Grant-in-Aid funding increased by £5 million in the year to £225.1 million.This was made up of £193.1
million for operating expenditure, £5.2 million for a subscription to BBC Monitoring and £26.8 million
for capital expenditure.This increase resulted from the Government's Spending Review 2002.
During the year savings of £4.4 million across BBC World Service have been made to offset rising
costs. The largest part of these savings came from short-wave distribution costs. This has allowed all
of the £5 million of increased funding to be spent enhancing our output for the Middle East and
wider Islamic world, improving our newsgathering capabilities and developing our programme to
strengthen our FM partnerships around the world.
The end of the year saw the completion of one of the largest capital projects in recent years.
This was the implementation of a single digital production system across the whole of BBC World
Service. It is the biggest change in how programmes are made since audio tape was introduced
over 50 years ago. It means that we will be better placed to meet the demands of our audiences in
the future by using content more flexibly and by providing programmes in different formats for the
growing variety of partners around the world.
BBC World Service continues to look for ways of delivering better value for money. A review of
business support functions was started during the year to complement the work being undertaken in
the production departments to find better ways of working. The results of this work will be co-ordinated
with the plans now being developed for the move of BBC World Service from Bush House to
Broadcasting House in a few years' time.
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 £24.8 million. Since 1 April 2003, following HM Treasury and stakeholder approval, BBC
Monitoring has been utilising accumulated cash reserves, which had arisen as a result of charging a
return on capital employed to stakeholder customers in prior years. Previously, limitations had been
placed on the use of these funds.
Chief Operating Officer and Director of Finance, BBC World Service