6th Report, 2015 (Session 4): Report on the Memorandum of Understanding on the BBC

SP Paper 764 (Web Only)

Contents

Introduction

Background

Parliamentary Resolution

BBC Charter Review
Scrutiny process

Key issues

Views from other Parliamentary committees

Education and Culture Committee
Public Audit Committee

Views of the Scottish Government and its proposed amendments to the draft MoU

Conclusion and recommendation
Annexe A
Annexe B
Annexe C

Remit and membership

Remit:

To consider matters relating to The Scotland Act 1998 (Modification of Schedule 5) Order 2013, the Scottish Independence Referendum Act 2013, its implementation and any associated legislation. Furthermore, (i) until the end of November 2014 or when the final report of the Scotland Devolution Commission has been published, to facilitate engagement of stakeholders with the Scotland Devolution Commission and to engage in an agreed programme of work with the Commission as it develops its proposals; and (ii) thereafter, to consider the work of the Scotland Devolution Commission, the proposals it makes for further devolution to the Scottish Parliament, other such proposals for further devolution and any legislation to implement such proposals that may be introduced in the UK Parliament or Scottish Parliament after the Commission has published its final report.

Membership:

Bruce Crawford (Convener)
Duncan McNeil (Deputy Convener)
Linda Fabiani
Rob Gibson
Alex Johnstone
Alison Johnstone
Lewis Macdonald
Stewart Maxwell
Mark McDonald
Stuart McMillan
Tavish Scott

Report on the Memorandum of Understanding on the BBC

Introduction

Background

1. In November 2014, The Smith Commission made the following recommendation with regard to the British Broadcasting Corporation (BBC) as part of its overall final report:

There will be a formal consultative role for the Scottish Government and the Scottish Parliament in the process of reviewing the BBC’s Charter. The BBC will lay its annual report and accounts before the Scottish Parliament and submit reports to, and appear before, committees of the Scottish Parliament.1

2. The previous UK Government’s Command Paper, containing draft legislative clauses, suggested that this recommendation of the Smith Commission would be dealt with via a Memorandum of Understanding (MoU), which would be entered into by the UK Government, Scottish Government, Scottish Parliament and the BBC. The rationale of the previous UK Government for adopting this approach was as follows:

Setting this out in an MoU, rather than draft clauses, ensures that the BBC’s integrity and independence is secured by keeping its governance and constitutional arrangements off the statute books. Importantly, delivering this commitment by MoU will ensure that the Scottish Government and Scottish Parliament are able to have a consultative role in time for the next Charter Review, which is due to commence after the 2015 General Election; any draft clauses in this respect, setting out a formal role for the Scottish Government, would necessarily come into force too late to guarantee such an involvement. Furthermore, the process, timing and scope of the review of the BBC’s Charter are not set out in statute.2

3. The process of agreeing a formal MoU between the above-mentioned signatories has been retained by the new UK Government elected after the UK General Election held in May 2015.

4. A final draft of the proposed MoU is set out in Annexe A of this report.

Parliamentary Resolution

5. As a proposed signatory to the MoU, approval of the Scottish Parliament would require agreement to a Resolution. Consequently, the Parliamentary Bureau agreed, at its meeting on 28 April 2015, that the Devolution (Further Powers) Committee should be the lead committee in consideration of the draft MoU and that the Education and Culture and Public Audit Committees would also consider the draft MoU and report to the Devolution (Further Powers) Committee.

6. Subsequently, the Devolution (Further Powers) Committee would report to the Scottish Parliament for its deliberation and resolution.

BBC Charter Review

7. Although the proposed MoU is a stand-alone document intended to set out the expected interaction between the BBC and the Scottish Parliament (and other signatories) over the longer-term, in the short-term, the most immediate issue is that of the proposed renewal of the BBC’s Royal Charter.

8. The Royal Charter is the constitutional basis for the BBC. It sets out the public purposes of the BBC, guarantees its independence, and outlines the duties of the Trust and the Executive Board. The BBC’s Charter Review takes place every 10 years with the current Charter due to expire at the end of 2016. Consequently, discussions on a new Charter are expected to begin in the summer of 2015 and the MoU would therefore cover the expectations that the Scottish Parliament would have of the BBC as part of this process (e.g. appearances before Parliamentary committees if invited etc).

