536PEOPLE

visited Television Centre in London fora tour of the studios

Distinctive high-quality programmes

The BBC wants to get better at listening to what
people think and explaining what it does. This year
the BBC Trust offered people the chance to give theirviews before it took major decisions. The Trust has
started explaining its decisions on its website.

WHAT STOOD OUT
FOR YOU?

give the BBC top marks for natural“ I’dhistory.
It’s the BBC’s forte… forexample in Life in Cold Blood.” *91%of the audience strongly agree that Life in
Cold Blood was a high-quality programme

A BBC valued across the world

listen to BBC radio for international“ Inews
and its analysis because it isfactual without bias or partiality.”

233†

When we judge how well the BBC is doing we always
take into account what audiences think about thequality and distinctiveness of BBC programmes –not just how many people watched or listened.

MILLION

used the BBC’s global news services –television, radio and online – last year

BBC news audiences value and demand impartiality –the cornerstone of the BBC’s reputation around theworld. The BBC Trust makes sure editorial standards
are of the highest quality. Ensuring impartiality is a key
priority for us.

* Member of public at Trust workshop.
† Housewife, Herat, Afghanistan.

08

OVERVIEW

93%

The percentage of adults in the UK using
BBC services.
Source: BBC Tracking Study. Claimed reachage 15+ 2007/08.

At the heart of BBC culture sit the values ofhonesty, integrity and straight dealing. These
values have won the trust and support ofthe public over eight decades. Future public
support depends on the BBC continuing
to instil these values into everyone in theorganisation. They must be impressed on
people on the day they join and be at theheart of their professional life throughout
their time at the BBC.
Richard Tait
Trustee, Chairman of Trust ’s
editorial standards committee

BBC Annual Report and Accounts 2007/08

This has been a year in which firm foundations
have been laid for the remaining years of thislicence fee period until 2012. We are clear
about what BBC audiences want; we haveapproved the Executive’s strategy for futureyears; and we have agreed a financial strategy
that includes challenging efficiency targets torelease money to fund further increases inquality. There are signs that the performanceof the BBC is starting to reflect the priorities
we have set it, although there are some areas
where internal processes must be improved.
In the year under review we have focusedon three key themes: reach; quality anddistinctiveness; and rebuilding trust.
Reach – a measure of how many peoplechoose to use our services – matters bothbecause it is an indication of the value the
BBC is delivering to all licence fee payers andalso because the BBC cannot deliver the
public purposes laid on it by Parliament unless
its services are used by the vast majority ofpeople in the UK.
Quality and distinctiveness matter because
audiences have made clear to us that these
are the most important issues for them.
And rebuilding trust matters because audiences
have traditionally placed great trust in the BBC
and when this confidence is damaged – as it
was by last summer’s editorial failings – thecost to a key relationship between the BBC
and its audiences is potentially extremely high.

“They do pretty well – all four
generations in my family seemto enjoy it.”Members of public at Trust research workshop.

Member of public at Trust workshop discussing
the BBC.

REACHING EVERYONE

maximum reach consistent with the BBC’s
purposes and values. Simply setting an
objective to maximise reach could createa perverse incentive that might work against
the high-quality output audiences expectfrom the BBC.

The Trust exists to promote and defend
the interests of licence fee payers – the public
who own and pay for the BBC. A key partof our task is to ensure that the BBC provides
everyone in the UK with high-quality output
that they value. Only by doing this can the
BBC deliver its six public purposes andmaintain support for the licence fee.
We are therefore pleased to note the BBC’s
good performance in terms of reach overthe past year. Reach is not the only significant
measure of performance, but it is an
important one that enables us to track how
many people are using the BBC’s services.
Throughout 2007/08 some 93% of the
population used the BBC’s services on a
weekly basis. Performance was particularly
strong in Television which saw reach increaseby 0.6% to 85% overall after declines inprevious years. The reach of BBC Radio fellslightly but bbc.co.uk continued its upward
momentum, as we would expect given thecontinuing strong growth elsewhere in
the sector.
In last year’s annual report we noted thechanging media behaviour of the young as
they switch away from old technologies
and into new ones at a faster rate thanolder audience groups. We are therefore
encouraged to note that reach to BBC TV
and radio held steady among the 16–34 age
group, with notable growth for BBC Two and
BBC Three, as well as Radio 1. Online reachhas increased to this age group.
Despite this encouraging performance weare aware that competitive pressures areintensifying and that the BBC may find it hardto sustain this performance in coming years.
This is why, when we approved the BBC’s sixyear strategy last year, we set management
the explicit objective of maintaining the

Our wish that the BBC should maximise reachwith high-quality output has played a part inour decisions to approve a number of newservices. In carrying out public value tests on
both the BBC iPlayer and the HDTV channel
we were convinced that each would enable
the BBC to reach people with something
they valued. The BBC iPlayer – successfullylaunched this year – enables the BBC to
respond to the clear demand from the public
to view BBC output at a time of their own
choosing. And in the case of the HDTV
channel (see page 45) we have foundstrong evidence that a sizeable portion of the
population would value such a service andbelieve that the BBC’s commitment to it –particularly on the free-to-view DTT and
DSat platforms – will ensure that all who wish
to can enjoy this promising new technology.
During the course of our discussions with
the Executive on the six-year strategy wedrew heavily on the extensive research andconsultation we carried out in 2007 on thedraft purpose remits, concentrating on areas
where we found audiences had identified
significant performance gaps. For example,
we found that while the BBC is rated very
highly overall for its provision of news andcurrent affairs it is not effectively reaching
low approvers of the BBC and we have asked
management to find a solution. One purpose
where we found some very marked
performance gaps was that of Representing the
UK’s nations, regions and communities. Dealing
with the weaknesses here is an importantfocus for our future work. There is more on
this later in this section.

09

OVERVIEWPERFORMANCEOVERVIEW10OVERVIEW“Originality could be doing thesame type of thing but to abetter quality, like Cranford.”

Member of public at Trust workshop discussing
the BBC.

Audiences expect the BBC
to provide a clear alternative
to other channels by providing
output that is fresh andconsistent with the BBC’s
core values.
Cranford, a drama on BBC One, was recognised ashigh quality by audiences.

Finding from BBC Trust research into audienceviews on BBC television, autumn 2007.

Increasing distinctivenessand quality
Audiences expect the BBC to set a benchmark
for quality programming and content. However,in last year’s annual report we reported on
research which showed a significant level ofaudience dissatisfaction: ‘Audiences are telling
us loud and clear that they want fresh andnew ideas and a wide range of enjoyable andentertaining programmes – and that they feelthe BBC could do better here.’ There was aclear sense that the BBC was not providing
enough programming and content that wasdifferent from that available elsewhere, giventhat the BBC is a publicly-funded organisationthat can take risks that commercial
broadcasters cannot.
We have discussed these issues at lengthwith the Executive and we have set the BBC
the objective for the six years of the current
licence fee settlement to ‘seek to increase
the distinctiveness and quality of its output’.
We will measure and report each year on
progress in delivering this and five otherstrategic objectives. Different audience groups
place widely differing values on the BBC; andfurther objectives call on the BBC to increase
perceived value among middle and low
approvers while maintaining perceived value
among high approvers.

To help understand better what is driving
audience perceptions we carried out more
research last autumn. Our research showsthat audiences are not calling for a radical
change of direction. But they do expect the
BBC to provide a clear alternative to otherchannels by providing output that is freshand consistent with the BBC’s core values.
By ‘fresh’ they mean television that can befamiliar but which offers ‘a new take’ or‘a slight twist’ or that is in some way ‘a bit
different’ – although they do also see a place
for the genuinely new and ground-breaking.
Audience expectations that the BBC shoulddeliver fresh ideas are higher than for otherbroadcasters because the public believe thatthe way the BBC is funded frees it from someof the pressures on commercial providers.
Audiences also believe that multichannel
television has complicated the picture. Where
once the BBC stood out for the range anddepth – as well as the quality – of its output,
there is now a strong sense that range isprovided by the wide choice available in themultichannel world. At the same time,
however, audiences believe that TV schedules
are genuinely dominated by ‘ratings chasers’such as soaps, big entertainment shows andreality TV, at the expense of serious drama
and factual documentaries, which are seen tohave declined in volume and prominence.

We take these findings very seriously. We
know from our research that a key driverin overall approval of the BBC is the public’s
confidence that the BBC will meet their highexpectations of its output. To underline
our determination that the BBC should
differentiate itself by the high quality of its
output we are publishing findings from ourresearch on television programmes thatscore highly in terms of viewers’ perceptions.
We hope this will promote debate about
the kinds of programmes the BBC should
make. It reflects our belief that performanceassessment should focus on quality anddistinctiveness as well as reach and share.
We provide more detail later in this reporton page 21.
Perceptions of quality – measured as
approval of BBC services – held steady year
on year. We note an appreciable increasein programmes scoring highly on the
Appreciation Index (AI) on television andradio. Changes to the composition of theaudience panel have resulted in marginal
inflation in AI scores, but it is unlikely thatthe increase is wholly attributable to this.
The true extent of the increase – andwhether or not it can be maintained or
improved – will only become apparent
in the future.

BBC Annual Report and Accounts 2007/08

Member of public at Trust workshop discussing
the BBC.

From the BBC Trust research workshop.

The percentage of relevant staff who attended
the Safeguarding Trust course in the past year.
This course is now being provided to the
independent sector.

Rebuilding trust
Historically the BBC has enjoyed exceptionallyhigh levels of trust compared with other
British institutions, and this reputation for
editorial integrity is the BBC’s most valuableasset. During the year that reputation waseroded as a result of actions by some
programme makers. We have taken steps toensure that public trust in the integrity of the
BBC is restored, and that robust measures are
put in place to prevent any repetition of thepractices that did the damage.

Following these incidents, we agreed with
the Director-General a ten-point action plan
which he issued in July. His plan included
important organisational changes to improve
the rigour and consistency of editorial
standards across the BBC; an independentinquiry into circumstances surrounding themisleading trail; the suspension of all BBC
competitions pending new guidelines; andmandatory training on the BBC’s editorial
standards for all programme and content staff.

Premium rate telephone services andon-air competitions

As we reported last year we had alreadycommissioned our own inquiry into theBBC’s use of premium rate services (PRS),
and we subsequently broadened thisinquiry into a more general review of theeffectiveness of the Executive’s response tothis succession of serious lapses in editorial
standards. We also asked the Executive toreview its compliance processes, taking
account of compliance models elsewherein the industry, to ensure these were robust
in all BBC output areas. The Executive advised
us in January that they were satisfied that
following the significant changes made, including
the enhanced role for the Director of Editorial
Policy and new management responsibilities
for compliance in output divisions, thecompliance processes were robust.

As we reported last year, instances cameto light of programme makers misleadingaudiences over on-air competitions and votes.
In May 2007 we published a review by the
Director-General, which accepted that serious
errors had been made. Further investigation
brought other instances to light.
Monarchy: The Royal family at work

In July 2007 a trail for a forthcoming
documentary series Monarchy: The Royal
Family at Work was shown to journalists. It
appeared to show the Queen angrily walking
out of a photo-shoot. In fact, the Queen had
not walked out, and the impression that
she had done so was the result of misleading
editing by the independent production
company making the documentary. The BBC
apologised to the Palace.

Our review reported in May 2008 andhas been published in full on our website.
It makes clear that the actions outlined in the
Director-General’s plan must not be thoughtof as a quick fix but a long-term change toprocedures, processes and safeguards
throughout the BBC.

ARTIfICE VERSuS DECEPTION

During the year there was much debate
over where the boundary should lie
between artifice and deception inprogramme-making. To understand thisissue better we commissioned research
to discover what the public thinks.
The work showed that TV audiences
have a sophisticated understanding of theboundaries between what is acceptableand unacceptable in this area. Viewers
want programmes to be engaging andaccept that a degree of artifice may benecessary to achieve this – but not
surprisingly they draw the line at
deception. They are willing to allow more
flexibility for entertainment than forfactual programmes, and in factual output
they expect finer judgements on moresensitive subjects. If a factual programme
promises an emotional journey then they
expect the journey to be genuine, notfaked. Audiences also have higher
expectations of some individual
presenters than others, and they expect ahigher degree of rigour from programmesthat promise high impact – a majorinterview or cultural event, for example.
The research showed that the BBC is
more strongly associated with valuesof honesty, trustworthiness and reliability
than other broadcasters and thataudiences expect more from the BBC.
However they do not want two tiersof standards. They would like all
broadcasters, including the BBC, to be
subject to the same editorial guidelines.
But for the most part, they feel that theirhigh expectations can be met via theapplication of common sense rather thanblack and white rules.

11

OVERVIEW

99%“I do trust the BBC at an
emotional level – I was raisedon them – but because of theway I see the world now andthink about their editorial,
I question it.”12

OVERVIEW“As I’ve got older I’ve foundout more about what themedia are capable of andI’ve become more sceptical.”

The BBC adopted new
guidelines governing phone
votes during the year whilechanges in technology now
prevent people being charged
for votes which are not counted.

Member of public at a Trust workshop.

Strictly Come Dancing was one of the BBC’s popular
programmes with phone votes.

SEMINAR ON TRuST IN BROADCASTING

At the heart of BBC culture sit the values ofhonesty, integrity and straight dealing. These
values have won the trust and support ofthe public over eight decades. Future public
support depends on the BBC continuing
to instil these values into everyone in theorganisation. They must be impressed on
people on the day they join and be at theheart of their professional life throughout
their time at the BBC.

In November we held a seminar,
jointly hosted with Ofcom, on trust in
broadcasting. It brought together leadersfrom across the industry to work on ways
to rebuild public trust following last year’sseries of editorial and compliance failures.
Agreements were made to consider acommon approach to premium rate
telephony; on developing industry-widetraining on ethical and editorial standards;
and on exploring a common frameworkof principles to promote best practice inprogramme-making.
Delegates will meet again later this year
to review progress.

Among the key recommendations of ourreview is that the BBC Editorial Guidelines
should be revised and reissued as a matterof urgency, and that, as a matter of priority,
executive producers should be given more
support in order to perform their critical roleas custodians of BBC standards and values.
Other recommendations include measures
to improve risk management – such ascommunicating experience of ‘near misses’much more widely so that lessons can beshared across the BBC by producers working
in different genres. We also want the BBC
to devise a way of assuring itself that thecompliance structures of its independent
suppliers are of the highest standard andare effective.

As part of our inquiry into the BBC’s useof premium rate services we commissioned
an independent review of the economic
aspects of the BBC’s premium rate services.
This work discovered a previously undisclosed
practice by Audiocall (a trading division of
BBC Worldwide), to retain all money raised
from telephone calls mistakenly made by
the audience when voting lines were closed,
including money that could be due tocharity. While the amounts from individual
programmes due to charity retained by
Audiocall were small, this practice was wholly
wrong and it is a matter of regret. The money
due to charity has been repaid with interestand the BBC Trust has requested the BBC
apologise on air, which it did on 24 May 2008.
The BBC regularly tracks levels of trust.
Members of the public are asked how muchthey agree with the statement ‘I trust theBBC’. Following the incidents of summer andautumn 2007 which we have reported above,levels of agreement with this statement
dropped. However, by March 2008 trust
seemed to have recovered and was backto the levels seen before these events.
Encouragingly, the majority of people (78%in March 2008), also trusted the BBC tosort out the situation and do the right thing
in the future.

BBC Annual Report and Accounts 2007/08

13

OVERVIEW

I trust the BBC to behonest and open.
The only thing that has
put me off is the phone
scandal. I still trust themto provide a variety ofquality programmes.
Member of public at Trust workshop
discussing the BBC.

14

BBC OUTLOOK

16.2

%

The proportion of the UK’s population
who live in Wales, Scotland andNorthern Ireland.

One of the great current challenges for the BBC
is to find effective responses to the changing
constitutional map of the UK as devolution takes
deeper root in Scotland, Wales and Northern
Ireland and regionalism rises up the agenda
in England.
Rotha Johnston
BBC Trustee, National Trustee
for Northern Ireland

BBC Annual Report and Accounts 2007/08

BBC OUTLOOK

87%

The number of homes in the UK that hadaccess to digital television by April 2008.

The BBC has to satisfy many different andchanging demands. In the case of television,for example, traditional linear channels still
attract large audiences – and we expectthat to continue. But there is also a growing
audience for on-demand video delivered via
the internet – a development fuelled by the
rapid spread of broadband. This year the
Trust approved plans for the BBC to meetthe challenge of satisfying the new demands
created by rapidly changing technology,
while still continuing to deliver high-quality
services to existing audiences throughtraditional channels.
In this section we explore how the BBC isadapting to different kinds of change in theUK; not just technological but also social,constitutional and economic.

CHANGE IN THE wIDER M EDIA MARkET

Radio

Television

Radio remains very popular: 90% of adults
listen every week. However, overall listening
is in slow decline, particularly among theyoung. 15–24 year olds listen for almost threehours less a week than five years ago. BBCRadio’s lead over commercial radio has
widened as listening to commercial stations
has declined relatively faster.

The pace of change in television, alreadyfast, continues to increase. Digital switchoverbegan last year and more than 87% of homes
now have access to digital television. Ondemand services, including BBC iPlayer, areblurring the boundaries between televisionand the internet and new channels continue
to launch. All this intensifies competition foraudiences, and puts pressure on traditional‘linear’ television channels.
And there is more to come as the take-upof broadband and the speed of downloads
increases, digital switchover progresses andFreesat is taken up.
Although the amount of time people spend
watching television remains fairly steady at
about 3.5 hours a day, viewing is becoming
more fragmented. Less than two-thirdsof viewing time is now spent with the fiveterrestrial channels (BBC One, BBC Two,
ITV1, Channel 4 and five). But each of thesebroadcasters has built portfolios of newchannels and overall portfolio reach for eachbroadcaster has increased over the year. BBC
One remains the UK’s most watched channel
and we are pleased to note that the BBC TV
portfolio has increased reach to 85% of the
population. Television therefore remains
central to the delivery of the BBC’s purposeswith the unique power to bring together
large audiences.

