1 Broadcasting in Scotland - the current position
- Broadcasting is currently a reserved matter, with key decisions being taken by the UK Government at Westminster.
- One consequence of this is that Scottish broadcasting has been marginalised within the UK framework.
- A key challenge, in establishing new operational arrangements for broadcasting in Scotland, would be to retain the best elements of the existing UK broadcasting system while allowing for a greater level of programming which reflects Scottish life.
The Scottish Broadcasting Commission
1.1. The most comprehensive recent examination of Scottish broadcasting can be found in Platform for Success, the final report of the Scottish Broadcasting Commission, chaired by Blair Jenkins, which was published in September 2008. The written and oral evidence taken by the commission provides a detailed picture of Scotland's broadcasting industry, and can be found at http://www.scottishbroadcastingcommission.gov.uk .
1.2. The establishment of the commission was announced by the Scottish Government on 8 August 2007 following concerns about the serious decline in the level of television production in Scotland. The commission was independent of the Scottish Government, and included representatives from across the political spectrum, as well as broadcasting industry experts. After a year of consideration, which included detailed evidence-taking, its final report contained 23 recommendations. These included proposals to:
- establish a Scottish digital network to ensure choice in Scottish public service broadcasting;
- increase network production in Scotland by seeking the setting of clear targets and objectives by the major broadcasters;
- encourage Scottish Enterprise to produce a strategy for the broadcasting industry; and
- give Scottish Ministers more power over certain key appointments in relation to broadcasting.
The constitutional position
1.3. At present, broadcasting is a reserved issue. In addition, most of the key means by which public service broadcasting can be supported (the television licence fee; granting spectrum to broadcasters; or using revenue from sales of the spectrum) are also reserved.
1.4. As a consequence of the reservation of broadcasting, virtually all of the decisions relating to broadcasting are currently taken in London by the UK Government, through the Department for Culture, Media and Sport.
1.5. This is particularly strange given that some of the decisions have very clear and unique Scottish application. For example, the decision to establish the Gaelic-language channel BBC Alba - which successfully launched in September 2008 - required to be taken not by a Scottish Parliament which has charge of Gaelic policy, but by a UK Government. That meant that many years of campaigning were required in order to persuade the London-based broadcasters and broadcasting policy officials, as well as London-based politicians, of the case for investment in the Gaelic language.
1.6. The Scottish Parliament has, on occasion, expressed a view on broadcasting issues, but usually to no avail. For example the Parliament on 8th October 2008 unanimously endorsed the recommendation from the Scottish Broadcasting Commission with regard to the creation of a new digital network for Scotland. That vote was conveyed to the UK Government for consideration during the consultations on the "Digital Britain" report but was ignored in the final recommendations from Westminster 1. The establishment of a new digital network was seen as essential by the Commission and the Parliament in terms of ensuring secure and sustainable choice in public service broadcasting in Scotland.
1.7. Of course Scottish viewers have won, over many years and often very slowly, certain specific safeguards with regard to the distinctive nature and organisation of public service broadcasting in Scotland.
1.8. There is a strong case for saying that in programming the particularly Scottish dimension has been overlooked in recent years - which is why the Scottish Broadcasting Commission concluded that there was no significant competition to the BBC other than in local news and that this situation was undesirable and damaging in the short, medium and longer term.
1.9. Broadcasting (and in particular television) has changed greatly in recent years. The majority of Scottish households now have a choice of viewing which extends significantly beyond the main public service broadcasters. At present 63% of Scottish households use cable or satellite broadcasting services - a figure which has increased by 7% in the last year, and which is likely to increase further in future years. 2 Such services provide access to hundreds of television channels from across the globe yet there is still a strong appetite for distinctively Scottish programmes and a desire for Scottish culture, sport, current affairs and entertainment - just as all viewers in all countries wish to access a balance of home-grown and overseas production. Public service broadcasting is seen as the normal way to provide the home grown element of that equation.
1.10. In addition, of the households which do not use cable or satellite television services, most now have digital access, and so can view approximately 17 television channels provided by public service broadcasters through the Freeview service. By 2011, as the "digital switchover" of television in Scotland is completed, access to these channels will represent the minimum level of choice to which virtually all households in Scotland are accustomed. Little of the content, however, will be Scottish or made for Scottish audiences. 3
1.11. The key challenge for Scotland, therefore, in determining the future constitutional arrangements for broadcasting, is to build on the strengths of the existing system, while seizing opportunities to address weaknesses (such as the lack of choice in Scottish public service broadcasting) which are not being satisfactorily addressed under the current system. This holds true for radio as well as television.
