The BBC Trust board is understood to have considered resigning on mass earlier this week if the government had pressed ahead
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ThE MaStEr
2010-10-21
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BBC Trust considered resigning over demand to fund over-75s' TV licencesTrustees considered measure during impasse between BBC and government over who would foot bill for £556m annual cost of free TV licences
The BBC Trust board is understood to have considered resigning on mass earlier this week if the government had pressed ahead with a proposal to make the corporation pay for free TV licences for over-75s out of the licence fee.
In the end the government took the free over-75 TV licences proposal off the table, with the BBC instead agreeing to take on other funding commitments including the World Service and S4C.
However, it is understood that on Monday at a point when an impasse had been reached in the negotiations between the BBC and the government the trustees considered resigning if the corporation was forced to foot the bill for the £556m annual cost of free TV licences.
Today the outgoing BBC Trust chairman, Sir Michael Lyons, declined to answer a question about whether he and other trustees – including former ITV director of programmes David Liddiment; Patricia Hodgson, the ex Independent Television Commission chief executive; and investment banker Anthony Fry - considered resigning during the negotiations.
Lyons, who announced last month he is leaving the BBC next year, also revealed that even though the government will no longer fund the BBC World Service, to the surprise of many, it will still have a say in how it operates.
Asked by the host of Radio 4's The Media Show, Steve Hewlett, "Did you at any point consider resigning?", Lyons replied: "It is not helpful to tell you what I considered."
He said no "threats" were made, adding "negotiations are not best conducted by making threats." The discussions were "tough" and the BBC had "very clear red lines", Lyons said.
Asked about the BBC taking over funding of the World Service from the Foreign and Commonwealth Office from 2014, Lyons said the agreement signed with the government in 2006 will be "rolled forward" and decisions on the scale of operations will be made on "the same basis as at the moment".
"Let's not conflate matters here. The foreign secretary has a voice on the opening of new services and closing of existing services. That doesn't sum up the whole of the decision-making," he added.
"The government will retain these rights", Lyons said, but insisted: "The BBC has complete editorial freedom in this."
When challenged that the government had undermined the independence of the BBC during its negotiations and with the settlement, Lyons replied: "Where it's a good deal for licence-fee payers is it protects the independence of the BBC... It gives us clarity of funding and takes the discussion about the right level of licence fee out of play."
He said that "these are exceptional circumstances for the nation as a whole", adding that the government came to the BBC with the "clear intention of shifting" some of its burden of welfare payments.
However, he conceded: "Obviously it's a challenging settlement for the BBC. It requires it not only to make efficiency savings to live within a flat licence fee up til the end of 2016/17."
Hewlett pointed out that the public had not been consulted about their licence fees potentially being used for services beyond the BBC's existing UK broadcasting operation.
Lyons did not disagree and said the BBC Trust would now consult the public about what the future of the corporation should be in light of the flat licence fee and the requirement to make more savings.
When asked if any aspect of the new licence fee settlement worried him, he responded: "These are exceptional times. You wouldn't want to renegotiate the licence fee in this way every time."
Lyons said "our aspiration" had always been to "lay out our arguments", but that "that luxury was not available" and "we had no choice but to negotiate". He added that it was "roughly a week" since the "government indicated it expected the BBC to shoulder some substantial burdens".
The corporation's first reaction was to "underline the independence of the BBC" and point out that changes such as taking on picking up the bill for free licence fees for over-75s, which it considered a "welfare charge", were "contrary to the charter".
Meanwhile, Mark Thompson, the BBC director general, today brushed off accusations of being strongarmed into an early licence fee deal, claiming the corporation pitched the idea of a multi-year agreement to the government more than a week ago.
In an email to BBC staff, Thompson said that the deal, which will freeze the licence fee for six years at £145.50, equivalent to a 16% funding drop in real terms, was "realistic".
He went on: "The idea of reaching an early multi-year settlement came from the BBC and negotiations on it began more than a week ago.
"Because of the work we had done for our ongoing strategy review, Putting Quality First, we were in a good position to carefully weigh the implications of the settlement and to inform the BBC Trust's final decision to accept it. Our next task is to develop detailed plans for the future based on this settlement."
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