BBC Trust to review transfer pricing, sets out commercial framework

BBC Trust member Suzanna Taverne

The BBC Trust, the UK public broadcaster’s governing body, has published a new framework for commercial services and will commission an independent review of transfer pricing.

The Trust will introduce new arrangements in April that will see it bring its oversight of commercial services, including BBC Worldwide, into line with the regime for licence-fee funded services.

The framework sets out how the Trust will decide if each services is performing to avoid market distortions. Each service must generate a long-term return on investment to the BBC appropriate to the market it is operating in. The Trust will review the annual performance, budget proposals and market evidence for each commercial service to ensure that this requirement is being met.

The review of transfer pricing practices is designed to assess whether the necessary controls and procedures are being applied to ensure that fair market rates are being paid when the BBC trades with its commercial units.

“The BBC’s commercial services and activities play an important role in generating returns for reinvestment into BBC content for UK licence fee payers.   This framework clarifies the Trust’s expectations and strengthens our oversight of them, to ensure the performance of the services is regularly and publicly assessed. Having listened to concerns from the industry, we will also launch an independent review later this year to provide assurance around separation and transfer pricing,” said BBC Trustee Suzanna Taverne.