§ Mr. FallonTo ask the Secretary of State for Culture, Media and Sport, pursuant to the answer of 25 May 1999,Official Report, column 142, on the BBC, (1) if he will set out the internal and external audit requirements for BBC Worldwide and BBC Resources Ltd; [86270]
- (2) what are the agreed borrowing limits for BBC Worldwide and BBC Resources Ltd.; and what is the security for such borrowing; [86268]
- (3) if the agreed borrowing limits for BBC Worldwide and BBC Resources Ltd. count as part of the public sector borrowing requirement. [86269]
§ Janet AndersonBBC Worldwide and BBC Resources are audited under the BBC's group internal audit plan. Both companies are required to have an external audit because they are limited companies that exceed the threshold size for audits.
BBC Worldwide has a loan agreement with the BBC which allows maximum borrowings of £150 million, subject to the constraints of three financial covenants: net assets, free cash flow and interest cover. BBC Resources has a £70 million term loan facility and a £30 million revolving loan facility which reduce to zero by August 2005. As with BBC Worldwide, borrowing is restricted by various financial and non-financial covenants within a loan agreement with the BBC. The covenants in both cases ensure, among other things, that licence fee money is not placed at risk.
Only the BBC's external borrowings form part of the public sector borrowing requirement, so the borrowing limits for BBC Worldwide and BBC Resources would only impact on the public sector borrowing requirement if they were to lead to an increase in the BBC's own borrowing from the market.