Aelon, dyna y ddenillod o'r eich hannogau euch rydym yn 2018, a dyna'r cymucigiauau gwirloedd a gwestiynau cwynhau yng Nghymru. Mae'r ddechrau hwnnw i ddwyngach, iddyn nhw'n gweld, a daw'r tyngau eich cymysgol i ddefnyddio gyda wyrdd. O'r ddesgrifenni'n gwyldiannau yw'r gweithio cael eu cymysgol i'r ddiweddau. I've received apologies today from Mary Gougeon MSP and Jackson Carlaw MSP. Our first item of business today is the third evidence session in our inquiry into Scotland's screen sector, in which we will focus today on commissioning. I'd like to welcome the witnesses, David Smith, the national representative for Scotland in PACT, Donald Campbell, chief executive of MG Alba and David Strachan, managing director of Tern TV. I'd like to invite David Smith to make an opening statement. I'd just like to thank the committee again for paying attention to the subject and looking into such detail and inviting us all here today. As I understand it, we're here to talk really about the impact of quotas and commissioning across the UK locally and at network level. I think that there are points that we've raised in these meetings beforehand and it's worth going back over some of them and talking about the nature of commissioning. There have been great improvements in the last few years, led in part by the committee's work and by the Scottish Government and at a national level. MG Alba, BBC Alba's emergence, was the first step in making our domestic market stronger. The new BBC Scotland channel is another step in that direction. It moves the off-commer about to undertake to review representation within British television and then out of London and the rules that apply to London can overstress how essential that will be in setting the weather for the next few years. When the rules first came into play in about 2009, the BBC undertook network supply review, which meant that a lot of the opportunity that was apparently present through the quota was met through the lift and shift process and moving large projects that consumed multiple hours and high value, in some cases, to Scotland and other nations and regions to absorb a quota. That was meant to be a short-term tactic that built jobs at a certain level in production, but it became over relied upon. I think that there is acceptance now across the board from the broadcasters and the authorities that we need to move on from that and we are moving on from it. The rules that the off-commer put in place for the next 10 years will help to determine the outcomes that we seek. That is the point that we need to focus on. We know what the outcomes were last time, we need to think about what the outcomes we seek this time are and work from that to develop a process that delivers those outcomes. For me, it is about if you want to set something against a Scottish quota, look to Scotland for it. If you want to commission from a Welsh quota, look to Wales for it. Do not commission London to London and displace elements of production to the nations and regions. That is important for various reasons. One of which, again, cannot be overstressed, is intellectual property and the value of intellectual property. If we own the IP, then we are in the driving seat. The idea that the commissioner wants is the idea that the broadcaster seeks. That is always going to be the fundamental first step. If your ideas are not up to scratch, the quota does not necessarily mean anything. That is why projects get lifted and shifted around the UK. As a nation, we have to improve our IP development, we have to improve our ideas in television. Having a stronger domestic market encourages that and makes it more likely and more possible. However, we have to work with a system that delivers nations and regions quotas from the nations and regions on the basis of the strength of our ideas and our companies. Thank you very much. As you said, there was a lot of criticism of the current and previous system, the screen sector leadership group, which is what our inquiry is based upon, said that 10 per cent of a production budget can be spent in Scotland with 100 per cent being set against the quota. You said that things are improving and that you are hopeful that the off-com review will make a big difference. What does off-com have to do? What would you like to see off-com putting in place as a result of its review that changes the system? I should say that it is improving, but it remains very mixed. I was doing a review of the out-of-under register that off-com published for 2016, and its new register for 2017 is not out yet. I was looking at the main projects that Channel 4 commissioned from Scotland. As we discussed in this meeting before, there is a spectrum of behaviour. There are things that are clearly, authentically, wholly owned and operated from within Scotland. There are things that have a minimal footprint within Scotland, and there are things that sit in the middle. 15-to-1, for example, is a project that sits in the middle of that spectrum. It has delivered good high-value jobs to Scotland. It has helped to build on our expertise in the quiz, it has occupied studios, and it has started careers on that quiz, a game show kind of ladder. It accounts for, by my estimates, about 20 per cent of Channel 4's spend in Scotland, and it is made by Remedy, who is not owned and operated in Scotland. The profits, the development, all return back to London. That is in the middle of the spectrum. If you look at the rest of Channel 4's spend, there are two other projects that I would draw your eye to. One is Eden, which was made by Q and North, who closed their Glasgow office midway through the production. It was not a happy production, it did not necessarily go very well. I think that it was originally commissioned as a 12-part series, and I could be wrong, but I think that four were transmitted in the end. That was, by most estimates, around £10 million worth of Channel 4's spend in Scotland over the last two years, 2016 and 2017. You have a comedy programme called Man Down, made by Avalon with Greg Davies. Again, a minimal footprint within Scotland seems to be an office in Glasgow that houses a development exec who is not accredited in the series. We do not know the figures for what was spent on each of those projects, but we can estimate based on what we know things cost and what the channels are likely to spend. I suspect that between 15 to 1 Eden and Man Down, you are looking at close to 50 per cent of Channel 4's claimed spend within Scotland. I am not sure that is the outcome that we seek, so we have to ask OFCOM to look again at the rules. As you know at the moment, it is a three-part test. You have to meet a substantive base and or 70 per cent of your production spend with various exclusions against that, and 50 per cent of your talent spend excluding on-screen talent. I think that the substantive base needs to be looked at very carefully, what is and is not a substantive base. At the moment, it seems to be taken to mean anywhere from where a production manager sits to a development executive. I would think that you need to look at chief executive officer and chief operating officers within companies and where they are based. Where do they pay tax? That is the determining factor. Where do those high value key roles pay tax? If they are based within Scotland, that is a clear indication that they are a Scottish company. You then need to look at the levels of spend. If you look at projects such as Eden or Man Down, Man Down does not claim to have spent 70 per cent of its budget within Scotland or outside of London. As you said, you can spend as little as 10 per cent within Scotland, provided that you have an out-of-London footprint that meets the full figure. If you look at a project like that, it does not seem to serve any great purpose, it is not an outcome that we would seek on any level. At the same point, there is an element of flexibility required within the system because as Scottish producers, we want to be able to make programmes across the UK and internationally. You have to have a bit of give and take within it. It may be that there is a question of pro-rata attribution of spend. If a project like Man Down wishes to be set or the channel wishes to set that project against the Scottish quota, how much has actually impacted on the Scottish economy? Set that amount against the Scottish quota, not the full value of the project. I wonder if other panel members would like to come in on that and specifically what their suggestions would be in terms of what COMS is doing, what outcome they would like to see of the review? It is a difficult one because we all know what the end result is that we want to achieve but defining where the end result is, where you draw the lines between them. We have talked about snooker ad nauseam and we do not want to go back into that again, but the argument over that fell over what constitutes managed and creating new opportunities for new production and who was doing that. I think that as an illustration what one might say is that if you lift and shift a game show up to Scotland, it may run for a number of years and as David says it may create some jobs in that genre. Most of the work will go to paying for the plant for the studios that the game show is recorded in, which is of great benefit to BBC's PQ, but you will create within the production company there a handful of jobs. If you spend a similar amount of money on factual programmes, and we can see this because we are as a company we are a parallel, we have 50 jobs in the office at the moment and six of those are about generating new and fresh ideas that represent the culture and people of Scotland. I am not sure that I have too much to offer the committee on that. Ofcom's role in this is very important. Equally important is that the sector and the broadcasters have a strategy for growing the indigenous sector and that it is clear how that strategy is going to be prosecuted. You need both of those things to work in tandem and there is a lot of work to do there. Do you think that Ofcom should make agreements with the television companies in terms of minimum production spend? That is potentially possible, but it is better to work on the volume and value quotas and see how they are addressed and delivered. I should have said at the start that PACT Council has not come to a firm view on this. The Out of London review has not been put out into the public domain yet by Ofcom. We expected it to be around about this point, but we have not seen it yet. My opinions that I am putting forward today are essentially my opinions on what I will be putting forward within PACT Council. PACT may come to different conclusions as we go forward. What I think would be useful for Ofcom to think about is the process for auditing and reviewing projects. At the moment, there does not seem to be a process for raising points about projects set against the Out of London quota, how they are then dealt with and what the outcomes of that process are. We have raised two points over the past few years—one about the snooker and one about the man down. I am not sure that we have had an answer about the man down yet, and that is probably a year after we first raised it. A timely process for the addressing of complaints, a little bit of proactive auditing by Ofcom would not go on this, and then a question about what the consequences are. We are keen to ensure that money does not leave the system. If our broadcaster was fined for misapplication of a project against the quota, that would diminish our ability to make programmes in the following year because they had left money to spend. Instead, I would argue that they were required to add back in the spend that was misapplied so that the following year rises rather than falls. That would seem to be an equitable solution to all. I should say that members have been provided with a copy of Ofcom's independent and regional production compliance form. The form does not appear to ask for detailed information or evidence regarding the production team's usual place of residence or work. Is that the kind of thing that you are talking about in terms of the difficulty in ensuring that filmmakers are complying with the regulations that we have at the moment? An element of spot-checking is a bit more detail-required on that form and undertaken by the production company and the broadcaster that it is legal, decent, honest and true. It is authentic that they have met the spirit as well as the letter of the rules, and Ofcom's ability to check on that. Ofcom is not a proactive system. It is a reactive system. If you raise a complaint of Ofcom investigates, maybe that has to change it. I will move on to Claire Baker. I did want to ask—sorry, I expected it. I think that it was Rachel who is going to come in next, but— I think that actually the convener has asked the question that I was going to ask, which was about minimum production spend, but I can develop the question if you like. I wanted to note about the impact that the current spending on production by public service broadcast is having on independent producers in Scotland. The Association of Film and Television Practitions in Scotland said that factual television seems to be relatively healthy, and there have been successes in children's drama, but it would be hard push to find a recent television drama made by an independent Scottish production company commissioned by the BBC or Channel 4. I just wondered what impact is this having on independent producers and how can we encourage more independent producers to get involved? We are—David and I are both factual producers, so we do not have expertise in drama, but what we do know is that drama is a very hard one to win, because there are relatively few dramas relatively high spend, so the perennial problem of trust between the producer and the commissioning editor is magnified in drama. It is hard enough for us in factual to persuade them that we are not going to go and drink their money or make a mess of the programme, but it is much harder in drama. It is about building relationships and what are the steps that could be taken. I can give you an illustration of steps that have been taken in factual to bridge