Watchdog says BBC exceeding efficiency savings targets

We have a good track record in delivering value for money, and won’t stop searching for ways to become more efficient so even more of the licence fee goes into the programmes and services that people love.Anne Bulford, Managing Director, BBC Finance and Operations
Date: 10.03.2015     Last updated: 10.03.2015 at 12.12
Category: Corporate
Overall savings of £374m reported by the BBC up to the end of 2013-14 exceeded its target, says a new report by the National Audit Office today.

The report has found that the BBC’s Delivering Quality First efficiency programme, “has so far delivered value for money in that overall reported savings of £374m are broadly in line with forecasts, exceed implementations costs and appear to have had a limited impact on performance. The BBC has made savings from sources such as renegotiating existing contracts, limiting salary increases and reducing the number of more expensive senior staff.”

The NAO states the BBC has successfully cut payroll costs for public service broadcasting during the first two years of the programme by 17 per cent in real terms, or £58 million. Amyas Morse, head of the National Audit Office, said: “The BBC has made reported annual savings of £374 million by such means as renegotiating existing contracts, limiting salary increases and reducing the number of more expensive senior staff.”

At the end of September 2014, the BBC reported to the NAO that it was on track to meet its 2014-15 target and that it had developed plans for most of its remaining savings.

Welcoming today’s findings as a further vote of confidence for the BBC’s efficiency drive, Anne Bulford, Managing Director of Finance and Operations at the BBC, said:

"For just £2.80 a week, the BBC provides great value to licence fee payers, and, as this report makes clear, the BBC has exceeded its efficiency targets. We’re on track to save £1.5 billion a year by 2016-17 despite the licence fee being frozen and some of it being used by the Government for other projects such as broadband roll-out and local television.

"We have a good track record in delivering value for money, and won’t stop searching for ways to become more efficient so even more of the licence fee goes into the programmes and services that people love."

In February, the influential Culture Media and Sport Select Committee concluded in its report about the Future of the BBC that:

“The BBC’s achievement of cumulative savings of £1.1 billion since 2007 is commendable given the relatively small negative impact they have had on audiences’ appreciation and on reach of its services... We believe that the BBC has done well in the current Charter period, in light of increased choice and competition, in terms of overall reach and audience consumption and appreciation.”

In November last year, the BBC published a comprehensive review of efficiency that revealed an overall picture of impressive savings across the Royal Charter period against a backdrop of a flat licence fee:

  • By 2016/17 the BBC will save over £1.5 billion every year thanks to savings programmes run since 2007/8. Of this, £1.1 billion a year has already been reached.
  • Since the licence fee freeze in 2010, the BBC has mostly used efficiency savings to meet inflationary costs and to pay around £500 million a year of obligations laid down by Government, such as funding broadband roll-out, local TV and S4C, and taking over financing the World Service from the Foreign and Commonwealth Office.
  • The BBC will have delivered the equivalent of around 36 per cent in cumulative annual net efficiencies of addressable baseline in the decade to April 2015. This compares to 27 per cent by central government.
  • More than 90 per cent of core controllable spend is on content, distribution and their related support costs, leaving just 9 per cent of spend on the professional support needed to run the BBC. This is a 25 per cent reduction in the proportion of the licence fee spent on such overheads in four years.

BBC Press Office