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Annual Review 2003/04
 
 
Financial Review

Broadcasting

BBC World Service Grant-in-Aid for 2003/04 increased by £19.1 million to £220.1 million (note 1a), comprising £188.1 million for operating expenditure, £5.2 million for a subscription to BBC Monitoring and £26.8 million for capital. This increase in funding resulted from the Government's 2000 and 2002 Spending Review settlements.

The additional funding was put to good use. It enabled us to finance significant additional programming and strengthen distribution to cover the war in Iraq and to continue the additional output in key languages of the Islamic world which we had commenced after 11 September 2001.

The surplus for the year of £9.9 million (note 1a) arises primarily because of a £9.4 million timing difference between the receipt of capital Grant-in-Aid in the year and depreciation and other capital charges being recognised in the 2003/04 statement of income and expenditure. This timing difference will reverse in future years.

Value for money

BBC World Service continued its ongoing programme of increasing value for money. We were able to increase further, to 89.1%, the proportion of funding spent directly on content production and delivery, with only 10.9% spent on support functions and overheads. We aim to increase this content percentage to at least 90% by 2005/06, the final year of the 2002 Spending Review period. We were also able to achieve efficiency savings on our operating costs of £3.6 million in the year.

We continue to search for opportunities to offset costs by raising additional income in a manner consistent with the BBC’s editorial and commercial guidelines. Despite tough market conditions around the world, external income of £3.6 million was generated in the year.

We add further value to the core Grant-in-Aid through partnerships with radio stations and internet service providers around the world, which rebroadcast our programmes and material at no cost to BBC World Service. This enables us to further expand reach without additional distribution costs.

BBC Monitoring

Subscription income from official customers (including BBC World Service Broadcasting) amounted to £21.9 million which, combined with income from other sources, produced total revenue for BBC Monitoring of £25.2 million. From 1 April 2003, HM Treasury approved the utilisation of BBC Monitoring’s accumulated cash reserves, which had arisen as a result of charging a return on capital employed to stakeholder customers. Previously, limitations had been placed on the use of these funds.

Andrew Hind
Chief Operating Officer and Director of Finance


Financial review
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