Will the BBC get all its cash from its new freedom to raise millions from video on iPlayer?

BBC Broadcasting House

BBC Broadcasting House


The BBC has taken a hammering from this government. It has had to impose cuts, agree to fund free TV licences from the over 75s, lose staff and transfer BBC3 to the internet. Further cuts could affect its 24 hour news service and its ability  to mount news investigations.

Yet is the BBC really taking advantage of the one lifeline thrown to it by the government – to be able to raise money from people who don’t watch it on TV  but via video on demand on iPlayer?

A completely unreported assessment by the National Audit Office – soon to be given powers by the government to directly audit the BBC – has called into question whether the BBC is really up to the job. I covered the report in Tribune.

The NAO after looking at the figures came to some startling conclusions. It found before the BBC had got new powers on September 1 that it was  already losing tens of millions of pounds by not chasing up people it should.

The audit office examined the BBC’s licence evasion strategy and concluded that it needed to update it and get accurate figures on how many people were watching TV on their computers, Ipads and mobile phones and no longer had a TV set. Others used game consules.

Figures in the report estimated that the BBC may lose £34m a year by not monitoring the rapidly growing group which has seen people watching iPlayer on their computers jump from 1.6m a day in 2009 to 8m now.

The findings also questioned whether the BBC was losing money by not  collecting  enough licence fees from students, military personnel, lodgers and second home owners.

The audit office estimated that while most students did not need a licence for watching TV because they went home during the vacations the BBC still only collected licence fees from half the number of students who should pay – some 22,000 out of 43,000.

The BBC, while acknowledging the shortfall, defended their decision not to concentrate on these evaders. The BBC was also found by the NAO to use forms that had not been changed for 15 years when they visited licence evaders referring only to TV sets. These have now been changed.

The BBC argued: “Students in halls of residence make up fewer than 1 per cent of addresses needing a licence, and fewer than 10 per cent of them need a licence. Students who normally live with their parents in the holidays will be covered by their parents’ licence at university if they watch live TV on a device which is not plugged into the mains e.g. a laptop or mobile phone.”

“The BBC will seek independent assurance where there are substantive changes to the model. In addition, we will assess how we deal with those likely to evade as a result of changing technology and audience behaviour… but to put this in context, these groups make up 1.15 % of the licensable base.”

Yet the same report also disclosed the scale of people who do not watch TV on TV.

The BBC’s own survey shows that 79 per cent of 16-24 year olds are now more likely to watch TV on other devices than a TV set. The figure for 25 to 34 year olds is 53 per cent.

Surely some mismatch here? And my suspicion is that the BBC is being a tad complacent about it.

Also even if the BBC is right and they have got 99 per cent of people paying a licence fee that extra £34m could make  a few more TV programmes and prevent staff being sacked.

It may be a drop compared to the £3bn raised from the licence fee but for the BBC at the moment every penny counts.




Leaked Savile Report: The BBC culture that failed to protect people from abuse


Dame Janet’s highly critical report on the BBC’s handling of Jimmy Savile leaked to me  pinpoints  very serious issues at the Corporation which are still not resolved.

The official response from Tony Hall, the director general of the BBC, that this was a dark day for the BBC and it is all in the past does not wash.

Nor frankly does Dame Janet Smith’s plea to ignore this “early” draft. All the evidence  from people was taken before it was compiled and she has said she has not changed her conclusions. So will she rewrite it now?

Her draft report is not a whitewash. It is a closely argued analysis revealing a culture that allowed considerable sex abuse to flourish at ground floor level without a mechanism to report this to the top. This does not seem to have  changed and has conveniently let all the BBC’s top executives off the hook.

It reveals a  crass deferential attitude to celebrities – who could do anything they liked because they were ” untouchable” and people looked the other way. This is no different today – given the present cult of celebrity.

It also reveals an organisation that is more concerned with its public reputation that tackling the root of the problem- how to stamp out opportunities for sexual abuse.

Not only were under age  adolescents and children the victims of sexual abuse but so were  staff employed by the BBC – who did not complain because they wanted to keep their jobs.

And if anyone complained it seemed the BBC was woefully inadequate in investigating what happened – if it did indeed want to get to the real truth. That failure extended to its own investigations into the issue by its own investigative journalists who found their work dropped or sidelined.

