BBC strategic financial management

Public Accounts Committee Closed Inquiry
Opened: 8 Feb 2021 Closed: 5 Aug 2021 Parliament page
The BBC is independent of government but is a public corporation, sponsored by the Department for Digital, Culture, Media & Sport (DCMS) and regulated by Ofcom. It is primarily funded by households paying the television licence fee - amounting to £3.52 billion in 2019-20 – and is also permitted by … Read more
2 Recommendations
22 Conclusions
1 Report
1 Oral session
2 Letters
1 Event
Activity timeline 7 events
16 Nov
2021
Correspondence
8 Nov
2021
Report published
16 Sep
2021
Correspondence
2 Sep
2021
Report published
21 May
2021
Report published
22 Mar
2021
Oral evidence
22 Mar
2021
Formal meeting (oral evidence session) · The Wilson Room, Portcullis House
Oral evidence sessions 1 session
22 Mar 2021
View on parliament.uk
BBC strategic financial management
Charlotte Moore · BBC Glyn Isherwood · BBC Tim Davie CBE · BBC
Title HC No. Published Items Response
Second Report - BBC strategic financial management HC 187 21 May 2021 24 Responded
Recommendations & Conclusions
24 results
2 Recommendation
Second Report - BBC strategic fina…
The BBC’s plans for an increased presence in the nations and regions seem unclear and...
The BBC’s plans for an increased presence in the nations and regions seem unclear and disjointed. In March 2021, the BBC announced that it would increase programming spending outside of London by £700 million by 2027–28. However, the BBC is … Read more
HM Treasury
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3 Recommendation
Second Report - BBC strategic fina…
There is considerable uncertainty over the BBC’s financial future, which its financial plans do not...
There is considerable uncertainty over the BBC’s financial future, which its financial plans do not appear to address adequately. The BBC Director-General has four new strategic priorities for the organisation—delivering high-quality 6 BBC strategic financial management content, developing the online … Read more
HM Treasury
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4 Conclusion
Second Report - BBC strategic fina…
At times, the BBC has deferred difficult measures and ducked the hard choices necessary over...
At times, the BBC has deferred difficult measures and ducked the hard choices necessary over cuts to frontline content. The BBC is candid about its view that, having driven down costs in back-office functions, it now sees no scenario in … Read more
Government Response
The BBC will respond directly to the Committee to the recommendations in the Committee’s report.
HM Treasury
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5 Conclusion
Second Report - BBC strategic fina…
The BBC appears unambitious about setting targets for the financial returns generated by its commercial...
The BBC appears unambitious about setting targets for the financial returns generated by its commercial subsidiaries. The BBC’s net returns from its commercial activities, at under 6% of licence fee income, are not at a level to make a significant … Read more
Government Response
The BBC will respond directly to the Committee to the recommendations in the Committee’s report.
HM Treasury
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1 Conclusion
Second Report - BBC strategic fina…
On the basis of a report by the Comptroller and Auditor General, we took evidence...
On the basis of a report by the Comptroller and Auditor General, we took evidence from the BBC about its strategic financial management.1
Government Response
The BBC will respond directly to the Committee to the recommendations in the Committee’s report.
HM Treasury
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6 Conclusion
Second Report - BBC strategic fina…
The growth of streaming has given people greater viewing and listening choices.
The growth of streaming has given people greater viewing and listening choices. According to the BBC, this change in behaviour has been reinforced by the pandemic as it has given people more opportunity to discover choice elsewhere.8 We asked the … Read more
Government Response
The BBC will respond directly to the Committee to the recommendations in the Committee’s report.
HM Treasury
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7 Conclusion
Second Report - BBC strategic fina…
The BBC also plans to reintroduce BBC Three to terrestrial TV, five years after making...
The BBC also plans to reintroduce BBC Three to terrestrial TV, five years after making it an online-only service.10 We questioned why BBC Three is the answer to falling audience share among young people when it did not work last … Read more
Government Response
The BBC will respond directly to the Committee to the recommendations in the Committee’s report.