Scrutiny process

9. The Devolution (Further Powers) Committee considered the draft MoU at its meeting of Thursday 11 June, taking into account the deliberations of the Education and Culture and Public Audit Committees which had met on 9 June and 10 June respectively. The views expressed by these committees are set out in a later section of this report.

10. Additionally, on 8 June, the Scottish Government’s Cabinet Secretary for Culture, Europe and External Affairs set out her views on the MoU in a letter to the Committee; a copy of which is attached as Annexe B of this report.

11. At its meeting of 11 June, the Committee agreed to postpone a final decision on the MoU pending an agreement being reached between the two governments on suggested changes to the MoU made by the Scottish Government and parliamentary committees. In an exchange of letters (see Annexe B), such an agreement was reached.

12. Consequently, at its meeting of 18 June, the Committee re-considered a revised MoU and whether to recommend approval to the Scottish Parliament.

Key issues

Views from other Parliamentary committees

Education and Culture Committee

13. The Education and Culture Committee considered the draft MoU at its meeting of 9 June. Subsequently, the Education and Culture Committee wrote to this Committee setting out its findings (see Annexe C). In summary, the Education and Culture Committee—

…noted the comments and suggested amendments of the Cabinet Secretary and were agreed it was important the Memorandum meets both the spirit and the substance of the Smith Commission.

Public Audit Committee

14. The Public Audit Committee considered the draft MoU at its meeting of 10 June. Subsequently, the Public Audit Committee wrote to this Committee setting out its findings (see Annexe C).

Views of the Scottish Government and its proposed amendments to the draft MoU

15. As indicated above, on 8 June, the Scottish Government’s Cabinet Secretary for Culture, Europe and External Affairs set out her views on the MoU in a letter to the Committee. This letter and the Scottish Government’s proposed amendments to the draft MoU were considered by the Committee at its meetings.

16. As noted earlier, agreement has now been reached by the two governments on the changes that were required to the draft MoU.

Conclusion and recommendation

17. At is meeting of 18 June, the Committee agreed to recommend to the Scottish Parliament that it gives its approval to the Memorandum of Understanding relating to the relationship between the British Broadcasting Corporation, the Scottish Government, the UK Government and the Scottish Parliament.

Annexe A

Memorandum of Understanding

Preamble

Following the referendum on the independence of Scotland on 18 September 2014, and in order to deliver the commitments made by the leaders of the pro-UK parties, Lord Smith of Kelvin was asked to convene cross-party talks and facilitate an inclusive engagement process across Scotland to produce recommendations for further devolution of powers to the Scottish Parliament.

That process led to the Smith Commission Agreement, published on 27 November 2014. This made several proposals specific to the British Broadcasting Corporation (BBC), as set out in paragraph 36 of the Agreement:

There will be a formal consultative role for the Scottish Government and the Scottish Parliament in the process of reviewing the BBC’s Charter. The BBC will lay its annual report and accounts before the Scottish Parliament and submit reports to, and appear before, committees of the Scottish Parliament in relation to matters relating to Scotland in the same way as it does in the UK Parliament.

The UK Government’s Command paper, ‘Scotland in the United Kingdom: An enduring settlement’, published in January 2015, set out at paragraphs 5.2.1 – 5.2.3 how paragraph 36 of the Smith Commission Agreement will be enacted by this Memorandum of Understanding (MoU), stating;

5.2.1 Paragraph 36 of the Smith Commission Agreement, which relates to the relationship between the British Broadcasting Corporation (BBC) and the Scottish Government and Scottish Parliament, will be enacted by Memorandum of Understanding (MoU). This MoU, entered into by the UK Government, Scottish Government, Scottish Parliament and the BBC, will fulfil the Agreement’s proposal by setting out commitments that guarantee a full consultative role for the Scottish Government and Scottish Parliament in the review of the Royal Charter and the on-going scrutiny of the BBC.

5.2.2 The commitments outlined in the MoU will be:

• A commitment on the UK Government to consult with the Scottish Government and Scottish Parliament before recommending that any Royal Charter on the BBC is granted, and detail concerning the terms of engagement throughout the review process;

• A commitment from the BBC to send its annual report and accounts to the Scottish Government and a commitment from the Scottish Government to lay these before the Scottish Parliament;

• A commitment from the BBC to appear before Scottish Parliament committees on matters relating to Scotland; and

• A commitment to enshrine all the above in the next Charter.