those relationships. In the Ofcom advisory committee's submission to you, they have talked about Firecrest's initial small grant from Channel 4, leading to an investment from Channel 4, leading to, I think, 30 or 40 jobs that they have now got and some well-established brands such as Super Shoppers. It is that sort of progression. We had a similar one with Channel 4, where they invested in development in order that we could increase our development team, increase the volume of offers that we made to them, increase the dialogue that there was between us and the commissioners, and that resulted two years down the line in a substantial amount of commissioning. It is those baby steps in between somehow that need to be imagined in order to make that happen. It will not just happen like that. I would add to that that one of the difficulties that commissioners face is the making short-term decisions against more longer-term decisions with sectoral impact and sectoral benefit. One of the things that we at BBSALP have done is that we have a long-term agreement with young films in the sky to produce dramas. It is a four-year agreement. That kind of agreement gives a measure of certainty to the company, allows the company to plan, allows the company to build up its talent base, allows the company to work with agencies to develop training programmes and talent development programmes in line with the production. The amount of money that we can put at the disposal of the company is not as big as we would like, obviously, given the budgetary constraints. However, being able to make that longer-term commitment to particular projects is essential. It is not really a factor or an aspect that is commonly seen in our sector in which audience trends are so variable. People are worried that audiences can leave you very quickly and go somewhere else. The measure of trust between broadcaster, commissioner and producer is essential so that you know that whatever happens to the audience, you might be able to flex direction or flex a storyline or flex even the brand as is required. There is a balancing act to be achieved there. I think that our sector has not yet probably achieved it. The broadcasters simply have not looked to Scotland to produce drama of network standard fairly often over the last 10 to 12 years. That has started to change. The BBC has commissioned two projects from Scotland, one from a non-qualifying SDV production, which Bobby can mention when he is in the second panel, and another one from Claire Mundell, who is a member of PACT. She is currently filming in Australia, but it is a Scottish project. There is a change in that area. As David said, there are fewer dramas commissioned each year. The real estate, as we would describe it in the schedule, is limited. It tends to be dominated by half a dozen London-based companies who have very good strong reputations in delivery, so they are trusted by the broadcasters. What we need to see happen over the next 5 to 10 years is that trust that is established with Scottish-based drama producers and developers. If you look at three-channel four projects and my first answer, I could equally have picked out Jonathan Creek as a famously Scottish BBC production. Jonathan Creek does not appear to me to have any more connection to Scotland than mannedown, yet it is set against the Scottish quota. At some point, somebody will have said, let's recommission Jonathan Creek, but can you make it in Scotland? That question is really at the nub of this. We want to have the commissioner conversations with people who are developing content in Scotland to be set against that quota. It's a couple of questions just regarding the public and industry confidence in the self-regulation area. Do you consider that the broadcasters have got a robust procedure for handling complaints about the suspected mislabeling of productions? I think that it's fair to say that there are questions whether they fall on the broadcaster or fall in off-com. I would imagine that the broadcasters do exactly what's asked of them by off-com at the moment. It's a difficult one for them because they have in the past, I think, relied upon the evidence that producers have given them. Of course, there's in-house stuff within the BBC as well. I suspect that they're becoming more robust. I suspect that they will have to become more robust because, as we see from next month on the advent of the screen unit within Creative Scotland with a substantial budget given by Scottish Government. Scottish Government doesn't hand out money like sweeties, it is looking to that to be an investment. Because of the separate tax system now, if that money all drifts to places where tax is not being paid in Scotland, then the return on that investment will not be seen. I think that there's going to have to be a greater robustness. I would say from a BBC-alip of perspective that this kind of mislabeling probably isn't an issue for us because our sector is completely indigenous, but what is important for us is transparency in decision making. We try to be very transparent about the process and about successes and failures in the tendering process as well, so that the sector generally understands why things haven't been successful or why it's not being recommissioned or whatever. I think that the answers have been really interesting, but it leads on to this next question. Do you think that the data that's actually been collected by the broadcasters is actually adequate, particularly for projects and project teams that are outside of London? There's a weakness in the system in that if you are a London-based company and you do 70 per cent spend and 50 per cent talent and it's all over the UK, then you're counted as out-of-London non-specific. If you have a permanent base—that's the crucial thing—what's the definition of a permanent base in Scotland and you do 70 per cent and 50 per cent outside, that counts as being Scottish? A very small proportion of that 70 per cent may be in Scotland, but if it's out of London, then the home base trumps everything else and that's where it's counted as. That's a weakness in the definition. On the production spend criteria, that presumes that around 30 per cent of the production will be spent in London anyway, even if it is a nation's and region's production. The 70 per cent also excludes huge lines of budget within each project, so the amount that's impacted the nation's and region's economy is false. As a producer, when we deliver the information, there's no granularity in it. There's very little detail as to who fulfilled what role and where they're based. Asking producers to deliver that level of information is quite onerous, but I have to say that programme has completed forms, which is what we deliver when we deliver a programme that's the background information is already quite onerous, so I'm not sure if that's a... You'd be asking quite a lot of producers, but the benefit, I suspect, might outweigh the cost of that. I think that that kind of goes back to a point that was raised a few moments ago, regarding off-com, with them being more of a reactive operation as compared to being proactive. Now, with what you just said there a few moments ago, your response is Mr Smith. Now, if off-com actually had a different way of working, do you think that that would actually help in this particular regard? Absolutely. The broadcasters have to react to off-com systems, so absolutely that would make a huge difference. That should be part of the out-of-London review when it comes around. It will certainly be part of what I will be putting forward with impact council, and I hope will form part of PACS's view in their response. We think that we are becoming so. They have increased responsibilities since the charter review kicked in the spring of last year, and the number of staff they've got in their Edinburgh office has increased. The dialogue that we're having with them helps them to understand what the issues are and to identify weaknesses in their own systems in order to deal with them. In addition to that particular aspect, what else do you think that the broadcasters could actually do to increase both the public and industry confidence in their internal processes for actually checking the compliance with off-coms made out of London criteria? The first one is to end that conversation. I like it, but can you make it in Cardiff, can you make it in Glasgow? The commissioning decisions, London to London commissioning, that displaces elements of production, are the flaw in the network supply review that underpins most of the commission that has taken place over the past 10 years. I should add that there is a lot of very good, authentic commissioning. David mentioned fire crest, race the roof, turns, own output, the channel 4. The channel 4 has done a lot of really good proactive building of infrastructure, building of companies within Scotland, and there are those outliers that undermine all of that good work. My question is why do they think that that is necessary? Why focus on something that is questionable? I suspect that the new regime within channel 4 will not rely on that to the same extent. Similarly with the BBC, there have been big changes in how the BBC has structured over the past few years. The new charter has a clear requirement that the BBC invests in the nations and regions creative economies, and that is starting to bear fruit. However, I think that off-coms role in this, and off-coms have moved substantial numbers of staff to Edinburgh, and they seem to understand the devolved nature of our system now. They very much get the point that out of London rules are not working, so they are looking at all of this. It is just a question of how far will they go. It is also important that whatever system they come up with applies to all public service broadcasters at network level. I had an example within the last couple of months of a producer in London approaching us and saying that I have the commission. I am told that it has to be made out of Scotland. I have no connections with Scotland. Is there any way that you could etc etc? After we had done quite a lot of work on that, they came back and said that they found something else to shove up to Scotland now that we are just going to do our one in London. That sort of conversation should not be happening in this day and age. I am a bit flummoxed by that particular example, because when you consider, I mean, this parent has been here for nearly 20 years now in terms of devolution. You would imagine that people would probably fully understand a lot more how important that type of discussion actually is, how negative that type of discussion actually is, as compared to being a positive. It is a slow process, but the fact that there is a forum such as this where these things can be discussed and democracy is functioning much better in Scotland than it used to means that you do not get these things swept under the carpet. That leads on to this other question. In terms of the screen unit, in both Mr Smith and Mr Shacken have touched upon this, what kind of impact do you think the screen unit is going to have on the industry and how it is going to be measured? I think the fact that they will be putting money into productions gives them an audit power, which Northern Ireland's screen, for example, currently enjoys. Our discussions with them have been quite clear that they derive great benefit in terms of data. It is very hard to hide things when you have a right of audit over a project. At the same point, they have also been quite clear that, even when something very clearly lands within the current ambit, large chunks of spend will still not fall within the province and will not fall within Northern Ireland. I suspect that that is part of the necessary flexibility for all, but the screen unit having a right of audit and, hopefully, having a team that is familiar with how television works, because up till now, they have been very much a film-focused team. They have elements of drama expertise within television, but they are really being focused on film because that is where their money has been targeted. National Lottery funding is only applicable to film. Television is quite a different industry. It is funded in a different way and operates in a different way. I have been working on it since 2003, and I barely understand it. It takes time. It is a very nuanced process. There is no such thing as the BBC. There are lots of different BBCs, which is why you end up with different levels of behaviour. A commissioner has landed with the obligation to win ratings, but she has also landed with the obligation to spend money in Scotland. They make quite human decisions, which may not be entirely within the spirit of some of the rules. It is about delivering that level around us and standing throughout the organisation. Thank you, convener. Just to stay on the issue of the screen unit, I just wondered if you have had any discussions. You mentioned perhaps that the screen unit is not as focused on television as it could be, or there is not evidence to suggest that that will be a focus going forward. I wonder if you have had any discussions that are being involved in how the screen unit is going to be formed. We took evidence last week from the stakeholders. I do not know if you were able to see that last week, but we took evidence whether you have any views on the screen unit going forward. It is early days that they have appointed two people with an understanding of television to their sub-board, which is going to run them on one of them. One of the things that, in the screen leadership group that we said would be a useful thing for it to do as far as television is concerned, because there was some concern about putting money into cookery shows and stuff like that. We do not want them to put money into that sort of production. It is relevant to invest in production when it is something like film or drama, but not in basic factual programmes. What we want them to do is to enhance our development potential, because the opportunity that channel 4 will give, particularly, and we hope that, when the rules are tightened up a bit, there may be more opportunity within the