BBC Trust

In accordance with the Royal Charter 2006, the Trust has the role of guardian of the licence fee revenue and the public interest in the BBC. The Trust has the ultimate responsibility for the BBC's stewardship of the licence fee revenue and its other resources (Charter, Article 22 (a)).

The Charter states that the Trust has the specific function of ensuring that arrangements for the collection of the licence fee by BBC management are efficient, appropriate and proportionate (Charter, Article 24(2) (m)). On an annual basis the Trust will review the Executive's collection strategy in order to fulfil this function.

However in 2007/08 the Trust committed itself to a more-in-depth review of the licence fee collection process which will include an opportunity for the public to have their say.

This document sets out the background to the review, its scope and aims, our planned approach, and the arrangements for delivery.

The Trust as the sovereign body within the BBC (Charter, Article 9(2)) is not in general involved in the day-to-day management of BBC operations. As such, its role within the collection of the licence fee is to oversee the Executive Board and their strategy for the collection of the fee.

A key aspect of this role is to assess whether in devising its collection strategy, the BBC's collection arrangements are efficient, appropriate and proportionate for all groups or licence fee payers and in all situations.

In 2007/08 £3.4 billion was collected in licence fee revenue (which was then available for public service broadcasting). In March 2008, the evasion rate was 5.1% (a slight increase in the lowest ever evasion rate of 4.7% achieved in 2005/06). The cost of collection was 4.1% of licence fee income.

The majority of households are liable for full cost of the licence. The only discounts available are the 50% for registered blind and severely sight impaired persons and a free licence for those aged over 75. Certain residential care residents may be entitled to a concessionary TV licence (priced at £7.50) under the Accommodation for Residential Care (ARC) scheme.

There is a small group of people who do not require a licence as they do not use a television or other equipment to receive broadcasts transmitted live.

The BBC has a duty to ensure that evasion rates are kept to a minimum so that those people paying for the licence are not disadvantaged by those that do not and also that the BBC has the income to provide its services. Equally, the BBC has a responsibility to ensure that arrangements for people who do not require a licence are proportionate.

The BBC outsources the collection of the licence fee to a number of contractors. The largest contract is with Capita Business Services Ltd.

The scope of this review will be limited to those areas within the operational and strategic control of the BBC. As such questions of policy such as “should there be a licence fee” or debates about the cost of the licence fee and whether there should be more concessions for disadvantaged groups are considered out of scope. The activities covered by the review include everything that the BBC does with the aim of collecting the licence fee, including consumer positioning, direct and indirect communications, collections operations and enforcement.

The review will consider whether the collection strategy and arrangements are efficient, appropriate and proportionate:

Efficient collection

This part of the review will investigate how efficient the BBC strategy is in maximising revenue collection while minimising evasion. How is an appropriate balance struck between the marginal cost of detecting and dealing with evaders, the revenue collected by this activity and the need to provide a suitable deterrent to would be evaders?

Appropriate collection

This part of the review will consider how effective the collection arrangements are from the consumers' perspective. In particular it will consider the following questions:

• Do all licence fee payers have reasonable access to a means by which to pay the licence fee?
• Does TVL reach all members of society to offer them information regarding the licence fee in a way which is accessible to them?

Proportionate collection

This part of the review will consider the way in which TV Licensing engages with the public and the impact that collection strategy has on different groups of licence fee payers. Areas to be considered include:

• What is the overall impact of the collection strategy on the licence fee payers?
• Is the tone of written and other communications with licence fee payers reasonable?
• Has TV Licensing struck the correct balance between encouraging payment and deterring evasion?
• Is there an effective way of dealing with those who genuinely do not require a TV licence?

In considering how efficient the BBC's collection strategy is, we will gather data and evidence from stakeholders within and outside the BBC. We may also draw on independent expertise if we consider this necessary.

The main sources of data for the review will be:

Operational data and research supplied by the BBC Executive and TV Licensing

We will examine current performance of the TV Licensing operation in terms of operational responsibilities, collection costs, evasion rates, levels of complaints. We will also analyse the various research undertaken by TV Licensing into the effectiveness of their activities.

Benchmarking data

We will compare the approach used by the BBC to collect and enforce the licence fee with that of other organisations who have a statutory obligation to collect various duties from the public. These bodies include the DVLA, HMRC, and local authorities. We will also look at the utility companies to see how they collect their revenue.

Complaints

We will analyse complaints received by TV Licensing, the BBC and the BBC Trust.

External commentary

We will consider press coverage and public debate about the issue of TV licence collection

Visit to TV Licensing sites and field visits

Visits will be made to the key TVL operational sites – including the field operations to gain a first hand experience of the collection and enforcement of the TV licence fee from a staff perspective.

Interviews

We will interview staff within both BBC management and the outsourced companies. We will also conduct a number of interviews with stakeholders, in particular those that represent specific audience groups.

Public consultation

We will be undertaking a public consultation to gain views from the public and other stakeholders.

Additional bespoke research

We may also undertake some additional quantitative and qualitative research in order to fill any evidence gaps from the audience perspective.

The Trust will produce a report of its findings which we will publish in spring 2009. We will also publish all our supporting evidence, subject to any commercial confidentiality concerns. Having considered the report the Trust may decide whether to request changes to the collection arrangements.