HM Treasury
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8 Conclusion
Second Report - BBC strategic fina…
The BBC has recently announced that it plans to reach out to audiences across the...
The BBC has recently announced that it plans to reach out to audiences across the UK by increasing its spending on programming outside of London by £700 million by 2027–28.13 We asked the BBC how this ties in with the … Read more
Government Response
The BBC will respond directly to the Committee to the recommendations in the Committee’s report.
HM Treasury
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9 Conclusion
Second Report - BBC strategic fina…
The BBC told us that the move out of London has been designed to improve...
The BBC told us that the move out of London has been designed to improve its representation in and portrayal of the regions, which will have a direct impact on audiences’ appreciation scores for the BBC. We queried whether the … Read more
Government Response
The BBC will respond directly to the Committee to the recommendations in the Committee’s report.
HM Treasury
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10 Conclusion
Second Report - BBC strategic fina…
In recent years, the BBC has entered into complex ‘sale and leaseback’ arrangements to develop...
In recent years, the BBC has entered into complex ‘sale and leaseback’ arrangements to develop and finance its estate.19 To determine whether the new regional plans are joined up with these existing arrangements, we asked the BBC whether it could … Read more
Government Response
The BBC will respond directly to the Committee to the recommendations in the Committee’s report.
HM Treasury
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11 Conclusion
Second Report - BBC strategic fina…
As part of its new regional plans, the BBC is intending to hire new staff.
As part of its new regional plans, the BBC is intending to hire new staff. At the same time, the BBC is making hundreds of staff redundant across the UK. We challenged the BBC on how exactly the two align … Read more
Government Response
The BBC will respond directly to the Committee to the recommendations in the Committee’s report.
HM Treasury
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12 Conclusion
Second Report - BBC strategic fina…
The BBC faces a number of emerging financial challenges.
The BBC faces a number of emerging financial challenges. These include:22 • A significant change in policy for over-75s TV licences which the BBC estimates will leave it £200 million a year worse off. Under the 2015 licence fee settlement, … Read more
Government Response
The BBC will respond directly to the Committee to the recommendations in the Committee’s report.
HM Treasury
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13 Conclusion
Second Report - BBC strategic fina…
The BBC is currently approaching the end of a five-year savings programme, which targeted £1...
The BBC is currently approaching the end of a five-year savings programme, which targeted £1 billion annual savings by the end of 2021–22 to address the shortfall in its finances created by these challenges. The BBC’s net commercial income is … Read more
Government Response
The BBC will respond directly to the Committee to the recommendations in the Committee’s report.
HM Treasury
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14 Conclusion
Second Report - BBC strategic fina…
On taking up his new role in September 2020, the BBC Director-General outlined four new...
On taking up his new role in September 2020, the BBC Director-General outlined four new strategic priorities for the organisation—delivering high-quality content, developing the BBC’s online presence further, growing commercial income, and a renewed commitment to impartiality.25 We considered that … Read more
Government Response
The BBC will respond directly to the Committee to the recommendations in the Committee’s report.
HM Treasury
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15 Conclusion
Second Report - BBC strategic fina…
In February 2017 the BBC introduced a programme to deliver £800 million savings annually by...
In February 2017 the BBC introduced a programme to deliver £800 million savings annually by 2021–22, in order to help address the estimated shortfall in its finances resulting from the 2015 licence fee settlement and trends in inflation and licence … Read more
Government Response
The BBC will respond directly to the Committee to the recommendations in the Committee’s report.
HM Treasury
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16 Conclusion
Second Report - BBC strategic fina…
By the end of March 2021, the BBC expects to be more than £800 million...
By the end of March 2021, the BBC expects to be more than £800 million through its savings programme, leaving around £200 million of savings to be achieved in 2021–22. However, it now appears that the BBC will only deliver … Read more
Government Response
The BBC will respond directly to the Committee to the recommendations in the Committee’s report.
