 Fy gael references ond yn ei wneud i gael eich tyntau mewn cael ei gael eich gael y cadw cwrs ac yn 2016 maen nhw'n ei wneud i'ch gael eu cyflwyffyr o'r ffordd sy'n mynd i'ch eu cael eu cyflwyffyr o'r ffordd sy'n mynd i'ch gael eu chyflwffyr o'r ffordd. Yr next item is to take evidence on two pieces of subordinate legislation as listed on the agenda. I welcome to the committee Aileen Campbell, Minister for Children and Young People, and our accompanying officials. Good morning to you all and a happy new year. I've seen an interview this year yet. After we've taken evidence on the instruments we will debate the motions in the the minister items 2 and 3, and the officials cannot permit to contribute to the formal debates. I invite the minister to make some opening remarks on both instruments. Thank you, convener and good happy year to you and to the rest of the committee. Thank you for the opportunity to introduce two draft instruments before you today. First, I am looking at the Secure Accommodation Scotland amendment regulations, 2016. The amendment regulations make provision about the time limits for and the hearing of evidence in i mi y tro mae'r cyfrindwyr yn cynnigol i gynnig i ddechrau'r dŵr a wneud o'r ddaeth yn ugyrchu sydd yn ein clwr neu rhan oedd yn cymdeithasio am wych yn cael ei weld o'r ddweud yn rhan o'r cofwyr gyda Sech την 44 o gyngorol Rhyw lyrwyr Scotland eich cyd-95? Ewa'w gwir eich syniog o'r 12-gwyrdau a wneud o'r ffiancon o'r gweld a fforddod macaroniad o ddweud y cyfrindwyr Cyfrindwyrewis Gwyrdau'r 44 o gyfnodol i ddweud ei weld o'r that the child will be detained in residential accommodation for up to a year. Those offences that would be imprisonable had they been committed by someone aged over 21. Importantly, the section 44 provisions don't extend to indictable offences or to murder. A child subject to a section 44 order may be placed in secure accommodation but only if certain conditions are met. The decision to place a child in secure accommodation is taken by the chief social work officer or of the local authority. Before that decision is taken, the chief social work officer has to consult with the child, each relevant person and the head of the secure unit. Less than five children were placed in secure accommodation as a result of section 44 orders in 2013-14, which was the last reported year. When a section 44 order is made by the sheriff, there is already an appeal right against the order under the 95 act. The decision by a chief social work officer to actually place the child in secure accommodation is already subject to a review process. However, previously, there was no right of appeal against the decision to place the child in secure accommodation in these circumstances. We, along with partners and stakeholders, consider that there was an opportunity to improve on that. The substantive issue was addressed by way of section 91 of the Children and Young People's Scotland Act 2014. That section inserted a new section 44A into the 95 act to create a right of appeal against the chief social work officer's decision. Those amendment regulations supplement those 2014 act changes by setting out further detail of the procedure relating to such appeals, including timescales, the taking of evidence and the obtaining of the child's views. Alongside the changes already made to court rules and the 95 act, that instrument will create a process that reflects as closely as possible the appeal arrangements for children placed in secure accommodation via the children's hearing system. I turn to the continuing care amendment order. This amends article 2 of the continuing care Scotland order 2015, with effect that from 1 April this year that a higher age limit for eligible persons specified for the purposes of section 26A to B of the Children's Scotland Act 1995 is increased from 17 to 18 years of age. That means that from 1 April this year an eligible person for the purposes of the duty on local authorities to provide continuing care under section 26A of the 95 act is a person who is at least 16 years of age and who has not yet reached the age of 18. By virtue of article 3 of the 2015 order, the local authorities' duty to provide continuing care lasts from the date on which the eligible person ceases to be looked after until the date of their 21st birthday. In summary, part 11 of the 2014 act on continuing care and the accompanying secondary legislation stresses the importance of encouraging and enabling young people to remain in a safe, supported environment until they are ready to make a more graduated transition out of care. That will help to normalise the experience by allowing strong and positive relationships between young person and their carer to be maintained into adulthood. This draft order is essentially a procedural amendment to increase the higher age limit for eligible persons from 17 to 18 years of age as part of an agreed annual roll-out strategy. That concludes my remarks, convener, and I am happy to take questions on both of those draft instruments. In paragraph 4 and 5, it says that the sheriff may hear evidence from the child or each relevant person in respect of the child. In a previous item that was discussed by the committee, we talked about the capacity of the child or the person acting on behalf of the child. In those circumstances, who do you think agrees the capacity of the child and who agrees the capacity of quote each relevant person in respect of the child? Is that down to the sheriff? It is important to remember that this is for children over the age of 12. There will always be appropriate ways to assess the capacity of the child and there will have been close working before the decision was made to take the decision to put the child into a secure unit. John, do you want to talk about anything more about the social work officer's role in assessing the capacity of the child? I think that, if I remember, there may be something in the 2014 act that says that, or at least if my memory serves me correctly, there will be something built into the sheriff quote rules that the sheriff can take the views of the child bearing in mind the age of the child and the ability of the child to offer a view. However, in the previous conversation, there was an age limit on that as well. However, the question is whether the child had the capacity to address the issues over the age of 12 or indeed the parent or person responsible for the child. Whether they had the capacity, are we saying that we are leaving it to the sheriff to decide? A child over the age of 12 will be presumed to have capacity, but clearly there has been intervention in that child's life, and there will have been a lot of support there in place and other interventions because of the decision to put that child into a secure unit. The other things that the legislation has to take cognisance of is getting it right for every child and all the checks and balances that are within that around making sure that child's decisions are taken. However, the amendment is to allow that child to have the same rights as if the child had been put into a secure unit through the children's hearing system to make an appeal if they do not agree with that process. Of course, that is to bring in that side of the secure unit legislation in up to pace with those children who are in place in a secure unit through the hearing system. That is about bringing in that equality and writing that anomaly that has been there within the legislation. However, the GERFEC legislation will capture those children as well, making sure that it is a child-centred decision because it is a serious decision. However, that allows that child to take an appeal and make an appeal if they deem that that has not been appropriate. I think that we support that. It is important that we do not leave it to the GERFEC to decide who is able and who is not able that there is a basis of him or her making that decision. On the continuing care, the policy note explains in line with the passage of the children and young people bill that continuing care provisions were being developed. The upper age limit will be extended annually until up to the age of 21. Why do we just do that now, instead of going 18 next year, 19 next year, 20 next year? For many of the members who have been in the committee at the point in which we passed the legislation, the aspiration is to get to 21, but the practicalities of doing that has been the grades rule out annually every year. That will capture the young folk who are about to ordinarily, if the legislation and law had not been changed. They would have had to exit their care placement. That is about the gradual increased roll-out of the policy to capture all the young folk. It does not make any difference, because there are 16 to 17, 17 to 18, and it is the same young people who, eventually and essentially, will get to the age of 21 if they want to stay in their care placement. That allows us to transition in a sustainable way to allow the care placements to cope. It was agreed as part of the roll-out that the approach would be taken. My late arrival due to flight problems. On the subject that Chick Brody referred to, the minister will recall that, during the passage of the bill, I was one of the ones who was advocating an extension to 21. The argument that the minister put in relation to why a more graduated approach was felt to be appropriate is one that the whole committee found compelling by the end of the evidence in the sense that what we want is to put in place is something that is sustainable and delivers the objective. From what we were looking at initially, the evidence that we received suggested that some 16-year-olds would find themselves at a point where they were about to set key life-stage exams. We are finding that they were having to cope with being exiting the care system, and that, I think, everybody accepted, was not a place we wanted to be. I think that all I wanted to do really was to acknowledge the fact that these regulations are coming forward and hope that they do now have the effect that we all aspire to during the passage of the bill. I thought that it was interesting that you were repealing the 1995 act 20 years ago, and we would always expect a right of appeal and new legislation going forward. Have you carried out a review of any other legislation relating to children that might require subordinate legislation to bring forward a right of appeal, or is that just a one-or? Sorry, in any element of the children's policy at all. Given that you are revising something that is welcome that is 20 years old, is there any other legislation relating to children where a right of appeal is absent if you carried out a review wider than that? Not to my knowledge, Ms Scanlon, but if there are any other things crop up, we will endeavour to let you know, but this is about making sure that the anomaly is rectified to allow this group of young people to have the same rights of appeal as those through the children's policy. I do agree with that. I am just surprised that it was 1995. Are there many parts of the 1995 act that parties have been quite determined to make sure that we do not touch? I am sure that you will be aware of the policy differences that exist between our respective parties, but there is certainly nothing in the imminent horizon that is there to do. My second point relates to the second policy note, the continuing care. I was just slightly surprised that no business case and regulatory impact assessment is necessary in line with the financial memorandum. I was not on the committee when the act went through, but the duty to provide continuing care and strong positive relationships with carers is that there is no financial impact, no additional costs for this at all? Part of that is around the gradual roll-out of the already-agreed policy that was captured within the Children and Young People Act, which had the accompanying financial memorandum that outlined the ways in which it was outlined. That was part of capturing what Chick and Liam said about the transition to get to the place where we want to be, which is around allowing young people to stay in their care centre. It was all caught in amongst the financial memorandum. There are going to be additional costs, but they are already accounted for, that is really what you are saying. That is fine. Can I just clarify? In terms of the secure accommodation amendment regulations, you have talked about the addition or the introduction of the appeal process, the new session 44A. It is covered under paragraph 6 of the policy note. Clearly, that is a welcome change, but has there been any adverse impact on any children involved in the process before, given that we are now only introducing an appeal process? No. From memory, I think that there has been around five children that have been gone into the secure unit through this route. This is more around making sure that the right exists for them to make sure that their legislation there is robust and allows for that appeal, because in the reality of it, there are very few children and young people who are in secure unit through the process. However, that does not mean that it is not the right thing to do, so I am just having to note that, in the last report of the year, there was confirmed that there were five children, not aware of any adverse effect on them, but there are very few children. This instrument is around making sure that the system is robust, allowing for that appeal to rectify the anomaly. However, the reality is that there have been few children caught in this route into secure unit. I appreciate that it is small in number, but clearly if those five individuals— No, not aware of it. No, you are aware of any of it. Thank you very much. Any other questions from members? It is indicated that we now move to the formal debate on the secure accommodation Scotland amendment regulations 2016, which is item 2. I invite the minister to speak to and move the motion. Formally moved. Thank you minister. Any contributions from members? Okay, thank you. Can I put the question there for that motion S4M14968 V agreed to? Are we all agreed? That's agreed. Thank you very much. We now move to the formal debate on the continuing care Scotland amendment order 2016, which is item 3. Can I invite the minister to speak to and move the motion? I formally moved. Thank you. Any contributions from members? Okay, thank you. Therefore, I put the question that motion S4M14984 V agreed to. Are we all agreed? That's agreed. I thank the minister and officials for our attendance this morning, and I'll suspend briefly. Our next item is to take evidence on the BBC Charter renewal process, but before we go to that, I have to inform members that we did invite the BBC trust here this morning, but they are not here as you can see. We had hoped that the BBC trust would have been part of this panel of witnesses, but unfortunately they have refused to attend. Despite first being asked to attend on 24 November, they would, as a matter of principle, only appear if we guaranteed they were on a separate panel from the BBC. I have to say to members that it is for this Parliament and this committee to determine the make-up of panels of witnesses, and we note that the trust previously appeared here in Parliament with the BBC before another panel for another committee. Clearly, although they have stated that it was a principle, they have indeed appeared before a parliamentary committee along with the BBC before. Their absence is regrettable, and we will wish to consider whether they or their successors should be placed under similar obligations to attend before the Scottish Parliament as the memorandum of understanding places on the BBC more generally. With that, I want to move on now, and I welcome from the BBC Lord Hall of Birkenhead and Billford and Ken Macquarie. Welcome to all of you here this morning to the committee. I believe that Tony MacDonald has some opening remarks that she wishes to make. Thank you, convener, and thanks for inviting us here today. What I want to achieve as director general of the BBC is a strong and vibrant BBC Scotland, one that reflects the nation it serves is full of confidence in its output and is properly fearless in its journalism. We all recognise the pace of change in devolution and that it is changing asymmetrically, as you know only too well, right across the UK. Part of that change is, of course, this new way of looking at the charter process with the Scottish Parliament, which I wholly welcome. I say this in no spirit of complacency or arrogance, but I am immensely proud of the BBC and the output we produce. If you just look at the breadth and quality of our pregaming over Christmas from Mrs Brown, Sherlock and so on and the way that our news teams in particular respond at times of crisis, like the floods here in Scotland, and provide an extraordinary public service to our viewers, listeners and users online. I have been following the evidence provided to this committee and rightly there has been proper debate and criticism of the BBC, but I hope that what I am also sensing is a belief in what the BBC should be and in public service broadcasting, which I have to say I welcome hugely. We are not without our flaws, we know that. There is a lot to do, but there are also things that we can be proud of. I just want to say a few words of context, if I might. First, I think that you have got to look at the BBC in a global as well as a national context. Overall, the thing that obsesses me a lot is the fact that the amount of money spent on UK production in the UK by UK companies is in decline. I want a vibrant production sector in the UK, which is not dominated by US studios, but is UK production for the UK and from the UK to the world. I want in that a strong and thriving Scottish production sector to feed into that, to work in that and to be a real part of that. I think that is the real prize. That is why I put a huge stress on wanting an open BBC, not an arrogant BBC, but a BBC that works as partners with people, supporting the creative industries and also being an open platform where it is right to help others to get visibility not only in this country or in the UK but also globally as well. I was really struck last night watching the obituary leading the 10 o'clock news by Sir John Sorrell who said, talking about David Bowie, he represents the most creative nation in the world and I really believe that. The UK, Scotland is an immensely creative nation. One, production interests me a lot and I think we've got a big role there. Secondly, we've got a role and I've laid this out just before Christmas in a variety of places saying that we need to look very carefully at how we serve Scottish licence fee payers and also we portray Scotland in two main ways. In television, the network supply review, which you've been talking about and examining, I think has achieved a lot but we can do so much better in telling the stories of Scotland to Scottish audiences but also from that to the whole of the UK and I think to the world as well. At the moment I am reviewing the way in which we commission across network television and one of the aims of this is to ensure that we are representing and portraying all parts of the UK but particularly Scotland and also looking at how we can help sustain production in the nations. I want to ensure that in the next charter period we can ensure that we're not only telling Scottish stories of Scotland but we're telling Scottish stories, Scottish dramas, Scottish comedy to the whole of the UK and beyond that and looking at ways within that of ensuring that we can tap into new talent, new writers, new directors and so on and I'm sure we'll talk more about that but