Magazine article Public Finance

Programme of Change at the BBC

Magazine article Public Finance

Programme of Change at the BBC

Article excerpt

THE economy may be on the mend but the mantra of doing more with less still prevails - particularly when you're a public service under constant scrutiny from the 96% of the UK population who use your services. For Anne Bulford, the BBC's managing director of finance and operations, who took on the role in June 2013, operational and financial rigour is at the core of her remit.

Moving from a Chief Operating Officer role at Channel 4 that included a period as interim chief executive, Bulford was just eight months into her £395,000-a-year job at the BBC when director-general Tony Hall charged her with carrying out a comprehensive efficiency review. The results were published in November and the ensuing 49-page report outlines the challenges that lie ahead.

The objective is to find more than £1.5bn in cumulative savings by the end of the current charter period, which ends on December 312016, while at the same time swallowing about £500m a year of new obligations placed on the corporation. These include broadband rollout, responsibility for the World Service (which until April 2014 fell under the responsibility of the Foreign Office), and funding local TV and Welsh language public service broadcaster S4C.

These challenges are set against a backdrop of flat licence fee income (held at £145.50 until 2016, representing a 26% cut in real-terms funding), not to mention inflation and finding the investment needed to stay relevant to audiences in the digital world. 'There is a very big focus on making savings without impacting the way in which our audience experience our content and services. It's a very tough challenge,' Bulford says.

The numbers are not for the faint-hearted but Bulford remains bullish, partly because the BBC is on track to hit its numbers. Since the start of the current charter in 2007, Bulford's report says it has delivered annual savings of £1.1bn out of £3.2bn in controllable costs.

Efficiency is a well-worn catchphrase at the BBC. Indeed since the mid-1990s, five such efficiency programmes have been rolled out, each seemingly named to shift the focus away from the underlying cost-cutting objectives. From 'Producer Choice' in the 1990s to 'Continuous Improvement' and the latest euphemism, 'Delivering Quality First', which pledges savings of £700m a year by 2017.

Bulford's three-pronged strategy has earmarked property rationalisation, procurement savings and reducing the cost of people as primary tasks. She claims the great majority of savings made to date can be attributed to true productivity increases and doing the same for less.

The size of the corporation's estate has already been reduced by 29%, despite the need to host new TV channels and radio stations. Even after rationalisation, in September 2014, 9.3% of the BBC's estate sat vacant, some way off its 5% target. However, the corporation has been discussing terms with a potential tenant for vacant space in the Media Village in west London, as part of a new strategy developed last year, which will also see staff relocate to surplus space in Birmingham, Salford, Bristol and Caversham. These arrangements are set to reduce vacant space to just 2.6%, significantly reducing costs. Plans are also in place to move BBC Wales to newer, smaller and more efficient headquarters in Cardiff.

'New cost-reducing targets will reduce the amount of space per person from 12 square metres today to 8.3 square metres, a target we've already reached at Broadcasting House,' Bulford states. The current public-sector target, set by central government, is 10 square metres per person.

Despite the progress, a report from the NAO warned that the corporation does not have good enough information on how its buildings are used to make the most of their potential. In January Margaret Hodge MP, the Labour chair of the Public Accounts Committee (PAC), described the costs of running Broadcasting House as 'staggering' at about 50% more than other properties in the same part of London and almost three times higher than the UK average for comparable buildings. …

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