BBC Trust assessment prcesses Guidance dcument Nvember 2012. Getting the best ut f the BBC fr licence fee payers
Cntents Intrductin 1 Purpse f this guidance 1 Activities cvered by the guidance 1 Prcesses cvered by this guidance 2 Prpsals that must be referred t the Trust 3 Frmat f the guidance 3 Pre-Trust assessment 5 Develpment f prpsals 5 Submissin f prpsals t the Trust 5 Cnsideratin f an applicatin 7 The Public Value Test 9 Summary f PVT prcess 9 Launching a PVT 10 The Public Value Assessment 10 The Market Impact Assessment (MIA) 15 Cnclusin f a PVT 15 Onging mnitring 18 Nvember 2012
Intrductin Purpse f this guidance The BBC Trust ( the Trust ) is the svereign bdy f the BBC and represents the interests f licence fee payers. It is respnsible fr setting the verall strategic directin f the BBC, including its pririties, and fr exercising general versight f the wrk f the Executive Bard ( the Executive ). 1 The Trust als issues service licences cvering every UK Public Service f the BBC. The Executive has respnsibility fr (amng ther things) delivering the BBC s services in accrdance with the pririties set by the Trust and fr all aspects f peratinal management. In line with these respective respnsibilities, it is fr the Executive t develp and frm time t time mdify the range f public services which it prvides and the ther activities it undertakes. Hwever, in certain circumstances defined by the Charter and Agreement, prpsals fr such changes cannt prceed withut the apprval f the Trust. In sme cases, the Trust cannt apprve a change unless it has first perfrmed a Public Value Test ( PVT ). This guidance sets ut the prcesses that the Trust will nrmally adpt when assessing prpsals fr change frm the Executive. It is intended t prvide clarity t licence fee payers, the Executive and stakehlders n the Trust s apprach when cnsidering such prpsals. It will be updated whenever new assessment prcesses are agreed by the Trust. Activities cvered by the guidance This guidance cvers the assessment prcess fr bth service and nn-service activities: Services (UK Public Services): all f the services prvided by the BBC in prmting its public purpses. These include all f the BBC televisin and radi channels bradcast in the UK and the BBC s nline services. Details f the scpe and remit f each service are utlined in separate service licences issued by the Trust. 2 Nn-services: thse activities which d nt have the characteristics f a service and are nt directly cvered by service licences but are still relevant t the delivery f the BBC's public purpses. 3 The guidance des nt apply t any services r activities which are: Cmmercial Services activities that are part f the BBC Wrld Service r therwise aimed primarily at users utside the UK, r are part f BBC Mnitring 1 The Trust is supprted by the Trust Unit in this task. The Trust Unit is a separate team respnsible fr supprting and assisting the Trust and is administratively separate frm the rest f the BBC s rganisatin. The Trust Unit als assists the Trust in the administratin f the PVT prcess. 2 A full list f the BBC s UK Public Services and Service Licences can be fund at: www.bbc.c.uk/bbctrust/ur_wrk/service_reviews/index.shtml 3 Agreement clause 22 prvides further details n the BBC s nn-service activities. 1
Where relevant, these matters are cnsidered under separate prcesses, details f which can be fund at www.bbc.c.uk/bbctrust/. Prcesses cvered by this guidance The BBC Agreement 4 recgnises that the BBC shuld be able t make changes t its UK Public Services and t nn-service activities, fr example, t respnd t changes in technlgy, culture, market cnditins r public expectatins. References t changes include starting new services (r nn-service activities) r mdifying r clsing existing nes. Hwever, any significant prpsal fr change must be subject t full and public scrutiny. One functin f the Trust is t cnduct such scrutiny, and when the Executive prpses changes t the BBC s UK Public Services r nn-service activities, and thse changes are significant, 5 the Trust will subject them t a Public Value Test. A PVT invlves tw key assessments: A Public Value Assessment ( PVA ), which assesses the likely public value f the prpsal, fr which the Trust is respnsible A Market Impact Assessment ( MIA ), which assesses the extent f any likely impact n markets relevant t the prpsed change, fr which Ofcm is respnsible The Trust will cnsider the utcme f the PVA and MIA, bth f which will be published, and reach its prvisinal cnclusins regarding the prpsed change. The Trust will cnsult n its prvisinal cnclusins befre reaching a final decisin. The Trust must be satisfied that any likely adverse impact n the market is justified by the likely public value f the change befre apprving the prpsed change. In additin, a prpsed change may call fr an amendment t the relevant service licence, whether r nt the change is significant. In that case, the prpsal, and the prpsed amendment, will need t be cnsidered by the Trust: nly the Trust can amend a service licence. The nature f nn-service activities varies; sme may have an audience fcus and a high degree f relevance t the BBC's public purpses. As with services, the Executive may frm time