Policy paper

BBC Mid-Term Review: Terms of Reference

Updated 26 May 2022

This was published under the 2016 to 2019 May Conservative government

These Terms of Reference have been produced by the Department for Digital, Culture, Media and Sport (DCMS) following consultation with the BBC, Ofcom and each of the Devolved Administrations in accordance with article 57 of the Royal Charter.

Purpose

The BBC is established by Royal Charter. Following the Charter Review in 2015/16, new governance and regulatory arrangements for the BBC were established: governance of the BBC would be conducted by a new unitary Board under article 19 of the new Charter, while regulation would pass to the independent regulator Ofcom under article 44.

Article 57 of the Charter allows the Secretary of State for Digital, Culture, Media and Sport to conduct a Mid-Term Review focussing on the governance and regulatory arrangements for the BBC. The Mid-Term Review must be completed between 2022 and 2024.

This review aims to examine and assess how effectively the governance and regulation arrangements of the BBC are performing at the half-way point of the BBC Charter.

Objectives

The objectives of the Mid-Term Review are to:

1. Examine whether the governance arrangements established during Charter Review 2015/16 and enshrined in the current Charter and Framework Agreement are effective in enabling the BBC to deliver on its Mission and Public Purposes.

2. Examine whether the regulatory arrangements established during Charter Review 2015/16 and enshrined in the current Charter and Framework Agreement are effective in enabling the BBC to deliver on its Mission and Public Purposes and reviewing the evidence as to how ensuring Ofcom can successfully hold the BBC to account.

3. Make recommendations, as appropriate, for changes to these arrangements during the current Charter period, and as necessary, for further consideration at the next Charter Review.

In conducting this Mid-Term Review, the government remains committed to upholding the independence of both the BBC and Ofcom.

Scope and key considerations

The scope of this review is to consider how the key changes to the BBC’s governance and regulation arrangements made through the current Charter have been implemented, and in particular whether they have successfully enabled the effective delivery of the BBC’s Mission and Public Purposes across the UK, including each of its Nations and globally), the successful discharge of the BBC’s General Duties and that specific functions of the BBC Board and Ofcom as set out in the Charter and Framework Agreement have been undertaken. In considering these issues the review may look at regulatory and governance best practice.  The review will have a particular focus on the following issues:

• Editorial standards and impartiality: assessing the effectiveness of the BBC’s governance mechanisms (including changes made in the light of the Serota Review) in ensuring compliance with its editorial standards including impartiality requirements, and the regulatory arrangements for the enforcement of the BBC’s content standards
• Complaints: the way the BBC handles complaints through its BBC First system, the Editorial Complaints Unit (ECU), transparency of complaints resolution, and Ofcom’s framework for assessing BBC complaints as part of ensuring effective oversight of the BBC and its relationship with licence fee payers
• Commercial governance and regulation: whether the governance and regulatory arrangements of the BBC’s commercial subsidiaries ensure the effective functioning of the BBC’s commercial subsidiaries in accordance with its Charter obligations and appropriately support the BBC’s ability to maximise revenue in support of its public service activities
• Competition and market impact: evaluating how the BBC and Ofcom assess the market impact and public value of the BBC in an evolving marketplace and how that relates to the wider UK media ecology, including with regard to commercial radio and local news sectors and other content makers and distributors
• Diversity: evaluating how well the BBC’s governance arrangements deliver on the duty for the BBC and its output to reflect the entirety of the whole United Kingdom, including how it ensures diverse perspectives and interests are taken into account, and its duty to enter partnerships with other organisations throughout the UK, and also the extent of Ofcom’s regulation of these requirements
• Transparency: assessing the way in which BBC governance mechanisms support the BBC’s duty to demonstrate high standards of openness and transparency in the BBC’s reporting of progress against key commitments and performance against the above themes, and the extent of Ofcom’s regulation of that transparency

As set out in article 57 (4) of the Charter the Mid-Term Review must also consider any relevant reviews carried out by Ofcom under article 51 of the Charter (i.e. Ofcom’s review of BBC regulation), and its assessment of the BBC’s performance over the Charter period so far contained in its Annual Report on the BBC 2020-2021. This should not unnecessarily delay the implementation of any changes proposed as a result of Ofcom’s review.

As set out in the Charter, the scope of the Mid-Term Review is limited and must not consider the Mission of the BBC; the Public Purposes of the BBC; or the licence fee funding model of the BBC for the period of this Charter.

Process

As required by the Charter, the Secretary of State for Digital, Culture, Media and Sport has consulted the BBC, Ofcom and ministers of the devolved administrations in the formulation of these Terms of Reference.

The review will be conducted by officials from DCMS.

DCMS will seek information and other assistance from the BBC and Ofcom in connection with the review.  DCMS will also seek information from specific third parties as appropriate, such as key stakeholder bodies with an interest in how the BBC is governed and regulated, including those based in the UK nations. DCMS may also consider commissioning external research as required.

DCMS will work with the BBC, Ofcom and the Devolved Administrations throughout the Mid-Term Review, and will consult them on conclusions before the review is finalised. The final conclusions and associated recommendations shall be for ministers.   Any subsequent updates to the Framework Agreement shall require agreement between the government and the BBC, together with Ofcom’s input where relevant to their remit.

In addition to these Terms of Reference, relevant correspondence and the outcome of the Mid-Term Review will be made publicly available.

Any other material, including details of individual submissions by stakeholders and notes of any subsequent discussions with stakeholders shall remain confidential unless agreed for publication by DCMS Ministers and the relevant organisations.

Timing

We will seek to complete the review at pace, within 12 months.

Outcomes

The review will conclude with a publication summarising the evidence in respect of the current governance and regulation of the BBC, and setting out the government’s resulting conclusions.

The report may make recommendations for changes to the governance and regulatory arrangements for the BBC as set out in the Charter and Framework Agreement.