BBC

Annual Reportand Accounts
2017/18

BBC
Annual Reportand Accounts
2017/18

Presented to Parliament by the Secretary of State for Digital,
Culture, Media and Sport by Command of Her Majesty

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ABOUT THE BBC

Contents

Nations’ data packs
p.150

p.02

Performance andmarket context
p.59

About the BBC

p.168
Detailed financial
statements

The year at a glance, award-winning
content and how we’re structured

p.08
Forewords fromthe Chairman and
Director- General

p.240
Equality Information Report

Performance against
public commitments
p.125

Governance
p.88

p.66
Finance andoperations

Delivering our creative remit
How we ’ve met the requirements ofour public purposes

p.18

About the BBC
02 The year at a glance
Strategic report
08 A message from the Chairman
10 Director-General’s statement
16 Our reporting structure
18 Delivering our creative remit
20 – Impartial news and information
24 – Learning for people of all ages
28 – Creative, distinctive, quality output
38 – Reflecting the UK’s diverse communities
52 – Reflecting the UK to the world
59 Performance and market context
67 Deputy Director-General’s finance review
69 Financial overview
74 Our people
78 Developing our people
79 Diversity
84 Charitable work
86 Environmental sustainability

Governance
90 BBC Board
92 Governance Report
93 Remuneration Report
101 Pay disclosures
107 NAO opinion on pay disclosures
108 Nominations Committee Report
109 Audit and Risk Committee Report
113 Risks and Opportunities
117 Viability Statement
118 Editorial Guidelines and Standards
Committee Report
119 Nations Committee Reports
121 Fair Trading Report
123 Regulatory Report
124 Statement of Board responsibilities
125 Performance against public commitments
150 Nations’ data packs
167 NAO opinion on Nations’ data packs

Financial statements
169 Certificate and Report of the Comptroller
and Auditor General
185 Consolidated income statement
185 Consolidated statement of comprehensive
income/(loss)
186 Consolidated balance sheet
187 Consolidated statement of changes in equity
188 Consolidated cash flow statement
189 Key themes for the BBC
190 Notes to the accounts
Additional information
240 Equality Information Report
264 Index
265 Image credits
266 Contact information and feedback

BBC Annual Report and Accounts 2017/18

01

ABOUT THE BBC

The year at a glance
In the first full year of a new Royal Charter, BBC Local Radiocelebrated its 50th birthday, BBC iPlayer recorded its bestyear ever and we announced the merger of BBC Worldwide
and BBC Studios into a single commercial organisation.
We continue to bring audiences, across the UK and aroundthe globe, award-winning content on television, on radio
and online.

92%
Adult reach
Percentage of UK adults
who use BBC television,
radio or online each week.
Target: 92-95%

7/10
General impression
Audiences’ general
impression of the BBC(mean average).
Target: 6 -7/10

19:12
Total time spent
Length of time UK adultaudiences spend with the
BBC each week on average.
Target: 18:15 -19:45

02

Blue Planet II
Spectacular natural history programmeBlue Planet II was BBC iPlayer ’s mostpopular programme of the year, with
4.8 million requests for the first episode.
The impact of the show led towidespread change in the publicawareness of plastic waste.

BBC World Service
As the World Service undergoes its
biggest expansion since the 1940s, wereached a record weekly global audienceof 279 million people around the world.
By this summer, our international news
services will broadcast online, on TV,
and on radio in more than 40 languages.

12 new services
launched:
—
—
—
—
—
—

PidginAfaan Oromoo
Amharic
Tigrinya
KoreanGujarati

—
—
—
—
—
—

MarathiPunjabi
TeluguIgbo
YorubaSerbian

BBC Local Radio
BBC Local Radio, which includes 40 local
radio stations across England and theChannel Islands, with more than six
million listeners a week, celebrated
its 50th anniversary.

BBC Annual Report and Accounts 2017/18

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ABOUT THE BBC

48m
General Election
Close to 48 million UK browsers
came to the BBC website and news
app in the week of the General
Election – an all-time record.

£34m
We announced our biggest
investment in children’s services
in a generation – an additional£34 million.

BBC Studios
We announced BBC Worldwide
and BBC Studios would join
forces, integrating programme
production, sales and distribution
in a single commercialorganisation, and producing
programmes such as Strictly Come
Dancing, EastEnders, Countryfile
and BBC One’s popular daytime
drama Shakespeare & Hathaway.

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BBC iPlayer recorded its
best year ever in 2017.
With a host of box sets,hits from the archive andgreater personalisation,
viewers streamedon average 272 million
programmes per month.

Live sports
coverageThree Girls
The BAFTA award-winning
drama dealt with thetrue stories of victims ofgrooming and sexual violencein Rochdale. Watched bymore than eight million
people, the programme
helped highlight a petition
for Sara Rowbotham to berecognised for her role inbringing the scandal to light.

272m

-

-

~.'-

We announced plans to reinvent
free-to-air sports broadcasting.
Working in partnership with thesports industry and making themost of digital technology,
our aim is to bring more
sports to more people.

BBC Annual Report and Accounts 2017/18

03

ABOUT THE BBC

Award-winning
content

4

We invest in award-winning programmes andservices across television, radio and online.

10

BBC named Broadcasterof the Year at the Diversity
Media Awards

17

Broadcasting Press
Guild Awards
March 2018

6

British Academy
Television Awards
May 2018

Broadcast DigitalAwardsJuly 20177
British Academy
Scotland Awards
November 2017

Association forInternational
Broadcasting Awards
November 2017

6

British AcademyChildren’s Awards
November 201718
RTS ProgrammeAwardsMarch 201804

BBC Annual Report and Accounts 2017/18

37

Audio and Radio
Industry Awards
October 2017
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8Grierson Awards
November 201711

RTS Television
Journalism Awards
March 2018

ABOUT THE BBC

16
British Academy
Cymru Awards
October 20176

National Television
AwardsJanuary 201815

8

British Academy
TV Craft Awards
April 2018

Broadcast Awards
March 2018

6
Creative Diversity
Network Awards
June 2017

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8
Comedy.co.uk Awards
January 2018

6

Writers’ Guild
AwardsJanuary 2018

BBC Annual Report and Accounts 2017/18

05

ABOUT THE BBC

Inform. Educate. Entertain.
Distinctive, world-class content that is engaging,risk-taking, educational and award-winning.

