MINUTES OF THE BBC TRUST MEETING. Held on Thursday 18 September 2008 in the Council Chamber, Broadcasting House, London

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1 MINUTES OF THE BBC TRUST MEETING Held on Thursday 18 September 2008 in the Council Chamber, Broadcasting House, London Present: Michael Lyons Chairman Chitra Bharucha Vice-Chairman Diane Coyle Dermot Gleeson Alison Hastings for England Patricia Hodgson ( only) Rotha Johnston for Northern Ireland Janet Lewis Jones for Wales David Liddiment Mehmuda Mian Jeremy Peat for Scotland Richard Tait In attendance Nicholas Kroll Director, BBC Trust from the Trust Christopher Woolard Deputy Director Unit: Sally Willson Head of Secretariat and Governance Items Phil Harrold Senior Adviser, Secretariat and Governance Items Tina Stowell Head of Communications Items Fran O Brien Head of Editorial Standards Items , Mark Wakefield Head of Performance 137 Items , Penny Young Head of Audiences 137 Items 135, 136 Gareth Barr Policy Analyst Items 135,136 Jon Cowdock Chief Strategy and Policy Adviser Items 137, 138 Alison Gold Chief Adviser, Performance Item 140 Bronwen Roscoe Senior Strategy Adviser Item 141 Alison Edwards Adviser, Secretariat and Governance For items: Items Mark Thompson Director-General Items Mark Byford Deputy Director-General

2 Items Caroline Thomson Chief Operating Officer Items Jessica Cecil Head of Director-General s Office Item 135 Gautam Rangarajan Head of Policy & Development Items 135, 136, John Tate Director, Policy & Strategy 137 Item 136 John Smith CEO, BBC Worldwide Item 136 Anna Mallett Head of Strategy Item 137, 138 Pat Loughrey Director, Nations & Regions Item 137 James Heath Head of Journalism Strategy Item 137 Jana Bennett Director, BBC Vision Item 137 Tim Davie Director, Audio & Music Item 137 Erik Huggers Director, Future Media & Technology Item 137 Roger Mosey Director, Sport Item 137 Kerstin Mogull Deputy Director, Policy & Strategy Item 137 Adrian Ruth Head of Strategy Item 139 Chris Day Group Financial Controller Item 140 Tom Everest Senior Distribution Manager 2

3 AGENDA 131. Minutes of the Trust Meeting held on 16 July 2008 and Matters Arising 132. Committees and Audience Councils 133. Director s Report 134. Director-General 135. Public Service Broadcasting Review 136. Commercial Strategy Review: Update 137. Performance Dashboard 138. Amendments to Ofcom Tier 2 Quotas Digital Zones 139. Quarterly Financial Report 140. Distribution 141. Other Business 142. Items for Noting 143. Business Handling and Communications 145. Declaration of interests 145 Conflicts of Interest 3

4 131 MINUTES OF THE TRUST MEETING HELD ON 16 JULY 2008 AND MATTERS ARISING The Trust approved the minutes of the meeting held on 16 July, with minor amendments, as an accurate record of proceedings. Members amended the proposed redactions, agreeing to publish more of the minutes than recommended. The Trust agreed to publication of the minutes, as amended The Trust noted the matters arising from previous meetings. 132 COMMITTEES AND AUDIENCE COUNCILS The Trust noted the reports from each of the committees and Audience Councils. The chairmen of each committee and council updated members on the key outcomes of their respective meetings The Trust approved the recommendation from the Public Value and Fair Trading Committee that a public value test should not be applied to the Executive Board s proposal to add pre-booking functionality to the iplayer. Members noted that the committee s recommendation followed a period of public consultation on the proposal. 133 DIRECTOR S REPORT The Director, BBC Trust presented his report, providing a review of recent activity undertaken by the Trust Unit and looking at the key issues to be considered by the Trust The Trust discussed recent developments in the public debate over the future of public service broadcasting. Members discussed how best to present the BBC s position on the key issues within the debate. 134 DIRECTOR GENERAL The Director-General updated the Trust on programming highlights over the summer, including the BBC s coverage of the Beijing Olympic and Paralympic Games. He noted that the Olympics coverage involved a significant increase in the number of hours of coverage from previous games, and a successful collaboration of departments across the BBC. The Trust congratulated the Executive on a highly successful Olympics coverage The Director-General briefed the Trust on other issues, including BBC News reporting of the UK and global financial story, as well as important international events, such as the Russia/Georgia conflict and the presidential elections in the United States of America. He commended the work of BBC journalists in reporting on these stories. 4

