Speech to BBC staff on delivering Creative Future
Thursday 18 October 2007
Good morning everyone. I've got a story to tell you this morning. It's a clear story – the clearest I can remember in all my years at the BBC. And it's a consistent story. Throughout the day, you'll hear the same ideas, the same themes cropping up in Journalism, Vision, Audio and Music, FM&T.
And that's because hundreds of people across the BBC have helped create the story, debate it, finalise it – to the point where Michael and the BBC Trust decided they could accept it and support it.
It's a story which includes some painful news and some difficult choices. I believe we will look back at today in a few years time as the moment when the BBC did make some difficult choices. I don't want to minimise the human consequences of some of the decisions we have reached. But this is not just a story about cuts. It's about building our future and grasping some amazing opportunities.
I spent a few days in India last week. I met our amazing journalistic and creative teams there. It's a snapshot of what's happening to our world. Nearly a hundred million new mobile phones every year – and many people predicting that broadband will leapfrog the PC and go straight to mobile. Technology, advertising, the media market – everything moving at incredible speed. And the BBC, by the way, right in there, making partners, launching new channels, finding new audiences.
It's the same everywhere. It's the same here. Media is transforming. Audiences are transforming. And so we find ourselves standing at a fork in the road.
It would be easy to say that the sheer pace of this revolution is too fast for the BBC. That for us to do what other media players are doing – integrating newsrooms, mixing media, exploiting the same content aggressively across different platforms – that would be just too radical for the BBC. That, especially after the tough few months we've just had with phone competitions and our documentary about the Queen, safety and slowness really would be the best policy.
But I think we can see both here and around the world the price you pay for taking what looks like the safe option. I've devoted almost my whole working life to this organisation, much of that not as a suit but as a rank-and-file programme-maker. Like many of you, I love the BBC and what it stands for. I love it too much to see it drift steadily into irrelevance. That's why I believe we should take the other fork in the road.
But this is not just a story about the digital revolution. For the public quality, originality and trust in media are more at a premium than they've ever been. Audiences are hungry for content they can really love and believe in. They're more discriminating and demanding too.
For the BBC then, success depends not just on riding the digital wave but on really living up to our audience's expectations of us in terms of quality. And of course what makes this challenge so hard is that our funding is pretty constrained.
Now we should put that in context. As everyone knows, we didn't get everything we asked for in the licence fee settlement, but the BBC's funding over the next six years still looks strong when you compare it with the rest of the public sector or with projections for commercial media.
The BBC Trust has set us the challenge of delivering 3% net savings in each year of the settlement period. That's a daunting target given the savings we've already achieved in recent years, but it's lower than the average we've achieved ourselves since the Nineties. Every other bit of the public sector – including the World Service, by the way – has been set the same or a higher target – some parts of government up there at 5 or 7% a year and you'd be hard put to it to find many private companies who don't believe they can use technology and new ways of working to achieve 3% or more in efficiency gains every year.
And it's worth remembering that these savings don't leave the BBC. We're going to use them to pay for our future.
I'm going to lay out the headlines now as they affect the whole of the UK public service BBC. I'll also talk about the impact on jobs across the BBC. Later today, you'll be hearing from your own group or division with more detailed information about how these plans will affect you. I'm not going to talk today about the other parts of the BBC – Worldwide, Resources, the Global News division – though I believe that, if you're watching, you'll find quite a few of the themes and ideas relevant to you as well.
Quality and Innovation
I'm going to set out the plans under five headings. The first and most important of them is quality and innovation. There's no point in this crowded media environment of a BBC which doesn't deliver exceptional output.
So we need more landmarks like this summer's brilliant Partition programming, more room for experiment like BBC Radio 4's Down The Line, more room for ambition – like the output which triumphed in this year's Prix Italia; and even more impact on the big stories of our time like BBC News's Emmy award-winning coverage of the Lebanon war. But we'll need less middling output. We should concentrate on the best.
Over recent years the amount of content we make has grown as the number of TV and radio channels grew – TV factual output, for instance, has grown by an astonishing 64% since 2000.
Much of that growth was justified. But now – given our funding but also given the many new ways we get content to audiences – we want to make less but make it to a higher standard.
In Factual TV, we plan to reduce hours by around 11% by next year. It will still be above 2004 levels, there will be more landmarks, more programmes like Planet Earth and Andrew Marr's brilliant post-war history, more impact. By concentrating on making less, we believe we can deliver more quality and more value.