I just want to lay that point out. The second issue round this is also round news. I mean the BBC's principle has been neither to lead nor to lag in devolution but now's the right time to say are we getting it right and do we need to change the balance. A lot of things have changed since the last time before my time that this was looked at by the BBC I think it was in 2011 and my own view is this is a time now to make a change so we're looking at a review of news which will report in the spring. This is a looking at the provision of news across television, radio and also online and of course in that there will be a debate about what has become known as the Scottish six o'clock news but I want to make sure the discussion is about the totality of our services as well and looks to the future because I'm very aware that as you look at how people are consuming news it's not just in the traditional and important ways in terms of our main services but it's also in things like mobile, online and so on. I want to make sure those are match fit as well. I've already said that for online there'll be a nation's front pages for news but today I also want to say that I want to say the exactly the same principle that Scotland should have its own front on the iPlayer, on the BBC Sport website and on the home pages as well and I think as we catch up with where we should be on data and we can personalise our services more then this also gives us a huge opportunity to offer our licence fee payers in Scotland services which are more attuned to the things that they may want and I think that's important too and finally just to stress the open point I made at the very beginning I think we've got a big opportunity with something we've called the ideas service but also with the work we're doing in arts and in science to open up the iPlayer to people who think like us and act like us and think in a public service sort of way where the iPlayer can be a backbone for what the BBC offers our audiences but beyond that it could also be the backbone for the way which the Edmont festivals for example also reach a bigger audience and we're looking at that because I think there's a lot we can do that there. Finally on devolution and decision making I want to devolve more decision making on how we provide services in Scotland to the BBC team in Scotland it strikes me that in the technical language we always use about these things that there should be a service licence agreement for the whole of what is done in Scotland and that should rest in Scotland and moving money between those services or looking at the quality of those services or adapting those services should be a matter for Scotland. I believe that very strongly as you know there's a review going on into how we'll be governed by Sir David Clementi at the moment I have made that point strongly to him. I also believe that if we go to a unitary board for the BBC then again clearly there needs to be a member on that board representing Scotland but also representing the fundamentals of public service broadcasting which I know are very dear to all of us. Thank you very much, Camilla. Thank you very much for those opening remarks, Tony. I very much welcome a review of the new service that you've mentioned and also the additional web changes that you're talking about and iPlayer changes but can I go back to what was widely seen as a very ambitious and forward-looking plan that was put forward by BBC Scotland. I want to ask Ken about this first and then I'll come to you, Tony. Ken, the BBC management has understand it, the BBC Scotland management put forward a very ambitious, wide-ranging forward-looking plan for how BBC Scotland would look in the future. Is that the case? Before we were running up to the charter across the BBC we had a number of groups of which BBC Scotland was a part and all of the divisions put forward a whole range of ideas, various options of ideas and certainly I'm proud to say that amongst all of the ideas and all of the options they were driven by the desire to serve the audience better, to deliver value to the audience and also to contribute to the whole of the BBC's creative process. For a period of some 18 months that work was going on across the BBC. BBC Scotland specifically, as I understand it, Ken, put forward, as I said, a very forward-looking and ambitious plan for the future of BBC Scotland. Could you tell us what that plan contained? Amongst the various plans that we put forward were whether to deal with the audience in terms of an online offer, whether a linear channel was the right offer for the audience. Those were all of a range of options on how we needed to make sure that we got younger audiences into the BBC viewing and listening. I was on the record at the Edinburgh Television Festival saying that a channel was one of the options that addressed a heartland audience, if you like, the traditional BBC audience, but would not deal with bringing younger and more diverse audiences to the BBC. If you are referring to ambitious plans in terms of the range, we had a range of options that were put forward in discussion right through the 18-month period, but that was true of every other division in the BBC as well. I am sorry, but I am asking you specifically about BBC Scotland. Are you saying that the document that you put forward was a range of different options, or was it a specific set of recommendations that you thought and the BBC Scotland management thought would be an ambitious future for BBC Scotland? We never reached the stage of having a formal document, as you describe it. What we did have was a number of ideas. We had a preference at one stage for looking and examining what the pros and cons of a channel were in delivering a bespoke channel for Scotland, but I have to stress that it was one of a number of options that we put forward during that period. Can you just clarify that you did not have a document? Within the BBC's formal structures, we did not submit a formal plan. It was part of the overall creative process of the charter. How did you let BBC Network or BBC London know what your plans were? Did you just phone them up? We met in various groups from various divisions and all the divisions put forward their range of options and a fairly broad range of options at the outset. That is how the discussion took place. It is fairly normal. Normal pros have been through a number of charter reviews, and that matches my experience in the past. I will stick with the word plan. What happened to the plan that you put forward to the BBC for the future of BBC Scotland? In terms of the discussion, we looked at the various options. That was in the context when we got to the stage in which the financial envelope of the BBC was clear. We looked at what the various options were. At that stage, we began to hone in every division across the BBC what the proposals would be, and that resulted in the document that the BBC submitted to the GCMS. I simply asked the question. Where is the plan? As I said, we did not have a formal document as such. You must have had a basis for your discussion. We had a basis for the discussion, which was essentially looking at an online delivery for Scotland, looking at the option of a linear channel. Those were the range of options that we were involved with. You are leading with the issue of online, but I understand that you have dealt with it a lot more than that, Ken. You have dealt with the possibility of a new television channel, a radio channel, full devolution of commissioning powers and budget, and all the things that went with that. Is that the case? One of the options that we were looking at was whether there should be a second service on Radio Scotland, what was the balance of advantage of a radio service versus a television service, and how we would get to the various audiences. However, I have to stress that those were a number of options that were tabled in discussion as part of the normal chart. Did it include the things that I have mentioned, such as commissioning and budget? We, in terms of the range of discussions on where commissioning should sit and what should be commissioned—if you like—Pan UK and what should be commissioned from London was one of the areas that we looked at. That has resulted, in the terms that the director general mentioned, the review of commissioning that is on-going at the moment. I will take that as a yes, that it did include those things. That plan that was put forward to you, in whatever format it was put forward to you, what happened to it when it reached you? Let me just add to the process that Ken just outlined. What we were doing was looking at ways in which, had we had the opportunity, we could say that the licence fee should go up more than inflation to fulfil a number of ambitions that we would have right across the piece, including Scotland. What happened after the settlement with the Chancellor in July is that we had to then say what are the priorities that really matter to us. I go back to what I was saying at the beginning, convener. I want to stress that it has not just been BBC Scotland versus London, we have been really talking about this a lot between us. We then said, what are the priorities that we have for the BBC and Scotland? I go back, I think that the priority is talking with Ken, talking with others, but this is part of the debate. It is for production from Scotland, drama and other things for the network and also for the globe. We thought that we would put our money more in that than in other things like a linear channel. The second thing that is also going on is us thinking about the future of broadcasting. Whereas I believe that channels will be important for a long time into the future, BBC One is doing remarkably well. It is the way to get to as many people as you can in Scotland or across the UK. Nonetheless, in certain areas, you can see the way in which people are wanting what they want, where they are, on demand whenever they want it, and particularly in our younger audiences. Insofar as we can prioritise our spending, clearly what we do in the nations is important, but also thinking about how we ensure, as Ken was saying, that the audiences of the future, younger audiences particularly, but also many of us too, can have the content that they want, where they want it. In that sense, building an online channel seems to us important. I thought that both things are important. It is not one versus the other. Why is it important to have UK channels such as BBC One, BBC Two, BBC Four and radio the same, but it is not equally important to have additional Scottish channels, as was proposed in that plan? Well, this goes back to resources and how best can you use the resources that we have, and you know what the settlement is for the BBC. We have to absorb the over 75s, and you know all that. Within that envelope, we are looking at what is the best way we can serve Scottish audiences and all our audiences across the UK too. In that sense, we have put our priority on getting our news right and our commissioning and production-based right. In terms of the last comment that you just made about Tony, you seem to indicate that any additional services that could potentially come to Scotland were dependent on the licence fee settlement, if my understanding and your comments are correct. You also said in the statement that you submitted to the committee that, during the current charter, steps were taken to ensure that spend on BBC network television in each nation would broadly match that nation's share of the population. Now, we did ask you for detailed figures for BBC Scotland, and we were told that they weren't available, but curiously enough you managed to provide headline numbers for income and expenditure, so I don't quite understand the difficulties there if you can provide the headline numbers. Taking your annual report, which is what you actually pointed out, and looking at the spend-by-service licence in 2015, you spent just shy of £2.4 billion on television. Scotland's share, according to your own targets of 8.6 per cent, which is a population share, would have suggested that we should have a £204 million spent in Scotland. Forget about local network and lifting shift and all the rest of it, you only actually spent £148 million in 2014-15, so that's a shortfall right away of £56 million. We then looked at radio, and you spent £652 million on radio, and 8.6 per cent of that would have been £56 million, and you spent £30 million. Again, that's a shortfall of £26 million. BBC online services had a budget of £201 million. Scotland's share should have been £17 million, and we spent £11 million, and the shortfall was £6 million. That's a total shortfall of £87 million, which suggests that there is room to improve that situation. Can I just run through the figures as we understand them? I'm really happy to work with whomsoever at giving clearer statements of what we're spending in Scotland and our performance in Scotland. I don't know whether you're going to come on to that, but I'd very much like to do that, because getting clarity about those things would be helpful for everybody. Can you confirm that there are internal financial documents that highlight specifically the amount of money spent in Scotland, but at present you're not prepared to release them? I can tell you exactly what we're spending on network content in Scotland and local content in Scotland. Would it be helpful to run through what our figures are? Is that the two numbers you've already provided? The numbers of 82.3 in the breakdown for network content. With respect, that includes so many overheads, including overhead share from BBC London. No, it doesn't. It absolutely does not. Does it set states on it? No, it absolutely does not. I would love to get clarity on this, because I think it would help everybody. The network content of 82.3 and the total local spend on all our services across radio, television, online, et cetera, is 108.2, which gets you to, if my sums are right, 190 million. We have not put in there overheads and the network contribution. If I could help the committee convener if that's useful. The document that I think you were referring to from the annual report on accounts of this page 39. For page 3. Yes, sorry, I've got, there are two sets. There's the one with the more chairman's report and things in the front of it. These are the detailed accounts, it's the same material. That is showing a breakdown of television spend of 2.4 million, 2367.8. The first column of 1.8 billion outlines the content to spend, which is spend on content and excludes distribution costs, lines and transmission, content and distribution support and general support, which includes the overheads that you were referring to. Within that, you can see the content budgets for the different services. Under the NSR review, as I understand it, the proposal was that the content budgets for BBC1 and BBC2, the proportion of that should match the population in Scotland and that is where the overall target of 17 per cent for the nation is to come from. I don't have any dispute about what's in the BBC consolidated accounts. What I'm asking about is about the two figures for the local content and network, which says, includes commissioning budget but also centralised content costs such as studios, post-production, sport and other rights, property, FM, IT, telephony, support and maintenance content, senior management teams, transmission, media storage, trading, et cetera, et cetera, et cetera. I'm sorry if our submission has been unhelpful in its clarity. In terms, first of all, of the spend in Scotland, the content spend in Scotland, in the submission, as explained, is £119 million. That includes £108 million on television services. BBC Scotland opt out and spend on Alba for television services. That £108 million includes £34 million on online radio, orchestra and Alba and £73 million on television opt out in Scotland. That £73 million, £73.9 million includes £35 million of cash spend, which is a number that has been spoken about quite a lot, which is, if you like, above the line commissioning for writers, directors, artists, production team talent. The other half of that money is the costs of production studios, post-production, outside broadcast rights, executive producers, property and IT, all of which is spend, which is integral to the production budget. Any production budget, you would see those there in it. That spend sits in Scotland and is part of the commission from Scotland. That £73.9 million of television spend, part of the £108 million, sits there. In terms of the network, which is the other part of it, £82 million network spend in Scotland, which is commissioned through from BBC One and BBC Two. I am not disputing the £190 million. What I am disputing is that you have said that we would broadly match that nation's share of the population and taking your annual accounts figure that summarised on page 3, there is a shortfall of £87 million spent in Scotland. The point that I was trying to make at the beginning was BBC One and BBC Two. I am talking about total television. The content to spend, because the distribution and content and distribution support and the general overhead support, that is not included in the percentage. That is the difference between the £1.8 billion and the £2.4 billion, which goes some way to explaining those differences. In terms of network spend of £82 million, we heard from last week's evidence that much of that spend related to programmes such as Question Time, the lottery shows, Homes Under the Hammer, Waterloo Road, The Weakest Link and Teach Road Trip. The BBC said that it was very keen. The BBC helps to connect the UK across all its constituents, nations and regions. Is that commitment to reflect the diversity of the country that has brought some of the best content to the nation's screens? Can you explain to me how those programmes reflect Scotland's view to the rest of the UK when most of them are not based in Scotland? I am just taking a moment to say something on that, because I think that it is a really important thing. I am speaking here of a BBC before I arrive, but I think that what has been achieved and what you are going to the heart of with the supply review is to say, how do we match spending against the proportion of the population for television? Things were done there, which have set up bases, and I think, as Bechtu said last week, have provided jobs in Scotland. What I am saying is that I want us to be more ambitious now, with, as it were, the lift-and-shift debate has done things that have provided economic value to Scotland and has changed perceptions within the BBC, which is good. The next part of our journey is to say, how do we use all our commissioning powers to have dramas, comedy and documentaries that feel of Scotland, to Scotland but also, as I say, go back, then use to the UK but also use worldwide to the world? I think that that is what I was trying to suggest is the next part of what we need to be doing. The policy of lift-and-shift has been in place for nine years, so how do you intend to develop a strong and sustainable sector in Scotland, in order to rectify the position that is perceived in Scotland, that production has moved up from London to Scotland for a short period of time to use up a quota and, when that programme finishes, the production team just moved back to where the original base was. How do you rectify that problem and build a sustainable? The word sustainable is exactly the right one. The second thing is that we have overachieved against our network commitment. It goes up and down for the reasons that you are suggesting. This, to my mind, is the important topic, which the commissioning