Regulation of broadcasting
1.12. At present, Ofcom acts as a broadcasting regulator for the whole of the UK. Ofcom is a UK-wide body, but it has an office in Scotland, and there is an Audience Council for Scotland which advises Ofcom. Ofcom had expenditure of £138 million in 2007-08, funded primarily by the UK Government (£82 million) and licensing and regulatory fees (£55 million) 4. A breakdown of specifically Scottish expenditure is not available.
1.13. One of Ofcom's six statutory duties is to ensure the optimal use of the electro-magnetic spectrum - the "wavelengths" which are essential to mobile phone operators and radio and television broadcasters. Ofcom grants the licences which allow broadcasters and mobile phone operators to operate, and determines which parts of the spectrum will be made available for commercial use. Many decisions relating to the spectrum are now taken at a European level rather than by national regulators. The scope for making major changes to how spectrum is allocated in Scotland is therefore limited.
1.14. There are some areas, however, in which a specifically "Scottish" approach to spectrum would be possible. This is because Scotland's geographical position towards the periphery of Europe means that it has a higher number of broadcast frequencies which could be "cleared" and made available on a nationwide basis than other parts of the UK. There is therefore scope for Scotland to use its "extra" spectrum for purposes such as the provision of mobile broadband technology or the broadcasting of local television. Ofcom is aware of this, and has on occasion held consultations in Scotland on possible uses for this "Scottish" spectrum. However, no matter the consultation outcomes, Ofcom remains clear that its decisions on this matter will be taken at a UK level and for reasons of strategic UK interest.
1.15. In addition to its role in relation to the spectrum, Ofcom also has statutory duties to protect audiences from offensive or harmful material, and to protect them from unfairness or infringements of their privacy. Recent high-profile examples of Ofcom's work in this regard include its ruling that the BBC should be fined in relation to the phone calls made by Jonathan Ross and Russell Brand to the actor Andrew Sachs. Even here, however, decisions are made at UK level, although Ofcom in Scotland contributes to the decision-making process when a complaint is made in Scotland about a broadcast only available to Scottish viewers. The principle of subsidiarity is clearly not at work in this and other areas of Ofcom's activity.
The BBC and the television licence fee
1.16. Given the importance of broadcasting, it is fair to say that the BBC is one of the most important cultural institutions in the United Kingdom. In that regard, the allocation of licence fee revenue is one of the most significant cultural interventions made by the UK Government. The BBC's group income in 2008-09 was £4.6 billion, of which £3.5 billion came in licence fees (it also has extensive commercial revenues) 5.
1.17. In addition to licence fee revenue, the BBC also benefits from "gifted" spectrum. This means that it does not have to pay for the parts of the electro-magnetic spectrum which it uses to broadcast its television and radio channels. The BBC does not have unlimited spectrum, however. The addition of new services (such as capacity for interactive services; high definition services; or carriage of BBC Alba on Freeview) is only possible if it can achieve these within its existing allocation of spectrum.
1.18. The BBC's status as an independent organisation is secured by a Royal Charter which is usually renewed every ten years - the current Charter lasts from 2007 to 2017. The BBC is overseen by the BBC Trust, a body established to ensure that the BBC complies with its public service remit.
1.19. BBC Scotland has no distinct legal status within the BBC, and is not referred to within the Royal Charter. The Royal Charter does however provide for a specific Scotland representative on the BBC Trust, and a specific Audience Council for Scotland 6.
1.20. The Scottish Broadcasting Commission identified three particular concerns directly relevant to the BBC: the low share of its network programming being made in Scotland; the presentation of Scottish news in UK news programmes; and the service provided by Radio Scotland. The BBC has claimed to be doing a great deal of work to address the first two of these concerns, in particular. Its own very critical internal review by Professor Tony King into news coverage of devolved issues has indicated that major change is required. Action is being overseen by the BBC Trust although no progress report has as yet been issued. The BBC also announced significant plans in late 2007 (after the establishment of the Scottish Broadcasting Commission, but before the publication of its final report) to increase the proportion of network programmes made in Scotland from the 2006 figure of 3% to 9% by 2016 7. However interim reporting since then has not shown that the necessary rate of progress is taking place - for example Ofcom's Communications Market Report for Scotland showed that Scotland's share of BBC network production only increased from 3.3% in 2007 to 3.7% in 2008.
1.21. Ofcom has estimated that by 2012-13 the BBC's licence fee income will increase by 14% from its 2007-08 level, due to annual increases of 3% or 2% in the level of the licence fee (which is currently £142.50 per household), and due to an increase in the total number of households in the UK8. The licence fee will be subject to a review during the middle of the BBC's Charter period in 2012.