t time prpse significant changes t nn-service activities (including cmmencing new nes).the Trust cnsiders that a PVT shuld be applied t any prpsal frm the Executive that the Trust deems t be significant, regardless f whether it is classified as a service r a nn-service. Thus, whether a prpsal relates t a UK Public Service r t a nn-service activity, the Trust will first determine whether r nt what is prpsed is a significant change, and, if it is, will apply a PVT t it. Nte, hwever, that it is always pen t the Trust t decide that a change shuld nt g ahead n grunds ther than that a PVT is required first. An example f such a case is where the prpsed activity des nt fit with the high-level strategies set by the Trust. Nte, t, that where any matter requires Trust apprval, the Trust will als lk at ther issues related t its supervisry functins. This includes ensuring that the prpsals 4 Clause 25. 5 As defined in Clause 25 f the Agreement. 2
cmply with the Cmpetitive Impact Principle 6 and are cmpatible with its Fair Trading plicies including cmpetitin and State aid law. Prpsals that must be referred t the Trust The Executive Bard must seek apprval frm the Trust fr any prpsal which in the view f the Executive Bard: requires an amendment t a service licence intrduces a change t the BBC s UK Public Services which is ptentially significant (which culd include starting a new service), r intrduces a ptentially significant new nn-service activity r prpses a ptentially significant change t an existing ne In sme cases an individual prpsed change may nt in itself be significant. Hwever, the cumulative effect f a series f changes ver time culd result in a significant change. In cnsidering any prpsed changes t services r ther activities the Executive must take int accunt ther previus amendments in cnsidering whether the prpsal is ptentially significant in the cntext f ntifying the Trust. In general, the Trust will nly cnsider prpsals which have been frmally submitted t it fr apprval by the Executive. Hwever, the Trust may at its discretin als require the Executive t prvide infrmatin n a change which had nt previusly been referred. Under the Agreement, it is fr the Trust t decide whether a change is in fact significant, r whether an amendment is required t a service licence. The substantive tests used t determine whether r nt a change is significant are explained in the next sectin. Frmat f the guidance The remainder f the guidance utlines the assessment prcess and its tw separate phases f activity: Part 1: pre-assessment phase: this stage refers t the develpment f prpsals by the Executive and their frmal submissin t the Trust fr apprval Part 2: assessment phase: this stage refers t the cnduct f the apprvals prcess fllwing a decisin by the Trust t apply a PVT Figure 1 belw sets ut the key stages in the assessment prcess cvered by this guidance: 6 The Trust s Cmpetitive Impact Principle requires the BBC t minimise its cmpetitive impact n thers whilst ensuring the fulfilment f its Public Purpses and ther bligatins as set ut in the Charter and Agreement 3
Figure 1: key stages in the assessment prcess Strategy BBC Trust P r e a s s e s s m e n t P h a s e Keeping the Trust infrmed Implementatin f strategy Ptentially significant changes Submit prpsals Pipeline Ptentially significant change Other changes Agreed regulatry handling fr ptentially significant prpsals Request fr apprval (e.g. new service strategy) Trust/ BBC Executive BBC Executive Exec A s s e s s m e n t P h a s e Nt significant Refer t Executive Assessment Ptentially significant Significance Test Significant Public Value Test BBC Trust 4
Pre-Trust assessment This sectin sets ut the framewrk within which prpsals t change the BBC s UK Public Services r nn-service activities are develped and submitted t the Trust fr cnsideratin. Develpment f prpsals Under the Charter, the Trust has the functin f setting the verall strategic directin f the BBC and apprving high-level strategy in respect f its services and activities, and exercising general supervisin f the Executive. The Executive has respnsibility fr implementing thse strategies and delivering the BBC s services in accrdance with the pririties set by the Trust. The Executive is respnsible fr authrising changes t BBC services and activities, and fr referring thse it cnsiders t be ptentially significant t the Trust fr apprval. In line with its general duty t maintain versight f the BBC s activities, the Trust may ask the Executive fr updates n prpsals as they are develped (whether r nt these are ptentially significant r therwise require Trust apprval). In general, the Trust wuld expect the Executive t ntify it f any prpsals which might attract public interest r which may, in due curse, require Trust scrutiny. The standard mechanism fr updating the Trust abut such prpsals is the regular pipeline meetings between Executive and Trust Unit staff in which the prpsed regulatry handling fr ptentially significant prpsals will be agreed. The Executive may alternatively prepare update papers prviding an utline f prpsals (which may include, fr example, a prpsed new plan fr implementing the BBC s strategy r a change t existing strategy