5.2.3 Setting this out in an MoU, rather than draft clauses, ensures that the BBC’s integrity and independence is secured by keeping its governance and constitutional arrangements off the statute books. Importantly, delivering this commitment by MoU will ensure that the Scottish Government and Scottish Parliament are able to have a consultative role in time for the next Charter Review, which is due to commence after the 2015 General Election; any draft clauses in this respect, setting out a formal role for the Scottish Government, would necessarily come into force too late to guarantee such an involvement. Furthermore, the process, timing and scope of the review of the BBC’s Charter are not set out in statute.

Parties

  • The Department for Culture, Media and Sport (The Department)
  • The BBC
  • The Scottish Government
  • The Scottish Parliament

Commitments:

1. Charter Review

The BBC is established by Royal Charter. The Charter sets out how the BBC is constituted, its public purposes, and the respective roles and composition of the BBC Trust and the Executive Board. The current Royal Charter expires at the end of 31 December 2016. The terms of the formal consultative role for the Scottish Government and the Scottish Parliament in the process of reviewing the BBC’s Charter shall be as follows:

  • The Department will consult the Scottish Government on the draft terms of reference for the Charter Review in advance of their publication.
  • The Scottish Government will lay the final terms of reference for the Charter Review before the Scottish Parliament.
  • The Department will consult the Scottish Government through the process of reviewing the charter
  • The Scottish Government will lay the draft Charter and Framework Agreement before the Scottish Parliament, and should the Parliament deem it appropriate, schedule a ‘take note’ debate on the content of the draft Charter and Framework Agreement
  • The Department will consult the Scottish Government before recommending to Her Majesty in Council that the draft Charter is granted.

2. Annual report and accounts

Under Article 45 of the Royal Charter, the BBC is required to prepare an annual report and the audited statement of accounts that complies with the requirements of that article and with any directions given (after consulting the BBC) by the Secretary of State or the Foreign Secretary as to the information to be given in the report about the finance, administration and work of the BBC, and in the statement of accounts. The completed report and audited accounts must be sent to the Secretary of State who must lay them before the UK Parliament; and once that has been done the BBC must publish them.

The BBC will send the completed report and the audited accounts to the Scottish Parliament at the same time they are sent to the Secretary of State. The BBC will lay the completed report and the audited accounts before the Scottish Parliament on the next day on which the office of the clerk is open after they have been sent to the Secretary of State.

3. Reports to, and appearing before, the Scottish Parliament

The BBC regularly receives invitations to provide evidence to Committees of the UK Parliament and to those of the Scottish Parliament (both through witnesses and by the production of documentary evidence). The BBC approaches such invitations from committees of the UK Parliament with due regard to its duty to maintain the BBC’s editorial and operational independence.

The BBC will submit reports to, and appear before, committees of the Scottish Parliament in relation to matters relating to Scotland on the same basis as it does in the UK Parliament

4. Next Charter

Subject to a Royal Charter for the continuation of the BBC being granted, the process outlined under section 2 above, relating to the BBC contained in the Smith Commission’s proposals will be enshrined in that Charter and in all subsequent charters unless otherwise set in statute elsewhere.

[signatories]

Annexe B

LETTER FROM THE SCOTTISH GOVERNMENT TO THE COMMITTEE (8 JUNE)

Dear Bruce

MEMORANDUM OF UNDERSTANDING BETWEEN SCOTTISH PARLIAMENT, SCOTTISH GOVERNMENT, BBC AND UK GOVERNMENT

I understand that your committee will be considering the draft Memorandum of Understanding to deliver the Smith Commission proposals around a role for Scottish Government and Scottish Parliament in the process of BBC Charter Renewal. I wanted to take the opportunity to write to you to set out the Scottish Government position to inform your consideration.

I am firmly committed to ensuring that the proposals made by the Smith Commission, to guarantee a formal consultative role for the Scottish Government and Scottish Parliament in reviewing and agreeing the BBC Charter, in the same way as it does the UK Parliament, are implemented in full. The commitment outlined in the Smith Agreement is that Scottish Government and the Scottish Parliament are to play a role in the governance of the BBC in the same way as for the UK Parliament. This is critical to our success in ensuring that the BBC can deliver for the people of Scotland.

