Summary of the Public Value Test 

The Public Value Test (PVT) is a key component of the BBC’s new system of 
governance which takes effect with the new Charter and Agreement on 1 
January 2007. 

The PVT is a means by which public value and market impact are taken into 
account for all major service-related investment proposals. Under Article 25 of 
the new Agreement the BBC Trust will be required to apply the PVT before a 
decision is taken to make any significant change to the BBC’s UK Public 
Services (which can include introducing a new service or discontinuing a 
service). 

The BBC Governors have also made clear their commitment to subject any 
proposal received from BBC Management under the existing Charter to a PVT 
if that proposal would qualify under the terms of the new Charter. 

Governors will decide whether a proposal requires a PVT. If so, BBC 
Management are required to compile the necessary evidence to support their 
proposition before applying for approval to launch or alter a service. 

There are two parts to the Public Value Test: 

• The Public Value Assessment (PVA), which measures the public value 
which would be created by a service. This is conducted by the 
Governors' own advisers in the Governance Unit. 
• The Market Impact Assessment (MIA), which measures the likely 
impact on existing or potential value created in the wider market as a 
result of the change. 
The Public Value Assessment (PVA) 

When conducting the PVA each proposal is considered against a number of 
drivers of public value. The key measures that will be used to assess the 
public value of a proposal are outlined below: 

PVA – Drivers of Public Value 
Fit with 
purposes 
Quality Impact Reach Cost & value 
for money 
Which public 
purposes does 
the proposal 
address and 
how does it fit 
with BBC’s 
strategy? 
Is the proposal 
high quality 
and 
distinctive? 
Will the 
proposal 
create 
consumer and 
citizen benefit 
(i.e. for society 
as a whole)? 
How far will 
the proposal 
extend the 
BBC’s reach 
and usage, 
particularly for 
underserved 
audiences? 
How much will 
the proposal 
cost to deliver 
and will it 
provide good 
value for 
money? 


The Governance Unit will seek representations on the public value aspects of 
the proposal during the course of conducting its assessment. 

The Market Impact Assessment (MIA) 

As outlined in the Charter and Agreement, the MIA is carried out by Ofcom 
under terms agreed by a Joint Steering Group, currently comprised of BBC 
Governors and Ofcom representatives. The MIA is conducted in accordance 
with the methodology agreed between Ofcom and the BBC Governors. Ofcom 
are also expected to seek representations on the market impact aspects of 
the proposal. 

The Public Value Test (PVT) 

The PVA and MIA reports will normally be completed in three months. The 
BBC Trust will consider the reports and make an initial judgement on the 
proposal, balancing the net public value created against the potential market 
impact. 

Agreed methodology 

Fit with Purposes
Quality & Distinctiveness
Impact


Reach
Cost and VFM


The BBC Trust will consult on this decision for 28 days1 before making its final 
decision on whether or not to approve a service. 

Under normal circumstances the overall PVT process is expected to take six 
months. This process is summarised below. 

Public Value 
Assessment (PVA) 
Market Impact 
Assessment (MIA) 
Public Value Test (PVT) 
1 The PVA and MIA reports will also be published at this stage 


The Public Value Test process 


BBC Management submit formal application 
(plus supporting evidence) 
Public Value Assessment 
(BBC Trust Unit) 
Market Impact Assessment 
(Ofcom) 
Public Representations Public Representations 
3 months 

Public Value Test 
(BBC Trust) 
Trust consults on 
preliminary conclusions (28 days) 
Final decision 
6 months 

BBC Governance Unit 
September 2006