BBC to do a cost-cutting of £800m
BBC said that it has completed nearly a third of its current £800 million cost saving target; Ann Bulford, BBC deputy director general commented that while BBC sought to protect spending on content as much as possible, “savings cannot simply come from overheads”.
“It’s not possible to make savings on this scale without also making changes to services, which some audiences will notice. Simply put, we cannot reduce our cost base by a fifth and not see impact in our content,” she said.
BBC director-general Tony Hall has already set out plans to reinvent the public service broadcasting for a new generation, stating that BBC should be nimbler in allocating budgets and more entrepreneurial in responding to changes in the media market.
However, with fierce competition for talent and rights and rising audience expectations, Bulford said, “Reinventing the BBC at a time of unprecedented pressure will require difficult choices to be made.”
BBC’s current £800m cost-cutting target is on top of the £700m in savings it made as part of its previous efficiency programme, ‘Delivering Quality First’.
In 2017, BBC delivered a total annual saving of £722m, including £712m of sustainable, ongoing savings that will continue in subsequent financial years. BBC opted to close youth network BBC and relaunched it as an online-only offering. BBC also made savings on sports, notably giving up its rights to Formula 1 racing.
As a result of its earlier efforts, BBC claims that it has already reshaped itself into a streamlined business with fewer layers and divisions, less bureaucracy and accessible management.
BBC claims that in 2017-18 more than 94% of core controllable spend was on content, distribution and related support costs, with just 5.7% going on overheads needed to run the organisation.
The report shows how cutting property and senior manager costs, renegotiating major contracts and simplifying the BBC have helped ensure that 94 per cent of the BBC’s controllable budget was on content and delivery during 2018, with just 5.7 per cent going on general support activities.
The overall £800 million target, combined with changes to the ways people access and consume content, will mean that the programmes and services delivered will need review, as per the report.