 Y ddig biting o'i my향maeth unig o'w ffordd yng disgwren a'r Abernem i fyw, nidio gyda bach dw i ben i ei fod yr pirementr mistaken a'i ddim! Azienda item 1 bydd yna ei chy batteries byw yn cychwyn eu gwelw blwysig. Ar wneud cafod, nad oedd byddai gw crédd有 May 3 yn cael ei~! I want to invite the committee to make an opening statement. I would like to welcome our witnesses, Glenn Preston, director of Scotland for Ofcom, and Kevin Baker's group director of content and media policy at Ofcom. I would like to invite Ofcom to make an opening statement. Thank you very much, convener. Thanks for the invitation to appear before the committee today. You will recall that Kevin and I came to see you in February, where we discussed some of the main features of Ofcom becoming the first independent regulator of the BBC. We touched then on the separation of governance and regulation. We touched on our role in setting the formal regulatory requirements, and we set out some of our early thinking then on how we'd hold the BBC to account. We consulted on those principles in our draft operating licence and performance measures between March and July of this year, and the end result was our statement published recently on the 13th of October called Holding the BBC to Account for Delivering for Audiences. What that does is set out the first operating licence and accompanying performance framework for the BBC. It covers the processes for setting and amending the licence in future, and there are some detailed annexes that explain how we took account of consultation responses and of the BBC's interim annual plan, which they published at the beginning of July this year. We also published—I think that you have it in your papers that were published for today's committee meeting—a document called to the BBC's services audiences in Scotland, where people can find all of the regulatory conditions as they apply to Scotland in a single place. Under the performance measurement framework, we'll publish an annual research report that will look at how the BBC has been delivering the mission in public purposes through the UK public services, and the evidence that is gathered for the preparation of that report will ensure that any future changes to the licence are fully evidenced. We are committed simultaneously to updating the audiences in Scotland document as the licence evolves and the regulatory conditions relating to Scotland change. The BBC has a responsibility to deliver content that meets the needs of audiences across all of the UK. It was noted in the spice briefing for today's session that there are two principal areas of public purpose for the BBC to provide output and services that meet the needs of the United Kingdom's nations, regions and communities, and to invest in the creative economies of each of the nations and contribute to their development. We have set objectives for the BBC in relation to the nations and regions. It must accurately represent and authentically portray all audience groups. It must also distribute its production resources and support creative industries across the UK. Our approach is intended to provide a greater focus on production in each nation of the UK and on guaranteed levels of programmes for the nations and regions, including in Scotland. In February, we discussed off-coms out-of-London guidance, out-of-London production guidance, and we've now committed to reviewing the guidance in light of our new BBC duties and the broader developments in the UK production landscape. We are in the middle of scoping the project. We had two really helpful recent sessions in Glasgow with representatives from the broadcasters, the independent production sector in Scotland and our advisory committee for Scotland. Our intention is to publish a fuller call for evidence in the first quarter of next year. Our new responsibilities have also required us to consult on procedures for enforcement of BBC competition requirements. The committee will be well aware of the proposals for a new BBC Scotland channel. We discussed it in February after the BBC gave evidence then. It will be the first test of our approach and processes, where off-coms must consider whether the public value of the proposal justifies any adverse impact on fair and effective competition. We're going to conduct that in two phases. That assessment is going to be done in two phases. In the first, which we will complete in the first half of January, we will decide if we agree with the BBC's view that its proposal represents a material change to its public services. Last week, on the announcement of our first phase after the BBC had published its public interest test, we had some initial conversations in Edinburgh with key stakeholders who may be affected by the proposal. That will inform our decision about the materiality. There are two types of assessment that we could undertake in phase 2. Both involve public consultation. The first is called a BBC competition assessment, which can take up to six months if we decide that the BBC's proposal raises large, complex or particularly contentious issues. The second is called a shorter assessment, and we'll generally conduct one of those if we think that the BBC proposal involves a more targeted set of issues that we'd expect to resolve in a shorter period of time. I'll close by touching briefly on the issue of diversity. Ofcom expects the BBC to lead the way in addressing underrepresentation. In our new operating licence, we've set a range of requirements to ensure that the BBC is publicly accountable for achieving its workforce diversity targets. Those include 15 per cent of staff to be from ethnic minority groups and 50 per cent of all staff in leadership roles to be held by women by 2020. Under the licence, the BBC must also measure and report annually on its on-screen and on-air diversity, and we will scrutinise the BBC's performance to assess whether it's making sufficient progress in serving the UK's diverse communities and whether the audiences themselves are satisfied. I hope that that's a useful update for the committee on the current state of play, and Kevin MacDonald and I look forward to discussing those issues with you. I thank you very much for that opening statement. If I could just begin by welcoming the fact that you're reviewing the Out of London guidelines, when you spoke to us in February, you said that you were going to be very tough in the way that you held BBC in particular to account over what constituted a Meade in Scotland programme, but you'll know if you've sat down with the independent producers, as I'm sure you do all the time, that they're very unhappy with the way that those guidelines are interpreted by the BBC. Can I ask you how you intend to address concerns from the independent producers about the accuracy of measures that are used by the BBC to identify Scottish production and whether you're confident that the criteria of what constitutes a Scottish production adheres to the public purpose of the BBC that you've talked about? I think that I can have a go at answering that. The Out of London production review was in substantial part something that came to our attention through some Scottish independent production companies and