Across TV as a whole we plan to commission 10% fewer hours than we do today by 2012. That's the equivalent of around £100million of commissions every year – it will have a much bigger impact than shutting a digital network like BBC Three would have had. We'll keep repeats on BBC One peak time at their current historic low level – elsewhere there will be more narrative repeats, though our digital networks will still have more originations than anyone else's.
On the web, we will again commission fewer pages but concentrate our investment to make sure that they're of higher quality. We're going to take that 360 degree idea wherever we can to make our content deliver the greatest impact. We want to build BBC Knowledge, for instance – history, science, the arts and so on – into a compelling multi-media, multi-platform offer, just as we've done with news. We're going to launch HDTV.
Above all, we're going to make sure that what we do is really distinctive – different from what commercial broadcasters can provide – and really original. Audiences are crying out for originality but in this very disruptive market, it's hard for commercial players to find the space to experiment and take risks. That's why I'm asking every controller and every commissioner and every producer across the BBC to step up to the challenge.
Value to ALL audiences
The second theme is to provide value to all audiences. This does not mean reducing our commitment to our existing audiences – we should be proud to serve those who already regularly use the BBC and who are, and who I hope always will be our heartland. But we should also reach out with quality content to those who currently use the BBC less – particularly children and other younger audiences. We should boost the value and relevance of what we offer to the UK's nations and localities.
The third theme is on-demand and it offers us the chance to redefine broadcasting – no longer transmit once and then throw away, instead the idea of content that grows in value and usage over time.
So we want to develop the web and other digital platforms so that audiences can find, play and share our content. We want to deliver a powerful new suite of on-demand offerings.
We need to work with others to distribute our content widely over all platforms. And we want to make it easier to find by using metadata and end-to-end digital production and content management.
Build Digital Britain
The fourth theme is our mission to help build digital Britain. Over the next few years, we've got a central role in digital TV switchover – the process began in the early hours of yesterday morning when we switched off the BBC Two analogue signal at Whitehaven.
We're going to launch Freesat and build on the strong position of Freeview, we're going to deliver the targeted help scheme to enable disadvantaged groups to make the change to digital. We're going to go on building support for digital radio. And we're going to grow the market for high-speed broadband in this country by driving usage of our on-demand services.
The most creative place to work
Fifthly and finally, we want the BBC to be the most creative place to work in broadcasting anywhere in the world.
The future will feel less secure than the past and it's not in my or anyone's power to wish that away. But we can and must make the BBC a dynamic, flexible organisation where people can give of their creative best. We'll provide new working environments like PQ in Glasgow which Gordon Brown opened a few weeks ago, like Salford, like W1. Yes it's about state-of-the-art technology, but it's also about a friendlier, more collaborative, more flexible creative space. We'll back you with the best tools, training and support and create more opportunities for you to move and develop your skills and ambitions.
A smaller BBC
What this adds up to is a BBC which is smaller than it is today but which can still deliver a bigger impact.
It's a BBC which won't try to do everything. No new channels or networks. No new local radio stations or regional centres. Overall in fact, we've trimmed around one and a half billion pounds and dozens of proposals from the list we put into our original licence fee bid.
And the BBC will be physically smaller. As I said, we're building some of the most advanced broadcast centres in the world. But we're also reducing our property footprint by consolidating on fewer sites. Part of that plan – though it will be an emotional wrench for many of us who have worked here over the years – is the eventual sale of Television Centre.
The impact on jobs
But the most important and also the most painful way in which the BBC will get smaller is in the number of people it employs. I think that everyone will understand that what I have talked about today will have an impact on jobs. Across the BBC, the numbers will be significantly lower than the figures you've read about in the press, but I don't want to minimise them: even one redundancy can be a big blow to the person involved.
Over the past three years the current VFM programme 3,800 posts will have gone across the public service BBC. The period we're now looking at is longer – five years – but the impact on jobs will be lower. The headline number of post closures we estimate over the five-year period is 2,500.
But that's not the end of the story. The money we save through efficiencies and the switching of resources is going to go back into the BBC in the form of fresh investment and that will create new jobs. And other opportunities will open up through natural turnover – around a thousand people leave the BBC every year either to retire or to take up a job elsewhere.
We already have fantastic talent in this organisation. Wherever possible, we should use that talent to achieve our future goals. That means investing real money – at least £4million of additional funds – in re-skilling. It means a bigger commitment than we've ever made before to redeployment and career development. It means working with all of you and with our unions.
