Post by Teddy Bear on May 30, 2008 23:13:54 GMT
BBC runs £36m over budget in spending on its websites
Dan Sabbagh
The BBC has spent almost £36 million more than planned running its family of websites in the past year, it was disclosed yesterday.
The site had a budget of £74.2 million but spent £110 million at a time when commercial rivals are already complaining about the impact that the public broadcaster is having on their businesses.
The budget overspill, uncovered by the BBC Trust, the corporation’s regulator, was described by that body as “a serious breach” that stems from “a lack of financial accountability” in the way that BBC websites are run.
Jeremy Hunt, the Shadow Culture Secretary, said that the review showed that “significant changes were needed to the way bbc.co.uk is run” and said that he expected the corporation to cut back its spending. “The test will be whether we actually see bbc.co.uk withdrawing from areas that the market is able to provide,” he added.
BBC-owned websites are the most popular British-owned destinations on the internet – bbc.co.uk is the third-most-visited site in Britain, after Google and Microsoft-owned sites, attracting 16.6 million Britons monthly, according to figures from Nielsen Research.
Technology spending to support BBC websites was wrongly allocated elsewhere, in an error that amounted to £13.8 million; while employee costs were £11.1 million higher because people who were working to support bbc.co.uk’s activities were being placed on other budgets. Readjusting the figures means that budgets elsewhere will be cut.
Don Foster, the Liberal Democrat culture spokesman, described the budget breach as an indictment of the way the BBC is run. “A cocktail of overspending and budget mismanagement has led to this huge increase. Not only has the BBC lost track of a phenomenal sum of money, but this mismanagement will now directly impact on the future development of this popular service.”
The BBC Trust decided it would adopt “a cautious approach to new investment”. The BBC wants to increase its online spending by £39 million next year to invest in better technology, and spend further unspecified sums on controversial local video news services and education sites for six to ten-year-olds.
If all were approved that would take the BBC’s online budget to well over £150 million, although Patricia Hodg-son, a member of the BBC Trust, said that the local news and education services would be subject to a “public value test” to see if they had an unfair impact on commercial rivals. Cash-strapped regional newspaper owners are unhappy that the BBC could take online readers away from their sites.
A statement from the BBC’s management said that the budgeting problems were “regrettable and we recognise the need to address this” and had arisen because employees who worked on bbc.co.uk were spread across the corporation.
Elsewhere the BBC Trust gave the bbc.co.uk site a largely positive review, describing it as an “excellent service that is highly valued” by the public, although “more needs to be done to ensure that all parts of bbc.co.uk are distinctive” from commercial offerings.
However, unlike the last review of the service, led by Philip Graf, the trust did not recommend that the BBC close any sites. Mr Graf’s review in 2004 forced the corporation to close websites covering fantasy football, event listing and soap opera gossip.
Dan Sabbagh
The BBC has spent almost £36 million more than planned running its family of websites in the past year, it was disclosed yesterday.
The site had a budget of £74.2 million but spent £110 million at a time when commercial rivals are already complaining about the impact that the public broadcaster is having on their businesses.
The budget overspill, uncovered by the BBC Trust, the corporation’s regulator, was described by that body as “a serious breach” that stems from “a lack of financial accountability” in the way that BBC websites are run.
Jeremy Hunt, the Shadow Culture Secretary, said that the review showed that “significant changes were needed to the way bbc.co.uk is run” and said that he expected the corporation to cut back its spending. “The test will be whether we actually see bbc.co.uk withdrawing from areas that the market is able to provide,” he added.
BBC-owned websites are the most popular British-owned destinations on the internet – bbc.co.uk is the third-most-visited site in Britain, after Google and Microsoft-owned sites, attracting 16.6 million Britons monthly, according to figures from Nielsen Research.
Technology spending to support BBC websites was wrongly allocated elsewhere, in an error that amounted to £13.8 million; while employee costs were £11.1 million higher because people who were working to support bbc.co.uk’s activities were being placed on other budgets. Readjusting the figures means that budgets elsewhere will be cut.
Don Foster, the Liberal Democrat culture spokesman, described the budget breach as an indictment of the way the BBC is run. “A cocktail of overspending and budget mismanagement has led to this huge increase. Not only has the BBC lost track of a phenomenal sum of money, but this mismanagement will now directly impact on the future development of this popular service.”
The BBC Trust decided it would adopt “a cautious approach to new investment”. The BBC wants to increase its online spending by £39 million next year to invest in better technology, and spend further unspecified sums on controversial local video news services and education sites for six to ten-year-olds.
If all were approved that would take the BBC’s online budget to well over £150 million, although Patricia Hodg-son, a member of the BBC Trust, said that the local news and education services would be subject to a “public value test” to see if they had an unfair impact on commercial rivals. Cash-strapped regional newspaper owners are unhappy that the BBC could take online readers away from their sites.
A statement from the BBC’s management said that the budgeting problems were “regrettable and we recognise the need to address this” and had arisen because employees who worked on bbc.co.uk were spread across the corporation.
Elsewhere the BBC Trust gave the bbc.co.uk site a largely positive review, describing it as an “excellent service that is highly valued” by the public, although “more needs to be done to ensure that all parts of bbc.co.uk are distinctive” from commercial offerings.
However, unlike the last review of the service, led by Philip Graf, the trust did not recommend that the BBC close any sites. Mr Graf’s review in 2004 forced the corporation to close websites covering fantasy football, event listing and soap opera gossip.