BBC plans 20 per cent budget cuts

By
Tim Westcott

October 06, 2011

The BBC has unveiled a plan to cut costs by 20 per cent before the end of its 2016/7 financial year. Significantly, the cuts - necessitated by the licence fee being kept at its present level until 2017 - do not include any closures of BBC TV and radio channels. Instead, savings of £670m a year will largely be achieved by 'more flexible working practices' and with programme expenditure focusing on key areas of the schedule.

Delivering Quality First, published today, outlines plans to cut 2,000 jobs, sell off property (with all public services eventually leaving west London) and the integration of BBC News and the World Service. Another 1,000 staff will be moved from London to Salford and there will be a 'significant shift' of spend away from the capital. The public broadcaster's director-general Mark Thompson said the changes would result in a 'smaller BBC... which uses its resources more effectively'.

The BBC will focus spending on primetime for its two main channels, BBC1 and BBC2, removing daytime programming from BBC2 and cutting sports rights expenditure (by 15 per cent) and acquired films and TV series. Digital services BBC3 and BBC4 will become supporting channels for the two flagships, aligning their commissioning and scheduling strategies. BBC2 HD will replace the existing BBC HD channel. Interactive 'red button transmissions' will be reduced while 25 per cent budget cuts for BBC Online remain in place. The BBC Trust has launched a public consultation on the plans, which will run until 21 December.

The scale of the cuts currently envisaged is certain to disrupt the BBC, with the reorganisation of news and the relocation of several jobs to the North of England in particular already proving unpopular among staff. The plan goes further than the 16 per cent cuts agreed with the government as part of the licence fee settlement which will run for the next six years.

However, in the short term the plan makes a case for the current government and its successors to leave the BBC alone. Further ahead, the BBC aims to have established a strong case for the licence fee system to remain in place beyond 2017, by delivering services which remain widely consumed and where the vast majority of licence fee money is spent on UK content.

In terms of service closures, the proposals are a lot less severe than they could have been. While overall content spending will be cut, key areas like news, drama, comedy and children's programmes will be protected and in some areas of the schedule, spending will be increased. Savings of £73m a year will be made on sports rights, acquisitions and off-peak programming. The replacement of the BBC HD channel with BBC2 HD also makes sense.

At a time when other state funded broadcasters in Greece and Portugal are facing the closure or sell-off of their main channels, the BBC has staked its claim to a continuing prominent place in the UK television landscape.

The cuts should also be seen in the context of recent years of heady expansion: BBC annual revenues swelled from £3.8bn in 2004/05 to £4.9m in 2010/11, an increase of 30 per cent.

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Companies: BBC