fr a service r cllectin f services) and submit these t the apprpriate Trust cmmittees fr nting r ther cnsideratin in advance f a frmal submissin. As with the regular pipeline meetings, the Trust r Trust Unit staff may ffer guidance t the Executive at this early stage n, fr example, the strategic fit, likely significance and ptential regulatry implicatins f prpsals. While the Trust cannt prvide a frmal pinin until it has received a full submissin frm the Executive (authrised by the Executive Bard), it may express a view n any aspect f the prpsals at any stage f develpment, fr cnsideratin by the Executive. Submissin f prpsals t the Trust Fr planning purpses the Trust shuld be kept updated n the prgress f all prpsals which the Executive cnsiders t be ptentially significant. If the Executive des nt cnsider a prpsal t be ptentially significant, it may use its wn internal apprvals prcesses, withut recurse t the Trust. If, hwever, the Executive wishes t pursue a ptentially significant prpsal, it shuld prepare a frmal applicatin t the Trust, accmpanied by supprting evidence, setting ut a detailed descriptin f the prpsed change, its likely scale, impact and budget. The remainder f this guidance therefre relates mainly t prpsals which the Executive has cncluded are ptentially significant. 5
Preparing supprting evidence Prir t submitting a frmal applicatin t the Trust, the Executive will prvide t the Trust Unit a service prpsal and draft research terms f reference, as fllws. Service prpsal, prviding an utline f the prpsal which shuld include: A summary f the new service r prpsed change, including its aims, bjectives and ptential scale A brief utline f the strategic ratinale fr the prpsal Supprting evidence fr the prpsal fr example, an assessment f any audience engagement activity that has been cnducted An assessment f significance f the prpsal An indicative timetable Research terms f reference, utlining the research that will be (r has been) undertaken in supprt f a prpsal. This shuld prvide details n: The primary and secndary research (including pilts r trials) that will be used t evaluate public value and market impact Existing BBC r external services against which the prpsal will be benchmarked (while direct cmparisns may nt always be pssible, high level cmparisns shuld be prvided where pssible). The Trust Unit will then wrk with the Executive t finalise the research terms f reference and ensure sufficient evidence is prvided with the frmal applicatin. At this stage, the Executive may als wish t prvide the Trust with an update paper, cntaining bth the service prpsal and research terms f reference fr nting and/r discussin. Any pilts r trials undertaken in supprt f an applicatin must cmply with the terms f the Trust s Prtcl C1 (UK Public Services and Nn-service activities) which sets ut the handling f public service pilts and trials at sectin D. It is pssible that prpsals may evlve in light f respnses t trials and pilts r evidence gathered. In any event the Executive is respnsible fr securing the Trust s apprval fr any pilts r trials that may result in an applicatin fr a new service r nn-service activity, r an amendment t an existing ne. 7 Frmal applicatins If after gathering sufficient evidence the Executive wishes t prceed with its prpsals, a frmal applicatin must be made t the Trust, which must include a detailed descriptin f the prpsed change, its likely scale, impact and budget and service licence implicatins. This shuld be accmpanied by detailed evidence in supprt f the prpsal, including the Executive s wn assessment f whether the prpsal in its view is ptentially significant. 7 BBC Trust Prtcl C1 sectin D at: http://dwnlads.bbc.c.uk/bbctrust/assets/files/pdf/regulatry_framewrk/prtcls/2012/c1_ulk_public.pdf 6
The Trust Unit will wrk with the Executive t prepare an agreed descriptin f the prpsal. This will serve as the basis fr any subsequent assessment by the Trust. Features nt explicitly cvered in the agreed descriptin will nt be cnsidered fr apprval. A finalised descriptin f the prpsals is then submitted alng with the full applicatin t the Trust. Cnsideratin f an applicatin Significance tests The requirement t apply the PVT relates nly t prpsals which the Trust decides are significant. Trust apprval is nt therefre required fr minr changes r rutine peratinal decisins by the Executive. The previus sectin explained that it is the respnsibility f the Executive t refer t the Trust fr cnsideratin any prpsed changes that are ptentially significant, and t keep the Trust apprpriately infrmed f any ther planned activities thrugh the pipeline meeting. Whether any prpsal fr change meets the criterin f significance is a matter f judgment fr the Trust. In exercising that judgment, the Trust must have regard t the fllwing cnsideratins, as set ut in Clause 25 f the Agreement: Impact: the extent t which the change is likely t affect relevant users and thers. This shuld nrmally include an assessment f the likely scale f impact n users f the prpsed change, ther BBC services and market participants. This assessment is nt designed t be a frmal market impact exercise r t assess market impacts in detail Financial implicatins: the