75% 75% 72% 77%% of UK adults who say the
BBC is effective at informing,
educating and entertaining
people in the UK(8% say ineffective)% of UK adults who say the
BBC is effective at informing
people in the UK(9% say ineffective)% of UK adults who say the
BBC is effective at educating
people in the UK(9% say ineffective)% of UK adults who say the
BBC is effective at entertaining
people in the UK(7% say ineffective)

Ipsos MORI: 3,568 UK adults 16+, April-May 2018.

We create
cutting edge
content...

Read more on pages 02- 05 and 28 -37...broadcast
acrossmultiplechannels...
Read more on pages 18 -58

06

BBC Annual Report and Accounts 2017/18

Documentaries that encourage change.
Blue Planet II won the Special
Impact Award at the NTAs for its
role in raising awareness of thedeadly impact of plastic waste.

Forging dynamic partnerships acrossthe country. From Hull City of Culture to
Super Movers with the Premier League;
from Tomorrow’s World to Opera Passion
with the Royal Opera House and the V&A.

First TV programme with an allautistic core cast. CBeebies launchedanimated TV series Pablo.

Award-winning podcasts from one of
the largest podcast producers in theworld. We create bespoke, entertaining
and revealing podcasts for a wide
audience including the new generation
who increasingly listen online.

Using technology to broaden theappeal of content. As part of the
Civilisations Festival we launched asuite of digital tools including the
Civilisations Augmented Reality app.

Television
Nine pan-UK television services,
including online- only youth service
BBC Three.
National and regional television
services across England, Northern
Ireland, Scotland and Wales.
Radio
Ten pan-UK radio networks and twonational radio services each in
Scotland, Wales and Northern Ireland.

Channel of the Year. BBC One
was named Channel of the Yearat the RTS Programme Awards.
The BBC World Service television,
radio and online in more than
40 languages.
OnlineOnline services including BBC News,Sport, Weather, CBBC and CBeebies,
iPlayer and iPlayer Radio, BBC Red
Button and our vast archive via a
variety of internet- connected devices
including tablets, smartphones andconnected televisions – as wellas computers.

40 local radio stations across Englandand the Channel Islands.

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ABOUT THE BBC...working
with talentacross theUK creative
industries.
Read more on pages 74 - 83 and page 144

We deliver
our public
purposes...

BBC staff
Our people are talented, diverse,
dedicated and passionate. They
make us what we are.
Partnerships
We work with organisations thatshare our passion for creativity,
quality and distinctiveness.
Investment
The BBC is a major investor in the UK
creative industries, contributing hundredsof millions of pounds to the wider sector.

1.

To provide impartial news andinformation to help people
understand and engage with theworld around them.

2.

To support learning for people of
all ages.

3.

To show the most creative, highest
quality and distinctive output
and services.

Knowledge -sharing
BBC engineers have always beenat the forefront of technologicaldevelopment. We provide a ‘centreof excellence’, sharing advances andbest practice across the industry.
Training
We are committed to offering
opportunities to everyone. Since 2014,
1.9% of our workforce has been made up
of apprentices and last year we launcheda £1 million scheme to recruit, train anddevelop journalists with disabilities.

4.

To reflect, represent and serve thediverse communities of all of the UK’s
nations and regions and, in doing so,
support the creative economy acrossthe UK.

5.

To reflect the UK, its culture andvalues to the world.

Read more on pages 18 -58...and ensure
value formoney forour audiences.

Investing as much money as possible indelivering great content and services.
Reduction in overheads
94% of the BBC’s controllable spend
this year was focused on content
and delivery, just 6% was spent
on running the organisation.

Senior manager paybill
The ratio of senior managers to total
public service employees is now 1.5%
and the paybill for senior managers has
reduced by over £36 million since 2009.

Talent spend reduction
Our total spend on on-screen and onair talent has been reduced to 11.1%
of our internal spend on content.

Total cost savings£160 million of annual savings weredelivered during the year, taking the
cumulative savings to £244 million. See
pages 67 and 70 for more information.

Read more on pages 66 -73 and 74 -77

BBC Two drama Peaky Blinders

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BBC Annual Report and Accounts 2017/18

07

ABOUT THE BBC

A message from the Chairman

This Annual Report and Accounts covers
the year to 31 March 2018, the first
financial year in which a new unitary
Board and governance arrangements
have been in place at the BBC.
These arrangements now make a clear
distinction between governance of theBBC, which falls to the new Board, andexternal regulation of the BBC, whichlies with Ofcom. Perhaps for the firsttime in the BBC’s history, they allow
the corporation to speak clearly with asingle voice, and for accountability to rest
unambiguously in a single set of hands.
During the course of the year the
Board has covered a significant range
of issues that the BBC faces, including:building an effective relationship with
our new regulator Ofcom; internally,working hard to ensure that the BBC
remains a fair and decent place towork; and externally, helping the BBC
to meet the challenges it faces from a
growing set of global competitors.
I am proud of the progress that is laid out
in this report, of the way in which our new
governance processes have embedded, andof what the Board has achieved in its firstyear. I am also, however, very consciousthat the environment around the BBC –competitive, financial, technological – hasnever been tougher. This is something we
discussed in detail in our 2018/19 Annual
Plan, published in March, and it is importantto view this Annual Report in that context.

