By David Williams
The BBC is under fire from all sides, over everything from the licence fee to its staff salaries. Director general Mark Thompson talks exclusively to David Williams about how he plans to weather the storm
** Mark Thompson will be speaking about the role of public service bodies at the CIPFA conference on June 25 **
On a windowsill in an otherwise featureless BBC meeting room sit a cuddly Pudsey Bear and a toy Dalek. Together, the pair oversee Public Finance’s meeting with director general Mark Thompson, silently bearing witness to everything that is inimitable, best loved and least controversial about the broadcaster.
Those venerable creations are associated with the core of what the BBC is and does – but profound changes are taking place all around them. They overlook the sprawling BBC village, dominated by the instantly recognisable Television Centre.
Thompson, who will be speaking at the CIPFA conference next week, plans to change that view of west London beyond recognition. Television Centre is to be sold off. By 2012, the corporation hopes to move 2,500 employees to its new cutting-edge headquarters in Salford's MediaCityUK.
An evangelical Thompson explains: ‘The idea was to get a cluster of public sector and private companies to come together to create something big. The BBC as a catalyst, in this case, for urban renewal and also to create a critical mass of creative industries – that feels like quite a big new idea for the BBC.’
The BBC as a property development partner is a far cry from its founding credo to ‘inform, educate, and entertain’ the nation. But with the further impact of digital technology, the broadcaster’s work looks set to remain in flux for years to come.
And since it was established in 1922, the Beeb has always occupied a singular place in public life. ‘We’re unusual in many respects,’ says Thompson. ‘We’re unusual in the sense that many of the markets we operate in – labour markets, markets for things like buying programmes or sports rights – are essentially private sector markets.’
But recent moves to push the BBC into closer collaboration with other broadcasters suggest that its future might partly lie in supporting its rivals rather than competing with them.
Negotiations between the corporation’s sales arm, BBC Worldwide, and Channel 4 are ongoing, but old industry tensions remain. A proposed regional news tie-up between the BBC and ITV stalled acrimoniously earlier this month and Channel 4 chief Andy Duncan has publicly slammed the BBC for buying up foreign shows. He argued the BBC was effectively robbing commercial broadcasters of a potential asset in acquiring US imports such as Heroes and The Wire.
Underpinning the rows is a sense of bitterness around the BBC’s comparative financial stability. The television licence income that provides the vast majority of the corporation’s £3.6bn budget has increased at almost double the rate of inflation since 1997, while commercial channels have been devastated by the recession.
‘We’re all traditional rivals,' Thompson admits. ‘We’ve come from a world with a very well resourced, very successful main commercial company, ITV, which still left plenty of room for Channel 4 to be extremely successful as well as producing great output. But it’s a different dynamic now.’
Nevertheless, he hopes that redefining the BBC as a benevolent partner might help secure the licence fee, which some have pointed out is looking increasingly anachronistic as more shows become available online. ‘If we can combine some of [our] commercial assets with Channel 4’s, then the licence fee is helping to underpin the sector beyond the BBC,’ says Thompson. ‘That’s definitely the intention and it does strengthen the arguments for a licence-fee funded BBC.’
As does the BBC's brief regarding new technologies. By 2012, it will have engineered the switchover from analogue television to an exclusively digital service.
The BBC is also likely to play a significant role in providing every home in the country with a broadband internet connection, as recommended in Lord Carter’s Digital Britain report, released on June 16.
But many within the corporation are still nervous about what the coming years might hold. Auntie-bashing is still common in the populist press and the recession can only result in budget cuts across public services.
Already, the corporation is being accused of reaching beyond its public broadcasting remit and into commercial empire building. BBC Worldwide’s 2007 acquisition of Lonely Planet travel guides raised many eyebrows – including those of the Commons culture, media and sport committee, which pointed out that commercial activities must link to core programming.
In recent weeks, the Conservatives have proposed freezing the licence fee for a year – a stance that would save just £68m but has been read as an early statement of intent from the party.
Conservative shadow culture secretary Jeremy Hunt told Parliament: ‘The BBC needs to maintain its bond of trust with the British people. That means understanding that, when times are tough, you don’t just pocket the money that was allocated to you in happier times.’
A recent Public Accounts Committee report concluded that the BBC spends too much on radio presenters, and fails to benchmark costs both within the organisation and in comparison with rivals.
PAC chair Edward Leigh says the corporation must change. ‘It is a very bloated bureaucracy,’ he tells PF. ‘There are layers and layers of it – on the newsdesk their staffing is much bigger than in the commercial sector.’
A source of frustration for the PAC is that, unlike other public bodies, the BBC is able to use confidentiality agreements to withhold details of staff salaries from public scrutiny. ‘It’s ridiculous that they’re not on exactly the same basis as other taxpayer-funded organisations,’ says Leigh.
Within a week of the PAC report, the BBC – ever sensitive to accusations of excess – announced a 25%–40% pay cut for all ‘top talent’ earning over £100,000 a year.
And Thompson is proud of his record on efficiencies. He is demanding annual savings of 5% a year from the BBC’s television and journalism departments, while a £1.9bn cuts programme has already shrunk the organisation by 7,200 posts since 2005, with another 1,200 to follow. ‘Up to now we’ve been able to live within our means and invest in the future, in services like [catch-up facility] iPlayer. But the choices are going to be harder,’ he says.
‘I’ve been very aggressive on value for money and the efficiency agenda. But there are some parts of the organisation, like local radio stations, where I can’t see where it’s going to come from.
‘Every new service we launch, [the public] lap it up. They love the new stuff we’re doing. And they still want the traditional services to be as good as they’ve ever been, if not better.’
As for the response to the recession, he says: ‘Areas of particular focus are going to be high quality, distinctive content that you couldn’t be sure of getting without the BBC – particularly in areas like news, information, programmes of educational value, of cultural value, and great
programmes for children and families.’
Which suggests that, whatever else is in store for the BBC, the future for Pudsey Bear and the Dalek remains secure.
Mark Thompson is director general of the BBC. He will be speaking about the role of public service bodies at the CIPFA conference on June 25