The commercial radio market is facing many
challenges. However, in the face of declining
listening figures and increased competition
from online media, radio advertising revenue
has seen four consecutive quarters ofgrowth. Consolidation has continued andthe commercial industry is now led by twolarge players.
Digital-only stations – including BBC stations– have yet to make a breakthrough. Although
growing, reach and audience awarenessremain low. In November the government
launched the Digital Radio Working Groupto look at how to promote digital radio andincrease penetration. It remains to be seen
whether the arrival later this year of thesecond national digital multiplex led by
Channel 4 Radio will boost the market
sufficiently to ensure its long-term viability.

15

BBC OUTLOOK

Although the time people
spend watching television
remains fairly steady, viewing
is becoming more fragmented.

16p

BBC OUTLOOKAs the internet joins televisionand radio as a mainstream
medium, the BBC’s online
presence is increasingly
important in serving groups
such as 18–24 year olds.

Online

The internet is now a part of everyday life
for many people in the UK, especially theyoung. More than half of households havea broadband connection, and there are signs
that mobile internet may be about to take off.
Broadband offers a much richer experience– watching and sharing videos, game-playing,social networking – and as a result people are
increasingly turning to the internet forentertainment, not just for information.
For broadcasters, the internet, already an arenaof intense competition, is becoming more so
as, for example, newspapers use their sites topost videos and podcasts, effectively turningthemselves into digital broadcasters. Videosharing sites such as YouTube provide newcompetition in the field of entertainment.
As the internet joins television and radio
as a mainstream medium, the BBC’s online
presence is becoming increasingly importantfor delivery of its public purposes, especiallyamong groups such as 18–24 year olds who
spend most time online.
THE BBC IN THE wIDER ECONOMY

In changing media markets there is an
important debate to be had on the impact(positive and negative) of the BBC on thewider UK economy. In order to ensurethat this debate is properly informed, we
commissioned a wide-ranging independent
study from PricewaterhouseCoopers (PwC),
and we held a seminar with industry experts
at the London Business School.

17.2

MILLION

The Apprentice is one of the most popular
choices for people accessing programmes with
BBC iPlayer.

The number of weekly users of the bbc.co.uk
internet service in the UK.

The PwC study is examining the benefits
and costs for both the UK as a whole, and as
far as possible for each of the UK nations andthe English regions. It will cover such things
as the effects of the BBC on the wider media
market, its impact on quality, its role as acommissioner from independent producers,
its effect on content, its role as ‘trainer for theindustry’, its management of the partnerships
in which it is involved, its record as a developerof new technologies, the scale of its direct
investment in the creative sector, and theimpact of the BBC brand on the developmentof the sector as a whole.

A NEw BBC CONTENT STRATEGY

We expect the study to be complete in July
2008. We will use the results to inform ourjudgements on future priorities and investment
decisions and will also ask the BBC Executive
to respond to the Trust’s conclusion on thereport. We will be particularly interested in
the potential for the BBC to work more often
in partnership with the wider media sector.

In the context of rapidly changing media
markets, and the background of a licence fee
settlement less generous than hoped for by
the Executive, a key task for the Trust thisyear has been approving the BBC’s six-year
strategy (Delivering Creative Future). We
led a re-prioritisation exercise that enabled
us to approve a content strategy for the BBC
retaining many elements of the original BBC
licence fee bid.
We accepted that rapid changes intechnologies, markets and audience behaviour
required a major shift of resources – subject torelevant approvals processes – into online andon-demand offerings. This meant investment
in Web 2.0 and BBC iPlayer. We haveconsidered much of the detail of this proposed
investment within the context of the bbc.co.uk
service review (see page 28). Some proposals– such as those for enhancements to the
Nations and Regions web offering – will be
subject to a public value test.
We approved investments in television
drama, comedy and entertainment – genresof wide appeal. We also approved some
new investment in content designed to reachspecific audience groups such as children,
teens, as well as journalism for those the
BBC currently finds hard to reach, and also
in content in the UK’s indigenous languages.
Finally, we approved investment in a morecollaborative relationship between BBC Two
and BBC Four as an important step towards
enhancing the BBC’s factual programming –a distinctive and valued feature of its output.

BBC Annual Report and Accounts 2007/08

Trustees Jeremy Peat, Mehmuda Mian Pritchard
and Alison Hastings visiting BBC offices inManchester for the Trust meeting in
September 2007.

To pay for these investments we approved
the Executive’s proposal to reduce the levelof originated programming by 10%. We didso on the understanding that while this would
mean more repeats outside peaktime it would
benefit audiences – provided management
commissioned content that is particularly
valued by audiences and which they willappreciate the chance to see again. Thisapproach is consistent with the findingsof research carried out on audience attitudes
to repeats noted in last year’s annual report.
However, we received a clear commitment
from the Executive that there would be no
increase in the level of peak time repeats
on BBC One – an important commitment
given audiences’ clear dislike of peaktime
repeats here.

The percentage annual recurring efficiency
savings target set by the Trust.

THE TRuST’S OBJECTIVES fOR
THE ExECuTIVE

As part of our approval of the BBC’s
forward strategy we have set the Executive
six high-level objectives consistent with ourframework of Reach, Quality, Impact andValue for Money (see below).
Reach
1 The BBC should maintain the
maximum reach consistent with its
purposes and values.

The BBC must provide everyone in the UKwith something they value. In an increasinglycompetitive environment this is likely to
become more difficult, so while we wantreach maximised this should only be donein a way consistent with the BBC’s purposesand values.

4 The BBC should restore trust in
its output.

Trust is the foundation of the BBC’s
relationship with licence fee payers. Last
year’s editorial failings led to a decline intrust in the BBC and the BBC has begun
to remedy this as a matter of urgency.
Impact5 The BBC should increase the deliveryof its purposes.

Our research has highlighted key areasof weakness in the BBC’s delivery of its
purposes (see page 23) and we believethat remedying these gaps must be a
top priority in the implementation of theBBC’s six-year strategy.

Quality
2 The BBC should seek to increase thedistinctiveness and quality of its output.

Value for Money
6 The BBC should deliver 3% year-on­
year efficiency targets.

Audiences have high expectations of the
BBC and of the quality of its output.
Our research has revealed significant
weaknesses in the BBC’s ability todifferentiate itself from other broadcasters
by providing content that is fresh and new.

Licence fee funding is a great privilege for
the BBC and it has a duty to make surethat it spends public money as efficiently
and effectively as possible. We believe that
this efficiency target, though challenging,is achievable. We will track progess closely
to ensure that it is not achieved at the costof the range of quality programming andcontent that audiences expect and deserve.

3 The BBC should maintain perceived
value among high approvers. The BBC
should increase perceived value among
middle and low approvers.

There is clear evidence from our researchthat significant parts of the audience feelthe BBC is not serving them as well as
it should. The BBC must address thisproblem, but it must also maintainperceptions of value among those whoare currently high approvers.

For each objective we have established ahigh-level set of measures that we will use
to track performance on a quarterly basis
and report on each year in the annual report.
The savings will be reviewed each year by theBBC’s auditors and in 2010 by the National
Audit Office.

17

BBC OUTLOOK

3%

We demanded a clear
commitment from BBC
management that there
would be no increase in thelevel of peak time repeats
on BBC One.

18

BBC OUTLOOK

82%“There is a home-counties andLondon bias on the BBC – forexample we have not hada single snowflake in Wales
this week and yet snow in
London is all over the news.”
Member of public at Trust workshop discussing
the BBC.

The Trustees familiarising themselves withBBC Scotland output during a visit to Glasgow.

The percentage of the UK population who areinterested in news about other nations in the UK.

Nations’ impartiality review

of drawing on the rich variety of the UK andcommunicating it to multiple audiences. As
examples, political coverage is seen as unduly
focused on Westminster in volume and style;there is seen to be a general bias in favour ofstories about England or telling stories froman England perspective; and there is evidence
that several stories in the nations which may
have been significant to the UK were nottaken up by the network. Overall, Professor
King concludes that the BBC has not
responded adequately and appropriately to
the UK’s changing political, social, economic
and cultural architecture.

The BBC throughout
the UKAs well as technological change, one of
the great current challenges for the BBC
is to find effective responses to the changing
constitutional map of the UK as devolution
takes deeper root in Scotland, Wales andNorthern Ireland, and regionalism rises up theagenda in England. The challenges take many
forms. There is a clear desire from audiences
around the UK for a fuller and more accurate
representation of their nation or region. This
is not just locally, but also to the rest of the
UK audience through network programming.
There are growing pressures to move moreproduction out of London – not just into
the rest of England, but into the devolved
nations too. There is an appetite for moreprogramming in the UK’s indigenous languages– this year, for example, we have given
conditional consent to the launch of a digital
TV service in Gaelic (see page 45). And there
is much-increased scrutiny of all broadcasters’
performance in meeting these challenges– witness, for example, the Scottish
Broadcasting Commission set up by thegovernment of Scotland in 2007 with a briefto ‘investigate the current state of television
production and broadcasting in Scotland
and define a strategic way forward forthe industry’. The National Assembly for
Wales has also established a Broadcasting
Commission to look at the future of public
service broadcasting in Wales.
The Charter lays on the BBC the public
purpose of ‘Representing the UK, its nations
regions and communities’ and this is a
responsibility we take very seriously as
BBC Trustees. During the course of the year
we have launched a number of significant
initiatives to ensure that the BBC continues
to respond effectively in this important area.
The BBC is for the whole of the UK and it
should reflect the whole of the UK in its
output and in its investment decisions.

A recurring message from our public
meetings and audience research, and fromour work with BBC Audience Councils in thefour nations, has been concern about theperceived lack of representation of the nations
in network programmes and insufficient focus
on the devolved nations in network news.
We therefore decided that the first
impartiality review we commissioned should“assess whether the BBC’s network news andcurrent affairs output was impartial, accurate
and clear as to which facts and views applied
to the individual nations and to consider if thenations’ policies were properly reflected andexplained.” We commissioned Anthony King,
Professor of Government at the University ofEssex, to carry out the review. His work was
supported by content analysis from Cardiff
University School of Journalism and audience
research from British Market Research
Bureau (BMRB).
The Trust welcomes the review’s conclusion that
there is little or no evidence that BBC network
coverage in this area falls short on grounds offairness or impartiality. The BBC is also praisedfor the impartiality of its coverage of politics
and policy in all four nations of the UK. Thisis an important conclusion and central to theTrust’s duty to ensure the impartiality of theBBC’s output.
Notwithstanding examples of good practice,
however, and supported by findings fromthe Cardiff research, the review highlights
concern that BBC network news and current
affairs programmes taken as a whole are notreporting the changing UK with the range andprecision that might reasonably be expected
given the high standards to which the BBC
should aspire. There are specific concerns as
to accuracy and clarity of reporting, thebalance of coverage, and missed opportunities

The significant weaknesses identified byProfessor King’s assessment must be put right.
In the closing sections of his report, Professor
King offers a range of suggestions and issues
for consideration in resolving the concerns
he has highlighted. In its initial response to ourreview, the BBC’s management has expressedcommitment to responding to the importantconcerns raised. We have highlighted anumber of issues for immediate action aroundthe accuracy and clarity of reporting, missed
opportunities and balance of coverage.
We have asked the Executive to provide a
final plan by July which sets out how they will
deliver the proposed actions over the next
year. We will seek the co-operation of the
Audience Councils in tracking the success ofaction being taken, and within 18 months willourselves repeat the research undertaken
to assess the BBC’s progress in improving
its performance in this area. (You can find out
more about the Audience Councils and theiractivities on pages 34–35. The map opposite
shows their geographical remits.)
The full report is available on our website.

BBC Annual Report and Accounts 2007/08

17
Doctor Who is one of many network programmes
currently made in Wales.

Producing more content outside London

We want the BBC to make signiﬁcantly more
content outside London than it does now,and to base a signiﬁcantly higher proportionof its staff outside London than it does now.
In broad terms our long-term aim is thatthe BBC should make at least as muchcontent in the nations as reﬂects theirpercentage of the population of the UK,
and that at least 50% of BBC staff should
be based outside London.
In May 2008 we approved plans that will help
make these aspirations a reality. In future the
BBC will use the Ofcom deﬁnition of network
production from the nations rather than its
own deﬁnition. The Ofcom deﬁnition is much
more challenging: under the previous deﬁnition
the BBC sourced 15.9% of network production
from the nations in 2007/08; under the Ofcom
deﬁnition the percentage is 7.7%.
Scotland, Wales and Northern Ireland
together make up nearly 17% of the UK
population. By 2012, network production
from the nations (using the Ofcom deﬁnition)
should reach at least 12% by spend, with the
17% target reached no later than 2016, when
the current Charter ends. We will monitor
these targets carefully to ensure that the BBC
is helping to build strong and sustainablenetwork production in all three nations.
We will also look at production in the
English regions.
The Executive began a review of the supply
of content to network television in September
2007, focusing on ensuring long-termsustainability across the UK. We expect toreceive the review’s ﬁnal recommendations
later in 2008.

%

The target percentage for network productionin the nations by 2016, compared with 7.7%
in 2007/08.

BBC NETWORK PRODUCTION AROUND THE UK

Scotland
Wales
Northern Ireland
Total Nations

3.5%
3.2%
1.0%
7.7%

North of England
8.9%
Midlands
4.0%
South of England
12.9%
Total English regions 25.7%
London

13

66.6%

14

1

3

National Audience
Councils
1–12 England
13 Scotland
14 Northern Ireland
15 WalesRegional Audience
Council Areas
1 North East
2 North West
3 Yorkshire
4 West Mids
5 East Mids
6 East Yorks & Lincs
7 East8 South West
9 West10 South
11 London
12 South East

6

2
5
4

15

9

7

11
10
12

8

19

BBC OUTLOOK

Average levels of affection
for the BBC are noticeably
lower the further people live
from London.

20

BBC PERFORMANCE

It’s sort of reassuring thatsomeone is doing this…
it’s important thatsomeone is making surethat everybody is cateredfor even if one personally
does not like all the
programmes that are on.
Member of the public at Trust
audience workshop,
Birmingham, April 2008

BBC Annual Report and Accounts 2007/08“I’d like to find different things
on the BBC but I find it tends
to be the same.”

Sacred Music – an example of specialist factual
output that was rated highly by its audience.

Member of public at Trust workshop discussing
the BBC.

Content of qualityand distinctivenessAs Trustees we have responsibility for ensuringthat the BBC delivers high-quality services
to all the people and all the communitiesof the UK. As part of this duty, each year we
assess the performance of the BBC against
the priorities that we set to determine
whether the BBC is using its resources welland providing services that are valued by
the public.
In this section of our report we set out ourassessment of BBC performance across anumber of areas as follows:
Content of quality and distinctiveness(page 21)
Delivering the BBC’s purposes(page 23)
Individual service performance(page 24)
Financial and business performance(page 29)
In reaching our conclusions we have also been
informed by the views of audiences. How wehave engaged with audiences and a summaryof their views is set out on page 33.

We noted in last year’s annual report that our
research had identified that audiences want
the BBC to devote more energy to producing
fresh and new ideas. Further research weundertook in 2007 has shown that audiences
do not want a radical change in direction fromthe BBC, but they do want it to provide analternative to ‘ratings-chasers’ such as soaps,
make-over, celebrity and reality shows which
they feel dominate the schedules of TV
generally. While multi-channel TV has led to
an increase in viewer choice, audiences feelit has diluted the volume and prominenceof genuinely alternative offerings. There isa strong belief that the BBC should do more
to provide this alternative.
Audiences also want the BBC to give greater
prominence to its original and distinctive
programming. Our research suggests that the
BBC could do more to effectively promote
the full range of its existing television portfolio.
When our researchers pointed out the range
and depth currently available across all BBC
television channels, people reacted positively
and recognised that the BBC was showing
programmes other broadcasters could notor would not make. But the reality is that the
majority of BBC viewing remains to BBC One
and Two – so audiences’ actual experience ofthe range on offer is more limited.

To explore this area further we have used
the Executive’s existing audience appreciation
data to examine the TV programmes
broadcast in 2007/08 which audiences thought
were high quality and distinctive, both on the
BBC and commercial channels. We used data
which rated programmes as ‘original’ and‘different’ as a proxy for the characteristicsof ‘fresh’ and ‘new’. Our aim in doing this is
to shift the focus of programme performanceassessment towards quality and distinctivenessand away from an almost exclusive focus onreach and ratings. We hope that, by publishing
information on which programmes audiences
think are high quality and distinctive, thiswill promote debate within management
and beyond about the kinds of programmesaudiences want the BBC to make more of.
The highest-quality programmes broadcast
over the past year were those dealing withspecialist factual topics. 91% of the audiencestrongly agree that Life in Cold Blood wasa high-quality programme while Tiger: Spyin the Jungle and The Life of Birds also
rated very highly. Beyond natural history
and wildlife, audiences strongly appreciate
other types of specialist factual output,
notably science, for example ATOM and Earth:
The Power of the Planet, and history, Sacred
Music and The Art of Spain. Music events alsoscore highly, notably BBC Cardiff Singer of theWorld 2007 and the First Night of the Proms.
We are pleased to note that the Executive
will be investing an additional £8 million
each year into specialist factual output, witha particular focus on science and history.

21

BBC PERFORMANCEBBCPERFORMANCE

22

BBC PERFORMANCE“There are some things which
the BBC has done first like
Strictly Come Dancing. That
was very original but was
copied to death.”

Member of public at Trust workshop discussing
the BBC.

In terms of output that rated highly for being
distinctive, single and authored documentaries
and factual output are highly appreciated.
On the BBC, Stephen Fry: The Secret Life of a
Manic Depressive is a notable example, whileon commercial channels, Autopsy: Emergency
Room (Channel 4), Ross Kemp in Afghanistan(Sky One), Malcolm and Barbara: Loves
Farewell (ITV 1) and Return of the Tribe(five) were all seen as highly original TV.
Long-running formats and repeats can also
be considered as distinctive – The RoyalInstitution Christmas Lectures on five and BBC
Two’s Fred Dibnah’s World of Steam, Steel andStone were both in the top 20 most distinctive
programmes of 2007/08.
For UK drama, Cranford, The State Within andLife on Mars stand out, while Doctor Who andSpooks continue to deliver on quality. We areparticularly pleased to note the success, interms of quality and distinctiveness, of two
single dramas on BBC One – The No 1 Ladies
Detective Agency and Ballet Shoes. Audiences
also value high-quality US imports such as The
Sopranos (Channel 4, E4) and 24 (Sky One).
Our findings also show that comedy makes animportant contribution to the distinctivenessof TV. BBC successes this year include
Outnumbered, The Mighty Boosh, The Thick
Of It, QI, Extras and Gavin and Stacey. Longrunning series can also do well, notably Have
I Got News For You, although traditional stylesketch show programmes, while still attracting
high viewer numbers, did not generally rate as
highly in terms of quality and distinctiveness.