producers. We looked at a number of individual programmes that they had concerns about. My view and the view of our team was that some of those programmes met the criteria, met the guidelines as they are at the moment, but our view was that they didn't deliver what the guidelines were supposed to deliver in terms of proper investment and development of the creative industries in Scotland and other nations when we looked at some of those. That was what kicked it off. The team has been scoping out how the scope of the work that we're doing. They've been talking to independent producers, they've been talking to broadcasters and other interesting parties. It will be quite a public process. We're going to put out, as Glenn said, a formal invitation for people to submit expressions and views at the beginning of 2018. It's a very complex area. There are quite a lot of certainly broadcasters and independent production companies who say that they don't think that we need substantial change. There are other voices that say that there isn't enough transparency about production bases, for example, what constitutes a substantial production base, what kind of spend leads to qualification. It's a complex piece of work and it's going to have an impact on both production companies and broadcasters. It's going to be done over 2018, but I have no doubt that two things will come out of it. One is probably a need for greater transparency around the register, if you like. When people say that they qualify, what do they mean by that? And also probably more rigor in terms of looking at, probably on a regular basis, the information that's given and what exactly that means. As you said yourself, the public purpose is that there are two that affect Scotland. One is that you support the creative economy in Scotland in the commissioning, and the other one is that you reflect the nation to the rest of the UK. There's obviously a tension between those two, because you could be making a programme which is badged as a Scottish programme, which has nothing at all to do with Scotland, but you could justify it in terms of the public purpose and the support and creative industries in Scotland. It's still hard to see how, for example, looking at your own list here, the Women's FA Cup final between Arsenal and Chelsea, or the England v Serbia Euro 2017 qualifier qualifies as a Scottish production that meets both those public purpose criteria. You'd be right. The portrayal and representation of Scotland is one of our main concerns alongside investment in the creative industries. Frankly, for Scotland or for the other nations to have a truly vibrant, diverse creative sector, they should be producing and being able to produce a range of those programmes. I would love to see more world-class production companies based in Scotland who are producing sport, for example, and there are some. Already Sunset and Vine is a very successful example. For the creative sector to have the breadth of talent, to create jobs and to bring in the right kind of investment here, it's really important that those programmes are not just written out of it, but it's equally important that there is an emphasis put on representation and portrayal. There are other tools that we're going to use alongside the Art of London review on that, particularly around the BBC. We mentioned our first ad hoc review into the BBC in 2018. It's going to be a comprehensive look at portrayal and representation of the peoples of the United Kingdom, which includes the diverse groups that are well known but also the nations of the United Kingdom. We're just scoping that work out at the moment. There are a number of tools. I would urge people not to dismiss programmes such as the Women's FA Cup final, because if it brings investment to a different part of the creative sector, it just needs to be seen alongside parts of the creative sector that will also promote representation and portrayal for it to be a truly vibrant sector. We all support women's football, and there's absolutely nothing wrong with the programmes. They are part of the Scottish allocation, so the BBC can turn around and say that we're meeting the criteria, but it includes things like that. In terms of drama, for example, it includes things like Rillington Place, which is about the John Christie murders in Notting Hill, I believe, in London. Again, that's a Scottish drama, but it's got absolutely nothing to do with Scotland. The casting wouldn't have been Scottish and the production would have not taken place here, so clearly there's a question mark over that, isn't there? I think that that's why the range of measures and the range of types of production is really important. Another thing that we've been looking at is—and we've had representations about that—the percentage of the licence fee that is spent here in Scotland and in Wales and Northern Ireland. One of the reasons that particularly Wales has a higher proportion of licence fees collected in Wales as a total is because it has created a very successful drama studio in Cardiff, which is producing some really expensive top-end drama there as part of the overall industry there. A lot of those dramas, such as Doctor Who or Casualty, which are made in Wales, don't contribute a huge amount to the portrayal or representation of Welsh people, but they do contribute a huge amount to the creative economy in Wales. That's why I say that a breadth of the creative economy is what we would aim to do, frankly. That's fine, so if it's not portraying Scotland, you would have expected a large proportion of the spend to be in Scotland to support the creative industries. Certainly, there's a feeling that that's not happening. How soon are we going to get these guidelines reviewed? The work is already under way. As Glenn said, we've been talking to the key stakeholders in scoping it out. We're going to go out publicly in the early new year and ask for calls for input, as we call it, which is, frankly, for submissions from people who have an interest in this area. We'll then have a look at all those. We'll then come out with our set of proposals during 2018 for public consultation. It will be within 2018, as well, with what we're looking at. I want to follow up on a couple of the points that you've just addressed. Clearly, there is an important distinction to be made between portraying the nations and regions of the UK and investment on creativity within the nations and regions of the UK. I would completely accept that. However, when you're reviewing the issue of diversity—you said that's work that's under way—that's about authentic portrayal and reflecting the diverse communities, as well as what you described as the traditional or the well-known diversities and the nations, will you also be looking at the regions within the nations? In other words, understanding that portrayal of Scotland is not simply about a single representation but about the diversity of Scotland. The answer is that we're scoping it out at the moment. Certainly, part of the work that I've been talking about is focus groups in different parts of Scotland. Frankly, how much granular detail we can get into on regions of Scotland or regions of England in this piece of work is a