I support the process of agreeing to a Memorandum of Understanding to ensure that the imminent process of Charter Renewal provides both the Scottish Government and the Scottish Parliament with a solid means of influencing Charter content so that it delivers well for the people of Scotland. I also consider the MoU to be the formal means through which our policy on broadcasting can be progressed once the process of Charter Renewal begins.

However, in order for this process to happen effectively, it is critical that the MoU provides absolute clarity and that the Scottish Government and Parliament will be meaningfully engaged at each point in the Charter renewal process. Whilst the present draft presents some detail on how consultation on the terms of reference for the Charter will be agreed, it does not currently provide for a role in determining the content of the Charter, both for this and subsequent charter renewal processes.

Consequently, I am of the view that the current draft MoU does not yet fully deliver the role which the Smith Commission outlined. I will be writing to the Secretary of State for Culture Media and Sport in due course to make specific comments on the draft, and my officials are in discussion with the Department for Culture Media and Sport. I attach for information our current revised wording for the MoU which will be proposed to DCMS.

I welcome consideration of the draft by the Committee and look forward to hearing more on your conclusions in due course.

Yours sincerely

FIONA HYSLOP

LETTER FROM THE SCOTTISH GOVERNMENT TO THE UK GOVERNMENT (15 JUNE)

Dear Mr Whittingdale,

MEMORANDUM OF UNDERSTANDING BETWEEN SCOTTISH PARLIAMENT, SCOTTISH GOVERNMENT, BBC AND UK GOVERNMENT

Thank you for your letter on 10 June in which you set out your response to my letters to the Committees of the Scottish Parliament, which are considering the draft Memorandum of Understanding (MoU) between Scottish Government, Scottish Parliament BBC and UK Government. I welcome your commitment to working with me to deliver the ambition and spirit of the Smith Commission to agree a draft that makes certain that Scotland has a strong voice through the process of reviewing the BBC Charter and which ensures that the BBC delivers well for the people of Scotland.

I have attached to this letter, at Annex A, the current draft of the Memorandum of Understanding which has been reached between officials. I welcome the amendments to section one to include the commitment that the Scottish Government will be consulted through the process of Charter renewal and feel that this delivers the intent laid out in Paragraph 36 of the Smith Commission report.

I also welcome the proposed changes with regard to the concerns raised by the Public Audit Committee of the Scottish Parliament at section 2. I am confident that through the process of Charter renewal itself we will be able to address their concerns regarding the provision of Scottish specific information.

I hope you agree with me that this version of the MoU, as presented by our officials, marks a positive step forward in delivering a positive outcome. If we are able to agree to this version within the next few days, then we can allow for the Devolution and Further Powers Committee of the Scottish Parliament to consider the draft on the 18 June, with a view to consideration by the full chamber in the following week. Timing of Parliamentary consideration is of course subject to other business in the chamber, but I have asked my officials to work with Parliament to progress considerations before recess begins on the 26 June.

Yours sincerely

FIONA HYSLOP MSP

LETTER FROM THE UK GOVERNMENT TO THE SCOTTISH GOVERNMENT (17 JUNE)

BBC Memorandum of Understanding (MoU)

Many thanks for your letter concerning the drafting of the Memorandum of Understanding (MoU). I agree that the proposed change to the third bullet ensures that the MoU is closer in tone and content to the Smith Agreement. This also addresses the points raised by the Scottish Parliament’s Education and Culture Committee in their deliberations last week, as their view was that the MoU should: ‘…deliver the spirit and substance of the Smith Commission recommendations’.

I further note the views of the Public Audit Committee, particularly on the provision of Scotland specific information in the BBC’s annual report and accounts, which you have referenced in your letter.

I agree with your view that these issues should be addressed through the Charter review process itself.

I am pleased that we have reached a form of words for the Memorandum of Understanding (MoU) with which all signatories are now content. I look forward to our respective Governments working collaboratively in the coming years, both in terms of the Charter review itself, and across a broad range of policy issues.

Yours sincerely,

RT HON JOHN WHITTINGDALE OBE MP

Annexe C

LETTER FROM THE EDUCATION AND CULTURE COMMITTEE TO THE COMMITTEE CONVENER

Dear Bruce,

The Education and Culture Committee today discussed the draft Memorandum of Understanding on the BBC and have asked me to provide the following comment to the Devolution (Further Powers) Committee.

