The Debate: Should the NAO audit the BBC?

NAO should audit BBC’s books

By Edward Leigh

As a publicly funded organisation, the BBC should be held publicly accountable and the present arrangements fall short.

This is not a party political issue: there is consensus of concern across all parties and both houses of parliament that the BBC is not accountable to parliament or the public for the £2.5bn it spends each year.

The solution is simple: the comptroller and auditor general, and his staff at the National Audit Office, should have the right to scrutinise the BBC’s financial management on behalf of parliament.

At present, the auditor general’s rights are limited in that he can only examine the arrangements for the collection of the television licence fee and the World Service.

The BBC finds few allies in its resistance to extending his access further.

It has argued that access may compromise editorial independence and inhibit creativity, but the NAO reports on the Arts Council without questioning artistic judgments.

Arguments that NAO scrutiny would duplicate the work of the BBC’s auditors ignore the fact that those arrangements are geared to providing information to the organisation itself and not to parliament.

The BBC has argued that its regular appearances before the culture, media and sport select committee provide accountability, and they do in part.

These appearances demonstrate that parliamentary scrutiny is compatible with editorial independence. However, they fall a long way short of the accountability provided by the NAO’s rights of access and reporting.

The arguments in favour of greater NAO access are robust. There is the issue of principle, that taxpayers have a democratic right to independent information about the way their money is spent, and there is the value the public audit process can add.

This argument has found favour in the House of Lords, and it welcomes the proposal to extend the comptroller and auditor general’s role. I look forward to this being placed on a firmer footing when the BBC’s charter is renewed.

  • Edward Leigh MP is chairman of the Committee of Public Accounts.

Debate on BBC will continue
By Damian Wild

Accountancy Age has argued that the BBC should be subject to scrutiny by the National Audit Office and is therefore delighted that it appears this will soon be the case. But that doesn’t mean the process will be simple, nor does it mean the arguments clouding this debate are over.

I first interviewed comptroller and auditor general Sir John Bourn in 1993. Sir John was keen to discuss what he thought the proper role of the NAO should be. Its auditors, he argued, should have the right to follow public money wherever it is spent.

In the last decade, he has presided over a number of notable victories in pursuing this goal. The NAO hasn’t quite expanded its remit in the way the Audit Commission has, but it now audits more non-governmental agencies than ever before. Meanwhile, the introduction of resource accounting to government in the last few years and the spread of devolution has seen its remit grow considerably.

So it is right that the audit office should play a role at the BBC. But defining that role will require negotiation. The arrangement is likely to take the same form as the BBC audit committee, on the basis of a dialogue with Sir John and the NAO – or another agency, if more suited – to carry out a programme of reviews over a number of years, reporting back to the audit committee.

Those conversations are unlikely to be comfortable – at least initially.

But they will have value. For the NAO, the meetings will help it achieve its vision of promoting ‘the highest standards in financial management and reporting, the proper conduct of public business and beneficial change in the provision of public services’.

For the BBC, it could even become a marketing device. Whenever discussion of whether the licence fee should be abolished, it will now have another arrow in its quiver. Assuming the NAO is impressed with what it finds, the BBC will be able to say that it does not waste its resources – and that parliament’s auditors can attest to that.

  • Damian Wild is editor of Accountancy Age.

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