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.




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.