Policy Paper on BBC Charter Renewal (September 2016)

Section Two - Non Charter Related Changes

Alongside the policy positions outlined above, there are a range of issues which do not require changes through the Charter in order to be effected, but would still improve the services offered, and the social and economic impact of the BBC Scotland. A range of such issues have been raised by stakeholders through a period of intensive consultation from the summer of 2015 onwards and are reflected in these policy issues. The Scottish Government would welcome debate and discussion. The Scottish Government also believes that alongside the policy laid out so far in this document, some of these issues, if addressed through the Charter would be beneficial across the UK.

Regulation of Production Quotas

The production quotas, including those established under the Network Supply Review, which were voluntarily adopted by the BBC, have been criticised by a range of stakeholders, in particular for the so called 'lift and shift' approach which they have fostered. This means that, in some cases, as little as 5% of a compliant project's budget is spent in Scotland, whilst 100% of that budget is set against the quota. This can lead to a Scottish base being established for administrative purposes and which delivers an outcome which does not see the purported level of production spend delivering the full range of benefits - from skills development to additional economic impact - in Scotland.

Whilst through the renewal of the Charter we seek to reach a position where the need for quotas of this nature was removed, in the absence of a firm commitment to this model, the BBC should move away from 'lift and shift' to ensure that all of the economic and wider benefits of commissioning in Scotland can be realised, with a more robust definition of Scottish qualifying spend agreed and audited to ensure that the full economic benefit from this spend is realised in Scotland and supports a sustainable production base.

By the end of 2018 - the impact of robust regulation of the existing quota would be an estimated additional £30m of benefit to Scotland's economy, alongside the uplift in direct investment into the production sector.

Key Issue: to ensure, when the quotas established under Network Supply Review expire at the end of 2016, that they are replaced in such a way that both reflects the income of the BBC in Scotland (as set out above) and stimulates sustainable Network production from Scotland, as well as taking into account the potential decentralisation explored elsewhere in this paper.

News Current Affairs and Sport

In the period following the Referendum on Scottish Independence, there has been detailed scrutiny of the news and current affairs coverage in Scotland. A common thread through this discussion has been the assertion that the current coverage of both national and international news and current affairs by BBC Scotland is insufficient in both scope, scale and quality of output, with audience satisfaction figures at little more than 50%.

A more comprehensive approach to news with a greater voice for Scottish journalists on Scottish issues in the UK Network as well as on national and international stories for the Scottish network cannot now be resisted and is a change which does not require changes in the Charter. The recent appointment of a Head of News in Scotland is a welcome first step, however there would also need to be a more fundamental consideration by the BBC of how it ensures that national and network news is able to cover stories from within and outwith Scotland and make best use of our journalistic talent to better reflect the views of audiences.

Damian Collins MP, Acting Chair of the House of Commons Culture Media and Sport Committee said, at the launch of their report into the BBC White Paper on 2 August that:

" The six o'clock news in Scotland is currently split into two: the main news stories, whether international or relating to the UK (in whole or in part), are presented from London while Scottish news is presented from Glasgow. In the post devolution era, this can lead to network news programmes transmitted from London leading on several purely English stories - for instance on health, justice or education. The BBC has already acknowledged that there is dissatisfaction with this situation. However, we believe that it is perfectly reasonable for editorial decisions on the running order for television news broadcasts in Scotland to be made in Scotland, and broadcast from Scotland, as they are already for radio."

This would ensure that there was a high quality dedicated news service for Scotland, able to better reflect Scotland unto itself and to cover international stories from a Scottish perspective more effectively than is possible in the current news structure. However, this alone would not be sufficient to address the wider issues with audience satisfaction and changes to ensure that the Scottish perspective is appropriately reflected to the UK network should also be considered.

Key Issue: to ensure that communities across Scotland have access to a more comprehensive news and current affairs service for TV and Radio and that Scottish journalists are able to contribute to network and international news on Scottish specific and other national and international issues.

We also recognise that the online services provided by the BBC are well used and provide an authoritative source of information for communities across Scotland. However, their continued development needs to be carefully managed to ensure they remain relevant to audiences, for instance responding to the growing hyper-local agenda, but also work alongside commercial services to stimulate high quality content and positive competition rather than supressing a market for local news.

Key Issue: The BBC's online services are an important source of news and information, BBC Scotland will need to consider whether any improvements to this service are required for users across Scotland.

