NAO: BBC on Track to Deliver Cost-Savings Targets


The BBC is on track to meet its current savings targets but will likely need to make further expenditure cuts in the coming years as it faces falling audience shares and fewer people paying a license fee, according to the U.K.’s National Audit Office (NAO).

The British pubcaster is on a five-year plan to deliver savings of £1 billion a year by 2021-22. It is currently in the midst of negotiating a new license fee agreement with the government for 2022 to 2023 and will then embark on a new five-year savings plan. It is expected to exceed its original savings target of £800 million a year by 2021-22 and is largely on track to meet its increased target of £1 billion a year, NAO says. In September, the BBC said it would deliver savings of £971 million a year by March 2022, 4 percent under its target. At the time, the BBC said that 41 percent of its annual savings would come from cuts to content and the scope of services, and 11 percent from changes to the scheduling mix. It also projected that 12 percent of its £971 million annual savings would come from income generation, significantly up from the 2 percent delivered under the previous savings program, driven by an increase in the amount of third-party funding of BBC-commissioned productions. In cutting content spend and adapting to the challenges of the pandemic, the volume of repeats shown across the BBC’s three main television channels has increased.

The NAO notes that BBC’s approach to its savings program could be improved, including in staffing reductions and consistency in implementation across the organization. Depending on the outcome of the next license fee negotiations, the BBC expects it will need to make further reductions to content and services across its television, radio and news operations. “To maximize its ability to deliver savings, the BBC must improve the information it collects on the impact of its savings measures. It should also ensure it implements lessons from the Covid-19 pandemic and pursues further standardization of operations across the organization in order to deliver further savings,” the NAO says.

Gareth Davies, the head of the NAO, commented, “Over the past decade the BBC has consistently made savings and is largely on course to achieve its £1 billion annual savings target by 2021-22. However, over the coming years it will need to make significant further savings at the same time as addressing a range of other challenges, not least its declining audience share. The BBC must ensure its savings plans do not further erode its position with audiences.”

Responding to the NAO report, the BBC noted: “From a BBC-wide perspective, we will continue to monitor centrally and embed the strong governance and tracking which has helped ensure delivery of our savings plans to date. We will also continue to build on lessons learned to improve future reporting for the second half of this Charter period and following the upcoming license fee settlement.”

The BBC also accepted NAO’s recommendation that it should include consideration of the risk that relatively short-term content savings measures may reduce the long-term value of the IP generated when accepting third-party funding. “[We] will continue to consider the long-term value when we accept third-party funding for our content. When working with independent production companies, under our commissioning terms of trade regulated by Ofcom, the producer retains all intellectual property in the long term.”