Hard choices have to be made

Tony Hall

Director-General Tony Hall said today the BBC must make tough choices as it continues to address the funding shortfall created by the evolving viewing habits of our audience.

With more people using BBC iPlayer, smartphones and other online catch up methods, fewer households are investing in a television set.

Added to this a loophole which means people do not need a licence to view catch-up TV, the BBC's financial position has made cuts inevitable.

In July, it was announced that:

  • £50 million will be saved by creating a simpler, leaner BBC with fewer layers and 1,000 fewer posts
  • Of this £50 million, half (£25 million) will come from reducing back office and professional support functions
  • Around £10 million through reducing management layers in content areas

The rest from the merger of technology and digital divisions and changes to expenses, payroll management and other areas.

Today's announcement revealed how a further £100 million will be saved. The key elements are:

  • £35 million from the TV sports rights budget which is likely to lead to the loss of some existing rights and events
  • £12 million from TV's budget. Drama is protected but there will be cutbacks in factual, comedy and entertainment though a commitment remains to making popular Saturday night shows
  • £12 million from BBC Online involving rationalising those features, innovation and development with greatest impact across digital services
  • £5 million from News achieved through efficiency savings from a review of working practices and, subject to approval from the BBC Trust, cost reductions in BBC Monitoring
  • £20 million from long term contracts and other costs, due to current lower levels of inflation
  • The final £16 million will consist of distribution costs savings, seeking a phased exit from the "red button" service, focussing the interactive TV offer on connected televisions and iPlayer and exploring more savings from BBC Online

The £150 million is part of the £700 million savings programme that must be found due to the flat licence fee agreed in the summer and the future transformation of the corporation.

The corporation today also restated its welcome to the Government's commitment to close the licence fee loophole and is continuing to urge ministers to introduce legislation as swiftly as possible.

A further £550 million of savings must be identified by 2021/22 with closure or reduction of services likely.

Tony said: "We are doing everything possible to make sure the impact on the public is minimised. But cuts to budgets for programmes and services are unavoidable. This is very tough but our financial position means there is no alternative."

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