review I have asked for, which will report by the spring, has got to answer. Likewise, when we build BBC studios, which is, to my mind, a really important way in which in-house production, which matters to the BBC, we are a programme maker, but we want to make sure that we get the best programmes from Indies, but also the best programmes from in-house as well, that that is properly represented in Scotland and the strengths that we have in BBC Scotland, which are many, are properly there in production. I want a detailed plan. It depends partly on commissioning, it depends partly on the strength of what we do in production. The third thing, which is really important, and this is what I was interested to begin to explore with some meetings yesterday in Glasgow, is how we can work with the creative industries in Scotland to carry on building a sustainable television base here. I hope that we can have good conversations with Creative Scotland and others, and indeed the Scottish Government, about how we can best use our weight and clout to do that. Does that mean that BBC Scotland, as part of your plan, will have a higher budget and have more control over commissioning in Scotland? As far as BBC Scotland is concerned, my plan—and these are all open for debate, because that is the process that we are going through—would be for Scotland to control the budget of what is done in Scotland for Scotland. I then want to find the right way to cement BBC Scotland creatively into the UK BBC in a way that we have begun to do, but we can do so much more. Mark Ruskell. Thank you for providing the figure that you have of the approximately £200 million of spending that can be attributed to spending in Scotland. You have also provided the figure of £323 million of licence fee income. Are you able to describe what additional £123 million of spending that is not attributed directly to Scotland from the licence fee? In truth, the balance of the figure between what the population is contributing towards the BBC and what is spent in Scotland is the balancing figure for the provision of all the other services, all the other radio services, all the other television services, all the online and so on, which I hope viewers, listeners and online users in Scotland enjoy. I take some comfort, but I am not being complacent or arrogant about it. I take some comfort from the fact that we have an 88 per cent viewing figure in Scotland for our Pan-UK services, which I think is good. We must not rest on our laws. We have to do more clearly. There have been calls on the committee on evidence. We have had the committee in the press for a more federal structure of the BBC in that, for all the licence fee income, that £323 million to be ring fenced, as I were to a federal BBC Scotland canoe, set out what the cost would be to those services that, like you say, 88 per cent of the viewing and listening time in Scotland. What would the cost to BBC Scotland be of buying in those services that lots of people enjoy? EastEnders match the day strictly, and they share a lot of the programmes that we enjoy. Do you have a cost of buying those in? We do not have a cost of, as it were. If you said—if I am understanding rightly—that we will then decide what the cost would be of us saying, all right, we will give you £10 million, what can we get for it, as it were. I am putting it horribly crudely, but forgive me. I cannot give you that cost. I read with real interest the discussions going on last January 5, with a variety of professors about the nature of what a federal BBC could be. The test for me, and it is one for the Westminster Government and yourselves, is how can we ensure that the power that we have globally, the brand of the BBC globally, is intact and that strength is there for everybody across the UK. At the same time, we are also reflecting on being a creative hub for Scotland or the north of England or whatever. I think that whatever we do in governance terms has to reflect that, together, if we are responsive and treat each other as equals, there is a huge amount that we can do. What it is that I am trying to understand was a call for a federal BBC structure in terms of the financial impact that has been claimed that £323 million would then be an automatic boost to the creative industries in Scotland of £323 million. I am trying to understand the financial impact of a federal BBC. If you were able to provide further clarification as to what proportion of that £323 million in a federal structure would be going back to buying the services that take up 88 per cent of the viewing and listening time of Scotland. At the moment, the £323 million is the licence fee estimate, which is a good estimate because that comes through from the way in which postcodes are allocated and all the rest of it. We can treat that as an accurate number. The spend directly in Scotland on local services, including all overhead and distribution in Scotland, is £123 million. Broadly, £200 million is the contribution into all other network services, all BBC responsibilities, everything around distribution across the UK, including the iPlayer and the development of the iPlayer. All of those services come through. If you look at the cost directly attributable to Scotland and the cost directly attributable to the network, what that shows is that the spend per head in Scotland is higher than the average across the whole of the UK because of that mix and size of population. There is a contribution from Scotland of £200 million in, if you like, to the overall BBC pot for all of those network services, which represent 88 per cent of the consumption. If you were to go through the whole of the BBC and to buy on a spot basis all of those services right the way across radio one iPlayer development through to east enders, I do not know what that would be or how that would work through. In an acquired system, so if you are ABC Australia, you can buy on an acquisition basis individual titles on a value, but what you are not buying is that whole service that runs across the whole of the UK, where everybody participates in everything. That is the number that contributes back into the whole of the network services, which the people of Scotland are able to access for 40p a day. I clarify two points on what you have just said. First, it seems to me that you have ignored two things. First, you have ignored the additional money above the licence fee that is generated from Scotland because it is not just the licence fee that BBC gets out of Scotland. There is additional money that comes into the BBC. Secondly, if it was the case that the BBC Scotland had to buy stuff from the network, anything that the network bought from BBC Scotland, again, you have ignored the money from there, so it works both ways. It would work both ways, of course, but that, just to remind the convener of everybody, we have just been through this. Of that £200 million, which contributes into network, £83 million is spent in Scotland. It is slightly apples and pears. I want to clarify one thing that you just said, before I began Liam McArthur. You said that the spending in Scotland per head is higher than the rest of the UK. Higher than England, yes. Well, no, you did not say that. I know, I did not say that. What you said was higher than the rest of the UK, so just for the record then, the spending in Scotland averages out total spend per capita 72.1. That is right. In Wales it is 83.6. It is. In Northern Ireland it is 83.45. It is. In England it is 52.05. That is correct. So it is not higher than the rest of the UK. It is higher than England. It is higher than England. Lower than Wales in Northern Ireland. Lower than Wales and lower than the average across the UK, which is what I should have said. Well, just for accuracy. Liam McArthur. Thank you, convener. Can I start, as I did last week, by declaring an interest as I have a brother who works currently as a journalist for the BBC? I just want to take you back to following on from some of the exchanges with Gordon MacDonald earlier. As you say, last week we heard, I think, different views on lifting shift, and I think you fairly pointed to the view of Beck to that this has created jobs, but I think that the accusation laid was where the legacy of that, what was the value over the kind of medium to longer term, terms of that. I think one of the witnesses suggested that the likes of the weakest link in Waterloo Road had come to Scotland to die, which I think was in keeping with some of the more floored language being used by that witness. What, from your perspective or perhaps Ken might be able to address, has been the value of that in terms of not just the jobs but the skills development and the potential then if there is no weakest link, if there is no Waterloo Road and programmes do have a shelf life. What the lasting value of that is in terms of generating the next weakest link or the next dramatic production in Scotland from that base. Do you want to say something and then I'll chip in? Two points. One is that we don't want to be—progams come to Scotland to die, you were right, it was a very powerful language. I don't think that anybody I've ever met in a press programme makers, they want programmes to succeed, and that's really important, but just to go back to the point that I was making to Mr McDonald, which I think is the right point, where I want to get the BBC with the help of others outside the BBC is where we do have a sustainable, vibrant production sector in Scotland. I know when I was chairing the 2012 cultural Olympiad, coming to Scotland and seeing what Creative Scotland was doing then was amazing, it's an extraordinary creativity and I want to reflect that in our output. I think there are things that we can do to cement much more closely, and Mr Griffin's point about should we make the BBC more transactional between Scotland and the network. I think we've got to get to the point when it's absolutely like that as a team, when the commissioning teams in Scotland are actually looking at how we can put high-quality output across drama, comedy, et cetera, et cetera, et cetera, both for the people of Scotland but also the people of the UK, and then we hope through BBC Worldwide to sell that globally. I think there are things being done in Scotland at the moment. I want to see on the network, which if I'm being frank, take too long to get to the network. This story of Scottish art I think is terrific and I'm glad that Shetland's coming back, but likewise I take an enormous amount of pride from the fact that also if you look at Dr Who, of which I am an addict, the director, the star and the key writer are all Scottish and two of those are also doing a brilliant job with Sherlock as well. That should be our aim, that actually we have a vibrant Scottish writing, directing scene in journalism, et cetera, which we can then take to the whole of the UK and beyond that to the world. That's the aim and we want to partner with people to better do that. I think that it probably reinforces the fact that it's not simply about reflecting Scotland to the Scottish population or Scotland to the wider UK network or internationally. You've pointed to the examples of Dr Who and in relation to Shetland. I understand that there is an argument that Basing Homes Under the Hammer has led to a commission for the production company there from Channel 4 because of the experience that they had with Homes Under the Hammer that likewise in terms of the weakest link, the specialist skills there, have led to commissions for other quiz shows on commercial television so that the spin-off of this isn't necessarily always with the BBC, it does go wider. Completely right. I think that we've seen here, but I think that the quantum you're all suggesting, I think that it should be more, we've seen it in Salford likewise that the BBC can act as an engine room by commissioning, by building a local economy, people have the skills, they've got the track record, which then means they can go elsewhere. You're also right, there's a balance between programmes that clearly reflect Scotland, Shetland being a wonderful example of that, versus things that could be anywhere but are made by Scots for a global audience. I'm sorry, Ken, do you want to add something? Just to Mr MacArthur's question, it was enormously beneficial in terms of skills development for the sector in that some 70 per cent of the spend that we've done year on year in the network strategy review has been from the independent sector. With programmes, so we're not complacent because to Mr MacDonald's point about sustainability, that's something that we want to deliver but also representation of a recognised we have to go further. I wouldn't underestimate the colossal benefit to the skill sector of the hundreds of millions that have come in and been spent. For example, if you talked to representatives of the community in Greenock, they were enormously pleased with the economic impact of Waterloo Road based in Greenock in an area that provided training and skills for young people. In writing and script development, we worked with the Caledonian University to train in that regard. We also worked with Skillsets Scotland to provide executive drama production courses and get the skills that we require to fulfil all of our ambitions. It's enormously important in that regard, but in itself, for my not-as-far-as-we-want-to-go on your points, Mr MacDonald, of sustainability and also representation. Can I preface my comments by saying that I'm slightly more confident than I used to be that things will change radically, although I would hardly draw an analogy between having a Scottish actor promoting development with Scotland. We have one in Caledonia called Sean Connery. The problem is that the BBC is a monolith and, like all monoliths, they have the potential to get into a death spiral by cutting or by not understanding what accountability they have. We just heard through some of the numbers that there appears to be no real accountability on the ground and the Royal Society of Edinburgh made a point that a stronger Government is more over the greater level of accountability to the people of Scotland, as well as Wales and Northern Ireland is absolutely necessary. Accountability, accounting—it would be interesting to see what management fee is charged to BBC Scotland from the headquarters of BBC UK—management control in terms of freedom to control, productivity and efficiency, operational performance, the creativity that you have mentioned. Why don't we just, as part of this reschedule of the BBC Not, create separate companies, part of the unified BBC, but create a separate company in Scotland where all of these things can be achieved and give at the end of the day the accountability to the licenced pair as to what we are actually spending? We do not end this argument about needing everything. I have to say that, having read the report—I am surprised, Mr Director-General—that you referred to, you are looking forward to BBC Studios, which really is, to me, as if you are shuffling the back, that that has not been decided yet. So how can you look forward to something that has not yet been decided? It will become a wholly-owned subsidiary of the BBC. Would it not just be simpler to say that we are going to set up separate companies that are responsible for accountability, performance, efficiency, creativity and, by all means, having a unified policy, but will lead the operational performance to the various nations of the UK? I am not as downbeat, Mr Brody, as you clearly are, about the monolith that is the BBC. I think that a union tree board—and I have said this in public—where we are held to account regulators, if you like, by a regulator outside the BBC—that is the first time, I think, that the clarity, accountability and the devolution of the right things between the centre and really important areas such as Scotland can do that in a business-like and properly effective way. It is a big change of culture, but we are about reforming the culture of the BBC. Just to say one thing to something that you said there about the overheads, as they were pressed down on Scotland. Ann Balford here, with a bit of help from me, is doing a huge amount of work to cut back on the amount of money that we spend on overheads. By the way, overheads sound like a bad thing. We depend as a broadcaster on support services and people who work their socks off to make sure that we get our services on air. Nonetheless, we want to make sure that, as many pounds as we can, we can get spent on programmes. I think that we can work an effective way for the future of the BBC within a union tree board. I say that it is very interesting, because I can see the way that you are thinking about this. I think that the power of us being together, but with clarity about who is responsible for each, as a big global brand, is really powerful. That would be much simpler, if there was a separate BBC Scotland company, albeit part of the BBC Empire. Otherwise, how do you know, without the accounting mechanism, how do you know that you are making cuts in the right place or that you are not making investment in the right place? We will talk about it and we will come to commissioning later. Looking at the diaspora of the Welsh, Northern Irish and Scots, are we doing enough internationally? I know that the BBC world wide does reasonably well, but it could do a lot better. A lot of the emphasis seems to be going on to this business. We will agree to disagree keeping this element together, when in fact there is no reason that it should not work together and work in partnership. I am talking about effective management control, which does not exist. The BBC is not out of control, if that is what you are also suggesting, Mr Brody. I do not know exactly what you are suggesting. I think that there is a very effective way of us managing the BBC in a simpler and lean way. In my time at the BBC, I want to make sure that we achieve that. I want to make sure that the creative voice of the BBC, which is the one that matters, the programme making voice, the people who are doing the things that fill up our airwaves with content that we love, is simpler, clearer and much more responsive within the BBC. Just one other thing. You mentioned studios, and of course that has got to go through the trust. It has got to go through all sorts of things. I am saying my belief in it, because, as I said earlier on, I profoundly believe in the BBC's role as a programme maker. I want that to thrive and I want that to continue. One of the values of BBC studios, the in-house production arm, will be to ensure that we are getting the very best ideas from the nations of the UK. I think that that is something that, increasingly, will be important for what the BBC does. Let me also stress that I also want to make sure that we have the very best from the indie sector, because, boy, do they do fantastic programmes for us. I will come back to that in a minute. I do not think that, with all due respect, as I said, shuffling the pack. It is management control that we manage. I am going to stop that, because I have a number of issues that I do want to go on, one of them is commissioning, but I know that Mary Scanlon has got some questions in this. Yes, it is really on the same front of accountability and governance, but I did read through your submission and it was your response to Gordon MacDonald. You never mentioned the Scottish Parliament on the Parliament channel. Is that included in your expenditure? It was nowhere in your submission. Is it included in the money that you spent in Scotland? I do not think that it is part of the Parliament channel, but I will check that. There is quite a significant amount going out