question of resource and proportionality. I was keen to look at the regions of Scotland. I know that it's very dear to a lot of people's hearts here and it's an important part of what the broadcasters do or should be doing. However, the honest answer is that the costs are ratcheted up very substantially, the more granular you get. The least that we're looking at at the moment is having focus groups in different parts of Scotland and not just in one part of Scotland to try and pick up some of that. That's welcome. Clearly, the phrase nations and regions can be taken to mean three nations and five or six macro regions within England. That is at a very large scale, if you like, and doesn't reflect the reality of diverse communities on the ground. That's covered by the objectives and regulatory conditions in particular to Scotland. Can I ask about another couple of aspects of those particular requirements? First of all, particularly on the number of hours allocated for those learning hours and the treatment of BBC Alipa, if you could indicate the basis in which, for example, the five hours for garlic learning has been reached and what consideration there has been of some of the other issues that Alipa is facing going forward. I'll start to answer that and Glen can pick up on a wider point. We have a lot of communication with BBC Alipa. I went up with my colleague Alan, who is sitting behind here in the summer, to Stornoway to go and see MG Alipa and the teams there and some of the independent producers based in Stornoway to try and understand first hand what are the things that would help to build BBC Alipa and MG Alipa and create a more impressive production industry there. What more would they be looking for, if you like, in terms of regulatory support or whatever? This is an area that we do take seriously. I'm hoping—I've mentioned this to the BBC—that some of the work on the BBC Scotland channel will involve—I know that they're working closely. They already told me with MG Alipa about looking at co-commissioning so that there could be a positive spin-off from the investment in the BBC Scotland channel working alongside MG Alipa and BBC Alipa. We certainly have been in my one year in the job. We've been doing a fair bit of work on that and talking to MG Alipa itself. Glen, is there anything else? There's probably two additional points. In the licence conditions, as they apply specifically to Scotland, we have included a new requirement for 75 per cent of original productions of all those that are transmitted on BBC Alipa. That's something new that they will have to meet. The broader point that Kevin Macintosh mentioned is worth just focusing on as well. We are having conversations with MG Alipa and BBC Scotland to ensure that they are talking jointly about what they want to achieve in a strategic sense. Ofcom has, for a number of years, had a role in reviewing MG Alipa's operational protocol, which is a bit about the kind of pay-in-rations that is the bit that we are legislatively mandated to do, but has also been about thinking about other sources of income and other strategic approaches that they can take to promote Gaelic and the Gaelic language. In this new world, where we are now regulating the BBC, there is a strong case for the BBC and MG Alipa to sit down and produce something in a joint fashion that really takes a strategic look at those things, which I know that both organisations are interested in doing. Excellent. My last question, if I may convener, is in relation to the objectives of regulations in particular to Scotland and domestic radio output. How do you see the regulatory regime supporting radio output not just in Scotland but across Scotland on that regional basis, as currently happens? When we designed the operating licence, it was designed to—obviously, there are several requirements on radio Scotland and other BBC radio services here. I know that the BBC is just appointed Steve Carson, who is looking in a multi-media way, and I know that one of the key areas that he is looking at is future investment in radio in Scotland. Those kind of investment decisions are something for the BBC and they have limited budgets, but I know that they are looking at potential possibly new radio services, continuing investment in radio Scotland. That is a priority for Steve, but it is something that we track carefully because we know the value of it. I was reminding myself about the specific provisions and it is maybe worth repeating them here. In each week, at least 50 hours are allocated to news and current affairs, including repeats. This is in respect to BBC Radio Scotland. Just picking up, Mr McDonnell on your point about regional representation, there is an obligation that Radio Scotland provides several regional opt-outs each weekday, offering news, sport and information, and some regional opt-out community programme in the evenings. We also have obligations in respect of content and music of particular relevance to Scotland as well. I take it from what you are saying that any review of those would strengthen, rather than reduce, the level of those requirements, for example, for regional opt-outs. Well, most of the requirements in the operating licence are that we have set floors, not ceilings, so it would be clear to the BBC that we would expect them to over-deliver on those. They are not a target for them. They are a floor that they should be above in our view. That is very helpful. Thank you very much. Thank you. Jackson Carlaw. When we saw you last, of course, you were preparing to take on this new responsibility. I would be quite interested to know a little more about the operational structure that you have now put in place. You were looking to recruit additional people from where those people have, in fact, been recruited. Were they from within Scotland, or have they relocated to Scotland, since we are talking about Scottish content? How have you determined what their focus and responsibilities will be? How is this resource being deployed in terms of the function that you now have? I do not want to bore you too much about our internal structures, but I will try to answer your question best I can. We worked very closely with Glenn, first of all, in terms of our duties in Scotland. As you will know, we now have, I think, 27 people in our Edinburgh office, which is substantially higher than we had in the past. There are plans to try and grow that further still. You talked about 40, I think, when you saw you in February. We actually have an ambition to go between 40 and 50, which I think will take another 12 to 18 months from this point. However, we have grown from, as Kevin said, I think that we had about 16 last October 2016. We are now just under 30. This is across all of our, all of Ofcom's groups, so not just in relation to content and media policy, but we have competition specialists and spectrum specialists and research specialists, for example. The office that we have in Edinburgh is capable of holding 40 to 50, and that is the ambition that we continue to have. That would, I expect, include some additional people on the content and media policy side. Just in general terms, what we have tried to do is—there was a discussion about whether we