The Use of the Licence Fee and FCO Grant-in-Aid in the Delivery of BBC Services
The provision of services from BBC News (Licence Fee Funded) to BBC World Service (FCO Grant-inAid
funded), are set out in a Service Level Agreement between the BBC and World Service. This agreement
sets out the rights, obligations and liabilities of each party to the other so as to ensure that the licence fee
will not be used to support or subsidise World Service activities and Grant-in-Aid will not be used to support
or subsidise the licence fee, thereby protecting the interests of the licence fee payer. The agreement is
negotiated between the BBC and World Service each year.
The agreement follows the principles set out in the BBC World Service Trading Protocols (WSTP), which
form part of the BBC’s “Fair Trading Guidelines”. The WSTP are not contractual agreements, but a
framework within which detailed agreements/contracts can be agreed.
The key principles of the WSTP include:
— Fair prices should be charged for all goods and services supplied by the BBC’s licence fee funded
groups to World Service.
— Trading between the BBC’s licence fee funded groups and World Service must be transparent and
established on the basis of formal agreements.
The WSTP [and any agreements within their framework] are subject to external audit each year. Each year
the World Service Annual Review contains a statement by the BBC Executive Board on the WSTP and the
external auditor’s opinion (BBC World Service AR 2008–09—see page 45, BBC Executive Board Report on