there. That might be under the Parliament channel, as opposed to Scotland. Yes, but it is being produced in Scotland. Maybe we might even be on the channel, given that you are here today. I hope that that is not the reason to be on the channel. Before I get slapped down by the convener, I would like to throw in the bits of information. It is really about the memorandum of understanding in future. Colin Beattie and I are both members of the Parliament's Audit Committee. When the memorandum of understanding went through, we succeeded in getting a small change. In your submission, consideration is being given to how statistical information, including Scotland, can be incorporated in your accounts. In order to allow the Parliament to do the job that we are tasked to do, I will ask how the BBC will ensure that the information from BBC Scotland, including all financial information contained in the annual accounts, will be made fully transparent in order that the Parliament can scrutinise everything that we are looking at today. We all want more to be done within BBC Scotland, but the convener raised the point last week that it will be the BBC UK's annual accounts. What I am looking for is a commitment that there will be more information reflecting what is happening in Scotland going forward. We are laying the report and accounts for the BBC before the Scottish Parliament for scrutiny. I want to work out what is the best way for us to add to that the detail about performance, about expenditure in Scotland and Scotland to the network to give you the clarity that you can then scrutinise what we are doing and hold us to account. Although the Audit Committee will obviously be looking at the figures that are for this committee to look at how it is better to reflect, I hear what you are saying about looking forward to a strong and vibrant Scotland and more decision making in Scotland. You have obviously heard or read last week's evidence, but what I would like to think that this process would lead to would be a much more positive footing and understanding going forward. How will the BBC seek to avoid future arguments about spending in Scotland? Is it realistic to say that this is the amount of licence fee that is paid so that we need all that is spent in Scotland? Should we be looking at quotas? What can we do instead of arguing about what was right and wrong in lifting, shifting and all the rest in the past? What can we do to use this opportunity to look forward to make sure that we are on a good footing in terms of spend and production in Scotland? I think that there are two things to consider. First of all, Tony, the director general spoke earlier about looking at the way in which the service licence is currently working and structuring those in the future, which will be a matter for the governance body in due course, the other side of charter. However, there is clearly an opportunity to make the objectives in the service licences relevant to Scotland. As far as we can move towards an overall service licence for Scotland, I think that that would be helpful. That would give us a framework to monitor against which people can use. What does that mean practically in terms of implementation? What does service licence for Scotland mean? The service licence is the basis on which we report at the moment. The amount of money and resource allocated into BBC One by genre, for example, is encompassed in a service licence and agreed with and administered and monitored by the BBC Trust at the moment. All of our commissioners, all of our services work within a framework of what we are supposed to be doing. There are service licences for the specific Scottish services, and we need to think about how we could pull those together in a way that is more helpful in giving a view of the whole. I think that the second thing—I have found the exchanges around the numbers and how they fit and how they reconcile into the group accounts—is helpful in helping us to think about how we best produce information to give you the sort of line of sight that you want to have and that we need to have in order to have a meaningful discussion around this table without spending too much time arguing about which number reconciles to what. I think that it is going to be very useful to work closely with officials to get to an agreed framework, which we can then use when we come and speak to you year to year so that we not only have good information in front of us on this year, but we have that all-important information for those of us who spend a lot of time on this stuff, giving you trend. Because, of course, if you find yourselves looking at figures in slightly different formats from year to year, that can bring a frustration. We look forward to presenting the accounts as set out in the memory of understanding and I think thinking about what material needs to come with that to aid discussions important. I do not want this to be a point of contention in the future. It says that my understanding of the memory of the understanding is that you will present to the Scottish Parliament the UK accounts, the UK report. For absolute clarity, both Mary and I and everybody else here is clear what exactly will you present to the Scottish Parliament beyond that. I think that what I was saying is that what is very clear from the meeting today and the material exchanged ahead of it is that we are going to need a format of supplementary information that is in the green format. I know that it is a format. What I am trying to ascertain is what is that format. Is it a full set of accounts giving incoming expenditure for BBC Scotland? Broken down by all the categories that we have been trying to ascertain? A full set of accounts would mean different things to different people, but I think that the material that we have been talking about today in terms of licence fee, income, spend in Scotland, proportion of the network spend—that is exactly the sort of material that it seems to me that you are going to ask us about, and therefore we need to agree a format of giving you that data so that we can have a meaningful discussion. The detail of it, the format of it, I think is going to need to be worked through. Just a final point. As a result of the convener, I do not think that we are in contention on this. As a member of the audit committee in her retirement in 10 weeks, I would be asking you the questions. In future, I have no doubt that the audit committee of this Parliament, which in my mind is a very effective committee, will be—the UK accounts are really of no interest. Were the audit committee to ask you for a breakdown, as the convener says, income expenditure, a breakdown that more reflects what is done in Scotland, that is something that you would positively work with the committee in order to bring that forward. Yes, but with that information being clear as to how it fits into group accounts, that is the key to avoid a lot of complexity. George Adam. Good morning. I would like to talk about commissioning with regard to television content in particular. Tony, I take on board everything that you have said so far with regard to your ambition and how you want to review it and how you see there is an issue and you want to deal with it. Some of the evidence that we received last week was that there were some that felt that the process was quite archaic. They found that it was quite difficult for them to actually get any content put forward. How can we formulate a way that will enhance commissioning for Scotland? I think that our aim is to have a commissioning process that is simpler and more direct. I think that you know the way that commissioning happens at the moment. There are controllers for BBC One, BBC Two and so on. And then there are commissioners by genre working to them, sifting ideas, nurturing ideas and building ideas. There are four such commissioners working out of Scotland. What I have asked television to do, Mark, is to examine how we can make that much more porous, simpler and more in tune with what I pick up from people when I talk to people, either in Scotland or in Wales or Northern Ireland or indeed in the north of England, which is we want more access to commissioners. But also, frankly, and this is the difficult bit, if it is no, let us have a no quickly. I think BBC One and BBC Two are in fine effect at the moment. We are doing extremely well. For one moment I am not saying that we are not in good creative shape. I think that we are in very good creative shape, but I think that we can respond more creatively to some of the questions that people are asking of us. When you say that four commissioners are working out of Scotland, what do you mean by that? I know that those four commissioners are the base in BBC Scotland. They are based in Pacific Key. They are working across the piece for television working into the controllers. I can tell you who they are. There is a commissioning edited for factual. There is one for comedy, which is good. Joe Street for daytime and also a commissioning edited for entertainment commissioning. Now, one of the things that we are looking at is, I think that we need to say, does this match the sort of output that we would like to develop and work within Scotland? Do we need to look at other things that we might do from Scotland? I mean, our arts programming is amazingly strong from Scotland, but that is all part of what we are looking at now. You brought this up yourself, being a big fan of Dr Who. I am as well, so you are my excuse for talking about this. I like it even more now, because, as you stated, the showrunner Stephen Moff comes from my home down at Basley. That is a good example when you look at a genius. I am sorry, but to be able to run in his head Sherlock and Dr Who all at the same time and deliver so much, I do not know how he does it. I am using that as an example, because of the commissioning. If you look at it, I will use two shows that are in the same genre, because I know that you are commissioned by the genre as well. Dr Who happened in 2005, because the BBC wanted to revive it. He went down there and wanted to wrestle to David. He said, I want to do it in Wales. He decided that it was going to Wales and it was not something that organically came from Wales itself. There is another example of the same genre, the same time, about 2006, Life in Mars, which was originally written to be based in London, but because you had the production facilities up in Manchester, everything was changed to make it a show based in Manchester. How do we get to the situation in which all the parts of the BBC and BBC Scotland, in our case in particular, are organically feeding into all this, so that some of the classic drama shows that we have had in the past like Tutti Frutti and things like that are getting networked television and it is coming from Scotland. Not particularly just about Scotland, but it is coming from Scotland. That is a big question. When you use the word organically, that is exactly right. That is how a properly networked BBC should operate, and we should be looking at things that can be sustainable in Scotland, as Dr Who is for Reslock. One of the other things that we received last week was Professor Blaine and Professor Beverage. They suggested that it might be an idea to help the commission inside of things, for example, if BBC 2 had been moved lock, stock and barrel into a big container truck and brought up to Pacific Key. That could be a way of looking at one of the major channels and a major commitment by the BBC to do something down that line, and a lot of the people with independent producers gave the evidence they liked that idea as well, because you would have a major player right in our doorstep. How do you think with regards to that? A major channel coming up to being based in Pacific Key? Let me put this another way. I think the BBC now has half its spending, half its people outside of the M25 and London. That is a good thing. I would like to see more of what we currently do centrally in London and move out of London. That is the question I have got, whether it is a channel or whatever, I do not know. I go back to something I feel very strongly about the BBC and why I do think organisationally we need to bind ourselves together in as close a way as I can. One of the strengths of the BBC is that it should be integral and part of the nations that make up the UK and working really effectively in the nations of the UK, and at the same time being global. That is an enormous strength for Scotland and the UK. I want to make sure that we reflect that in what you do. I sat and watched breakfast this morning. It feels different coming from the north, and it is interesting to see the perception of the BBC in the north of England. It is better now that we are in Salford, and that is important. I take you back to the four commissioners that you mentioned, based in Scotland. Just for absolute accuracy, when you say based in Scotland because one of the arguments about lift and shift is the trolley we gave to arrive at Pacific Key on a Monday and leaves on a Friday, they are not based in Scotland. Do you mean that they live here and they work here? Based means that the primary place of residence is here. So, they live and work here? Yes, they live and work here, but I am absolutely certain that their mortgages and families are living here, but that is how I interpret it. For clarity, as it has been suggested otherwise. Can you clarify again the four commissioners? Are they commissioning work for Scotland? Are they Scottish commissioners? Are they commissioning using the Scottish commissioning budget? Those are network commissioners, and then there is a separate set that can maybe talk about who are commissioning for Scotland. I will come on to that in a second. Can those commissioners take the final decision on commissioning or does the final decision not rest with them but rest in London? The final decision for anything is always a long conversation between a controller and a commissioning editor and so on. It is a conversation that takes place. Clearly, if you trust the commissioner and you know that that person is doing good work, you are going to go with what they say. The whole of the creative industry is based around a conversation. Well, yes, who eventually decides the important point of that conversation? Okay, so let's do it to answer your question. If you are controlling BBC One or BBC Two, in the end you will say, well, that is the programme that I kind of want, but life in the BBC is not like that. You normally have someone who believes in something, being passionate about it and arguing a very good case. So, these things are discussions. Well, I think that that is a yes, that it is London that finally decides. It would be the controller who would finally decide, but I don't need to think that it's a sort of, you know… I wasn't suggesting that it was dictatorial, I was suggesting that that was the final decision that was taken. Can I just clarify in this movie community what the Ken suffered about BBC Scotland commissioning itself? How much of the budget, so what is the commissioning budget for BBC Scotland, Ken? Well, in terms of the programme making budget, it's 67.9 is the commissioning budget for BBC One and two, it's the budget for BBC One and two Scotland, but as we've indicated, that contains sports rights, property, FM, IT, telephony, but that's what you need to make the programme, so that's the total budget for BBC Scotland. How much of that budget does the commissioning editor have at his discretion or her discretion to spend? I'm sorry, convener, is it okay if I go back? This is the material that I spoke about earlier. The commissioning budget for television in Scotland is divided into two parts. There are the cash elements of the individual programmes, which sometimes are described as the commissioning budgets, which are the allocations into talent directors, that kind of thing. The other part of it, which is studios, post-production, outside broadcast and all the other material you need to make the programme, is held in Scotland, but it isn't referred to as the same way as the cash commissioning budget. The combination of the two gets you to the commissioning budgets for Scotland, but just to be clear, those aren't somehow controlled from London, those are the studios and outside broadcast, post-production facilities, edit stuff, which is part of it. I'm trying to find out what the actual budget is that the commissioning editor in Scotland has at their discretion to spend. They have a cash budget of £35 million, if you like. They have an allocation of the resources, which goes with it. I understand that, but so do they have a cash budget? And then they have the resource allocation that comes with it, because you can't make it without the other half. I understand that, and I'm not trying to suggest otherwise. Which takes you back to the £70 million in the round. So they have a cash budget at their own discretion to spend. Of all the programmes that are made for the network by BBC Scotland, how many of them are commissioned by BBC Scotland? For the network? I suppose that the programmes that actually appear in the network are supposed to specifically make—if we take an example of Stonemouth—that Stonemouth will be an example of where BBC Scotland funded with the network that drama, where we had local funding in that, but that went on to the network. We also have, in trying to ensure that much of the programming that we make locally in Scotland—we call it Nations to Network—appears on the network, and often there are a variety of the primary decision of all that is made in Scotland, including those programmes that Stonemouth that eventually appear on the network rests with Ewan Angus, our television commissioner. To differentiate between the lift and shift productions, for example, the lottery show is not a programme that was commissioned by BBC Scotland, but it appears on the network, but it is not commissioned by BBC Scotland. I am trying to differentiate between those programmes that were specifically commissioned by BBC Scotland and appear on the network. If you can give me the total, if you like, but also give me the breakdown between those two groups? The breakdown is on BBC One, including all the figures, which is £14.15, was £49.4 million locally. Sorry, what is the 49.4 million? 49.4 million includes the cash budget, if you like, the direct cash budget, but also all the sports rights and other rights. Sorry, what was it for? What was the 49.4 million for? For BBC One Scotland, for the programmes that would opt out on BBC One Scotland. That is the programmes that were commissioned in Scotland, not for the network. Not for the network, yes. On BBC Two, the figure that we supplied you with is £18.5 million for our local content service. Does that figure include the news? That figure does include the news, yes. Right, let's take the news out of it. What is the figure without the news? That the figure without the news would need to extrapolate the over net over when you would have to come back. Can you give me an estimate of roughly what it is? Approximately, if we take £14 million to £15 million out for the news, that would give us the figure. The actual budget, which I was trying to get to, of BBC Scotland commission programmes, not the lift-and-shift stuff, and excluding the news, for obvious reasons, is what? That is the budget for BBC Scotland. I am giving you the figures, which, if you take the news out of it, that we are at a figure of approximately £35 million is direct cash spend. No, hang on a second, Ken. No, hang on, let's go back. Sorry about that, but you said that it was £49.4 million. That was cash. Or BBC World. Yes, I understand that. Cash and all the other fixed costs. You take out roughly £15 million for news. That takes you back down to around about £35 million. £35 million was for not only cash spend at the discretion of the commissioning editor, but also the fixed costs. If we take the total figure for the local spend, not counting BBC Alipys of the order of £68 million, so if you take your £16 million off, then you are down to a figure of approximately £52 million across BBC One and BBC Two. Let's go back through this. Okay, Gordon, on you go, Gordon. A very quick supplementary. Just on the figures that you have just given, I am a bit confused. The management review numbers for 2014-15, given you the 882 hours of Scotland's local television. 