MPs publish report on scrutiny of value for money at BBC

• Report: Scrutiny of value for money at the BBC
• Committee of Public Accounts

Edward Leigh MP, Chair of the Committee of Public Accounts, today said:

"The BBC is currently immune from being properly held to account for its spending of billions of pounds of public money. It is a publicly owned and funded organisation, receiving an annual grant from Parliament. But, unlike other such organisations, it is not accountable to Parliament for the public money it spends, through audit by the Comptroller and Auditor General.

"The current arrangements for value for money audit of the BBC, under which the BBC Trust selects the subjects for examination and decides what information it will allow the National Audit Office and this Committee to see, are anomalous and untenable.

"Despite the limitations of the value for money reviews which the Comptroller and Auditor General has been able to carry out, this Committee has learned enough to be concerned about the BBC's record of spending public money without fully analysing costs and benefits, and its use of editorial necessity as a rationale for some spending decisions, thereby placing them beyond value for money considerations.

"The Committee believes that the British public's view of what level of transparency and accountability can be expected of a publicly owned and funded corporation today is different from that currently prevailing at the BBC. We consider that there is a significant expectation gap between the two that needs to be bridged to provide a stronger basis for public confidence.

"The Government apparently recognises that the current audit arrangements are unsatisfactory but considers the proper time to address them is in 2016, when the BBC's Charter is next reviewed. Putting proper accountability on hold for six years in this way is not acceptable."

Mr Leigh was speaking as the Committee published its 29th Report of this Session which sets out the Committee's reflections on the BBC.

The BBC is a great British institution delivering highly valued public service broadcasting to viewers and listeners across the United Kingdom. The Committee's interest in the BBC is promoting value for money. The BBC receives £3.5 billion a year of public money (76 per cent of its income), provided by taxpayers in the form of an annual grant voted by Parliament. The BBC receives that grant having collected the licence fee, which is paid into the Consolidated Fund. The licence fee is itself a tax.

This report sets out the Committee's reflections on the BBC at the end of a Parliament in which the Government has renewed the BBC's Royal Charter and revised the arrangements under which the Comptroller and Auditor General conducts value for money examinations of the BBC at the invitation of the BBC Trust, which replaced the Governors in 2007.

To reflect the BBC's independence from Government, the Royal Charter created the BBC Trust to oversee the work of the BBC's Executive Board, including examining the value of money achieved by the BBC.

The Committee are not in a position to assess the effectiveness of the BBC Trust in holding the BBC to account across the full range of the BBC's work.

Nevertheless, through the lens of a series of 12 value for money reviews by the Comptroller and Auditor General and the Committee's examination of BBC witnesses the Committee considered a broad cross-section of BBC work and have identified particular concerns in:

• the BBC's track record of committing public money without full analysis of the costs and benefits
• the BBC's apparent reluctance to apply value for money considerations to editorial decisions
• the BBC's mixed record of seeking and applying lessons that could improve value for money

As a creative organisation it is important that the BBC has the freedom to succeed as well as the room to fail. The BBC's editorial independence, however, does not absolve it from responsibility to deliver value for money. With that freedom goes the responsibility to make sure there is strong financial control. Too often there has been a culture where ends have overridden means.

The Committee are also concerned that the Comptroller and Auditor General, in contrast to his role in other public sector organisations, has no right to audit BBC expenditure on behalf of Parliament.

Although the BBC Trust consults the Comptroller and Auditor General when drawing up its programme of value for money reviews, the Trust has the last word on what value for money work is to be done, who will do it, what information will be made available, and what is published and when.

The current arrangements constrain both the Comptroller and Auditor General's access to information and, in a practical way, his discretion to report to Parliament. The Trust has also refused to provide the Committee of Public Accounts with information unless the Committee guaranteed that it would not make the information public.

The Trust seems to think it is acceptable to negotiate the terms on which it will do business with Parliament. This is unacceptable and a discourtesy to Parliament.