08

BBC Annual Report and Accounts 2017/18

All Board members are acutely awarethat our first responsibility is to serveand protect the public interest, primarily
by ensuring that the BBC meets the five
public purposes that are set out in ourCharter and that we report against here.
Some may perceive these public
purposes to be obligations imposed onus, or consider them a kind of burden.
As Chairman of the BBC, I view themdifferently. It is these public purposesthat set us apart from other broadcasters
and underline that we have a distinctiverole to play. They represent our contract
with the public, and are criticallyimportant as our audiences’ fundamentalmeans of holding us to account.

“The value of our role
as one of the mosttrusted sources ofaccurate, impartial
news, both in thiscountry and aroundthe world, has notdiminished in thedigital age, but grown.”
Sir David Clementi
ChairmanOver the course of this year, I have been
impressed by the depth of commitment
our staff have shown to delivering onthese purposes. Whilst the organisation
continues to address key issues, such as
those of fairness and pay, our people havenevertheless constantly kept the needsof our audiences front of mind. I have also
been struck by the extent to which theBBC’s public service mission is growing
in importance in a fast-changing world.
News is a good example. Our audiences
have long relied on the BBC to be theplace they can come to for news they cantrust and analysis they can rely upon. This
year, BBC News remained the country’s
biggest provider of news and audiences’
preferred source of trusted information.

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S T R AT E G I C R E P O R T

Overall, BBC News reached a weekly
average of over 80% of adults in the UK.
BBC News Online continued to attract
30 million UK browsers a week on averagein 2017, while the BBC News app had an
average of 7.8 million monthly browsers.
The fact that the BBC is where the country
comes to understand what is happeningat key moments was demonstrated
once again in the week of the General
Election last June, when close to 48
million UK browsers came to the BBCsite and news app – an all-time record.
It is clear to me that the value of ourrole as one of the most trusted sourcesof accurate, impartial news, both in thiscountry and around the world, has notdiminished in the digital age, but grown.
This is because we now live in an age
when trust is at a premium, and truth andaccuracy are increasingly under assault.
‘Fake news’ has become harder tochallenge. False claims can travel theglobe in an instant. Social media echochambers reinforce our own views of
the world and new media channels
can speak to closed groups of people
unchallenged. It is becoming ever harder
to separate fact from falsehood, truth
from opinion, prediction from assertion.
In this landscape, the BBC’s historic role
as a trusted guide could hardly be morevital. It is a responsibility we take very
seriously and we have responded withinitiatives like an expanded Reality Check,our fact-checking service designed to getto the bottom of the various claims andcounterclaims that surround the news
agenda. This includes the introductionof a television version, and we werepleased to have the impact of this service
recognised recently when Reality Check
was given an ‘Award for Innovation’ by
Voice of the Listener and Viewer.
Another important area in which audiences
rely on us is original, home-grown content.
The BBC’s priority has always beenhigh quality, British programming andit is part of our public mission to reflect
and represent the diverse communitiesof all the UK’s nations and regions.
The report from the Director-Generalemphasises how much our audiences
value programmes that speak directly tothem about their lives, or say something
significant about the country and thesociety they live in. But it also highlights
the threats that are now facing original,
British content right across the industry.

At a time when the UK is more and more
being portrayed as fragmented anddivided, the BBC must continue to be theplace that brings the country together
and helps it understand itself. This means
making sure that our creative output
portrays the full richness and breadthof an increasingly diverse and devolved
UK, and that all its many voices areheard. It also means reminding all ourcommunities what they have in common,as well as what sets them apart.

“I have been struck by
the extent to which
the BBC’s public service
mission is growing inimportance in a fastchanging world.”

The BBC has always been the place
where the whole country comes together
to celebrate big national events, like a
Royal Wedding, Jubilee or the Olympics.
It is also the place for shared national
moments and conversations – whether it
is audiences of all ages coming together
in their millions for Strictly, Doctor Who
or Blue Planet II, audiences returning
year after year to shows like Just a Minuteand Desert Island Discs, or output thatcommemorates important landmarks in
our history both on-screen and on-air, suchas this year’s programming on World War I
and the campaign for women’s suffrage.
This Annual Report sets out ananalysis of our performance against
our public purposes. It is important tounderline that, as well as marking thefirst year of the BBC’s new operating
arrangements, this also marks thefirst year in which we see changes tothe way we measure our performance.
This means that many statistics will
look different this year and may not bedirectly comparable to previous years.
As the Director-General’s reportunderlines, the market around us isbecoming more global and competitive.
We face a threat to British content fromthe west coast of America, and we need torespond to the rapidly changing habits andneeds of our audiences in the digital age.
All this must be set alongside the BBC’s
tougher-than-ever financial context.
As the BBC moves towards its centenary
year in 2022, I believe that the role itplays for the UK grows increasingly
valuable. I am proud of the progress
set out in this report, but I am also
very aware of the challenges ahead.

}v~ C[,~·">··············~···················································

Sir David Clementi
Chairman
21 June 2018

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BBC Annual Report and Accounts 2017/18

09

ABOUT THE BBC

Director-General’s statement“Never has the BBC
been more vital as
the cornerstone of the
UK’s creative andcultural strength.”
Tony Hall
Lord Hall of Birkenhead CBE
Director-General and
Editor-in-Chief

It’s been a remarkable year of change,
challenge and creative success for theBBC. This year’s Annual Report setsout – I hope above all – a picture ofan organisation on top creative form,
driving the national conversation
with content that changes the way
people view the world. Who else but
the BBC could, for example, start afundamental conversation on an issue
like plastics, such as was generated
by the astonishing Blue Planet II?
But beyond this, the Report also tells thestory of an organisation which is moving at
speed to adapt to a changing environment– both competitively and in the country
itself. We are meeting these challenges
in a wide range of ways, for example bybringing together our production anddistribution businesses in the new BBC
Studios. Or, for that matter, by investingin content for each of the nations; putting£34 million into children’s content; orby committing to reshape what we do
locally and regionally across England.
And we also tell a story of continued
reinvention – building a BBC that is able
to meet the challenges posed both by thechanging habits of young audiences and theglobal shift in content production towarda small number of US-based competitors.
Whether it be our continued focus on
great British content; our concentration on
nurturing and developing new young talent;or continuing to reinvent the way we makevideo and audio available online, I believe
this Report shows a BBC that is adapting
and changing to the benefit of all its users.
10

