This is taken from the Guardian:

MPs accuse BBC of arrogance on spending
• Trust dismissed concerns over Lonely Planet buyout
• Corporation's response not coherent, committee says
by James Robinson
Wednesday 23 September 2009
     
MPs today condemn what they call the "arrogance" of the BBC Trust for dismissing some of their anxieties about the expansion of the corporation's commercial activities.

The criticism is contained in a report today by the Commons culture select committee which attacks the BBC's response to its investigation earlier this year that was focussed mainly on the BBC's business arm, BBC Worldwide.

The investigation was particularly critical of BBC Worldwide's controversial acquisition of the Lonely Planet travel guide business, a deal approved by the BBC Trust, the corporation's regulatory and governance body, which has attracted intense criticism of its role recently from News Corporations's James Murdoch and culture minister Ben Bradshaw, while the Tories have also questioned the spending on digital channels.

The Lonely Planet purchase was one of the most controversial deals ever done by BBC Worldwide, because it took the corporation into a new market, travel guides, not directly related to its programmes or services. Today's report by the cross-party group of MPs concluded says: "We were especially concerned about the apparent arrogance of the BBC Trust who appeared to believe they had no case to answer ... The purchase of Lonely Planet remains the most egregious example of the nature of BBC Worldwide's expansion into areas where the BBC has no, or very limited, existing interests."

MPs also describe the BBC's response to the committee's first report, published in April as "not coherent". The decision by MPs to publish a further report rebuking the BBC Trust's reply to its recommendations, which was submitted in July, is highly unusual.

Last week, the BBC Trust's chairman, Sir Michael Lyons, was involved in an angry public exchange with Bradshaw at a TV industry conference after the culture secretary said the body should be scrapped. "I don't think it is a sustainable model", Bradshaw said. The BBC is also trying to fight off government plans to use licence fee money to pay for a replacment ITV regional news service and Lyons has spoken out vocally against the plan.

Meanwhile, the BBC is under siege from commercial competitors who argue that its dominance is distorting the market at a time when they are struggling to survive during one of the most serious advertising downturns for generations. Last month James Murdoch, the chairman and chief executive of News Corporation in Europe and Asia, used a landmark speech at the MediaGuardian Edinburgh International Television Festival to call for a "far, far smaller" BBC.

Bradshaw has since indicated that he accepted parts of Murdoch's critique, using his first major speech at a Royal Television Society conference last week to say that: "There may indeed be a case for a smaller licence fee."

The Lonely Planet deal was singled out by Murdoch last month as an example of how far flung the corporation's commercial empire has become. The owner of Time Out magazine, which also publishes city guides, has complained bitterly about the Trust's decision to give the deal the go-ahead. Last night Tony Elliott, the founder of Time Out, called for the purchase to be reversed. "Clearly there is a lot of cleaning up that has to take place in and around BBC Worldwide", he said. "The BBC is talking about 'painful decisions'. Why shouldn't they be forced to sell it [Lonely Planet]?"

"Lonely Planet is losing money hand over fist. They are having to pump million into it. It is a complete sprawling mess," Elliott claimed. "I know a lot of very senior people at the BBC and I have yet to meet anyone who doesn't think this was a deal too far."

The select committee report also accuses the BBC Trust of using talks about a possible tie-up between BBC Worldwide and Channel 4, which were taking place over the summer, as "an excuse" to avoid publishing considered replies to its recommendations.

"We are disappointed that the BBC Trust appears to have used this as an excuse to avoid responding to a number of our wider recommendations", the report said. "As a consequence the BBC Trust's response cannot be regarded as a coherent response to the Committee's report."

It also criticises the trust for failing to fully reveal the full financial details of the Lonely Planet deal. "The BBC was... not as transparent as it claimed.... to have been", MPs added.

In an unprecedented attack on the BBC Trust, John Whittingdale, the Conservative MP who chairs the culture select committee, said: "This is a further illustration of the disregard shown by the Trust to the work done by the Committee and its arrogance in appearing to dismiss many of its recommendations without proper consideration or comment. We look to the BBC to respond with greater diligence to Select Committee reports in future."

In response the BBC Trust pointed out that it had carried out its own review into the corporation's commercial operations, which published recommendations last week. They included some of the measures put forward by MPs in their April report, including removing executives from the corporation's main public service broadcasting operation from the board of BBC Worldwide.

"The Trust last week announced changes to BBC Worldwide's governance which were reported to the Committee" it said. "These changes addressed a number of the issues to which the Committee's latest report refers."

"We are committed to ensuring licence fee payers get a good return on their investment, while being mindful of the BBC's impact on the wider market."