Press Office
Independent Report Into BBC Funding Published
058/06
26 April 2006
An independent report into the future funding needs of the BBC has today been published by the Department for Culture, Media and Sport.
DCMS commissioned PKF to carry out a financial analysis of the BBC’s value for money plans, its bid for the next licence fee settlement and its commercial services. The work is part of a wider review to determine the level of the licence fee from April 2007, which also includes a public seminar with industry representation and willingness to pay research, which will provide information on the public’s views.
Overall the PKF report, entitled Review of the BBC Value for Money and Efficiency Programmes, concludes:
“We consider that our detailed report contains specific information for the Government to progress discussions with the BBC which would point to a lower settlement than currently sought. There are, however, a number of areas, especially in relation to digital switchover, where figures can only be finalised following policy decisions by Government.”
The BBC has submitted a funding bid for the next seven years for a yearly increase of Retail Price Index (RPI) plus 2.3 per cent, excluding the cost of funding support to help vulnerable people switch over to digital television.
Notes to Editors
1. The report Review of the BBC Value for Money and Efficiency Programmes is available online. Commercially sensitive material has been removed from the final published version of the report.
2. The current settlement for the BBC licence fee is due to expire at the end of the 2006/07 financial year and consists of an annual increase of RPI plus 1.5 per cent. The BBC has submitted a funding bid for the next seven years for a yearly increase of RPI plus 2.3 per cent, excluding the cost of funding support to help vulnerable people switch over to digital television. A colour television licence currently costs £131.50 and a black and white licence currently costs £44.00. Television licence fee income in 2004-05 was £2,940m. The BBC also received £432 million from the Department for Work & Pensions for free television licences issued to people aged 75 or over.
3. PKF’s remit was:
- To assist the DCMS in considering the BBC’s efficiency and value for money.
- To assist the DCMS in considering the assumptions and arguments underpinning the BBC’s assessment of future funding needs.
- To assist the DCMS in assessing the potential future contribution of the BBC’s commercial services within the new policy framework.
4. PKF is a UK firm of accountants and business advisers, which specialises in advising the management of developing private and public businesses.
5. Lord Burns, a cross-bench peer, who has acted as independent adviser to the Secretary of State on BBC Charter Review, will chair the stakeholder seminar on the licence fee on Friday 5 May. The seminar will examine issues including the BBC's current settlement, cost pressures, efficiency, technological development and the BBC's own future funding proposals.
6. The BBC's current Charter expires at the end of 2006. The new Charter and Agreement will be finalised later this year. The green paper, white paper, draft Charter and Agreement and regulatory impact assessment can be accessed at www.bbccharterreview.org.uk. For further details of the white paper see DCMS press release 030/06 published on 14 March 2006.
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