5 134.3 [withheld from published minutes information to be published at a later date] The Director-General noted the appointment of Erik Huggers as Director, Future Media & Technology. 135 PUBLIC SERVICE BROADCASTING REVIEW The Deputy Director, BBC Trust gave an update on recent developments in the public debate on the future of public service broadcasting in the UK. The Trust exchanged views with the Executive on these recent developments. In particular, members noted the difficult commercial environment that all broadcasters were currently experiencing The Director-General updated the Trust on progress towards developing potential partnerships between the BBC and the broadcasting sector. These partnerships were first mooted in the BBC s response to Phase 1 of the Ofcom review process The Trust noted the progress that had been made in developing the partnership proposals. The Executive Board would present a more developed proposal to the Trust for consideration in coming months. Members requested that the final proposal be placed in a context where any new proposals would sit alongside an outline of what the BBC already provides to the wider industry. 136 COMMERCIAL STRATEGY REVIEW: UPDATE David Liddiment declared an interest in this item. See minute The Director-General provided an update to the Trust on the developing thinking behind the review of the BBC s commercial operations, which had been commissioned to report to the Trust and the Executive Board Following approval of the BBC s strategic plan, Delivering Creative Future, the commercial review had been initiated to provide a re-assessment of BBC Worldwide s strategy and governance. The review would ensure alignment between the BBC s public service strategy and commercial activities Members discussed how the BBC Worldwide strategy and mandate best align with the BBC s public service interests and the relationship between the BBC s commercial activities and its public purposes. Members noted the value that the BBC s commercial activities returned to licence fee payers The Trust agreed that all of the BBC s activities including its commercial activities must be held to a high standard and be underpinned by the BBC s public purposes. Additionally, members agreed that any proposals to amend the Corporation s commercial strategy must ensure the BBC s brand and global reputation are protected. 5

6 136.6 The Trust noted the progress on the review agreeing to continue engagement with the Executive on this topic over the coming months. Members requested that future analysis include a greater focus on potential areas of risk. 137 PERFORMANCE DASHBOARD The Chairman welcomed the Director, Audio & Music and the Director, Future Media and Technology to their first Trust meeting in their new posts. The Directors spoke to the Trust about their plans and aspirations The Trust s Head of Performance introduced the dashboard, which was being presented to the Trust for the first time. He explained that the performance dashboard would be the method by which the Trust would track delivery, every quarter, of the high level objectives agreed as part of Delivering Creative Future. The dashboard would also look at recent performance of the BBC s services and highlight areas for further consideration with the Executive The Trust discussed the performance against the Delivering Creative Future objectives, which were reported for the year to April-June 2008 against a baseline. Members noted that, as expected at this early stage, movement against the baseline was minimal Members discussed the trends in internet usage across the UK and the impact of this on use of the BBC s internet-based services. The Trust agreed to look in more detail at access to the internet and how this impacts on the accessibility of the services that the BBC provides through this technology The Trust discussed the reach of the BBC s radio stations in Scotland, Wales and Northern Ireland, and also local radio. The Director, Nations & Regions outlined some of the factors impacting on the individual services. Members agreed to return to this topic in the future. Members also discussed some of the challenges facing the DAB radio platform. It was noted that the Executive was thinking about possible approaches to DAB as part of the partnership proposals currently being developed The Trust commended the first of the dashboard reports and noted that the next one would be presented for consideration in December. 138 AMENDMENTS TO OFCOM TIER 2 QUOTAS DIGITAL ZONES The paper from the Executive Board sought the Trust s approval to request changes to the BBC s Tier 2 quotas from Ofcom. The changes sought by the Executive would lower the levels of output required in three of the BBC s nations and regions quotas from The changes were requested to reflect both the impact of digital switchover and the closure of the BBC Two digital zones in Wales and Northern Ireland and changes proposed as part of Delivering Creative Future The Trust agreed the proposed reductions were appropriate and agreed to seek Ofcom s approval of them. 6

