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29 October 2014
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BBC Governors publish independent value for money studies

The BBC Governors have today laid before Parliament two independent studies: The BBC's Management of Risk by the National Audit Office (NAO); and BBC Independent Television Commissioning by Deloitte and Touche LLP (Deloitte).


The reports are the last in the current three-year programme of studies, commissioned by the BBC Governors' Audit Committee and carried out by the NAO and other agencies as part of its programme of value for money reviews.


Under the new Charter and Agreement the BBC Trust's relationship with the NAO will be strengthened.


The BBC is currently working with the NAO on a proposed programme of value for money studies for the Trust to consider commissioning from January 2007 onwards.


Jeremy Peat, Chairman of the Audit Committee, said: "The introduction of the programme of reviews in 2003 marked a significant, positive change in the Governors' approach to ensuring value for money at the BBC.


"Our constructive relationship with the NAO over the past three years has led to useful insights into whether the BBC is providing best value for licence fee payers.


"These two reports, the last in the current series, offer important independent advice on how we can improve the management of risk and independent commissioning at the Corporation in the future.


"The new Charter offers the BBC Trust an opportunity to strengthen further the relationship with the NAO and ensure even greater value for money on behalf of licence fee payers.


"This 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: "My review of the BBC's management of risk completes the programme of studies which I agreed with the BBC Governors' Audit Committee in 2003.


"And with arrangements for the development of a further programme of studies in place, I am looking forward to working with the new BBC Trust in the next Charter period."


Each report is published by the Governors along with their response and a response from BBC Management.


The BBC's Management of Risk


As the NAO acknowledges, the BBC faces a wide variety of risks ranging from those associated with its broadcast output and the risk of transmission failure, to risks in managing its resources.


Risk management arrangements have been in place for several years and at the start of 2006 these were strengthened.


The Board of Governors is pleased the NAO has concluded that the BBC has an appropriate framework for managing risks and that its approach is similar to that of other organisations.


The Board welcomes the report's recommendations for strengthening the BBC's arrangements for managing risks, including its suggestions that these are embedded across the organisation through improved training and communication.


In future the BBC Trust's responsibilities for overseeing the BBC's management of risk will be different to that of the Board Governors.


Under the new Charter and Agreement the Trust is required to have in place a risk protocol specifying how it will carry out its duties in this area.


It will be published in the New Year and will incorporate the NAO's recommendations.


The Governors welcome the report and endorse Management's proposed action to address these recommendations.


BBC Independent Television Commissioning


As the report outlines, in recent years there have been a number of changes affecting the BBC's relationship with the independent sector.


The commercial framework within which the BBC and independents work together has seen many alterations, particularly in relation to Terms of Trade and Code of Practice.


The introduction of the Window of Creative Competition from January 2007 will have further implications for this relationship, as will any agreement to new media rights with the independents' representative body, PACT.


The Deloitte study acknowledges that the BBC's ability to improve value for money in commissioning from the independent sector is bound up with this commercial framework and that normal commodity based procurement strategies are less applicable.


Nevertheless, the Board welcomes the report's conclusion that the BBC's new commissioning process places significant focus on effectiveness, that value for money considerations are taken seriously within the organisation and that the process includes controls to minimise value leakage.


The report highlights limited areas in which the BBC can improve the process, including monitoring tariffs and reviewing the mechanisms for managing royalties.


The Governors welcome the report and endorse Management's proposed action to address these recommendations.


Notes to Editors


The reports 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 BBC's new Charter and Agreement states that the arrangements should continue and sets out how the Trust should strengthen its relationship with the NAO. This includes the NAO's involvement in reviewing the extent to which the BBC meets its future self-help targets.


BBC Governance Unit








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Category: BBC
Date: 21.11.2006
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