BBC, it is very significant that there is a huge potential growth, especially if we can persuade off-com to persuade channel 4 not just to have increased out-of-London targets but increased Scottish targets or increased nations targets. Do not let it all go to Manchester, thank you. The stepping up that we will have to do to meet those opportunities is probably beyond our resources, even the more substantial companies, to grow organically. If the screen unit can be a catalyst to rapidly enhance the development that we can do to seize the moment now, that will be a great contribution. My point was not a direct criticism of Creative Scotland up to this point, because they have not had the money for television, so not having an expertise, particularly in that area. They do have people who have knowledge of television, but a specific expertise is something that they have to develop going forward. It would be a criticism if, in a year's time, they have not, but at present it is understandable that most of their knowledge is in the film area. I do have concerns that they consult with industry when they are talking about their funding models and how those will be applied to television. I hope that they will consult with PACT, I hope that they will consult with industry quite widely. I have concerns that television is a moving feast at the moment, so at the moment we have a big Netflix production under way within Scotland. Is that television? Is that film? We need to have quite clear guidelines on that, because clearly, if it is for Netflix, it is a television platform, but it is an easy film on a television platform. Would that be able to apply to the television pot of money rather than the film pot of money, and what impact would that have? Those are questions that we can need to ask. That is quite helpful. I was going to ask about the new platforms such as Netflix and Amazon and production, and how Scotland can take advantage of that. Do you think that there is more that could be done in Scotland to support companies taking advantage of those new opportunities? Would that be a role for the screen unit? Is that a good point that you make around where the funding would lie between film and television? That is of interest. There is always opportunity cost. We, as a company, focused on the BBC for a long time, and then more recently on channel 4, which has been very productive and most recently on channel 5, which has brought some success. Our team was across in Washington in January at real screen trying to make relationships with PBS and Smithsonian channel and things like that for the first time. However, how thinly do you spread yourselves if you take your eye off the opportunities that channel 4 is offering because you want to get into America? There is potential for dialogue with for instance Apple, because Jay Hunt, who was at channel 4, is now running Apple, so there are relationships that people have that they had through channel 4. That is how it works. It is the personal relationship. We have all got our fingers crossed as far as that is concerned. The targets that the screen unit has got are pretty ambitious and they are challenging the doubling of the sector over a period of time. I think that it is the right target or it is an economically driven target. The only way that that is going to be achieved is by having a very international focus and by using the funding of the screen unit as leverage to bring production and creativity to the fore in Scotland, but with very much an international footprint. We do not do as much as we could, but we do some work with Northern Ireland's screen, for example, and SDI to bring people to the content markets producers. It is those kind of networks that bear fruit in the long term, so sending team to Washington is absolutely where the investment has to happen. It does spread resources very thinly and people are busy in production and finding the time to develop not just creative ideas but the business networks and the trust that leads to commissions is a work of a period of time. It needs to be strategised, but it does bear fruit. Our own experience has been that five years ago in the Gaelic television sector we were quite a self-sufficient kind of economy in that we had money to commission it, we spent it, we thought wisely and the producers did a great job of making good television content. Now those same producers are bringing a whole load of other people to the table to work with us, so we are looking at portfolio projects that involve funding from Canada to China. That is different. It is the work of the last few years, but it is the right direction of travel. That is quite interesting points, because if you were a manufacturing company or a food and drink company, I would imagine that there would be support from Scottish Enterprise who would be the economic driver for that. Where, as a sector, do you feel that you have been receiving support and where do you expect it to come from in the future? Is it the screen unit? Does the Scottish Enterprise need to play a greater role here within the film and TV sector? I think that the fine companies—Facebook, Amazon, Apple, Netflix and Google—have no end of suitors. Everybody wants to play with them because they have deep pockets. They don't always pay very well and we have to be quite careful about rights positions in that world because they do take everything and you have to make sure that as a company they are paying you a sufficient amount of money to make the project and survive into the next project. What they are interested in is good ideas and the talent to make them. So, yes, it's about development. That would be a Creative Scotland screen unit area, I would have thought. Yes, it's about access to markets and meeting people, so that's Scottish Enterprise. I think that the domestic broadcasters have a role to play in that, because they are very well trusted co-signatories of a lot of the Fang deals. If you are a good supplier to Channel 4 or a good supplier to the BBC, you have the trust and respect of a very well respected broadcaster, and that gives the Fang companies a lot of comfort. So, working with the national broadcasters to access those companies is quite a useful route, but they have no end of suitors. It's not an easy thing to get into. Finding time with anybody from any of those companies is tricky. Second, with the screen unit for a moment. We took evidence from the public bodies from Scottish Enterprise, Creative Scotland, SCS etc. There was some concern raised off the back of that session, in fact. During that session, with a number of us on social media, that the public bodies were taking a leadership role within the screen unit without the relevant industry experience professionals within that, and that industry experience professionals such as yourselves would not have the leadership within that screen unit that was actually required to make it a success, so that those making the ultimate decisions in regards to the unit would not have the level of knowledge required. Is that a concern that you've heard? Is that one that you share? What do you think the governance arrangements around the screen unit should be? Speaking as one who's on the sub-board, it's a big sub-board. There's two of us from the industry and there's quite a lot of people from the public agencies. We shall see how our voices are heard when it all starts. There is an issue, if I may, that I would raise with particularly the Scottish Enterprise side of the public agencies, which is that they measure success in terms of job creation. We do create jobs, but most of them are freelance jobs and they tend not to count. They are substantial, high-value jobs and they are pretty well continuous. We may have an office full of 50 people. They come and they go, but if we can get it right in the development side, we've got a decent steady flow of that, but if they don't count and therefore we don't qualify for some of the support that we would like to see, investment in plant and infrastructure and so on, which would otherwise have to be taken away from our development, which is what generates new jobs, that's a problem. I think that you could probably draw a degree of comfort from the fact that the Screen Sector Leadership Group report was chaired by John McCormack and was actually, I think, pretty well received by the industry and that it hit most, if not all, of the right points and the right tone. As I said earlier, the key thing at the moment is the funding rules that are going to be applied to the new pots of money that they have and how those are developed. I appreciate that David McCormack is involved in that process, but we would like to see wider industry consultation so that all points of view, all genres, can consider how they would impact on them. David McCormack mentioned the first question from the convener, information that you had drawn from the register and that you could only draw so much from it, and then there was a bit of educated guesswork involved in getting to the conclusions that you need. If the goal here is to create the level of transparency that results in industry confidence and audience confidence, what information should be part of the registers that are published? That's a good question. I meant to mention that earlier. At the moment, every title is listed, so an individual 10-minute film is given the same weight as a 15-part series. It's a title that's set against the register, so we know we can go back and check to see how many episodes there were in each series, but the actual weight of things is not there. I think that the Out of London register should at the very least list the number of episodes in each commission and their durations so that we know what's there. It's difficult to provide financial detail because it's commercially confidential and there's a real question there around the broadcaster's ability to negotiate. They have to be able to negotiate with us without revealing too much of their hand as we do, and that's a commercial relationship. At the same point, more broad financial information could be provided as to how the overall spend is broken down between companies based within different parts of the UK without naming the companies or setting too much information financially. Proportionally, we know what channel for the BBC spends on the nations and regions and how much we break that down for us in a bit more detail. On the complaints procedures that have already been mentioned—somewhat mentioned that it could do with being a bit more robust if you have an outstanding complaint of over a year or around a year—beyond the complaints procedure, what regulatory tools can off-com actually bring to bear to create the kind of sustainable industry growth that we want to see? There's that kind of current and stick balance that you mentioned earlier on, but if you're using punitive measures that find companies, that's not going to result in any sustainable industry growth in the following year. What tools can actually be brought to bear there? Regulation is a blunt tool and not always an effective tool. I mean, I asked the national health service about nurses who were there to tick the box for being seen within A&E within a certain period because they took your name and wrote it down in a bit of paper or something like that. We have to change the culture and I'm not sure that we do that just by regulation. We have to change the behaviours, we have to change the assumptions and the expectations and that's a big job. It's been going on for a long time and it's difficult to do with commissioners whose first priority is the programmes and who regard the obligations to have a sea change in the way commissioning is happening as an irritation. How do we achieve culture change? I don't know what the answer is, but it's by drawing around us people who get it, it's by telling stories and making people realise that that doesn't work. I also ask for plans. It has asked the BBC for an annual plan in advance of each year. I think that by setting out a plan about how you intend to achieve certain quotas, it allows a more constructive approach to how to address issues. Issues can be addressed earlier that stage rather than retrospectively using audits. There are bigger changes in move. Channel 4's current plan to move 300 jobs outside of London to establish three centres outside of London, one of which will be its national headquarters. That's going to locate, we are told, commissioners within the nations and regions. It's become part of the community that produces content in those locations. It becomes more authentic as a result because they get to know the people that live and work in those areas and they get to trust them and they can see what they've done before. If everyone's based in London, everybody who buys programmes is based in London—I'm not talking about obviously BBC Scotland and local broadcasters, I'm talking about the network broadcasters—it becomes a harder process, you're not part of that community. I think that Channel 4's move, obviously prompted by DCMS and not OFCOM, is a really positive move and their reaction to the requirement that's placed upon them has been positive. It's a new regime within Channel 4, we wait to see how they take everything forward but it's a good first step. I'm told that Glasgow is keen to put its hat in the ring. Can I ask a little bit about the portrayal of Scotland? Although it's not a public purpose in the same way as support for the creative industries in the nations and regions as a public purpose, it certainly represents the diversity of the United Kingdom. I understand that, and I know that Mr Campbell, you have raised issues around the accurate portrayal of Scotland in the past. Ofcom talked about it, and it's going to be part of its review of the BBC going forward. I wonder if you were able to reflect on whether you think that the current regulatory framework is delivering sufficient programming that portrays Scotland and what measures could be implemented by OFCOM, the broadcasters or the screen unit to encourage the portrayal of Scotland and commission programmes? I'm not sure that there's a method that can currently measure