1.22. A detailed breakdown of licence fee income between the different countries of the UK is not available. However, if the level of licence fee income contributed by Scotland is proportionate to its share of the population, Scotland's share of the 2008-09 total would be £304 million.
1.23. It is estimated that approximately £130 million of licence fee revenue is spent directly in Scotland at present 9. Scotland also benefits, of course, from services and programmes which do not involve direct expenditure in Scotland.
1.24. A set proportion of television licence fee revenue is currently set aside to help to meet the costs of "digital switchover" (the process whereby all households across the UK will change from analogue to digital television by the end of 2012). The UK Government announced in June 2009 that it would consult on a proposal to continue to set aside or "top-slice" the licence fee beyond 2012, but to use it for other public service broadcasting purposes once digital switchover is complete. Its current proposal is that it would retain approximately 3.5% of the licence fee to subsidise the provision of local, regional and national news on television channels other than the BBC, although other forms of public service broadcasting may also receive support 10. Under current constitutional arrangements, the Scottish Government has no power in relation to these "top-slicing" proposals although there is substantial need for, and pressure regarding the use of such monies in the Scottish Border region, where news coverage now comes from distant (and largely irrelevant) Tyne Tees coverage and more widely in radio and television with regard to overall Scottish coverage.
1.25. There are fifteen different licences to broadcast on Channel 3 across the United Kingdom. ITV plc holds eleven of these licences, which cover England, Wales and (through the Border region) 250,000 people in the south of Scotland. Stv holds two licences, and UTV (in Northern Ireland) and Channel Television (in the Channel Islands) hold the other two. The main "support" given to Channel 3 by the state, at present, is to allow it to use spectrum for free (essentially, the free spectrum is in return for Channel 3 licence-holders agreeing to meet public service obligations). Public service broadcasters also receive a prominent position on Electronic Programme Guides.
1.26. The majority of the content broadcast on Channel 3 in Scotland, even in the stv regions, is produced or procured by ITV plc. Ofcom has imposed certain requirements on stv as a condition of its licence to broadcast in Scotland. In particular, stv must broadcast 4 hours of news each week, 2 ½ hours of which must be in peak viewing hours. Stv must also broadcast 90 minutes of non-news programming each week, out of the 168 hours available for broadcasting 11.
1.27. The conditions imposed on stv and the other licence fee holders have been relaxed in recent years. This reflects the fact that the value of the spectrum which the channel 3 broadcasters receive has declined, as advances in technology have made it easier for spectrum to be used to carry a large number of different channels. The large number of television channels now available to many viewers, combined with the growth in advertising on the internet, has made it more difficult for commercial broadcasters to maintain previous levels of income from advertising revenues. At present, the impact of these structural changes to the broadcasting industry is being intensified as a result of the recession. Ofcom has estimated that in the next few years, the value of the spectrum gifted to Channel 3 broadcasters will be outweighed by the cost of maintaining their public service obligations 12. At this particular point, ITV could conclude that the commercial drivers oblige it to renounce its public service obligations.
1.28. ITV plc and stv are currently in dispute on a range of issues. The Scottish Government cannot comment in detail upon the dispute, particularly since it is now the subject of legal proceedings. However the tensions which exist between ITV and stv highlight both the changing nature of broadcasting, and also the potential difficulties within the existing Channel 3 licence structure.
1.29. As indicated above, a particularly important function served by stv is the provision of national news. It is the only major broadcaster other than the BBC to broadcast a peak-time Scottish news programme. Stv currently claims that such news provision is unprofitable. The UK Government has agreed that there is a danger of local and national news provision becoming unsustainable, not just in Scotland, but in other nations and regions across the UK. The UK Government is therefore proposing that independently funded news consortia ( IFNCs) should be permitted to bid for money which has been retained from the television licence fee. This money would support the news consortia to provide news programming which would be broadcast on Channel 3. The two stv regions of Scotland will probably be subject to a pilot of the proposal during the second half of 2010 though who will provide the IFNC service is not clear yet.
1.30. 250,000 viewers in the South of Scotland are currently part of the Border television franchise, which also covers the north of England. As a result, viewers in the south of Scotland do not see stv programmes on the occasions when stv "opts out" of the main ITV franchise. Border TV merged its news operations with the neighbouring Tyne Tees television franchise at the start of 2009. As a result of this, the main "local" news bulletin shown on Channel 3 in the south of Scotland is currently broadcast from the Tyne Tees studio in Gateshead. The guaranteed minimum level of Scottish news is restricted to six minutes within the main half hour evening bulletin. This provides little material of relevance to viewers in Dumfries and Galloway and the Borders.
