BBC Plans Radical £100 Million Cost Reductions
The BBC has unveiled that it is planning to take radical cost cutting measures so that more of its £2.68 billion licence fee income can be invested in making programmes.
According to a report in today’s Financial Times, a small team of managers overseen by John Smith, BBC finance director and chief operating officer, is planning radical action to reduce operating costs to more £100 million by next year, this is an ambitious reduction of a third to 8%. This would allow the Corporation to invest more its £2.68 billion licence fee income in making programmes rather than servicing the running costs of an organisation employing 28,000 people.
Officially, Mark Thompson the BBC’s new director, has committed to cutting overheads from 12 to 10% of its total expenditure over the period of its next 10 year charter which is due to begin in 2007.
A spokesperson involved in the value for money project said: “In the next week or two targets will be announced to improve efficiency, particularly in areas such as programme production, and increasing value for money at the Corporation. It’s about very significant savings.”
Other potential savings that have been considered is the potential sale of several other high-profile areas such as BBC Worldwide – the overseas channels and programme sales operation, magazine publishing & licensing – such as the Radio Times, merchandising and education.
In the past four years overheads have been halved from 24 to 12%, contributing to a total cost saving target of £1.99 billion by the end of the current charter period. But executives warn that the next tranche of savings could prove harder to achieve than initial cuts, involving big staffing reductions in areas such as finance and the outsourcing of property management.
An official told the Financial Times: “The overheads are greater than they need to be. We will take some convincing that keeping these assets is the best idea.”
The next steps are already underway; to outsource its technology division and transfer 1,400 staff to new employers. Dispute union protests, Siemens and a consortium lead by Accenture and BT Group are bidding for the £2 billion contract which will be announced on Friday.
BBC: 020 8743 8000 www.bbc.co.uk
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