incremental csts assciated with the prpsed change. In general, any planned r actual change in annual expenditure f mre than 10% in real value f the annual budget cntained in a Service Licence requires apprval frm the Trust Nvelty: the extent t which the change wuld invlve the BBC in a new area f activity fr the BBC, as yet untested Duratin: hw lng the activity will last. In sme cases a prpsal may be cnsidered t be permanent in nature Depending n the circumstances, when the Executive submits a prpsal t the Trust fr cnsideratin, the Trust may either review the analysis f significance that the Executive has prvided, and the evidence relied n, and (if satisfied) adpt it; r carry ut its wn analysis. Whenever the Trust perfrms a significance test itself, it will invite Ofcm 8 t prvide its view f the ptential impact n thers f the prpsal. These arrangements are set ut in an Additin t the Memrandum f Understanding between the BBC Trust and Ofcm 9. 8 Ofcm is the regulatr fr the UK cmmunicatins industries 9 http://dwnlads.bbc.c.uk/bbctrust/assets/files/pdf/abut/mu_additin_dec2011.pdf 7
Prpsals fr the intrductin f a new service are subject t a prcedural vet by the Secretary f State fr Culture, Media and Sprt, as set ut in Clause 33 f the Agreement. This requires the Trust t infrm the Secretary f State fr Culture, Media and Sprt whenever it begins an assessment f a prpsal frm the Executive t intrduce a new service. 10 The Agreement als requires the Trust t presume that any change that requires a new service licence, r any amendment t the key characteristics f an existing service licence, ught t be subject t a PVT. 11 The Trust will als apply such a presumptin in the case f any prpsed change t a nn-service that wuld (if implemented) require a change t the terms n which the nn-service was riginally apprved. Where this presumptin applies, the Trust may still decide that there is n need fr a PVT, but in such cases, the nus is n the Trust t justify departing frm this presumptin. Fr example, the Trust may be satisfied that changes in circumstances since the issue f a service licence mean that a particular change t ne r mre f its key characteristics wuld nt amunt t a significant change, cntrary t the presumptin that a PVT shuld be applied. Befre exercising its judgment, the Trust must investigate r therwise infrm itself f any facts r cnsideratins which it cnsiders ptentially relevant t the exercise f that judgment. What this means in practice will vary accrding t the circumstances. Smetimes, fr example, the prpsed change may be s manifestly significant that the Trust will nt need t lk beynd the nature f the prpsed change itself befre cncluding that it wuld be a significant change. In ther cases, which are less clear cut, the Trust may feel it apprpriate t investigate mre thrughly cmpeting arguments fr and against the applicatin f the PVT. As a general rule the Trust wuld nt seek external representatins at this stage. Having cnsidered all relevant factrs, the Trust may, hwever, determine that a specific prpsal is nt significant and therefre des nt require a PVT r ther detailed assessment prcess. In cases where the Trust decides nt t launch a PVT but where a new service licence is t be issued, it will frmally ntify the Secretary f State f its decisin and the steps taken t reach that decisin in rder that the Secretary f State can decide whether r nt t apply the prcedural vet. In all ther cases the Trust may refer the prpsed change back t the Executive t pursue. In the event that the Trust determines that a PVT shuld be applied, it will publicly annunce the launch f the prcess and cmmence the assessment. The prcess fr undertaking a PVT is set ut belw. Cnsideratin f activities nt frmally ntified t the Trust In general the Trust wuld nly expect t cnsider prpsals where an applicatin has been submitted by the Executive Bard. In certain circumstances, hwever, it reserves the right t review a prpsal r change which was assessed by the Executive as nt 10 The intrductin f a new service fr the purpses f the Secretary f State's prcedural vet means anything which the Trust prpses t authrise by a new service licence rather than the amendment f an existing licence (Clause 33(4) Framewrk Agreement) and des nt apply t nn-service activities. Mre detail abut the arrangements regarding the prcedural vet can be fund here. 11 If a change t a service r nn-service activity is apprved fllwing the PVT, the terms f the apprval will be cntained within the relevant service licence(s) r nn-service apprval. 8