should have a separate team within Ofcom to look at the BBC work, apart from our other broadcasting work. My view, having got there and spoken to colleagues, was that there is a real strength in having an overview of the whole of broadcasting and media so that teams working on the BBC would understand the concerns, the issues of other stakeholders as well. We have combined the teams. At any given time, there is a team who would be working—for example, we have a team currently working on our work around the BBC Scotland channel. Some of them are based up in the Edinburgh office. Some of them are in our competition team in London, and they are working together on that. We have created bespoke teams. Overall, the teams are combined, and they tend to be across three areas. One is editorial standards, which Ofcom has got a track record on across the industry, where they are taking on the BBC responsibilities as well. The second one is competition, which we have touched on because of the BBC Scotland channel. The third one is about performance, so there will be a team who worked on the operating licence of the BBC and will be working on the measuring and our first annual report on the BBC in the autumn of 2018. I am intrigued. From where do you recruit individuals? What is the experience of the people who will be performing these functions in relation to scrutiny of broadcasting of the BBC? Are the people who have been formally in the broadcasting industry themselves? Yes. They are not all BBC-type salaries, I hope, are they? Sadly for them, they are not. Every job that we have done has been an open competition. Frankly, we go out there and people externally apply and internally at Ofcom apply, and it tends to be a mixture. Just give you a flavour to try and answer your question. We have recruited several people from broadcasting backgrounds, from Sky, from the BBC, from other organisations. We have a small number who came from the BBC Trust with specialist knowledge, probably four or five out of a team of nearly 100 at Ofcom. There are people who come in with specific knowledge of competition, for example. They tend to come from a variety of backgrounds. We deliberately try to make sure that there is a varied background from different broadcasters and also with understanding of regulation as well as a combination of those two things. There is one additional point that is worth making here, which is that we are moving towards location neutrality for advertising all of Ofcom's jobs. There are some specialist jobs that are located in particular bits of the United Kingdom, but virtually all of the jobs that Ofcom are now advertisers will be advertisers as location neutral. In practice, that would mean people being based either in Edinburgh, which is one of the available sites, or London, and certainly working on those types of issues. I have just one final question on that. In terms of the expectation that you had in planning for the responsibility when it came in April, has the plan that you imagined you would be putting in place been the one that you have employed, or have there been some unexpected ways in which you have had to adjust to amend that? One of the important things—there was a long process—is that the best way to try and regulate the BBC was to allow the BBC the right amount of creative freedom to do the very best it can, but also to make sure that the key requirements of the Charter and Agreement were in place. The sort of hundred or so requirements that we put on the BBC would be a reflection of what the Charter and Agreement asked us to look at or to put in place or key areas in terms of delivering the sort of things that we have been talking about, which is representation, portrayal, investment, key genres of programming that otherwise the BBC may not do, key commitments in peak times on BBC One, for example, to particular types of programming that otherwise the BBC may be tempted not to do, the requirements on Radio Scotland, where we think that it is important for audiences and the audience values a certain amount of news content, for example. Have we amended it? Yes, we amended some things because of representations from the BBC, which were that certain things were not workable, which we saw that they gave us the facts and figures and we accepted that in other areas. An example of that would be, for example, the percentage quota for England for network production, where the BBC previously had put in multi-centre productions into that, and they said that they were not going to do that, so we needed to amend those. Those are the sort of things that we would have changed, but there were other things that the BBC asked us to change, for example, the quotas on hours that we put in for Scotland, Wales and Northern Ireland, which, in the end, we heard what they said. We did not think that there was a convincing argument and we thought that it was important not just to have a percentage of spend in Scotland as a flaw but a percentage of hours, because that is a way of, frankly, making sure that there is a range of production in Scotland, for example. You can put a percentage of spending in, but eight per cent of spending could be all spent on one very expensive genre. If you put in an eight per cent of network hours, it means that there has got to be a range of programmes. There was twoing and throwing. One of the important things is that this is the first operating licence that we put out. Undoubtedly, we will have to make changes, and we should. It should be a living document, because audience patterns will change. The BBC is changing its plans for Scotland, so we will have to amend the licence to take into account the new BBC Scotland channel in terms of the hours that we set, for example, for BBC Two Scotland or whatever. There will have to be amendments over time, and that is the way it should be in my view. It should not just be set in stone, because the market is changing very quickly and audiences are changing really quickly. For jumping in, there is one other broad point about how much it costs to regulate, which is one of the questions that we touched on last time that we were here in February. We had an indicative additional budget for 2017-18 of £8.5 million. We think that we will come in within that budget. It is the case that the costs may change year on year, as Kevin Stewart said, as how we are regulating and what we are regulating changes. If there is any favourable variance in the balance, we would return that to the BBC, for example, within the next year's fees. We are flexible in how we approach those things. Many of the questions that I was going to ask have been covered already. One outstanding question that I have is in relation to productions that have had public money being available to the public on a permanent basis. I remember Scotland's music with Phil Cunningham, which was a great series in television. I have always wanted to see it again because I missed some of the episodes. I do not understand why that is not constantly available, given that public money was used for producing that programme, presumably. I wondered whether you thought that there should be guidelines, or whether there are guidelines, or whether there