80 per cent of that was news, current affairs and sport by ours. Are you saying that the remaining 20 per cent used that large disproportionately? Yes. Yes, the cost of other genres outside news is much higher. If you are making dramas, it is much higher. If you are making high-end factual documentaries, comedy, entertainment, the comedy in particular, those are much higher. The figure that we have given you for 2014-15 was 67.9, which includes the news, which we have just discussed. Given that 80 per cent of BBC Scotland's output is news, current affairs and sport, there should be a separate service licence agreement for Scotland. How do we change that proportion of output? It is important that news and current affairs are more reflective of the network, which news and current affairs is only 22 per cent, as opposed to 61 per cent of Scotland. I think that we have invested in news in Scotland. I am thinking of the non-news aspect of it. The non-news aspect is part of the discussions that we are having here today in terms of what the mix is. It is one that will be decided in relation to giving the best. There is a disparity where 61 per cent of Scotland's local output is news, and only 22 per cent in the network. In fact, it is 15 per cent in Scotland's sport, and it is 15 per cent in the network. In terms of the total services of the BBC, in Scotland, news is a higher proportion of our overall offer to Scotland than it is for the network. However, if we want to reflect the diversity of the nations and regions of the UK, surely the proportion of non-news emanating from Scotland should be substantially higher and closer to the network, which is 85 per cent if you strip out and use current affairs on its own. In terms of addressing the audience's need and ensuring that getting that, what the figure is in terms of what the balance should be between news and the non-news is a subject that we could discuss over the new charter. At the moment, we have given the detail of how we have laid out the spend by genre to you in response to your supplementary questions, and that gives an indication. That is obvious in terms of balancing by our edge. The news is always going in a Scottish situation because we are addressing all of the needs of the populace as far as democracy is concerned. It is going to be a substantial part of our output. What the right balance is is something that we need to consider in relation to the consultations that have come in to the BBC Trust and the various consultations that have come in to the Department of Culture, Media and Sport, and then looking at the audience and where we deliver the best value to the audience. I will get off the numbers, because clearly we do not know what the numbers are. To avoid circumincution, from my point of view, I would expect to see a full set of accounts with supporting evidence and supporting information. I say that as a former financial director of a large company. One question that I want to ask earlier, director general, you mentioned that you included indies in terms of production. Will that include an independent producer who might also be a broadcaster? I am so sorry, ten. It includes non-qualifying indies. Non-qualifying independents include independents who are owned by broadcasters, yes. For example, ITV studios would count within, if you like, the non-in houses that are labelled indie and then the non-qualifying indie independence for the purposes of the quota. In terms of the quota, will it mean that, for example, Scottish Television as a broadcaster would now be able to produce programmes for BBC? Scottish Television does indeed produce programmes for the BBC. Its status under the regulation is as non-qualifying independent. I am looking at the BBC's submission. The pages are not numbered, but I think that it is page 2, third paragraph, down. It states here that the BBC is also proposing to remove its overall in-house guarantee of 50 per cent, being the 50 per cent outside London, basically. There is a positive spin to that in the submission here, but it is not a double-edged sword. It could go the other way. 50 per cent is for an in-house guarantee for television production overall for in-house. 25 per cent then is for indies and 25 per cent is the window of creative competition, the walk, as it is called. What we have been saying to PACT and to others has been that if our in-house production, aka BBC Studios, can be given the ability to tender for work outside the BBC, because every time I meet in-house producers, I am tripping over ideas that they have. At the same time, we could, as a word, liberalise our current commissioning erasions to say that there ought to be freedom to compete for indies versus in-house production right across the piece, except in areas of current affairs and in some part of children's. How would you ensure that there is no deterioration in the ratios? I believe that in-house production is really important for the BBC. I think that the way it has been run organisationally, which is part of television, does not match the world that we now are in. What I want for in-house studios is creative leadership, where we can sell programmes not just to in-house but outside. Why does that make a big difference? If you are the controller of BBC One and you have an in-house idea coming at you but there is an indie saying, you know what, I might take this to ITV, it is just possible that that controller might say, I will failure the indie. I just do not know. What I want is for our in-house producers to have the same jeopardy that you do if you are outside. Also, I believe in the ability of our people inside when they are freed up to compete. I believe in competition. I think that the best idea should win as the indie sector and the growth of the indie sector in the last decade or two has shown. I would love the same ability for our in-house producers. They are really good people, I believe in them. I think that this is the way of securing in-house production programme making in the BBC for the future. We have been talking very much about the aspirational future with the BBC, but looking at the current strategy of the BBC, what is the BBC's current strategy for developing the creative industries in Scotland? We are working with Creative Scotland. We are also participating in ongoing groups that are looking at what the right arrangements for the screen sector is in Scotland. In all those groups, we have an ongoing dialogue with Creative Scotland, with the industry, with the producers in Scotland that is absolutely participative as far as that is concerned. That is similarly in terms of training. We work very closely with the bodies that deliver training. We are proud of the record that we have in terms of developing apprentices, providing introductory courses within the BBC and making the whole of the training of the BBC academy available to the independent sector or simply the freelance sector in Scotland. We are proud of that sort of work, Mr Beattie. We work as actively and proactively as we can with the various players in that regard. You were talking there about trainees and apprentices. Obviously, you have quite a number of those employed by BBC Scotland. How many of them actually find employment in Scotland, ultimately? Is it correct that a disproportionate number gravitate towards London? That we have good record in finding employment for the apprentices in Scotland. Some gravitate towards London, some come back. It is a very mobile workforce, but in terms of the exact number in terms of our percentage, we are happy to look at that for you. Historically, that has been something that has worked well for us. Did you see the figures on that one? One of the things that I strongly believe is apprenticeships. When I arrived at the BBC, because in my previous life I had done a lot of work with the Skills Council, which I set up for that. What was interesting was that I said that I would like to get to 1% of the workforce of the BBC being apprentices by the end of the charter period, end of this year, 2016. In fact, we got there by, I think, the end of 2014. The really important thing that apprenticeships for me is that they are also locally based. Forgive me for referring to England, but in England, apprentices attached to local radio stations means that you then have people being trained who cannot afford to go to London or a big city, are able to live at home, are part of the locality. That has been really successful. We will give you the rates for what happens to those when they are through, but I want to continue with all the apprenticeship schemes. I think that it is really important for the BBC and important for the apprentices. Should the charter specify the BBC's role in supporting the talent and skills across the creative industries in Scotland? If it does, how would you measure that? I am very supportive of the amendment to the purposes of the BBC to include being part of the creative industries as part of our role. Then, I think that you have to measure—you look at value-added, you look at the contribution to the economy, and we need to work out at your completely right, Mr Beattie, ways of being able to demonstrate that without per-eventure. What would be a measurement of success? One of the measures for me, apart from employment, apart from all sorts of other things that we have been talking about this morning in terms of the quality and amount of output, would also be the value that you bring to the creative economy. I am very struck, for example, from Liverpool City of Culture onwards by the analyses that demonstrate that £1 spent brings in another £4 or £5. One of the things that I hope we can again build on is what BBC Films does. BBC Films do remarkable work on nurturing talent, bringing relationships together and bringing in funding. We put in £1 and we bring in £4 to £5. That sort of demonstration of the importance that the BBC can bring to the creative economy is really important. As Ken just said, I want the BBC, in its open way and partnership way, to be working with the creative economy in Scotland to help deliver what I know you want. Just one last question about how are you going to respond to the calls that are being received for parity between your in-house production for BBC Alba and that for S4C in Wales? We met BBC Alba yesterday and had a very interesting conversation with them and there are some budget issues that we want to resolve. Where we got to—well, I am saying this, but they must say it too—is that I want us to have a creative review of where we are with Alba and to see what we can do together to build on the partnership that we have already got. It is a really good partnership and we need to see how we can take that to the future. One of the thoughts that has come up to me watching BANAN over the weekend is also how we can see whether there are things—this all depends on contracts and all sorts of other things—but there are things that Alba is doing that can link in more with what the BBC is doing overall. BANAN is one of those things that my own viewers should have an outlet across the whole of the UK, not just on Alba. Equally, what Alba is doing on music is again something that we should be building on. I am keen that BBC music is a brand, something that is in the DNA of the BBC and all the things that we do. We find ways of aggregating that for our audiences in the future and that, obviously, I think that BBC Alba has got some important role in that, too. The answer is that we have a conversation and I hope that we can move that forward. Very quickly, convener, I am not too sure if my bay I picked you up wrong, but what are the apprentices that you take on 10 apprenticeships every year and are they actually trained in London? If that is the case, are there any apprentices that are based in Scotland? Apprentices are based in Scotland and we work with other tertiary education providers to ensure that they get formal accredited training. Do any of these be apprentice journalists? Some of them have aspirations to be journalists and they rotate through the BBC on a variety of placements so that they can find themselves working in news, they can find themselves working in factual or in education, and they rotate round on that sort of basis. We have also been working away from apprentices working on a big initiative called Make It Digital, which came from a conversation that I had with some big tech companies who were saying that there are three languages that you need to know in the world, one is English, one is Chinese and the other is coding. Britain needs to get much better at coding and we all agree on that. As part of that, we have taken on digital trainees, both some within the BBC and outside as well. That again is the sort of thing that a BBC working in an open way with others can help to do, because we all know that coding and digital literacy is absolutely essential to the future of our economies. With regard to the money that Scotland pays into the pot overall, do you think that we get enough back to training apprentices? I think that, in terms of the overall, it is something that I believe passionately in. I do not think that you can ever, to the future of a digitally skilled workforce, it is an important issue. It is always something that we need to keep under review to make sure that we have the right number of placements, the right spend and the right, but also critically the right training so that we have a workforce that is fit for a digital world. Yes, it was just on the BBC, looking at the portrayal of the BBC and the different nations, I do notice in your submission that there is a higher figure percentage in Scotland consuming, that is the word, BBC TV each week compared to UK wide, and that is for BBC 123 and we are equal for four. I also notice figures that we got last week from the BBC Trust. In terms of audience appreciation, there was less than 2 per cent between the different nations, nothing really to talk about. The one thing that really jumped out at me was the BBC radio reach in Scotland is 57 per cent compared to 76 in Wales. Is there something wrong with the or something that could be improved in the BBC infrastructure in order to increase that reach? It is well below the national average. I am sorry, I cannot answer that if it is in the infrastructure, but it is not a distribution, is it not? That is checked that it is not a distribution. It is just that in the absence of the BBC Trust coming, I thought that you are only going to get appreciation if you have got the reach, obviously. I want to ask you, is the BBC keeping pace with the changes in Scotland? The pace of devolution is increasing by the day. The figures that we have here in front of us are that the portrayal and the perception and the appreciation, the acceptance of the BBC is pretty similar in each nation of the United Kingdom. Do you feel that you are keeping pace with devolution and do you feel that the appreciation of your audiences in Scotland is equal to that of the rest of the UK? Obviously, I am delighted that, on the 80% figure that we talked about earlier, it is really interesting in the top 20 programmes, as you correctly say. Five out of 20 are Scots-made programmes and the others are, as it were, pan-UK programmes, which is terrific and the AIs, as you say, are more or less flat. No, I hope that I am made clear in my opening statement that, I think, in news and also in portrayal that there is more to be done. That is what I strongly believe and how we do that and what we do is in my mind. In Scotland, you mean to meet— Scotland and for the UK. The rest of the UK, but you do not see any difference in the appreciation of the BBC by the Scottish audience compared to audiences elsewhere in the UK. That is what your figures are saying. I want to make sure that the support that we have for public service broadcasting and the support that we have there in the figures in Scotland continues. If I may, perhaps I can write you a note on the figures that you gave me on Reach for Radio. I am glad not to write. You are right to the convener. I am looking at the time and I have a number of people trying to get in, so I am going to be a very quick one from Liam and Gordon. You are responding, obviously, to questioning pressures that are very evident in Scotland. I think that you have alluded to similar pressures perhaps in other regions within England, and I dare say that Wales and Northern Ireland make a very similar case. I think that within all of that, is there a risk that where the pressure is not coming in a global sense, in an international sense, where the audience there is more disparate, that in order to accommodate all of the things that you are perhaps having to take on board domestically within the UK context, where things will get peered back, is in terms of the world service and in terms of the international reach? Thank you for the question because also I might be just to add to something or correct something that was said by one of your witnesses last week. I have made a strong argument at the time of the settlement in July that I wanted to come back on to the Chancellor on a number of points, one of which was world service, because I believe very strongly that the UK together has a powerful voice, soft power, I suppose you would call it, to the globe and world service in particular. I was very glad, I have been talking to the Chancellor, others have been dealing with the Treasury too and I was very pleased to say that we won an agreement from him for an extra 85 million, that is new money coming into the BBC because we made the arguments to the Chancellor of the Prime Minister and others about the importance of what the UK can offer globally through world service as soft power, so that was a very separate arrangement to the ones that we came to last summer. Thank you for that, Gordon. Yeah, just getting back to the network TV numbers, I just wanted to ask you a further couple of questions on that. The first one was you said you'd spent some time reading through the submissions you've had and I hope you had the opportunity to read the submission from Matchlight because I felt it was very important in how they felt the system was actually being manipulated and the comment that was submitted in the written submission from Matchlight said, a lift and shift producer needs to spend as little as 5% of a production's total budget in Scotland for 100% of that budget to be counted as Scottish and set against the nation's quotas and I'm just wondering what your views are on that. The definition is set out in regulation by OFCOM and to qualify as Scottish, a programme needs to meet two of three criteria. It needs to have a substantial base in Scotland which means usual place of employment for senior management. It has to have 70% of the production budget spent in Scotland excluding on-screen talent archiving copyrights. It's quite a high hurdle and it has to have more than 50% of production talent based in Scotland. Looks at