ptentially significant r nt frmally submitted t the Trust fr cnsideratin, but which the Trust cnsiders culd be ptentially significant. The decisin t review a prpsal r activity in this way is a matter f judgement fr the Trust. The Trust culd decide t frmally review a prpsal (r part theref) at any stage in its develpment by the Executive, including as part f the Trust s peridic service r strategy reviews. It may als chse t review a prpsal that was nt frmally submitted t the Trust fr apprval prir t being implemented. Such a review culd als be prmpted by a third party cncerned abut a new r changed BBC activity. Having decided t review a prpsal the Trust will nrmally ask the Executive t submit details f the change. These will be used t establish significance, using the significance test criteria set ut abve. During this prcess, the Trust may require the Executive t suspend r delay the launch f any services r activities pending the utcme f its review. The Public Value Test This sectin prvides guidance and clarificatin n the PVT prcess. In certain circumstances the Trust may decide t mdify the applicatin f aspects f this guidance, where nt specifically required by the Charter and Agreement. 12 Summary f PVT prcess The sectin that fllws sets ut the detailed prcess that will nrmally be fllwed when undertaking a PVT. This prcess is summarised in figure 2 belw: Figure 2: summary f PVT prcess 12 In such cases the Trust will explain the steps taken. 9
Launching a PVT Where the Trust determines that a prpsal is significant and that a PVT shuld be applied, it will publicly annunce the launch f the prcess and infrm the Jint Steering Grup (JSG) 13 f the need fr an MIA. At launch, the Trust will aim t publish as much relevant infrmatin abut the prpsal as pssible, including the applicatin frm the Executive and the agreed activity r service descriptin. It will als infrm the Secretary f State fr Culture, Media and Sprt whenever the Trust applies a PVT t a prpsal fr the intrductin f a new service. In sme cases it may be necessary t make redactins befre publishing this infrmatin, fr example if the applicatin includes infrmatin which may be cmmercially sensitive t the BBC, third parties r suppliers; includes a level f cst detail beynd that nrmally published by the BBC; r culd have an impact n wider plicy cnsideratins. The Trust will aim t keep such redactins t a minimum. At the start f the PVT prcess the Trust will utline the prpsed timetable fr cmpletin f the prcess which must nrmally be cmpleted within six mnths. Where necessary, this timetable may be revised during the PVT prcess. In sme cases the Trust, fllwing discussins with Ofcm with respect t the MIA, may agree that it is apprpriate t cnduct the PVT prcess in a shrter perid f time. At its discretin, where justified by the circumstances, the Trust may als allw a lnger perid than six mnths fr the cmpletin f the PVT. Likewise, the JSG, where justified by the circumstances, may allw fr a lnger perid than three mnths within which t cmplete the MIA. Pssible amendments t the required timetable r prcess are discussed in the fllwing sectins, and the Trust will endeavur t set these ut at the start f the PVT prcess. In determining the utcme f a PVT, the Trust will take accunt f bth the PVA and MIA. These assessments are cnsidered in the fllwing sectins and are nrmally cnducted in parallel during the PVT prcess. The Public Value Assessment The Public Value Assessment prvides an assessment f the likely public value that will be created by the prpsed change. The PVA is prduced by the Trust Unit and adpted by the Trust, and nrmally cmmences at the start f the PVT prcess. During the PVA prcess apprpriate public cnsultatin will be carried ut t help the Trust assess the aspects f public value that are relevant t the prpsal. Cnsultatin will nrmally invlve seeking representatins n the prpsal frm licence fee payers, stakehlders, and any particular grups fr whm the subject f the prpsals may warrant specific input. The Trust is als required t cnsult with its reginal audience cuncils during the PVT prcess. 14 13 The Agreement (clause 29) requires the JSG t be established by Ofcm and the Trust t carry ut certain functins in relatin t the cnduct f Market Impact Assessments. 14 Infrmatin n the Trust's Audience Cuncils is available at www.bbc.c.uk/bbctrust/abut/audience_cuncils/audience_cuncils.shtml 10
Representatins will nrmally be sught fr a perid f 28 days. This perid may be lnger r shrter taking int accunt matters such as the nature and cmplexity f the relevant prpsals and the need fr adequate cnsultatin. The Trust will als cnsider, in relatin t the prpsals, whether it shuld undertake research f its wn and/r btain external expert r prfessinal input. A summary analysis f all inputs received frm the cnsultatin will nrmally be published. One specific cnsideratin that will be cvered by the PVA will be hw, and t what extent, the prpsals, if implemented, will prperly reflect the diversity f the BBC s audience and, in particular, whether the prpsals will duly serve particular parts f that audience. This is part f the BBC s Public Purpses, in particular, the bligatin n the BBC t represent the UK, its natins, regins and cmmunities. 15 The BBC s cmmitment t diversity and equality is set ut in the BBC s Diversity Strategy, which was apprved by the Trust in 2011. 