When the BBC does publish the report it will have a lot of explaining to do. On the central issue of child sex abuse Dame Janet concludes that there could still be a paedophile lurking in the BBC and thinks the chance of this being exposed is now worse than then – because many people are on short term contracts and would worry if they could work again.

Her findings directly contradict a report commissioned by the BBC last year from the firm Good Corporation which praises the BBC’s policies in preventing a repeat of child sex abuse. Which is right?

Also it is still clear  the whistle blowing process at the BBC, is, at best, not properly promoted ( say the Good Corporation) or worse, virtually non existent  (  says Dame Janet’s review).

So I don’t think anyone should be fobbed off by complacent attitudes from the BBC and attempts to move the debate to the dim and distant past,. The BBC failed a group of survivors of sexual abuse by doing nothing then – and could be doing the same now.

Tax Avoidance:Treasury ” We screwed Up”,BBC ” Nothing is wrong.”

Treasury mandarin Sir Nick Macpherson- admitting catalogue of errors Pic Courtesy: BBC

Yesterday Parliament’s Public Accounts Committee had the Treasury, the BBC, Revenue and Customs and local government before them. Subject: How have so many publicly paid figures got away with tax avoidance.

You could not draw more of a distinction between the evidence given by Whitehall and the BBC on the  same issue. There are are detailed reports by me and Mark Conrad on the Exaro news website ( http://www.exaronews.com) about the hearing.

Suffice to say Sir Nick Macpherson, permanent secretary to the Treasury, put his hands up. He admitted ” a catalogue of errors” had led Student Loans Company chief, Ed Lester, to get a £182,000 a year  job with the government and avoid having tax and national insurance deducted at source. Indeed Howard Orme, the financial director of the Department for Business, Innovation and Skills, admitted he originally wanted £260,000 a year to do the job.

The disclosure that 2400 Whitehall staff have personal contracts shocked Sir Nick. He was forthright: “The Treasury had been asking the wrong questions. We were concentrating on value for money and not on the tax implications. We should have looked have looked at the figures more carefully.”

Contrast this with the BBC’s chief financial officer,Zarin Patel, who despite disclosing that the BBC employs a third of staff – some 25,000 – as freelances and admitting that 148 of the 467 journalist talent are paid through personal service companies, thought there was no tax avoidance at all.

Patel said: “There is no difference to the HMRC whatever way this is done.” In other words it doesn’t matter.

Not a view shared by the committee, Margaret Hodge, the chair, pointing out there was nothing worse than ” a person paid by the taxpayer avoiding tax.”

Patel’s complacency was also shattered later when HM Revenue and Customs chief, Lin Homer, revealed the paucity of checks on these people who have personal service companies. She disclosed that over three years the number of checks had been 25,12 and 23 respectively. One MP  even wondered whether this should be made public because it would only encourage more tax avoidance and evasion. This is now going up to 230 – but with 3,000 non journalists at the BBC on personal service contracts alone – how much difference will this make. More grist to the case presented by Mark Serwotka, general secretary of the Public and Commercial Services Union, that the Revenue is indeed well understaffed to do its job.

More interest for Freedom of Information freaks – it emerged that the information I got through  the freedom of information request  which blew the whole story – is now to be used as a case study by Whitehall of how something can go wrong ( or at last I hope so!).

The London borough of Barnet also emerged in its true colours . Evidently it had not replied to a request from the Local Government Association to disclose how many senior staff were on personal service contracts – the number according to the redoubtable Mrs Angry @brokenbarnet is 13. But Mps appear to be on the case – they will need to be vigilant, Barnet has a habit of not co-operating with anyone who wants information.

The hearing was a success. The next stage will be to ensure there is proper action to get these wheezes stamped out, the sooner, the better. And of course end the BBC’s complacency over this issue.

now with full cast of characters to appear before MPs

Westminster Confidential

On Monday BBC chiefs will appear before Parliament’s most powerful committee, the Commons Public Accounts Committee.

They will be there to answer questions on the vexed question of employing people through personal service companies to avoid paying tax and national insurance at source.

The BBC will be joined be civil servants from Whitehall and local government who have all been exposed of using this device to employ people and avoid paying tax and national insurance at source.

The scandal was first exposed by me on the ExaroNews website (http://www.exaronews.com)  and BBC Newsnight when it was discovered that Ed Lester, the Student Loans chief, had used this device to be paid £182,000 a year.

