Mark Thompson tells staff rarget for cuts will rise from 16% to 20% to free up resources for programming and technology.

The BBC director general, Mark Thompson, told staff today that he was raising the target for cuts at the corporation from 16% to 20% over four years.

This will free up about £400m by the end of the recently negotiated licence fee settlement in April 2017, which the BBC aims to invest in programming and new technology.

The BBC had already announced that it would have to cut 16% of its budget – or more than £1bn – to meet the cost of taking on the additional responsibilities handed to it in the licence fee settlement negotiated with the government in October, including funding the World Service.

Under the new funding deal agreed with the government, the licence fee will be frozen at £145.50 until 2017, a 16% reduction in real terms, following frantic negotiations in the runup to chancellor George Osborne's comprehensive spending review announcement in late October.

Thompson said finding the money needed to fund the World Service and other commitments, including providing most of Welsh-language broadcaster S4C's budget, cannot be done through efficiency savings alone.

The BBC has said it will reduce overheads, which have already fallen from 24% of its income to 12%, to 10% or below so that 90% of licence fee money is spent on making content and delivering it to viewers.

Further savings will be made by cutting the senior management pay bill by 25% by December 2011 and reducing the amount spent on online services by 25%.

In addition to that, back office functions, including HR and finance, will be expected to find savings of 25% and "output areas" – programming and content – will have to slash budgets by 20%.

Half of those budget cuts will come from efficiency savings but half would have to come from "doing less", Thompson said.

He is launching a consultation with staff and asking them for ideas on how this can be achieved.

Thompson also ruled out closing any services or channels, despite an apparent suggestion from the BBC Trust yesterday that this might be the best way of achieving the necessary cuts.

The BBC Trust today issued a statement clarifying yesterday's comments by the outgoing chairman, Sir Michael Lyons.

"The trust has never suggested that the executive should close any individual service," a BBC Trust spokeswoman said. "This is the start of the process: we now await the director general's suggestions for how to implement the new licence fee settlement and the principles of the new strategy set out by the trust at the end of last year."

The savings outlined today are in addition to the £140m of cuts being pushed through this year and next to meet the cost of freezing the licence fee in 2010/11 and 2011/12, when the current settlement ends.

Caroline Thomson, the BBC's chief operating officer, will hold a series of "town hall meetings" with staff in an effort to build a consensus about where the cuts should fall.

BBC managers will then make a series of recommendations to the BBC Trust in the summer.

By:- James Robinson.
Source:-
http://www.guardian.co.uk/media/2011/jan/13/bbc-extra-savings

I'm thankful I don't have to have the stress of being in the firing line of announcements like todays....rings a bell with Michael Checkland's BLACKSPOT announcements of the 80's though!

Having said that though I wonder what BBC Pensions have in store for us!!

It's a shame to be on the outside looking in on what can only be described as (whatseems to be) a hacking up of a once proud organisation.

Looking at the net product of the BBC these days it could save a lot of money by just doing what it's good at (and that isn't chasing ratings). I'd rather have two of professionally produced programmes of decent content each evening instead of the hours of drival that you have to pick through in the RT to make a decent evenings viewing.

As David commented the other day the BBC seems to be occupied in ticking relevent "boxes" when hiring people instead of what they can actually do!

As I was told many years ago...getting a job at the BBC isn't about what you know..it's who you know (not in my case I hasen to add!) these days it seems to be what you are.