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http://www.ex-bbc.net/cgi-bin/yabb/YaBB.pl >> News and Comment >> BBC loses audit battle http://www.ex-bbc.net/cgi-bin/yabb/YaBB.pl?num=1079353885 Message started by Forum Admin on Mar 15^th, 2004, 12:32pm

Title: BBC loses audit battle
Post by Forum Admin on Mar 15^th, 2004, 12:32pm

This from the FT, Monday March 15:

Parliament's spending watchdog has begun a probe into Freeview, the BBC's digital television service, in the first of a series of wide- ranging investigations into the way the broadcaster spends the £2.6bn raised each year from the licence fee.

The National Audit Office has just begun looking at the BBC's investment in Freeview, which is also funded by British Sky Broadcasting and Crown Castle, the transmission company. The BBC poured £2m into launching Freeview. Five other areas, including how the broadcaster demonstrates it is fulfilling its public service obligations, have been ear-marked for studies.

This is the first time the corporation's main oper-ations have been examined by an externally appointed auditor. In the past the NAO's remit has been restricted to arrangements for collecting the licence fee and the BBC World Service. MPs and rival broadcasters have put pressure on the government to make the BBC more accountable for the taxpayers' money it receives. The scope of the investigations has surprised Whitehall insiders. The NAO's decision to launch a series of inquiries follows a deal struck last year between the government and the BBC, which previously argued that opening its books would jeopardise its editorial independence.

Freeview was deemed a success for Greg Dyke, for mer director-general, reaching more than 3m homes. But even if the NAO decided the money was well-spent, subsequent inquiries could prove more controversial.

Other reviews will look at the way the BBC shows it is meeting its remit to provide a public service. This could play into the hands of the corporation's opponents who believe taxpayers' money raised through the licence fee should be shared with other broadcasters offering a public service.

The NAO will also investigate the construction of a building in London's White City, overheads, risk management and outsourcing.

The BBC said: "Together the NAO and the governors' audit committee have agreed this programme of work." The board of governors had concurred with the government that "this additional work on value for money would enhance the BBC's accountability to licence fee payers".

Julie Kirkbride, shadow culture secretary, said: "I have long campaigned for the BBC to be subject to proper scrutiny under the NAO."

Gavyn Davies, the former BBC chairman who quit after the Hutton inquiry, bitterly opposed the idea of being scrutinised by the NAO, saying last year that "the direct responsibility of the governors for the probity of the BBC's financial arrangements is at the heart of their powers over the organisation, as set down in the BBC's charter".

Title: Re: BBC loses audit battle
Post by Forum Admin on Mar 15^th, 2004, 12:34pm

This is the Guardian's follow-up:

John Plunkett
Monday March 15, 2004

The way the BBC spends licence fee payers' money on outside suppliers and its mammoth White City building project is to be investigated by the government's spending watchdog.

The corporation's books are to be opened for the first time to the parliamentary watchdog, the National Audit Office.

The first of six "value for money" reviews will look into the BBC's investment into Freeview, its digital terrestrial joint venture with BSkyB and Crown Communications.

Future investigations will centre on the building of the corporation's new White City offices next to BBC TV Centre in west London, and the cash it spends on external suppliers, including independent TV producers.

The six separate investigations will be the first time the National Audit Office has been able to examine the way the BBC spends its £2.6bn of licence fee income.

The office's role has previously been restricted to examining the way it collects the licence fee, and its spending on the World Service.

The review will follow the passage of the communications bill through parliament last summer, in which MPs called for greater public accountability of the BBC. The watchdog will report its findings to the audit committee of the BBC governors, who will then present the findings to parliament, together with their own responses.

The BBC has always resisted the prospect of being scrutinised by the NAO. Gavyn Davies, the former chairman of the BBC who quit in the wake of the Hutton report, said last year "the direct responsibility of the governors for the probity of the BBC's financial arrangements is at the heart of their powers over the organisation, as set down in the BBC's charter".

Along with its spending on Freeview, the White City project and outsourcing, the three other areas the NAO will examine are the corporation's risk management processes; definition of overheads; and measurement of public service broadcasting.

The six investigations are expected to be completed by 2006.