Mark Thompson, the director general of the BBC, has told the Guardian he is aiming to make annual savings of half a billion pounds to ensure the public broadcaster can function within the terms of its recently agreed licence fee settlement.

In an interview with Media Guardian, Thompson said he expects to make efficiency savings of £330m a year by slashing overheads – including cutting the cost of licence fee collection and targeting evaders of the £145.50 household levy.

The BBC will also cut a quarter from its online spending – currently running at £200m a year – and make unspecified but significant savings by merging the World Service with BBC News in 2014 because "however well-resourced the BBC is, we cannot afford to run two global news operations".

Six weeks ago the BBC accepted a freeze in the licence fee until March 2017, and agreed to take on the costs of running the World Service. But until now the director general has provided little indication as to how he believes the BBC will be able to afford the bill.

He also made clear that he will also target further efficiencies in TV, with under-pressure areas such as sport and US programmes the first targets, but will not offer further details until the new year when he has had "a big conversation" across the organisation to establish how the BBC can best prioritise.

The director general would not be drawn on the likely impact on jobs, other than to say that the BBC will have to operate on a smaller staff than its current 23,000. But he did promise that no TV channels or radio stations would come off air because of lack of resources.

Any attempts at cutbacks are likely to prove unpopular internally, with the BBC's unions long opposed to compulsory redundancies. Efforts by management to cut the size of the BBC's pension deficit by reducing the rate of future increases to pensionable benefit prompted two days of industrial action by the NUJ last month that forced news programmes such as Today and Newsnight off air.

Thompson earned £838,000 last year, but has agreed to see his pension contributions cut and forgo a month's salary, all of which is expected to see his total remuneration drop to about £600,000 in 2011. But while Thompson said the BBC was targeting cuts to its pay bill for senior staff, he is not prepared to entertain any further discussion on trimming his own pay, saying: "I don't think there is anything I can usefully add on this."

He said the BBC faced a "tough few years" but added: "When we model all the comings and goings, it is possible for us to take on and afford the new obligations." He wanted to focus on more "impactful" programmes, highlighting a new BBC2 series about the power of the British novel fronted by writer Sebastian Faulks – an example of doing "fewer things better".


By Dan Sabbagh.

Source:-
http://www.guardian.co.uk/media/2010/dec/05/bbc-mark-thompson-half-billion-cuts