that. Successfully, people have a wide range of views on portrayal and where it's failing and where it's actually working. You can point to recent successes or recent instances such as the Shetland series on the BBC, which is a network. It's allowing you to see for people across the UK to experience in their own way part of what it's like to be somewhere else and live somewhere else, regardless of the story that's underlying it. I'm not sure that there's any current methodology that gives us a picture that everyone would agree with. The emergency services in the BBC Scotland is interesting in that regard. For the first time, we have a national broadcaster that, as a fixed linear timetable, broadcasts every day from 7-12. It's going to be commissioning a lot of content. It may not always be able to fully fund that content. We're conscious at the moment that their budget levels are lower than we would hope. Obviously, we've talked in this forum before about BBC license fee reinvestment and how we hope that there can be more money brought into the Scottish system by the BBC. The pressure does deliver co-commissioning between the BBC Scotland and the BBC network. You're going to see more projects, I hope, to be funded at the outset between different parts of the BBC, so they play on the BBC Scotland channel, they play within the network, but also the more moving of BBC Scotland commission programmes to get network slots. Without blowing our own trumpet too much, Matchlight made a programme that was broadcast on Monday night on BBC Two in Scotland about the Masons and the history of the Masons. It had an almost 20 per cent share, so one in five people in Scotland were watching it. That would seem like an example of a programme that could move to the network. We benefit from that as a company because there's a small network uplift payment that's made, which is useful financially, but it also allows for a degree of representation, but your projects have to be good enough. You have to be able to play on the national stage with an idea and a subject that punches through nationally. I think that that leads on to another area that we haven't covered, but I wanted to raise it. I realised that some of you have to go very promptly, but I wanted to make sure that it was covered because there's been raised a lot with the committee, which is the relationship between commissioners and production companies in the sector. What we've been told is that, because the commissioners are in London, their relationships are with people in London that they trust. That's a very difficult thing to change. How can we go about changing that? Are there other regulations that we can put in place that force a change there? Not so much regulations and catalysts, because commissioners are resentful of anything that looks like their hand is being overly forced. I think that we're all capable of building those relationships. David has them and we have them. It's just a question of resources and time. Partly in answer to your last question, the representation thing, a story that illustrates it, is that after Derry Girls was on channel 4, we suddenly had interest in something that we thought we'd never have before, which is history of the troubles from our Northern Ireland office. There tends to be an assumption that something that's got a regional accent on it won't travel. Derry Girls had a very strong regional accent on it, and it was very attractive to an audience. That surprised the commissioners, so suddenly they're thinking, oh, maybe this will work. Who knows, it could have a roll-out effect on Scotland, too. The other answer is that channel 4 has moved to place commissioners in the nations and regions. The BBC could be doing more of that on a network level. It already has a few, but, as we've said in this forum before, you have to distinguish between a commissioner and a conduit to commissioner. Somebody who gets in the way of a commission, potentially another link in the chain, is not useful. Somebody who has the direct ear of the channel controller is useful. That's something that's been a bit confusing in terms of the evidence that we've heard at the committee that we're told that there's a drama commissioner in BBC Scotland, but other people say that's actually not happened and that the commissioner within BBC Scotland doesn't actually have the clout in London. You need to ask the BBC for more details on that. My understanding is that if you want to win a drama commission, you need the head of drama in London to greenlight it and the controller of the national network channel. That person who sits in Scotland will be a commissioner or a commissioning editor, but they will not have the power to directly greenlight anything. Just one last question. There's a fair amount of consensus that there are problems in terms of the commissioning process and the amount of Scottish content that's getting onto the screen, and even Ofcom have agreed that there's a problem there. When we took evidence from the deputy director general, Ann Balford, in October 2017 about the whole process of establishing Scottish content, she said across the whole UK that we check line by line through the returns, against the criteria for the base of the production company and the percentages of people to ensure that that does not happen. She was very robust in defending the BBC, but everyone else that we've taken evidence from and indeed the screen sector leadership group itself were saying that there's clearly a problem here. Do you think that there's an issue there that the deputy director general of the BBC doesn't recognise a problem that everybody else has said exists?  I heard Peter Murrell saying that he had seen a drama crew sitting on the steps of their house in Charlotte Square, and he'd just late at night and he'd engaged in a conversation with them and was asking them what it was like and so on, and some of them had said, oh, it's terrible, I've got to find a granny here with an address so that I can tick the Scottish box. Wrong person to say that to, I mean to say. But if that happens and the production company is told that the box has been ticked and the production company tells the BBC that the box has been ticked, it's quite hard for somebody like Ann Balford to know, because all the information that she's getting through the chain is that it is working, but we have to tell these stories in order to change the system. What is not a substantive base? That's the key question. They are happy to accept that a temporary office with a production executive in it is a substantive base, because as the rules are currently set up, that's allowable, so we need to think about what should be a substantive base when it comes to actual personnel involved in a project, where are they paying their taxes? Thank you very much and I'd like to thank all of our witnesses in panel 1 today for coming to give evidence to us, and we shall now have a short break while we change our panel of witnesses. Thank you. Good morning, welcome back. We continue with our second panel of witnesses on television commissioning from BBC Scotland, Steve Carson, head of multi-platform commissioning and Bruce Malcolm, head of the service department, from Channel 4, Lorraine McEchnie, the nations and regions executive, and Sophie Jones, head of corporate affairs, and Bobby Hain, director of channels STV. Welcome, thank you for coming to give evidence to us today. I believe that you were all here for the first panel of witnesses, which was great. I wonder if you could reflect on some of the evidence that we heard there in terms of the off-com review, whether the regulations on ensuring that Scottish creative industries were benefiting from the regulations that are in place at the moment, how the regulations need to change and indeed compliance with the regulations, because we heard quite a lot of evidence that clearly there were breaches in what was being determined to be a Scottish production. Who would like to go first? I think that it would be useful, perhaps, if we put some context on it. What I would like to do is start with where the BBC is being and where it is going in a sense. When I look back over, since 2004, we have tripled network production in Scotland. By any business standard, that is a big expansion. Some people think that we went too slow, some people went too fast, but we have tripled the production in Scotland. We have also launched or will launch two new channels, the only two new channels that the BBC has launched in Scotland, the BBC Alba and the new channel in the new year. That new channel plus the new network production is about another £40 million of business. The context that I would like to go over is that we have been in a journey, we have been in a big journey here, we are in a different position than we were 10 years ago, a different position from five and a different position from three. We still realise that, but to achieve that level of growth so quickly has meant that we have done a number of things. However, what the BBC did back with Mark Thomson's announcement, we said that we would spend 8 per cent or 8.6 per cent of all network production in Scotland. That is an economic measure, and I will keep coming back to that. Mark said that we should spend 8.6 per cent, and that is what we do, and we have exceeded that target. I am sorry for intervening, but if you heard the evidence that was led there, there were questions as to whether that 8 per cent was authentic Scottish content or was it done through lift and shift, it was done through a temporary executive and independent production company, clearly. You heard some of the examples that were raised, and this is not just that one-hour panel. Obviously, you will be aware of the evidence that previous committees, such as the Select Committee in Westminster, have taken on this issue before. Basically, what has been classified as a Scottish production is not a Scottish production. I will hopefully get to that in due course, but with the 8.6 per cent, that means what the BBC is saying is that all network television, sport, children, daytime, quizzes, factual, drama, we are saying that we will make 8.6 per cent of all these genres. As a result of that, it will be a mix of content, a mix of content of network content that we make across the country. Some of it will be drama, some of it will be comedy, which we will talk about, more about Steve will talk to you about where we have evolved there, but it is an economic measure, and it is stuff. A couple of examples might help, so we talk about Sunset and Vine, I know that there have been questions about the Women's Safety Cup final. Sunset and Vine, I believe, are a great company to be based in Scotland. They've got a great office, they've done work over maybe a decade for us, they cover Shinty, the Balls, Football Rugby, they cover BT with a word-winning football covering, so they're a great company, they make great stuff. What they've also done is went some work outside of Scotland, so they do make stuff outside of Scotland, and what the BBC has to do under the Ofcon rules is badge that as having come from a specific place. We think they've got a base in Scotland, a meaningful base, they've employed apprentices, they did come with games with us for instance, so the sort of question, and there isn't a right and a wrong here, is what do we think of Sunset and Vine's presence? Do we want, should we be proud of that company, exporting their skills and their expertise and making content elsewhere, and therefore accept that that is one of the productions that will be badged as from Scotland or not? That's that question, it has qualified because I think that is a meaningful production in a sense, other people have got a different view. If you go on to some of the stuff earlier, some of the studio stuff we were talking about, we made a big decision quite a long time ago to build a studio at Pacific Key, to feed that studio and keep the hundreds of people busy around about that studio means that we need to utilise and put a volume of work through that studio on a regular basis. That means lift and shift, that means eggheads, but it also means a whole set of other productions like Children and Need, it means Mrs Brian's Boys. Again there's the question, is that good production for Scotland to do with hundreds of people gaining skills and experience and wages being paid and mortgages being paid and so on? We think that's a good thing, we accept it doesn't mean portrayal, we accept it doesn't mean representation in some cases, but if you want to make 8% of all the BBC's network production and play a part in that, you have to accept that there's a mix of work involved. I think it's the right decision for Scotland that we've got a studio, I think it's the right decision that Channel 4, SDV and ourselves utilise that studio, without that we wouldn't have a studio, we wouldn't make game shows, we wouldn't make entertainment, but it does mean that some shows qualify, which some people might say couldn't it be better, couldn't it be a drama, couldn't it be this or couldn't it be that. I think we all have to accept there's a difference between economics and off-com measures, off-com only measure the economics and portrayal and representation and finding a clever way to measure portrayal is a topic that we should discuss. On some of the stuff earlier, we do comply both before a production is made and after if we receive any question we take these complaints or issues seriously, we do look at the returns that the production company makes, we do audit them when asked to do it and we do our own review of them, we do have a lot of knowledge in this area yet. When we do review, they do meet the criteria that off-com set in most occasions. Whether those criteria can be tightened, improved, made slightly better is for discussion, I think that they maybe can, but we comply as required to and that's the way that the system works. The last thing that I'll say is in the sort of what I term the peripatetic productions, there are a lot of productions that move about the country and use staff and people from all over the country and the measure for that is substantive base. The key measure is substantive