Classics such as University
Challenge, Mastermind andAntiques Roadshow are seen
as part of the core of what the
BBC should do.

Audiences consider that successful comedies
such as The Mighty Boosh make an important
contribution to distinctiveness.

Audiences value the familiar as well as the new.

We are pleased to note that current affairs
programmes are also generally seen as
distinctive and high quality. These include theBBC’s flagship shows Panorama and Question
Time, while audiences also value Dispatches
on Channel 4.

We intend to use the analysis from this year
as a baseline in order to track the quality anddistinctiveness of TV programmes over the
coming years and will continue to monitor
closely the BBC’s performance in this area.

New takes on an old format can also be
distinctive. Channel 4’s food season, and BBC
Three’s Kill It, Cook It, Eat It were notable
examples from this year of food programmes
which were considered both high-quality anddistinctive. Some property shows also score
highly, notably Grand Designs on Channel 4.
And viewers do not see any genre as
intrinsically non-BBC – as long as the BBC canbring a fresh approach. For example, althoughviewers in general may criticise celebrity andreality shows, they strongly endorse Strictly
Come Dancing and The Apprentice because
their tone, content and execution is seen
as being in line with BBC values.
Our research also shows that audiences value
the familiar as well as the new. Classics suchas University Challenge, Mastermind or Antiques
Roadshow are seen as part of the core of what
the BBC should do.
There are some clear themes when looking
at the lowest rating programmes for qualityand distinctiveness. These programmes tend
to include repackaged clips – for example list
and outtake shows as well as some spin-offs.
Although the majority of these programmes
were broadcast on the commercial channels,
some also featured on the BBC.

We are pleased to note that the Executive’sStatement of Programme Policy for 2008/09
explicitly acknowledges the need for BBC
One to offer ‘distinctive, enjoyable andentertaining programmes as well as fresh andnew ideas’ and that its strategic plans include
a commitment to ‘place more emphasis on
the commissioning of distinctive, high-quality
and innovative content drawing on new ideasof real creative and editorial ambition’.

BBC Annual Report and Accounts 2007/08

Member of public at Trust workshop discussing
the BBC.

In setting priorities for the BBC
we drew on audience researchthat identified those areas
where the BBC could do better.

Birmingham, April 2008. Events such as thisenable Trustees to hear directly from audiences
their views on BBC services.

Delivering theBBC’s purposes
The Charter sets six public purposes for
the BBC. We have translated these into
purpose remits that define our priorities for
the Executive. The remits were finalised in
December 2007 following extensive public
consultation and audience research, which
identified the following key areas where thepublic want the BBC to do better:* More programmes that are fresh or
demonstrate new ideas* High-quality news and education
programmes accessible to all audiences* An improved service for the UK’s nations,regions and communities
We used this research as the basis foragreeing the strategic allocation of thelicence fee. In April 2008 we approved the
Executive’s plans for delivering the purpose
remits and we will use these to inform our
discussions about performance with the
Executive in the coming years.
We will also track audience perceptions of
how well the BBC is delivering its purposes.
In order to establish baseline measures,
we asked audiences in February 2008 how
well they thought each priority was being
delivered. The findings are broadly consistent
with those from 2007 which we used toapprove the strategic direction for the BBC.
We will repeat the audience survey in 2009,and later this year we will carry out further
in-depth audience research to assist us inassessing performance. We will include theresults in next year’s report.

1 Sustaining citizenship and civil society

In the main, our results show that audiences
agree that the BBC delivers news andcurrent affairs output well, and are more
likely to name a news service from the
BBC than from other broadcasters asstanding out for them. However, younger
people in lower social grades are significantly
less likely to agree that the BBC makes news
and current affairs interesting to them. The
primary challenge, therefore, is to engage
new audiences without jeopardising
the support of existing audiences. We
have approved the Executive’s plans tostrengthen on-demand provision, increase
the emphasis on quality and distinctivenessand deliver value to all audiences. The new
90-second 8pm news bulletin on BBC One
is an imaginative initiative to help meetthese goals.
2 Promoting education and learning

Audiences see education as a key strengthof the BBC with 70% of people agreeingthat they have learned new things while
enjoying content on the BBC. And 70% of
those responsible for children or teenagers
under 18 agree that the BBC has helped
support the educational needs of this age
group. We note that audiences consider
that BBC Bitesize in particular stands out inthis area. In December 2007, we approvedin principle the strategic direction forlearning based on a fresh, skills-based
proposition. We will be considering the
Executive’s application for this in detaillater in 2008.
3 Stimulating creativity and cultural
excellence

Although the provision of high-quality
entertainment is seen as a relative strengthof the BBC, there remain concerns about
the delivery of fresh and new programmes.

Only half of those we surveyed in 2008
agreed that the BBC does so, falling further
still for younger men. We have agreed with
the Executive that providing distinctive
content is a high priority in the coming
period. We are pleased to see this ambition
beginning to be reflected in the BBC’s
programme plans for the coming year.
4 Representing the UK, its nations,regions and communities

Audiences across the UK think the BBC
could do more to cater for their nation
or region as well as portraying their nation
or region to the rest of the UK. We havemade it clear that the BBC must serve
all its audiences. Initiatives under way to
improve performance include increasing
programming from around the UK broadcast
on the network and more effective
representation of the UK’s nations andregions on network news. We will consider
the Executive’s proposal to strengthen
on-demand provision for local communities
during the course of 2008.
5 Bringing the UK to the world and theworld to the UK

Audiences consider this as a real strengthof the BBC, particularly in keeping them up
to date with what is going on in the wider
world and helping them appreciate different
cultures and lifestyles. We report on theWorld Service performance on page 27.
6 Delivering benefits from emerging
communications technologies

For those who use particular services suchas bbc.co.uk, BBCi and DAB radio, there ishigh appreciation of the content provided
by the BBC on these services. We haveapproved a number of initiatives this year
to help deliver this purpose. (See page 31.)

23

BBC PERFORMANCE“The danger is that if they
focus on educating andinforming they’ll be in dangerof forgetting to entertain.
For most people TV should
be entertaining.”

24

BBC PERFORMANCE

23%

Audiences recognise that BBC
Four provides output which is‘original and different’ and a‘place to learn’.

BBC One has rejuvenated the 7pm weekday slotwith The ONE Show.

The number of 16 –34 year olds now watching BBC
Three, up from 17% in 2006/07.

Audiences to BBC Two have grown thisyear, reversing a long-term decline. Reachto younger audiences (16–34 year olds) has
increased with a number of programmes
successfully appealing across age groups. BBC
Two has also had success in using narrative
repeats to increase audience reach such as
Natural World. We expect this approach to
be used more as the BBC seeks to generate
the best value from high-quality output.

In last year’s report we raised the issue of
BBC Three programme titles and we havesince discussed this with the Executive. While
it is clearly up to management to decide what
to call programmes, there was agreementthat using ‘shock’ titles could actually limit
the number of people watching the channel
in the longer term and distract audiencesfrom the programme’s content. We will be
examining the role of BBC Three as partof our review of services for young people
starting later this year.

Individual service
performance
TelevISIon

Audience perceptions of BBC One tend tofluctuate in line with overall perceptions of
the BBC – a reflection of BBC One’s placeas the flagship of the Corporation’s output.
The fall in perceptions of the channel recordedin late summer 2007 may therefore reflect
the concerns over trust at the time. We arepleased to note that since October 2007
levels of trust and approval for BBC One have
improved and by March 2008 had reachedsimilar levels to April 2007.
We are also pleased to note that BBC One’s
overall audience has remained steady,reversing a longer-term fall over previous
years. However younger audiences havecontinued to decline. The number of 16–34
year old viewers has fallen by around 1.5%.
BBC One’s remit is to be the BBC’s mostpopular mixed-genre television service acrossthe UK, offering a wide range of high-quality
programmes. Memorable BBC One drama
and entertainment included The Street, The
No 1 Ladies Detective Agency and Strictly
Come Dancing. The challenge for the channel
is to reach these heights more frequently,
and to avoid any risk of becoming stale byproviding fresh entertainment and dramathat demonstrate high quality and creative
ambition. The channel must not become
over-reliant on established titles.
The remit of BBC One also includes highquality factual output. The channel has
rejuvenated the weekday 7pm slot with The
ONE Show and has brought large audiences
to landmark series such as Life in Cold Bloodand Tiger: Spy in the Jungle. The channel does
however face challenges in attracting similarly
large audiences to specialist factual output for
topics such as science, history and the arts.

The challenge for BBC Two is to maintainits appeal to audiences while meeting its
commitment to provide programmes ofdepth and substance. Although BBC Tworemains the BBC’s strongest channel for arts,
history and science, audiences also increasingly
perceive it as a channel for entertainment,
lifestyle and leisure programmes. Our
research on quality and distinctiveness (page21) suggests that audiences see BBC Twobecoming increasingly mainstream. We haveapproved in principle the Executive’s proposal
for BBC Two to build a closer relationshipwith BBC Four to bring high-quality material
to a wider audience. We will be addressing
the role of BBC Two in detail as part of ourreview of the television portfolio starting
next year.
BBC Three has performed well in termsof reach which now stands at around 17%.
Nearly one in four 16–34 year olds now
watch the channel. BBC Three has continued
to develop its strong reputation for original
comedy, most notably The Mighty Boosh and
Gavin and Stacey, and has developed a numberof strong factual programme brands such as
Kill it, Cook it, Eat it. The number of viewers to
the 7pm slot remains an area of concern andreflects, in part, BBC Three’s lack of audience
inheritance at that time.

BBC Four performs particularly strongly inaudience perceptions as providing output
that is ‘original and different’ and a ‘place tolearn’. It now reaches 7% of the population
although audiences are more aware of thechannel itself than of individual programmes
or series. This may mean that the output is
not being watched by the widest possible
audience. The closer relationship that wehave approved between BBC Four and
BBC Two should help build awareness andextend the reach of BBC Four programmes.
We will be examining the role of BBC Fourin detail as part of next year’s review of the
television portfolio.
BBCi continues to play an important rolein providing a range of non-linear output
through the red button. We will consider the
future of BBCi when we have received the
Executive’s proposals for reorganising BBC
services on the Digital Terrestrial Television
platform and as part of next year’s review of
the BBC television portfolio.
The Trust notes the strong performance ofthe children’s channels CBBC and CBeebies
in terms of audience reach and share. Bothare viewed by a significant proportion of theirtarget audience – an impressive performance
given that they compete with more than 20
children’s channels in satellite and cableBBC Annual Report and Accounts 2007/08%

Member of public at Trust workshop discussing
the BBC.

Radio 4 attracts the highest average listening
hours of any BBC station.

The percentage of listening to BBC radio
stations via digital platforms.

homes. It is also notable that CBeebies isclearly regarded as the best pre-school
channel against a number of quality measures.

stable and listeners’ approval of the station
has increased. Its listeners rate the network
highly for the quality of its programmes andthe broad range of music it plays. We note thework done by Radio 2 to develop talent andthe station’s role in developing new artists
through its ‘Music Club Introduces…’ strand.

The size of audience for Radio 5 live isquite dependent on the sporting calendar.
However the station’s annual average reachhas declined while share has risen slightly.
Whilst approval is generally strong, there
has been a fall in the proportion of highapprovers, and the service’s reputation as thebest for sport has declined slightly. We notethat the station is successfully building a digital
listenership, decreasing its reliance on medium
wave transmissions. It remains to be seen
whether, over time, this helps the service
stabilise its reach.

CBBC faces tougher competition fromcommercial channels tightly focused onparticular groups of children. In our review of
bbc.co.uk this year, we noted that the relaunchof the CBBC website in late 2007 appeared
to provoke a negative reaction among its users
initially. This demonstrates how demanding
the children’s audience can be and we lookforward to understanding more about thisimportant audience and how the BBC
provides for it as part of our review ofchildren’s services, now under way.
RADIo

BBC network radio stations continue toperform strongly overall, reaching two-thirdsof UK adults every week. Listeners are
increasingly using digital platforms, such as
DAB and online, to listen live or listen again.
Radio 1’s reach and share have both grownin the past two years, and we are pleased tonote that, alongside this growing popularity,
its reputation as a station for new, UK andlive music remains strong. Reach among thetarget audience has also grown in each of thepast two years and the station now reaches
just under 5 million 15–29 year olds. We
will look in more detail at how Radio 1 and1Xtra serve younger audiences in our review
of BBC services and content for younger
audiences later this year. The launch of new
programmes aimed at teens under the ‘Switch’banner is designed to appeal directly to anunderserved audience.
Radio 2 remains the most popular stationin the UK. Although its reach has fallen veryslightly this year, its audience share has been

Radio 3’s level of approval has risen in thelast year but its average reach and hours oflistening are all declining. Schedule changes
made in 2007 have not so far increased reach;– which is at 1.9 million. We will continue to
track the service’s performance in light ofthese trends, but we note that the only otherclassical music radio station in the UK, Classic
FM, is also facing declines in reach and shareand this may be due to increased listening toRadio 2 and Radio 4.
Radio 4 is continuing to refresh its output
successfully. It has maintained its weekly reach,while share of listening has increased slightly.
It attracts the highest average listening hoursof any BBC station: just under 13 hours
a week. Its listeners continue to have avery high regard for the station. It has thehighest mean scores against the public
service broadcasting characteristics for all
radio services surveyed, scoring highestfor ‘well-made high-quality programmes.’
A decline in reach among 35–55 year olds
has been stabilised to some degree but thisneeds continued focus. We note that a highproportion of listeners listen live digitally,
the majority via DAB digital radio. Live online
listening is increasing rapidly and faster thanany other BBC radio station. Podcasts havebecome very popular and this does notappear to have affected overall reach levels.
Indeed, there is some early evidence thatthose who ‘listen again’ on the internet are
now listening to more live radio.

Digital radio listening is growing steadily.
More than 17% of listening to BBC stations is
now via digital platforms – DAB in particular.
Listening to podcasts is also growing. However,
the overwhelming majority of digital radio
listening is to the BBC’s analogue services(Radios 1, 2, 3, 4 and 5 live). Awarenessof the digital-only services also remains low:
only 41% of the population have heard ofthem, even when prompted, and concerns
have grown about the future of DAB within
the commercial radio market.
BBC 7 remains the most popular BBC digitalstation and is the third most listened todigital-only radio service in the UK. We arereviewing BBC 7’s children’s provision as partof our children’s review.
BBC 6 and 1Xtra have built audience over theyear but still attract only around half a million
listeners a week each. 1Xtra has refreshed its
schedule and remains committed to offeringspeech programming for its target audience,alongside a distinctive range of music. Radio
5 live Sports Extra’s audience and presenceon the multiplex fluctuates according toseason. It has the ability to build high levelsof reach but falls back when fewer hours
are broadcast. We note management’s
objective to build awareness of Sports Extra.

25

BBC PERFORMANCE

17“I hold it close to my heart.
I’d miss radio more thananything.”

26

BBC PERFORMANCE“Their breaking news is great.
They’re there when things
are happening. They doreport it as it is. I don’t thinkthey colour it.”Member of public at Trust workshop discussing
the BBC.

We note that reach, share and listening are
not growing to the BBC Asian Network
despite the overall growth of the DAB
market. A new controller is now in place
and we await the outcome of his plannedschedule changes.
loCAl AnD nATIonS’ RADIo

BBC English local radio stations provide
highly valued local news and information
to audiences who can sometimes feel
underserved by the rest of the BBC. The 39
stations together reach 2.8 million people
who do not listen to any other BBC network
radio. However, BBC local radio stations face
the challenge of maintaining their relevanceand appeal while remaining distinctive within
local markets and within the BBC radio
portfolio. The 39 local radio stations had an
average combined weekly reach of 19% of
adults in 2007/08. Average weekly reach andshare has been trending downwards in recent
years and some services serving cities areshowing particular declines in common withlocal commercial services. We also note thatthe proportion of high approvers of English
local radio appears to have risen slightly to
65% in the last year.
BBC Radio Ulster/BBC Radio Foyle remains
the most listened to radio station in Northern
Ireland, reaching more than 38% of adults
and taking over 20% share of listening. It isvery highly valued, with an approval scoresignificantly above the overall BBC score in
Northern Ireland. Its proportion of highapprovers is consistently higher than theother nations’ radio services.
BBC Radio Wales’s reach has fallen this year,
although its share of listening has increased.
We note the recent changes to its daytime
schedule. Radio Cymru’s reach and share
have both declined in each of the past two
years and we note that its reach to all adults
within its transmission area is now just 6.2%.

2.8

MILLION

BBC News is performing very well in terms of
maintaining reach on TV and radio.

The number of people who listen to one of the 39
local stations and who do not listen to any otherBBC network radio.

Radio Scotland offers a diverse range ofspeech, sport and musical genres and changes
are being made to modernise and refresh it.
However, reach and share to Radio Scotland
have slipped significantly and this is a concern.
Reach for Radio Scotland was down in
2007/08, to 21.5% from 23.1%, and share oflistening has also fallen to 8%. This may be due
to increased competition from commercial
radio but there may also have been losses to
BBC Radios 2 and 4. We note however thatthe proportion of its listeners who are ‘highapprovers’ of the station has grown this year.
The station also rates well for the quality andattractiveness of its programmes.

Although BBC News (formerly called News24) is now clearly ahead of Sky News in termsof viewing, we note that Sky News still has avery good reputation among viewers for being
high quality and informative.

Due to no RAJAR coverage we have little
data on Radio nan Gàidheal’s performance,
we are encouraged by audience research on
listening which indicates that reach is stable
year-on-year.
JoURnAlISm

We are encouraged to see that BBC Newsis performing very well in terms of maintaining
reach on TV and radio, and continuing togrow reach online and on mobile devices.
Reach to BBC News has been supported by
the strong performance of Radio 1 and Radio
2 at breakfast time. This has led to an overallrise in the reach of BBC news on radio –including among some of the audience theBBC has traditionally found it hard to reach.
Public perceptions of BBC News wereaffected temporarily by the BBC’s broader
editorial problems during the summer of 2007
– even though none of these came about
as a result of actions by the News division.
In terms of impartiality, audience perceptions
are steady year-on-year. Three-quarters of
the audience say that they trust BBC news
programmes to give a fair, informed andbalanced view on important events andissues. Audience perceptions of the BBC’s
trustworthiness are steady year-on-year.