that criteria, who's set to come? Yes, exactly. That criteria is looked at at the point of commissioning by an independent assurance mechanic within the BBC. It's subsequently looked at again at the end of the production process and it's subject to audit and review by OFCOM on a sample basis so it's not without regulation and it's not the case that every programme that begins as a inverted commas Scottish production ends as a Scottish production so if when the work is done and those two of those three criteria aren't met then it can't count as a Scottish programme and it doesn't and we take them out. We're in a situation where we've given a fictitious television programme. Can you give us a live example of a programme that has been put against Scottish production where all of the spend was at spend in Scotland? I can't. In order to meet the criteria to be counted as Scotland you've got to hit two of the three. We do have examples where programmes were… Is that information held about how you meet the criteria? Yes. Right. So you could write to the committee and say the following programmes. This particular programme had 35 per cent spend in Scotland or this particular programme had 65 per cent spend in Scotland. This whole mechanic in terms of definition of independent, which we spoke about earlier, and definition of regional is the OFCOM title for it, is subject to a regulatory process monitored by our independent regulators. So we'd have to think about how we deal with all of this because this is material that comes in for individuals. You said earlier that we need to remove the lack of clarity in this subject, so I'm asking you to remove the lack of clarity. Of course we do, but what I'm saying is this is not an unregulated process. But let's see how we can help. Right. Because it would help us to understand whether this is a concern that we should be taking seriously where the figures are being deliberately manipulated or it is something that somebody has a concern about but doesn't stand up after has been evidenced. So it would be good for you to provide some clarity on that. To continue that, we have a quota of 17 per cent. Of course, Mr Donald. I am very happy to help. The only point I'm making is that there's an interrelationship with the regulator in this space and we just need to think about how we handle that. I appreciate that. Thank you. In terms of the quota of 17 per cent that we have for the nations and regions, should Scotland have its own quota? It does, yes, and that targets 8.7 per cent. Right, but in regulation it says a grand total of 17 per cent doesn't actually specify. That 8.7 per cent is a number which I believe is referred to in the idea. I apologize. But again, we can show progress against that over the last week. The off-com definition, should that be changed to reflect ownership of IP and retention of profits? Should the definition include another criteria test that determines who ultimately benefits from the profit of the production and also who retains the IP? The definitions used by off-com have been looked at again and again over the last 20 years. This is a mechanic that works very well. It has worked across the industry for a long time. Moving into changing a definition has all sorts of unintended consequences. If, for example, an independent production company were to be acquired by US Studio, that would potentially alter its Scottishness, if you did that, which may or may not feel fair to the individuals concerned in that world. There are a lot of different issues around changing definitions to deal with a potential concern A, as opposed to potential concern B. It is very tricky territory and there has been a lot of debate about it, as I have said over a number of years. My own view is that the definition runs across the whole of the industry. It sits. We have had it for a long time. Everybody understands how it works, and it is best to try to make it work well. You have said the word regulation several times. It is not in regulations. Off-com cannot make regulations. Off-com are the regulator. They are the regulator. You have said that you define them as regulations, but they are not regulations. Effectively, it is a formula that you are not enforced to adopt. You decide to adopt it. We have decided to adopt that, but the definition of regional independent is established with off-com and science. It was the use of the word regulation. I am so sorry if that has been confusing, but it is an industry-wide I accept that. It was the use of the word regulation, which I think would perhaps give the wrong impression as to what it was. The point that I was trying to get across is that this is not a set of definitions used only by the BBC, which is not subject to any sort of scrutiny it is. No, I understand that. Just finally, Tony, if you do not mind. The issue that has been running through much of last week's discussion has been about the amount of autonomy that BBC Scotland has and our interest in the future of the success of BBC Scotland and the importance of BBC Scotland to the creative industries and to the wider economy of Scotland. Is your view on the idea that there should be further devolution of the BBC to BBC Scotland? I start off by the principle of, and I think that we got into whether service licence agreements mean anything to anyone, but I feel very strongly that those services are for Scotland. The nature of those services, the amount of money in the envelope that is agreed across the BBC for those services, should be nurtured, the performance should be assessed, the change is if there are to be any changes within those services, the balance of those services you were talking earlier on about news versus comedy versus drama within Scotland, all those things should be determined within Scotland. I think that there is then another set of relationships, which is how we can work most effectively under a unified board, if that is where we are heading and other people will make their minds of about that, not me, then how we can ensure that the voice of Scotland is properly represented at the pan UK and global levels through the board of the BBC. I am trying to get, perhaps you are not going to answer this, but I am trying to get you to answer what degree of autonomy effectively you believe BBC Scotland should have in the future. Maybe the use of the word autonomy is what I am finding difficult to define. It is a bit like sort of federal. I am trying to avoid the word federal here, but I am also trying to suggest that effectively at the moment there is not sufficient devolution of budget and commissioning and etc. I want the director for Scotland, as indeed the director for Wales, to have more power to decide the services that the people of Scotland want for Scotland. I also want the director of Scotland to have a powerful voice in determining what the BBC does as a whole, because I really do believe that there are things that the BBC together can do nationally in Scotland, nationally across the UK and globally as well. I want that voice to be heard. Can I thank you very much and also thank Ken and for coming along this morning. We do appreciate your time in coming to the committee. It is very welcome, but I am going to suspend briefly before we move to the next panel. I welcome Fiona Hyslop, Cabinet Secretary for Culture, Europe and External Affairs and her accompanying officials. Good afternoon to you all. I apologise for the delay. I invite the cabinet secretary to make a brief opening statement. Good afternoon, convener, and thank you for the opportunity to appear before you today to discuss this important matter. I am very pleased to be able to contribute to the committee's inquiry and to build upon the written and oral evidence that you have previously considered. The BBC is a hugely important cultural institution and our interests in its future is an interest rooted in the strongly held belief that public sector broadcasting is a vital part of our social, democratic, cultural and democratic economic life. I believe that it is time for the BBC Scotland to be empowered and resourced to be bold and creative for Scotland. The Scottish Government is proposing a federalised BBC that would allow the BBC Scotland to control decision making within Scotland, and I stress that it is independent of Government in order to strengthen and grow the industry's and Scotland's creative sector. I believe that this would be a win-win for viewers in Scotland, but also for viewers across the rest of the UK. I am keen to work in partnership with the BBC to achieve this both within and without the charter renewal process because we should all appreciate that there is much that the BBC can do outside the charter renewal to improve its service to the people of Scotland. I want to be clear that it is not about some desire to control the BBC and to dictate what kind of services are delivered. It is about ensuring the BBC's long-term future in a way that benefits both the BBC and Scotland. It is a future that cannot be deemed to be meeting the needs of the UK's nations and regions unless it thinks about Scotland in a different way. We have worked hard with stakeholders across Scotland to understand the issues and to develop a position that we believe has support and credibility. I thank those who have engaged with us on the quality and thoughtfulness for the contributions, as well as for their time. Our ask is simple and it is widely shared. We want the BBC to be structured in a way that better reflects the needs of the nations and regions that it serves. A federal structure that empowers BBC Scotland to take full control over decision making in terms of how revenue that is raised and here is spent, full control over commissioning and editorial decisions would have an enormously positive impact and would enable BBC Scotland to take a long-term strategic approach to delivering the sustainable, high-quality programming for the benefit of Scotland's diverse industries and audiences and the UK's audiences themselves, the global market and the creative sector. It can also support additional digital platforms with content from Scotland that could lead during the new charter period to new digital TV and radio channels. With that in mind, I very much welcome the recent publication of the figures setting out how BBC Scotland spends its resources. It is hugely helpful to have those figures as they help to inform the on-going conversation that the Scottish Government is having with the BBC. I followed the previous evidence sessions and indeed the one that you have just had in the inquiry and with interest. Of course, I have been involved in and considered the work of the Energy, Enterprise and Tourism Committee, which expressed its views on the value of BBC's spend for creative and economic impact in Scotland earlier in 2015. I look forward to discussing all those issues with you. Thank you very much. We will try and keep the questions brief and, hopefully, the answers reasonably brief as well, so that we can get through as much as possible this morning, Cabinet Secretary. You have heard this morning that I asked Ken McCorrie and Tony Hall about the BBC Scotland plan, I believe, unanimously supported by the BBC Scotland management team that was put forward for the future of BBC Scotland. First of all, are you aware of that plan, in the detail of that plan, and what is your view of it? I am aware that there was a view and expressed in the plan to the BBC at network level that a way forward for Scotland to be bold and ambitious and to be able to take a strategic lead in all those different aspects of economic creative impact and, indeed, serving audiences, as they really must do, was that they would have an additional television channel, but also radio content as well. There is a big challenge even on radio and a lot of focus is on television. That itself would have been an extremely positive step forward. My understanding is that the restrictions imposed in terms of budget settlement in relation to the UK Government in terms of licence fee for over 75s had meant that it withdrew or pulled back from that proposition. What we are proposing is not something that is somehow alien or different from the ambitions within Scotland—the issues of the capability that it can produce with the resources that it has—but it is perfectly possible, even with transfers of existing resources, to be ambitious for Scotland in terms of decision making, commissioning and economic and creative impact. However, the idea of having an additional channel is one that this Parliament has supported previously in terms of the broadcasting commission and digital channels, so it is disappointing that that did not see the light of day in terms of the proposition put forward to the BBC when it went into charter renewal process. I just wanted to ask whether you felt that Scotland got a good deal out of the £323 million of licence fee. RTE has four channels and four radio stations for €312 million, which equates to £234 million. Professor Blaine last week said that the Republic of Ireland is a smaller population in Scotland, so if we are looking at what is imaginable, Ireland provides a good model and goes on to say that I have no difficulty in proposing that Irish model is one that we should look at at least in an interesting way. First of all, could I just congratulate the committee on the work that you have done already in eliciting more concrete information from the BBC in terms of its spending in Scotland? I think that there are still questions as to what is above the line and below the line, what is overhead, what is creative content for Scotland and what is commissioned in terms of the UK that benefits Scotland, but what the balance is. The value that we get from the BBC is very strong. Nobody is questioning the quality of many of the productions, but the range of services in terms of the number of channels and in number of stations. Whether you look at Ireland, whether you look at Finland, if you indeed look at the German model, if you look at other models, you can have more distribution. I think that one of the key things in this debate, and I was listening to Tony Hall very carefully, he was talking about the importance of providing more online platforms. I think that the very least we can agree on is more online platforms for Scotland, but it is not just about how you access and how you want to watch it. It is what you want to watch, and it is content as well. It is not just about the number of channels, it is also about the quality of the content that you see. I think that we need to be approaching both, but in terms of value, other countries seem to get better value in terms of the number of stations and the number of channels that we do in Scotland, but we need the balance of both access in terms of channels whether it is online or, as we would argue, additional channels or, indeed, the content, because we need to make sure that it is the content that has the impact as well with its creative content or economic impact. Would it be beneficial to Scotland if there was a separate licence agreement for Scotland, which changed the balance that BBC Scotland's figures highlighted, that a large proportion of its output was news, current affairs and sport, and a very small proportion was drama, entertainment and comedy? Do we need something within the licence agreement with the BBC that puts a certain bar on how much that should be produced? Absolutely. If you look at the BBC's current consolidated accounts, if you look at the lines for Scotland, all you have is BBC Radio Scotland and Radio and Engail, we have two radio stations. That is the only mention in terms of the allocation. I think that one of the things going forward, not just about the charter renewal but about the accountability between the Parliament and the BBC, is to be able to break down what that content is. I think that setting that out is really important. That is where, yes, the service levels agreement is useful, but it is not essential in how we change the overall impact of spend in Scotland. The service makes sense to have that, but do not see that as the be all and end all in terms of charter renewal. In terms of some of the figures that I have heard, I thought that it was very helpful to hear from Ann Balford that she confirmed that £35 million is cash spend above the line to spend on commissioning. There is obviously an amount somewhere, but we do not know what we need to dig into this, and we can do that. That can be done not offline if necessary. Between the £74 million that they say they are spending, a lot of that will be in overheads. It is about running the show. In terms of the aspects, I think that the point that was raised in questioning by Mark I think was in relation to how much of the £323 million is spent in Scotland. If Ann Balford says that £200 million is servicing the overall BBC and she is talking about economic impact, she has only got £123 million, of which some of that will be spend in Scotland that is coming back into commission, where it is weakest link, no longer produced, Waterloo Road no longer produced. The counting of that will be very important, but we need to think about what should be in the actual charter and what the expectations are in terms of the overall strategic thinking that should be in the charter, the accountability to Parliament, Mary Scanlon's point about the Audit Committee and this committee about how we can get underneath this and what the impacts are. The service level agreement goes without saying that it is not there now, I think that it is really important, it is part of the governance aspects, but it will help to elicit information. It is not just the numbers, but it is the impact. That is where the committee itself, the Parliament, will be very helpful. As indeed the previous enterprise and tourism committee was about the economic impact of the spend as well, it is what we can contribute, not just what we can get. I think that that is the important tenor of this debate here in Scotland. Just to go over those figures and put some of the questions that I put the previous panel to that, BBC figures suggest that licence fee income from Scotland is £323 million, spending Scotland, whether that is network costs for Waterloo Road or other productions that are across the network, and the local content is £200 million, which leaves a contribution to the UK services that we benefit from of £123 million. If you are talking about a Scottish Government preference for a federal structure for the BBC, how much of that federal BBC Scotland budget at the outset would be taken up by procuring, purchasing the programmes that the vast majority of the time of the year is 88 per cent of the time that I spent watching? That is exactly what we have been working with the BBC to try to list it, and your committee has been very helpful at getting those figures out in the public in terms of what those figures look like. Obviously, in terms of programmes such as Doctor Who and Sherlock are seen by countries across the world, if you look at Sky Virgin and Ireland, they get that. The premium in terms of the contribution is about one euro. We can look into that in terms of per household. Of course, you would be paying into a federal system, you would be paying into the overall pop for issues, whether it is UK, worldwide, etc. Indeed, some of that programming is also expressed by George Adam in a previous session, actually producing some of the big shows, drama shows, not just quiz shows, however much that can provide jobs for crews, etc. Drama is where you get your big recurring spend in terms of developing the industry. I want to be able to see that, but in terms of creative impact of original