The furore that followed led Danny Alexander,Chief Secretary to the Treasury, to launch an inquiry which discovered that another 2500 civil servants were using the same device across Whitehall. The review’s findings were also leaked to…

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Why Margaret Hodge must hold the British Tax Avoidance Corporation to account: Updated

George Entwistle, new director general. Time to tackle tax avoidance? pic courtesy: Metro

On Monday BBC chiefs will appear before Parliament’s most powerful committee, the Commons Public Accounts Committee.

They will be there to answer questions on the vexed question of employing people through personal service companies to avoid paying tax and national insurance at source.

The BBC will be joined be civil servants from Whitehall and local government who have all been exposed of using this device to employ people and avoid paying tax and national insurance at source.

The scandal was first exposed by me on the ExaroNews website (http://www.exaronews.com)  and BBC Newsnight when it was discovered that Ed Lester, the Student Loans chief, had used this device to be paid £182,000 a year.

The furore that followed led Danny Alexander,Chief Secretary to the Treasury, to launch an inquiry which discovered that another 2500 civil servants were using the same device across Whitehall. The review’s findings were also leaked to Exaro and BBC Newsnight.

Less well covered is that the BBC and local government were up to the same thing . Until now both sectors have got away with it. on Monday they can be called to account and should be.

The BBC has enjoyed the protection of Jeremy Hunt, the culture secretary, and as never been required to disclose the full picture.  Indeed the biggest disclosure came from David Mowat, a former member of the public accounts committee, who  found out through a freedom of information request that the BBC employed 3000 people- more than the whole of Whitehall – through personal service companies. And none of these were journalists who are exempt from FOI because they are regarded as ” talent.” So the full  picture is bound to be much,much bigger.

Similarly Eric Pickles, the communities secretary, has not followed through vigorously what is going on in local government.No attempt has been made to probe tax avoidance at the London boroughs of Barnet, Hackney and Hammersmith and Fulham or the blatant disregard for employing people directly on the Isle of Wight.

Monday will be a great opportunity for the terrier instincts of Margaret Hodge, Richard Bacon, Stephen Barclay, Meg Hillier and Fiona Mactaggart to name but a few to ask a few very pointed questions and demand explanations from the BBC and town halls. I hope they will not disappoint and not be put off by Whitehall  sniping about the way they question witnesses.

The BBC after all would not exist if it did not receive licence  fees from taxpayers and even non taxpayers. Its new director general George Entwistle, should make the Corporation becoming more transparent as a priority. Over to you, Margaret.

Since this has appeared a full cast list of people  summoned to appear has been announced. They are:

 Carolyn Downs, Local Government Association, Zarin Patel, Chief Financial Officer, BBC and David Smith, Head of Employment Tax, BBC; Sir Nicholas MacPherson KCB, Permanent Secretary, HM Treasury, Howard Orme, Finance Director, Department of Business, Innovation and Skills, Lin Homer, Chief Executive and Permanent Secretary, HMRC and William Hague, Executive Director, Efficiency and Reform Group, Cabinet Office.

Followers of the story might be interested to know that documents released to me  under Freedom of Information point to Harold Orme being directly connected to the controversial appointment of Ed Lester, head of the Students Loan Company, with the knowledge that he would not have any tax or national insurance directly deducted by the Student Loans Company. This is a good call by the committee.

Exaro  News will have a story up on their website  on Monday evening –  after the committee has met.

Is the BBC the British Tax Avoidance Corporation?