We welcome the introduction of the 8pm
bulletin on BBC One as an innovative way
to reach audiences who may not otherwisechoose to watch news. We are also
encouraged by the strong performance of
the BBC One news at ten o’clock. We havediscussed with management the need tobalance a response to strong public interestin big crime stories with the duty to cover arange of other topics. We are satisfied thatmanagement understands our concerns andthat they will aim to strike the right balancein future.
We endorse the Executive’s commitment
to bring a range of high-quality current
affairs stories to mainstream audiences bymaintaining Panorama at 8.30pm and we havebeen encouraged by the range and natureof the topics covered. However, we areconcerned that current affairs output on
BBC Two – notably This World – is not gaining
strong audiences, despite doing well inindustry awards. We have asked management
to consider how these programmes could begiven greater prominence on BBC Two and
we note the commitment in the Executive’s
2007/08 Statement of Programme Policy
to ‘experiment with new approaches toincrease the impact of BBC Two’s foreign
affairs coverage.’BBC Annual Report and Accounts 2007/08

182

MILLION

Using a new measure of quality: Net promoter
advocacy rating.

Afghan women listening to BBC World
Service radio.

The number of people who listen to the BBC
World Service each week.

BBC WoRlD SeRvICe

Afghan media, including television, is growing.
The challenge is to remain distinctive andrelevant at a time of great social, economic
and political change. Our ELCS research was
carried out in key markets among opinion
formers– a priority audience for the World
Service. We found that the ELCS is valued
for distinctive journalism that complements
other news sources. However our research
revealed that while there is an appetite for
ELCS news-related output there is low
awareness of it. Management is working toaddress this problem.

We are happy to note that BBC iPlayer,
which launched over Christmas 2007, appears
to be on target to meet usage forecasts.
Content requests have more than doubled
since its launch to 4.7 million a week by theend of March 2008. However, it appears that
this would have been unlikely without the
introduction of streaming, which outstrips
downloads by a ratio of eight to one. We
will monitor the effects of streaming on
costs, web traffic and user behaviour. We areencouraged by indications that BBC iPlayer
may increase reach to niche programming,with shows from BBC Three and BBC Four
regularly appearing among the top 20 mostrequested shows. It is too early for a fullevaluation of BBC iPlayer’s performance but
we are committed to conducting a full review
by the end of 2009. We are also closely
monitoring the delivery of the Executive’scommitment to make the full service available
on non-Windows operating systems.

The World Service is funded through aparliamentary Grant-in-Aid rather than thelicence fee. The Trust’s role is to agree andpublish long-term objectives in agreementwith the Foreign and Commonwealth Officeand to approve high-level strategy. In June2007 we issued the World Service Operating
Agreement, equivalent to the service licences
we issue for the BBC’s UK services. Key
events during the year included the launchof BBC Arabic TV in March 2008, and thetransfer of the international English language
news website to commercial operations as
BBCNews.com.
We note that the World Service maintained
its reach, although at 182 million weekly
listeners the overall audience was downslightly on the record levels of 2006/07. Theinternet is becoming an increasingly important
medium for the World Service in many partsof the world. The online audience grew by
34% year-on-year, although we note that the
Spanish-language site BBC Mundo is failingto keep up with overall growth in internet
access. Attracting new and younger audiences
is key to improving performance here.
The World Service continues to be theleading international broadcaster in terms of
quality measures such as trust, objectivity andrelevance, and in some markets such as Nigeria
and Bangladesh, the World Service scores
higher on these measures than local media.
The Trust’s audiences and performancecommittee commissioned independent
research into the BBC Afghanistan service,
and into the English Language Core Service(ELCS) on radio. The Afghanistan service
received overwhelmingly positive responses.
It is the most trusted source of news, andone of the most popular radio services in the
country. However, competition from other

onlIneThis year we conducted a major review of
bbc.co.uk (see next page). As our review
looked in detail at performance over the last
three years, we give only headlines in thisreport on bbc.co.uk in 2007/08.
We are pleased that bbc.co.uk’s reachgrew by 16.2% over the year, with the site
attracting an average of 17.2 million weekly
users from the UK alone, and a total of
33.2 million worldwide. While the growthrate was lower than in previous years, thecontinued increases in reach are encouraging
given the increasing competition.
A new and more sensitive measure of quality
has been introduced: the Net Promoter
advocacy rating. A number of areas of bbc.co.
uk receive very high scores on this measure,including news, sport, CBeebies and a numberof learning sites. While this is encouraging,
we note that local sites tend to score lowon this (and other) quality measures, and our
research has identified local provision to be
one area where audiences believe the BBC
should do better. Management is currently
refreshing local sites and we will consider
their proposals for a new, local broadband
video service later this year.

Finally, we welcome moves to refresh thebbc.co.uk site, including the launch ofa homepage that users can personalise.
Initial reactions have largely been positive
and the page has received above average
quality scores.

27

BBC PERFORMANCE

Within the BBC’s online
services, news, sport andCBeebies are rated particularly
highly for quality.

28

BBC PERFORMANCE“There is no other site which
offers such diverse and yetsuch comprehensive andin-depth information. The
quality is without doubt
standard setting.”“The bbc.co.uk site is moretrustworthy than other sites
because it is not trying toadvertise something or sell
you something.”

Contributor to research for the BBC Trust’s
review of bbc.co.uk

bbc.co.uk is the only British site consistantly among
the top ten destinations for UK users.

Contributor to research for the BBC Trust’s
review of bbc.co.uk

BBC.Co.UK S eRvICe RevIeW

view the BBC investment in the service isreasonable and offers good value for money
to licence fee payers.

as a result of our review, and was muchhigher than stated in the service licence.
There were also weaknesses in strategicand editorial oversight. We have required
management to bring forward proposals
to deal with these shortcomings. We also
believe management must demonstrate
more clearly how bbc.co.uk delivers public
value while taking into account potential
negative market impact, and we have asked
them to develop a system for assessing
output that will demonstrate this.

We review each BBC service in depth atleast once every five years. In 2007/08
we reviewed bbc.co.uk, looking at how it
performed against its service licence andwhether its licence should be revised toreflect users’ needs and changes in themarket. In broad terms we found bbc.co.uk
to be an excellent service, highly valued byits users, and meeting most of its service
licence commitments. There were, however,areas that concerned us and where we want
to see change.
In the three years that we reviewed
bbc.co.uk it performed very well against
the public value yardsticks of reach, quality,
impact and value for money. Its reachgrew despite strong competition. It is the
only British site consistently among the top
ten destinations for UK users.
We were struck by how highly users value
the site for its high quality, range and depth.
Audiences describe it as a standards setterand as one of the best sites in the world.
Scores for quality support this. During theperiod under review nearly two-thirds of
its users have been ‘high approvers’ and thesite’s advocacy rating, expressed as a Net
Promoter score, is higher than most otherUK sites surveyed.
By providing news and other content
of high quality, bbc.co.uk makes a strong
contribution to the delivery of the BBC’s
public purposes. Its performance isparticularly strong in the areas of sustaining
citizenship, promoting learning, representing
the UK and its nations, regions andcommunities, and of bringing the world to
the UK and the UK to the world. In our

The areas where we want to see change are:Distinctiveness: although audiences see
bbc.co.uk as distinctive, other operators
have concerns about its presence in somemarkets. We found that management had
no agreed definition of distinctiveness or any
consistent way of measuring it. We haveasked management to adopt our proposals
for a rigorous and consistent approach toassessing the distinctiveness of bbc.co.uk
Search and navigation: this is a clear
weakness. There is little horizontal navigation,and the BBC’s internal search engine isineffective. We note that management istrying to improve both areas. We questioned
whether the BBC should be providing amainstream external search engine, and wehave asked management to review its future.
linking to external sites: we weredisappointed that bbc.co.uk’s links toexternal sites are not leading to more
click-throughs in spite of this being identified
as a priority in the Graf review of 2004.
We have asked management to ensure thatusers are encouraged to navigate to externalsites and we will closely monitor progress.

We will not approve new investment in
bbc.co.uk until we are satisfied with the
Executive’s proposals for improved control
and we have considered their investment
plans in more detail. In October we approved
the broad direction of management’s plans
for the service when we approved the BBC’s
six-year strategy. In the light of our review
we believe a cautious approach to approving
more detailed plans is in the best interest of
licence fee payers. We will consider the planstaking into account their public value,
distinctiveness and competitive impact.
To achieve better accountability we will
restructure the bbc.co.uk service licence.
During our review concerns were raisedover the level of accountability that waspossible by having a single service licence
for a service as diverse as bbc.co.uk

encouraging dialogue: users have growing

expectations of open dialogue and we hopethat management’s plans to invest inaudience participation and interactivity
will meet this need.
Improved management control: we foundmanagement control insufficiently strong.
Financial accountability was ineffective: thetrue level of spending only became known

We do not believe that the service should
be governed through more than one service
licence, but we will create separate annexes
to the service licence covering the main
editorial areas: news, sport, nations and local,
formal learning, audio and music, and vision.
Full details of the review are on our website.

BBC Annual Report and Accounts 2007/08

We have set the BBC new
efficiency targets which linksavings to service performanceto ensure that in cutting
costs we do not compromiseon quality.

29

MILLION

The Trust is reviewing the arrangements for thecollection of the licence fee.

The value of annual savings achieved over thelast three years.

£4 million of the savings came from property
sales and represent a one-off benefit rather
than a recurrent saving.

BBC six-year strategic plan. As we reporton page 28 we have raised some specificconcerns with the Executive about thestrategic and financial oversight of the service
bbc.co.uk In the coming year we will expect
to see more robust reporting and forecastingof spend by service.

Financial and businessperformance
As Trustees we are responsible for overseeing
the financial and business performance of theBBC. We keep a close watch on the financial
needs of the BBC, we ensure the BBC
delivers value for money, and we review theperformance of the BBC against its financial
targets and objectives.
A neW FInAnCIAl AnD STRATegIC PlAn
FoR The BBC

The licence fee settlement announced by thegovernment in January 2007 gave the BBC theadvantage of certainty about its income forthe following six years, but it also posed someproblems. The settlement was lower thanthe Executive had hoped, and it could create
difficulties if inflation rises. We worked with
the Executive on a review of plans and budgets
and approved a new six-year strategic planfor the BBC (see page 17). This includes achallenging target of 3% efficiencies each year
to release cash from existing operations.
These savings, added to the increased income
we expect the BBC’s commercial operations
to produce, should allow the BBC to meet
audience expectations without any compromiseon quality. The review has also enabled us tosteer funds to areas we see as priorities. We
will closely monitor the performance of the
BBC against these plans.
PeRFoRmAnCe AgAInST SAvIngS TARgeTOur new efficiency target for the BBC takes
effect from 2008/09. This past year marked
the final phase of the BBC’s previous
three-year objective to deliver annual cash
savings of £355 million. The Executive reports
on its performance against this target in
its review in Part Two (page 84). We weredisappointed that the Executive did not meet
the target, falling short by £8 million, although
the savings they did make are still a significant
achievement. The shortfall is expected to bemade up in the coming years from actions
already under way. We note that someIn setting our new efficiency target we have,for the first time, linked savings to service
performance to ensure that in cutting costs
we do not compromise on quality. We haveestablished clear definitions as to what
constitutes efficiency savings and the baselines
against which savings will be measured. In
doing so we have drawn on guidance available
from the wider public sector and on advice
from the National Audit Office.
PeRFoRmAnCe AgAInST SeRvICelICenCeS

We have reported elsewhere (page 24) how
BBC services performed in terms of theircontent. All the services also have to workwithin the budgetary limits set out in theirservice licences. However the financial results
reported in Part Two show that 11 services
exceeded their budget limits in 2007/08. We
were pleased that one of these ‘breaches’
was in fact an underspend due to greater
efficiencies being achieved than initiallyforecast. However, in the main, the overruns
reflect some confusion about how to allocate
costs between content and non-content
spending. Spending on items such as central
infrastructure and support, and development
activities are not included in content
spend and fall outside the service licencebudgetary regime.
In order to resolve this issue we asked the
independent accountants KPMG to review the
way costs are classified so that all appropriate
costs are included in service licence budgets
in future. Our new baseline budgets for eachservice for 2008/09, issued in May 2008, takeaccount of this work and also reflect theefficiency savings we expect the Executive to
make and the new investment priorities of thelICenCe Fee ColleCTIon

The financial health of the BBC depends oncollecting the licence fee efficiently andeffectively and keeping evasion within bounds.
Over the past year we are pleased to note thatthe combined cost of collection and evasion islower than the previous year as a percentage
of gross licence fee income. However evasion
itself has remained steady at 5.1% with the fallbeing driven by a reduction in collection costs.
The Trust has a duty to make sure the collection
process is not only efficient, but also appropriate
and proportionate. We recognise that this is an
issue that can arouse strong emotions. We havebegun a review to ensure the right balanceis being struck between the need to raise themaximum revenue and the need to avoid
heavy-handedness, especially with people who
do not own a television set and therefore do notneed a licence. We expect to report our findings
by the end of 2008.
CommeRCIAl BUSIneSSeS

We are pleased that BBC Worldwide is on
track to meet the financial targets set in its
five-year plan which the Trust agreed in March
2007. During 2007/08 it generated revenuesof £916 million (£810 million 2006/07) andprofits of £118 million (£111 million 2006/07)
before interest and tax, both ahead of budget.
We note however that some investment
activity was put back to 2008/09 which is
expected to be reflected in lower profits inthat year.

BBC PERFORMANCE

£347

30

BBC PERFORMANCE“The BBC has to be prepared
to walk away from deals that
do not offer good value tothe audience and to equip
itself to do this by continuallybringing on new talent.”£75

MILLION

Sir Michael Lyons, BBC Chairman, discussing
the findings of the Trust’s review of talent costs,
May 2008,

Trustees watching a rehearsal of the BBC
Philharmonic Orchestra during a visit to theBBC’s Manchester studios.

The value of savings that the BBC has madein the three years to April 2008 from
improvements in its procurement processes.

vFm STUDy on BBC PRoCURemenTDuring 2007/08 we completed threesuch reviews. The full reports are on our
website and summaries are included in
the shaded boxes on this and on page 31.
Additionally we commissioned a review
of in-house commissioning – that is, making
programmes using the BBC’s own staff. We
will be publishing this review in the summer
2008 and will report on it next year.

The Trust also acknowledged that whilst not
all talent would be universally popular the
BBC should offer something of value to all
audiences. There were, however, areas
where BBC performance could be improved
and where better value could be achieved
for licence fee payers in some of its talentdeals. The Trust believes there needs to bea more consistent and systematic approachto gathering independent data and subjecting
deals to more rigorous challenge. The BBC
should be prepared and equipped to walkaway from deals that do not offer good value.
This means it needs to do more to bring on
new talent. The report also highlighted areas
such as some parts of network radio andnews and current affairs where the Executive
will be considering their talent strategy.

The BBC spent £531 million on goods
and services in 2006/07 and we asked
the NAO to examine the way thisspending is managed.
The NAO found that overall the BBC
had very good procurement practices.
However, the review made somerecommendations for change. These
included continuing to develop the useof technology to cut administrative
costs; getting better deals from suppliers
by negotiating more central contracts
and reducing the number of suppliers
where spending is of low value; andstrengthening the way the BBC assesses
its procurement performance by starting
to measure user satisfaction.
We accepted the NAO’s recommendations.
We discussed them with the Executive,
and we are content that the Executive’s
actions are an appropriate response.

vAlUe FoR money RevIeWS

Licence fee payers rightly expect the BBC tospend every pound of their licence fee wisely,
and we have a duty under the Charter toensure the BBC achieves value for money inthe way it spends the licence fee. To fulfil thisduty we commission and publish independent
value for money (VFM) reviews in consultation
with the Comptroller and Auditor General –the head of the National Audit Office (NAO).
The reviews are carried out by the NAO orother independent agencies.

BBC TAlenT CoSTSIn addition to our formal programme of value
for money reviews, in November 2007 theTrust commenced a study of the cost of on-air
and on-screen talent. Concerns had beenraised that the BBC was using its guaranteed
income to overbid for talent, thereby raisingcosts for the industry as a whole and the
public were also asking questions about thefees being paid to some BBC performers.
The study, carried out by independent
consultants Oliver and Ohlbaum Associates
Limited, reported in June 2008. Its main
findings were:* There was no evidence of the BBC paying
above the market price for leading television
talent when competing with rivals. In somecases the BBC might well be paying less thanthe market price.
* There was no evidence that the BBC
was systematically pushing up prices in thetalent market. Where high rates of inflation
do currently seem to exist in the BBC, thislargely reflects market forces at work in
rapidly changing UK media markets.
* The BBC has systems to ensure it achieves
value for money when negotiating talentfees – and has strengthened these systems
in recent years.

The Trust Unit will carry out a review ofprogress by June 2009 and their report will
be published. The report into talent costs
is available on our website.
DelIveRIng The BeneFIT oF emeRgIng
TeChnologIeS AnD S eRvICeS

The public purposes of the BBC include aduty to take a leading role in the switchover
to digital television within the UK and to help
deliver to the public the benefit of emerging
technologies and services. We report below
on some of the ways the BBC is responding.
On page 27 we look at the BBC’s online
services and consider how services needto adapt and change in response to newtechnologies.
DIgITAl SWITChoveR h elP SCheme

The BBC is required by the government toprovide help to certain groups within the
public who may find the switchover to digital
television particularly hard. The help which
the BBC must provide, and the people eligible
to receive this help, have been determined by
the government but it is up to the BBC to run
the help scheme.

BBC Annual Report and Accounts 2007/08“It should be part of the BBC’s
remit to spread the word
about digital. Not everyone
understands digital. So the BBC
as the national broadcasterhas to be involved in this.”

