Procurement contributes to annual savings of £1.1 billion at BBC

28 November 2014

"Savvy” procurement saved the BBC more than £70 million on goods and services this year, a report into the broadcaster's efficiency has stated.

Total category spend of £655 million across 11,500 vendors in 2013/2014 is managed via framework agreements or managed services, and competitive pricing led to savings across the function, according to Driving Efficiency at the BBC.

In one example, a competitive tender that resulted in Siemens becoming the single technology provider to the BBC, led to annual savings of £37 million. Additional savings via volume reductions through the adoption of strict policies and targets, and price negotiation with Atos (which acquired Siemens’ SIS division) have totalled £13 million over the 10-year contract.

Two major contracts re-procured in 2013 and 2014 for facilities management and domestic radio transmission are also saving the corporation £20 million a year.

Procurement is one of three areas of operation targeted for efficiencies – alongside people and property – that forms part of the BBC’s saving plan, Delivering Quality First. Since the start of the current 10-year BBC Charter in 2004, annual savings have grown to £1.1 billion. The report forecasts these will rise to £1.5 billion by 2016/17.

The BBC’s procurement team has been benchmarked regularly with the £690 million annual spend with strategic suppliers (with contracts worth over £5 million a year) subject to rigorous and regular re-procurement, the report stated.

“There’s always more to do and we continue to make sure we get value for money for licence fee payers,” said Anne Bulford, managing director, finance and operations at the corporation. “The BBC remains passionate about delivering the great public service TV, radio and online content that our audiences deserve, but after a long period of delivering annual savings, the challenges to avoid having to cut content are very real.”

“It’s vital that as much of the licence fee as possible goes straight to the programmes and services audiences love, and this report shows we’ve made great strides in becoming more efficient. We‘re doing far more for less,” she added.

 

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