7 139 QUARTERLY FINANCIAL REPORT The acting Group Finance Director introduced the report, which provided the financial results for the BBC for the period to July Members noted that the report had been discussed in detail by the Trust s Finance and Strategy Committee (FSC) The Trust discussed the measures that were being taken to mitigate risks in the current economic climate, noting that further work on this would be presented to the FSC and the Trust in later months. The Trust noted the key risk factors and supported the Executive s proposed approach to modelling a range of outcomes The Trust discussed the headline figures, particularly noting the work that had been done to ensure that service licence budgets were being appropriately recorded The chairman of FSC noted the committee would be paying particular attention to the impact of any changes on the objectives agreed as part of Delivering Creative Future. 140 DISTRIBUTION The Executive Board presented two papers to the Trust for consideration regarding the distribution of the BBC s services: the first was a Digital Switchover Coverage Plan and the second was a proposal to change the transmission mode used for digital terrestrial television The Trust noted that the BBC s agreement with the Secretary of State for Culture, Media and Sport required it to ensure that the coverage of the digital terrestrial television (DTT) network after digital switchover substantially matched the proportion of the UK population who received analogue television services. In order to meet this objective the Executive Board had prepared a switchover coverage plan that detailed, among other things, the characteristics of the proposed transmission network. The Trust considered the plan and agreed that it could be submitted to the Secretary of State for approval. The Trust agreed that future updates to the technical parameters and details of the switchover timetable could be notified to the Trust Unit The Executive Board also sought permission to change the transmission mode for multiplex 1, which was gifted to the BBC. The change in transmission mode would ensure that both the multiplexes used by the BBC would continue to abide by the same technical standards and offer viewers a consistent experience. The Trust agreed that transmission from Multiplex 1 could be changed to the 8k transmission mode in keeping with the same change to the Ofcom-licensed Multiplex B. 141 REMUNERATION REPORT Members discussed the governance arrangements and strategy for remuneration of executive members of the Executive Board, noting the respective responsibilities of 7

8 the Trust and Executive Board s Remuneration Committee The Trust agreed to changes to the internal reporting and oversight mechanisms for executive remuneration. These would be reflected in a revised protocol. It also discussed particular aspects of the remuneration strategy and policy and agreed to return to these in due course. 142 ITEMS FOR NOTING (a) Premium Rate Services residual calls assurance (b) Minutes of Trust Committees and Audience Councils (c) Note of offline approvals (Sports Personality of the Year Appeals) (d) Documents for sealing (e) iplayer Pre-Booking PVT decision 143 BUSINESS HANDLING AND COMMUNICATIONS The Trust discussed the handling and communication of items considered at the meeting. 144 ANY OTHER BUSINESS Members noted that it was the last meeting to be attended by Dermot Gleeson. On behalf of the Trust, and the Corporation more widely, the Chairman thanked Mr Gleeson for his service to the BBC as a member of the Board of Governors and subsequently as a member of the BBC Trust. 145 CONFLICTS OF INTEREST David Liddiment declared an interest in item 136 (Commercial Strategy Review). Mr Liddiment is a non-executive director of the independent production company All3Media, which operates businesses in the commercial media sector. It was not necessary for Mr Liddiment to leave the meeting for any part of the discussion. 8