16 The Strategy may be relevant t the Trust s cnsideratin f the prpsals. The Trust must als cmply with the general law in this area, including (in respect f sme f its functins 17 ) the public sectr equality duty cntained in sectin 149 f the Equality Act 2010. This duty requires the Trust t: have due regard t the need t (a) eliminate discriminatin, harassment, victimisatin and any ther cnduct that is prhibited by r under [the 2010 Act]; (b) advance equality f pprtunity between persns wh share a relevant prtected characteristic 18 and persns wh d nt share it; (c) fster gd relatins between persns wh share a relevant prtected characteristic and persns wh d nt share it. T perfrm this duty the Trust will gather and analyse relevant evidence cncerning the ptential impact f the prpsals under cnsideratin upn (in particular) persns with particular prtected characteristics, and that analysis will be ne f the factrs taken int cnsideratin when the Trust reaches its final decisin. The PVA will nrmally be cmpleted within 12 weeks. Hwever, as nted abve, it can be cnducted within a shrter r lnger perid. The Trust will cnsider such matters as the nature and cmplexity f the prpsals in deciding whether a different timescale is apprpriate fr the cmpletin f the PVA. The Trust and Ofcm will aim t publish the final PVA and MIA simultaneusly. An advance draft cpy f the reprts will be shared in cnfidence with the Executive fr fact checking ne wrking day in advance f publicatin. 15 Charter, article 4(d). 16 http://www.bbc.c.uk/diversity/strategy/dcuments.html 17 Fr the BBC, the Public Sectr Equality Duty des nt apply in respect f functins relating t the prvisin f a cntent service. A cntent service is a very brad cncept: it cvers any cntent service f the BBC TV, radi r nline. 18 The prtected characteristics are age, disability, gender reassignment, marriage and civil partnership, pregnancy and maternity, race, religin r belief, sex, and sexual rientatin. 11
Methdlgy fr the PVA The BBC s main bjective is the prmtin f its Public Purpses. The PVA shuld therefre cnsider the value which the prpsed change wuld deliver thrugh its cntributin t the BBC's Public Purpses. These are presented belw in Fig 3: Figure 3: the BBC s public purpses, as laid dwn in the Charter In cnsidering the public purpses, the Trust will als assess the prpsal in terms f the BBC s wider strategy, including the expectatins f licence fee payers and external market develpments. At the utset f each PVA the Trust will cnsider carefully the aspects f public value which may be relevant t the assessment f the prpsal and hw thse aspects shuld be explred and evaluated. In general terms, a PVA shuld include an assessment f: The value which the prpsed change wuld deliver t sciety as a whle thrugh its cntributin t the delivery f the BBC s Public Purpses The value which licence fee payers wuld place n the prpsed change as individuals The value fr mney f the prpsed change and its cst (including the ptential financial implicatins if the prpsed change were nt t be made) Mre specifically, the extent t which a prpsed change prmtes the Public Purpses and creates public value will usually be assessed with reference t certain key drivers f public value. Hwever, depending n the prpsal the Trust may decide t cnsider ther factrs if this is mre apprpriate. An explanatin f the steps taken will be prvided in the PVA. The fur drivers f public value that the Trust will usually cnsider are utlined belw. 12
Figure 4: the drivers f public value Quality Reach Impact Value Quality is the prpsal high quality and distinctive? Reach hw far will the prpsal extend BBC usage and reach? Impact what are the benefits f the prpsals t cnsumers, citizens and sciety as a whle? Value fr Mney is the prpsal an effective use f public mney? The exact definitin f each f the drivers f public value will be determined in the PVA and may vary depending n the nature f the prpsals. The fllwing hwever prvides a brad guide t the drivers that may be used in the PVA. Quality and Distinctiveness The PVA may cnsider the likely quality utputs f the prpsal. This may include the quality f any cntent t be supplied by the service r the ptential impact n quality measures. The PVA will als cnsider the extent t which the prpsal is distinctive frm ther existing r prpsed services. Distinctiveness may be particularly difficult t assess in nascent markets, hwever, the PVA wuld need t cnsider what features culd make a prpsal distinctive in such markets. Reach Reach assesses the prjected usage f the service ver a given perid f time (fr example, the number r percentage f adults wh wuld use the service at least nce in an average week). Taking int accunt its duties under the Charter and Agreement and the particular prpsal under cnsideratin, the Trust may in sme cases wish t fcus n a particular cnsideratin f reach, fr instance reach by specific audiences and regins r prgramme genres. Impact The impact f a prpsal can cnsist f tw cmpnents which may be cnsidered separately: a) Cnsumer benefit this refers t the benefit that an individual user wuld directly gain frm using the prpsed service, fr example, whether individuals find a prpsed new service enriching r challenging. This wuld als include an assessment f the value which licence fee payers wuld place n the prpsed change as individuals. b) Citizen benefits this refers t benefits which the prpsal may create fr sciety as a whle, fr example, whether a service might fster a better functining demcracy r understanding and respect between different cmmunities 13
