Regulator Assessment: Template
Regulator Assessment: Template
Regulator Assessment: Qualifying Regulatory ProvisionsTitle of proposal / Broadcasting Guidance
Lead Regulator / Equality and Human Rights Commission
Contact for enquiries /
Date of assessment / 17/03/2017
Commencement date / 2016
Origin / Domestic
Does this include implementation of a Cutting Red Tape review? / No
Which areas of the UK will be affected? / England, Scotland and Wales
Brief outline of proposed new or amended regulatory activity
This publication provides guidance for the television broadcasting sector on what action can lawfully be taken to increase diversity in the industry. It aims to tackle some of the misunderstandings about what equality law prohibits and permits. The EHRC published this guidance in response to concerns raised by the then Minister for Culture and Media, Ed Vaizey and following discussions within the television industry, where it was apparent that the sector was confused about its requirements in relation to this issue. No Government Department or other public body was taking forward work in this area.
The EHRC is uniquely placed to deliver this work given its role as the regulator of equality and human rights. We chose to work in partnership with the: industry regulator Ofcom; intermediary- the Creative Diversity Network; and, PACT the trade association for independent filmmakers, in order not to duplicate efforts and to bring together key advice and information in one place for ease of access.
This guidance relates to England, Scotland and Wales, reflecting the EHRC’s geographic remit .
Which type of business will be affected? How many are estimated to be affected?
The guidance is aimed at people working in the television broadcasting sector including commissioners, programme-makers, independent production companies, directors, recruiters and lawyers. The guidance is likely to impact a range of different businesses, from small and medium sized enterprises as well as large businesses.
The businesses the guidance effects fit into two broad categories – producers and broadcasters. The combined total is 9010 businesses.
Broadcasters:
Data for the number of broadcasters was unavailable in official government statistics. The total number of broadcasters is therefore taken from: https://www.ibisworld.co.uk/market-research/television-programming-broadcasting.html
The total number is 1160.
A breakdown of the number of small/medium/large businesses was not available.
Producers:
Figures for the total number of producers are sourced from the BFI statistical yearbook: http://www.bfi.org.uk/sites/bfi.org.uk/files/downloads/bfi-statistical-yearbook-2014.pdf
No. Employees / No. Businesses
1 - 10 / 7485
11 - 49 / 315
50+ / 50
Total: / 7850
Summary of costs and benefits
Price base year / Implementation date / Duration of policy (years) / Net Present Value / Business Net Present Value / Net cost to business (EANDCB) / BIT score
2016 / 2016 / 10 / 0 / 0 / 0 / 0
Direct Impacts
Costs
Familiarisation Costs:
Due to the demand for the guidance within the industry as well as the publicity that surrounded the guidance we assume that all businesses read the guidance. It is also assumed that the guidance is likely to be read by a HR manager or equivalent, and then disseminated where appropriate. Based on ASHE data (with a 20% uplift applied to account for non-wage costs, source: Eurostat) an hourly wage of £24.72 has been used. To calculate familiarisation time the document length is 5000 words and a reading speed of 130 words/minute is used (assumption based on relatively straightforward nature of the guidance and readability). Familiarisation is assumed to be a one-off cost that only occurs in year 1. This is because of the straightforward nature of the guidance and because any re-familiarisation is likely to be on specific elements of the guidance and the costs are therefore likely to be negligible. See summary table below:
Table 1: Total Familiarisation Costs
Number of Businesses / 9010
Wage Rate £ / 24.72
Time Spent (hours) / 0.64
Total cost / £142,774
Policy Costs
Any policy changes that businesses make as result of the guidance are completely voluntary and there are no new legal obligations for businesses to alter policy. The guidance only seeks to help businesses understand what is and isn’t legal in regards to discrimination in order to help them with their goal of increasing diversity. Any policy changes businesses decide to adopt would be on the basis of any costs to them being outweighed by the benefit. Policy costs are therefore considered to be nil for the purposes of the business impact target.
Benefits
Time saved over previous guidance:
It is likely that time will be saved by the guidance since it covers 3 areas of interest: the Equality Act, the Communications Act and the Data Protection Act. Not only does bringing the three together save time in terms of search costs but also provides better understanding of the interplay between the legislative requirements specific to this industry. Some of these benefits will be captured by legal savings. In the interest of avoiding double counting, as well as in the interests of proportionality, these time savings have not been calculated.