The help scheme is designed to help thosegroups most likely to have difficulty in making
the switch to digital television. The scheme
is open to anyone who is aged 75 or over,seriously disabled, or blind or partially sighted.
It is funded by a ring-fenced allocation of
the BBC’s TV licence fee (estimated costs£603 million), and run by the BBC throughDSHS Limited, a 100% BBC-owned subsidiary.
The BBC is responsible for delivering thescheme, although day-to-day operation iscontracted out to a third party, eaga plc.
The Trust’s main role in relation to the Digital
Switchover Help Scheme is in holding the BBC
Executive to account for ensuring that value
for money is achieved in the operation of thescheme. To that end, in February 2008 theTrust set success criteria for the scheme
which it will use to monitor and assess thescheme’s performance throughout the life of
the scheme, to ensure that licence fee payers’
money is spent in the most cost-effective way.
FReeSATThe launch of Freesat in May 2008 marked an
important step forward in making choice inaccess to digital services available to everyonein the UK. Freesat is a satellite platform
developed in a joint venture between the BBC
and other UK broadcasters, offering a wide
range of digital TV, radio, interactive services
and HDTV – for a one-off payment forequipment and installation. It should increase
digital take-up in analogue homes including
those out of the Freeview coverage areas,
and offer a free-to-view digital service inperpetuity. We expect the number of services
available via Freesat to rise rapidly to morethan 200 by 2009. Early indications suggestthat the service will be popular.

25,000Over 1,100 TV transmitting stations will need to
go digital over the period to 2012.

vFm STUDy on BBC PRePAReDneSS FoR
DIgITAl SWITChoveR

Digital switchover, which began in Copelandin 2007 and will end in 2012 with Ulster,
Tyne Tees and London, is a lengthy andcomplex project involving other public andprivate sector organisations. It will affectalmost every home in the UK and we takeour duty to ensure its success very seriously.
In order to assure ourselves that the BBC
is in the best state to fulfil this duty, we
asked the NAO to examine the BBC’s
preparedness for digital switchover.
The NAO made three key recommendations– all of which the BBC accepted. These
were: to strengthen oversight of switchover
work through independent representationon the project governance board; to put inplace indicators to measure the value formoney of the BBC’s £200 million funding
for Digital UK; and to incorporate thelessons from the Copeland switchover inthe procurement of the national Digital
Switchover Help Scheme.
We discussed these recommendations with
the Executive and are content that their
proposed actions are an appropriate response.
We will continue to scrutinise the BBC’s
preparations for digital switchover and we willcommission a review of the Digital Switchover
Help Scheme around 2009 to monitor theoperational value for money of the scheme.

The number of households in Whitehaven,
Cumbria, the first to lose their terrestrial signals
in 2007.

vFm STUDy on BBC SPeCTRUm USe

Spectrum is a valuable resource and the
BBC uses significant amount to transmit its
analogue and digital terrestrial televisionand radio services across the UK. We asked
Deloitte & Touche to look at how efficiently
and effectively the BBC uses spectrumwith the main focus on Digital Terrestrial
Television (DTT) also known as Freeview.
The review noted that the BBC’s priority wasto encourage viewers to take up Freeview,
and it has achieved this by offering the best
possible signal and picture quality. However,given that Freeview is now well established,
and demand for spectrum is growing (partly
as a result of the success of Freeview), thereview concluded that the BBC should
reconsider this policy. The review suggested
that the BBC should be prepared to maketrade-offs between spectrum capacity andpicture quality in order to ensure thatspectrum is used effectively for competing
service demands.
In response the BBC Executive has outlined
its plans to increase the efficiency of its
use of spectrum through the use of newtechnology and has agreed to carry out
consumer research on the picture qualityof BBC services on DTT.

BBC PERFORMANCE

Member of public at Trust workshop discussing
the BBC.

31

32

BBC AUDIENCE VIEWS

7
The number of formal public consultations theTrust held during 2007/08 on issues ranging
from new service proposals to a new complaints
framework for the BBC.

Even though we’ve made real progress in givinga greater voice to the public we need to do
more. The public want to know they can get
involved and they want to know what action has
been taken by the Trust as a result, so they canassess whether it’s worth their time and effort.
Sir Michael Lyons
Chairman, BBC Trust,
speaking at the Voice of the Listener
and Viewer’s annual conference
29 November 2007

BBC Annual Report and Accounts 2007/08

lISTenIng To AUDIenCeS

The Trust has a duty to stay in close contact
with licence fee payers, and to take their views
into account when making decisions. A goodpart of our work is driven by the extensive
audience research we commission1, as well
as by personal contact with licence fee payers
at events around the UK and by such things
as Trust members taking part in local radio
phone-ins. We also carry out regular public
consultations on key issues affecting the BBC,and we are assisted in our work by four
Audience Councils – one for each of thenations of the UK.

“If people had more of a say,they’d feel more content withthe licence fee.”

104 people from across the UK provided us with
their views.

Member of public at Trust workshop discussing
the BBC.

were as follows:

the strength of the relationship between
different audiences and the BBC.

* Some aspects of BBC values and content
are highly regarded: people trust the BBC
more than its commercial competitors– the independence of BBC news isparticularly highly valued – and the BBC
is considered educational. Audiences canidentify distinctive content in BBC drama
and factual – either because of its highquality, or because other broadcasters do
not provide this output to the same extent.
Audiences want more family programming,
more originality, and better provision foryoung people.

mAKIng AUDIenCe vIeWS CoUnTIn addition to the work described above, andour annual survey of licence fee payers, thisyear, we also asked the public to contributedirectly to our annual assessment of BBC
performance. We did this through a deliberative
research workshop held in Birmingham
on 7 April 2008. In deliberative research,
participants are given an insight into thebackground of particular issues and thenasked to come to conclusions.
We brought together 104 people from acrossthe UK, who together formed a representative
sample of the population, and asked them togive their assessment on a range of issues.
These included how the BBC is performing
against its strategic priorities and objectives;
how far it has succeeded in increasing theoriginality and quality of its output; how far
it has been able to restore trust in its output;
and how far it has managed to convince
sceptical audiences of its value while maintaining
the affection of those who value the BBC
highly. Before coming to their conclusions,participants heard presentations from theTrust, took part in discussions, and were able
to put questions to the Trust Chairman,
Sir Michael Lyons. The main conclusions
1 Results of our research can be found on the BBC Trust website.

* Audiences were upset and disappointed
by the BBC’s breaches of trust but also
felt that the BBC’s transparency in dealing
with the problems had limited the damage,and it was not seen as doing the BBC
permanent harm. While they valued the
BBC as an institution and for some of its
content, they did not feel the value wasincreasing – this reflected their concerns
over trust and originality, coupled withthe rising cost of the licence fee and theproliferation of choice elsewhere.
You will find quotes from people who took
part in the research throughout the report.
SeRvIng All AUDIenCeS

It is an important principle for us that the BBC
must deliver something of value to everyonein the UK. However, we know that the BBC
does better with some audiences than withothers. One of the main objectives we have
set the Executive is to increase the value the
BBC is seen to provide for those whocurrently place a low value on the BBC while
maintaining the position with those who value
the BBC highly. To help us understand theseissues better, we commissioned research on

This confirmed that the BBC continues to
do best among better off older audiences.
Conversely the BBC has more challenges
reaching younger audiences, especially lesswell off younger audiences, and this problem
appears to have worsened over the past five
years. The BBC also faces a challenge to reachless well off middle aged audiences. Blackand Asian audiences are less likely to feel thelicence fee is good value for money than whiteaudiences – to some extent this may reflect
age as well as ethnicity, as black and Asian
audiences are, on average, younger than the
population as a whole.
The research also showed that levels of
approval vary according to where people
live in the UK. Although the BBC’s share of
television viewing is much the same in all partsof the UK, people living in Scotland are muchless likely to feel the licence fee is good value
for money than other UK audiences, andpeople in Northern Ireland and Wales areless likely to feel the licence fee is good value
than audiences in England.
On the positive side the BBC does better
than other broadcasters on measures ofaudience affinity: nearly 77% agree theywould miss the BBC if it were no longer
there, compared with just over 71% for ITV,
and 64% for Channel 4. However, looking
at the results in more detail, it is clear thatyounger audiences and black audiences alsofeel a strong affinity with Channel 4 and Sky.
Our research will feed into the Executive’splans to increase approval among audiences
who do not place a high value on the BBC.

33

BBC AUDIENCE VIEWS

BBC AUDIENCE
VIEWS

34

BBC AUDIENCE VIEWS

95%

We will always explain thereasons for the decisions
we make and how we used
the information provided by
the public in reaching ourdecisions.
BBC Trust promise to audiences.

our Promise to you

In 2007, after an extensive public consultation,
we published Our Promise to You1, which setsout how we will engage with audiences.
Our consultation showed that only a small
proportion of people are actively interested
in giving feedback to organisations – this is a
widespread challenge, not something that justaffects the BBC. What participation there istends to be at a local level on issues affecting
everyday life such as local council services,
schools and hospitals. Only 8% had ever given
feedback to the BBC.
However, most people we consulted feltthat the Trust, because it represents
audiences, should nevertheless create as
many opportunities as possible to encourage
the public to get involved with its work.
Unsurprisingly, we found a much greater
willingness to take part in decisions directly
relating to value for money and services
than to be involved in compliance andregulatory matters.
The consultation revealed low awareness of
the Trust and its work – but also a desire forgreater understanding, which in turn, it was
felt, might encourage more people to takepart. We have taken this on board and will
work to increase the visibility of what we doin order to encourage public participation.
People also told us that we should make it aseasy as possible for people to engage with theTrust, and we have undertaken to make ourmethods of engagement practical, convenient,and easy for those taking part.

Vice chairman Chitra Bharucha finding out
what children in Northern Ireland thought
about the BBC.

The percentage of respondents who wanted
the BBC Trust to report back on its activities
to the public.

Other advice from the public that we haveadopted includes being open and transparent
when reporting back to the public theoutcomes of our engagement; writing ourconsultation documents in plain language;
and not placing too much reliance on online
methods of consultation. People also told
us they only wanted to take part in ourconsultations if it was clear what mightchange as a result, and we have undertaken
to make the exact scope of our projects clear
at the start. There was also concern that weshould not give interests groups too great an
influence, and we have promised not to allow
such groups to dominate discussions and to
consider their views alongside what we learn
from open consultation and research.

AUDIenCe CoUnCIl englAnD

Building on this work, we are developing aseries of measures to assess the effectivenessof our engagement work and we will reportprogress in future annual reports.
AUDIenCe CoUnCIlS

The BBC Charter provides for four Audience
Councils – one for each nation. The Councils
advise the Trust on how well the BBC is
promoting its public purposes in theirrespective nations.
Key parts of the Trust’s work over the past
year were stimulated by concerns raised by
the Councils. These included the Nations’
Impartiality Review (see page 18) and the
Network Supply Review (see page 19). The
Councils also made important contributions
to Trust consultations in the course of the year,
informed by the many audience engagement
events that each Council carries out.
Each Council presents its annual report –briefly summarised below – at a special
meeting of the Trust at which the issues that
the Councils wish the Trust to progress overthe following year are considered.1

Audience Council England commended thecontent and sense of identity in much of BBC
English Regions’ output, which has built public
value and engaged strongly with audiences.
However, the Council criticised the impact of
the BBC’s reprioritisation plans on BBC English
Regions. Plans for four new local radio stations
had been abandoned, and it was felt that
this decision, together with other cutbacks,
would reduce the BBC’s ability to reach out
to communities and underserved audiences.
It was hoped that the BBC Local proposition
would, if approved, help regain lost ground.
The Council felt there was still much to bedone to ensure that England in all its diversity
was reflected at the national level. The BBC
networks were also criticised for continuing
to draft in network presenters to report on
regional matters, often inaccurately.
There was high praise for BBC Local Radiofor its strong links with local communities
and its ability to reach audiences sometimes
underserved by other BBC services. BBC
Local Radio’s Connecting in a Crisis work
during the summer and autumn floods of2007 prompted particular appreciation.
The Council’s audience engagement work
events included a series of meetings withyoung people which gave Council members
a deeper understanding of young people’s
expectations of the BBC and of otherbroadcasters. Council members also engaged
with family groups to explore what they lookfor in entertainment programming – this will
be a focus for further work in the coming year.

1 The Councils’ reports are published as part of each nations’s
Annual Review document and appear on their websites.

BBC Annual Report and Accounts 2007/08

8

An Audience Council Scotland event in
St Andrews, Fife.

The number of events held by the Audience
Council for Scotland when seeking views during
the Gaelic Services’ public value test.

AUDIenCe CoUnCIl SCoTlAnD

AUDIenCe CoUnCIl WAleS

AUDIenCe CoUnCIl noRTheRn IRelAnD

Audience Council Scotland reported that BBC
Scotland had performed strongly against the
Public Purposes in a year of many challenges,
including the Scottish general election andthe move into the new BBC Scotland HQ at
Pacific Quay in Glasgow.

Audience Council Wales commended BBC
Cymru Wales for its success in gaining
Network commissions, especially in factual,music and drama. However, the Council felt
much remained to be done before Wales
was adequately reflected in Network output.
The Council continues to be concerned
about the inadequate reflection of devolution
in Network news and current affairs andwill monitor action to address theseconcerns once the Nations’ Impartiality
Review is published.

Audience Council Northern Ireland has
identified enduring concerns about thetreatment and priority given to coverageof the devolved administration and thewider political, legal, economic and culturalarenas. The Council has welcomed the
Nations’ Impartiality Review, in which it
participated fully. It considers there is moreprogress to be made in this area for audiencesin Northern Ireland.

BBC Scotland provided comprehensive,high-quality coverage of the general election
and played a useful role in explaining the new
PR voting system introduced for the Scottish
council elections. However, the Council
remains unconvinced that network coverageof Scottish affairs is always sufficiently accurate,comprehensive, or given due weight.
BBC Scotland produces strong output acrossa range of genres, including learning, the arts,
drama, comedy, sport and factual. Audienceuse of new technology, especially the internet
and broadband, has clearly been stimulated
by new BBC Scotland content in news, sport,
education and music.
Approval of the Gaelic Digital Services (seepage 45) was an important step forward.
Progress was made in addressing other key
issues – particularly the level of network
commissions from Scotland, and coverageof Scottish affairs on network news – but, asdelivery has not yet begun, these will remainpriorities for the coming year. New priorities
for audiences in Scotland include coverage ofnational football and improved radio
reception in the Highlands.
Much of the Council’s audience engagement
work was concerned with the Gaelic Services’public value test. Eight events were organised
and awareness of the Trust is now high in the
Gaelic world.

The Council welcomed the launch of Freesat,
which greatly increases the availability ofdigital television in Wales; but serious concerns
remained about the availability on DAB ofRadio Cymru and Radio Wales, especiallyin north-west Wales and the South Wales
valleys. The lack of a good FM signal for Radio
Wales made this an even more serious issue– one consistently raised by the public at The
Council’s accountability and outreach events.
The Council was pleased by the success ofthe first year of the three-year BBC-S4C
strategic partnership. The BBC is obliged toprovide ten hours a week of Welsh language
programming for transmission by S4C paid
for from the licence fee. The Council considers
the fulfilment of the BBC’s PSB Welsh language
responsibilities central to the renegotiationof the BBC-S4C strategic partnership.
The Council considers it vital that any
successor service to BBC jam provides
material in the Welsh language as well as
English language material tailored to thecurriculum in Wales.

The Council also remains concerned about
the low number of hours and spend of local
commissions for network television. In the
coming year it will work to increase thevolume, value and sustainability of locally
produced network programming, taking
account of cultural representation issues,audience benefits and the development needsof the creative industries in Northern Ireland.
The Council continues to be concerned about
the limited representation in network output
of life in Northern Ireland. The Council will
work to ensure that high-quality, creative anddistinctive content, relevant to and reflectiveof the needs of diverse audiences in Northern
Ireland and across the UK, is available on
all platforms.
The Council recognises audience concerns
about the limited availability of digital services
as well as the acknowledged digital divide
in Northern Ireland. The Council will work todevelop digital access, ensuring that the needsof Northern Ireland audiences are met.

35

BBC AUDIENCE VIEWS

The Audience Councils bring thediverse views of communities
from throughout the UK to theTrust’s attention.

36

BBC GOVERNANCE

25%

The percentage of the public who say they know
at least a little bit about what the Trust does.
(Holden Pearmain.)

The BBC Trust, the governing body of the BBC,
exists to represent the interests of the licencefee payers and to make sure the BBC is run in
their interests, not those of its managers. We
guard the editorial independence of the BBC
and make sure it is beholden to no outside
interest, whether political or commercial.
Sir Michael Lyons
Chairman, BBC TrustBBC Annual Report and Accounts 2007/08“As Trustees we do not run the
day-to-day operations of theBBC. Our job is to make surethat the Director-General andhis staff have clear priorities
and that they use theirresources well.”
Chitra Bharucha, Vice chairman, BBC Trust.

Delivering value
for money
The BBC Trust began work on 1 January 2007
– part of the wide-ranging BBC governancechanges introduced by the new Charter.
The Trust, as the governing body of the BBC,is quite separate from the Executive which
manages day-to-day operations. The Trust
represents the public and makes sure the
Executive delivers the high-quality public
service programmes and services the publicwant, and also ensures that the BBC isaccountable and open. The Trust protects
the independence of the BBC fromcommercial or political influence.
As BBC Trustees we are committed to
upholding the highest standards of corporate
governance. In this section we set out ourassessment of our own performance and also
how our governance activities have served
the public:
Delivering value for money (page 37)
Serving all audiences (page 42)
Ensuring impartiality (page 43)
BBC’s economic power (page 45)
Other regulatory information (page 48)
Part Two of the BBC’s Annual Reportprovides more information on how the
Executive has undertaken its corporate
governance responsibilities.

