BBC HomeExplore the BBC
This page has been archived and is no longer updated. Find out more about page archiving.

27 November 2014
Press Office
Search the BBC and Web
Search BBC Press Office

BBC Homepage

Contact Us

Press Releases

BBC Governors publish independent value for money studies

Category: BBC

Date: 07.07.2006
Printable version

The BBC Governors have today laid before Parliament two independent studies by the National Audit Office (NAO): The BBC's definition of overheads and BBC Outsourcing: The contract between the BBC and Siemens Business Services for the provision of technology services.


The reports were commissioned by the BBC Governors' Audit Committee as part of its programme of value for money reviews and are published by the Governors along with their response and a response from BBC Management.


Jeremy Peat, Chairman of the Audit Committee, said: "The Board of Governors - and in future the Trust - is responsible for ensuring the BBC invests its money wisely on behalf of licence fee payers.


"The programme of value for money studies continues to provide us with constructive and independent insight into whether the BBC is achieving best value for the public, along with important learning points for the future.


"We look forward to further developing the programme and to strengthening our relationship with the NAO under the new Charter, which will include the NAO reviewing the extent to which the BBC's future self-help targets are being met."


Sir John Bourn, Comptroller and Auditor General and Head of the NAO, said: "I am pleased that my value for money reviews on the BBC are supporting the Governors, and through them licence fee payers and Parliament, in assessing whether licence fee income is being used to best effect."


The BBC's definition of overheads report


Governors welcome the NAO's confirmation that, since they approved the overhead reduction target in 2000, the percentage of overhead as a proportion of 'output spend' has reduced from 24% to 12%.


The NAO acknowledges there is no universal and standard classification of the costs that make up overheads but conclude that the BBC's measure - which splits content and non-content expenditure - demonstrates that the Corporation is putting its resource into front-line services.


Governors accept the NAO's recommendations for ensuring overhead targets and measures support the BBC in achieving best value for licence fee payers.


These include: linking overheads measurement with the wider performance measurement framework; clearer reporting to stakeholders; aligning overheads to business needs; and comparing performance with others (benchmarking).


Governors have endorsed Management's plan to address the recommendations.


BBC Outsourcing: The contract between the BBC and Siemens Business Services for the provision of technology services


The NAO concludes that the deal with Siemens is delivering benefits: savings are being achieved; performance against targets is high; and the BBC and Siemens consider the partnering relationship is constructive.


Governors are satisfied that the partnership has delivered a number of major benefits to the BBC and the services have provided value for money.


They also recognise some important learning points for the future and welcome the NAO's recommendations for strengthening performance management.


Governors already had in hand an internal review of technology governance and will ensure these issues are addressed as part of that.


Governors welcome the NAO's acknowledgement that the BBC's estimated savings in the first year of the 10-year contract are in excess of £20m and that an additional £4m is expected from 2006/2007 onwards as redundancy savings are realised.


Governors believe that this year-on-year saving, together with the £150m Siemens paid for BBC Technology Ltd at the outset of the partnership, shows that the deal has been a financial success for the BBC.


However, the NAO report highlights the fact that total savings under the contract could not, in practice, be guaranteed; that the savings made so far, while substantial, are not fully in line with the figures reported to the Governors in September 2004; and that the use of the term 'guaranteed savings' was inexact.


Governors have indicated to Management the importance of adequate controls and processes to ensure that information put to the Board is full and accurate and that any subsequent amendments are reported to the Board.


The Governors welcome the measures proposed to address these points and note that their own advisers in the Governance Unit now provide an independent resource for them to examine investment proposals in detail and review their progress.


Notes to Editors


The two value for money reviews are available online at


In 2003, the BBC and the Government agreed an evolution in the Governors' oversight of value for money. As a result, the Governors' Audit Committee, in dialogue with the Comptroller and Auditor General - the head of the National Audit Office (NAO) - established a programme of independent value for money reviews. The reviews are undertaken by the NAO or other external agencies. This is enshrined in the 2003 amendment to the BBC's Agreement with the Secretary of State. All studies under this programme performed by external agencies, including the NAO, are reported to the BBC Governors and subsequently laid before Parliament by the BBC together with separate responses from Governors and Management.


The Government's draft Charter and Agreement, published in March 2006, stated that the arrangements should continue and set out how the Trust should strengthen its relationship with the NAO. This included the NAO's involvement in reviewing the extent to which the BBC meets its future self-help targets.


BBC Governance Unit







The BBC is not responsible for the content of external internet sites

Category: BBC

Date: 07.07.2006
Printable version


The BBC is not responsible for the content of external internet sites

About the BBC | Help | Terms of Use | Privacy & Cookies Policy