Pubcaster to make $1.03 billion savings a year

The BBC is wielding the ax, with 2,000 jobs to be eliminated and services cut in an attempt to save some £670 million ($1.03 billion) by 2016.

The pubcaster is undertaking what amounts to a 20% reduction in its operations to carve out what’s described as a “smaller and radically reshaped BBC.”

This effort “puts quality and creativity first,” said BBC director-general Mark Thompson on Thursday. “It’s a plan for a smaller BBC, but a BBC that uses its resources more effectively and collaboratively to deliver a full range of services to the public.”But he warned, “It’s my judgment that this is the last time the BBC will be able to make this level of savings without a substantial loss of services or quality or both.”

While no channels will close, the changes — the result of a nine-month review called Delivering Quality First — will include fewer entertainment shows, a shrunken BBC3 and BBC4 and more repeats on BBC2.

The cuts, which also include a full exit from the BBC’s West London base and a further shift of operations to northern England, Scotland, Wales and Northern Ireland, come as part of the pubcaster’s mandate to meet last year’s license fee agreement with the government while taking on extra funding responsibilities.

In 2005, Thompson announced plans to cut 3,780 posts over three years, which was expected to save $548 million a year. The plan to move out of West London could help raise more coin for the Beeb by allowing it to sell some of its valuable real estate.

In the latest round of pruning, the BBC’s sports budget will be cut by 15% — the pubcaster has already agreed to share Formula One motor racing rights with BSkyB. Funding for a “radically refocused” website will be slashed by 25%. There will be less coin for acquired films and series and cuts in entertainment programs that have “lower impact” on BBC1 and BBC2.

All new general daytime programs will be shifted to BBC1, while BBC2 will air more international affairs programs and sports.

BBC3, which will move to the northern base in Salford, and BBC4 will play a more “supporting role” to BBC1 and BBC2.

Radio will also be hit with cuts in original programming across BBC networks, such as comedy on Radio 2 and Radio 5, as well as fewer lunchtime concerts on Radio 3. More news bulletins will be shared across radio networks. However, flagship station Radio 4 will be protected.

Overall content savings total $313 million a year for the next six years with flagship channel BBC1’s underlying budget expected to fall by just 3% over the period.

Children’s programming will be protected. However, the Beeb is aiming to drop kids shows such as veteran “Blue Peter” from BBC1 sometime after Blighty switches to digital in 2012 and air them exclusively on CBBC and CBeebies.

The pubcaster will aim for “leaner, flatter management structures” with no more than five layers of staff between the director general and junior staffers. Senior positions in the org will fall from 3% to 1% of staff.

The Beeb says that despite the cuts, it will continue to prioritize investing in new programs and the move to digital.

In October, the government and the BBC locked a deal that the annual license fee, paid by every home with a TV, should remain at $223 until the end of the BBC Charter in 2017.

In addition, it was decided last year that the BBC would take over funding from the government for the BBC World Service and BBC Monitoring; expand its partnership with the Welsh-language TV service S4C; support new local TV services; and raise and extend the funds set aside in the license fee for digital TV switchover from $204 million per year to $230 million per year, repurposed to support the broadband rollout.

“The BBC is far from perfect, but it is a great institution and, at its best, a great broadcaster,” said BBC Trust chairman Chris Patten. “We have a tough and challenging new license fee settlement, but it should still be possible to run an outstanding broadcaster on £3.5 billion ($5.36 billion) a year.”

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