BBC Annual Report and Accounts 2017/18

I would like to begin, though, by
paying tribute to the extraordinary
job that our news teams have done
throughout what has been an extremely
tough and challenging year; perhaps
one of the toughest in memory.
It began with the calling of a snap General
Election, which kept our political teamson their toes just two years after thelast poll and less than one year since
the referendum on EU membership.
Aside from the political developmentsof an intense election campaign, all of
us recall the series of terrible terrorist
atrocities that took place during that
period, as well as the appalling tragedyof Grenfell Tower. Teams in London
and Manchester demonstrated great
professionalism and exceptional resilience
in reporting on these awful events,
sometimes in unimaginable circumstances.
Serving local communities
The BBC’s coverage of national events
such as the Manchester Arena bombing,the London attacks and Grenfell Tower
fire are absolutely core to what we do, but
it is also important to recognise here therole of our local radio services, which eachweek reach more than six million listeners.
As I have witnessed for myself during somany visits to our local radio stations
around the country, local teams arealways there for their local communities
at the moment they are most needed,
whether for coverage of breaking news orfor information and advice that can keepthem safe during periods of freak weather

or flooding. And they are still there longafter the national attention has moved on.
In Manchester, it was moving to hear
how people turned to their local radioin the wake of the bombing for comfort
and support. Instead of finishing at 1am,
BBC Radio Manchester’s late-nightphone-in show went on until 5am andreceived around three times its usual
number of callers – all keen to relate
their experience or share details of
extraordinary acts of kindness or support.
It was a reminder of something reallysignificant: that local radio is in the
DNA of our communities; part of whatdefines them. Great local radio is notabout broadcasting to audiences,
but broadcasting with them.
That is why I was pleased to be able toannounce our commitment to invest
in BBC Local Radio for the future, on
the occasion of its 50th anniversary in
November. Our ambition is to reinvent
local radio to ensure that it better reflects
local voices, celebrates local identities,
nurtures new talent and engages local
audiences on digital platforms.
Bringing the country together
Within two weeks of the Manchester
bombing, the country came together fora benefit concert, One Love Manchester.
I am proud of the role the BBC was able
to play in helping to make happen an
event that raised almost two and a half
million pounds for the victims and theirfamilies during the concert alone.

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S T R AT E G I C R E P O R T“It has been a year thathas proved once again
why BBC News is not
only so trusted andrelied upon, but alsoso needed.”At home, we brought it to a TV audienceof close to 12 million, one of the highestof the year. And as host broadcasterfor the international networks, wewere able to play our part in taking it
to a global audience of tens of millions,in over 50 countries worldwide.
For me, it was a moment that underlined
the unique nature of the role the BBC
plays for the country: through local radio,
representing communities to themselves;as the national broadcaster, bringing
the country together at importantmoments; and as a global influence, taking
Britain’s voice and values to the world.
Taking the UK to the world
This last task – reflecting the UK, its
culture and values to the world – isfundamental to our public service
mission. This year the BBC reached arecord weekly global audience of 376
million people around the world, andwe have enhanced our role significantly
by carrying out the biggest expansionof the BBC World Service in 70 years.

“Taking risks with freshnew voices in front ofand behind the camerais critical to the BBC
and to ensuring it best
serves the public.”Thanks to new, Government-funded
investment designed to help increase
the UK’s international impact andreach, we now operate in more than 40
languages – launching 12 new language
services over the course of the year,
from Korean to Pidgin to Punjabi. We
have also opened new and expanded
bureaux in locations from Lagos to
Bangkok, and Cairo to Seoul. Meanwhile,
the World Service has continued tobring the best of the UK’s culture to therest of the world, from the Proms to
the Edinburgh festival to the FA Cup.

Reporting around the world, of course,
is fraught with danger, and nowhere wasthis more tragically evident than in Kabul,
where, in May 2017, a bomb blast took thelife of Mohammed Nazir, a BBC driver, who
was taking colleagues to work. Mohammed
was a popular colleague who left behinda young family. His was a devastating
loss to his family, friends, and the BBC.
More recently came the terrible news
that our colleague Ahmad Shah was killed
while working for BBC News in Khost
Province. His death came on a dreadful day
for journalism in Afghanistan, with nine
journalists and photographers killed inbombings in Kabul. Ahmad was a talented
journalist and a popular and respectedcolleague, and we continue to do all we
can to support his family and friends.
We have also joined forces with others
to highlight the case of our BBC Persian
staff, who, along with their families,
are being harassed and persecutedby the Iranian authorities. This year
we took their case to the UN Human
Rights Council, the first ever time theBBC has made an appeal to the UN.
Trust and integrity
Overall it has been a year that has
proved once again why BBC News is
not only so trusted and relied upon, butalso so needed. In addition to the news
services we provide, we believe that the
BBC can also play a vital role in helping
audiences combat misinformation, byleading the way for integrity in news.
We are acutely aware that, if it is often hard
for adults to tell the difference between
fact and falsehood, it is even harderfor young people. We are determined
to use the unrivalled experience andexpertise of our news staff to help
young audiences develop their criticalthinking and become news literate.
That is why more than 1,000 schools
around the country are now being
offered mentoring in person, online orat group events, from BBC journalists,
to help students identify real news
and filter out false information.
All schools can access free online material,classroom activities and video tutorials
via our School Report website. We havealso launched the BBC iReporter app,which was developed by the Academy
Award-winning studios, Aardman, andallows 11-18 year olds to experience thedecision-making pressures of being a BBC
journalist in the heart of the newsroom.

