Q101 Kitty Ussher: Do you feel constrained in any way?
Sir John Bourn: I do not feel constrained about the subject. The BBC has accepted everything I have suggested, so I do not feel constrained in that sense, but I do feel constrained in terms of what it is that an external auditor should be. He should be sovereign, he should be untrammelled and in that sense I am not.
Q102 Kitty Ussher: I am sure the Committee would share your view. Do you want to comment on anything the Comptroller and Auditor General has said?
Mr Peat: It would largely be repetition. Essentially the constraints are simply the right for the BBC to exercise a veto if in any case it deemed there were risks. If Sir John were to feel there was any way in which the present experiment was running which did impose constraints on information which was available, then we should be very happy to discuss with him how one could make minor adjustments or changes to the process in order to minimise or reduce those constraints. We should certainly be very happy to discuss it. I repeat the point Mark Thompson and indeed Sir John made, that there has been no request which has caused any problem; none of the Reports has caused any problem, indeed the relationship with NAO throughout both Reports they have undertaken and the ones under way has been absolutely first class from our perspective. The Reports have been extremely valuable. I believe the experiment is working exactly as those who set it up hoped it would and I do not believe that at this juncture change is desirable, other than if there were any instance of concern and then we should be very happy to talk with the Comptroller and Auditor General.
Q103 Kitty Ussher: If you did want to exercise your veto or want to tweak what the NAO was asking for, would that fact be made public? Would we know?
Mr Peat: It would be a matter which was discussed by the Board of Governors and I am sure that this Committee would know. The extent to which it was included in the published minutes of the Board of Governors or was redacted would be a matter for discussion given the occasion. I cannot give any commitment. As I cannot envisage the circumstance where it might operate, I cannot determine whether it would be appropriate to publish it or not.
Q104 Kitty Ussher: But you do commit that we would know.
Mr Peat: Yes; yes.
Mr Thompson: Clearly the BBC would have to have clear reasons for doing it and would have to appear here and elsewhere to defend those reasons.
Mr Peat: It would be a decision which would be taken by the Board of Governors and would be taken extremely seriously by the Board of Governors and I hope and trust it will never happen.
Q105 Kitty Ussher: Coming back to the points made by Alan Williams about the energy centre, I am quite interested in this. I address this question to Mr Smith. You were proposing to have a combined heat and power installation there. You said earlier that the reason that has not happened is because the power demands you envisage are fewer than originally thought. The Report says that it was removed to reduce costs. Is there a contradiction there? Paragraph 49 of the Report says "The Energy Centre was originally intended to include a combined heat and power installation to provide . . . but this was removed from the specification to reduce costs".
Mr Smith: Removed at the time because the need for a combined heat and power plant was not quite justified based on the actual developed density of the site as it was then and bearing in mind the use to which the buildings were being put then. It is still our expectation that a combined heat and power plant may make eminent sense, depending on the exact configuration of departments on site, depending on whether the move to Manchester happens, value for money savings and all those other things. The timing to decide about a combined heat and power plant is when we are absolutely certain about whether Manchester is occurring, when we know for sure the impact of the job reductions and when we know for sure therefore whether Worldwide is going to move onto the site or not. Then we shall take the decision and if it makes economic sense, that will be the basis on which the decision is taken. If it does not, then we shall use it for office space instead.
Q106 Kitty Ussher: Where are you currently purchasing your electricity from? From the pool in a normal way?
Mr Smith: Yes; from the pool.
Q107 Kitty Ussher: I am told that combined heat and power is supposed to be a very efficient way of producing electricity.
Mr Smith: We do have them in other places including the television centre down the road.
Q108 Kitty Ussher: So you have some experience of this.
Mr Smith: Yes.
Q109 Kitty Ussher: If you had invested in it as originally planned, when would those capital costs have paid back? You would presumably have saved money on your energy bills.
Mr Kane: Typically one would expect payback on the initial investment in between five and seven years. It all depends on the units of consumption. This entire site is planned to hold about 1.8 million square feet, of which approximately one quarter has not been developed, which are the later phases for development on that site. If you get the whole thing together at 1.8 million, the investment will then pay back in between 5 and 7 years.
Q110 Kitty Ussher: I understand. Presumably if you generated surplus electricity that could have been sold back into the pool even if you did not have total capacity.
Mr Smith: Yes.
Mr Kane: Exactly.