BBC now in row over paying 3,000 people through personal service companies

The BBC has disclosed that around 3000 people on the Corporation’s books are paid through personal service companies – the same system used until banned by the Treasury by Ed Lester, the Student Loans Company chief, to avoid paying tax or national insurance at source.The full story is in Exaro News at http://www.exaronews.com It comes from a Freedom of Information request by David Mowat, the Conservative MP for Warrington,South and only covers part of the picture.
Altogether the BBC across the globe has 20,000 directly paid employees and 12,000 freelancers – 3,000 of them through personal service companies.
The figures are an underestimate since it does not include many of the BBC’s commercial companies and all of BBC’s talent – defined by them as ” people who appear in presenting or journalistic roles on our television, radio and online.”
So none of the high paid presenters will be in this breakdown nor will be people employed on many of the BBC’s commercial activities. Nor are people supplied through Reed Personnel who can choose to be paid through a personal service company, and BBC has decided to keep their numbers secret.
This means the figure must be much, much higher. A breakdown provided by the BBC – suggests that more than half the 3,000 are taking less than £26,000 a year, which suggests that they are genuine freelance. Another 1300 or so earn over £26,000 – 318 over £50,000 – and of these five earning over £150,000 and 31 over £100,000.
The BBC insist that none of them are permanent staff and like the government point out that none of them are being paid illegally.
A BBC spokeswoman said:”In the main they are hired to do specific jobs for a fixed period of time such as directing, editing and other craft skills. When a person is contracted in this way it is their responsibility to organise their tax arrangements directly with the HMRC. This is entirely in keeping with HMRC regulations and is standard practice across broadcasting and many other industries.”
However there are other questions to be answered. Why are the BBC not doing the same review as Whitehall in finding out whether all these contracts are genuine? David Mowat is right when says the BBC management should do this.
And why can’t we find out what the BBC Talent is paid – rather than the BBC sheltering behind an exemption through their Freedom of Information Act aimed to protect journalists; sources not disclose their pay – since it is paid by the licence payer.
Also rather disturbingly two prominent journos (one ex BBC)have told me the BBC tried to encourage them to be paid through personal service companies when they did not want to do it. Is this pressure from the BBC to avoid having to pay national insurance and encouraging possible tax avoidance. We should be told.

Why the Tories have only themselves to blame for not reining in BBC excesses

Jeremy Hunt : Playing a blinder in making sure the public don't know too much. Pic Courtesy: The Guardian

Remember the great fuss from the Conservatives on how they were going to hold the BBC to account, expose those mega salaries paid to Graham Norton and Jeremy Paxman and make sure the taxpayer got the best value for their money from the BBC.

Well if you beleive  culture secretary Jeremy Hunt and Lib Dem culture spokesman Don Foster, it will be all happening from next year in the new cash frozen agreement to fund the BBC. He has spent the last year telling us about his success in allowing Parliament’s National Audit Office the right to launch any inquiry it likes into whether the BBC is value for money.

To quote him directly: “It is right that licence-fee payers have confidence that the BBC is spending money wisely, so I am pleased that the NAO now has the right to full access to BBC information. Its new power to decide which areas of activity to scrutinise will increase transparency while maintaining the BBC’s independence.”

In fact this statement is the worst kind of spin and churnalism. The hilarious fact is that the national papers that were critical of the BBC, the Daily Mail and Daily Telegraph plus for that matter the Huffington Post website  ( see it here http://huff.to/vDq6y5 ) fell for the whole thing, hook line and sinker.

How do we know this to be true? Well reluctantly after both the NAO and culture ministry had refused to reveal it,  all the correspondence between the remarkably named Amyas Morse, head of the National Audit Office, Jeremy Hunt and the Chris Patten, chairman of the BBC Trust and his predecessor Sir  Michael Lyons, were released under a  Freedom of Information request to Exaro News, the new investigative website I work for. You can see  the two detailed factual articles at http://www.exaronews.com/ .

What they reveal is that Amyas – the nearest person we have in Britain to ” Mr Taxpayer” was engaged in a bloody war of attrition with the BBC and Mr Hunt on behalf of you, the licence fee payer, to get proper unfettered access to the BBC and that he lost.

At one stage he was extremely fed up.  In Whitehall language he wrote, ” “I am concerned that audit access that depends on continuing agreement between the government and the BBC rather than on statute leaves important matters unresolved and may mean that, in practice, the coalition’s proposals may not take things much further forward in terms of independent scrutiny of the BBC.”

In even more stark language he said:”“I am disappointed that it remains your view that my reports should reach Parliament via the BBC Trust and secretary of state.” “It raises the possibility that the BBC Trust or the secretary of state could redact material or, indeed, not publish the report.” You can  download all the letters at the Department of Culture, Media and Sport website See http://bit.ly/ujwp60 if you want to trawl through them.

The reason why this public official is so cross is plain to see. Why he might have the right to investigate what he likes, he is shackled by what he can find out. For a start all those BBC stars can protect their deals from public scrutiny because he has no statutory right of access and cannot override the Data Protection Act.  Even the Royal Household is not so well protected from this and the mega salaries, also paid by the taxpayer, and  the rest of Whitehall can be  scrutinised.

Also no other organisation  examined by the NAO can delay the publication of a critical report by running off to the secretary of state.

Hunt also rejected giving the right of the NAO to audit the BBC accounts – something I am told auditors find extremely useful because  throws up very quickly information when money is misspent.