should be regulation over public access to programmes that have been made with public money? I think that you would like the Proclaimers programme as well, don't you? I am impressed that you know that. The answer is that the BBC itself would like to make more of the back catalogue available to people. There is always a cost question, and there is an agreement with independent production companies, artists and so on. There is a cost implication of making programmes available long-term. I think that the BBC is more consistently now trying to make sure that they can, because they are trying to build the iPlayer, so that they want more content on it, and they want more content beyond 30 days on it where they can. However, they have to weigh that against the costs of doing that. In particular, some programmes, particularly with music rights, there is quite a significant cost to them in doing that. Yes, as a public interest, they have a way to weigh that up against the level of public interest and the costs of doing it, frankly, and that has got to be something that they can only look at, because they have a way up where they spend their money. However, if there has been a huge amount of creative effort put into a production that is of cultural importance to our country, and public money has contributed towards that, is there not perhaps a principle that that should be available on a permanent basis to the country? That is my point, really, is that should that not be something that perhaps could be subject of guidelines or regulation from OFCOM, because it just strikes me as bizarre that those productions are made and then hidden away for time and memorial in some cases? Rights are a highly complicated area and there are lots of stakeholders. I agree with you in principle that things that are of cultural importance should be a priority, but in each individual programme, there are significant rights negotiations and issues around them, whether that is with input and production companies, whether it is with equity, whether it is with musicians union and rightly so. People should expect to get some payment if the programme is consistently being shown, but there is a price tag on that for the BBC and they have to weigh that up against investment in new content as well. I do not disagree with you in principle. I think that, practically, that is an issue for the BBC and I am sure that they would put a priority on things that are of cultural importance, but they have to weigh all those things up. Sorry, that is not probably what you want to hear, but I think that that is a reality. I do not have to reflect on it, because it is a part of the kids list. We will think about it, yes, for sure. Rachel Hamilton, thank you, convener. Good morning. I know recently that OFCOM has accused the BBC of being reliant on too many repeats of films and sitcoms and long-running daytime shows, and I know that you, Kevin, recommended that the BBC provide more original UK drama. However, I do quite like a nice black-and-white movie, a weepy movie, on a Sunday afternoon, I have to say. You did recommend that perhaps more original dramas such as Mrs Brown's Boys was televised. Can you talk us through the process of how you persuade the BBC to be more creative? That is a really good question. I am sorry that we are taking away your black-and-white movies, but you can get them on Netflix, probably. How do you persuade the BBC to be more creative? I think that we saw a number of things. You are right. We looked at what the audience is really value about the BBC and original UK productions that reflect lives in the UK, whether that is drama, or factual entertainment, are the things that the audience really value. What we tried to do was to say that these things are important to the audience, but they also define what the BBC should do. It is what the Charter and Agreement also asked the BBC to do. Whether that is in children's UK content, which the BBC has become pretty much the only commissioner of some aspects of children's content, which are hugely valued by the audience and by parents and so on, whether that is in drama or whatever. It is to point out what is valued. In some cases, it is to set a requirement of a minimum number of hours for key genres, arts programmes, which will be one. In some ways, it is about leaving the BBC the freedom to make it the best creative choices it can do. The BBC Board and the BBC Executive have to be able to manage the BBC. They have all the facts of their fingertips. They have the people who make these and brilliant creative people in the organisation. It is a bit about striking the right balance between making sure that we protect key genres or stand up for key things that we believe in, which is representation portrayal and so on, which is important to audiences and is in the Charter and Agreement, but allowing the BBC the space to make the best creative decisions that it can make. I also wanted to ask you, in order for the BBC to spend the same per head on views, which is obviously the ultimate aim, how long do you think that that will take and how do you measure that change? How long will it take? I think that our role is to try to make sure that we can create the environment, the best environment, for that to be possible and likely for the BBC and other broadcasters to spend more in the nations of the UK. In the end, we should not be deciding what the BBC spends, but we will measure it and put it out publicly. How long will it take? It depends on the decisions that the BBC takes about spend. It comes back to what I was saying about allowing the BBC the creative decisions. If they want to make a really expensive drama in Northern Ireland or Wales or whatever, and that skews spending or a few expensive dramas in Wales, which is what they are currently doing, that is, in their view, the best place to do that. They have the creative communities and the studios to do it. It has to be a decision of the BBC. I read the evidence that the BBC gave about their intent of increasing spending in Scotland, which would welcome that. However, the most effective way to enable that to happen is, frankly, to do what we are trying to do, which is to make sure that the creative economy here has the right mix of skills, the right investment and the right range of programmes being made here. If it has the right scriptwriters, then drama will come. If it has the right studios, different types of programmes will come. Those sort of actors are slightly outside our hands, but we can just try to create the best conditions for it and also make it clear that we think it is important that representation and portrayal does improve. Do you believe that the regulations that you are obliged to ask the BBC to meet, do you believe that that will have an effect on the quality that is being produced? Yes, undoubtedly. Making sure that there is a substantial commitment to children's programming, making sure that there is a commitment to arts, religious programming, current affairs, news in peak time, regional news. These are the sort of things, frankly, I am sure that the BBC would and should be doing, but there is no guarantee. It is putting a flaw there, making sure that those valued genres