BBC Three’s award-winning comedy This Country

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BBC Annual Report and Accounts 2017/18

11

ABOUT THE BBC

These initiatives are great examples of
how we are using the extra investment inchildren’s services both to sustain CBBC
and CBeebies, which has performed
extremely well for under 6s despite
increased competition, and to raise ourcreative ambition significantly, supersizing
our content in the digital space.

Record figures
for BBC iPlayer
Our iPlayer Christmas box sets
contributed to the service’s
best-ever weeks, with nearly
80 million requests between
Christmas and New Year.

Investing in children and young people
In a further sign of our commitment
to supporting young people in today’s
media environment, the BBC was proudin December to host the Children’s Global
Media Summit for the first time. Our aim
was to bring together leading voices inmedia, technology and beyond, fromaround the globe, to help tackle the issues
facing young people and empower themto take control of their digital futures.
During the event, we launched Own
It, a new website designed to help
9-12 year olds develop the confidence
and resilience they need to tackle theeveryday challenges they face online.

And I’m incredibly proud that BBC
Bitesize remains the most popular
dedicated education site in the UK on
the eve of its 20th birthday, and has been
joined by The Mind Set, the UK’s firstnational peer-to-peer coaching network
for GCSE and National students.
Creativity and risk-taking
Of course, the level of that creative
ambition remains high across all areas of
our output. As ever, this year has been
above all about our programmes and ourcommitment to creativity and risk-taking.
This is something I picked out at the startof the year as our first priority as we seek
to reinvent the BBC for a new generation,and nowhere has it been more evident
than in the quality and distinctivenessof our output on-air and on-screen.
Landmark series like Blue Planet II
on BBC One have proved once again
that, when you create television thatis truly world-class, audiences of allages respond. Major programmes like
Civilisations on BBC Two and Living with
the Gods on Radio 4 have demonstrated
what the BBC can do like nobody else.

In drama, big hits like Line of Duty,
Doctor Foster and the newly regenerated
Doctor Who have shown how British
audiences still want to come together
for unmissable, appointment-toview television. Audiences have been
gripped by shows like Poldark, The
Replacement, Trust me, Broken, Clique,
Shakespeare & Hathaway and the BAFTA
award-winning Peaky Blinders.
We have made them laugh together atcomedies like Peter Kay’s Car Share,
Still Game, Two Doors Down, The Young
Offenders and Man Like Mobeen. We
have kept them informed with daily
developments from Today to The Daily
Politics to 5 live Drive to Newsnight, andoffered them new perspectives on history
with shows like A House Through Time andBack in Time for Tea. And we have kept
them entertained with everything from
Casualty and The Archers to The News
Quiz and The Mash Report, to the BAFTA
award-winning Murder in Successville anda record-breaking series of Strictly.
Innovating for our audiences
Meanwhile, we have increasingly
experimented with how we deliver
content to our audiences. This year BBC
Radio launched its first podcasts madespecifically for the medium, and new ideas
like The Naked Podcast from BBC Radio
Sheffield joined popular podcasts suchas Radio 4’s Political Thinking with Nick
Robinson and Flintoff, Savage and thePing Pong Guy from 5 live – which had arecord half a million downloads in March.
Award-winning drama Three Girls

This was the first product to launch fromthe BBC’s biggest investment in children’s
services in a generation: an additional£34 million for children’s content. Morerecently it has been joined by BBC Buzz, an
app for 8-12 year olds that provides children
with a daily diet of interesting and inspiring
facts, and encourages them to share
their passions and creative endeavours.

“To me it was a reallypowerful example ofthe impact public service
broadcasting can have in
giving a voice to those
who might not otherwise
be heard.”

12

BBC Annual Report and Accounts 2017/18

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S T R AT E G I C R E P O R T

The official opening of Hull’s tenure as UK City of Culture

Celebrating Hull2017 UK City of Culture
Our partnership with Hull City of
Culture 2017 was an outstanding
success and a great example of
the BBC working with an outsideorganisation. A ‘Hull-centric year’in 2017 was promised and wemore than delivered on that. Hereare a handful of the many BBC
highlights from Hull’s special year:—

A major national spoken word
festival, Contains Strong
Language, was launched in Hullin September. Events werebroadcast across all the BBC’s
network radio stations.

—Thousands of people attended
a range of live music events
organised by the BBC in Hullduring 2017. These included
Radio 1’s Big Weekend, Radio 2’s
I Feel Love concert and Radio 3’s
Uproot Festival.

—

For the first time since 1930, theBBC Proms left London and aProm was performed on the
Hull waterfront.

——

TV highlights included BBC Four
documentary Through the Lens
of Larkin, travel series Yorkshire
Wolds Way, featuring thecountryside of East Yorkshire,
and Welcome to Hull, a BBC Two
documentary looking at the
impact of City of Culture on Hull.
BBC Radio Humberside produced
200 outside broadcasts over theyear and BBC programmes thatbroadcast from Hull in 2017
included Songs of Praise, Any
Questions, The Jeremy Vine Show,
The Listening Project, The One
Show and BBC Breakfast.

With BBC Ideas, we are experimenting
with a short-form video platform whichmakes trusted factual content easier tofind, introducing busy users to illuminatingideas and perspectives. This year we also
reinvented BBC Weather to offer an evenbetter experience – including a refreshed
look, new data and new digital features
such as ‘chance of rain’ percentage
and ‘feels like’ temperature guide.
With iPlayer, personalisation is now rightat the heart of the design. We now havearound 15 million people actively signed ineach month so that we can provide themwith the tailored services they increasingly

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expect. Box sets such as Top of the Lake,
Requiem and the full back catalogue of
Peaky Blinders – which we released toaccompany the latest series – have allowed
viewers the opportunity to watch theshows they want, the way they want to.

decisions that NHS staff must take everyday. Meanwhile, Surgeons: At the Edge ofLife massively broadened the audience forscience programming while generating
an incredible response on social media,
in particular from younger viewers.