  He told Morse: “I do not intend to give the NAO statutory access. “I am not persuaded that I should require the BBC to appoint the NAO as its external auditor. I do not consider this is a necessary step in ensuring that the government commitment on NAO access is achieved.”

 Finally he put a gun to his head: ” “If we do not reach agreement, the NAO will not have access to the BBC at least until there is another chance to review the agreement in 2016.”

Hunt has played a blinder over this. He convinced the media that he is Mr Good Guy when actually he is a baddie. The trouble is that  it is you, the licence payer, who have been conned. You could tell  him if you want to. His e-mail is jeremy.hunt@culture.gsi.gov.uk.

BBC bosses: Squandering £160m of our licence fee

Broadcasting House: Part of the BBC's wasted £160m Pic Courtesy:vam.ac.uk

Update: Since this blog was written Chris Patten, chair of the BBC Trust, has decided to curb the very high levels of executive pay at the BBC – a first step to deal with the problem. But he will need to tackle how the managers control non journalist spending – such as IT contracts and property moves which cost licencepayers £160m.

Don’t get this blog wrong, this is not  an attack  on the BBC for wasting licence payers money on programmes. It is an attack on how the BBC has wasted  tens of millions of pounds by not controlling the money it spends on the boring bits – the money spent on property, studios and digital equipment that go to make those programmes possible.

Two recent reports from the National Audit Office – the body that on our behalf examines whether our taxes are spent wisely –  make very disturbing reading. They are into the BBC’s handling of some £2 billion of cash that is being spent on moves from  London  to Salford and Glasgow  and back to Broadcasting House in London and into cutting edge digitisation of  TV. I have written about this at length in The Journalist – the National Union of Journalists magazine  see http://bit.ly/mCekbZ .

In a nutshell they show that up to £160m was wasted on these plans because of delays, a botched private tender and exposed a  bad management attitude at the top.

As the auditors, not known for colourful phrases, said on people handling the  studio move to Pacific Quay, Glasgow :“It was sometimes difficult to engage senior staff in decision-making about their area as some seemed to either not fully understand their responsibilities or take them seriously enough.”

To put in context the money lost was enough  to run both BBC News Channel and BBC4 – or in radio terms the entire cost of running Radio Three and Four – for a year. That bad.

The reason why it matters is that the BBC is now having to make cuts to meet the government’s spending targets. Journalists are going to be sacked, programmes and parts of the BBC World Service , radio  and TV channels closed down. It can ill afford to make mistakes in its boring  bits.

I don’t mind paying a licence fee to hear Jim Naughtie and John Humphrys confronting a less than straight politician on the Today programme or  see  Ian Hislop and Paul Merton take the piss out of  Boris Johnson on Have I got News for You? I certainly am keen on Panorama exposing scandals in private care homes. I like to be entertained by comedians like David Mitchell or the lewder Russell Howard on Live at the Apollo or dramas like Case Histories, Waking the Dead etc.

I do mind paying a licence fee for some useless manager to spend millions giving IT contractor  Siemens a monopoly tender  to digitalise TV which then falls apart. Or giving some  property company £46m extra cash because  BBC managers can’t get their act together to move back to Broadcasting House in time and have to extend their leases at Bush House.

So I think it is time the corporation got a grip on this. And what are they and Jeremy Hunt, the culture secretary, doing. Trying to bind the hands of the very body exposing this waste from doing its job properly.

Over a  year in government nothing has been done. The head of the National Audit Office who has the wonderful name of Amyas Morse wrote to Mr Hunt last September trying to get three basic things done on behalf of viewers and listeners.  He wanted  unfettered access to information to the BBC, the right to decide what he wanted to investigate and the right to publish his findings when he and not the BBC wanted.  Hardly revolutionary stuff.

Not granted yet. So how about some interactive reaction. If you think the man from the audit office should get  his access on our behalf –  send him an email at  enquiries@nao.gsi.gov.uk  marked Amyas Morse ( as it says on their website). You think  the BBC Trust is blocking this email trust.enquiries@bbc.co.uk or contact its chairman Lord Patten at pattenc@parliament.uk .

Finally you could remind Jeremy Hunt that he is supposed to have sorted this. Try jeremy.hunt@culture.gsi.gov.uk .  It is time the BBC had a metaphorical bomb put under it so it  gets its act together and doesn’t waste another £160m.