NAO: Some Salford allowances were too generous

BBC North at MediaCityUK

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BBC allowances to incentivise some staff to move to Salford were "more generous" than usual, according to a National Audit Office report on Tuesday.

The packages included a guaranteed minimum price for homeowners' existing properties, as typical for relocation projects, but the NAO said the BBC's additional "remote location allowances" (RLA) were not standard practice.

The RLAs covered rental and weekend travel costs to London for two years after moving. They also included financial incentives of at least £5000.

The NAO found that 44 staff received more than the maximum monthly RLA of £1,900 gross, of which only six had been recorded as exceptions.

"The BBC told us that it paid some staff more to offset the impact of higher income tax rates on the net amount they received," the NAO said.

BBC at Salford

  • BBC has a 20-year lease on three buildings at MediaCityUK until March 2030
  • Opened on May 16, 2011; first relocation phase completed in April 2012
  • Implementation cost: £224m
  • Approved budget until 2030: £942m
  • Staff: 2300, including 800 from London, 750 from BBC Manchester & 700 new recruits
  • 548 staff made redundant because of the move
  • 254 new workers recruited from Greater Manchester (including 39 from Salford)
  • Expected total cost of relocation allowances: £24m
  • Must make £151m efficiency savings by 2030 to remain within budget

It also described the controls on exceptions to the relocation policy as "inadequate".

The BBC says it made 91 exceptions to its relocation policy, to meet the needs of staff with disabilities or caring responsibilities, or for those whose house sales fell through or whose relocation was affected by the school year.

But while these were mostly recorded, their authorisations were not documented.

While highlighting some weaknesses in the relocation, the NAO said the corporation had "successfully completed the complex challenge" of moving around 2300 posts to the MediaCityUK site.

Key findings include:

  • The BBC estimates the final implementation costs will be £224 million, less than the BBC Trust's approved budget of £233m.
  • The estimate for running the site until 2030 has risen to £942m (including the £224m cost) from the previously estimated £877m. This is partly due to an increase in technology services and utility prices.
  • 38% of staff in the 1500 posts relocating from London, i.e. 574 people, moved to Salford. This exceeded the BBC's 30% target. Overall, 854 staff from outside Greater Manchester moved if you include those who were not earmarked but volunteered to relocate.
  • Final cost of relocation allowances will not exceed £24m, according to the BBC.
  • The corporation delayed installing digital technology on staff desktops by a year, due to technical problems with the Digital Media Initiative, which were not directly connected to the Salford move. Staff used temporary systems or external contractors at a cost of £200,000 until permanent installation last October.
  • The BBC needs to match its studio use at Salford with its contract with Peel Media Studios Ltd. A shortfall in production during the first year, when departments were migrating, resulted in a £500,000 underspend against the contractual minimum of £2.8m. BBC North chief operating officer Alice Webb said the BBC was now on track to fulfil terms with increasing studio usage.
  • BBC North did not carry out sufficient analysis of how it would make £151m efficiency savings up to March 2030. But it has since partly addressed this by cutting the budgeted cost for its head office and other central services by £45m.
'Sound balance'

BBC North director Peter Salmon said he was pleased the NAO recognised that the division had "delivered on time, under budget and with no break in business continuity, however I also accept that there are some things that we could have done better".

Anthony Fry, chair of the BBC Trust's finance committee, added the BBC had "struck a sound balance in its handling of this move".

BBC North: Key aims

  • Better serve audiences in northern England, and cut approval gap between them and the rest of the UK.
  • Deliver benefits to the region by creating a world-class talent pool and strengthening the northern indie sector.
  • Deliver a "creative dividend" to the BBC by increasing output quality.
  • Realise financial benefits by becoming more efficient.

He said "it is disappointing that some of the controls on relocation payments proved inadequate and we would not expect a repeat of this with any future moves".

Given that the BBC started its Salford relocation two years ago, Amyas Morse, head of the NAO, said it was too early to judge whether it was delivering value for licence fee payers' money.

"Skills were maintained and redundancy costs reduced by offering London-based staff more generous relocation packages than it usually offers to encourage them to move, though the BBC could have controlled these better."

She said it was "welcome" that the BBC had developed an approach to measure the relocation's future impacts "but it still needs to explain how it is going to make all of its planned efficiency savings".

Around 2300 staff have moved to Salford since May 2011, including Sport, Radio 5 live and Children's from London, plus shows like Dragons' Den and Mastermind from the former BBC Manchester.

Another 1000 staff are expected to move from London to Salford before 2017, including BBC Three.

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