In fact, the host of drama programmingthat we released on iPlayer at Christmas
to accompany everything on offer on
our schedules led to its best-ever weeks,with almost 80 million requests-toview between Christmas and New Year.
Overall, 2017 was iPlayer’s best-everyear, with total requests up 11%.

Compelling documentaries such as
Rio Ferdinand: Being Mum and Dad, Chris
Packham: Asperger’s and Me, and Patrick
Kielty’s My Dad, the Peace Deal and Me,
have explored important issues throughreal-life experience. Programmes like
Growing Up In Care and My Extraordinary
Skin did the same on Radio 1 and 1Xtra,
while The Fix on Radio 4 brought together
12 of the country’s brightest young
minds to take on our most complex social
problems. And factual dramas such as
The Moorside and the multi-award-winning
Three Girls have told challenging, importantstories that urgently need to be told.

Finally, I want to highlight the innovationthat goes on behind the scenes. This year
we undertook a number of major projects
to modernise and improve the resilienceof our broadcast system – including
putting in place new infrastructure forthe ‘playout’ of network and nations
programming and a new TV schedulingsystem – all with no disruption to viewers.
Telling important stories
I have been particularly proud thisyear of programmes that have madegenuine contributions to publicdebate or taken on some of thecritical issues facing our society.
Award-winning shows like Hospital andAmbulance continue to focus urgent
attention on areas that could not be closer
to the nation’s heart. And they do so in a
way that uncovers true complexities byfocusing on the incredibly hard, humanThree Girls was an extraordinarily powerful
drama that dealt with the true stories ofvictims of grooming and sexual violence inRochdale. It was not only the fact that morethan eight million people watched it that
demonstrated its importance to audiences.
It was also the fact that, within days, morethan 300,000 people had signed a petition
for Sara Rowbotham – played brilliantly
by Maxine Peake – to be recognised forher role in bringing the terrible scandal
to light. To me it was a really powerfulexample of the impact public service
broadcasting can have in giving a voice tothose who might not otherwise be heard.

BBC Annual Report and Accounts 2017/18

13

ABOUT THE BBC

BBC Drama produced 85 hours of content
last year for £97 million – the same cost
as two series of Netflix’s The Crown.
£97 million/$130 million gets you:“Home-grown showsthat reflect the wholeof the nation andresonate directly with
British audiences havenever been more
important.”

BBC Drama – £97 million

The Crown – $130 million—

18 series/c.85 hours of content—

2 series/c.20 hours of content—

Viewed by 74% of UK adults—

Viewed by 14% of UK adults—

Viewer appreciation: 8.7/10—

Viewer appreciation: 8.2/10

Sources: BARB, ONS, Populus, GfK.

Investing in new talent
Essential to this is a determination tounearth and support new talent, wherever
it is in the country. I was pleased, rightat the turn of the financial year, whencreative leaders from across the BBC came
together to identify the UK’s most exciting
on and off-screen talent – producing a
New Talent Hotlist that earmarked over
200 broadcasting stars of the future.
Creating a pipeline for new talent is vitalfor the future of the BBC and the UK’s
wider creative industries. Taking risks withfresh new voices in front of and behindthe camera is critical to the BBC andto ensuring it best serves the public.
It is through backing new thinking, newperspectives, and taking creative risks thatthe BBC will not only better reflect thefull diversity of modern Britain but alsodeliver even more engaging, relevant andground-breaking programming. Awardwinning comedy shows like This Country
and Famalam are great examples of ourcommitment to supporting exciting new
voices, and I see this as central to our
mission as a public service broadcaster.
17 BAFTAs and 18 RTS Programme Awards
tell their own story about the BBC’s creative
track record this year. I am pleased that thecommitment that goes into taking risks,telling important stories, and investing in
new talent has been so widely recognisedby audiences and the industry alike.
Reflecting the whole of the UK
I believe that programmes such as thoseI have mentioned here – world-class,home-grown shows that reflect the wholeof the nation and resonate directly with
British audiences – have never been more
important. Nor has the fact that, as we seek
to respond to the needs of an increasingly
diverse and devolved UK, we are making
big changes to invest more in our nations.
In Scotland, we are launching a brandnew channel, with a special news hour
14