base and whether a company has a substantive base and where that substantive base is. That is the question that we have to answer for Sunset and Vine for any of the companies that we're talking about. We feel that we qualify what we have to qualify but I'll stop there and pause for anything else. Thank you, convener. It's just a quick question in relation to the off-com review. I accept the argument that the channels are working within the rules that off-com currently set, but is the panel supportive of a change to the rules? I doubt that you're able to say that given off-com's rules as a regulator. Would a change in the rules make it, I suppose, particularly for the BBC and Bruce Malcolm's comments, if the rules were to substantially change, would it present challenges for the studio that is based at Pacific Key? Would it present challenges for the viability of the studio at Pacific Key if there were to be substantial changes or would there be enough flexibility within any new rules? Are you supportive of a change in the way in which off-com regulates this area? Just to set the scene a little bit for us, a year ago or so we were here and I think the consultation about Channel 4's future contribution to nations and regions and what more we could do had just kicked off. I'm very pleased to be sitting here today nearly a year later and we've just announced a very major, in fact the biggest, single shift in the way we operate in the last couple of weeks and at the heart of that is a renewed commitment by us to increase our commitment to commissioning from the nations and regions from the current quater of 35% to 50% in the next few years. We're very excited about that. We're going to support that objective, which is right at the heart of our full UK plan, with the opening of three new creative hubs, the location of those is yet to be determined, but that marks a very significant shift in our commitment to ensuring that we are investing our money far and wide right across the UK. I mention that because I think it forms a really important backdrop to the big question that I think we're here to talk about, which is how do we support and catalyse an increase in commissioning and creative activity right across the UK and including in Scotland? That's the primary objective that we are working to here. I think that the quotas are an important part of that, but they are not the sole solution to whether or not we are meeting that big objective of driving regional economic growth, I think, as has also been alluded to. An important point with the quotas is to identify and be really clear about what they are there to do and they are there to support economic activity. The portrayal question I think is a really important parallel question and we mustn't lose sight of that. When it comes to the quotas themselves and how they are structured, we have extremely robust processes internally. We look at projects before they are given the green light, we keep track of that throughout, we regularly have external review of our programmes to ensure that they are meeting both the spirit and the letter of what the regulations demand, but I think that the important metric to look at in terms of their effectiveness is the system as a whole delivering the objective we want and that's an increase in economic activity and investment. When we look at our performance there, I think that we are really pleased to see that through the combination of the quotas, a lot of the work that Lorraine and the team we have based in Glasgow do and our own corporate objectives, we've seen very significant increase over the last 10 years, so fourfold increase in our spend in Scotland in the last four years. When we come to publish our figures for 2017, we'll see a very substantial jump of about 25 per cent in our investment in Scotland. Taken as a whole, we think that the system seems to be working, looking at what is happening in terms of the range of companies that we're investing in and the amount of money that is supporting that. We recognise the increase in spend, which is welcome, but will the creative hubs, I think that you did say that the creative hubs, the intention would be to increase regional content and to increase portrayal, because the quotas at the moment, if they are worked to the letter, I accept that everybody here is saying that we abide by the quota rules. The quota allows that kind of flexibility, where you might base a hub in Glasgow or Manchester, but the content you could be filming a national game show that takes place in Glasgow, but it doesn't have any reflection of Scotland within it. The current rules would allow you to do that, but I think that you said that the hubs, you would intend there to be a greater, while it would create regional economic benefit, there would also be regional content linked to that, although at the moment that doesn't mean that you have to match the off-come rules. The hubs of which there will be three, and there will be a pitch process in what we'll publish in the coming weeks to identify that. Will, for the first time, put real creative decision making power into the nations and regions? That is a very significant step, and I think that it is a subject that we've discussed in this forum before and elsewhere. That will mark a very significant shift, not only for Channel 4, but actually in the weight of commissioning power across all UK broadcasting commissioning. We are absolutely determined that that new structure will help catalyze and underpin the growth in commissioning expenditure. Alongside that, we are also working to an objective that the new nations and regions plan that we have developed outside of what the quotas are there formally to do will also help us to deliver to our remit for diversity and within that regional and national diversity by ensuring that more programmes contain a more diverse range of viewpoints than people from across the country. Now, often programmes commissioned from a particular location will strongly represent that location, but we also want the creative flexibility to say that actually if something's made in Scotland, it doesn't necessarily have to be deeply Scottish in what goes on screen, and equally we want our programming to reflect the diversity of the UK wherever it's made. An example of that is in January this year, Channel 4 News, as you may know, opened a new bureau in Glasgow. Part of our nations and regions plan is also to bolster the number of regional bureau that Channel 4 News has, and the objective there is to ensure that we are able, on a daily basis, to have more regional diversity as a matter of course in our Channel 4 News app, albeit one reaching a national audience. Can I give an example of where we are now and where we've come from? I think where we are now in the second phase of moving spend out of London is portrayal is now coming through strongly. On our drama story, for example, I think that I'm actually just picking up on what Ms Hamilton said. We've, the past few weeks, greenlit Shetland, series 5. There's new titles being announced, The Cry, which is from an Indigenous Scottish indie set here in Australia. STV productions are becoming a major drama player for the BBC with The Victim and Elizabeth as Missing. Our comedy slate, we've got some of the biggest comedies on the BBC in two doors down and still game, so I think that has been a sort of a progression to portrayal in defence of so-called lift and shift from my experience in Northern Ireland. I think if, you know, when broadcasters were serious about getting spend out of London rather than wait several years for a development pipeline, they moved specific titles. Some titles that were moved to Belfast, for example, one series is Wanted Down Under, which is 30 episodes a year of a show that's actually set in Australia and New Zealand, but made from Belfast, then I could see in my time there, you know, with the talent pipeline that came through, people who started as runners were assistant producers-producers after three or four years. What also happened was that the show owners, the series producers who may be early years were fly-ins, so-called. You know, by the end of that, all the network titles were run by local people and, you know, you were beginning to begin a sector where, if you wanted to work in network television, you know, you could do it from Belfast, whereas in my generation, your next question was, you know, when does the next boat leave? So there was economic impact there, but clearly the big win is in portrayal and, you know, certainly in Scotland, as I said, there you can see that come through. It's interesting that you could take back to Mr Carson on the Northern Ireland question, because we visited Northern Ireland and we took evidence from an independent production company there who had lots of positive things to say, but they did say that it was almost impossible to get a network commission from the BBC. They were winning prizes at international festivals in New York. They were more likely to get a commission from Netflix or NBC than they were from the BBC network. The picture of Northern Ireland is mixed in drama and in children's. There was a huge amount of activity against some of the biggest dramas in BBC too. It came from Northern Ireland during my time. Factual had remained a problem. One of the fixes we did with that, as the BBC as a whole, was broker partnerships with Northern Ireland's screen, which I could talk about if you like. Northern Ireland's screen then, for example, injected money into factual production to help to close that gap. There are some strong entertainment companies in Northern Ireland that Stelify, for example, were doing well. Mr Heane? I'm just going to offer a couple of observations on your question about the first session and regulation in general. I think that it's absolutely true that it was described earlier as a blunt instrument, but there is some effectiveness to even that bluntness. The parallel that I would draw is, for example, the point that was made around the BBC's intention, their own stated intention, to commission programmes by volume and value, commensurate with population, leaving aside the question of detail that's been raised as to line by line per programme. However, if you contrast that with the ITV network, for example, which has no nation's quota within its licence and could, I think, have actually gone for a whole year without making a single programme in Scotland for the network, that gives you a sense of the requirement of regulation at some level as part of this solution. However, I think that the second point that I would make is that it's clear that the nations and regions picture, which is an echo of television past, is not a sophisticated enough regulatory instrument to bring about what I think are three different outcomes, industrial policy of making any kind of programme around the country with a dispersal of production generally. Secondly, ensuring that there is portrayal and representation at some cultural level from areas where those programmes are made and the areas that they reflect. Thirdly, a much more difficult point, which is around how do you ensure that there is disbursement of investment? In other words, the creation of IP, as David Strachan called it, is also mirrored with disburse investment and disburse growth around the country and doesn't return to a smaller geographical pocket of investment and returns, which is London-based. The final point that I would make, which came up earlier on, is around co-regulation. I think that there are two very successful models that OFCOM has followed that go to the provenance of data and the responsibility of industry operators. The first is the advertising co-regulation, where the regulation of advertising is shared by an industry body and by OFCOM itself and that OFCOM is not concerned initially with day-by-day issues raised by advertising. They will come to OFCOM eventually, but they are actually dealt with by the industry body first and foremost. Secondly, the initial setup of the on-demand programme service, the VOD services, which OFCOM had an arms-length agency work with the industry to get off the ground. That has now come into OFCOM because of the growth in services such as Netflix, Amazon and the amount of viewing that they now represent. They have become regulated by OFCOM, but I think that the early days of that particular structure are a good pointer to how—I think that it was a question from the committee—is there a co-regulatory model that relies as much on the industry as it does on the regulator. Although some of the suggestions that you put there would require legislation at a UK level, we are at the situation at the moment where OFCOM has been given additional powers to regulate the BBC in particular. I guess that our focus is on seeing how that works out and whether the review is going to be effective or not. I'll move on to Richard Lochhead. Thank you. I've got two questions. The first question relates to the decision-making process and the light here from the BBC, but also channel 4 in light of your proposal to create three creative hubs, which the previous panel warmly welcomed, so it sounds like good news. In terms of actual decision-making power over budgets, quite clearly, if the ideas are created in the hubs and the work begins there, they've got to be paid for. I just want to understand how the decision-making framework will work in terms of the influence of those creative hubs. Maybe we can start with channel 4, and I'll go to BBC. Thank you. Well, there is a lot of work to be done to get into the detail of exactly how the creative hubs are going to work. However, as I say, one of the really significant shifts that is within this plan, and it's very much about ensuring that there is a greater degree of decision-making power transferred from London to the nations and regions, is that the people who are in these three creative hubs will be decision makers when it comes to commissioning. That is the first, so Lorraine and Deborah, who are based in Glasgow, are absolutely integral to a lot of the work we've done around building up talent, supporting companies on their growth trajectory, but they