Examination of Witnesses (Questions 1249
- 1259)
THURSDAY 6 DECEMBER 2007
Mr Mark Thompson and Ms Caroline Thomson
Q1249 Chairman:
Can I make two announcements first? As always, the declaration
of Members' interest is on one of the tables. Secondly, for those
who have been following these proceedings throughout, there is
no public meeting next Wednesday. Welcome to you both. Caroline
Thomson, you have not been given a label so tell us your position.
Ms Thomson: I am Caroline Thomson and I am Chief
Operating Officer.
Q1250 Chairman:
This is the first parliamentary Committee you have come to since
the BBC announced its major six year plan.
Mr Thompson: I think that is correct.
Q1251 Chairman:
Can you remind us, first in the financial context, where you have
ended up compared to your bid for the next five years?
Mr Thompson: The first thing to say is that
the shift in the current licence fee settlement from a formula
based on RPI plus or minus to an absolute set of numbers over
the period means it is actually quite difficult to give a definitive
answer to that because it will depend on the run rate of inflation
over this coming period. Although there are Treasury forecasts
there is a fairly large amount of debate about how inflation will
pan out. We had been asking for a licence fee that would increase
somewhat above inflation. I will not go into the detailed formula
but we have a licence fee which goes up in nominal terms by 3%
for the first two years of the settlement and by 2% for the next
three years with the amount in the sixth year to be assessed.
The difference between what we had asked for and what we will
receive, assuming a mid-case on inflation, is probably around
£2 billion over a six year period. It is very important to
emphasise that this is occasionally written as if we have had
a £2 billion cut but it is not a cut in that sense. What
we expect is the licence fee, as a whole in terms of the BBC's
take of the licence fee, to remain broadly stable, possibly declining
very slightly in real terms over the period. The challenge the
BBC faces is that over this period we have significant responsibilities
to discharge in the matter of, in the broader sense, digital switchover
and digital conversion, the building out of transmitters to enable
the switch to DTT as part of the broader analogue switch off.
We have our own costs. We also have the costs pan-industry marketing
costs and we also have the costs of the government's targeted
help scheme. Also, because of what is happening to media, we have
some infrastructure and other costs of our own to discharge. That
means, within the context of the licence fee settlement we have,
that we have to look pretty hard at releasing resources for our
current operations to enable us to continue to offer high quality
service to the public and yet release cash which we can use to
discharge these additional responsibilities.
Q1252 Chairman:
To cut through that, would it be fair to say that you are operating
in a context where you have £2 billion less over the next
six years than you had hoped for?
Mr Thompson: Yes.
Q1253 Chairman:
The result is that you refer to 2,500 post closures, which is
an interesting phrase. I assume that includes redundancies. It
is 2,500 posts you are going to lose.
Mr Thompson: For reasons you will understand,
and I will try to make this as simple as I can, over this period
because of our plans, and in particular because of the developments
we believe we need to make in certain digital services, we expect
to create posts. We also believe there is scope and indeed both
the BBC Trust, and behind them the government, are very clear
they wish the BBC to make efficiencies in existing services. There
are many ways of making efficiencies but part of the way in which
we have to approach efficiency is looking at whether we can deliver
existing services using fewer people than we currently do. 2,500
existing jobs we expect to go but we also expect to create some
new jobs and where we can we will try and redeploy existing staff
into new jobs so the net number of redundancies we expect in this
period is 1,800, which is roughly 10% of the head count of the
public service UK BBC.
Q1254 Chairman:
The number of jobs that are going compared with the number of
new jobs being created, it would seem more jobs are going than
are being created.
Mr Thompson: It is true that the total head
count of the public service BBC will reduce over this period.
However, I believe of the 2,500 people occupying the posts which
are going to close we will be able to redeploy 700. Several hundred
other new jobs will be created in areas, for example, some of
the internet operations where we do not believe we have the current
in-house talents. I am afraid in addition to the numbers I have
given there are hundreds of other new jobs that will be created
over this period.
Q1255 Chairman:
We have been through some of this before so we will not re-trail
the whole thing. Our interest in this inquiry is the provision
of news. I have always believed that the provision of impartial
and balanced news is really the essence of the BBC. Would you
agree with that?
Mr Thompson: I would agree 100%, yes.
Q1256 Chairman:
As I also understand it, 400 journalist posts are to be closed
down. I am not sure how I see that as compatible with your statement
that you are giving more weight to journalism. You are closing
400 journalist posts down and you are giving more weight to journalism.
The two do not seem to add up.
Mr Thompson: If you believe that head count
is the only way of measuring our commitment to journalism then
you would have a point. I would say we see journalism playing,
as it does currently, a central role in what the BBC does. Over
this period our investment in journalism is going to remain very,
very strong. The proportion of the licence fee contents we spend
on journalism as a whole will go up over the period. However,
we believe that the combination of new technology and some opportunities
we have not just to reduce duplication, that is important as well,
but also to look at the way we create our news programmes across
television, radio and the web, together mean that we can deliver
the same or higher quality of journalism with somewhat fewer people.
Q1257 Chairman:
If I was a news editor, if I can put it that way, and I have 400
less journalists would I not regard that as a bit of a deficit?
Mr Thompson: Across the BBC we currently have
a population of 7,200 journalists and we will end this period
we believe with a population of 6,800 journalists.
Q1258 Chairman:
That makes you the biggest in the world.
Mr Thompson: I believe the BBC journalists'
delivery of services to the public here and around the world bears
comparison with any other news organisation in the world. I have
to say I believe that because of the expertise and the quality
of the people we have and it is not just the head count numbers.
Every part of the BBC has to look hard at whether there are ways
it can deliver what it does to the public in ways which use the
licence fee in the most efficient way possible. I believe it is
absolutely consistent to say that we are totally committed to
high quality impartial journalism for the UK public and people
around the world. We are going to use technology and better ways
of working to make the licence fee go further. If one believed
that it was impossible to maintain quality standards if you were
ever going to reduce head count, quite apart from the BBC no part
of public sector reform would be possible.
Q1259 Chairman:
Those posts are basically unnecessary, are they, and surplus to
requirements?
Mr Thompson: A significant part of our news
operations will be either marginally or, in some cases, unaffected
by these changes. For example, we believe our news gathering operation,
which is a significant part of the reason for the BBC's strength
in journalism, in very large measure should be preserved. Particularly
our global news gathering operation is going to become more distinctive
and more important in the future. What we have been doing is running
in parallel a television news operation, a radio news operation
and an operation for our website and for other mobile platforms.
That often means you have a number of different journalists working
on different platforms on essentially the same story. Moreover,
we sometimes find, and I would be surprised if there are not members
of this Committee who have not been on the receiving end of this
as I have myself, that multiple BBC News outlets are seeking,
for example, their own interview with the same person when they
are in the news. The record I once got to was 37 requests for
interviews from my colleagues in the BBC on a particular day.
We believe that although we want to preserve the character of
different news programmes, and it is entirely appropriate that
Today should want an interview, Newsnight should want an interview,
Five Live should want an interview, and so forth, but that there
are ways of maintaining the diversity and plurality of our news
operation but working slightly better to co-ordinate what we do.
We believe that, although all of my colleagues in journalism are
working very hard, there are ways of organising ourselves and
critically using some of the new technologies, particularly between
different platforms, to deliver the same or better quality to
the public but with slightly fewer people involved.
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