The BBC’s ongoing cost reduction programme ‘Delivering Quality First’ has so far delivered value for money, according to a report by the National Audit Office. Reported savings of £374 million have exceeded implementation costs and have had a limited impact on audience perceptions.
The report finds, however, that the BBC plans to make around 85% of remaining savings from productivity improvements that will involve more challenging and potentially disruptive changes to structures and ways of working.
The findings from the report include the following:
- The overall savings of £374 million reported by the BBC up to the end of 2013-14 exceeded its milestone target of £367 million, although annual sustainable savings were 4% less than planned. The BBC has slipped against its interim milestones for making sustainable savings because it made fewer productivity savings and earned less commercial income than it planned.
- The BBC established a well-designed reporting system with clear accountabilities, supported by external review, to provide assurance that reported savings are genuine.
- The BBC cut public service broadcasting staff costs by 17% during the first two years of the programme, despite staff numbers falling by only 1% overall.
- To inform its savings plans, the BBC could make more use of data held by individual divisions about how they have cut costs.
- The Programme has so far had a limited impact on audiences according to the BBC’s performance measures.
- Although the BBC has developed plans for most of its remaining savings, these plans involve significantly greater challenges compared to the initial years of the Programme. If the BBC is not able to make the planned productivity savings, it risks having to make further reductions to scope.
- Some cost reductions secured up to the end of the Programme in March 2017, when the current licence fee settlement ends, might not be sustainable in later years.