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Raymond Snoddy 

The BBC deal almost defies belief

The BBC deal almost defies belief

That the Government, this time without any Lib-Dem brake to apply, should impose such a deal for the second time in five years behind closed doors is nothing short of gobsmacking, writes Raymond Snoddy.

Even in the long archives of political cynicism it is difficult to come up with anything that quite matches this week's treatment of the BBC by Chancellor George Osborne.

Last time around in 2010 there was an overnight deal, mitigated by the intervention of Lib Dem leader Nick Clegg, and driven entirely by Osborne's determination to cut public spending on the eve of a Commons statement.

Work and Pensions Secretary Iain Duncan Smith was determined to get the cost of the free licence for the over-75s off his budget.

The BBC Trust took the view that the Corporation was not part of the Government's social security machinery and was threatening to resign en masse in the face of such a threat to its independence. Then the deal was cut.

The over-75s threat was instantly dropped as long as the BBC took over the cost of the World Service, the Welsh Fourth channel and the Caversham monitoring service.

The deal meant cost pressures of at least £600 million on the BBC and the loss of more than 2,000 jobs.

This time was supposed to be completely different. There would be no rushed last minute deals. The whole future of the licence fee and the structure of the BBC in a rapidly changing media environment would be properly examined and rationally determined.

Whether good or ill will flow from such a cynical manoeuvre for the BBC and society is difficult to say."

Instead we have another last-minute deal the like of which gives horse-trading a bad name.

Little thought or concern about one of the UK's most important and enduring institutions - despite everything - worry only about being able to bury, in some form, the over-75s commitment in order to cobble together the promised £12 billion in public spending cuts on the eve of the summer Budget.

Whether good or ill will flow from such a cynical manoeuvre for the BBC and society is difficult to say. The only certainty is that for Chancellor Osborne such an outcome, either way, is almost immaterial compared with his real motives.

Shadow Culture Secretary Chris Bryant was not far from the truth when he called the process an "utter shambles", and Labour knows a thing or two about shambles.

It almost defies belief that the Government, this time without any Lib-Dem brake to apply, should impose such a deal for the second time in five years behind closed doors and with no public consultation of any kind.

As former BBC director-general Lord Birt observed, such behaviour not only set a very dangerous precedent but one that suggested that the BBC's independence from government had been compromised.

It is interesting also to note that one BBC Trust, under the chairmanship of Sir Michael Lyons, was on the point of resigning over the free licence fee issue, whereas another led by Rona Fairhead, after a bit of wriggling, accepted it.

So after the railing against the process involved, what sort of deal has the BBC emerged with?

Former director-general Mark Thompson was probably right when he claimed that the deal reached last time was the best that could have been achieved in the political circumstances.

This time around Lord Hall has caused a raised eyebrow or two by claiming that the five-year deal will leave the BBC no worse off, and possibly slightly better off in cash terms than before, across the five-year period.

In truth it is virtually impossible to say if he is right because of the phasing in of both costs and savings and the sheer number of moving parts involved and the caveats still hanging loose.

The bad news for the BBC is that it will indeed have to take on the funding of the free licence fee for the over-75s, although it will be phased in from 2018-19 with the full cost resting with the BBC from 2020-21. The current charge is more than £600 million a year and with an ageing population this can only increase.

How many jobs do they want to see lost in an arena of British output where expansion should be the ambition?"

The manifesto promise that the free licence fee will continue throughout the life of this Parliament will therefore be honoured. After the next Parliament when the BBC "will take on the policy" there may be the possibility of finding a way to slip off at least part of the obligation. There are, of course, poor over-75-year-olds but many are among the most comfortably off in the land.

Against that immutable bill there are a number of positives.

BBC financial support for broadband, currently running at £80 million a year, will be phased out.

The commitment to "modernising" the licence fee to cover public service broadcast catch-up services will become progressively more important over time.

At the moment anyone can access expensively produced BBC content for free on laptops and mobile and the number of freeloaders is growing as the word spreads.

However, if the Government decides to decriminalise the licence fee it will be virtually impossible to chase every smartphone and laptop in the country to see whether they are watching "public service broadcast catch-up TV". Without compensation the annual loss could run into several hundred million.

We are in low inflationary times but the possibility of linking the licence fee to the consumer price index could be an important plus for the Corporation in the overall financial mix, when the threat was for a permafrost licence fee.

The slight problem is that there are two rather vaguely-worded provisos standing in the way of a licence fee rising with inflation.

The BBC will have to demonstrate that it is undertaking efficiency savings "at least equivalent to those in other parts of the public sector."

How many jobs do they want to see lost in an arena of British output where expansion should be the ambition?

Then it will be subject to the outcome of Charter Review.

So there is no commitment there at all then. Having had its pound of flesh on the over-75s the Government could then renege on the non-commitment. They are certainly cynical enough for that.

Meanwhile, after the BBC Three triumph, watch for the BBC News channel going online - cost cuts dressed up with babble about online being the wave of the future.

This will leave Sky News with a 24-hours news broadcast monopoly and you can be sure they will not be silly enough to go online only.

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