don't have commissioning power. That will be a significant shift, and those people will hold real budgets and real commissioning decisions. Commissioning as a whole is a collaborative process where, of course, you've got a schedule or a set of schedules, and you have a number of different genres, different obligations that we have to meet. We have a remit that asks us to do 15 different things, and within that a set of regulations of which nations and regions commissioning is one part. Exactly how the opportunities will pan out for Scottish production companies as well as any other production companies will still need to be part of that overall commissioning process to fill the schedule. We have to fill our schedules in a way that is both commercially optimised because we are entirely commercially funded and in a way that supports our publisher model, where we don't have in-house production in the way that colleagues alongside us here do, we are trying to also balance commissioning all of that from external production companies and ensuring that we're working with a diverse range of production companies. We're very clear that, although the regulations don't formally require it of us, we hold ourselves to a high standard to ensure that we are working with a whole range of different people, and we heard from some of those in the previous panels. There are a number of complex bits of the jigsaw at play, but the short answer to your question is absolutely that this marks a very significant transition in the way that we operate in creative decisions and budgets being held by commissioning people outside London. I think that what is also necessary to flag up is that Channel 4 is quite a small company. The commissioning floor is small. There are different genres, and each team is made up of six to eight people with a head of department, so you've always got people to talk to about ideas. I think that having decision makers in the different hubs is great, but you will always work within your team anyway, but it is a very collaborative environment to work in. If I can move on to BBC, because I clearly will have to wait the detail from Channel 4, but it sounds as if it's hopefully going the right direction. In terms of the BBC, is it ultimately the situation that irrespective of all the good things that are happening with BBC Scotland and the devolving of more budgets and so on, that the commissioning process ultimately will still be decided in London? That's my first question, and my second question is, I think that it's unlikely that if Queen of the South were playing Morton in the fourth round of the Scottish Cup, that that would be broadcast into television rooms in England and Wales, but yet an addition of Shetland was dumped for the Swansea city versus Sheffield Wednesday FA Cup replay in February, where the stadium was half-empty, so even the local people didn't want to watch that match and never mind people in Scotland who were expecting to watch Shetland. Do you not agree that that gives the impression that all the decisions are taken in London about what happens with the BBC? Pictures are a mix, is the honest answer. Locally, within the reorganisation of BBC Scotland, all commissioning decisions across radio, television and digital services are taken in Scotland by myself and a team of commissioners. Network commissioning works, there's no commissioner in any system that is a single tick, it's a minimum of two, so in Scotland there's the genre commissioner in my team and myself. In Scotland, looking at drama, for example, and I would just like to correct the record on that, so there's a network drama commissioner, Gainer in Glasgow, who we work closely with. Gainer and Liz have a daily direct contact to the head of drama peers, and then the final tick there in that system is obviously the channel controller. As you can see in the dramas that we run through, Shetland, The Cry, Elizabeth is Missing, The Victim, Cleak, there's a very strong drama slate now coming from Scotland. The FA Cup final replay that you mentioned is emblazoned in my heart. Is that the one that went to penalties? I switched off. Clearly, the BBC is a plan UK organisation and the FA Cup rights are purchased on a plan UK basis. I think that Shetland wasn't dumped, it was actually moved with River City to Waddenstay. The realities are that you are putting local content into national services. Subject to regulatory approval, the channel environment will help us in that regard. Did BBC Scotland say anything about the FA Cup replay happening and having the Scottish role happening? We look at those in the schedule and again, particularly where the potential can go to penalties and timeshift everything, including the 10 o'clock news. During the recent weather conditions, we made provisions for, if it did overrun, how we would get local weather, for example, on air. We do work closely in the scheduling terms with them as well. I'm not sure that answers the question. I do think that we do communicate with them. We do talk to them, whether we ought to whether we stay with the network. That's on a case-by-case basis, and we'll do it before and after. It's not one-size-fits-all on the answer. I don't know what the issues were in this, particularly whether Shetland could have went out in Scotland and not in the UK, whether that would have given the plot away or something like that. For instance, there are always a set of pros and cons as to whether you do or don't go with it. That occasion, we went with the FA Cup match. I know that there's a lot of comment about that, whether we could have actually kept Shetland on and shown that Scotland and not the rest of the UK is a point for dramatic commissioners and everyone else to debate, but I suspect there was something about the series and the plot, etc., that wanted to go across the UK at the same time. Okay. I'll leave it there, but I suspect to have just got one screen in there. Yeah, the MSP for Shetland, I think it's only right that he gets to come in at this moment. I'm very grateful to Richard for raising it. I was just simply going to say that I'm very glad it does go out across the whole of the UK, because that's the point of that, how successful it's been. Four and a half million people watched the last one the other night, and my understanding is that rather than watch the football that night, because it's a dreadful game of football too, because I did watch it, but only because anyway, it's no point. Can I just ask Steve Carson, firstly, thank you for commissioning another series of that. Scotland announced a huge acclaim at home on the other night, but can you just describe why you have decided to do that, because it might be more important to deal with the important aspects of why you've commissioned another series of that, and is it also related to Netflix? I understand that show is being syndicated not just around Europe, but also by vast organisations, in this case, such as Netflix, and how important is that in the decision? Surely. Well, formally the commissioning decision for another series of Shetland would be made by network BBC drama, of which Gaener would be a central part of that. That's an interesting example of where we can play, and we want to continue to play a role as a sort of a pipeline for development. Shetland was initially a BBC Scotland only commission, as was still game, for example. We've got some strong examples there, and that's exactly what we want to do now going forward, is that we can be the kind of innovator of new ideas and new programmes coming through that can then potentially have a kind of a pan-UK audience. Shetland is a very good series, and the audience in Scotland and across the UK have responded to it very strongly. The point about Netflix is that I write in understanding that the BBC has been able to sell that programme internationally, but does that financial income therefore help in your decisions to commission out more series? Virtually all drama is co-funded from a variety of different sources. That's produced for the BBC by ITV Studios. If you look at Netflix, you'll see quite a few BBC titles. Piki Blinders, for example, appears on Netflix with some BBC branding, but producers typically are getting a range of funding sources to get the tariff to make the programme. Ross Greer. In the previous panel, we've discussed the amount of information that's disclosed in off-coms registers. David Smith from Pact gave quite a helpful example. I thought we said that it was not particularly granular information that a single 10-minute production would be listed in the same way that a 12-part major production would be. From your perspective as broadcasters, I know that you are interested in industry confidence and improving confidence in relations with independent production companies. What level of information do you think would be helpful to be disclosed as part of the registers? I think that David Smith's suggestion of more granular information is useful. I do think that there's a commercial and confidence thing that she talked about. We can't talk about money, we can't talk about that, but some of the suggestions about durations and number of episodes, I don't think that the BBC would have any problem with them, for instance. In principle, if this process becomes one that enables a more open discussion about how the system is working and as a result of that, there is a case for some greater degree of transparency, although the point about commercial confidentiality is well made, then I think that that might be a helpful outcome in better understanding exactly what goes on, but I think that it's also important to, through this, also understand more about how each of our processes work and that is that there is a very high degree of scrutiny around the categorisation of productions. We have external review of those and we want to be confident in that system. I think that there's also an important relationship of trust between producers, broadcasters and OFCOM that regulation is part of, but actually the system needs to work because we want it to work and we make it work properly, and we are comfortable and confident from the reviews that we do that that is the case. I think it's worth just reminding people that the although the picture for STV as a broadcaster, as distinct from a producer, is slightly different in as much as 100% of the programmes we make are obviously made in Scotland, nevertheless, because of the regional licence structure that still underpins the channel 3 network, we are using the same criteria as applied to a specific region, so although they're called the out-of-london criteria, they also apply to individual regions within the channel 3 network, which is a regionally diverse series of licences, and to the extent that it's important to remember that the output that you see as a register is an output, it is not all of the information that's given to the regulator, so the regulator needs to establish from a licence point of view the volume and value calculations to satisfy itself that, however exact or inexact or perfect or imperfect the calculations and the regulations are, they are to the regulator's determination satisfied by what's been actually on screen. I think the other point was made, OFCOM is an ex-post regulator, so it's only really looking in the rear view mirror as to what's gone out on the TV. However, I would certainly be in favour of any additional information, which particularly if it's in the public domain and as much it pertains to the number of episodes or series, which is not a commercially confidential item being included in the register in the interest of transparency. I would also just add that I think in looking at this question, the quotas aren't the be all on endals, so I think it's also important for us to communicate and bear in mind in thinking about it that there is a wealth of activity that goes on in terms of sort of off-screen development of companies. I think that the case of our indie growth fund where we've invested in Firecrest to a base in Glasgow, in the time that we've been working with Firecrest as investors, they've become the fastest growing indie outside London and that's a fantastic success story and we're very proud of that and we want to be doing more of that. It's an important part of the picture in looking at the economic growth. There's also activity that we do outside of the quota world, which applies to a sort of narrow set of programmes on the main public service broadcasting channels, but we are investing beyond that and actually film is a really interesting example. We're through film for production, obviously we had T2 18 months or so ago and this year we'll have a title called country music, which is made largely in Scotland and that's that's economic investment coming into Scotland as a result of that, but it's not captured by the quota so there's a bigger picture at play to look at as well. I'm just turning to the complaints procedure for a moment. Again, I don't want to get too hung up on specific examples that may or may not be representative, but in previous session there was the example of an outstanding complaint of over a year that had been lodged with Ofcom. I was wondering if you could talk a little bit about the balance of complaints that you received that go through the Ofcom process compared to complaints that you as broadcasters received directly, industry complaints rather than audience complaints. Do you receive more complaints directly from industry because there is that existing relationship or are they going through the Ofcom processes? I'm not aware that there are that many complaints. There are clearly a few examples that come to light and in those cases, as far as I'm aware, they have come to us and when they have come to us we have looked at those in full, including from independent external review body. In the case of, I think, Mandan is the one that you are referring to, that was reviewed and was found to be compliant with the regulations as they are drafted on the substantive base and the staff criteria, so it met the definition. I know that I can talk a bit more about the substantive base and staffing elements to that. The other example