91热爆

Speech by Rona Fairhead, Chairman of the 91热爆 Trust, to the Trust event on 91热爆 funding held at London School of Economics

Thank you Kamal. And thank you to all of you for joining this important public consultation which will form part of our Charter Review response. Today we are addressing funding.

It would be easy to focus solely on the mechanics of funding the 91热爆. But I hope we won’t do just that today. Instead I hope we can look at the bigger picture, of that unique relationship between the public, the 91热爆 and the vital role that the funding mechanism plays.

I witness the unique relationship between the 91热爆 and the licence fee paying public every day. Working within the Trust, the representative body of the licence fee payer, I know first-hand that the current structure provides a direct line between the licence fee payer and the 91热爆.

Put simply, the public pay for the 91热爆 – it is their 91热爆 and it is therefore quite right that they demand the highest standards from the broadcaster. They want a universal service – one where everybody pays so everyone benefits, one which is widely available, free at the point of use and able to bring the nation together for special events.

It also means that they demand the highest levels of accountability and good value for money. The role of the Trust is to ensure that the licence fee payers get the 91热爆 that they want, not politicians nor vested interest. But times are changing. Media consumption habits are changing and this is challenging the status quo.

Charter Review and the licence fee settlement

And at this time of Charter Review, it is quite right that the Government is asking series of questions about the 91热爆 of the future – and within that the funding of the 91热爆. And it is those questions which I hope we will explore in some depth together today.

Now, in a perfect world, we would have settled the mission and purpose of the 91热爆, we would have determined its scale and its scope, and only then would we have begun to talk about both the level of, and the mechanism for, funding. But, as you will know, the level of funding was set earlier this summer in a settlement which tested the 91热爆’s independence, and our resilience.

The government decided that the licence fee should fund free licences for over-75 year olds. The effect of this was mitigated in a number ways which were negotiated by the Trust and the Executive on behalf of licence fee payers. These included:

• An end to top-slicing of the licence fee for broadband infrastructure
• Modernisation of the current arrangement to close the iPlayer loophole    
• And an agreement to increase the licence fee in line with CPI over the next Charter period provided the 91热爆 retains something like its current scope

The financial framework will allow the 91热爆 to have a strong sustainable future but it is a tough settlement and will require some difficult decisions. And the Trust has been clear that the process was highly unsatisfactory. The 91热爆’s independence is something that people really look to and admire both at home and abroad. When governments seek to alter the 91热爆’s funding, be that through the level of funding that the Corporation receives, or by putting additional burdens on it, as has happened previously, without a proper process, they threaten to undermine the 91热爆’s independence. 

In the next Charter there must be greater protection built in for the 91热爆 - a transparent and clear process, some form of parliamentary scrutiny and there must be the opportunity for the public to have their say.

The Trust’s consultation

But although the level of funding has now been set, a number of questions relating to funding remain outstanding. And the public’s answer to these must be known and articulated - that is why we’re holding events like today's, and why over the summer the Trust consulted widel,y with over 40,000 responses from members of the public.

We also commissioned independent, nationally representative, research, to examine attitudes towards the various funding options set out in the DCMS Charter Review Green Paper. Today we have published an annex of evidence of public attitudes towards funding of the 91热爆, which you can . I wanted to share a snapshot of these findings:

We wanted to understand public attitudes and opinions of the three different funding model options set out for consideration by DCMS. These were,

1. a reformed licence fee, modernised to include the iPlayer;
2. a universal funding model, such as a household levy;
3. or a combination of public funding and subscription.

Now in our consultation, a fairly strong view came back: the public told us that the modernised licence fee was their preferred option for funding the 91热爆. In fact 53% of respondents were found to prefer it. And 53% of respondents expressed concern about the idea of subscription.

The quantitative research had more nuanced results - we saw a more closely aligned split in preference for three funding models, where only 35% of respondents closely favoured the licence fee. Of the three methods, the licence fee was supported because it provides the 91热爆 with creative freedom, funding certainty, fairness…but concerns were raised about its potentially regressive nature.

We saw a mixed reaction in our quantitative study to the concept of a universal household levy. Some respondents saw it as efficient and progressive in extending the fee to cover TV, Radio and online, and raising the possibility of enabling a reduction in licence fee as more people would pay. However, others were more negative and saw it as risking becoming too tied to government – and levied the charge of "poll tax" against it.

The reaction against a top-up subscription raised the highest levels of concern – the public questioned which services would be free to air and which were behind a pay-wall – and who would make that decision. The mixed public funding and subscription model had some strong initial appeal, but for most this quickly faltered under closer scrutiny.

More fundamentally, it became clear that the public acknowledge the importance of the 91热爆 being a universal service – indeed the two universal funding models represented 58% of responses.

Throughout our consultative work, we found that universality was a core principle which people returned to. 58% said the 91热爆 should provide something for everyone who pays the licence fee. Only 8% who responded to our consultation disagreed.

Beyond the funding model

Efficiency

The public also want a 91热爆 that is accountable for the way it uses public money. Our previous research shows that value for money is one of the single most important things for the audience. They want the 91热爆 to provide value for money, they want to to be efficient – and I’m pleased that our Chair of the Trust’s Value for Money committee, Nick Prettejohn, is with us on the panel today.

The Green Paper asks a question about whether there should be more contestability in the licence fee. Our consultation and the research showed a mixed response from the public on the idea of contestable funding. We think this mixed response may be a result of people not knowing what it would mean in practice. But when we explored this with focus groups, people started to raise concerns about how contestable funding would work – who would be responsible for administering it. These are concerns that we in the Trust share. And this is something else for us to discuss today.

Closing remarks

So in closing, the evidence seems to support a modernised licence fee for the next period. It was this we used as the basis for our response to the Green Paper However, as viewing patterns change, we also recognise that it is likely that the licence fee will become less sustainable in the future. Based on our research and public feedback, we recognise that other funding options may need to be considered, however, we would urge that any future model takes into account the public’s desire for a 91热爆 which has creative and editorial independence and is underpinned by the concept of universality    

I look forward to hearing the debate today, and to hearing your views.