By Vivienne Russell | 6 March 2012
MPs have castigated the BBC for being ‘unambitious’ in finding savings and raising income.
A report issued by the Public Accounts Committee today concludes that only the ‘pressure’ of a reduced licence fee settlement forced the broadcaster to set an annual target of 3% efficiency savings.
When negotiating the licence fee in 2007, the BBC had claimed that it would reach its ‘efficiency frontier’ in 2008 and no more savings could be found. But it went on to meet its 3% efficiency target easily and is now set to save £560m a year by the end of 2012/13.
The committee said the early assumptions about efficiency savings were ‘very wide of the mark’ and could damage public trust in the BBC’s financial management and openness.
PAC member Richard Bacon said:
‘When negotiating the television licence fee settlement in 2007, the BBC
claimed that it could make no efficiency savings beyond 2008. But it now
forecasts that, by 2012/13, it will have delivered annual efficiency savings of
£560m and plans to make further annual savings of £400m by 2016/17.
‘It took the pressure of a licence fee settlement to force the BBC into setting a target of 3% annual savings, which it is comfortably on track to achieve.’
There was also criticism of the limited scope of the income the BBC plans to bring in through its commercial arms.
Bacon said: ‘The BBC’s plans for this are unambitious when placed in the context of the financial pressures on the broadcaster. We expect a clear explanation of why a £40m a year increase in commercial income is the limit of what can be achieved.’
The BBC today issued its latestquarterly expenses covering July to September 2011. These showed a 15% drop in the expenses claimed by senior managers at the corporation.
A BBC spokesman said: ‘There will always be unavoidable costs to keep the business running but we are mindful that we spend public money and we work hard to keep this expenditure to a minimum.’
