The BBC has been told it can no longer shy away from implementing the worst of its £ 1 billion ($ 1.4 billion) cost-saving plans as it faces a perfect storm of pressures, including falling incomes, declining audiences and strong pressure from the deep – battered rivals.
A grim report by the UK’s National Audit Office (NAO) supervisory board said the BBC has in recent years “delayed what is considered the most difficult aspect of its savings,” including job cuts and cuts Content.
While the NAO noted that the BBC had “made progress in making savings” and hit £ 618 million of its overall goal, the watchdog warned that the worst was yet to come. It indicated that the BBC is delaying layoffs in its news as well as in units of nations and regions, while at the same time the total number of employees has increased 7% over the past four years.
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The NAO said the BBC needed to make these cuts amid “significant” financial and strategic pressures. The BBC’s £ 3.5bn license funding is in decline (it fell 8% last year) while future negotiations with the government on its funding and growth in streaming will put further pressure on its finances .
The NAO added that the BBC’s commercial arms revenue, including BBC Studios, “is not yet at a level to make any significant contribution to total revenue”. Additionally, there is market inflation fueled by streamers like Netflix, which not only appeal to the BBC’s audiences but also add to the cost of content. According to the BBC, the cost of drama has increased by two-thirds in the past five years.
The NAO said the BBC needed to put in place an urgent cost-cutting plan. “When making royalty decisions, the BBC needs to develop a clear financial plan for the future that outlines where to invest and how it will continue to generate savings,” said Gareth Davies, director of the NAO. “Without such a plan, it will be difficult for the BBC to effectively implement its new strategic priorities.”
A BBC spokesperson said: “As the NAO has pointed out, we have made significant savings and increased efficiency while maintaining our content spending and remaining the UK’s most widely used media organization. We have plans for urgent reforms aimed at delivering high value to all viewers and we will be further developing this over the coming months. “
One plan the BBC is considering is to cut 20% of its content and redirect that resource into program areas that offer better value for the audience. Director General Tim Davie first brought up this idea last year and it was featured on the NAO report, suggesting that it has become an important part of BBC planning.