BBC settlement: At first glance it looks horrendous but it could have been so much worse
Raymond Snoddy says (in a whisper) that the BBC might not have done too badly in its licence fee battle with the government – “evidence of this can be seen from the obvious anger coming from Rupert Murdoch’s News International. David Cameron has not delivered on their hopes for a very much smaller BBC – something for which we should all be grateful”…
Naturally today’s headlines on the future of the BBC focused on one comment by Sir Michael Lyons – that the closure of some services “could not be ruled out”.
It was equally certain that the chairman of the BBC Trust refused to confirm that either BBC 3 or BBC Four was safe from the axe.
Sir Michael is a cautious man and would have been absolutely daft to rule anything out at this stage, before there has even been a proper review of the full implications of making an additional 16% cut over the next six years.
Such a cut will hurt. Many people will lose their jobs and several thousands posts will go.
But whisper it gently, this is not such a bad licence fee settlement for the BBC in all the political and economic circumstances and the corporation might just get through without the loss of any key service.
Above all it could have been so much worse.
The initial Conservative plan was for a root-and-branch investigation of everything the BBC does. The outcome would almost certainly have been a much smaller BBC with a very considerably smaller licence fee. Think of a cut of 20% or even more. That really would have meant the loss of a number of services.
The BBC was saved from that fate by the coalition’s urgent need to cut the public sector deficit. There was no time for a lengthy external inquiry.
The BBC got lucky again when, at the last minute, thanks to Lib Dem pressure, it escaped the imposition of paying for free licence fees for the over 75’s. Apart from abstract arguments about assaults on the BBC’s independence that would have led to a £600 million a year hit, plus in effect, an open-ended cheque in an ageing society.
In last month’s frantic negotiations the BBC offered up a frozen licence fee and taking on both the World Service and BBC Monitoring in return for a six year deal.
Culture secretary Jeremy Hunt added on paying for the Welsh Fourth Channel and a £25 million down-payment plus £5 million a year for his pet project, local television.
In the middle of the night director-general Mark Thompson checked all the permutations already fed into his excel spreadsheet and decided the BBC could live with such a deal.
At first glance it looks horrendous. A 16% cut in jobs at the BBC, for instance, equates to the loss of 4,000 people. More strikes, chaos, disruption and impoverished services?
It is a much more complex issue than that and numerous positive numbers lurk just beneath the surface, even before they calculate the advantage of knowing exactly where they stand for six years.
At the moment, the BBC is already committed to making efficiencies at the rate of 2% a year for the next two years. The corporation will then have to move up a gear to 4% a year for the following four years, beyond the reach of “normal” efficiency gains.
Yet the BBC gets to keep almost all the “digital dividend” when the move to digital is complete in 2012.
Across the period there will also be an estimated 4% increase in the number of licence fees because of the creation of new households. The BBC concedes it can increase the efficiency of licence fee collection and crack down harder on licence fee evasion.
The BBC is coming to an end of a massive period of capital investment – new headquarters in Scotland, the move to Salford, which will be financially beneficial in the medium term, and the move to new headquarters in W1.
Thomson also emphasised the pressure that can be put on external suppliers to cut rates. There has been more than a hint of extreme generosity to some of the businesses floated free from the BBC in the past.
The downward pressure on the money paid to stars and BBC executives is already being applied.
The arrival of the World Service is an additional cost of more than £200 million a year but considerable sums can be saved by integration with BBC News – and just maybe a better BBC news service as a result.
As for jobs, according to Thompson, staff turnover at the BBC currently runs at around 8% a year, though it is much lower for journalists and producers.
There will still be a gap of course but Thompson is not, at least at this stage, talking about service cuts. The 6Music fiasco is too fresh in his mind. The threat of closure hugely boosted the station’s audience. The Trust is talking now about BBC 4 having to “increase its impact”.
The solution is obvious. Threaten to close BBC Four – one of the very best things the BBC does – its impact and its audience will increase. If the threat of closure should ever become real my placard can be prepared very quickly for the demo.
Instead Thompson has been pointing to example of the BBC’s recent experience in cutting the numbers of hours of factual programmes by 20%. Extra money was devoted to a small number of high profile programmes such as Opera Italia and Wonders of the Universe.
As a result the public perception was that the BBC was doing more and better factual programmes.
In the age of multi-channel television the BBC should be less wary about repeats. Even if you sat in front of your TV 24 hours a day you couldn’t catch up with everything good on offer.
The BBC can save a lot of money by judicious directing of what are still enormous revenues.
The final evidence that the BBC might not have done too badly in the battle with the government was the obvious anger coming from Rupert Murdoch’s News International. David Cameron has not delivered on their hopes for a very much smaller BBC – something for which we should all be grateful.
(Raymond Snoddy presents BBC television viewer access programme Newswatch)