We estimate that, by doing all these things, we can reduce the total number of actual redundancies over the five years to about 1,800. If we can make it lower still, no one would be happier than me.
A varied picture
But beneath the pan-BBC story lies a varied picture group by group. The impact of that overall 3% headline efficiency target varies from one part of the BBC to another. The central divisions took such a big hit in the current VFM programme that the room for further efficiencies is very small. There's less scope for savings and for the switching of resources in radio than there is in TV.
That means that the effect on jobs varies widely as well. Here is the overall picture. As I said, in some areas, there will be little change on current numbers while in others there will be big reductions within a total of around 1,800 expected redundancies. Today your Divisional Directors will brief you on what it means for your area. But I do want to touch briefly on two parts of the BBC which will see significant job losses.
The first is News. BBC News is, and will remain, the cornerstone of the whole organisation. The proportion of content spend that goes to journalism will go up not down over the coming years. We have a powerful and coherent vision of what BBC News can become in a fully digital world.
But we also believe there is real scope for improvement in the way we organise news. Instead of largely separate TV, radio and web operations, we plan an integrated multi-media newsroom. And we think we can significantly reduce duplication in newsgathering and production without our most important flagships like Today and Newsnight losing their distinctiveness and their character.
All over the world, media players are moving in exactly the same direction. It does not mean that we're stepping back from news or that we're prepared to compromise on quality. But it will mean quite big reductions in jobs.
The second area I want to talk about is TV factual programmes in England. Here a number of things have come together. Significant over-capacity even today – over-capacity that would get worse as the volume of commissions reduces. The movement of commissions to the nations. The need to create some space for competition in the WOCC. And on top of these things, the impact of the efficiency target.
Over the past few months, Peter Salmon has led a piece of work looking at the future of Vision Studios. We believe that in-house production is going to be a vital part of our future – indeed, this year we've seen some parts of in-house like Entertainment winning lots of fresh business in the WOCC. Factual is a critical part of in-house vital to deliver the new Knowledge strategy.
But to be strong, it needs to be the right size – and that means a substantial reduction from its current scale.
I know that this is a tough message, especially after the previous upheavals which Factual has gone through. It's painful for everyone involved. I've worked in and led this part of the BBC myself. I believe passionately in in-house factual production and I believe the BBC will need a really strong factual division 10, 20, 30 years from now.
But to achieve that and to stop what could be a relentless and demoralising downward spiral, we have to get the size of this part of the BBC right. With my colleagues we will work to preserve and support the many pools of critical talent and expertise that exist within Factual, especially in some of those vital specialist factual disciplines which produce some of our best landmarks. Where we can, we will create opportunities for talent to move to new homes within the BBC.
The need for speed
One of the things you've told us – told me – is that, if there are to be redundancies, you'd like the whole process to be as fast as possible. So this time we want to move with real speed.
We believe that the best way to minimise the total number of redundancies is to run all the processes at the same time. That means that in those areas where there are significant post reductions, we intend to ask people to express an interest in redundancy and simultaneously begin the process of selecting for retention, retraining, redeployment or redundancy.
As I said, we're going to put more money and more management effort into retraining and redeployment than we ever have before and we want to work with our unions to get that headline number of 1,800 redundancies lower if we can. We also want to spend as much of the licence fee on content and on retaining key talent as we can, so we intend to make two changes to our employment and redundancy policy.
First we intend to end pension augmentation for staff taking early retirement from April 2010 – this will not affect the vast majority of people who leave in the light of today's announcements before then.
Second we intend to end UPA allowances from January 2008 for new joiners, not for existing recipients.
So what would success look like in 2012, the year of the completion of switchover, the year of the London Olympics, one of the biggest broadcasting events in the BBC's history?
It will be a smaller BBC, but one which packs a bigger punch because it is more focused on quality and the content that really makes a difference to audiences. And it will be a BBC which is fully ready for digital.
People come to work in the BBC not because of masterful management strategies but because of the incredible creative opportunities it has always offered them. That is why so many people want to join and why so few want to leave. The BBC in 2012 must offer all its people more room for growth, more skills, more creative space.
But success in 2012 depends on our clarity and our courage today. We have a clear story about our future. If you love this organisation as I do, if you believe in it, I'd ask you to listen to the story today with an open mind. The people we need to deliver Creative Future are you.