television content for Scotland, as confirmed by Anne Bo for today, of £35 million out of a budget of £323 million, that is not a big economic creative impact that we need to see in Scotland. We need to have that shift, and yes, it would be contributions that would go back in terms of that overall spend. To do that in that way around, the committee is looking at the accounts to determine what is overhead spend for the UK and what is necessary here. That is the challenge, because what we have not got is the economic impact of network spend for network commission programmes here in Scotland. The convener tried to get that from Ken Macquarie in his questioning, but he was referring back to local spend, not the other impact. As Anne Bo for saying that it costs in a federal structure, it would cost £200 million to get all the services that we get from the UK. I am not so sure about that. I cannot give you that, because I am not in charge of the BBC accounts and the budgeting. I am in probably a similar place to you as trying to get in around this, but we are in a very good place now because of the work of the committee to be able to have that dialogue with the BBC. My intention is to meet with BBC at UK level, Tony Hall and BBC in Scotland to be able to identify what those figures would look like. That figure for what it would cost to buy in is probably key. That is the figure that sets out if it is actually worthwhile, if there is any financial benefit to move into a federal structure. You have to differentiate two things—buying programmes. For example, RT will buy in Sherlock and Dr Who. It will be in the range of tens of millions for what they have to provide to make sure that East End is all those programmes are seen now. What we are saying is that the value of the BBC is not just in the consumption of programmes such as East End or Sherlock etc. It is in being able to have a sustainable production system. For a strong, bold, creative and ambitious BBC, we have to make sure that—what was it that Tony Hall said—he thought that the charter—I agree with him—should have part of the BBC's role to support creative industries. I agree with that. The issue is how much of that is being supported in Scotland currently. Under the current system, when, as the enterprise and tourism committee identify themselves—I think that the committee has looked into that as well—you are not getting the same impact. By moving decision making and some budgets—I would like to see all the budget transferred and then something remitted back in for the central services, but even in a federal structure, to come to some agreement of what is the transfer of decision making and commissioning to BBC Scotland that will enable that impact, not so that we can have good quality programmes, not just for now and next year, but building the industry for the future. The danger that we have is that, if you are talented and you are able and you want to be a producer, you are a series editor, etc., your career choice means that you have to move to London. That is not going to be good for the BBC in the long run, even across the UK. We have got to make sure that we have that industry. I know a lot of this is about the accounting of the immediate spend, but the strategic interest in the BBC charter when you have to be about shifting the impact of decision making and commissioning. Across my discussions and all the different stakeholder sessions that we have had, that is where people have got a consensus. I have seen that from the other committee's inquiry as well. In response to Gordon MacDonald's question about RTE, I think that I heard you right in suggesting that it appears to get better value in the number of channels that it has. That tells us about a quantity but not necessarily a quality. One of the concerns that has been raised in relation to what happens in Ireland is that there is an awful lot of bought-in content from the US that comes at a high cost and has led to a flight of talent from Ireland to other parts of the UK. Is there not a risk that we get hung up on quantity and lose sight of the issue of quality? If you listen to my answer to Gordon MacDonald, I deliberately stress that this is not just about the range of platforms, it is also about the quality of the content. I agree with you that it has to be both. You can only guarantee the quality of content if you are reinvesting in the capability of the sector. Although there are great things happening in Scotland, there is a real risk that we are not producing as much in Scotland in terms of the creative content as we should do to do exactly that. Otherwise, if it is just buying in, that is not good enough. Just to buy in programmes is not good enough. If you look at what Tony Hall said, he said that building an online channel is important. I agree with him, but it is not just about, as he said, windows to access. It is not just about how you access. It is not just windows of different platforms to access. It is the content behind it. The idea that Scotland can't produce quality content drama is ridiculous, because we have a good experience. If you look at what is coming out of Scotland currently, even for the network commission, even for the network commissions by the Indies, a lot of it is factual and excellent. We have a great reputation. A lot of it is children, so we have heard a lot of it is game shows, but we need to make sure that we have that broad range of quality, as you said, to make sure that we can produce that. The only way that you can guarantee it, because we have tried quotas, I am not saying that there has not been an economic impact by quotas and lift and shift, it is just a different type that we might need for sustainable production in Scotland. The issue there is that we are trying to make sure that we have the quality of what we need from that. That is going to be the real issue. I think that what I have heard this morning is a lot of consensus about what we are trying to achieve. The issue is how do we get it? Although you have had quotas, the decision making and commissioning would be the big difference. Tony Hall said that his answer to your questions was about access to commissioners. What we are saying is that you need the commissioning here. Not all the commission, and yes, it has to operate within a federal model. We have recognised that. People might feel uncomfortable with federal aspects, and we might be ahead of the game in a lot of this. It might be a decentralized approach in decision making, but the power and influence follows the money. If you do not have control of the budgets and commissioning, you will not be able to have the creative content, the quality content that you want to see. He also said that four of the commissioners are based out of Scotland. It is not simply an access issue to be fair. You referred to the weakest link, which I show no longer on, similar to Waterloo Road. It appeared as if you were somewhat dismissing the impact that those had. I understand that the weakest link, for example, the specialist skills that have risen from that have led to a subsequent commission for that team through commercial television. While I understand your desire to see more, for example, drama commissioning, there is going to be a finite budget here, and more of something is potentially going to lead to less of something else. When Waterloo Road was commissioned here, I welcomed it, because I did know that that would help the school base in Scotland and recognise that. However, I am not sure whether the company that produced that still has an office in Scotland and what activities it is doing. It is probably worth looking into that. I am not saying that there is not an economic impact, but I am saying that it is not at the level that would have now originated Scottish material. Otherwise, it is the lift and shift. There is an economic impact for lift and shift, but it is limited. Yes, it provides that Bec is absolutely right in terms of the evidence that he gave you in terms of jobs for the crew and perhaps for assistant producers and researchers. However, if you even look at the off-com quotas, it is worth looking again at BBC voluntarily administering the off-com quotas. Waterloo Road, the weakest link and so on would count towards 9 per cent of Scottish produce material. However, the off-com quotas are outside the M25. Tony Hull did not necessarily answer your question about how their definitions were in terms of what is Scottish. It is the senior decision making. It is a bit like branch economies in terms of recognising if you have something that is headquartered in Scotland. Not only do you have the immediate economic impact of the jobs in terms of whether editing would be done in Scotland, particularly in the crew base and the sound engineers and so on, but the big economic impact comes back to where the future is. That is why the BBC Charter has to be strategic, is about how we can get better value out of exports, how we make sure that online productions and co-productions with other companies are skill based and experience. There are a lot of the companies that are conducting the lift and shift with their head quarters based in London, but that is the experience that they are not getting in Scotland and that is what we have to try to shift. I think that the point that was also made was that if we are not careful about the unintended consequences of shifting in terms of a Scottish-based or Scottish-owned company, is that you get a change in the market that sees a company bought out by a London-based company or a US company and suddenly a whole series of people who have a set of skills and are based in Scotland and feel themselves very Scottish are considered outwith whatever mechanism that you use to describe those things, so that there are real risks in tartanising that in a way that simply does not keep pace with what is happening within the marketplace. It has got to be sustainable and we have got to look at global markets absolutely, but as somebody who represents a west loading constituency that has seen NEC and Motorola come and go, if you look at the parallels of Mware Investment, it is a bit like Waterloo Road, it takes something out and then all those jobs then move because of that one programme. If you have one big network programme, perhaps as it was indicated, coming to the end of its lifespan, that is not necessarily as sustainable as homegrown and developing businesses that can be global, can be export-based, can be selling into markets. Part of that is the confidence and capability of the Scottish content to be of quality that can add into the mix. There are two things, there is the economic creative impact but it is also about the BBC being, they know the challenges in itself and indeed the consultation from the UK Government is how do you get that diversity of perspective and if your commissioners by and large have a similar mindset and a similar experience, then you are not going to get the quality and range and what is interesting in the global area and how do you plan for five, ten years, you have a charter of ten years, how do you plan for the future. The originality of content in the global market has currency and you are seeing that with the Scandinavian broadcast and a lot of production is going to be co-production in the future and we need to make sure that we have a sustainable base for that and I think that the role of the BBC is not in just in providing immediate consumption for audiences, it is about being a leader in how do we make sure that sustainability for five, ten years time and I think how it has an impact on creative industry in Scotland is absolutely critical and we haven't got that balance right yet so I'm not saying lift and shift, it was necessary perhaps at the time to get the figures and the numbers etc but it's a different type of qualitative production in Scotland that we're looking for going forward. I think that it's a brief supplementary on this then, we want to governance. Yeah, there's just a lot of the links too. Thank you for mentioning global markets, the customers, because we seem to not have discussed that this morning and while we've had numbers, you know, I think it's clear that some people are not quite on top of the numbers that they have or should have. In terms of used federalism, I'd be cautious about that a bit. I raised the question about why doesn't BBC Scotland be its own company, entity, accountable, measuring performance, productivity efficiency and creating creativity as the main product and service. Why would we not talk about that as part and it could be reported to the unitary board so that policy is set but the operation is quite clearly measurable, achievable and sustainable? Well I believe in public service broadcasting and I don't want to give any opportunity for the Conservative Government to privatise the BBC. Now I'm not saying that that's what the plans are but in terms of the structures, I think we've got to be very careful about making sure that the governance model fits in with public service broadcasting and doesn't allow an opportunity for privatisation, which I heard Mary's concerns. I'm not suggesting that the UK Government is doing that but I'm just saying that that actually is part of that process. I think that in terms of the governance arrangements and that's why the Clemente review, which is very imminent actually and I'm due to speak to him tomorrow, is very important in the governance aspect. I mean there's lots of things that need to be reviewed about the BBC governance but in particular there's the Scottish representation within that. Now I do think in terms of a board set up that can work but not in a way necessarily that leads it to a kind of marketised model. I think in terms of the accountability it can be and that's why I do think that there needs to be Scottish representation on that and I think actually if you had more accountability both to this Parliament but also to a Scottish board that fed into a federal system within the UK, that would be a very good system for checks and balances and I think it's the checks and balances because you don't want things to be overly on a marketisation for making profit because audiences, you've got to think, you know, the point about consumers or in this case audiences and they're... The board would have the policy. Exactly and I think it's that and I suspect that that is the direction we're going in and it's just what we need to make sure, again it's part of the role of this Parliament as well, is to make sure that within that set up there'd be strong representation from Scotland. Right, except for a lot but it has to be measurable and seemed to be an interdate to be measured. And that's where, you know, the separate service agreement we talked about would allow that scrutiny and accountability in many ways but I think there's an issue about where I think the board would be helpful is actually in the strategic ambition of what's happening rather than just managing things on a short-term basis. That's where I think the board could be helpful because it could take in more holistic and over, that's what I agree with. I think we have actually been fairly consensual on this. I think all of us round the table want the same thing for Scotland so I will ignore the comment about my colleagues down south. Can I just say, I was pleased that you did acknowledge and you appeared to be satisfied with the commitment to improving Scottish specific statistical information. I think that we all need that in order for the audit committee, for this committee and for yourselves going forward and also to ensure that the BBC Scotland is more accountable to Scotland financially but also in terms of service. But what really struck me was, given that there is a commitment to that information, that you've come in with a federal budget. Now, presumably a federal budget, that means a fixed sum given to Scotland every year, etc. Would that not be very difficult to negotiate at the moment given that we truly do not have enough Scottish specific statistical information? You're right that it would at this moment in time but even the movement in the last few weeks and months in terms of the publication of Scottish specific information is enabling us to have that dialogue and discussion. To what extent would you then say that in a federal structure there would be agreement that the allocation to Scotland would be x or would Scotland get all the £323 million and then be a subvention back in for some of the UK-wide roles and responsibilities. I'd like to maximise how much that is but you're absolutely right. Now we've got the basis for that discussion and although I recognise what the BBC has put forward in keeping with the information that we have but we've got a far more openness and clarity so we can genuinely have that discussion in a way that we wouldn't be able to have even six months ago. So the process of doing this has been very, very helpful. I'll give you a memorandum of understanding, given the Audit Committee and this committee, plus this information. I would just convener to be very concerned if we suddenly, in the absence of the information that we all need as parliamentarians to start looking at a federal structure, just leave it there. Okay, do you not want to ask your second question? Yes, I do, given that you asked it in the— And given that you chastised me for it, I thought you did. Pinched my second question. Well, it was really about the role of autonomy and I was quite interested and I have no doubt that you've read the BBC submission and it seems that audience appreciation for BBC channels for the weather, for sport, etc. They're very, very similar in Scotland compared to the UK. In fact, for TV overall, the figures in Scotland are just 1 per cent higher in consumption of BBC compared to UK-wide, but it was really to look at, you know, to what extent, given that we all know that devolution is moving a pace now, you know, to what extent do you feel the BBC has kept up with the changing face of Scotland in terms of devolution and how much further it should go in the future. We've spoken about the degree of autonomy in terms of budget, etc, but how much more Scottishness are you looking from BBC Scotland in future to reflect the increasing pace of devolution? It's really important, as a Government minister, that I make it quite clear that it's not my job to influence the content and the editorial decisions and all that. There has to be independence in that. I think that it's a fair comment that the BBC themselves have acknowledged that they haven't kept pace with devolution, which obviously started in 1999. They've acknowledged that themselves. The challenge that we've got in the charter, which is with 10 years, is possibly 11. I do think this merit in trying to separate out elections and charter renewal timescales. We've got to future proof for 10 years' time. We don't know where we'll be in 10 years' time, but Tony Hall himself acknowledged that the political developments in Scotland are asymmetrical, whether it's Northern Ireland, Wales, etc. In terms of the capability of Scotland to be able to make decisions operationally within the BBC, we think that they can be empowered far more than they have just now. I'm arguing that a federal structure makes sense in lots of different ways. I know that other people say that what you need is more decentralisation, which is more like devolution or enhanced devolution. It could be different in Scotland than it is in Northern Ireland and Wales, because our challenges are different. Actually, our devolution settlements are different. I think that there's a space to move on this, but we have to make sure—I agree with you—that he talked