1.31. Ofcom has indicated that it would like to see a Scotland-wide Channel 3 licence in the future, but has indicated that it may not be possible to achieve this until the existing Channel 3 licences expire in 2014 13.
Channel 4 and Five
1.32. Channel 4 and Five are commercially funded through advertising revenue. However they receive free spectrum and, like other advertising-financed public service broadcasters, they benefit from other regulatory assets, such as a priority position for their flagship services on electronic programme guides. Five is wholly owned by RTL Group, a company with headquarters in Luxembourg, which in turn is owned by Bertelsmann, a German private company. Channel 4, on the other hand, is a public trust which is owned by the UK Government. Its assets are valued at £435m, including a headquarters building valued at £49m and financial assets of £206m 14.
1.33. Under the Communications Act 2003, Five has a remit for the "provision of a range of high quality and diverse programming." Channel 4 has the same general mandate as Channels 3 and 5, but with the additional requirement that its programming should "demonstrate innovation, experiment and creativity"; appeal to a culturally diverse society; make a significant contribution to educational programming; and exhibit a distinctive character. These public service obligations only apply to the "flagship" channels of Channel 4 and Five - they do not apply to additional channels such as More4 or Five USA15.
1.34. Channel 4 currently undertakes some work in encouraging digital media industries within Scotland, most notably through its 4iP fund. One of the Commissioners for 4iP is based in Glasgow, and Channel 4 currently invests £1.5m a year in the fund in Scotland. The total fund is worth £6m, due to additional contributions by Scottish Enterprise (£3m) and Creative Scotland Ltd. (£1.5m).
1.35. However neither Channel 4 nor Five have any obligations which are specific to Scotland, and their news bulletins are entirely UK-wide. Ofcom has imposed a requirement on Channel 4 that at least 3% of its programmes must be made in Scotland, Wales or Northern Ireland. The Scottish Broadcasting Commission recommended that Channel 4 should commission 8.7% of its network television programmes from Scotland; in 2008 the figure was 1.4%. 16
1.36. It is worth noting that the present severe difficulties being experienced in the broadcasting production industries in Scotland - which form an important part of the creative industries - are due in great part to the low level of commissioning of independent and in-house production (which often uses freelance talent) by all the UK broadcasters based in Scotland. Even the BBC's commitment to increase production has not yet provided much assistance, not least because anecdotal evidence suggests that incoming programme strands bring in programme staff from elsewhere on a temporary basis rather than using local production capability. The threat to stv's long-running "Taggart" series has also been detrimental.
Satellite and cable services
1.37. In addition to the Freeview channels, 63% of households in Scotland watch services on satellite or cable, principally through BSkyB and Virgin Media. By doing so, they gain access to hundreds of television channels from throughout the world. The proportion of people in Scotland with access to cable or satellite is 7% higher than in the rest of the UK17. This may reflect not just consumer choice but transmission difficulties which make the use of satellite in particular essential in areas of poor terrestrial reception.
1.38. BSkyB does not have any public service obligations. However it has a significant impact in Scotland both as a broadcaster and as an employer. It employs more people in Scotland than all other broadcasting organisations put together, as a result of its customer service and sales centres which are based at Dunfermline, Livingston and Uddingston 18.
1.39. Freeview is a joint venture established by the BBC, ITVplc, Channel 4, BSkyB and Arqiva. It allows any digital television viewer to gain access to at least twenty channels which are made available on the service. These channels include the five public service channels made available on analogue terrestrial television.
1.40. Scotland currently has 38 local commercial analogue radio stations, in addition to 12 community radio stations, two BBC national stations (Radio Scotland and Radio nan Gaidheal) and UK-wide BBC and commercial stations. Local commercial stations are significantly more popular in Scotland than in the rest of the UK, accounting for 41% of listener hours as opposed to 32% in the UK as a whole. Scotland is the only part of the UK where BBC stations account for less than half of total listening hours. BBC national and local expenditure on radio in 2008-09 was £38 million. Revenues generated by the local commercial stations in Scotland amounted to £42 million in 2008 19.
1.41. The Scottish Broadcasting Commission reported widespread criticism of BBC Radio Scotland 20, for example in relation to the level of ambition and originality in its programming, although the BBC currently appears to have taken little heed of these concerns. Significant support exists for more speech based radio in Scotland and there is strong demand for the continued growth of Community Based Radio.