Money matters

The BBC Trust's new command and control system for dealing with Auntie's commercial operations is as clear as mud. It basically says everything must be done to make a profit for the licence-fee payer, but it doesn't have to be that big, or, indeed happen every year, as demanded in most of the real world. There may be more clarity when it publishes an indepent review of how the BBC currently operates transfer pricing,

The report is good at reprinting the big questions, but less good at answering them. Here's a few.. 

One respondent, having examined the published accounts for BBC Studios and Post Production, said that it was clearly not contributing to the licence fee income of the BBC and questioned how the proposed remit could be satisfied. Another respondent had examined the published accounts for BBC Global News Ltd, and commented that it had been operating for many years without making a viable return and in a commercial environment would have been closed long ago.

One respondent raised a specific question about whether the arrangements under which two of the BBC’s commercial subsidiaries will lease space at Television Centre once the refurbishment project is complete had been negotiated on an arm’s length basis and whether the subsidiaries would bear the full cost of these arrangements. Another respondent called on the Trust to include a requirement that all codevelopment, co-production, co-funding and first look deals between the BBC public service and commercial parties (including the BBC’s own commercial services) should be competitively tendered.

Some respondents made reference to the BBC’s recently announced ‘compete or compare’ plans and were particularly concerned that any new BBC production business should fully comply with legal and fair trading requirements and the Trust’s framework. One commented that should the BBC wish to proceed with moving inhouse production into a commercial service, it was vitally important that details were published so as to enable the BBC Trust and others to ensure that the commercial service would always pay market rate and that, where a concern was raised, there should be a formal system for issues or concerns to be raised with the Trust.

Let's hope the independent review gets some real prices and answers.