that the audience really care about remain a priority for the BBC. When they have lots of other priorities, lots of other areas, they want to spend money on and lots of other services that they would like to create, but some of those genres are really valued by significant parts of the audience. Hopefully, yes, we are going to set a minimum standard for some of those areas, and I hope that the BBC will exceed it in many cases. It is maybe just worth adding one additional point on that. I mentioned in my opening remarks that we will report annually on how the BBC is performing against these obligations. We would expect to have conversations about your quality point when we are out and about in Scotland talking to audiences about whether they think that they are getting the quality that the BBC is obligated to give to them. We will have a tool by which we can comment on those issues. I wonder if I could ask the Crown vs Blue Planet question, which is maybe the opposite end of the spectrum to the one that Lewis MacDonald was asking about local radio stations, because I could do that all afternoon and bore you about that. I suppose that my concern at the moment is Netflix, Amazon, Disney, Fox and that happening across the other side of the Atlantic—huge international pressures on broadcasting competition. Do you worry at any stage that we will all get so obsessed by the nuts and bolts of pens spent here and there and miss the big picture, which is that the BBC, like every other state broadcast of that point of view, is going to be under enormous pressure from these international vast organisations that are competing absolutely head-on for customers and doing it very well? That is a key part of what we have to do, not just for the BBC, but for Channel 4, in particular, who will be under pressure from ITV. These are also our stakeholders. These are also public service broadcasters. Ofcom's role in supporting public service broadcasting in the UK is there. It is in statute that we should be doing it. It provides a lot of what is valuable for audiences and society. Yes, we are having constant conversations and also with other stakeholders like Sky, who provide excellent service themselves to consumers about these existential threats, if you like, and the BBC has voiced them quite explicitly about Netflix, for example. So that yes is the answer to your question. When an organisation like Fox, for example, is said to say that it is not big enough and therefore is looking to link up with Disney, and Fox is an enormous organisation, that says something about the way the world is going. So yes is the answer. One of the things that we are constantly talking to the BBC and other broadcasts about is how they can work better together to protect British content and British broadcasting. I think that I said publicly that I actually think for audiences that this is a particularly golden period because the amount of choice, the range of ways you can view content, yes, the crown on Netflix, Blue Planet on the BBC, but a whole range of other fantastic programming across our broadcasters and international broadcasters, the audience have never had so much choice and high quality choice, but it may be a moment in time. You do look at the pressures and commercial pressures as well on ITV and Channel 4, who have seen a downturn in the advertising market. That means reduced investment in content, probably, because that is what they have to do. So that golden period may not go on forever, and part of our job is to try to make sure. One of the ways, frankly, that the BBC and ITV and Channel 4 will stand up to Netflix and Amazon and so on is investment in UK and British content that reflects the lives of British people. I do not foresee that, in the near future, any of those big organisations might represent a very small part of British society, but in terms of representing people's interests, their daily lives and the issues that affect them, that is a unique proposition for the British broadcasters. Frankly, it is one way of them also to protect themselves going on to the future, I think. Thank you. Thank you, Stuart McMillan. Actually, it follows on from that area. Just structurally, there are two programmes in recent years that I thought were really interesting. One was on ITV, it was Robson Greens in Northumberland, and I thought it was a fascinating programme and certainly very informative. Now, BBC do not do anything like that. Also, the BBC covered the coast, and it did a programme a couple of years ago about the east coast of Sweden. Part of the programme is factual and accurate, first of all, but there was a link to Scotland, which it omitted to highlight in the programme. It is bad to your point that it is just about being relevant, irrespective of whether it is BBC or ITV or anyone else, but if programmes ensure that the link to either Scotland or the UK or particular communities was highlighted, I think that that would probably strengthen their particular case. I agree with you. Relevance to your audience is always going to improve the audience's connection with the programming. When I was working in news in Ireland and previously at the BBC, you would always look at what would connect international stories to UK life or UK communities, because you can have great stories, but if there is also a connection some way through people or through issues, it undoubtedly makes it more relevant and more interesting. I support what you are saying. If I could go back to the whole issue of diversity and the two public purposes in terms of the creative economy and portrayal. By 1 April, the BBC has to have a code of practice in place over diversity. I wondered how they were going to be measured in terms of how you intend to measure them, particularly in terms of what I talked about earlier and the public purpose around portrayal of authentic voices and authentic stories from Scotland, because we have a way to measure the public purpose in terms of supporting the creative economy. Many people would say that it is very flawed and I might come back to that again, but we do not seem to have at the moment a way to measure the issue of portrayal, which I understand is difficult and it is subjective. For example, some broadcasters would argue that setting a drama in Edinburgh for the backdrop, but there is absolutely nothing else that is an authentic Scottish production about it. It would fulfil that portrayal obligation, but many people would say that it does not. However, how are you intending to measure that issue of portrayal and diversity so that Scottish voices and Scottish stories are told across the UK and get the funding that the network programmes get to tell those stories? That is a very good question. We have been spending quite a long time talking about it. One of the tools that we have, which is probably the most powerful tool, is to measure what the BBC does every year. I think that our audience research people at Ofcom have already had a very good external reputation. Those are some of the exact issues that they have been looking at, which is a robust measurement of those kinds of things. It is a range of measures that we are going to use. It is not just hours of programmes