The BBC has been slammed by MPs over how it has handled its cuts programme.
The Commons public accounts committee warned that the broadcaster risked damaging public trust “in its financial management and openness”.
When negotiating the licence fee, the BBC had claimed it would reach an “efficiency frontier” by 2008, the limit of its ability to make savings. However, the BBC found almost half the required savings in the first year of its programme.
“It took the pressure of a licence fee settlement to force the BBC into setting a target of 3 per cent annual savings, which it is comfortably on track to achieve. The BBC’s assumptions about what it could deliver were unambitious” said Richard Bacon MP.
The BBC came under further attack for its lack of commercial ambition, as they try to find £700m in savings.
“The BBC must maximise its commercial income. But the BBC’s plans for this are unambitious when placed in the context of the financial pressures on the broadcaster. We expect a clear explanation of why a £40 million a year increase in commercial income is the limit of what can be achieved," Bacon said.
Bacon was speaking as the committee published its latest report, which examined the progress of the BBC’s efficiency programme and their plans to make savings.
MPs criticised the BBC for bringing in cuts to services without properly accounting for their value to the public. This came after protests over planned BBC cuts to sections like Radio 6 Music. The committee said:
“Such an analysis [of cost/benefit] is vital in deciding where future cuts should fall and should be based on a rounded assessment of feedback from licence fee payers about the value they place on services.”
A BBC Trust spokesman told the Huffington Post UK:
“The Trust’s target for the BBC’s commercial income was based on what the Corporation expected to be achievable without damaging either the wider market or the quality of services for UK audiences. If it proves possible to generate more commercial income without any such damage, we would of course welcome this.”