The Committee considered the draft Memorandum together with a letter dated 8 June 2015 from Fiona Hyslop Cabinet Secretary for Culture, Europe and External Affairs. The Committee noted the comments and suggested amendments of the Cabinet Secretary and were agreed it was important the Memorandum meets both the spirit and the substance of the Smith Commission.

Yours sincerely,

STEWART MAXWELL MSP
CONVENER

LETTER FROM THE PUBLIC AUDIT COMMITTEE TO THE COMMITTEE CONVENER

Dear Bruce

Thank you for your letter dated 29 April in which you invite the Public Audit Committee to provide views on the draft BBC Memorandum of Understanding (hereafter referred to as the ‘draft BBC MoU).

As you may be aware the Public Audit Committee has been undertaking scrutiny of the possible impact on audit and accountability of the proposals for further devolved powers as set out in the UK Government’s Command paper entitled Scotland in the United Kingdom: An enduring settlement.

The Committee will conclude its initial consideration of these proposals when it publishes an issues paper in late June 2015. As such we are able to provide the Devolution (Further Powers) Committee with some early views in advance of agreeing that issues paper.

The Committee’s observations are as follows:

We question the extent to which any Scottish Parliamentary Committee can hold the BBC to account on ‘matters relating to Scotland’ on the basis of its UK annual report and accounts. We would observe that the BBC raises revenue in Scotland and funds Scottish specific activities such as programming and coverage of major events such as the Commonwealth Games. It also reports to the Scottish Parliament on some Scottish specific activity through its BBC Scotland Management Review and provides specific audited annual report and accounts for BBC Alba.

We consider therefore that for any accountability to be meaningful the BBC should provide Scottish specific data on performance, service delivery and financial information in its UK annual report and accounts. Although the BBC does provide a BBC Scotland Management Review, we consider it essential that any Scottish specific data is robust and has been subject to external audit as is the case with the BBC’s annual report and accounts (which are audited by the Comptroller and Auditor General and the National Audit Office).

We are concerned that in the absence of Scottish specific performance, service and financial information, requests for the BBC to give evidence before the Public Audit Committee on the basis of their UK accounts could be rejected on the basis that their UK accounts do not contain sufficient information on matters relating to Scotland.

We note that the Secretary of State or the Foreign Secretary (set out in section 2 of the draft BBC MoU) has the power to give directions as to the information to be given in the report about the finance, administration and work of the BBC and in the statement of accounts. We consider that the draft BBC MoU should provide for consultation with the Scottish Parliament before any such directions are made.

This would enable the Parliament to provide any views on the impact of the proposed direction on the transparency of any Scottish specific information in the annual report and accounts. It could also provide for a mechanism by which more Scottish specific information in the annual report and accounts could be requested by the Scottish Parliament, particularly as its oversight role develops.

Finally we observe that the draft BBC MoU refers to the BBC annual accounts being laid by the BBC in the Scottish Parliament on the next ‘available sitting day’ after the Secretary of State lays those accounts in the UK Parliament. Under Standing Order Rule 2.1.3 a sitting day is any day ‘when the office of the Clerk is open but not when the Parliament is in recess or dissolved’. We are concerned therefore that if the BBC UK annual accounts are laid in the UK Parliament during July each year (as is usually the case) then there would be no obligation under the draft MoU to lay those accounts in the Scottish Parliament until the first sitting day in September (given the Scottish Parliament is usually in recess during July and August).

We also question whether the use of ‘available’ could also result in the UK accounts being laid in the Scottish Parliament sometime after they are laid in the UK Parliament as it is open to interpretation. We therefore recommend that the words ‘available sitting day’ is replaced with ‘the next day on which the office of the Clerk is open’.

I will ensure that a copy of our issues paper is sent to you once it has been agreed.

Yours sincerely

PAUL MARTIN MSP
CONVENER


Any links to external websites in this report were working correctly at the time of publication. However, the Scottish Parliament cannot accept responsibility for content on external websites

Footnotes:

1 The Smith Commission, Final Report, November 2014, paragraph 36.

2 The UK Government, Scotland in the United Kingdom: An enduring settlement, January 2015.

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