Budget Proposal for BBC to Pay Over 75's TVL

[Teddy Bear]

The article about the attitude of the BBC as shown by their response to the proposal that they fund the over 75's free licence fee speaks for itself.
I hope the government has enough guts to carry it through and make the BBC reduce its bloated surplus - it'll be good for starters.

Budget cuts will give the BBC a taste of the real world

By Harry Phibbs

The Government is proposing that the BBC, with its astonishingly bloated budget, should make some contribution to the public sector economy drive.

The idea is that the BBC should pick up the cost of the free TV licence fees for the over 75s - rather than the present arrangement where the Government hands over the revenue.

I think the arrogant reaction of the BBC vindicates the proposal - which I hope will be confirmed in the Comprehensive Spending Review tomorrow.

They say it could lead to a real terms decrease in its programming budget of up to 26 per cent – the equivalent of the entire budget of BBC2. They say the ‘only solution’ would be a £20 licence fee increase as it is quite impossible for them to find any savings.

But the decision on the level of the licence fee is not a matter for the BBC. What are they suggesting - that they can just charge us as much as they like?

The comment about closing down BBC2 is also very revealing. As John Redwood said yesterday: ‘If one of our big food retailers wants its stores to cut their costs by three per cent, the managers do not normally respond to the boss’s e-mail by saying that means they will have to shut the bread department.

‘They usually work up a proposal to improve stock turn or lower purchasing costs or use staff more effectively. Public sector managers need to adopt a similar approach.’
The BBC spent £4.79 billion last year, including £3.45 billion from the licence fee. This year the fee revenue will be £3.6 billion, with other income also expected to rise.

The revenue from the Government for paying the over-75s’ licence fee is £556 million. So we are looking at spending cuts of 10 or 11 per cent. Somehow the Beeb immediately talks about taking 25 per cent out of making programmes.

It seems bureaucracy is sacrosanct. The 92 BBC suits on more than £150,000 a year are deemed untouchable. It is also absurd to say that when it comes to programme-making savings could only come from making fewer programmes or poorer quality programmes. The inefficiency and overmanning in the BBC's programme-making is beyond belief. Yet the ratings buster continues to be Dad's Army repeats.

The BBC is, at least, consistent in its policy on spending cuts for itself and the rest of the public sector. On its website it has an interactive section entitled Spending Review: What would you cut? It allows you to move a slide along for different Government Departments to reach £50 billion of savings.

But alongside, it gives you an ‘equivalent to’ section. The one on welfare only offers cuts in the basic state pension. According to the BBC, a one per cent cut in the health budget means leaving the hospitals empty for 10 days a year. Defence cut means ‘fewer service personnel’ - even though there are more civil servants in the MOD than soldiers in the armed forces.

The examples ‘are for illustration only.’ But how revealing that none of the examples ‘for illustration only’ involve cuts in the civil service, or the £40 billion spent on Quangos, or even our £14.5 billion budget contribution to the EU.

A 10 per cent budget saving will give the BBC some modest sense of the real world. They should not be allowed to put the licence fee up for the rest of us by a penny.

[Teddy Bear]

Well although the above proposal didn't go through, I suppose we have to be grateful for smaller mercies, as the final agreement does involve some cuts, as detailed below.

One of the things I'm concerned about is whether the fact that the BBC will be paying for the World Service directly will involve them being even more self serving than they are already, to the detriment of our society.

Time will tell.

Licence fee is frozen for six years: BBC heads off plan to pick up cost of free viewing for over-75s... but at what price?

By James Chapman, Paul Revoir and Gerri Peev
Last updated at 7:57 AM on 20th October 2010

The BBC licence fee is to be frozen until 2017 under a deal hammered out last night by Chancellor George Osborne.

The corporation will also be forced to pick up the cost of the BBC World Service, currently paid by the Foreign Office, and Welsh language channel S4C, funded by the Culture Department.

In addition, the BBC will have to pay £150million a year out of its licence fee cash towards an expansion of superfast broadband services.

Under the deal - a result of the Government playing ‘hardball’ - it must also rein in its burgeoning internet empire and creeping commercial activities.

In all, the moves will mean a 16 per cent real terms cut in the BBC’s budget - a figure that has triggered fury among senior figures at the corporation.

It is the first time since the 1950s that the licence fee, which is £145.50 a year, has been frozen for such a long period.

The next possible increase will come in April 2017.

BBC sources predicted the cuts would mean big job losses and raise question marks over the future of less popular services such as digital channels BBC3, which has showcased popular programmes such as Gavin & Stacey, and BBC4.

But the corporation did successfully mount a last-ditch attempt to head off an alternative proposal - revealed in yesterday’s Daily Mail - which would have meant it had to pick up the £550million bill for free TV licences for the over-75s.

Executives argued that given the rapidly ageing population, the move would have landed the BBC with an ever-expanding bill for which it would be impossible to plan effectively.

Liberal Democrat members of the Coalition also feared that asking the BBC to pay for a welfare policy would set a dangerous example and could threaten the broadcaster’s independence.

But the price the BBC is having to pay for resisting the free licences bill is substantial.
Mr Osborne and Culture Secretary Jeremy Hunt imposed an 11th-hour settlement that will cost the corporation slightly less per year.

Under the terms of last night’s deal, which will be confirmed in the Chancellor’s spending review today, the £229million annual costs of running the BBC World Service will be transferred from the Foreign Office to the BBC from 2014.

It will also take over from the taxpayer the £90million cost of Welsh language channel S4C and BBC Monitoring, a foreign news monitoring service largely funded by the Cabinet Office.

Whitehall sources said the original proposal would have enabled the BBC to try to ramp up the licence fee in the years ahead.

‘This is a better deal,’ said one. ‘It gives licence fee payers absolute certainty for years to come. When George Osborne said we’re all in this together, he meant it, and this shows that the BBC is no exception.

‘We played hardball with them and made them aware of the difficult challenges that the Government was facing and made them look at some difficult choices themselves.’

In addition, the BBC has made commitments to rein in activities ministers fear are having an impact on the commercial media market.

It will get rid of most of its commercial magazine business and reduce the content budget of BBC online by 25 per cent and hold it at that level for at least three years. In total, around £340million a year will have to be found from the BBC’s £3.6billion licence fee revenue.

A further £150million a year used to help prepare for the digital switch-over will be diverted into boosting access to superfast broadband.

Last night BBC Newsnight’s political editor Michael Crick said: ‘The corporation recognised they had to contribute to the spending review process, and bringing the World Service within the overall BBC budget was a logical move given the fact that BBC and World Service journalists will soon share the same building.’

But union leaders tonight voiced fears of a fresh round of job cuts at the BBC following the deal.

The broadcasting workers’ union Bectu accused the corporation of ‘throwing in the towel’.

General secretary Gerry Morrissey said: ‘How can you cut 16 per cent off your costs without affecting jobs or services?