The BBC's efficiency programme - Public Accounts Committee Contents

3  Challenging the BBC's costs

12.  The BBC told us that in future it will aim to make a base level of efficiency savings each year but that there would be times when a shift in the environment may mean greater savings are possible. To identify the scope for such savings it is important that the BBC understands what its services should cost to deliver. The BBC has a creative culture which focuses on delivering the highest quality possible with the available budget, rather than making trade-offs between saving money and delivering quality.[32]

13.  Both the BBC Trust and the BBC itself acknowledged that scrutiny from this Committee and the National Audit Office has encouraged the BBC to be less inward-looking and more inventive in how it challenges costs. For example, following the National Audit Office report on the efficiency of radio production the BBC invited John Myers, who has a history in commercial radio, to look at the how the BBC was managing some of its radio stations.[33]

14.  Previous reports by this Committee and the National Audit Office have recommended that, when trying to bring down costs, the BBC should make greater use of the information available to it. Whilst it can be challenging to find sufficient information to undertake benchmarking in some areas, there are a range of ways to bring in external perspectives. The BBC told us that it gets insights from staff moving around the BBC to work on different television programmes and can benchmark services internally, for example across its local radio stations. It acknowledged, however, that it could pursue other avenues such as seeking benchmarking partners overseas or inviting other experienced individuals into the BBC.[34]

15.  Of the £700 million annual savings required by 2016-17, the BBC expects to find £400 million from further efficiency savings and £205 million from cuts to servces, but only £40 million from increasing its commercial income. In 2010-11 the BBC received £181 million from its commercial arm, BBC Worldwide, and around £100 million from production companies who, in exchange for distribution rights, contributed funding to jointly produce programmes such as Frozen Planet.[35] The Royal Charter, under which the BBC operates, states that the "BBC Trust must have regard to the competitive impact of the BBC's activities on the wider market".[36] The BBC Trust must balance the BBC's desire to generate additional revenue with the risk of undermining commercial media operators.[37] The BBC Trust noted in a September 2011 meeting that the proposals for increasing commercial income should be at the lower end of estimates.[38]

32   Q 82; C&AG's Report, para 2.11 Back

33   Qq 83-84; Report by the C&AG presented to the BBC Trust's Finance and Strategy Committee, The efficiency of radio production at the BBC, 5 February 2009 Back

34   Q 83 Back

35   Qq 45-47, 76-77 Back

36   Royal Charter for the continuance of the British Broadcasting Corporation, October 2006 Back

37   Qq 79-80 Back

38   Q 79 Back

previous page contents next page

© Parliamentary copyright 2012
Prepared 6 March 2012