Finance staff at the BBC, many of whom already face losing their jobs, were hit with more bad news last week as culture secretary Chris Smith announced that the corporation’s planned £750m budget cuts did not go far enough. Smith said he wanted the corporation to make further savings on top of these that will lead to the estimated axing of 1,000 jobs by 2003 as part of the existing restructuring plan. He added he wanted the BBC to shave nearer £1bn off its costs over the next six years, in a bid to pump further funds into programming. It is feared director-general Greg Dyke may be tempted to announce further cuts and job losses as a result of the criticism – many of which could come from the finance, property and business departments. Some 2,700 employees work in the professional services department, including many finance staff. A BBC spokeswoman said it was not possible to determine how many accountants are among this number. But it is likely to be significant. The recruitment section of its website says: ‘The BBC employs both chartered and certified accountants, many of whom join from the top accountancy firms and from industry. Clerical posts also arise and are advertised as appropriate.’ Last week Accountancy Age revealed that the professional services department is expected to reduce overheads by 27%, and, following the culture secretary’s comments, it is feared this figure could increase even further. The BBC has some 21,000 people under contract at any one time. There is also expected to be reorganisation in the drama, entertainment and factual programming departments, with only BBC News set to remain unscathed. These new savings – largely from support services – came as the BBC announced the creation of a BBC Technology arm and changes to BBC Resources, which is likely to lead to around 200 job losses and increased commercial revenue to the BBC. When he announced the restructuring plan, Dyke said he wanted to reduce the amount of money spent on running the BBC and increase the proportion of its income spent on programmes and services from 76% to 85%. He said: ‘I asked the directors of the new divisions to think radically and come up with structures that will help the BBC deliver better programmes and services, but to also look at how we could do it more efficiently. ‘Their responses have been fast and have already stimulated action. Most importantly, they will help us put in place a robust structure that will help the BBC operate in a more dynamic, creative way. ‘The extra money we plan to spend on programmes and services will come from three main areas – job losses; additional commercial revenue; and smarter buying and simpler processes. Changes will not come without some pain and upheaval, and will involve redundancies. We will deal with everyone fairly and properly,’ he added. The plan for finance will depend on the successful introduction of Apollo, a software package which is due to replace 13 financial systems with one – and reducing business units from 150 to 60. Such swinging cuts have never before been made at the BBC. PROFILE: JOHN SMITH, DIRECTOR OF FINANCE John Smith, FCA, is the director of finance, property and business affairs, responsible for overseeing all aspects of the BBC’s finances. He moved to television in 1989 after having worked at a senior level in the British Rail Group, Travellers Fare and BT Advertising as well as gaining experience in internal and external audit and risk assessment. His first BBC role was in the corporate finance office, where, in 1990, he negotiated the first contracts introducing private sector competition for television licence fee collection and enforcement when responsibility passed to the BBC. In 1992 Smith was appointed financial controller, network television before becoming deputy finance director in 1996 and taking up his current position in 1997. He has been a director of Vickers plc and the Royal Television Society. A SHORT HISTORY OF THE BBC 1922 – British Broadcasting Company founded 1922 – Ten shilling broadcasting licence fee introduced 1923 – Radio Times published (Price 2d) 1927 – The BBC established by Royal Charter as the British Broadcasting Corporation – Sir John Reith becomes the first director general. 1940 – 98% of population could ‘listen in’ to the BBC’s radio services. Nearly nine million ten shilling listening licences had been sold. 1955 – ITV launched 1957 – Queen broadcast her Christmas message on television for the first time. 1967 – Radio 1 launched 1990 – Almost 64% of households have video recorder REVIEW OF THE BBC’S FINANCES Mid-tier firm Pannell Kerr Forster is carrying out an independent review of the openness and transparency of the BBC’s finances – just 12 months after being hired by the government to examine the scope for cutbacks within its budget. Last year the firm was called in by Chris Smith, the culture secretary. Among Pannell Kerr Forster’s recommendations were: – Efficiencies of #50m to be achieved in the costs of ‘new services’ – Targets for efficiences to be increased by #20m per annum over seven years – Reduce cost of licence collection by nine per cent – BBC’s property strategy to be reviewed The review will examine the level of information provided in the corporation’s annual report and accounts as well as how far the reporting meets the needs of the royal charter under which the BBC operates. The BBC’s annual report and accounts was published on 21 June. HOW THE BBC SPENDS THE LICENCE FEE Total – £2,318m £823m – BBC One£421m – BBC Two £207m – Nations and regions television £158m – Nations, regions and local radio£#114m – Licence fee collection costs £89m – BBC Radio 4 £65m – BBC Radio 5 Live £64m – BBC Radio 3 £57m – Corporate centre £52m – BBC Choice £50m – BBC One and Two widescreen £44m – BBC Radio 2 £43m – BBC Radio 1 £32m – BBC Online £25m – Restructuring £21m – BBC Knowledge £10m – Digital Radio £6m – Digital Text £4m – BBC Parliament (Figures from 1999/2000 accounts).
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