BBC: Expenditure (Hansard, 20 January 1993)

HL Deb 20 January 1993 vol 541 cc892-3 892

§ 3.2 p.m.

§ Lord Orr-Ewing asked Her Majesty's Government:

§ Whether they are satisfied that the £50 million of BBC licence payers' money recently overspent can be properly accounted for.

Viscount Astor
My Lords, the audit committee of the BBC has reported that the money in question was used to make programmes from which viewers will benefit in the future. The Government are of course concerned that a significant overspend should have arisen on the BBC's network television budget; but it is important to recognise that last year the BBC as a whole came within its budget.

§ Lord Orr-Ewing
My Lords, I believe that it would be in order to congratulate the chairman of that committee on the speed with which he conducted his inquiry, and on the recognition that some reform is necessary and desirable and will be put in hand. Can my noble friend ensure that steps are taken so that any overspends which may arise are revealed speedily and do not exceed £50 million before action is taken and an inquiry begun?

Viscount Astor
My Lords, a net overspend of £38 million on the network television budget for 1991–92 came to light when the accounts for that year were produced last May. As I have said, the BBC as a whole came within its budget. The problem was confined to one directorate. The matter was immediately referred to the BBC's external auditors. The report of the 893 auditors was subsequently placed before the audit committee. That is chaired by the noble Lord, Lord Barnett, who is vice-chairman of the board of governors. The BBC published the audit committee's report on 3rd December.

§ Lord Barnett
My Lords, I am not sure whether I should be gratified by receiving the commendation of the noble Lord, Lord Orr-Ewing; but I am grateful. As the Minister kindly said, I chair the audit committee, and I should be glad to help your Lordships whenever I can. As the Minister also said, the overall budget is in balance. Is he aware that any overspend on network television, which I very much regret, was offset by underspending elsewhere within the BBC's budget? Is he also aware that the problem arose because of complex systems and controls, both of which have now been corrected and new controllers put in place?

Viscount Astor
My Lords, I am sure that the House is grateful for that explanation by the noble Lord. As he said, the BBC has implemented a number of measures to deal with the identified shortcomings of control which, if they had not been corrected, would have led to continuing overspending during the current year and in future years. A new finance team has been appointed within network television. The BBC's internal audit capacity is being strengthened. The relevant financial systems are being reviewed and improvements are being made.

§ Lord Marsh
My Lords, the Minister mentioned that the external auditors had reported on this matter to the internal audit committee of the BBC. Do not the external auditors have a responsibility to report to somebody outside the BBC; and, if so, to whom?

Viscount Astor
My Lords, I am not sure of the answer to that question, but I believe that the external auditors should report to the governors and the chairman of the BBC.

§ Lord Donoughue
My Lords, bearing in mind that the House has been advised that the losses suffered were compensated for by savings elsewhere and the budget met, that the people responsible have gone and new people and new financial systems are in place, and that the report of the audit committee was openly published, is there any point in pursuing this vendetta any further?

Viscount Astor
My Lords, I do not believe that there is any vendetta. I am here purely to answer any questions which are asked on subjects which relate to my department.

§ Lord Harmar-Nicholls
My Lords, is my noble friend aware that many people will resent the suggestion that there is a vendetta? Ought we not to congratulate my noble friend Lord Orr-Ewing for drawing attention to a matter which we would not have known about if he had not asked his Question?

Viscount Astor
My Lords, as I said yesterday, the Government have the fullest confidence in the chairman of the BBC and the board of governors, and their management of the BBC.