Cst and Value fr Mney This driver assesses the value fr mney f the prpsed change and the cst t the BBC f the prpsals (including the ptential financial psitin if the prpsed changes were nt made). This may invlve cnsideratin f the relative efficiency f delivering the prpsed change, fr instance thrugh cmparisn with similar services where pssible. Overall Assessment The PVA will cnsider the relative strength with which the prpsed change supprts the relevant drivers f public value and the cst f delivering that value. The utcme will take accunt f all the factrs, althugh cnsideratin may als be given t islating thse factrs which specifically drive the Public Purpses fr the prpsal in hand. The PVA may als cnsider any cnditins which wuld alter the public value f the prpsals. Finally, the assessment may als take accunt f alternative methds f delivering the stated aims f the prpsal. Hwever, this wuld be unlikely t invlve an assessment f any alternative ptins in detail. Surces f evidence The Trust will always include apprpriate public cnsultatin in explring and evaluating public value. It may draw n a range f ther evidence during the PVA. This includes, but is nt limited t: Frecasts f demand Results frm trials r pilts Qualitative and quantitative studies including cnsumer research and deliberative juries Internal and external market analysis Independent expert advice Evidence f impact n particular parts f the audience, and the analysis f such impact (especially as regards, where applicable, cmpliance with the public sectr equality duty). The Trust will assess the evidence submitted by the Executive and may questin the Executive further where necessary. If required, the Trust may als cmmissin additinal research. Crdinatin with Ofcm The Trust will liaise with Ofcm thrughut the PVA prcess. Infrmatin will be shared between bth parties, except where submitted in cnfidence r where therwise vertly cmmercially sensitive, as set ut in the JSG cnstitutin. The Trust and Ofcm will ensure that the PVA and MIA prvide a cnsistent basis n which the Trust can assess the prpsal. Hwever, the PVA and MIA perfrm different rles and the Trust s cnclusins n the PVA will be develped independently and withut the input f Ofcm, and vice-versa. 14
The Market Impact Assessment (MIA) The MIA assesses the effect f the prpsed service r activity n the wider market, bth nw and in the future. The MIA is prvided by Ofcm and verseen by the Jint Steering Grup (JSG), which cnsists f three members frm Ofcm and three frm the Trust. The JSG is respnsible fr: Setting and publishing terms f reference fr the MIA Agreeing the ptential relevant markets fr the assessment after cnsidering advice frm Ofcm. Where there are a number f ptential markets identified by the JSG, the MIA will reprt n each ptential market in the absence f agreement t d therwise Ensuring that the MIA is cnducted in a manner apprpriate t the nature f the PVT and t a suitable schedule The JSG will als establish a timetable fr cmpletin f the MIA. The MIA prcess itself begins with the publicatin f the terms f reference fr the MIA and a public cnsultatin. The MIA must be cmpleted within three mnths, althugh the JSG, where justified by the circumstances, may allw a lnger perid. The JSG may als determine that a shrter timetable is apprpriate fr a particular assessment as set ut belw. Changes t the MIA timetable part way thrugh an assessment will be annunced publicly. The MIA will be undertaken in accrdance with the methdlgy agreed between Ofcm and the Trust 19. In certain circumstances the JSG may decide t adpt a simplified apprach t the MIA, in which case it may be pssible t cmplete the MIA in less than three mnths. Befre deciding n a simplified apprach, the JSG will take int accunt the results f a shrt public cnsultatin carried ut by Ofcm. While the prvisin f the MIA will be verseen by the Trust, the substantive findings f the assessment remain a matter fr the judgment f Ofcm. The final MIA reprt will be published by Ofcm. The Trust and Ofcm will aim t publish the MIA and PVA at the same time, and in any event at least ne week befre the prvisinal PVT findings are published by the Trust. Cnclusin f a PVT The Trust will cnsider the final PVA and MIA reprts. In deciding whether t grant apprval fr the prpsal, the Trust must satisfy itself that any likely adverse impact n the market is justified by the likely public value t be created. In arriving at its decisin, the Trust will als take int accunt whether any apprval wuld be cnsistent with the Trust's duties under the Charter and Agreement and cmpetitin law (including state aid law) 20. The brad cnsideratins the Trust will generally take int accunt in the PVT are utlined in figure 5 belw. 19 This is published at http://stakehlders.fcm.rg.uk/binaries/research/tv-research/bbc-mias/bbc-mia-meth.pdf 20 The Trust will satisfy itself in this regard n the basis f advice received. Ofcm has n respnsibility fr prviding the Trust with advice n cmpliance with cmpetitin law, either as part f the Market Impact Assessment r therwise 15
