The BBC's efficiency programme - Public Accounts Committee Contents

2  Minimising the impact on the licence fee payer

7.  For the savings delivered by the BBC to count as genuine efficiencies, the BBC needs to know that they have not adversely affected performance.[15] Over the course of its efficiency programme the BBC has monitored over 50 different audience measures covering the range of services it provides and compared them to their level in 2007-08.[16] Although some of these measures have, at times, fallen significantly below their 2007-08 levels, it is not the same measures or services that are underperforming each time. The BBC told us it takes action when it sees the performance of a service declining. It had, for example, spent more on children's programmes in response to a fall in performance measures.[17]

8.  The BBC acknowledged that, even with all the work it does to monitor its performance, it does not fully understand whether savings have affected the quality of its services - because of the difficulty of isolating the impact of the many factors that can affect quality.[18] In future the BBC will be making cuts as well as delivering efficiency savings and so it is far more likely that the quality of services will be affected.[19] The BBC agreed with the need for absolute clarity over the distinction between what is defined and reported as an efficiency saving and what is a cut.[20]

9.  There are hard choices to be made about where cuts should fall. However, to underpin its current efficiency programme, the BBC did not use a detailed analysis of the costs and benefits of what it produces to support its decisions about where to make savings.[21] Such analysis will be vital to make sure that the BBC does not make ill-advised cuts to lower cost services that may be of relatively higher value to the public.[22] The BBC recognised that, due to the high fixed costs in smaller services such as local radio, cuts are "deeper" in terms of what they might mean for reductions in numbers of staff.[23] We questioned how the BBC compares the value of spending money on local radio, where the total budget in 2010-11 was £147 million, with spending on BBC1, where the corresponding budget was £1.4 billion.[24] In making comparisons the BBC claimed it tries to "analyse the net public value of each service and relate that to expenditure".

10.  The BBC told us it has a number of ways of gauging public opinion on the value of its services. The BBC Trust runs four national audience councils and the BBC itself tracks public attitudes through surveys and gains insights from correspondence received.[25] As well as measuring its performance against its public value indicators of Reach, Quality, Impact and Value, the BBC is also interested in whether its services are original.[26] The BBC acknowledged, however, that it needs to continue to develop how it analyses its performance to recognise the changing ways that people access the BBC's services.[27]

11.  Sometimes the value licence fee payers place on the BBC's services is linked to the extent to which there are credible alternatives. For example, the service provided by many local radio stations, based around news, information and speech, is often very different from that provided by the commercial alternatives. It is unclear how such considerations factor into the BBC's thinking about where cuts should fall.[28] The BBC has, however, put its proposals for further savings out to public consultation and has in the past shown a willingness to reverse its plans in the face of public opinion, for example in the case of Radio 6 Music.[29] The Director General was clear to us that he does not want "to preside over the decline of England's local radio".[30] In January 2012, the BBC Trust published an interim report on the BBC's savings plans. In this report the BBC Trust recognised the value placed on local radio by its audience, and called for the BBC to scale back the proposed cuts to local radio.[31]

15   C&AG's Report, para 1.25 Back

16   C&AG's Report, para 1.27 Back

17   Qq 21-23 Back

18   Q 49 Back

19   Qq 67-68 Back

20   Q 67 Back

21   Q 31 Back

22   C&AG's Report, para 2.9 Back

23   Q 27 Back

24   Qq 30-32 Back

25   Qq 24-25, 39 Back

26   Q 35 Back

27   Qq 37-38 Back

28   Qq 40, 44 Back

29   Qq 24-27 Back

30   Q 40 Back

31   BBC Trust report: Delivering Quality First, Interim Findings, January 2012 Back

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© Parliamentary copyright 2012
Prepared 6 March 2012