BBC Annual Report and Accounts 2017/18

that will blend Scottish and UK coverage.
In Wales, we are focusing investment
on BBC One and iPlayer, and we’restrengthening our mobile services. And
in Northern Ireland, we are working on
an online news service with enhanced
news coverage right across the week.
Alongside our news services, we have also
deepened our commitment to telling ournations’ stories. The centres for drama
production that we have in Glasgow,
Cardiff and Belfast help to act as magnets
for ideas and talent, find and develop
local talent, and generate new jobs andinvestment. And this year programmes
like Shetland in Scotland, Keeping Faith inWales and Come Home in Northern Ireland
have helped to shine a light on our nations
and speak directly to their communities.
Our role in British creativity
Right now, this is truly vital. In the UK, welike big global shows that are designed
to travel widely and have international
appeal, but we also want content thathas something authentic and relevant
to say about our society and can help us
to understand ourselves as a country.
This could not be more essential at atime when the UK feels increasingly
fragmented at home and is seeking toredefine its identity abroad. Yet homegrown, British content has never been more
under threat. Today’s media environmentis increasingly global, and more andmore dominated by a small number ofUS-based giants with extraordinary
creative and financial firepower.
This has brought real benefits for audiencesby driving quality and choice. But it has
also driven up costs across the market.
And it has done so at a time when thebudget of the BBC – which has long been
the largest single investor in British talentand ideas – has become increasingly
squeezed, and our ability to fund original
British content has diminished. What thisadds up to is that the volume and breadthof British content that British audiences
rely on is at real risk. And it is a trend thatis set to continue. In fact, over the nextten years we expect a very substantial gap
to open up between the overall amountthat is spent on UK content now and theamount that will be spent in the future.
This was at the heart of our decision tobring together BBC Studios and BBC
Worldwide this year. We believe a single
organisation focused on producing thehighest quality, homegrown content
is the best way of ensuring that the
BBC can help safeguard the future of
British content and continue to play its
crucial role in supporting the successof the UK’s creative economy.
Financial challengeThis is one of the most critical challenges
we need to respond to as we seek toreinvent the BBC. And we need to do it in afinancial context that is tougher than ever.
Put simply, in the past few years, the BBC
has shrunk as the market has grown.
Since 2010, when the licence fee wasfrozen and the BBC was required to takeon new obligations, including financial
responsibility for the World Service, ourfunding has fallen in real terms. Meanwhile,the broader market around us has
undergone a remarkable transformation
which has seen accelerating super-inflationin key areas such as drama and comedy
production, sports rights and talent costs.
Fundamental to the way we have been able
to maintain spend and deal with new funding
obligations over the past few years has beena substantial and extensive programmeof cost management. We have worked
hard to make sure that the organisation
is run as efficiently and effectively as
possible, and to redirect spending andsimplify procedures in a way that supports
a more sustainable and creative BBC.
As Anne Bulford sets out in her Deputy
Director-General’s finance review, wehave done a vast amount to make the BBC
simpler, leaner and more efficient. We
have brought down overheads to industryleading levels: just 6 per cent of ourcontrollable costs. This is better than mostin the private sector, and puts us in themost efficient 25 per cent of benchmarked
regulated and non-profit organisations in
the country. All in all, by the end of 2018
we will have delivered more than £200
million of annual recurring savings.

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S T R AT E G I C R E P O R T

Of course, there is more to do. We know wewill need to push even harder. There aremany more challenges ahead as we look
to meet our savings targets and respondto the significant financial challenges we
now face. The most pressing of these,of course, stems from the fact that thecost of free TV licences for the over-75s– previously met by Government – will betransferred over to the BBC from 2020.
This will mean some tough decisions in
the future, but what is clear is that, as
an organisation, we are committed toour aim to be as efficient as possible.
Fairness and diversity
In addition to financial pressures,
we also face other organisational
challenges. Not least, to ensure that the
BBC is one of the very best and fairest
places to work and that our workforce
reflects the country as a whole.
The BBC believes in equality: no one
should be paid differently because of theirgender. More than that, we recognisethat we have a very special role to play
representing the UK and leading the way.
That is why we are determined to be an
exemplar on gender pay and equality.
We know it is not enough to say that ourgender pay gap is narrower than mostother media organisations. The public,quite rightly, hold us to a higher standard.
That is why we have committed to closing
the gender pay gap by 2020 – somethingthat no other large media organisation
has done, as far as we are aware – and why
we want an equal split of men and womenacross our airwaves by the same year.
We are also absolutely committed to equalpay. We know that this is not a structuralproblem across the BBC, but we also knowthat we still have real and important issues
to tackle and we have been working very
hard to do so. As part of this, we want toensure that any individual in the BBC has
the chance to progress in the organisation,
regardless of gender, race, disability or
background. We’ve been looking closely
at this over recent months and are settingout plans to allow talented people toprogress more quickly in the BBC, with aparticular focus on getting more womenand more BAME at the most senior levels.
And we have pledged to have a workforce atleast as diverse as any other in the industry,
if not more so, by 2020. We are alreadywell on track to hitting a target of having
15% of staff from a BAME background bythat year, with the proportion rising from
13.1% to 14.8% since 2015. Meanwhile our
BAME pay gap as of March 2018 is 0.4% .
But we know there is much more to
do. Our goal is not only to become
stronger and more representative as

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an organisation, but to be a standard
bearer for equality and fairness forthe whole of the country we serve.

Responding to ourchallenges

Reinventing the BBC for a new generation
All this puts the challenge that the BBC
set itself at the start of last year – toreinvent the organisation for a newgeneration – in a broader perspective.
Even over the past 12 months, we haveseen an extraordinary pace of change inthe media industry. Global media giants
are being bought and sold in a race forscale. Consumers have more choice andmore competition for their time andattention than ever before. Audience habits
are changing more rapidly than ever.

We recently published our Annual
Plan for 2018/19, and in that we
set out what we will be doing in themonths ahead to meet the strategic
challenges outlined in this document.
There is plenty of work now underway,
but some of the areas we arefocusing on in particular include:
Tackling fake news
— Reality Check – our expandedfact-checking service

Nowhere is this more obvious than withyoung audiences. Young adults watch
less television than older people, andlisten to much less radio. In just a few
years, online-only video has grown from
5% of young people’s consumption to25%. Music streaming has gone fromaround 10% to around 30% of listening.
Where younger audiences lead the way,older audiences will likely follow. That
is why we have put this challenge rightat the heart of our strategy to reinvent
the BBC for a new generation. We
want to make sure we can continue toreach everyone to inform, educate andentertain at a time when that mission ismore important than it has ever been.

—‘Slow news’ – more in-depth
coverage and analysis behindthe events—

Online news services – doing
more for younger and harderto-reach audiences—

Media literacy – expert mentoringin schools around the country

Investing in content, new talent andnew voices around the UK— British talent – commissioning
distinctive, world-class content
from across the UK

Never has it been so important for the
BBC to be the country’s trusted voice,providing accurate news and informationand making sure all views are heard.
Never has the BBC been more vital as
the cornerstone of the UK’s creativeand cultural strength. Never has it been
more important to strengthen the BBC’s
unique global voice, as Britain seeks toreshape its relationship with the world.