on-screen. It is also going out and talking to audiences. You are right, it is quite hard to measure how people feel that they have been portrayed. Is it authentic or not? However, we are using every kind of audience measurement tool that we can do. Alongside, as I said to you, the first ad hoc report that we decided was going to be about representation and portrayal of the people of the UK, which involves an even deeper dive into that issue. We think that it is really important. You go round talking to all the various stakeholders, politicians and so on around the UK. This is the issue that comes up all the time, which is how authentically our Scottish people are shown to themselves and shown to the rest of the people of the UK. We want to use the full range of measures that we can. We will publish that very openly. Transparency about putting the figures out there in an independent, transparent way, saying that, yes, the BBC is doing a good job in this area, but not so good in that area, is the most powerful tool quite often. My colleagues in audience research are working closely with Glenn and his colleagues up here looking at what is the best way to do that using the full range of tools that we have. We will publish that probably in October as part of our assessment of year 1 of the BBC with an independent regulator. Is that the title of your audience advisory council? I was reading their document from July this year, and they were quite encouraged, but they were quite critical of the way things operate at the moment. One of the things that they talked about was commissioners and where commissioners were based in terms of commissioning that authentic programming, the portrayals that were just being talked about. The committee has had quite a bit of a to-and-froing with the BBC as to how powerful their drama commissioner, for example, in Scotland really is, because everybody in the industry tells us that the decisions are really made in London. As your advisory council says, a commissioner that is not based in the nations and regions will look at things in a completely different way to one who is. Perhaps that is the reason why, with the big-budget network commissions, our whole canon of Scottish literature, for example, is very seldom portrayed on television, whereas, as much as I love Dickens, there has been about three or four repeats. Every few years, the BBC repeats a big-budget drama version of the classics of English literature, but they do not usually ever reflect the Scottish canon. That is something that comes up all the time when you speak to the cultural sector in Scotland. What are you going to do about that? Clearly, in terms of portrayal, that is not working, so what are you going to do about that in your regulations? You are right. Where commissioners are based and who they talk to and how easy it is to pitch them is an important part of improving portrayal and representation. I would be encouraged to say that, of the relatively few members of the BBC executive who are on the board, one of them is Ken Macquarie, who is a very persuasive voice for Scotland and for the nations and regions as a whole in terms of portrayal. I have spoken to Ken about this and it is in his blood, as you well know, better than I do, so some of those key appointments are really important. I would say that Dan Alder and Steve Carson are a powerful team up here and Steve Carson worked previously in Northern Ireland, so he knows his way around the commissioning processes within the BBC. Having the right people based here is really important. All we can do—how the BBC organises its management and its teams is a matter for the BBC board, and it is not for us to decide where they are based or where decisions are taken. However, what we can do is show what the impact of those decisions is and question some of those decisions and present the facts back to the BBC. If you are not doing well enough in this particular area, are there other things that you need to do about it? That is one of the public purposes that has been laid down, so presumably they have to be forced to, but as part of their licence, they have to meet that public purpose. They do, and they know that they need to do better on it. They have said that themselves, and we have made it very clear. That is why particularly we focus on that in year 1. The ad hoc report is one of the most powerful tools that we have to shine a light on a particular area of the BBC. There were a number of areas contending for what we thought was the priority. We chose this as a priority, and the upshot will be the most comprehensive picture that we have had yet of how the BBC is doing in that area, and hopefully it will be a useful tool to them. They have to think about how they can do that better. I do not think that anyone would want the regulator deciding who is managing the BBC or where they should be based, because the BBC is in a better position to make those decisions, and they should be. It is your job to ensure that they fill their... It is our job to hold them to account on how they are doing in a general way. It is not just the BBC, but Channel 4. I noticed in your list of Scottish productions includes a Channel 4 production of Alan Titchmarsh following the footsteps of A.A. Milne around Harrod's Toys, Toy Department and Surrey, and that is the Scottish programme, apparently, as well. To go back to the regulations that we can measure in terms of supporting the creative economies, there are three criteria that have to meet two out of the three criteria. One is the executive space in Scotland, and the other two are related to spend and where people are employed. Do you see those three criteria changing as a result of your review for out of London spending? Clearly, some of the issues around particularly where the executives are based, you could have one or two executive spaces in the Glasgow office, and that would be one of your two criteria met. It is clearly for many people that they do not think that that is good enough. I obviously cannot prejudge. There is a huge amount of work going on. Are those three criteria satisfactory in themselves? That is one of the things that we are looking at. How are they being interpreted? It is another thing that we are looking at. What does a permanent base mean? What is the importance of a permanent base? Do you want to exclude other UK companies coming in making a very significant film or drama or whatever in Scotland because they do not meet one of those criteria? Those are all areas that we are looking at. Currently, the information that is available is that the broadcasters have a ticker box saying that they are the executive base in Scotland, and they tick a box saying that they are, and that is as far as it goes. Is that enough information? My view is probably not. Transparency is a huge tool. If you have to give more information, when you tick that box, you say that the executive or the management is based in Scotland, I think that there should be another thing saying, well, what does that mean? That is something that we can see next. We will go out to consultation on this and we will welcome the views of this committee in terms of the options that are out there and the issues