about an asymmetrical development in Scotland and that they hadn't kept up. Actually, there's the scope and capability for changes in Scotland. It's the changes that are needed. That's going back to Liam's point that you can have a percentage figure, but if it doesn't allow keeping up in pace with the cultural developments, etc. We've got a very strong cultural base. I know that a previous director general had said to me that one of his regrets in relation to the Olympic coverage is that they did not have more creative cultural content because the cultural Olympic from Scotland was so strong in Scotland that that would have added to the overall UK content. I think that there is an embeddedness of how we do things in Scotland that is of quality. It comes back to this. It's not just about platforms and it's not just about channels and it's not just about spend. It's about impact. I think that's the bit that is in Ireland. Right, convener, just a final point. I think that the audience appreciation figures illustrate that in Scotland we are very loyal to the BBC and we're certainly watching it in a great figure. All I want you to ask about your federal model, have you discussed that model with your counterpart in Wales, Northern Ireland and in England? You couldn't just have a federal structure for Scotland without having a federal structure elsewhere. Is this something that cabinet secretaries and the other nations have been discussing? I have had discussions with the culture ministers of Northern Ireland and Wales. I've also met with John Whittingdale. I plan to meet him again and he's aware of our work. I think the emphasis is on what can we achieve with the BBC. We can't do this in isolation and that's why it's got to be in discussions with them. I'm due to speak to Wales and Northern Ireland again fairly soon but I don't think that it's dependent on that. I think that we can share our views and what we can offer. It's helpful to know. The point about content, I mean the interesting thing is that Wales, because of Doctor Who and other things, we have a strong production base because a lot of our commissions are from there, whereas Northern Ireland isn't the case. Everybody's experiences are different. The challenge that the BBC has themselves from their own audience research is that they are concerned about how the BBC reflects Scotland to itself. Some of that is in use and that can be dealt with separately from the BBC Charter but also in relation to other content and to share that. I think that they'll have to decide that themselves. It's better that it will be easier to do that if commissions are from Scotland and decisions are taken from Scotland, which we can then share the great productions with the rest of the audiences across the UK. Some of the Scottish individuals that the director general mentioned are examples of Scots who have had to go away from here. It's back to your argument again about commissioning being based up here. Last week, we heard from Professor Blane in Beverage. Professor Beverage said that we should look at having an existing channel or a new television channel based here, because it was all about commissioning and it was all about how we deal with that. Professor Beverage went even further and said that BBC Two should be just moved to Pacific's Key and he believed that there was a plan that the BBC had looked at that at one point to do that. The BBC already has history in doing that anyway because Media City in Salford is an example where they move BBC Breakfast, CBC, BBC Sport and BBC Radio 5 Live to that area. In that, they are saying that over a five-year period that could be worth about a billion pounds to that regional economy. Is that not just an example of the BBC that we have already done before? Is there not a way that we can find a way for them to do something as well so that we can all—because even Tony Hawley himself said that he wants a drama in particular to be more organic and coming from the area, not necessarily with tartland shortbread on it from Scotland but a Scottish drama, a Scottish science fiction show or a show of some sort? Is that not the radical way that Professor Beverage said? Is that not the way forward for us? Well, there needs to be significant, possibly radical change to the BBC to make the impact that we really need both in the impact for creative and economic content for what the audiences want but also to help the sustainability in the long term. The issue is how do you do that? Now, we think that certainly having an additional channel, additional channel and also radio because I think that there is a challenge there for speech and also music in the same channel on how you can have opportunities to have both. I think that where there is an agreement is that there needs to be additional online platforms for Scotland. That can be a channel. That can be a channel. That can be a linear channel. You can think about—you can move into a linear channel or you can also then have in terms of radio opportunities. Nobody is seeing the status quo as satisfactory. Even the BBC, I say, everybody has acknowledged that. Therefore, what is the change and what can it be? You can try to do something internal within the BBC structure and that is why moving the BBC 2, for example, was that proposition. However, taking up the BBC 3 space where it becomes vacant with a new Scottish channel is another opportunity. It is a decision making about commission the content, which will drive that. That comes back to the point of being able to then have the quality content to put on there, which we are capable of doing. However, if you do not have the budgets to do it, and going back to Ann Balford's evidence, the budgets for decision making and commissioning in Scotland are very, very small in need. There is nowhere near the £323 million. There is nowhere near even the £123 million that Mark was referring to. If your decision making is over a very small amount, you are not going to have that influence. The consensus is that people have different views and opinions, and people who are giving evidence to you will have different views and opinions. However, the consensus opinion that has been built up over the last period of the number of engagements that we have had over a number of months has been that the change in the decentralisation of decision making and commissioning to Scotland would make a huge impact. The federal structure is the logical end game of that. However, that would depend across the UK, where, as Mary was saying, we have Northern Ireland and Wales, but regardless of any of that, you can still have more decision making made in Scotland. If we were to try and describe what we are trying to achieve with the charge of renewal, it is empowering the BBC, but it is also getting a bit of strategic thinking in there. It is the strategic part that I think really will be the win for us. It will not just benefit Scotland, it would actually benefit the rest of the UK as well. I presume, cabinet secretary, that you have seen the detail provided by matchlight in terms of commissioning and the off-com rules, which are the context for some of that. Those comments that they provided to us, they gave an example—not a real example, but a worked example—of how commissioning, which ends up being all allocated as Scotland's spend, can be as little as a single-figure percentage in terms of actual spend. What is your view of the evidence that we have received in this area, not just from matchlight but from others? What are your views of the off-com rules? One of the BBCs are voluntarily operating off-com, and there might be an issue, but what should go in the BBC's charter? I am not saying particularly that it is a 10-year charter, so you have to have some scope for flexibility in that. However, I will be firming up as to what that looks like, which is very important. In terms of the evidence that was provided by matchlight, it is very similar to the other committee, the Enterprise and Tourism Committee, in terms of economic impact. I am not saying that there is no impact because, of course, there is, and I recognise that, but it is the qualitative aspect of that. Even within the off-com rules of variations that the BBC Scotland or the network commissioners are looking at, it could be—if your talent is—you can have talent outside the M25 as their rules. I am not quite sure what the rules are in terms of Scottish residency and how they measure that and have the impact, but it is quite clear that matchlight has a point that we are not getting the same economic and creative impact or sustainability. Going back to my point, even if people have a branch office in Scotland, some of the issues where you can have the development of the industry—it is about those other aspects of global sales, it is about online aspects in relation to other companies in terms of intellectual property, where the intellectual property lies. For many of those examples, the intellectual property value does not lie in Scotland, even though they are called Scottish productions. That is the shift that we need to have. I have too many people who have said to me, we meet in airports, where people come up on a Monday and go back on a Friday, but they are a long-term investment in Scotland to the industry. They are not leading the industry particularly. They are having an impact, and I do not want to underestimate how important it is. The answer that you did not get from Kevin Macquarie was about how much of the decision-making for a network comes from Scotland and how much is the spend of that. That is the number of what we need to try and change. I did try. We have returned to the figure of £35 million, which I accept that the BBC itself was, in a sense, substantiating, but I am taken by a comment from Nicolle Cleman of Firecrest Film, specialising in current affairs and also working on the panorama and channel forward dispatches programme. My feeling is that the value of television production in Scotland to the Scottish economy and to the Scottish viewer is significantly more than £35 million. Another executive commenting in the same article suggested that we are using local companies and we are doing our editing here. I am employing Scottish producers, assistant producers and journalists. Does not that benefit the Scottish economy? It is bizarre. It just does not make sense. The amount, the value of productions made here for the network is so much higher than that, referring to the £35 million. I do not think that necessarily we are ever going to be able to drill down into, given the make-up of the way in which programmes are produced and commissioned. Is there a risk, to some extent, that what we are seeking to do is to create a definition of Scottishness, which does not necessarily reflect what is happening in the industry and undervalues some of what is already happening at the moment in terms of productions? You said that we may never get to resolve it. I think that that is why Mary Scanlon is quite right to say what we can do in terms of the accounting and what can be produced, because even in the last few weeks, the committee has elisted information that actually one confirms our figure that we have been using of the £35 million of original TV content, not series production for a week original TV production for Scotland. That is now acknowledged by Ann Bolford. Is it underestimating? I agree that there is more from independent producers that are maybe doing network commissions for panorama or else to spend in Scotland. I am not saying that there is not an economic impact there is. The issue there is that we are using Ann Bolford's figures, £83 million spent in Scotland including lift and shift. There is, but it is better to have a headquartered base that can grow in a longer term rather than one-off commissions. That is the difference. I am not saying that that does not matter, but if you have sound engineers and assistant producers, what you want is the people who devise the programmes. Where is the intellectual property value of that? The intellectual property value of what a lot of the lift and shift companies are contributing is not remaining in Scotland, so there has to be a better balance. Everybody is saying that there has to be a better balance. Now the issue is how do you get that better balance? Tony Hall is talking about access to commissioners. That is not necessarily going to be sufficient to get the better balance that we are trying to achieve. It is quite interesting that, since the figures that were produced by the BBC and furthermore from their evidence today, they are backing up the figures that we have been using. I do not want to have a fight about—I think that it is not necessarily going to be productive just to—I think that we are now getting to consensus even of what the figures are representing. I think that we need to get a bit more clarity and detail on it, but, by and large, we have got an understanding of what that looks like. The issue is how do you change network commissioning, budget and decision making? How do you do that for the benefit of Scotland but also within the context of the BBC and the rest of the UK that is a win-win for both? I think that we can do that. I think that there is a case for that. That is why I am very pleased that I have had constructive discussions and a number of meetings with BBC Scotland management and also with BBC UK management, and we will continue to do so. We are starting to move into a ground where the areas of difference in terms of understanding the figures are not that great. We have been talking about the creative industries. In the context of the charter, how is the Scottish Government, presumably in partnership with Creative Scotland, proposing to become engaged in setting the strategic direction for the development of broadcasting in the independent production sector? First of all, there is a memorandum of understanding. With the UK Government as partners for Scottish Parliament, the BBC is very important. One of the things that I managed to preserve the UK Government to amend was that the Scottish Government would be involved throughout the process, not just at the beginning or the end. That consultation on the BBC charter has generated 200,000 responses, which is the biggest response for any Government inquiry ever. We will engage with the UK Government on the responses to that consultation, but we can also input the content prior to the publication of the white paper. The white paper will be part of the stages of the process. That is the point about the impact on creative industries. I might be wrong, but there is a consensus with the UK Government, the BBC and ourselves, that the role of the BBC has been leaders to help to lead in terms of the sustainability of creative industries, not just for themselves but for the wider sectors. They have to be able to compete and have the opportunity to provide other areas. The BBC studios have the duaries out on that. It is something that we have to revisit from a Scottish perspective and also from a UK perspective. I agree with Tony Hall's point that there should be something in the charter about the role of the BBC to lead the creative industries. I do not think that it should be measured or understood just at a UK level. If the BBC does that, it will ignore the impact on Scotland and all the changes that we can have. It can do that in skills training, co-production, but it can do it very much by commissioning. It is the commissioning aspect that we come back to time and time again. The way to support creative industries in Scotland is to have more decision-making and commissioning in Scotland. We are likely to have more commissions in and of Scotland that we can then contribute to the UK. It is absolutely critical. Is there a danger that the BBC might be too dominant in the market in terms of too big a proportion of the creative industries in Scotland becoming dependent on the BBC? There is more business for Scotland, which might be a nice problem to have. You are absolutely right that we have strong other sectors. We have channel 4. We also have public service broadcasting provision in channel 4. That is very important. There are questions as to how channel 4 contributes to the creative industries, as well as on TV. If you have taken evidence from MGL, I think that the model of what it is doing and how it supports independent producers is really strong. There is a scalability aspect of what can be done from that for the rest of Scotland and perhaps elsewhere. The issue is that you have a diminishing resource. We think that there should be more resource to Scotland to reflect our population share. Even without an increase in resource, transfer of decision-making would have an injection of potentially £80 million or otherwise in terms of economic and creative impact. That helps the creative industries. We are in a strong place with capability, but we are under utilising our potential in terms of the creative industries of the BBC. Yes, there has to be checks and balances there. That is why some of the off-call rules about eligibility for independent producers for the BBC themselves mean that that is the movement in the shift. I think that the BBC studios have potential, but it could, as you have been warned by Janet Archer and some of the evidence, if it ends up in reinforcing the centralisation of production in the London Corridor N25, then you are just going to recreate with the BBC studios problems that we already have with the BBC as such. I cannot be definitive as to where that will be because we still have not got definition and clarity from the BBC themselves of where the BBC studios are in the competition. Cabinet Secretary, in the context of charter renewal, I wonder whether what your view is of how the Scottish Government in partnership with Creative Scotland could propose to become engaged in the whole process of setting the strategic direction of the development of broadcasting in Scotland and for the independent production in Scotland. We have already got the TV leadership group. We are also thinking in terms of strategically, film and television are becoming so high-end television is competing in many of our film screen sectors. Therefore, there is more of a connection about looking about the strategy for screen in Scotland collectively. Obviously, in terms of injection of funding, we have got development fund, production fund and different things that we as a Government are providing with the focus of the film strategy that Creative Scotland has, and in relation to the screen leadership group that has been established that brings in the independent producers so that the sector itself can help to set that. It is like any sector in which its creative industry is energy, food and drink, tourism or other areas. It is not for Government or Government agencies to set a strategy without recourse to what the industry wants. I think that we are getting far better placed in Scotland to make sure that all the players with their BBC, Scottish TV and the independent production sector are coming together to help to set that strategy. I do not know, Laura, if you can maybe want to add in on what else is happening in terms of that area. Is that sufficient for you going on? I think that that covers it in terms of the funding and the work that we do. We have also got the Scottish Creative Industries partnership and the work that we do there. Thank you very much. Is there any more questions at the moment? Cabinet Secretary, can I thank you and your officials for coming along this morning? Again, we appreciate your time in coming to the committee. As the committee has already agreed to take the next item in private, I close the meeting to the public.