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Huge EU Loans To The BBC

by Chauncey Tinker – 9 Jan 2019

EU funding for the BBC has many times hit the headlines in recent years with articles such as this one from the Telegraph published in 2015:

BBC has received £2m in EU funding in run up to referendum, fueling accusations of bias

I became curious when the claims were circulated again recently and I started searching for more information about BBC funding, particularly from the EU. I came across an Early Day Motion that was tabled in 2008 that contained a far more astonishing claim. From the UK Parliament website:

EARLY DAY MOTION – EU FUNDING OF THE BBC

Quote:

soft loans and payments amounting to 258 million euros over the last five years were paid by the EU to the BBC

The motion was sponsored by 5 Conservative MPs and 1 DUP MP with several other MPs supporting it. They of course raised concerns about BBC impartiality in light of the payments and loans. Early Day Motions are apparently designed to raise awareness of a particular issue and rarely result in any immediate government action. So far I can find no reference to any follow up from the motion.

Obviously there’s a difference between payments and loans, and most articles on the subject of EU financial transactions with the BBC focus on direct payments. By “soft loans” they presumably mean loans that are either at lower interest rates or have some flexibility with regards to repayment timeframes. The EDM text does in fact refer to:

20.4 million actual saved interest on loan facilities of 240 million

This figure it says forms part of a “cash equivalent” total of 39 million (all figures in euros) over the 5 years.

In another article from the Telegraph in 2012, there was a claim relating to large loans to “BBC Worldwide” (which presumably are a part of the larger figure claimed in the above motion):

BBC admits receiving millions in grants from EU and councils

Quote:

The broadcaster also disclosed that its commercial arm BBC Worldwide borrowed over £141million from the European Investment Bank since 2003. Of that figure £30million is still due to be repaid by the end of May this year.

BBC Worldwide was the “commercial subsidiary” which for example sold BBC programs abroad for profit, i.e. it’s commercial in the sense that it sells the programs. Its profits were ploughed back in to the BBC. In other words BBC “Worldwide”, BBC Whatever, it’s all the same organization.

The article quoted a representative of BBC Worldwide who claimed that the loans were on a “fully commercial basis”. It’s hard to understand how a loan from the EU investment bank to an organization that is part of the BBC can possibly be regarded as in any sense commercial however. Because the European Investment Bank (EIB) does not make a profit it is able to offer loans at lower interest rates, which is a not very commercial advantage for the recipient of such loans. The question of where the EIB gets its funds will no doubt have a very complicated answer, but it’s an EU institution anyway. From the EIB’s mission statement:

The EIB is the long-term financing institution of the European Union and its mission is to help implement the EU’s policy objectives.

In other words, the EIB’s mission is political not commercial. Apparently the EIB has become the world’s “largest multilateral financial institution”. It has 3200 employees and is not to be confused with the European Central Bank.

BBC Worldwide has since been merged with BBC Studios which continues the same sort of functions in addition to producing programs. In a pathetic attempt to appear impartial, BBC News is a separate division and they claim they do not receive any funding from the EU. However, obviously any money received in one area of the BBC means more money is available from the licence fee to be used in another, so BBC News has benefited from both EU funding and EU loans just the same. This obvious fact did not trouble Mark Thompson former Director General when he was challenged by an MP. From the Guardian (2006):

MP questions BBC’s impartiality on Europe

Quote:

The BBC director general, Mark Thompson, added that the EIB loan was unrelated to BBC journalism.

None of this money would go anywhere near the news division,” he said. “I want to give you my absolute assurance that the BBC’s impartiality is utterly unfettered by this.”

The next question is obviously is the BBC still benefitting from EU funding and EU loans? A Freedom of Information request was submitted to the BBC in July this year regarding funding of BBC Studios and they unhelpfully replied simply linking to the main index page of the BBC Studios website saying the information was available there:

Freedom of Information Request – RFI20181336

Here is the link to the BBC Studios website:

BBC Studios

After a bit of searching around the site though I found this page:

Annual Review (2018)

This links to two documents one for BBC Studios and one for BBC Worldwide:

BBC Studios Annual Report and Financial Statements (Year ended 31 March 2018)

BBC Worldwide Limited Annual Report and Financial Statements for the year ended 31 March 2018

There is a reference to loans in the second above document (BBC Worldwide), in a section titled “Non-current liabilities” and a figure of £171.0 million for 2018 (£198.5 million for 2017), but no detail as to what organizations the money is owed to; whether any of this amount is owed to EU institutions is therefore not clear. (Note: According to investopedia, non-current liabilities means liabilites not due for settlement within one year). I assume that though BBC Worldwide is now merged with BBC Studios there are still outstanding financial arrangements for BBC Worldwide that presumably have to be disclosed separately. There is a footnote in the report:

The Group’s principal source of funding is a multi-currency loan facility of £235.0m (2017: £235.0m) with BBC Commercial Holdings Limited

OK so the BBC owes money to the BBC in other words!!! That’s really not very informative!!!

I then searched for financial info. from BBC Commercial Holdings Limited hoping to discover more about who the BBC actually owed the money to and found this:

BBC Commercial Holdings Ltd – Annual Reports and Consolidated Financial Statements 2017/18

Annual Reports and Consolidated Financial Statements For the year ended 31 March 2018

In the section titled “20b Borrowings due after more than one year”, there is an amount for “bank” loans of £181 million for 2018. I cannot make out from the above document however which organizations the money is owed to. There is a reference to footnote 26f but I’m still none the wiser after reading that section. The BBC is not really telling us anything useful about these loans in short.

My next idea was to see if the EIB discloses who it loans money to. The EIB website boasts that it has lent a staggering EUR 117.4 billion to the UK overall over 1410 projects:

United Kingdom and the EIB

There is a searchable list of those projects here (it might be interesting to have a look at some of the other projects they are lending to as well):

Financed projects

Searching for “BBC” produces 3 results and a grand total of 211 million euros (47 million less than the figure quoted above in the EDM). The last is in 2006 with a figure of 74 million euros, this entry has a more detailed page here:

BBC Worldwide II

However there is nothing to indicate in this link whether, or how much of, the loan has been paid back.

SUMMARY

It seems as if the last loan from the EIB to the BBC dates from 2006, but some part of these loans was still outstanding in 2012 according to the Telegraph; the outstanding figure quoted in the Telegraph was £30 million at that point. It would obviously be in the public interest to know if any of the loans are still outstanding today. Whatever the current status of these loans, clearly the BBC had a lot to lose financially from the UK's departure from the European Union.

RELATED ARTICLES:

The Orwellian War On Fake News – Part 1

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ELSEWHERE ON THE WEB:

From the Express (2017):

Brussels Broadcasting Corporation? The EU millions being banked by the impartial BBC

Is it biased? Is it, is it?

Brexit The Uncivil War: Viewers SWITCH OFF as Cumberbatch takes lead role in ‘biased’ show

Even a BBC presenter writing at the Guardian was critical of the financial transparency of the BBC Worldwide organization:

BBC Worldwide: smoke and mirrors

Quote:

The way the corporation’s commercial arm now reports its results makes it almost impossible to assess how it is performing

From the BBC:

BBC Studios wins approval to launch as a commercial entity

From the LSE, an article about the EIB:

The European Investment Bank is becoming increasingly politicised

From the Parliament website:

Communications Committee – Second Report The governance and regulation of the BBC

BBC annual report and accounts 2017/18:

BBC annual report and accounts 2017/18

From the BBC:

Reality Check: Is the BBC funded by the European Union?


What do you think? Is the BBC biased? Please leave a comment below.

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