3 Balancing value for money and creativity
16. In addition to examining the BBC's 'back
office', we have been turning our attention to the BBC's programme-making
activities. In the last year we have taken evidence from the BBC
on the efficiency of its radio production and its coverage of
major music and sporting events. We recognise fully the importance
of the BBC having the editorial independence it needs both as
a public service broadcaster and as a creative organisation. Neither
the Comptroller and Auditor General nor this Committee has challenged
the BBC's editorial judgements, and the BBC has consistently acknowledged
that audit scrutiny has not put at risk its editorial independence.[20]
17. The BBC's editorial independence, however, does
not absolve it from responsibility to deliver value for money.
Artistic endeavour involves risk and failure. We accept that.
With that freedom goes the responsibility to make sure there are
appropriate internal challenge and review mechanisms.
18. In 2004, the BBC introduced a bespoke performance
measurement framework for assessing the its performance in
delivering public service broadcasting. The framework, with its
four overarching criteria—Reach, Quality,
Impact, and Value for Money—is intended
to provide assurance that the BBC is delivering public value.[21]
19. In 2005 the Comptroller and Auditor General
reported on the design and early implementation of the framework,
concluding that the BBC had made good progress and that there
was some evidence that the framework was beginning to influence
decision making. Recognising that it was early days, the Comptroller
and Auditor General identified a number of areas on which the
BBC should focus, including the need to assess the extent to which
the framework was embedded at all levels of the BBC.[22]
20. Six years later, there are clear indications
that the framework is not being used to its potential. The BBC
uses the framework to set targets for the overall performance
of the portfolio of programmes for each television channel and
radio station, and has only very recently started to set targets
for some of its major sporting and music events.[23]
We saw that despite spending over £350 million in 2008-09
on rights for and coverage of major sporting and music events,
neither BBC Sport nor BBC Audio & Music Divisions
had any Impact objectives.[24]
21. Similarly, there was no clear evidence that the
BBC had made any systematic use of the performance measurement
framework when considering radio production efficiency initiatives.[25]
In addition, we were concerned that the BBC's use of cost per
listener hour as its main measure of the value for money it secures
from its radio output could lead to the justification of high
costs on the strength of increasing audience size, introducing
a potentially inflationary spiral. The cost per listener hour
measure does not provide assurance that programme costs are the
minimum necessary to reach the required quality and intended audience.
Using a basket of measures, drawing on the BBC's own performance
measurement framework, to manage costs would produce a more rounded
view of performance.[26]
22. In our investigations into programme making,
we found that the BBC used editorial necessity as the rationale
for some of its expenditure decisions, effectively placing some
of its expenditure beyond value for money considerations. For
example:
- the BBC spent what we now understand
to be £576,000 on a studio in the centre of Vienna for its
coverage of Euro 2008 based the proposition that it provided
an editorially necessary backdrop and was consistent with the
BBC's editorial approach to covering major events.[27]
- the BBC argued that differences in scope and
editorial ambition contributed to variations in the costs of radio
programmes.[28]
- the Comptroller and Auditor General found no
evidence of a structured review of the scale of, and differences
in the costs of, staff, studios, and outside broadcast facilities
used in the BBC's coverage of major events.[29]
- the BBC appeared to be paying some of its radio
presenters more than twice what the commercial radio stations
were paying their presenters, but had not investigated why.[30]
- while the proportion of the total costs of talent
for covering major sporting events ranged from 6% for one to 20%
for another, the BBC had not taken steps to demonstrate the cost-effectiveness
of the amount spent on presenters.[31]
23. The BBC appears to consider that certain aspects
of its expenditure represent value for money simply because they
deliver what the BBC describes as 'editorial ambition'. Our view
is that, by employing this argument, the BBC is placing some expenditure
beyond the reach of proper analysis, in which the cost-effectiveness
of expenditure is evaluated on an evidence-based informed manner.
In this way, without challenging editorial or creative independence,
editorial choices can still be subject to value for money scrutiny
by the BBC and BBC Trust.
20 Committee of Public Accounts, Twentyfourth Report
of Session 200506, The BBC's White City 2
development, HC 652), para 16; Qq 238-241 Back
21
C&AG's Report, Public service broadcasting: the BBC's
performance measurement framework, May 2005, para 1 and
Figure 4 Back
22
C&AG's report, Public service broadcasting: the BBC's
performance measurement framework, paras. 5, 12, and
13 Back
23
Q 33 Back
24
C&AG's Report, The BBC's management of its coverage
of major sporting and music events, December 2009, para 23
Back
25
C&AG's Report, The efficiency of radio production
at the BBC, February 2009, para 73 Back
26
Committee of Public Accounts, Twentyfifth Report of
Session 200809, The efficiency of radio production
at the BBC, HC 285, para 15 Back
27
Q 1; Ev 31 Back
28
Committee of Public Accounts, Twentyfifth Report
of Session 200809, The efficiency of radio production
at the BBC, HC 285, para 10 Back
29
C&AG's Report, The BBC's management of its coverage
of major sporting and music events, December 2009, para 53
Back
30
Committee of Public Accounts, Twentyfifth Report of
Session 200809, The efficiency of radio production
at the BBC, HC 285, Conclusion and Recommendation 4 Back
31
Q 86 Back
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