Savings from legal advice:
Seeking legal counsel is commonly used in the industry in order to seek clarification on equality issues; the OFCOM broadcasting code advises the industry to seek legal counsel on compliance issues. As the industry is highly competitive it is unlikely that this information would be shared between businesses, as in a sector with many suppliers to share information would result in a loss of market share, disincentivising this behaviour.
In line with previous assessments we have assumed that no small or microbusinesses would seek legal advice in this case and that only businesses with more than 50 employees would seek counsel in the absence of guidance.
Given that the total number of broadcasters couldn’t be broken down by size of business we have chosen to assume that broadcasting is similar to production. Overall this means that only 0.6% of our business population are assumed to seek legal advice in the absence of the guidance. Given the demand for guidance this is likely an underestimate.
In forming the guidance EHRC sought the counsel of 2 lawyers. The total time spent on the guidance and rates charged form the basis of several of the assumptions used in calculating legal savings. In total this work required 76 hours of legal counsel, at an average rate of £200/hour.
It is assumed that businesses wouldn’t require the full 76 hours of legal counsel that EHRC sought in producing the guidance. Some of this time was spent drafting the guidance, but also we have taken the view that businesses are unlikely to seek legal advice for every point covered by the guidance. We have therefore assumed that businesses seeking legal advice would only require 10% of the total time spent, i.e. 7.6 hours, in the absence of guidance. This seems reasonable given that counsel would not only need to familiarise themselves with the law and the particular issues, but also the specific issues and needs of the business. We have also assumed that 3 hours would be needed to sit down with a HR manager (or similar level person within the organisation) in order to explain the legal implications and discuss options.
In the scenario “with” guidance i.e. businesses having access to our guidance, we have assumed that only 20% of the legal counsel time in the “without” scenario would be needed. This is on the basis that the guidance is straightforward to follow and unambiguous so the vast majority of issues are covered. It would also reduce the need for familiarisation from legal counsel as the guidance also clarifies issues for them. In the “with” scenario we assume that a larger proportion of legal counsel time would be spent in discussion with the client, for simplicity this is assumed to be 1 hour. See table 2 below for summary:
Table2: Legal savings per business with guidance
Lawyers (hours) / Rate (£) / HR (hours) / Rate (£) / Total
Without / 7.6 / 200 / 3.04 / 24.72 / 1,595
With / 1.52 / 200 / 1 / 24.72 / 328
Total saving per business (£) / 1,266
The total savings per business are then applied to the 0.6% of the total business population assumed to be seeking legal advice in the absence of guidance. These savings are considered to be one-off and occur in year 1 only. This is on the basis that the guidance is in response to demand from the industry with support in increasing diversity, but the nature of the issue is such that once businesses understand how the law applies they are unlikely to require considerable further clarification.
Table 3: Total legal savings
Number of Businesses Impacted / 9010
% Seeking legal advice / 0.6%
Total Seeking legal advice / 54
Saving per business / £ / 1,266
Total Saving / £ / 68,387
Indirect Impacts
Costs
There are no obvious indirect costs associated with the guidance. The guidance was produced in response to industry demand and any additional costs are likely offset by benefits.
Benefits
Given that the guidance was produced in response to demand from the industry, which in turn is influenced by what viewers want to see, it is likely that there are going to be commercial benefits to both producers and broadcasters due to increased diversity on screen. Programmes are likely to be more reflective of society i.e. their audience, which would likely increase viewing figures. In the case of producers it is also more likely to lead to content that meets broadcaster demand and therefore it is more likely their programme will be purchased. Overall it seems reasonable that an indirect benefit of the guidance is increased revenues for the industry, though it isn’t proportionate to try and estimate these.
Increased diversity on screen as result of this guidance will not only improve employment opportunities for underrepresented groups but is also important in terms of television’s role in shaping the thoughts and opinions of society. Improved diversity in the industry, from actors to decision makers, is likely to lead to more positive portrayals of diverse communities, of disability and other issues leading to changes in the way people think about the issue of diversity.
Please provide any additional information (if required) that may assist the RPC to validate the BIT score