Summary of Key Points from White Paper

The BBC�s purposes

The White Paper confirms six new public purposes for the BBC:

1 Sustaining citizenship and civil society

2 Promoting education and learning

3 Stimulating creativity and cultural excellence � including film

4 Reflecting the UK�s Nations, regions and communities

5 Bringing the world to the UK and the UK to the world

6 Building Digital Britain

Within that framework, we make clear the importance of entertainment to the BBC�s mission, whilst ensuring that its content should offer something distinct from other broadcasters.

The White Paper confirms a set of five characteristics that will distinguish the BBC�s content: high quality; challenging; original; innovative; and engaging. All BBC content should display at least one of the characteristics.

The Trust will consult on new �purpose remits�, setting out its strategic priorities within each purpose.

Preparing for the future: Building Digital Britain

As part of its purpose of �Building Digital Britain�, the BBC should continue to play a leading role in technological development. At the same time the Government supports an equally vibrant, competitive and innovative commercial sector � and the BBC will need a very different relationship with the outside world to reflect that.

The White Paper confirms the BBC�s role in digital switchover. A key outcome of digital switchover will be to ensure that all licence fee payers can receive the BBC�s digital services. It is therefore right that the BBC should take a leading role in making digital switchover happen.

Under the new Charter and Agreement, the BBC�s contribution will fall into three key areas: extending the digital network, informing the public and help for the most vulnerable TV viewers.

The Government welcome the BBC�s investment in and promotion of digital radio, and believe that the BBC should continue its role in this area.

Clarity and certainty: service licences and the Public Value Test

BBC services will be run according to a �service licence�, issued by the Trust to the Executive. Service licences will contain all the most important characteristics of an individual service. They will set out how the service contributes to achieving the Trust�s priorities and will include indicators the Trust will use to judge the service�s performance. There will be public consultation on each service licence, and the Trust will review them periodically.

All proposals for significant change to existing services or for new services should be subject to a Public Value Test. Whether a proposal is significant or not will be determined by the Trust with reference to clear criteria.

Whenever the Trust carries out a Public Value Test, Ofcom will be responsible for providing a market impact assessment, which will be published. Ofcom�s work will be overseen by a steering group drawn jointly from the Trust and Ofcom.

Regulating competition

The BBC will be required to deliver its responsibilities to the licence fee payer within a new market framework:

1. A duty, to be set out in the new BBC Charter, for the Trust to have regard to competition issues in ensuring the delivery of the BBC�s public purposes

2. An overhauled fair trading regime

3. A new system of ex ante codes, operated by the Trust and drawn up by them in consultation with Ofcom, in specific areas which raise potential competition concerns

4. A new complaints regime

Commercial Services

The BBC should continue to relieve pressure on the licence fee by generating commercial income. However, its commercial services should be run according to four principles: fit with the BBC�s public purposes; commercial efficiency; BBC brand protection and avoiding market distortion. The BBC Trust will be responsible for holding the Executive to account for complying with the criteria.

It is important that licence fee payers should have access to information on how money moves between the different parts of the BBC. Appropriate safeguards will be put in place, including fully separate accounts, and clear terms on which transactions are conducted between the public services and commercial activities

Production and organisation

The White Paper believe that encouraging competition in television production through the introduction of a �window of creative competition�, combined with a strong and sustained BBC in-house capacity, is the best way of ensuring that the best programmes reach the screen

The White Paper will place on the Trust an overall duty of ensuring that independent radio producers have the opportunity to contribute fully to the BBC�s provision of the best possible programmes for listeners. The White Paper will ensure that similar principles are adopted for online content as for radio.

The White Paper confirms the BBC�s leading role in training � including its contribution to industry-wide initiatives � and to technological research and development.

The Government welcomes in principle the BBC�s proposals to move a significant amount of production to cities outside London, in particular to the North West of England. We will consider more closely the potential value for money of such a move in the context of the BBC�s licence fee bid.

The BBC Trust and Executive Board

The White Paper confirm that the BBC Governors will be abolished and replaced by two new, formally constituted bodies: the BBC Trust and Executive Board. The Trust will be the sovereign body within the BBC

The White Paper will create a new line of accountability � from the new Trust directly to the licence fee payer, reinforced by clear separation between the Trust and the Executive Board and an unprecedented obligation to openness and transparency.

The Trust will need people with the right expertise. It will include members dedicated to the interests of England, Scotland, Wales and Northern Ireland.

The Executive Board will include mainly senior Executives with a significant minority � at least one-third and no fewer than four � of non-Executives to act as �critical friends�. It will be chaired by the Director General or, at the discretion of the Trust, a non-executive.

The relationship between the Trust and the National Audit Office will be strengthened within the existing arrangements.

Funding

The Government proposes no changes to the existing range of licence fee concessions. On collection and enforcement of the licence fee, we will make the

Trust more directly accountable for the activities of TV Licensing. The White Paper will encourage the take-up of easy payment schemes. And we will consider further proposals to divert offenders from the Criminal Justice system.

Setting the level of the licence fee

The television licence fee remains the best way to fund the BBC and will remain its main funding mechanism throughout the next ten years.

The White Paper will review the scope for alternative funding mechanisms after the end of the next Charter in 2016. The Government expect this review to take place around the end of digital switchover, in order to allow for the necessary planning before any changes are implemented.

The Government is currently considering the level of the new licence fee settlement, due to come into force in April 2007. The Government will announce the details of the settlement in due course. As was the case with the current licence fee settlement, we will expect the BBC to achieve a large part of the funding it needs through �self-help�: efficiency, improvements in licence fee collection and enforcement and commercial revenue.

The future of Public Service Broadcasting beyond the BBC

The Government will conduct a review, as the impact of the move to digital becomes clearer during the course of the next Charter Period, of the case for public funding including licence fee money � to be distributed more widely beyond the BBC. We expect this to mean conducting the review towards the completion of switchover, but will retain the option of conducting an earlier review before the end of this decade.