The BBC’s Efficiency Programme

Audit Summary

Publication Date:
November 2011

Audit Office:
National Audit Office

Link to full report:
http://www.nao.org.uk/report/the-bbcs-efficiency-programme/

This report examines the BBC’s progress to date in delivering the savings required, and assesses the BBC’s approach to delivering the programme against the principles of effective structured cost reduction.

The report does not examine in detail the individual initiatives through which the BBC is delivering savings. Instead the team audited the processes put in place by the BBC to manage the programme and validate and challenge the savings delivered.

The BBC is delivering value for money from its efficiency programme in that it is on track to exceed its target of delivering £487 million sustainable, cash releasing net savings by 2012-13, whilst its overall performance in terms of audience measures has not declined. The efficiency programme is therefore proving a clear success in the terms set for it.
It is, however, hard to say whether the target set was sufficiently stretching and the BBC cannot say whether all the savings represent genuine efficiencies. To manage within its 2010 licence fee settlement the BBC must build on the successful elements of its efficiency programme by strengthening its approach to targeting savings and creating a culture of challenging cost on a continuing basis.
Although the BBC is on track to achieve its overall target for the programme, the performance of individual areas of the BBC in meeting their targets varies. As at April 2011, nine of twelve areas were ahead of schedule, with North, Future Media & Technology and Workplace behind. The BBC’s Internal Audit Department conducted a review of how areas were managing the programme that highlighted a lack of senior management control and insufficient embedding of risk management in two of the three that are currently behind target (Future Media & Technology and Workplace). By contrast BBC Vision, which had implemented strong governance arrangements, is ahead of schedule.

The BBC should continue to explore opportunities to challenge its perceptions about what its activities should cost to deliver, and use the resulting insights to identify and deliver cost savings.
The BBC should prioritise these savings mandated by its new license fee settlement) by using a detailed analysis of the value its activities contribute to its objectives.
The BBC should review its approach to accounting for external factors when measuring its performance and one way the BBC could adapt its performance management framework is to give more focus to areas where it has greater influence over the outcomes.
The BBC should:
- evaluate the approaches taken by different areas to identify which have proved most effective; and
- use this evaluation to develop a consistent approach to identifying, prioritising, monitoring and evaluating initiatives to improve the efficiency of its activities.
In seeking to improve the efficiency of its operations in future, the BBC should challenge activities, as well as discrete areas of the organisation. One way of promoting this approach is to make named individuals responsible for activities that cross areas.