As Trustees we oversee the BBC’s financial
and business performance. We have ultimate
responsibility for the BBC’s stewardship of
its resources including, most importantly,
the money the public pay for their television
licences. We keep a close eye on the financial
needs of the BBC and ensure that the BBC
delivers value for money in the way it spends
its income.
We do this in two ways. We keep overall
high-level budgets and plans under continual
review. Each year we take a strategic look at
the BBC’s finances and, once our questions
have been answered and any changes wewant have been made, we approve the BBC’s
budget and its long-term financial plans. We
may set management financial objectives toguide the way they manage their operations.
The Trust’s Finance and Strategy committee
plays a key role here. The committee’s
membership is set out on page 48.
We also regularly look in detail at particularareas to ensure they deliver value for money.
We have summarised the findings from our
specific value for money reviews undertakenin the past year on page 30.
The duty of the BBC to deliver value formoney applies to the Trust too. To help ensure
this, the Finance and Strategy committee
oversees the Trust’s own financial affairs
and manages any conflicts of interest
involving Trustees.
The Trust is supported in its work by theTrust Unit, which provides independent andobjective advice, calling on outside experts
when necessary. The Trust Unit is independentof BBC management, its director is appointed
by the Trust and its staff are outside theThE TruST u niT

The Trust is supported in its work by theTrust Unit, which provides independentand objective advice, calling on outside
experts when necessary. The Trust Unit
is independent of BBC management, its
Director is appointed by the Trust and its
staff are outside the BBC management
chain. The Unit is made up of professional
staff with expertise across a range of
disciplines who advise Trustees on the
conduct of their duties and support theirwork in key areas.
BBC management chain. The Unit is made up
of professional staff with expertise across a
range of disciplines who advise Trustees on
the conduct of their duties and support theirwork in key areas.
We set out on the next page the Trust’s
expenditure and the external auditor’s reporton this. This year the direct expenditure
incurred by the Trust represents 0.34% of theBBC’s public service expenditure. The Trust
has set itself the target of keeping expenditure
at or below 0.35% of the BBC’s public service
expenditure over the next five years.
The Trust reviewed its own performance toconsider how effectively it is operating andmeeting its aims. The results of the review
are set out on page 39.
The Trust oversees the policy that sets the
pay and benefits of the Executive. The Trust
manages this through its remuneration andappointments committee, membershipof which is shown on page 48. The Trust’sreport on remuneration, including Trustees’
own fees, is on pages 39–41.

37

BBC GOVERNANCE

BBCGOVERNANCE

38

BBC GOVERNANCE“The cost of the licence fee justkeeps going up and up andthe programmes are still thesame, which means the value
is getting worse.”

Member of public at Trust workshop discussing
the BBC.

STaTEmEnT Of TruST E xpEnDiTurE

Note

12 months
2007/08£000

3 months
2006/07£000

Trustee remuneration

1

642

209

Staff costs

2

4,526

Other operating costs

3

0.34

%

Dermot Gleeson, Trustee, listening to the calls to
BBC Information in Belfast.

The proportion of the BBC’s public services
expenditure which is incurred by the Trust.

TruST hEaDCOunT

Our responsibility, in accordance with theterms of our engagement letter, is to form an
independent opinion, on the basis of the work
performed, and to report our opinion to theTrust. Our examination was substantially lessin scope than an audit.

Note

1

31 March
2008
EFT No31 March
2007
EFT NoTrustees

2

12

11

865

Trust Unit staff

3

61.0

42.0

6,741

1,564

Other staff

4

9.8

21.5

Direct Trust expenditure 4,511,9092,638

Trust expenditure as% of BBC UK public
services spend

0.34%

Ofcom regulatory fees
Ofcom MIA fees
Total Ofcom fees

6
7

3,253
491

875
620

3,744

1,495

Notes
1 The remuneration for previous period includes fivemonths of remuneration for the eight trustees who wereappointed with effect from November 2006. Prior to theformation of the Trust the BBC had a Board of Governors.
The remuneration of the Governors for the first ninemonths of 2006/07 is shown within the remunerationtables in Part Two.
2 Staff costs include wages and salaries, social security
costs and employer pension contributions.
3 Operating costs include direct expenditure on activities
such as research, legal advice and other specialist
advisory services.
4 The expenditure shown above for the Trust represents
direct external spend by the Trust. Additionally theTrust made use of shared services provided by the BBC
which included the use of property, finance, HR andinformation services.
5 Of the Trust expenditure, £1,595,000 relates to spend
on the Trust’s activities in the four nations which primarily
covers support for the four Audience Councils and the
12 regional Audience Councils (2006/07 £244,000).
6 Ofcom allocates its costs of television and radio regulation
between the BBC and the commercial channels. The Trust
Unit pays the BBC’s share of that allocation.
7 Ofcom MIA fees cover Ofcom’s direct and indirect costs inundertaking the Market Impact Assessment for the Public
Value Tests undertaken in the period. Market Impact
Assessments completed in the year included HDTV andthe Gaelic language service.

Notes
1 EFT means equivalent full-time numbers.
2 The current chairman was appointed on 1 May 2007.
3 Trust Unit staff are those employed directly by the Trust
Unit. Of these, 12 are based outside London providing
support to the work the Trust undertakes in Wales,
Scotland, Northern Ireland and the English Regions
respectively. These 12 staff transferred to the Trust
Unit’s payroll on 1 April 2007. Previously the Trust was
reimbursing the cost of these staff.
4 Other staff are staff who provide support to the
12 regional Audience Councils but who are not direct
employees of the Trust Unit. The costs of these staff arereimbursed by the Trust. These staff are all based outside
London. (The prior year number includes the 12 staff
who transferred to the Trust Unit payroll on 1 April 2007
referred to in Note 2 above.)rEpOrT Of KpmG LLp TO ThE BBC TruST(‘ThE TruST’)In accordance with the terms of ourengagement letter dated 3 June 2008,
we have examined the above expenditurestatement (‘the Trust expenditure statement’)for the year ended 31 March 2008 which has
been prepared, further to the requirementsof the BBC Charter dated October 2006,
by the Trustees of the Trust and is theirsole responsibility. The Trust expenditurestatement has been prepared by theTrustees of the Trust applying the recognition
and measurement requirements of UK
Generally Accepted Accounting Practice.

Our report has been prepared for the
Trust solely in connection with the Charter.
Our report was designed to meet the agreed
requirements of the Trust and particularfeatures of our engagement determined by
the Trust’s needs at the time. Our report
should not therefore be regarded 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 accessto our report or a copy and chooses to rely
on 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 the books andrecords of the Trust on the basis of the statedassumptions included within the Notes to theTrust expenditure statement.
KpmG LLp
Chartered Accountants
Registered Auditor, London
19 June 2008

BBC Annual Report and Accounts 2007/08

In its first year the Trust
has started to establish
itself as an independent,
evidence-based and open
body representing licencefee payers.

Member of public at Trust workshop discussing
the BBC.

Young people giving their views on the BBC toTrustees in Belfast.

TruST pErfOrmanCE aSSESSmEnT

reviewing the Trust’s business calendar.
The Trust also felt that it could develop
more ways of engaging with stakeholders.

The Trust formally reviewed its own
performance and the performance ofits committees following its first full yearof operation. This is in line with its own
Standing Orders and with best practiceas set out in the Combined Code on
Corporate Governance.

Another evaluation exercise will be carriedout in early 2009 by external advisers and theresults will be published in next year’s report.
TruST rEmunEraTiOn rEpOrT

The review, led by the Chairman, Sir Michael
Lyons, looked at how effectively the Trust isfulfilling its remit and how well its businessprocesses are operating, and assessed thecontribution of individual Trustees. The
process involved a structured questionnairecompleted by all Trustees, individual
performance evaluation by the Chairman anddiscussions at Trust meetings. Trustees werealso able to comment on the Chairman’s
performance. The Chairman gave each Trustee
the results of their performance evaluationand presented a report to the Trust bringing
together the main themes, alongside ananalysis of the questionnaires compiled by theTrust Unit. Ways to improve performance
were agreed and are being implemented, andprogress will be monitored during the year.

This report sets out the remuneration
received by the members of the Trust, theoperation of the Trust’s Remuneration andAppointments committee and its duties inrespect of Executive Board remuneration
strategy, the Director-General’s remunerationand the remuneration of the non-executive
Directors. The BBC is exempt from therequirements of the Directors’ Remuneration
Report Regulations 2002 and those of the
Financial Services Authority, but this reporthas been prepared as if those requirements
apply wherever the disclosure provisions
are relevant and applicable. The section
on remuneration received by the Trustees
is audited.

The Trust has made progress in its first fullyear of work in establishing the Trust as anindependent, evidence-based and open body
representing licence fee payers across the
UK. Meeting and committee structures
are generally functioning well and enabling
Trustees to contribute their individual skills
and experience effectively. All Trustees havedemonstrated their commitment to the role,
although the demands the work of the Trust
makes on their time are often extensive.

The members of the Trust receive a fee
determined by the Secretary of State forCulture, Media and Sport which is generally
reviewed annually. On 1 April 2007, all
Trustees in post received an increase to theirfees of 0.66% (rounded to the nearest £5),
as recommended by the DCMS.

The Trust has identified areas where somechanges could improve its effectiveness.
These included setting aside more time forstrategic discussions at Trust meetings andmEmBErS Of ThE TruST: rEmunEraTiOn
pOLiCyTrustees are additionally reimbursed for
expenses incurred on BBC business, forexample on travel or accommodation, in linewith the Trust’s Code of Practice. Some ofthese out of pocket expenses, together withsome support services booked centrally by
the Trust Unit, are classed as taxable benefits
by HM Revenue and Customs, such as travelfrom home to work. Any tax arising on
Trustees’ expenses is settled directly by theBBC. The higher taxable benefits for the
Chairman and Vice Chairman reflect theiradditional time commitments and duties,
their home locations and the requirements
to travel to their main BBC place of work.
Since July 2007, the Chairman has had
part-time access to a BBC driver and carwhen working in London on BBC business.
The table on page 40 shows the fees andtaxable benefits received by the Trustees
during 2007/08.
pensions

Under the terms of his appointment, theChairman is eligible to participate in a pension
scheme with benefits which mirror those of
the BBC Pension Scheme. Sir Michael Lyons
has elected not to participate in this scheme,
hence the BBC has made no pension
contributions. The Chairman instead receives
life assurance at a similar level of cover tothat of pension scheme members. In addition
he receives private medical insurance coverat the same level of cover as BBC senior
managers. Other than the Chairman, Trustees
are not eligible to participate in the BBC
Pension Scheme.

39

BBC GOVERNANCE“I didn’t realise the Trust
existed. Who pays theirsalaries?”

40

BBC GOVERNANCE“The Trust has already provedthat it has an important roleto play in maintaining the highstandards of public service
broadcasting in Britain and
I am glad to serve on it foranother two years.”
Richard Tait, Trustee, on being reappointed by
the DCMS for a further two years, 11 April 2008.

The value of the remuneration
fees received by the Trustees
is fixed by the DCMS but paidout of BBC funds.

Richard Tait, Trustee, in Glasgow.

rEmunEraTiOn rECEivEDThe remuneration of the members of the Trust during the year is shown below:
Fees
£000

Taxablebenefits
£000

Total
2007/08£000

Total
1 Nov 06 –31 Mar 073£000

Trustees
Chairman
Sir Michael Lyons1, 5

128

35

163

–

1 May 2007 30 Apr 2011

Vice chairman
Chitra Bharucha 2

81

22

103

65

1 Nov 2006 31 Oct 2010

National Trustees
Alison Hastings (England)
Rotha Johnston (Northern Ireland)
Janet Lewis-Jones (Wales)
Jeremy Peat (Scotland) 4

40
40
40
40

2
–
1
1

42
40
41
41

19
17
18
11

1 Nov 2006 31 Oct 2010
1 Nov 2006 31 Oct 2010
1 Nov 2006 31 Oct 2010
1 Jan 2005 31 Dec 2008

Trustees
Diane Coyle
Dermot Gleeson4
Patricia Hodgson
David Liddiment
Mehmuda Mian Pritchard
Richard Tait4

35
35
35
35
35
35

1
1
–
–
–
–

36
36
35
35
35
35

16
9
15
15
15
9

1 Nov 2006
1 Nov 2000
1 Nov 2006
1 Nov 2006
1 Nov 2006
1 Aug 2004

Total Trustees

579

63

642

209

Appointment term
Start dateEnd date

31 Oct 2010
31 Oct 2008
31 Oct 2010
31 Oct 2010
31 Oct 201031 July 2010

1 Sir Michael Lyons was appointed as Chairman on 1 May 2007 and his fees relate to the period 1 May 2007 – 31 March 2008.
2 Chitra Bharucha was Acting Chairman until Sir Michael Lyons was appointed and received fees for acting in that capacity from 1–30 April 2007.
3 The comparator figures for 2006/07 relate to the period 1 November 2006 – 31 March 2007 only as Trustees were appointed on 1 November 2006.
4 For their services as BBC Governors from 1 April 2006 to 31 December 2006, Dermot Gleeson, Jeremy Peat and Richard Tait were paid £26,000, £34,000 and £19,000 respectively as disclosed
in the 2006/07 Annual Report and Accounts. The figures shown above for their fees for 2006/07 relate to the period January – 31 March 2007 only.
5 The chairman also received life assurance at a cost of £3,951 for the period. His private medical insurance cost £1,792 for the period; this is a taxable benefit and is included in the taxable benefits
figure within the table.

Members of the Trust are not eligible for payments in respect of termination or compensation for loss of office.
Trustee terms of appointment

The remuneration table also shows the terms of appointment for each of the Trustees. Richard Tait’s term was due to end on 31 July 2008 but
in April DCMS announced that it had been extended until 31 July 2010.

BBC Annual Report and Accounts 2007/08

rEmunEraTiOn anD appOinTmEnTS
COmmiTTEE: COnSTiTuTiOn anD
OpEraTiOn

The Trust’s Charter gives the Trust and the
Executive Board specific responsibilities for the
remuneration of the Executive Board members.
The remuneration and appointments
committee is a sub-committee of the Trustand is responsible for setting the remuneration
strategy for the Executive Directors, and formaking recommendations to the Trust on the
remuneration (including the base pay and any
bonus) for the Director-General, and fees forthe non-executive Directors. The committee’s
membership is shown on page 48.
The Executive Board also has a remunerationcommittee and its constitution andresponsibilities are set out in Part Two.
The meetings of the Trust committee areadvised by members of the Trust Unit.
As required, the Director-General, theDirector, BBC People, the Reward Director
and the Chairman of the Executive Board’s
remuneration committee, attend for mattersrelating to other members of the Executive
Board. The Director-General is not present
when matters concerning his own
remuneration are considered.
Complying with the 2006 Combined Code, thecommittee takes specialist advice from external
professional advisers on remuneration matters.
The Trust committee has appointed Towers
Perrin to provide advice on remuneration
strategy and market information as required.

Remuneration should take
into account the unique
opportunities that working at
the BBC can offer.

Members of public at Trust research workshop.

One of the principles governing executive
remuneration set by the Trust’s remunerationcommittee.

ExECuTivE BOarD: rEmunEraTiOn
STraTEGy* The remuneration framework shouldreflect the different labour markets
for different posts

The Trust’s remuneration and appointments
committee sets the remuneration strategy
for Executive Directors which is operated
by the Executive Board’s Remunerationcommittee. The strategy is intended tooffer rewards that attract, motivate andretain the key talent required to lead the
BBC and to deliver outstanding public
service broadcasting while recognising
the BBC’s status as a publicly funded
corporation which must deliver value tothe licence fee payer. The main elementsof remuneration are base pay, annual bonus
and pension. The Trust has responsibility
for setting the Director-General’s basesalary and bonus accrual in line with thisstrategy and has assessed his performanceover the year. The salary and bonus
awards for the Executive Directors for
2007/08 were decided by the Executive
Board’s Remuneration committee. The
remuneration strategy and remuneration
received are set out in Part Two.
The Trust’s Remuneration and Appointments
committee has set a number of principles
against which the strategy should deliverin the coming year. These are that:* Remuneration should take into accountthe unique opportunities that working
at the BBC can offer* The BBC should follow and not lead themarket for executive pay* Executive remuneration should beconsidered alongside remuneration
strategy for the BBC as a whole
The Trust’s remuneration and appointments
committee will receive an annual reportfrom the Executive Board’s Remunerationcommittee to assure itself that the salaryand bonus awards made are in line withthe strategy the Trust has approved.
nOn-ExECuTivE DirECTOrS:rEmunEraTiOn pOLiCy

The Charter gives the Trust the responsibility
for approving the appointments of the
non-executive Directors and setting thepolicy for, and level of, their fees. In
December 2007 the Trust approved theappointment, including the terms of theappointment, for an additional nonexecutive Director to join the five who
were already members of the Executive
Board. The fees received by the nonexecutive Directors during 2007/08 are
set out in Part Two; the level of these fees
has not changed since they were initiallyappointed. In line with best practice, theTrust will review the level of fees every
other year. The first review will take placein 2008 and take effect from January 2009.

41

BBC GOVERNANCE

The Trust decides the
remuneration of the DirectorGeneral and sets the fees
for the BBC’s non-executive
Directors.

42

BBC GOVERNANCE

13

As trustees we are responsible
for ensuring the BBC delivers
high-quality services to all thepeople and all the communitiesof the UK.

Janet Lewis- Jones, Trustee for Wales, talking
with attendees at an Audience Council Wales
event in Cardiff.

The number of phone -ins undertaken by Trustees
on local radio during 2007/08 to hear local
audience views.

Council members are licence fee payers who
have an informed interest in the work of theBBC, and an understanding of the interests,
concerns and diversity of the audience in theirnations. Members are volunteers and do nothave any professional link with the BBC. Eachnational Audience Council is chaired by theTrust member for that nation. A summary ofeach Council’s annual report is on pages 34–35.

discrimination, promoting equal opportunity,and promoting good relations between
people of different racial groups. For eacharea the BBC publishes an equality scheme
and reports on its performance. The race,
gender and disability schemes have recently
been updated and will be published on the
Trust website.

Serving all audiences
The public is made up of many different
groups reflecting such things as age,geography, interests, religion and ethnic
background. As Trustees representing the
public we work to understand everyone’s
opinions and expectations. Informed by thiswork, we use our judgement to make thedecisions that set the BBC’s course.
One of our key priorities is to ensure the BBC
delivers fresh, high-quality services to all thepeople and all the communities of the United
Kingdom. We do this by looking in detail at
how the BBC is performing among different
audience groups and using what we discover
to set challenges for the BBC in the future.
We use extensive audience research to
inform our work, and we have also consulted
the public about the service licences andpurpose remits in which we set out what we
expect from the BBC. You can find out more
about the licences and remits and how they
help us govern the BBC on our website.
The Trust’s Audiences and Performancecommittee oversees this work. In the past
year it has discussed the performance of theBBC’s public services with the Executive,
and it has also had detailed oversight of the
in-depth service review of bbc.co.uk (seepage 28). The committee’s members arelisted on page 48.
auDiEnCE COunCiLS

Audience Councils are one of the key
ways we ensure the views of the public are
represented at the highest levels of the BBC.
There are four Audience Councils – one each
in England, Scotland, Wales and Northern
Ireland – with the work of the Council in
England assisted by a network of 12 regional
Audience Councils (see map on page 19).

