News

BBC Trust announces Public Value Test into BBC HD Channel (1/5/2007)

At its meeting on 25 April 2007 the BBC Trust decided to apply a Public Value Test (PVT) to the BBC Executive's proposal for a permanent high definition (HD) television channel.

The Public Value Test will begin on Monday 21 May. Documentation - including the BBC Executive's application for approval of the new service, terms of reference for Ofcom's Market Impact Assessment and a timetable for the process - will be published at that time. That week will also see the start of a 28-day consultation period for both the Public Value Assessment by the Trust and the Market Impact Assessment by Ofcom.

The Trust expects its final decision will be published by 21 November.

At its meeting on 25 April 2007, the Trust gave permission for the BBC's HD trial to be extended until the end of the PVT process.

Notes

1. Public Value Test Process
The BBC Trust's Public Value Test has three components. The first is a Public Value Assessment, carried out by the Trust. The second is a Market Impact Assessment, carried out by Ofcom to terms agreed jointly by the Trust and Ofcom. These run concurrently. The third is the Trust's consideration of both assessments: the Public Value Test, resulting in the Trust's provisional conclusions which it publishes for consultation before reaching its final decision.

For more details about the Trust's PVT process, please go to: http://www.bbc.co.uk/bbctrust/framework/public_value_test/index.html

2. The Trust's decision making framework
The new Charter and Agreement sets out a range of approval processes designed to create a "tiered" approach to decisions.

The most demanding of these is the Public Value Test (PVT) reserved for the most important decisions about new or significantly changed public services. The PVT is a thorough evidence-based process including a Market Impact Assessment (MIA) by Ofcom and a Public Value Assessment (by the Trust). The Agreement envisages that PVTs will normally be completed within six months. It includes two periods of open consultation: after application by BBC management for a new service; and after publication by the Trust of its provisional decision. Where the decision does not concern new or significantly changed public services, the Charter and Agreement provides a flexible framework in which the Trust can apply its judgement to other forms of approval taking into consideration its general duties and functions.

Where the publicly-funded BBC is making a significant investment, but not in a new service that commissions its own content (BBC One, Radio 3 etc), the new Agreement defines this as a non-service. When considering non-service applications from BBC management, it is for the Trust to decide how it will consider the public interest and market impact issues. The Trust may choose to consult publicly.

Where the BBC is engaged in commercial services, the Charter and Agreement sets out a different approval mechanism. This recognises that although the BBC's commercial services must "fit with the BBC's Public Purpose Activities" they are not necessarily (but may be) delivering the public purposes and are not publicly funded. Commercial activities must meet the four criteria set out in the Agreement which are:
* They must fit with the BBC's Public Purpose activities
* They must exhibit commercial efficiency
* They must not jeopardise the good reputation of the BBC or the value of the BBC brand
* They must comply with fair trading guidelines and in particular avoid distorting the market

In the case of commercial services, the Trust has no requirement to and does not expect to consult publicly. Publication of information about how the Trust has assessed a commercial proposition against the four criteria is not a Charter requirement and a decision about publication will be made by the Trust on a case-by-case basis dependent upon the risk to commercially sensitive information.

More broadly, for both public service and commercial decisions, the Charter sets out an expectation that the Trust will only deal with decisions where they "stand to have significant implications for the fulfillment of the purpose remits... or the financial position of the BBC" with the expectation that other decisions will be a matter for the Executive Board. The Trust has set out in more detail in its protocols how this divide will work. Broadly speaking only strategically significant decisions or those worth more than £50m will come to the Trust.

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