Reported in The Observer today.

The BBC will retaliate against cuts in its budget this week by claiming that its contribution to Britain's economy grew 5.6% to top £8bn last year, delivering well over £2 of value for every pound in fees from television licences.

As the former Conservative minister Lord Patten prepares to take the chair of the corporation, the BBC will step up its efforts to justify the licence fee, arguing that far from being a drain on taxpayers, its activities in commissioning programmes, buying services and supporting creative activities act as a net positive for the nation's finances.

A study by the accounting firm Deloitte will conclude that the BBC's UK activities generated £8.1bn of economic value in the last financial year, up from £7.7bn the previous year. And its "net" contribution – taking account of a simulation of activity that would replace the BBC if licence fees were scrapped – has grown to £5bn, up 14.9% compared with the results of similar research a year ago. Licence fee income is around £3.6bn per year.

In spite of efforts to broaden activities away from the south-east, the BBC remains highly London-centric – Deloitte found that 69% of the BBC's gross economic contribution remained in the capital, although benefit to Scotland, Wales and Northern Ireland all increased. The BBC is trying to reduce its south-eastern focus: by 2016, half of network TV programmes and 40% of radio spending are due to be made outside London, partly through a move of five departments to Salford.

Patten, whose appointment was approved by MPs last week, has warned that the BBC faces severe challenges. He told a select committee that he anticipates "huge fusses" over cutbacks: "There'll be all hell let loose."

Under a settlement agreed with the Treasury, the BBC has promised 20% cuts to all departments over the next four years. Licence fees are to be frozen for six years and the BBC is taking over the Foreign Office's funding for the World Service. In an unguarded comment last year, David Cameron sparked criticism by describing the BBC's squeeze as "delicious".

The BBC employs 17,000 people. Senior news executives revealed last week that covering uprisings in Libya, Tunisia and Egypt had stretched the corporation's budget on foreign news to such an extent that resources at annual events – including the Oscars, the Cannes film festival and European summits – were being trimmed.


http://www.guardian.co.uk/media/2011/mar/13/bbc-delivers-two-pounds-to-economy-f...