CEnTraL rELiGiOuS aDviSOry
COmmiTTEE (CraC)

In the previous governance arrangements,
the CRAC advised the BBC and Ofcomon religion-related polices and coverage.
Membership was drawn from the main
Christian denominations and other religions
prevalent in Britain. The Trust considered
the future of CRAC at the end of 2007, andagreed that it did not sit well with the new
governance arrangements. The only formal
advisory bodies that the Trust has under theCharter are the four Audience Councils; andunder the new consultative model of the Trust,
all stakeholders can have their say throughconsultations on purpose remits, service
reviews, public value tests and other matters.
CRAC may continue in some form as anadvisory body to programme makers – this iscurrently being discussed on the Executive side.
prOmOTinG EquaLiTy anD DivErSiTy

The BBC has duties under equality legislationin relation to its ‘public functions’ – such things
as television licensing, the arrangements for
digital switchover, and some of the regulatory
functions of the Trust. The legislation – theRace Relations Act, the Disability Discrimination
Act and the Sex Discrimination Act – meansthat in these public functions the BBC musthave due regard to eliminating unlawful

The BBC has made good progress inmeeting its equality duties. Examples include
consultations with disabled people and withpeople from differing ethnic and cultural
backgrounds to ensure their needs are taken
into account in digital switchover. TV Licensing
has improved the accessibility of its televisionpublicity through subtitling, and is making
efforts to ensure that its marketing materials
accommodate the needs and issues
experienced by different groups of people.
The Trust now conducts diversity monitoring
when it holds public consultations or stages
public meetings; and we now also carry out
equality impact assessments when considering
work of a public nature.
EnSurinG a DivErSE wOrKfOrCE
in ThE BBC

As Trustees we are committed to ensuring
the BBC develops a diverse workforce.
The 2007/08 report from the Executive
on its arrangements for promoting equal
opportunities shows that although progress
is being made in some areas, there is stillwork to be done, particularly where blackand minority ethnic staff are concerned.
We will monitor developments closely.

BBC Annual Report and Accounts 2007/08“Ensuring impartiality is a key
priority for us. We have asked
all programme areas – notjust news – to consider this.”

Trustee Mehmuda Mian Pritchard, member of
Editorial Standards committee (Manchester
September 2007).

Ensuring impartiality
Impartiality is one of the cornerstones of
BBC editorial values. The public value it anddemand it. It underpins the public trust in
the BBC without which the BBC cannot
function. Impartiality depends on accuracy,balance, context, distance, even-handedness,fairness, objectivity, open-mindedness, rigour,self-awareness, transparency and truth. It is
about breadth of view and completeness.
Ensuring the impartiality of BBC output is a
key priority in our work of upholding editorial
standards. This work includes overseeing
the way the BBC sets and meets its own
editorial standards and the way it complies
with Ofcom’s broadcasting standards.
We approve the Executive’s editorial guidelines
setting out the values and standards we expect
of all BBC content. We are also responsible
for ensuring the Executive deals properlywith complaints. Where appropriate, we hearappeals. From time to time we commission
research to inform our editorial standards
work. In the past year we have commissioned
a review of the impartiality of the BBC’s
network news and factual coverage of the four
nations of the UK (see page 18). We have also
reviewed the Executive’s response to last year’s
serious editorial failures (page 11).
This work is managed through the Trust’s
Editorial Standards committee, which is also
the body that hears appeals on editorial
complaints. The members of the committee
are listed on page 48.
Editorial compliance

Every six months the Executive reports to
the Trust on editorial compliance issues andthe committee scrutinises these reports. In
2007/08 the committee noted 56 breaches
of editorial compliance upheld either by BBC
management or by the committee itself. This
compares with a total of 38 in the previous
year. While this represents a 47% increase,

these accounted for just 0.045% of complaints
received by the BBC.
The committee considered a number of
impartiality complaints. Three of these related
to Horizon: Nuclear Nightmares, broadcast
on BBC Two in July 2006, in which scientificevidence of the effects of nuclear radiation
was discussed without sufficient reference
to alternative opinions. The committee noted
the importance of ensuring the impartialityof all output – not just news – and asked all
programme areas to give consideration to this.
The committee also upheld a number ofcomplaints about editorial inaccuracies in BBC
online journalism. While these did not amountto serious editorial breaches, they highlighted
the need for web teams to acknowledge
errors pointed out by users and makecorrections promptly. The committee asked
the Executive to encourage web teams to
respond more effectively to these initial
complaints to prevent their escalation throughthe complaints process.
Ensuring editorial integrity and independence
can pose particular challenges for BBC
programme makers when they work withexternal partners. One of BBC One’s mostsuccessful programmes in 2006 was How
Do You Solve a Problem Like Maria? – a talentcontest in which viewers helped choose thestar for a commercial West End productionof The Sound of Music. In July 2007 thecommittee considered a complaint that the
programme had breached BBC guidelines.
The complaint cited the involvement of
the producers of the West End show,
Andrew Lloyd Webber and David Ian,
in the BBC production.
In deciding not to uphold the complaint, thecommittee noted that as this was the firstprogramme of its kind it was likely to test theguidelines and that, given the programme

format, it would have been impossible to
avoid some degree of product prominence for
the West End show. Although some mistakes
had been made initially, the production team
had taken steps to address them and it wasappropriate to give some latitude to innovative
programmes to put mistakes right.
The committee receives reports from the
Executive on those breaches of the guidelinesthat the Executive itself has acknowledged.
This allows the committee to determine
if any further action is required. Last year
the Executive reported breaches of theimpartiality and accuracy guidelines in two
editions of Newsnight broadcast in Januaryand June 2007 and as a result the committee
asked to see new guidance on polls, votes
and straw polls, and published its findingson the breaches.
The Executive also reported a breach of
the guidelines regarding the use of the mostoffensive language pre-watershed during theLive Earth concert broadcast in July 2007.
The committee was concerned that following
similar editorial breaches during the Live 8
concert in 2005, Ofcom had noted that the
BBC had offered to consider using a delay
in future to prevent similar breaches, but
a delay was not used for Live Earth. The
committee decided that any such further
breaches of the guidelines would be
unacceptable. The committee also notedthat the explanation for not using time delay
provided by the Executive on the complaints
website was inaccurate in detail, andrequested changes.
Swearing on air during Live Earth was also thesubject of a sanction issued by Ofcom against
the BBC in April 2008. Ofcom required the
BBC to publish an on-air finding. Ofcom
upheld a total of 17 programme standards
complaints against the BBC and resolved
three others. These included a sanction

43

BBC GOVERNANCE

As trustees we have
responsibility for guarding theeditorial independence of the
BBC and making sure it isbeholden to no outside interest,
whether political or commercial.

44

BBC GOVERNANCE

57

The BBC can afford to be
neutral because they do nothave to pander to commercialorganisations.

Member of public at Trust research workshop.

The number of editorial appeals heard by
the Trust – of which two were upheld andseven partially upheld.

against the BBC regarding a competition on
Blue Peter in November 2006, for which Ofcom
fined the BBC for the first time. The Editorial
Standards committee noted that a numberof breaches related to matters of fair dealing
and consent, and is looking to the Executive
to ensure that programme makers deal
straightforwardly with contributors.

The Editorial Complaints Unit received
270 complaints in 2007/08, up from 187 in
2006/07, and upheld 47 of these in full orpart. The committee was pleased to notethat despite the rise in complaints, the unit
improved its turnaround times and dealt with
74% of complaints within the target timecompared with 42% last year.

volume of editorial complaints received at
Stage 1

In 2008/09 the committee will continue toscrutinise the Executive’s efforts to ensure
editorial compliance of all output. Thereis a particular need to ensure that in secretrecordings any obscuring of identities iseffective. The Executive must also continue
to monitor prominence across BBC television
output to ensure the BBC’s editorial
independence and integrity. The committee
will continue to monitor the work of the
Executive’s Complaints Management Board.
This board, which is chaired by the Deputy
Director-General and has senior management
representation from each programme
division, has the authority to order changes inprogramme areas and to put in place corrective
measures to prevent repetition of mistakes

The committee itself heard 57 appeals in
2007/08, of which two were upheld andseven partly upheld. The increase in appeals,
as well as the complexity of the complaints,
affected the committee’s own turnaroundtimes. It regrets this and is seeking to improve
its performance in 2008/09. The ESC has
always measured the time it takes to consider
a complaint from the date a request for an
appeal has been received to the date thefinding was posted to the complainant. Under
this measure the ESC dealt with 16% ofappeals within its 16-week target turnaroundtime. The committee’s published terms ofreference, however, calculate turnaroundtimes from the date the committee agrees
to take an appeal to the date it hears anddecides the matter. This measure of thetime taken to hear complaints disregards
preparatory work necessary to determine
whether a complaint falls within the ESC’sremit as well as administrative procedures
following the hearing involved in publishing
the finding. On this basis the ESC determined
67% of appeals within 16 weeks.

EDiTOriaL COmpLainTS

The BBC process for handling editorial
complaints has three stages. At the first stage
complaints are dealt with by the programme
team or by BBC Information. Complainantsdissatisfied with this Stage 1 response cantake their complaint to either the independent
Editorial Complaints Unit or to a senior memberof the appropriate BBC division. Complainants
who dispute this Stage 2 ruling can appeal to
the Editorial Standards committee (ESC),
which hears those complaints it considers
appropriate and which are of substance.
The BBC received 123,529 Stage 1 complaints
in 2007/08, and the target of responding to
93% of them within 10 days was met. The
ESC was pleased to note the improvementfrom 90% last year.

improving complaints handling

During 2007/08 the editorial standards
committee developed a new complaints
framework (see panel on facing page),which will be published in July 2008. The
committee will monitor the effectivenessof the new processes, which are designed
to make complaints handling more efficientand transparent.

Complaints answered

05/06

150,143

06/07

123,69307/08

123,529

findings of editorial appeals heard by the
Editorial Standards committee
Upheld

06/07
07/08

2
2

Partially upheld

06/07
07/08

4
7

Not upheld

06/07
07/08

26
48

Training

The Executive reports to the Trust annuallyon how its arrangements for training staff
help deliver the public purposes, as well as
contributing to the wider broadcasting
industry. We welcome the investment madein the last year to training a highly skilledworkforce, particularly the focus on editorial
standards where we believe the BBC canhave a key role in supporting standards
across the industry. The full report, and theTrust’s commentary, are available on the
Trust’s website.

BBC Annual Report and Accounts 2007/08

Jeremy Peat, National Trustee for Scotland,
speaking at the time of the Trust’s approval of
the Gaelic digital service, 28 January 2008.

The Trust has a duty to takeaccount of the competitive
impact of the BBC’s activities
on the wider market.

Jeremy Peat, National Trustee for Scotland.

BBC’s economic power
The BBC is a major presence in the UK
media sector. It spent £3.5 billion in 2007/08(£3.3 billion in 2006/07), including £1.2 billion
spent outside the BBC on independent
productions, artists and other programme
resources (£1.1 billion in 2006/07). The BBC
is spending more outside London – £994
million was spent in the nations and regions in
2007/08 (£856 million in 2006/07). We knowthat the public places a high value on thebreadth of choice that springs from a thriving
UK media market and it is clear that the public
interest lies in maintaining this breadth of choice.
Some BBC activities may produce a positive
public value, but have a negative impact
elsewhere – for example on commercial
broadcasters or media suppliers. In orderto ensure that the right balance is struck
when there are competing interests, weapply a public value test before we consent
to the BBC starting a new service or making
a significant change to an existing service.
The test considers both positive or negative
market impact.
The BBC undertakes some activities on acommercial basis. The aim is to generate
revenue to reinvest in the public services tothe benefit of the public. Commercial activity
cannot take place directly within the BBC
Corporation but must be carried out throughcommercial subsidiaries. It is our duty as
Trustees to make sure the BBC conducts
its commercial trading activities fairly andto prevent the BBC from using its economic
power in ways that might stifle enterpriseor initiative from elsewhere. We set theframework in which new BBC commercial
services are approved and overseen. There
are four criteria BBC commercial services
must meet. They must:* Fit with the BBC’s public purposes activities

nEw SErviCES apprOvED By
ThE TruST* Exhibit commercial efficiency

high definition services* Not jeopardise the good reputation of the
BBC or the value of the BBC or the valueof the BBC brand* Comply with BBC fair trading guidelines andin particular avoid distorting the market
While the Trust sets the framework andrequires reporting against it, under theframework most operational decisions aretaken either by the Board of BBC Worldwide(the BBC’s main commercial subsidiary) orby the Executive Board. In a small proportionof cases Trust approval is required for new
service proposals. In October 2007 the Trust
approved proposals to launch bbc.com, acommercial venture to offer advertising on
the BBC’s international-facing website forusers outside the UK, and BBC Worldwide’s
acquisition of a 75% stake in the Lonely Planet
travel guide business.
We are also responsible for approving theBBC’s policy on fair trading and for holding the
Executive to account for compliance with thispolicy. Where appropriate we hear appeals
on fair trading complaints.
The Trust’s public value and fair trading
committee plays a key role in this work.
This committee was formed in January 2008
when it took over the duties of the previous
fair trading committee and public value
steering group. In particular the committee
is responsible for monitoring fair trading
compliance, hearing appeals and undertaking
public value tests. The members of thiscommittee are listed on page 48.

In November 2007 we approved thelaunch of a BBC high definition television
channel. The channel is available on Freesat,
and it will launch on cable and Sky satellite
as soon as possible, and on Freeview assoon as this is feasible.
We were satisfied that the public value
generated by the new service would be
sufficiently high and that there wasunlikely to be a negative impact on themarket. We concluded that when theservice launched on Freeview it would be
best if this could be done in collaboration
with other public service broadcasters.
Gaelic digital service

In January 2008 we gave conditional
approval to the launch of a Gaelic digital
service. The service – a partnership
between the BBC and the Gaelic Media
Service – will launch later this year on cable,
satellite and broadband but not yet on
Freeview. We concluded the service would
create value for audiences, particularly in
Scotland, although we asked for the service
to have a greater educational focus. It was
too early to judge whether the public value
created would justify carriage on Freeview,
taking into account the cost and thepotential audience.
We will, however, carry out a performance
review before digital switchover in themain Gaelic speaking regions of Scotland in
2010/11. Carriage on Freeview will be one
option we will consider then. The review
will examine whether the service is providing
value for money for licence fee payers anddelivering to the intended audience in thebest way.

45

BBC GOVERNANCE“The Trust believes this service
will offer public value and be
culturally significant for bothGaelic speakers and Scotland
as a whole.”

46

BBC GOVERNANCE

3All BBC trading activities arecovered by the BBC’s fairtrading regime.

TruST OvErSiGhT Of fair TraDinG
arranGEmEnTS

All BBC trading activities are covered by theBBC’s fair trading regime which is designed
to ensure that the BBC’s commercial andtrading activities are conducted fairly. The
BBC recognises it plays a unique role in the
media market and has chosen to abide byconstraints additional to those imposed on
it by UK and European competition law andby European law on state aid.
The Trust is required by the Charter toadopt a statement of policy on fair trading
and to hold the Executive Board to accountfor compliance with it. The BBC Trust’s Fair
Trading Policy and BBC Trust’s Competitive
Impact Codes came into effect on 1 July 2007.
Prior to 1 July 2007 the Trust continued tooperate under the rules of the previous fairtrading regime. For the period covered by thereport the BBC complied with its published
Fair Trading Commitment for the period from
1 April 2007 to 30 June 2007 and with therequirements of the BBC Trust’s Fair Trading
Policy and Competitive Impact Codes and
BBC Management’s Fair Trading Guidelines forthe period from 1 July 2007 to 31 March 2008.
Responsibility for day-to-day fair trading
compliance by the BBC and for handling fairtrading complaints lies with the Executive
through its fair trading compliance committee.
Responsibility for monitoring fair trading
compliance and for handling fair trading
appeals lies with the Trust’s public value andfair trading committee. This began workin January 2008 succeeding the Trust’s fairtrading policy and appeals committee,
which formerly handled these matters.
The members of both committees arelisted on page 48.

Diane Coyle, Trustee, listening to calls to BBC
Information, Belfast.

The number of fair trading appeals commenced
during 2007/08.

The Trust believes the BBC’s Fair Trading
Commitment, the BBC Trust’s Fair Trading
Policy and Competitive Impact Codes and
BBC Management’s Fair Trading Guidelines
are consistent with the requirements of theCharter and Agreement. Through thework of its committee, the Trust has gained
reasonable assurance that the controls andprocedures designed to ensure these policies
are applied throughout the BBC have been
operating effectively throughout the year.
The Trust will continue to review the policies
in the context of the dynamic media market.
The BBC Executive reports in Part Two
on its own measures to ensure compliance.

inDEpEnDEnT fair TraDinG auDiTOrS’rEpOrT TO ThE BBC TruST fOr ThE yEar
EnDED 31 marCh 2008

In 2007 the Trust considered one appeal
and upheld it in part. In the current financial
year the Trust is considering three fair trading
appeals – as these are ongoing we cannot
report on the findings. Findings of all appeals
are published on our website.

Our instructions for this engagement, including
the scope of work to be undertaken, wereagreed with the BBC Trust’s fair trading policy
and appeals committee which in January 2008
was succeeded by the BBC Trust’s public value
and fair trading committee. These instructions
include agreement that our audit should be
conducted in accordance with International
Standard on Assurance Engagements (ISAE)
3000, agreement on the limit of our liability inrespect of this work and agreement that our
duty of care in respect of this work is solely to
the BBC Trust, as a body. We are satisfied thatthe agreed scope of our audit was sufficient toenable us to express the opinion set out below.

The Trust is advised by independent
fair trading auditors and advisers. The
independent auditors conduct an annual
fair trading audit to determine whether the
BBC has established and applied a system ofinternal controls which provides reasonableassurance that it has complied with its
published Fair Trading Commitment during
the period from 1 April 2007 to 30 June 2007
and with the requirements of its Fair Trading
Policy, Competitive Impact Codes and the
Fair Trading Guidelines for the period from
1 July 2007 to 31 March 2008. The audit
includes a wide programme of reviews, tests
and evaluations across all BBC divisions.

