BBC departments to share cost cutting ideas

2 November 2011


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2 November 2011 | Adam Leach

Internal departments at the BBC will share cost cutting best practice with each other to help hit the £1.9 million savings that must be delivered through the licence fee settlement.

In a report, published yesterday, the National Audit Office (NAO) praised the broadcaster for being on target to exceed its savings goal of three per cent by March 2013. The need to secure more savings follows a decision to freeze the licence fee settlement until 2017. The level of the TV licence fee is set by government and funds the BBC’s domestic broadcasting services.

The NAO said the BBC approach of assigning specific savings targets to departments had been successful in promoting ownership of targets and stimulating competition. However, it raised concerns that as a result, potential collaborative savings were not being identified. It said it will need to do so because it will have to make further savings of 16 per cent between 2013 and 2017.

A spokesperson for the BBC, told SM: "Procurement already adopts a central and co-ordinated approach to the purchase of goods and services across the organisation. The team negotiates and manages central contracts and frameworks for goods and services that support the BBC as a whole. Therefore, the divisions across the BBC benefit from Procurement’s ability to leverage the BBC’s purchasing power."

In response to the NAO report, the BBC Trust has said it will take action to ensure best practice is used to drive efficiency throughout the broadcaster’s departments.

Anthony Fry, BBC trustee with lead responsibility for value for money, said: “The lessons learned to date will be invaluable as we implement the challenging programme of efficiencies proposed as part of the Delivering Quality First process.”

As part of the Delivering Quality First Strategy, the BBC procurement team needs to deliver annual savings of £80 million. Speaking to SM last month, Gareth Nugent, head of strategic relationships at BBC Procurement, explained that his team is working to reduce the supplier base, volumes and specifications linked to internal stakeholder demands. The proposals aim to make efficiency savings in order to limit the impact on programmes and content. 

The report highlighted the approach taken by BBC News Group, which reduced headcount but preserved quality by increasing collaboration across teams as an example of challenging how services are delivered.

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