Thursday 31 Jul 2014
The BBC Director-General, Mark Thompson, has launched a wide-ranging consultation with all BBC staff today on how the Corporation can best deliver the highest quality programmes and content to audiences to the end of the Charter in 2017.
The licence fee settlement, which froze the licence fee to April 2017 at £145.50, means the BBC faces significant financial challenges if it is to balance income and expenditure, meet its new obligations, such as BBC Monitoring and the World Service, and continue to invest in new programmes and innovation.
Mark Thompson has therefore set the Corporation the challenge of finding 20 per cent savings over the four years to April 2017 – 16 per cent savings will balance income and expenditure and fund new services whilst a further 4 per cent will give flexibility to invest back into new content and innovation priorities as set out in Putting Quality First.
The BBC set an ambitious aim in March last year to spend 90 per cent of the licence fee on making content and getting it to the public. This means having reduced overheads from 24 per cent in 1999 to 12 per cent today, we now need to drive them down further to 9 per cent or less by the end of the Charter period.
Today's announcement means the BBC can continue to maintain that 90 per cent pledge following the settlement.
Maintaining our 90 per cent pledge under this settlement means being even tougher on running costs. To protect front-line content and services, efficiencies to the cost of running the BBC, including back-office and support functions such as HR and finance are greater than for content areas.
Despite this drive there will also be an impact on programmes and services. The BBC will need, in some areas, to do fewer things better but will focus on finding smart changes that save money and improve quality at the same time.
Mark Thompson said: "The BBC is being realistic, taking prompt action to make sure it meets future funding limits, while continuing to aim to devote 90 per cent of spending on content and getting it to the public.
"Rather than imposing these efficiency savings and reductions in a top-down manner, we are asking people who work at the front line to say how these can best be achieved.
"The tough, but realistic, settlement we achieved gives us certainty of funding for six years. However, the BBC is not immune to the economic climate and it will require tough decisions to achieve these savings."
The BBC will now talk to staff across the organisations to get their input and ideas about how to make savings and deliver quality first, before presenting formal recommendations to the BBC Trust in the summer.
More information on Delivering Quality First is available on the About the BBC website.
BBC Press Office