Lord Young: The BBC is the biggest single investor in the UK’s creative industries

This Thursday I am introducing a debate which asks the House of Lords to: ‘Take note of the role of the BBC and public service broadcasting to the UK’s economy and creative culture’. Firstly, let me declare an interest: I am a former governor of the BBC and an avid viewer and listener across a range of channels – including Netflix – and I recognise that we live in a global multi-media world. When public service broadcasting began Lord Reith, the first Director General, coined what I believe to be one of the best ever mission statements: “To inform, educate and entertain,” and those criteria are still relevant to public service broadcasters in today’s multi-media environment. To put creative industries in context they contribute £100.5bn to the UK economy and public service broadcasters make an enormous contribution to the industry.

The BBC is the biggest single investor in the UK creative industries contributing hundreds of millions of pounds to the wider sector. Every £1 spent on the BBC through the licence fee produces £2 value through jobs, economic opportunities and expenditure. The Impact of a Change in the BBC’s Licence Fee Revenue report published by PwC in 2015 found that every £1 increase in licence fee revenue would generate about 60p of extra economic value. Conversely, a 25% decrease in the licence fee over five years would slash GDP by £630m and lead to 32,000 job losses.

BBC research & development alone delivers significant value to the creative community, the wider industry and the UK economy. Every £1 spent by BBC R&D during the last charter delivered a return of at least £5-£9 to the UK. This equates to a total economic benefit of between £827m and £1.40bn over 2007-16 (relative to costs of £161m).

The licence fee underpins not only the BBC, but the competitive environment that supports the success of UK broadcasting. When the BBC performs well, commercial broadcasters raise their game to compete for audiences, which challenges the BBC to aim higher – in a positive feedback loop not a zero-sum game. 

BBC investment over many decades has helped to develop significant creative economies across the UK. It has major production centres in Glasgow, Cardiff, Belfast, Salford, Bristol, Birmingham and London and over 50% of the BBC’s employees and network television programming spend are outside London.

This investment has driven not just BBC creativity, but significant hubs of independent production. For example, Bristol has become an international hub for natural history production following decades of BBC investment in its Natural History Unit in the city (which produces Blue Planet II and Planet Earth). Wales, which is home to global BBC hits such as Doctor Who and His Dark Materials.

The BBC has just announced further plans to support small and emerging independents across the UK. It already commissions significantly more small producers and out-of-London producers than any other broadcaster and these new measures will boost the strength of UK production across the country. These measures will include a £1m Small Independent Fund to support small and emerging companies, bespoke deal arrangements (such as tailored cash flow terms, shared risk arrangements and help securing third party funding) and tailored events to build stronger connections between emerging small companies and the BBC. Public service broadcasters employ over 500 trained journalists and sponsor journalists for local media together with a very significant number of apprentices.

In a post Brexit environment our flourishing creative industries will make an even more vital contribution to the UK economy and public service broadcasters which are the envy of the world and do so much to promote UK culture and values. The current arrangement with a licence fee, and with advertising supporting the other PSB channels, is a delicate balance. Changing the BBC to either a subscription service – or making it dependent on advertising – will undermine public service broadcasting. And, in the words of my favourite songwriters, Joni Mitchell said: “You don’t know what you’ve got till it’s gone.” 

Lord Young of Norwood Green’s debate on the role of the BBC and public service broadcasting to the UK’s economy and creative culture is scheduled for Thursday 5 March

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