that I heard come up this morning was about Eden. Now, I think that there's a bit of a sort of perception question around how the Eden experience played out, which is Keo had an office in Glasgow. The office was moved from Glasgow during the period in which the programme was being filmed because it was quite a long way from where the filming was happening and it was more practical to relocate the Scottish office, but it remained a Scottish-based office much closer to the filming location. I think that there was a sort of perception that they sort of vacated where they had been, but not recognised as having moved. Now, unfortunately— For a second, sorry, and I'd like to come back to the point that you're developing, but just on that point about it was relocated, but it was still a Scottish office. Where was it relocated to? To the location of the filming of the programme. And where was that? In the Highlands. In the Highlands, yeah. Now, unfortunately with Keo, the ambition and the intent with Eden was that it would turn into a long-running multi-series and potentially global format because it was a highly-formatted thing. When we went into that, the idea and the aspiration was that it could represent very significant long-running investment into a Scottish-based production. Unfortunately, and as is the way often with television, this is a high-risk hit-and-miss business, and on that occasion the programme sadly did not work as well as we had expected. Had it done, I think that we'd be having a very different conversation here today. So I think that it's also important to think about the intention going into these projects, whether or not they ultimately succeed and the intention there was very, very high ambition. You just can never second-guess the audience, unfortunately. And then with mannedown, the producers of that Avalon, we are actually in regular discussions with the exec producer who is looking to develop more ideas over and above mannedown to base, you know, to have more of a presence in Scotland and to have more ideas coming through that office in Scotland. So my team, the nations and regions, are working very closely with them. On the BBC side, I'm only aware of the off-com official complaints that we can check up and whether they come from any other source, but I think we, as a handful, we've talked about most of the titles here, if not all of them, so there are literally hundreds of titles of network production that qualifies Scottish. We've talked about most of the handful that there's been queries on today. The only other point that I would make, we tend to forget in all this, there's another side of the story. We have got a lot of Scottish people who work in our network shows that don't count in Scottish. I'm aware of European Championships in Glasgow this year. We've got quite a lot of Scottish crew in that, yeah. We're sending quite a lot of Scottish crew to the Commonwealth Games, yeah. I know, for instance, the Chelsea Flower Show, someone like John Smith directs that. There's an awful lot of stuff that's the other side of this, that's stuff that isn't counted, that's significant volumes of Scottish people are working on. So, again, we have to be careful that there's another side to this. Other people could be saying that this qualifies as English or Welsh, but there's a lot of Scottish people working on it. Because that is the case as well, yeah. I think that we would acknowledge that and very much welcome folk from Scotland having opportunities, but our priority as a committee is about growing the industry in Scotland. So, where someone came from, if they are working in London, they are growing the industry in London, we want to grow the industry here in Scotland. So, take on board your point absolutely, and it's valuable, but from our perspective, this is about industry growth rather than individual destinations. To put the other case, the skills individuals have is what attracts the business. So, if we've got some people performing big roles and big shows that perform them, they will help attract work back to Scotland. So, that's a slightly longer term connection, but that happens. That's why we win work, because people trust the creativity and the skills of the people we're talking about. Yes. The off-com compliance form for the regions and nations doesn't require that much detailed information. I wondered whether, on this point, you thought that those people should be identified as to where they actually live, because that's kind of the point that you're making, so that that can be proved that they are actually contributing to Scottish economic growth. I don't know. I don't want to create a world of bureaucracy in huge reports and lists that no one reads. Recording the postcode of everyone who works on a show and where it's from seems to me a bit overzealous. I don't know, but at the moment they do fill in a form saying they comply, the detail is behind that, that we can see and we can review and we do review, and if there's a query, we follow that up. You've heard some anecdotal evidence from the previous panel about conversations that are had. Can you put that through as a Scottish production and your production company? We've visited post-production companies as a committee who have told us that they've been asked to put a production through their London office, so they took Qualifi, put it on paper as this through their Scottish office, even though it's gone through their London office. We have taken other off-the-record evidence of productions where the person in charge on the ground is asking members of the crew if they have a Scottish address, if they can put down their brother-in-law's address to qualify as Scottish. There's just so much of this information coming forward that suggests that there's quite a lot of rule-breaking going on. If I could go to the BBC and how the BBC establishes the accuracy of the forms that are being filled in, we have had a look at the overview of the BBC processes and understand from the guidelines that the BBC manager will discuss the production with independent company to satisfy themselves that it will qualify, but it's not clear in those guidelines the extent to which the BBC requires its staff to maintain a written record of those discussions, like how the information is recorded and audited. Clearly, we've taken extensive evidence on this and people throughout the sector agree that it's a problem, so notwithstanding you've said that you don't want too much paperwork, but clearly if people are filling it, if people are regulating themselves, we need to make sure that the information that they're giving you is accurate and it doesn't seem that there's an audit trail that you can prove that it's accurate. Any of the things that were said earlier, if we receive anything official, the formal for anyone saying some of the things that were said by yourself or else, we will follow these up, convener. We will look at them and they don't sound right if that's what's happening. We would welcome anyone to come and talk to us about these things. We do follow up what we're told. I don't think that we're hearing about these things directly ourselves, so that's the first point. We do have written records. There are lists of how it's going to comply, etc. We do have these things and we do review them. The other thing that comes across quite strongly to the committee is that people that are coming forward with this information tend to be their freelancers or their independent production companies and they feel that if they go public on it, it will jeopardise their livelihood and that's the reason they're not coming to you. Could you put a system in place where you felt that they could come forward and tell you about these breaches without their livelihood being jeopardised? We'd be very open to anyone providing information, but bear in mind that this is an off-com quota and they are the regulators and the managers of it. Those instances of what used to be called brass plating or warehousing, again anecdotally, that failed some time ago. Obviously, on my personal level, I'm commissioning for audiences in Scotland, so these things aren't quotas, these are a kind of lifeblood to make sure it's in Scotland and for audiences in Scotland. Again, going back a ways, there is a role for production being located in a place that the IP may be somewhere else. It may not be portrayal. Going back to Northern Ireland, Game of Thrones has done an amazing job for the sector in Northern Ireland, but there may be some similarities in politics, but it's not actually about there. The first few series there did have quite a few people heads of department coming in, but again, over three or four seasons, local people got a chance on that. That's not brass plating or warehousing, that is a production being encouraged to be somewhere by a very innovative screen agency. Stuart McMillan Thank you, convener. Good morning, panel. I think certainly one of the key points to this committee is certainly trying to establish and get over to anyone who comes in to speak to us. It's about Scotland getting a fair deal and Scotland actually getting that better opportunity to actually highlight the benefits of the sector within Scotland, but also increase opportunities for people in Scotland to get involved in the sector. We've had a wide variety of evidence thus far, not just today, but certainly throughout this whole inquiry, where I think that there are increasing opportunities, which I think we would all agree to, but clearly there are still some practices that are taking place that probably seem to have an adverse effect on this issue regarding the data collection and the information that I just heard about there as well from Mr Malcolm, but that's still going to be an issue. I accept your point, Mr Malcolm, regarding that you don't want things to be too bureaucratic. I think that we would all agree to that, but at the same time, if there is a process that is taking place that all of this brass plating order is trying to find and address, then that's not good enough. That's not actually helping people in Scotland to get on in this particular sector. So, if we take drama, which we've been talking about, there's £15 million to £20 million of drama in Steve's talk through the titles, that these are great titles, these are great shows that portray Scotland better than we've done before. We think that we've got a very strong drama slate that's grown and improved in terms of portrayal. What we do have for each of these dramas, sorry if I've not explained it correctly, for each of these dramas, if it's to qualify as Scottish you'll have to get the 50% or etc of the tar, there will be a list of all the crew in that show with, I guarantee from the production company that they are based in Scotland. We have that, we do get that, we don't make it public, we review it if asked to and we review it up front before the commission as well. If these have not been filled in correctly or dishonestly, that's another issue entirely that we would take very seriously if we found that out. I don't think that we're happy at the level of granularity that we see, we review it. I don't know what beyond that we're sort of saying that if there's dishonesty on behalf of production companies that's a different matter. You mentioned earlier regarding not wanting to go and ask if anyone who's involved in the programme, you really don't want to go and ask about where they stay, what their address is, their postcode, but surely if you're employing a particular production company to undertake a piece of work on behalf of the BBC then they will have their details because they pay tax somewhere so they will have their details so that really shouldn't be an onerous piece of work just to establish exactly where people actually do live. Production companies do that? If you're saying by a matter of course should we go through and check that line-by-line if that's what you're suggesting, that would be a level of work that we don't currently do by checking it against tax records or something, we don't do that now. That's actually quite a difficult thing to address as well because being a publisher, broadcaster, we rely on producers for content and suppliers, so we've got to take the word of the production company that they have done their own audit, if you like, of where the crew are from and then they are self-regulating with the off-com, so I think that's quite a difficult thing from a broadcaster's point of view to actually do, but in terms of what we do, channel four, as the publisher, broadcaster, we do my department as nations and regions, our team look to nurture talent in creative hubs, if you like, and Glasgow being one of them. At the moment in Glasgow, we're working with over 27 independent production companies and in regular dialogue with 50 suppliers to the channel, and we are trying to get to know each of the teams within that as well so that we know who they've got and possibly staff with that different levels that are ready to make that next move, because what is quite difficult in Glasgow and in other nations and regions is retention of staff and retention of talent, so if there's opportunities there so that they can keep moving within the career ladder, then that's always a good thing, so I think a mixed ecology of programmes from all the different broadcasters so that we can retain the talent is important. Do you think that the regulatory framework that's currently in place is actually sufficient in terms of how Scotland is actually portrayed in the media? Portrayal is a very difficult thing to regulate. I think that we've talked a lot about the composition of production, the people who make the production, the spend, the activity. I think that if I'm right off the top of my head, we're a 100 per cent Scotland-focused broadcaster, but I'm not aware of any portrayal obligation in our licence or indeed any of the other licences, and I think that this is one where there has to be a degree of editorial freedom, but a very clear expectation that there will be, in the best traditions of public service broadcasting, portrayal representation, cultural diversity and so on and so forth. I don't think that