16 May 2008
The BBC is on track to meet its target of £75m savings on procurement spending over three years, but could reduce its costs even further, MPs have found.
The broadcaster spends more than £500m a year on goods and services, and 'could secure more' savings in a number of areas, the Commons Public Accounts Committee says in a report, BBC procurement, published on May 13.
Overall procurement savings of 5% in 2006/07 concealed variations from less than 3% to more than 12%, the MPs found, and spending in categories such as temporary staffing had increased.
'The BBC could save money by aggregating its requirements and reducing its supplier management costs,' the report says. It notes that around £207m a year is
not spent through centrally negotiated contracts – and £26.5m of this is spread across 14,000 suppliers.
The MPs also warned that the benefits of centralised procurement could be lost where purchasing is outsourced. About 45% of the BBC's spending is on outsourced services, ranging from finance and human resources functions to independently made TV programmes.
PAC chair Edward Leigh welcomed the BBC's progress on its £75m savings target, but added: 'A closer analysis reveals, however, that the percentage savings were lowest in the areas where the BBC spends the most.'
Leigh also hit out at the BBC Trust's power to decide what spending would be scrutinised by the National Audit Office.
A spokesman for the BBC Trust said the corporation had 'exceeded its target of £75m in savings'. The BBC had already accepted NAO advice aimed at improving procurement and would 'review carefully' the PAC's additional recommendations, he said.
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