The provision of sport, and investment through the procurement of broadcasting rights into sports throughout Scotland and at a UK and international level should also be continued by the BBC. In a period of financial challenge the BBC should be able to continue to provide key sporting events on free-to-air television, but work in partnership with sporting bodies to ensure that the procurement of rights to broadcast represent value for money and provide financial support for grassroots and professional sport in Scotland. It is also important that diversity with reference to disabled people and women's sport is represented and visible both online and on broadcast media. This plays an important role in not only developing our national sporting ambitions, but in reflecting the nation and in empowering our communities.

Key issue - Listed Events: The Scottish Government recognises the important role that listed events play in the social and cultural life of communities across Scotland. It is in the public interest that key sporting events continue to be free-to-air and that disabled people and women's sports are fairly represented across the schedule.

Commercial Operations

The current structure of BBC Worldwide operates effectively to provide a route to a global market for the products of the BBC, and independent producers working in partnership with the BBC. However, the revenues from Scottish produced content are relatively low. Further work should be done to ensure that the expanded production base in Scotland is able to find an appropriate route to market through the operations of BBC Worldwide.

We ask that the BBC and UK Government commit to not privatising BBC Worldwide but instead look to work in partnership with stakeholders and independent producers in order for it to better support the global development of Scottish independent producers and afford them better routes to market.

BBC Worldwide plays an important role in supporting activity and providing an income stream for the corporation - such an integral part of the public service broadcasting model should not be privatised. In a decentralised model, we believe the BBC worldwide element would continue to work and would help to improve the sustainability of the wider and independent sector in Scotland.

We accept that a critical part of the financial sustainability of the BBC is the ability to participate effectively in the secondary broadcast market, including through the sales of formats and programmes internationally. This element of the BBC also has a key role in encouraging independent production and supporting the internationalisation of Scottish independent producers by providing them, in partnership with the BBC, with a route to market.

Key Issue: We expect BBC Scotland and independent productions to be able to navigate effective routes to market through BBC Worldwide, and for the support that BBC Worldwide offers to the development of in-house productions in the BBC to be extended to independent producers.

Indigenous Language Production

BBC ALBA's reach amongst the Scottish population fell over the last 18 months from 18% to 16%, but continued to reach an average of over 700,000 viewers a week. However, among Gaelic speakers, reach increased slightly from 72% to 73% and audience approval remained high. The BBC Scotland Audience Council report noted that `the channel remains highly dependent on repeats and there was a small dip in the channel's audience for the first time since its inception in 2008. `

There is a clear need to make indigenous language broadcasting sustainable and for its important education and societal values to be more widely acknowledged in this process. The channel also provides significant economic benefit through its commissioning model which ensures growth in the creative industries in Scotland. In particular there is the opportunity to build on the MG ALBA model and secure an equitable funding position with that in Wales, where S4C receives additional funding from UK Government.

We ask that the BBC provide the same levels of in-house programming to BBC ALBA as they do to S4C. Currently the BBC supplies 520 hours to S4C with a value of £20m (compared to 230 to BBC ALBA, valued at £5m). We also ask that current anomalies, e.g. MG ALBA paying the BBC to produce programming, cease.

This commitment would contribute to both promoting the Gaelic language and to supporting Scotland's wider creative sector.

Channel 4

Channel 4 should be recognised as an important part of the Public Service Broadcasting system, and the commitment to a high quality PSB system, set out at the start of this paper includes Channel 4, which should be retained in public ownership. However, we believe that Channel 4 must commit to a more transparent approach to delivering its production quota in Scotland ensuring that 'lift and shift' does not become the primary tactic for meeting this quota.. Similar to the position set out for the BBC elsewhere in this paper, Channel 4 should work in partnership with independent producers in Scotland to build a sustainable production sector, allowing for a substantial increase in programming made in Scotland. Their new licence requirement should be "a floor, not a ceiling". The establishment of a new `Nations and Regions team` is welcome, and we would encourage them to work closely with the commissioning department to help deliver the new licence commitment to commission at least 9% of original spend by 2020 from the Nations.

The Scottish Government is strongly committed to the principle of public service broadcasting and opposes any proposals to privatise the channel.

Channel 4 occupies a unique position in the delivery of public service broadcasting in Scotland, championing new formats and commissioning experimental programmes. We encourage Channel 4 to make better use of the talent and skills in the Scottish production sector, but do not believe that privatisation would represent an improvement to the service Channel 4 provides.