Figure 5: PVT cnsideratins Public Value Test (PVT) Public Value Assessment (PVA) Market Impact Assessment (MIA) Fit with purpses Agreed markets Quality and distinctiveness Identified impacts Reach Cmpetitin effects Impact Cst and value fr mney In assessing the prpsal the Trust may als cnsider whether any pssible amendments t the prpsal culd increase the public value created r reduce the impact n the wider market. Having cnsidered the PVA and MIA the Trust will draw prvisinal cnclusins n the prpsed change. At least ne week after the publicatin f the PVA and MIA reprts, the Trust will publish its prvisinal cnclusins. The Trust will als publish any prpsed amendments t service licences r nn-service apprvals if required by the prpsal. Where the prpsal requires a new service licence r nn-service apprval, the Trust will publish this fr cnsultatin, at the same time r shrtly afterwards. The amended r new service licence r nn-service apprval will nly cme int effect when and if final apprval is given by the Trust. The Trust will publicly cnsult n its prvisinal cnclusins, nrmally fr a perid f 28 days. The Trust may, hwever, cnsider hlding a lnger r shrter cnsultatin perid, depending n matters such as the nature and cmplexity f the prpsal and the vlume f infrmatin published at this stage f the prcess. The Trust will cnsider and take accunt f respnses received during the cnsultatin befre making its final decisin. Fllwing the cnsultatin and having taken accunt f the respnses, the Trust will publish its final decisin. Depending n the view reached, the Trust can: Apprve a prpsed change Apprve a prpsed change with cnditins Reject a prpsed change Similar utcmes are available t the Trust in the case f changes invlving nn-service activities that have been the subject f a PVT. The Trust will publish its final decisin and at least a summary analysis f all inputs received in cnnectin with the public cnsultatin. It will als publish any amendments t service licences, r new service licences if required, reflecting the Trust s decisin and 16
which were cnsulted n as part f the PVT prcess. The final decisin will be shared in cnfidence with the BBC Executive ne wrking day in advance f publicatin. The Trust s decisin is the last stage in the PVT prcess and the Trust s decisin in relatin t the PVT is final. As nted abve, prpsals fr the intrductin f a new service are als subject t a prcedural vet by the Secretary f State fr Culture, Media and Sprt, as set ut in Clause 33 f the Agreement. 21 Once the PVT prcess has cncluded it will frmally ntify the Secretary f State f its decisin and the steps taken t reach that decisin in rder that the Secretary f State may cnsider whether r nt t apply the vet in a particular case. 21 The intrductin f a new service fr the purpses f the Secretary f State's prcedural vet means anything which the Trust prpses t authrise by a new service licence rather than the amendment f an existing licence (Clause 33(4) Framewrk Agreement) and des nt apply t nn-service activities. Mre detail abut the arrangements regarding the prcedural vet can be fund here: [link t exchange f letters]. 17
Onging mnitring Once launched, all BBC activities must cmply with relevant regulatry and legal requirements, including the terms f the relevant service licence r nn-service apprval, and any cnditins impsed theren. The Trust has als put in place a range f regulatry framewrks, including, but nt limited t, the fllwing: Editrial guidelines Statement f plicy n fair trading Syndicatin plicy Parties wh believe that specific BBC activities are in breach with any f these requirements may cmplain t the BBC thrugh the relevant cmplaints prcesses. In general, cmplaints are cnsidered by the BBC Executive in the first instance. The Trust may then cnsider cmplaints n appeal. Details f the Trust s cmplaints and appeals prcesses can be fund at: http://www.bbc.c.uk/bbctrust/cntact_us/making_a_cmplaint.html Applicatin f the PVT t launched services The Trust can decide t apply a PVT t any significant change t a UK public service that was nt frmally ntified t the Trust befre the change was made. These are expected t be highly exceptinal circumstances and the Trust may cnsider it apprpriate t suspend the service pending cmpletin f the PVT. Service Reviews The Trust als undertakes a detailed review f each BBC service at least nce every five years. This includes public cnsultatin n the perfrmance f the service. Details f the Trust s service reviews can be fund at: http://www.bbc.c.uk/bbctrust/ur_wrk/services/ Strategic Reviews Under the BBC s Ryal Charter it is the respnsibility f the BBC Trust t set the verall strategy fr the BBC and t determine hw the BBC can best fulfil its Public Purpses that as set dwn in the Charter. Peridically, the Trust will review the verall strategic directin f the BBC t ensure its activities cntinue in alignment with the BBC s Public Purpses in light f changes in the envirnment in which the BBC perates. http://www.bbc.c.uk/bbctrust/ur_wrk/strategy/ Value fr Mney Reviews One f the Trust s key respnsibilities is t make sure that every pund f the licence fee wrks as hard as pssible. One f the ways we d this is thrugh a prgramme f indepth value fr mney reviews carried ut by the Natinal Audit Office and ther 18
independent experts. We always publish these reprts and explain hw we plan t respnd t the recmmendatins made. Yu can find the reprts using the link belw. http://www.bbc.c.uk/bbctrust/ur_wrk/value_fr_mney/ 19