that we should be looking at. How will you deal with complaints when someone says that a programme has been incorrectly identified where they have ticked the box and it is not true? That is another key area that we are looking at. Do we have a robust enough complaint system? At the moment, producers will come to us and say, can you have a look at this programme? I have looked at your list of programmes that are question marks over, but we have gone back to the broadcasters and asked for more information. That will form part of our decision making going forward. These were productions that qualified ostensibly on the criteria. What did that actually mean? When we asked for more information, which we have now gone to the broadcast on all those programmes to ask for more information, we want to see what that turns out. There is one additional point that is worth adding there about transparency. For all sorts of complaints that we receive in relation to broadcasting, we have really well established routes where we are transparent. We publish a broadcast bulletin every couple of weeks that outlines the sorts of complaints that we have received, whether or not we are going to pursue them and eventually what the outcome is. That is less true in relation to the made-out-of-London guidance that is not as transparent a process. It is absolutely one of the spaces that we will have to review in the next few months. When will things change? We expect it to happen during 2018. We are statutorily obliged to consult on those sorts of things. We have a method of doing scoping to go and talk to the people affected by it before we do our formal consultation. At some point in 2018, we will see a new set of guidelines that they have got to adhere to. When do you think that that will be? Will we see a new set of guidelines published by yourselves? Yes. Either a new set of guidelines or a new framework around the existing guidelines if we decide that those are the right ones but need to be adhered to in a more transparent way, for example. I do not want to prejudge what the outcome is. There is a new set of guidelines or a new system around the guidelines with more transparency and a better complaint system. I do not know whether those are all the options that we are looking at, but in terms of the timetable, yes, throughout 2018. Early in 2018, we will go out and ask for formal inputs into the process. We will then put out our initial thinking probably around spring time. We would hope towards the end of the year that we will have a conclusion or which, again, we will have to put out a consultation. We are aiming to get it out, done and dusted in 2018. Ross Greer, do you have a question? Yes. I am going back to the issue of representation. Amongst all broadcasters, the BBC in particular has come under some quite profound criticism for its failure to represent class accurately, both in terms of staffing, particularly at senior level, and in representation and casting, particularly with dramas. Overwhelmingly, drama is set in a middle class or upper middle class situation. When that is not the case, when it is set in a working class situation, the casting is often of actors who are themselves from upper middle class backgrounds cast into working class roles. In your diversity report from September, you looked at a range of characteristics, the three that you can compel broadcasters to give you information on, and a range of others under the Equality Act that you requested, but class was not part of it. My understanding is that off the back of that report, OFCOM has asked broadcasters to start providing you more information on the class make-up of their staffing, et cetera. I was wondering if you could explain why that came off the back of the report and was not part of the information that you requested to be included in that report. Well, I think that suffice it to say that this is probably one of the more difficult ones to measure, if you like. However, it is one of the biggest issues facing UK broadcasters, I think, by their own admission. I think that there are only two professions, as far as I understood this, and this is not a fact. Someone told me that there are only two professions that are less inclusive than the media. One is journalism, the other is medicine. Well, probably not politics, actually, but medicine is another one. There is work going on about it. It is one of the hardest things to measure. How do you say which social background people come from? There is no doubt, though, and the broadcasters know this. Quite a few of them, Channel 4 BBC, have put in place some quite good new initiatives now about apprentice schemes and so on to try and open that up more. They have stopped doing, to a large extent, unpaid internships, which is, in their own way, exclusive because people cannot afford to do it if you come from a particular part of the country or a particular background. They are doing measures. I know talking to people at Channel 4, ITV and the BBC, for example, and Sky 2. They are things that they are actively focusing on. They know that this is a real issue for them. It is a problem about trying to measure it in a robust way. How do you characterise someone who has come in from a particular part of society? Is it because their parents did not go to university? Is it because they live in a particular area? It is not as easy to get definitive figures about it, but it is a major issue. It is certainly one of the issues that we will be looking at in terms of representation as a whole. We are working on how you define it as one of the key things. Have the broadcasters responded positively to your request in future that information that they provide you with? They have responded positively in that this is an area of concern. I think that the work, the discussions that are going on at the moment, is how we define that because we do not have a necessary solution. There may be particular ways that you can define it. You may be looking at particular measures that individual broadcasters are taking. I think that the honest answer is that it is work in progress. We have all identified it as a significant area, as John Snow did in his speech at the TV Festival quite rightly, but I do not think that people have the answers to a lot of things, including how you measure it effectively. The Parliament has passed legislation on university intake to ensure that the broader range of social class gets into university, based on post-codes and other criteria. When you apply for a job with BBC Scotland in order to ensure diversity, you have to tick a box voluntarily about your background. There is a whole post of different ethnic backgrounds, including Irish and white Irish, but Scottish does not actually appear. I know that being Scottish is not actually a protected characteristic, but given the context that we are talking in today, perhaps they should be asking people if they are Scottish when they apply to BBC Scotland? I do not know. That is an opening can of worms. I think that you better put that to the BBC rather than to us. Thank you very much. I will now bring this evidence session to a close. I thank Gareth for coming today. We are suspended and going to private session.