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Patten: BBC Worldwide is not for sale

Chris Patten used his first speech as chairman of the BBC to argue that the organization should remain in control of its commercial arm BBC Worldwide, and to tackle criticism of executive pay and governance.

Speaking to the Royal Television Society, Patten said that a sale of BBC Worldwide is not on the cards. “It makes no sense to sell Worldwide. Its symbiotic relationship with the BBC could not survive privatisation; competition requirements would likely cut that to shreds,” he said.

“Privatisation would destroy not enhance value. Moreover it is difficult to see how public policy concerns about Worldwide and its role in promoting the exports of other creative businesses would sit alongside shareholders’ commercial and fiduciary responsibilities.”

Programme sales and distribution, all BBC-branded channels, digital services and the new international iPlayer, bbc.com and BBC World, should all stay within the corporation, he said. “We will not be willing to consider any proposals for privatisation either in whole or in part of any of these core elements,” Patten said.

Patten also said the BBC would undertake a governance review with a view to providing greater clarity about the respective roles of the BBC Trust and the executive board, to introduce a simpler complaints system and regulatory systems, and to encourage the Trust to seek more advice from external regulators including Ofcom. Changes will include the Trust focusing more on strategic issues and less on day-to-say management, a stronger role for non-executive directors, a simpler editorial compliance structure and the introduction of a new chief complaints editor.

Further down the line, any new activities undertaken by the BBC will be subject to two tests – whether a proposal would amount to a significant change to the BBC’s services and the existing public value test, with Ofcom taking a view on the potential market impact ahead of a decision on either test.

On executive pay, Patten said there were “still too many senior managers” and set a target to cut the number from 3% of the workforce to 1% by 2015. He said that the bonus freeze for most senior executives would continue. The BBC will also introduce a pay multiple, comparing the pay of executive board members to media pay within the BBC. “We have agreed with the non-executive directors, who decide pay levels for executive board members other than the director-general, that we will regard the current multiple in effect as a cap within which executive pay should be managed,” he said. “Moreover, although of course the BBC must continue to strive to attract and retain outstanding candidates for senior posts, the [BBC] Trust’s intention is that over time this multiple will fall.”