We have audited, in our role as the BBC’s Fair
Trading Auditors, the system of internal controls
established within the BBC to provide the
BBC Trust with reasonable assurance that the
BBC has complied with its published Fair
Trading Commitment during the period from
1 April 2007 to 30 June 2007 and with therequirements of its Fair Trading Policy,
Competitive Impact Codes and the Fair Trading
Guidelines for the period from 1 July 2007 to
31 March 2008 (‘Fair Trading arrangements forthe year ended 31 March 2008’).

respective responsibilities of BBC Trust,management and auditors

The BBC Trust is responsible for ensuringthat the BBC meets all the requirements ofcompetition law and trades fairly. They arealso responsible for preparing the section
within the BBC’s Annual Report entitled‘Trust oversight of fair trading arrangements’
which includes a statement on fair trading.

BBC Annual Report and Accounts 2007/08

External auditors provide an
opinion on whether the BBC
has established and applied asystem of internal controls toensure compliance with the fairtrading regime.
Members of public at BBC Trust research workshop.

The BBC’s management is charged by the
BBC Trust with establishing and operatinga system of internal controls designed toensure compliance with the BBC’s Fair Tradingarrangements for the year ended 31 March
2008 including identifying and assessing risks
that could threaten fair trading and designingand implementing responses to such risks.
As the BBC’s Fair Trading Auditors, it is our
responsibility to form an independent view,
based on our audit work, as to the extent towhich the BBC has established, and applied,a system of internal controls which provide
reasonable assurance that it has compliedwith the requirements of its Fair Tradingarrangements for the year ended 31 March
2008. We have reviewed specific decisions
reached by the BBC on fair trading issues
only in so far as this is necessary to form an
opinion on the application of the system ofinternal controls. Our audit was not designed
to express an opinion on the quality of thespecific decisions taken by the BBC on fairtrading. We have also reviewed whether the
BBC Trust’s statement on fair trading reflects
our findings of the BBC’s compliance with its
system of internal controls, and we report
if it does not.
Our opinion has been prepared for and only
for the BBC Trust, as a body, in accordancewith our instructions which were agreed with
the Trust Unit of the BBC on behalf of the
BBC Trust’s fair trading policy and appeals
committee (which in January 2008 was
succeeded by the BBC Trust’s public value andfair trading committee). We do not, in giving
this opinion, accept or assume responsibility
for any other purpose or to any other person
to whom this report is shown or in to whose
hands it may come, and no other person shallbe entitled to rely on our opinion, save where
expressly agreed by our prior consent in writing.

Our approach

OpinionWe have performed a reasonable assurance
engagement as defined in ISAE 3000.
The objective of a reasonable assurance
engagement is to perform such procedures as
to obtain information and explanations which
we consider necessary in order to provide
us with sufficient appropriate evidence toexpress a positive conclusion on the BBC’s
compliance with its Fair Trading arrangements
for the year ended 31 March 2008.

Based on the results of our procedures,in our opinion the BBC has established andhas applied a system of internal controlsthat provide reasonable assurance thatit has complied, in all material respects,
with the requirements of the Fair Tradingarrangements for the year ended
31 March 2008.

Our work consisted of enquiry and testing
to enable us to form a view as to whether
an appropriate system of internal controls
was in place. We also reviewed the processingof a sample of material transactions to provide
us with reasonable assurance that the system
of internal controls had been applied.

We draw attention to the section of the
BBC Annual Report headed the ‘Executive
Statement on Fair Trading’ which explains thata revised Fair Trading regime came into effecton 1 July 2007 and that during the period
1 July 2007 to 31 March 2008 the BBC
has applied a combination of both old andupdated procedures rather than implementing
the revised regime as at 1 July 2007. Having
reviewed the matter, the BBC is satisfied thisapproach has operated effectively to ensurethat its Fair Trading obligations have been met
for this transition period. Our opinion is not
qualified in relation to this matter.

inherent limitations

As with any system of control it is notpracticable to ensure that no errors or
irregularities have occurred without being
detected. Our audit work was designed togive the BBC Trust reasonable but not absoluteassurance as to the adequacy of the system
of internal controls which were in place andbeing applied to deliver compliance with therequirements of its Fair Trading arrangements
for the year ended 31 March 2008. Further,because Fair Trading issues require judgements
which ultimately might be tested in a court oflaw, competition authority or elsewhere, there
is always a risk of challenge even where thesystem of internal controls has been followed
and decisions have been taken with thegreatest care.

Emphasis of matter – Transition to newfair trading regime

pricewaterhouseCoopers LLp
Chartered Accountants
19 June 2008

47

BBC GOVERNANCE

The auditors’ opinion on the
BBC’s system of fair trading
controls is unqualified.

48

BBC GOVERNANCE

The full BBC Trust usually
meets once a month andminutes of these meetings are
published on our website.

The Trust does much of its
work through a number ofcommittees which report tothe full Trust.

Trust meeting May 2007, Council Chamber,Broadcasting House, London.

Other regulatory
information
The full Trust usually meets monthly but we do much of our work in small committees of Trustees who report back to the full Trust. These
committees have decision-making powers. The members of the committees, their chairmen and their attendance during the year are shownin the table below.
TruSTEE mEETinG aTTEnDanCE

1 April 2007 to 31 March 2008

Number of meetings

Trust

Editorial
Standards
Committee

FinanceandStrategy
Committee

14

14

13

Chairman
Sir Michael Lyons1

12/12

Vice chairman
Chitra Bharucha

13/14

11/14

National Trustees
Alison Hastings (England)
Rotha Johnston (Northern Ireland)
Janet Lewis-Jones (Wales)
Jeremy Peat (Scotland)

12/14
13/14
14/14
13/14

2/3

Trustees
Diane Coyle
Dermot Gleeson
Dame Patricia Hodgson
David Liddiment
Mehmuda Mian Pritchard
Richard Tait

13/14
13/14
14/14
14/14
11/14
13/14

10/11

Audience
Councils
Committee

PublicValue andFair
Trading
Committee

PublicValue
Test
Steering
Group3

Fair
Trading
PolicyandAppeals3
Committee

8

3

3

8

4

7/84

3/32

6/8

3/3
3/35
3/3
3/3

Remuneration
AudiencesandandAppointments Performance
Committee Committee

3

Nations
Audience
Councils†

3/3
3/32

12/13
13/13
13/13

3/3

13/13
13/13

2

14/14
11/14
14/142

2/3

7/8
6/6
8/82
4/4

6/8
3/3

4/4

3/3

7/8

4/4

3/32

8/8

3/4

3/3

8/8

3/3

4/8

6/62
10/102
10/102
11/112

2/4

1 Appointed 1 May 2007.
2 Committee chairman.
3 In January 2008 the Public Value and Fair Trading committee replaced the Fair Trading Policy and Appeals committee (chairman: Jerermy Peat) and the Public Value Test Steering Group(chairman: Diane Coyle).
4 Chitra Bharucha was chairman until April 2008.
5 Rotha Johnston was chairman until May 2008.

† The Audience Councils in each Nation are not committees of the Trust but separately constituted advisory bodies, chaired by the respective
National Trustee.

BBC Annual Report and Accounts 2007/08

Chitra Bharucha, when launching the BBC Trust
consultation on complaints, 29 October 2007.

Under the new complaints
system the Trust will consider afar greater range of complaints
on appeal than previously.

Young people giving their views on the BBC to
the Trustees in Belfast.

STaTEmEnT Of TruST rESpOnSiBiLiTiES
in rESpECT Of ThE annuaL rEpOrT
anD aCCOunTS

STaTEmEnT Of DiSCLOSurE Of
infOrmaTiOn TO auDiTOrSThe Charter requires that an annual
report and statement of accounts is
prepared and audited. The Executive
Board’s responsibilities are detailed in its
responsibility statement on page 95 of Part
Two of this Annual Report. In summary, theExecutive Board is responsible for preparing
the financial statements and statementsof compliance with applicable corporate
governance codes and remuneration
regulations and delivering these to theTrust within Part Two of the Annual Report.

The Trustees who held office at the dateof approval of the Annual Report andAccounts confirm that, so far as they areeach aware, there is no relevant audit
information in respect of the Trustgovernance disclosures, remuneration
disclosures and Trust statement ofexpenditure of which the BBC’s auditors
are unaware; and each Trustee has taken
all the steps that they ought to have taken
as a Trustee to make themselves awareof any relevant audit information and toestablish that the BBC’s auditors areaware of that information.

In preparing its associated corporate
governance disclosures the Executive
Board has elected to comply with the 2003
Financial Reporting Council Combined
Code and the disclosure provisions of theCompanies Act 1985 and, where applicable,
the Financial Services Authority Listing
Rules which apply to a company listed on
an EU regulated market.
In order to comply with those requirements
the annual report must also include
disclosures on the governance arrangementsof the Trust as well as those of the
Executive Board. These disclosures, which
are audited, are included in Part One of
the Annual Report and are the responsibilityof the Trust.
Additionally, the Charter requires the Trustto prepare a statement of its expenditureand include this within Part One of theAnnual Report.

This statement was approved by the Truston 19 June 2008.

COmpLainTS framEwOrK

An open and fair BBC must respondeffectively and justly to complaints, andthe Charter requires the Trust to set andpublish a framework and procedures
setting out how the BBC will do this.
During 2007/08 we adopted a newcomplaints framework. This sets out ageneral complaints process, as well as
specific procedures for complaints about
editorial, licence fee and fair trading issues,
as well as for complaints about the Digital
Switchover Help Scheme. There is also a
process for complaints against the Trust.
Before adopting the new framework
we consulted the public and as a result
made a number of changes to our
original proposals.
The new system will mean that appeals
to the Trust can be taken more quickly
and that, for the first time, the Trust
will consider appeals about licence feecollection. Overall the Trust will consider
a far greater range of complaints on appeal
than it has done in the past. This will
strengthen our ability to ensure that the
BBC responds effectively to complaints.

49

BBC GOVERNANCE“The Trust wants to ensurethat complaints are received
via a system which is open
to everyone, consistent in
its fairness to all, and simple
to follow.”

50

THE TRUST ’ S PLANS FOR 2008/09

The Trust’s plansfor 2008/09
Making the Trust work betterfor audiences
We want every part of the BBC to be more
responsive to audience needs, and this applies
to the Trust itself. We want to be open andtransparent in everything we do. We set out
on our website what we do and why. We
frequently consult audiences – and we’vetaken account of comments that the language
we use in our consultations is sometimes too
technical. We’ll try to do better in future. We
plan to keep audiences and other stakeholders
better informed by setting up an electronic
mailing list. And we also have a project under
way to ensure we make the best use of thework done by the Trust’s Audience Councils.
It is important that the Trust and the Trust
Unit that supports our work are effective
and efficient. We review the performanceof the Board every year and we will review
the operations of the Trust Unit to ensure
it delivers value for money.

In our first full year as Trustees we haveestablished open and transparent systems; set
the strategic course for the BBC over the next
six years; worked with the Director-General
to remedy some serious editorial failings; andconducted public value tests before agreeingsome new services, including BBC iPlayer,
a high definition TV channel, and the new
Gaelic digital service.
We have placed audiences at the centre ofeverything we do – for example, by consulting
the public before finalising the purpose remits
that give the BBC Executive strategic direction.
We have also agreed a stringent efficiency
programme with the Executive to ensure
licence fee payers receive good value for
their money.
In the year ahead we will continue ourefforts to help the BBC deliver high quality,
distinctiveness, efficiency and value for money.
The table opposite gives some headlines ofwhat we did last year. It also shows our plans
for the coming year – on which we haveconsulted the public. We will report back on
how we performed against these plans innext year’s report.

BBC Annual Report and Accounts 2007/08

Stewardship of thelicence fee

Effectively promoting theBBC’s public purposes

To ensure that the BBC works in the public
interest as effectively as possible and is as
responsive as possible to audience needs.

To ensure that the BBC’s overall aim is topromote the six public purposes set out for
the BBC by Parliament.

Trust role
To ensure that the licence fee income is spentin ways that meet audience expectations anddeliver value for money.

2007/08 priorities and outcomesrEpriOriTiSaTiOn

puBLiC vaLuE TESTS

purpOSE rEmiTS

The Executive recast its budgets following thelicence fee settlement and produced a new
six-year strategic plan known as ‘Creative
Future’. We led this reprioritisation and madesure the new plan meets licence fee payers’
expectations and priorities.

We carried out two public value tests (seepage 45). These help us ensure that when the
BBC embarks on a new activity, proper,
account is taken of the potential value forlicence fee payers and impacts on otherparticipants in the market.

Purpose remits set out how we expect the
BBC to deliver each of its Public Purposes.
Before publishing our final versions of theremits in 2007/08 we consulted the public
and took account of their views.
SErviCE LiCEnCES

We carried out an extensive consultation
to find out how the public want us to engage
with them (see page 34). This will help us makeit as easy as possible for audiences to maketheir views on key BBC issues known to us.

Service licences set out what we expectfrom each BBC service and how we expect
them to contribute to delivering the Public
Purposes. Before we published the final
versions in 2007/08 we consulted the
public and took account of their views.

COmpLainTS framEwOrK

SErviCE rEviEwS

It is important that anyone unhappy withanything the BBC does can complain about
it easily – and be sure that the complaint will
be taken seriously and dealt with in a timely
manner. We consulted publicly on a newframework for handling complaints and wewill implement it in 2008.

We review each BBC service at least once
every five years. In 2007/08 we undertooka review of bbc.co.uk

vaLuE-fOr-mOnEy STuDiES

EDiTOriaL STanDarDS anD imparTiaLiTyrEmEDyinG pErfOrmanCE GapS

We commissioned four value-for-money
studies (see page 30) and a review of BBC’srole in the talent market. These help us
ensure the BBC is generating the greatest
value possible for its audiences.

Following the editorial lapses revealed in 2007
we commissioned a review of management’s
actions to remedy matters. We will publish
this review later in 2008. We will also publish
an impartiality review of network news
coverage of the nations.

In 2007 we consulted the public about how
well the BBC was performing against its public
purposes. This revealed gaps in performance,
particularly in the provision of distinctive
programmes and content. We have challenged
the Executive to remedy these gaps andmonitoring their performance here will bea major focus of our work in coming years.

auDiEnCE EnGaGEmEnT2008/09 priorities

vaLuE fOr mOnEy STuDiES

We will examine:* Production costs in radio to ensure bestvalue is being achieved for the £550 million
spent each year
* Management of strategic contracts toensure the BBC is making sure those towhom it has contracted out £800 million
a year of support costs are working
together effectively* Asset management to ensure the BBC
employs its major studio and transport
resources across the UK in the mosteffective manner
We will also monitor the progress of digital
switchover and the targeted help scheme,
and carry out a public consultation about
licence fee collection.

nETwOrK SuppLy rEviEw

A review of network supply – examining theamount of content the BBC produces in eachnation and region has begun and the results
will be published in 2008. We will also publish
the results of our review of the economic
value of the BBC to the UK.
rEviEw Of ThE winDOw Of CrEaTivE
COmpETiTiOn

The Window of Creative Competition was
created to open more BBC programmecommissions to independent producers.
We will publish a review of its effectiveness.
We will also commission reviews of radio
and online commissioning and of the BBCfilm strategy.

SErviCE rEviEwS

Our service reviews in 2008/09 will lookat BBC radio, television and online services
for children and young people.

51

THE TRUST
TRUST’S’ S PLANS FOR
2008/20092008/09

Upholding licence fee
payers’ interests

52

CONTACT THE BBC TRUSTContact the
BBC Trust
The BBC welcomes comments or queries on any
aspect of its operations.
BBC Trust
Any comments or questions you have about thework of the Trust should be sent directly to:
BBC Trust Unit
Room 211
35 Marylebone High Street
London W1U 4AA
Telephone: BBC Informationline 03700 103 100*
Textphone: 08700 100 212(Lines open Monday to Friday between 9.30am
and 5.30pm)
Email: trust.enquiries@bbc.co.uk
Programme and editorial complaints
If you think a BBC programme or website has
fallen below the BBC’s editorial standards you
should contact:
BBC Complaints
PO Box 1922
Glasgow G2 3WT
Telephone: 03700 100 222
Textphone: 08700 100 212
Website: bbc.co.uk/complaints

BBC operations
Comments or queries about the BBC’s operations
are best dealt with by the relevant BBC
department. Contact:
BBC Information
PO Box 1922
Glasgow G2 3WT
Telephone: 08700 100 222*
(24 hours a day, seven days a week)
Textphone: 08700 100 212
Fax: 0141 307 5770
Website: bbc.co.uk/info* Calls to this number may be monitored or recorded
for training purposes.
BBC Audience Councils
The Audience Councils in England, Northern
Ireland, Scotland and Wales help the BBC Trust tounderstand the needs, interests and concerns ofaudiences throughout the UK, and to identify ways
in which the BBC can better serve its audiences.
If you want to contact the Audience Councils you
can write to them at the addresses below:
Head of Governance and Accountability Scotland
BBC Audience Council Scotland
Zone G.11
40 Pacific Quay
Glasgow G512 1DA

Head of Governance and Accountability Wales
BBC Audience Council Wales
Room E5108
BBC Broadcasting House
Llandaff
Cardiff CF5 2YQHead of Governance and Accountability
Northern Ireland
BBC Audience Council Northern Ireland
BBC Broadcasting House
Ormeau Avenue
Belfast BT2 8HQHead of Governance and Accountability England
BBC Audience Council England
BBC Birmingham
The Mailbox
Birmingham B1 1RF
Other information
This BBC Annual Report and Accounts
is available in public libraries throughout the UK
and on the BBC Trustees’ website at bbctrust.co.uk.
It is also available in Welsh, in an audio version andin Braille. Annual Reviews for BBC Scotland, BBC
Wales, BBC Northern Ireland, BBC English Regions
and the BBC World Service are also published.

OT H E R I N F O R M AT I O N

The following photographs have been
reproduced courtesy of:Mike Abrahams and Murray Langton
Front cover
Andrew Catterall
Page 2 (Sir Michael Lyons)Page 12 (BBC Trustees)
All other photographs reproduced courtesyof the BBC Trust

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