HM Treasury
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17 Conclusion
Second Report - BBC strategic fina…
The settlements that emerge from licence fee negotiations typically result in the BBC making some...
The settlements that emerge from licence fee negotiations typically result in the BBC making some financial gains and some losses.30 We asked the BBC why, going into its latest negotiation, it was not better prepared, for example, by modelling potential … Read more
Government Response
The BBC will respond directly to the Committee to the recommendations in the Committee’s report.
HM Treasury
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18 Conclusion
Second Report - BBC strategic fina…
The BBC told us that its savings programme to date has focused primarily on support...
The BBC told us that its savings programme to date has focused primarily on support and back-office functions, with its indirect costs now among the lowest of comparable media companies. It said that, because those functions have now been cut … Read more
Government Response
The BBC will respond directly to the Committee to the recommendations in the Committee’s report.
HM Treasury
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19 Conclusion
Second Report - BBC strategic fina…
The BBC indicated that, in general, it will also need to make tough choices on...
The BBC indicated that, in general, it will also need to make tough choices on programming, making less content but ensuring that the impact is high.34 The BBC has 27 C&AG’s report, para 12 28 Qq 32, 68, 71, 73, … Read more
Government Response
The BBC will respond directly to the Committee to the recommendations in the Committee’s report.
HM Treasury
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20 Conclusion
Second Report - BBC strategic fina…
In addition to this uncertainty surrounding future frontline cuts, the BBC has delayed more than...
In addition to this uncertainty surrounding future frontline cuts, the BBC has delayed more than once planned changes to its News and Nations & Regions divisions which involve significant post closures. The BBC had identified early on in its efficiency … Read more
Government Response
The BBC will respond directly to the Committee to the recommendations in the Committee’s report.
HM Treasury
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21 Conclusion
Second Report - BBC strategic fina…
Staff pay is another high-profile area where the BBC has recently attempted reform.
Staff pay is another high-profile area where the BBC has recently attempted reform. In 2018–19, the BBC introduced new terms and conditions for staff. The BBC calculated these changes would result in a net saving of £4.9 million in its … Read more
Government Response
The BBC will respond directly to the Committee to the recommendations in the Committee’s report.
HM Treasury
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22 Conclusion
Second Report - BBC strategic fina…
In 2019–20, the returns paid by commercial businesses for the BBC to use on its...
In 2019–20, the returns paid by commercial businesses for the BBC to use on its programme-making were £208 million, equivalent to under 6% of licence fee income.41 The BBC Director-General has identified increasing commercial income as one of the organisation’s … Read more
Government Response
The BBC will respond directly to the Committee to the recommendations in the Committee’s report.
HM Treasury
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23 Conclusion
Second Report - BBC strategic fina…
We asked the BBC if it had explored how it could increase income from BritBox,...
We asked the BBC if it had explored how it could increase income from BritBox, the streaming service it runs overseas and in the UK in partnership with ITV, and expanding its use of the BBC archive. The BBC responded … Read more
Government Response
The BBC will respond directly to the Committee to the recommendations in the Committee’s report.
HM Treasury
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24 Conclusion
Second Report - BBC strategic fina…
DCMS restricts the BBC’s total borrowing limit for commercial activities to £350 million, a level...
DCMS restricts the BBC’s total borrowing limit for commercial activities to £350 million, a level set in 2003.47 We asked the BBC if this limit holds it back from increasing commercial revenues and to what extent it is exploring this … Read more
Government Response
The BBC will respond directly to the Committee to the recommendations in the Committee’s report.
HM Treasury
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Correspondence 2 letters
16 Nov 2021 Correspondence from Andrew Scadding, BBC Head of Corporate Affairs, re Responses to the PAC’s report on the BBC’s Strategic Financial Management, 28 October 2021
Parliament page
16 Sep 2021 Public Accounts Committee report on BBC strategic financial management BBC response
Parliament page