The BBC relocated to Salford on time and maintained broadcast continuity, according to a report today by the National Audit Office for the BBC Trust. Moreover, the latest estimates show that the final cost of the move phase should be below the £233 million budget approved by the BBC Trust. However, it is too early to judge the long-term impact and value for money of the move for licence fee payers.
The NAO’s findings include the following:
- The BBC successfully completed the complex challenge of relocating to Salford, by using the right skills and processes, developing clear delivery plans and maintaining good communications. The BBC recruited staff with expertise in managing relocations and set up a project team that developed and implemented plans for the move.
- The BBC exceeded its target to relocate 30 per cent of staff from the 1,500 roles transferring from London to Salford (38 per cent relocated).
- To encourage sufficient staff to move, some of the allowances the BBC offered to incentivise and compensate relocating staff and minimise redundancy costs were more generous than it normally offers. For example, the remote location allowance covered the cost of renting property in Salford and travelling to and from London for two years. This allowed staff who were unable or unwilling to commit to moving permanently to keep their homes in the southeast. The BBC benchmarked some allowances, but controls over exceptions to its relocation policy for Salford were inadequate.
- The BBC estimates that the final cost of fitting out the buildings at Salford and moving people in will be £224 million, £9 million less than the revised budget approved by the BBC Trust in February 2011. The lifetime budgeted cost of relocation and operating costs up to 2030 is £942 million (or £573 million after discounting future costs to their present values). This cost does not take into account reduced spend on the BBC’s estate in London and Manchester as a result of the move.
- Whether the move delivers value for money will depend on the BBC’s ability to achieve a sustained improvement in audience approval in the north, embed new ways of working to achieve efficiencies of £151 million and provide sustainable economic benefits for the region.
Among the NAO’s recommendations are that the BBC Trust should periodically review progress against the aims in the original business case for the move; that the BBC should establish robust systems and maintain clear records when paying allowances, so that it can demonstrate they are appropriate in all cases; and that it should continue to seek recovery of all allowance payments repayable by staff who leave the BBC.
The BBC Trust accepts these recommendations and will ensure that they are implemented. In its published response to the NAO’s report the Trust has said that:
- It welcomes the NAO’s overall conclusion that the BBC managed the relocation to Salford on time and within budget, while successfully maintaining broadcast continuity for audiences.
- The BBC was able to maintain continuity for audiences and minimise redundancy costs by establishing a Salford relocation allowances policy that encouraged staff to move. The Trust accepts that such a policy was justified but, having established it, it considers that any exceptions should have been rare, clearly justified and supported by well-documented business cases. It is unacceptable, therefore, that the NAO found BBC management did not adequately document the reasons for all exceptions to the standard policy.
- There are encouraging signs that the anticipated benefits of the move are beginning to be realised. The BBC’s relative share of overall television viewing and reach to BBC radio in the north-west has increased when compared to the UK average, more collaborative and flexible ways of working have been introduced, some efficiency savings have been delivered and there has been significant economic investment in the region. However, the Trust agrees that it is too early to conclude that the move has met its long-term objectives and it will continue to periodically review progress against the aims for the move, including efficiency savings, at the appropriate points.