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National Audit Office report: The BBC’s move to Salford

The BBC’s move to Salford

The relocation took place on time and without disruption to broadcasts and should be within budget. But it is too early to judge value for money for licence fee payers.

“The BBC has struck a sound balance in its handling of this move, part of a commitment agreed during the last Charter to better serve all audiences across the UK. Relocation allowances have helped to ensure continuity for audiences by encouraging a sufficient proportion of London staff to move, while over 250 new staff were recruited from the Greater Manchester area. Now a solid and thriving production base with major live programming broadcast 24 hours a day, Salford has a strong working culture that should deliver long-term improvements in both creativity and efficiency, as long as the BBC keeps focused on these objectives.Given that the move was well-managed and within budget, however, it is disappointing that some of the controls on relocation payments proved inadequate and we would not expect a repeat of this with any future moves." Anthony Fry, Chair of the Trust’s Finance Committee, 14 May 2013 “The BBC relocated to Salford on time and without disruption to broadcast services, and the final cost of moving should be within budget. Skills were maintained and redundancy costs reduced by offering London-based staff more generous relocation packages than it usually offers to encourage them to move, though the BBC could have controlled these better. However, it is too early to judge whether the move will achieve value for money for licence fee payers. It is welcome that the BBC has developed an appropriate approach to measuring the future impacts of the move but it still needs to explain how it is going to make all of its planned efficiency savings.

Amyas Morse, head of the National Audit Office

 

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.

 

Publication details:

Published date: May 14, 2013