BBC Looks for Additional Savings

LONDON, November 13: In an
e-mail to BBC staff, the public broadcaster's director-general, Mark Thompson, has called for additional savings across the group in order to cope
with a £140 million shortfall in finances over the next five years.

In the e-mail, published
on The Guardian's website today,
Thompson noted that the BBC "is not immune" to the economic downturn.
"But we are in a stronger place than most as a result of action we've
taken over the last few years to reduce our costs."

In the last four years, he
said, costs have been reduced by £350 million. "Our ongoing efficiency
targets mean we need to continue to cut costs by 3 percent every year, that
amounts to savings of £535 million a year."

The economic crisis has
created two factors that are impacting the BBC's financial health, Thompson
explained: "a sharp decline in the commercial property market, and the
consequences of inflation on a fixed revenue business like ours." The
timetable to sell off Television Centre and Woodlands by 2013, Thompson said,
would need to be reviewed as a result of current market conditions. "Delay
will have a knock-on effect on our spending plans, a point made starkly
yesterday by Chris Kane, the BBC's head of corporate real estate, who reported
that we face as much as a £140 million shortfall over the next five years if we
are unable to dispose of these assets."

Thompson continued,
"Inflation is an issue too." With this rise in expenses, the BBC has
implemented new policies on the use of taxis, limits on entertaining,
attendance at award ceremonies and conferences. "For all large
organizations, corporate hospitality is an important part of doing business.
However, this year we will significantly reduce our spend in this area and we
will have targets to achieve further reductions over the course of the current
license fee period."

Further, a team of
executives from the strategy and finance division is looking at possible cost
savings across the organization. "Our guiding principles are to maintain
the high-quality output … [and] to minimize any further large-scale job
losses."

—By Mansha Daswani