there is portrayal regulation or legislation as such, and I think that that is a very difficult instrument to draft and implement, but I think that that's the answer to your question. I don't think that there is portrayal regulation per se. I would echo that. I think that trying to find metrics that work in a creative context like that is incredibly hard. However, in the last few years, there has been across the industry, and certainly within Channel 4, an even greater degree of emphasis placed on ensuring that we are being diverse across everything we do, both on and off screen. On screen, as we said, it's hard to measure, but representation and portrayal of different communities, cultures, backgrounds in all the various different shapes and sizes is a really important thing for us. We have tried, we have a diversity report that we publish every year. We set ourselves a very extensive range of 30 metrics within that. Boiling them down when you're talking about creative decision makers to very, very tiny sort of micro subsets of subsets is very difficult, but it's certainly something that has become much more front of mind in both the way we run the business and in the way that creative decisions are made. I think through our, for all the UK plan that we've published, diversity and ensuring that the diversity of the UK is better represented as a result of that is something we are going to hold ourselves to account for, and we will do our best to ensure that we are telling those stories when we come to account for that, even if it's not in cold numbers terms. Rachel Hamilton, did you have a supplementary? It's not a supplementary, but it was based on the last panel questioning that I had. It's just a one question. I'll make it very quick. The last panel said that building trust and relationships are very important, and that is going to be the key to success for the screen sector. I just wondered how you go about that and how your Scottish-based commissioners do build that trust and those relationships in order to increase drama production, for example. I mean, we don't know where the three creative hubs are going to be for Channel 4, but my team, the nations and regions team, we are embedded in the commissioning teams in London, and we also are based in Glasgow, which is great for the Scottish Indies, not so good for the Welsh ones. In doing that, being embedded in the commissioning teams means that we can share the intel that we gather from them. The good thing about our job is that we are a cross-genre, so we can mix between features, current affairs, fact and docs, and we can gather insight as to what the commissioners are wanting at any given time and then feed that back to different production companies. We have regular routines with production companies, as I said, 27, that we will sit and go through the developments slate with those companies, and we will help to shape ideas according to the brief that we have managed to gather from the commissioners. That has actually worked. It is starting to be our fruit now, and we have a lot of different ideas in paid development and a few commissions of the back of that. We also run a programme of briefings, which takes us all throughout the UK. We ran 21 last year and six were in Scotland, where we take commissioners—it is like a road show, if you like—where we take commissioners and they give their latest brief to producers. We have started to really tailor them so that they are very specific to the needs or where certain producers are not breaking into certain genres and some of the higher tariff genres. We will really tailor the briefs for that. We also have the Alpha Fund, which is a small pot of money, but it can offer financial support to companies. We Alpha Funded three companies last year, totaling £80,000. We see five times the return on each pound of that, which is quite significant. Although it is seed money, it does deliver, if you like. We are currently in discussions with Creative Scotland and other partners to see how we can make that money go further, because coming from a creative background and development, it is a rejection business. The more relationships and partnerships that we can have to bolster development and bolster development teams, the more commissions we will see in the areas. I want to move on to some questions about the Screen Agency and Creative Scotland from Claire Baker. Steve Carson described the Northern Ireland screen as a very innovative screen agency, so I would be interested in what the panel's views are about the Scottish screen unit that is due to launch on 1 April. Have there been discussions with yourselves on what partnerships can be created? I understand that there is a memorandum of understandings to be coming forward. Do you know what progress has been made in those areas? I welcome, as I said earlier, any partnerships that will help with development, because we see what impact our alpha fund can have on companies. If you mentioned earlier, Firecrest has been one of them, and David Strachan, in the previous session, with TERN, helped alpha funding. TERN made routes into the channel and then have five commissions last year, which was quite incredible. Any partnerships that we can have and conversations that we can have is all a positive step. We are in dialogue at the moment with the Screen Agency on how we can move forward and work a strategy between us. We are obviously talking to Creative Scotland and working towards a memo of understanding. We are very keen to get engaged with the screen unit when it starts. When you have an agency focused on broadcast, obviously from an economic activity point of view, I would like to see the investments that the BBC has been putting into Scotland. There are £40 million, including nearly £20 million for potentially new channels subject to the regulator. That kind of multiplier effect between the money that the Screen Unit can put into the sector and what all host of broadcasters are doing. The momentum is very strong coming into the sector comparatively recently. I have found that there is a very strong range of suppliers here who actually have experience now of working locally and network across all the genre. I think that money, probably deployed, is coming at exactly the right time. I would echo that. Partly because of the routes of the Scottish Screen and the Scottish Arts Council, I think that there was at that time a bit of a gap in television production specifically. When the agencies joined to become Creative Scotland, I am not sure that that was addressed. I think that it is being known. Like others, we are engaged in talking formally with the screen industry leadership group, which we are part, and on a bilateral basis with the Screen Unit. We welcome the additional investment into the sector and we are positively engaged. I wonder whether the BBC can say a little bit more about the proposal for the new channel, which I know is sitting with Ofcom at the moment. There has been some discussion on the panel and from MSP to Smart about portrayal. Is the purpose of the channel to respond to some of those issues, or could you say a bit more about what its intention is? In part, we are content on the channel, we are working closely with colleagues in network where something could be co-funded by channel or developed by channel, which could then go to network. I think that it will help that portrayal pipeline. The channel put simply as a way of improving our offer to audiences in Scotland in conjunction with our other services, bear in mind. We have also a responsibility for radio, digital and people who are on Scotland. We would remain a key service for us. The investment will create 900 hours of original content that is going to make a big impact. It is going to provide Scottish audiences with a whole range of different genres. We are commissioning already into some serious factual pieces. We are again close, I hope, to doing some co-funded drama, comedy and factual pieces as well. The money that is invested directly into the channel, we are obviously working with suppliers. We are bringing other money in. We have greenlit a factual series recently that has got several hundred thousand pounds in from a distributor, for example. We are working with colleagues in nations and co-productions with other broadcasters as well. That should have an economic impact. Ultimately, it is for audiences in Scotland to find a huge amount of content that they like and feel relevant to them. Llyrain mentioned development funding and the term is a rejection business. When we were in Northern Ireland talking about both the screen agency and the independent productions sector, they said that one of the really helpful things that the agency was able to do was development money and an understanding that the development money would not always result in a production being made because, as you say, it was a rejection business. Would you like to see the new screen unit be able to do that? What do you think its role should be in assisting with television development? I think that what we have seen huge benefit from is actually looking at slate development. So, saying to a company that it is not just one idea, we will not help fund you for one project and development because that is not really sustainable. What we want to do is help to encourage growth within the sector, growth within each independent company, so that it becomes sustainable and so that they get into all-year round production, because then that is when things can start moving. That is what happened with IWC and location location location several years ago. That was transformative for the sector in Scotland. A lot of the indies grew from that as well, so there was that halo effect, if you like. We think that slate development is the way that you will reap the most rewards. Funding a project when it is already in production, we would hope that the broadcaster would be able to finance, if not fully, a good chunk of it and then there are other options for producers in terms of going for distribution or co-production to get the top-up funding that they require. In terms of growth and sustainability, slate development funding is a really good way of moving forward. I would add to that that, as Lorraine says, we think that development funding is absolutely vital to achieving those long-term goals of genuine, deep-rooted growth. I think that there is also a bigger point here, which is that all of us here are focused on delivering UK economic growth for the UK, for UK audiences, whether that is through the investment or the portrayal. What underpins that is a very strong vibrant public service broadcasting sector that has multiple players with different business models and different objectives. We all share a common objective, which is to ensure that our UK strengths are as strong as they can be. We have also heard this morning about the role and the influence of the fan companies. They represent huge opportunity in many ways for producers. I think that there are some really exciting things going on. Interestingly, they are not doing the same things as we are doing. They are not investing in the same types of things. They are not thinking about Indigenous audiences in the same way as we are, and I suspect that they are focused on grassroots investment to help to deliver that long-term growth. There is an important part of that, which is to think about the regulatory structures, both in terms of quite specific objectives, but also the big regulatory structures that sit behind us and ensure that, ultimately, we are able to generate as much revenue as we can and reinvest as much back as we can into UK-produced content for UK audiences. How will the impact of the screen unit be measured? How would you measure success in the screen unit? The biggest measure is the doubling of turnover. That is the first measure that they have set out as one of their objectives. One of the issues that has been raised is the data collection in the industry. The Northern Island Agency sits within its economic development stand. The head of the agency told us that there is very good data on the sector, which has been identified as a gap here by the screen sector leadership group. Do you agree that that is a problem, and how do you think that it should be addressed? In terms of data, you are right that Northern Island's screen is primarily an economic investment agency, so that it does a huge amount of metrics work on multiplier effects and things like that. The data on spans and quotas is readily available. I take the point about potentially going into deeper data on the off-com requirements, but in terms of overall spend and the effects that could happen through an economy, I think that that is readily available. I think that it is easy to get the broadcast. We will all participate in supplying what we spend, how we spend it etc. I think that the industry more broadly with film and freelance and money coming from all that is the difficult bit that the screen unit finds how to get a handle on. That will be difficult to capture. I think that that is right, but I think that the emphasis with those sorts of exercises in developing metrics should always be on the outputs rather than the things going in. The more metrics that are defined in use are about economic investment, multiplier effects, employment and those sorts of things, but as has been said, we are very well used to sharing that sort of data, and I am sure that whatever framework is put around that, we will want to help contribute to that. I think that you need to see the delta effect on the existing data. I think that one of the difficulties is that if you spend too much time developing new metrics and KPIs, it is difficult to know what the difference is, whereas there are well-established trends in production spend and economic activity that is already established. I think that it is much easier to take a view on what difference has this intervention made over two or three years, whenever, rather than to start measuring something new that you have no history of. Thank you very much for coming to give evidence today, and we shall now suspend and go into private session. Thank you very much.