—

Local radio – new investment for
local voices and local services—

Nations – transforming the BBC’s
Nations services, including a new
Scottish channel

Reinventing the way wedeliver our content— iPlayer – reinventing throughmore personalisation and anenhanced user experience—

The following pages set out how we havedelivered our creative remit and performed
against our public purposes. They showthat this has been an outstanding year
for the BBC, but we remain acutely awareof the challenges we face as we seek
to reinvent the BBC for the future.

Audio – a bolder and moreintuitive platform for all ourradio and audio content

Taking the UK to the world— BBC World Service – the biggest
expansion since the 1940s—

I am very confident about our ability tosucceed. I am determined to make surethat a strong BBC can be a powerfulchampion for the UK, at home andabroad, in the years to come.

BBC Studios – newly created tobring British creativity to new
global audiences

More details on these and all of ourstrategic priorities for reinventing
the BBC can be found in our Annual
Plan: bbc.co.uk/aboutthebbc/
insidethebbc/howwework/
reports/annual_plan_2018

1~/Nw···················L············································
Tony Hall, Lord Hall of Birkenhead CBE
Director-General and Editor-in-Chief
21 June 2018

BBC Annual Report and Accounts 2017/18

15

ABOUT THE BBC

Our reporting structure
The way we are governed and funded is establishedby Royal Charter. The Charter and the accompanying
Agreement are the constitutional basis for the BBC –they set out our public purposes, guarantee our
independence and outline the duties of the Board.

Our current Charter cameinto effect on 1 January
2017 following a wideranging Charter review
process which was
conducted by Government.
As part of that review, newgovernance and regulatory
arrangements were put inplace which established asingle BBC Board and gave
sole regulatory responsibility
for the BBC to Ofcom.
The new Charter also
amended the public purposes,
which we report againstin this Annual Report.
The Charter andAgreement, combinedwith our governance andregulatory obligations,define the way we operate
and the way we report ouractivity and progress.

Governance
BBC Board
The Board, which came into
being on 3 April 2017, ischaired by Sir David Clementi
and consists of ten nonexecutive directors, including
the Chairman, and four
executive directors, including
the Director-General.

Annual Plan
We publish an Annual Plan
setting out our intentions
and future priorities forthe financial year.

The Board is responsible for
ensuring we meet our mission andpublic purposes. It does this by:

The Annual Plan is an essential partof our accountability to licence fee
payers and is a key document in therelationship between the BBC andOfcom. It provides a frameworkon which we can be judged as towhether we have delivered our
mission and public purposes.

— setting the strategic direction
for the BBC

The Annual Plan contains informationon three areas:— establishing the creative remit— the BBC’s creative plans for theyear ahead— setting the BBC’s budget— determining the framework forassessing performance.
The Board makes its decisions in the
public interest and is accountable
for all of our activities including the
publicly funded services, as wellas our commercial activities, bothin the UK and around the world.

— the BBC’s three-year strategy andwork plan for the year ahead— each BBC services’ contribution
to distinctiveness.

The Board demonstrates weare meeting our obligations
through the publication of two
key governance documents; theforward-looking Annual Plan andthis Annual Report and Accounts.

BBC New Broadcasting House, London

16

BBC Annual Report and Accounts 2017/18

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S T R AT E G I C R E P O R T

External regulation
Annual Report
The Annual Report andAccounts sets out how wehave delivered our mission
and public purposes andthe extent to which thecommitments set out in
the Annual Plan (as well
as regulatory and othercommitments) have been
met. It is published after theend of each financial year.
A key change in this year ’s Annual
Report is that it is structured
around reporting how we have met
each of the public purposes.
This Annual Report continues to reportfor the whole of 2017/18 against theprevious BBC Trust Service Licenceand Ofcom Tier 2 requirements. This isbecause Ofcom’s operating framework
did not begin until 1 January 2018
for calendar year targets and from
1 April 2018 for financial year targets.

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Ofcom
The Office ofCommunications (Ofcom)
is the UK’s broadcasting,telecommunications andpostal regulatory body.
Ofcom assumed its full regulatory
responsibilities for the BBC on 3 April
2017, at the same time as the new
Board took over the governance fromthe BBC Trust. Ofcom regulates the
BBC via an operating framework andby setting a licence for the BBC that
contains the regulatory conditions the
BBC is required to meet. Ofcom also
assesses performance, ensures fair andeffective competition and regulates
how the BBC’s commercial activities
interact with its public services. In
addition, it regulates BBC content andoutput against its Broadcasting Code.

Audit arrangements
The Comptroller and
Auditor General, Sir Amyas
Morse KCB, is the BBC’s
external auditor and is
supported in this role by the
National Audit Office (NAO).
As part of the governancearrangements, the Comptroller and
Auditor General examines, certifies
and reports on the BBC’s groupaccounts and is appointed as auditorof the BBC’s relevant subsidiaries
unless the Comptroller and
Auditor General and the BBC agree
otherwise. The NAO also conducts
value-for-money examinations on
the use of the licence fee and in
relation to the BBC’s commercial
activities. Sir Amyas and the NAO
are independent of Government.

BBC Annual Report and Accounts 2017/18

17

DELIVERING OUR PUBLIC PURPOSES

Delivering ourcreative remit
The BBC’s public purposes areenshrined in the Royal Charterand Agreement and are at thecore of everything we do.

1

The public purposes outline thevalues we hold when striving toachieve our mission to inform, educate
and entertain and they provide aclear framework through which weare held to account. The following
pages set out how we have met therequirements of those public purposes.

To provide impartial news andinformation to help people
understand and engage withthe world around them

The BBC’s role in UK life is clear fromthe below; when asked to pick theone media provider that does mostfor people in the United Kingdom
the BBC is chosen the most often
across a range of characteristics.

Read more on pages 20 -23

Of all the media providers (TV, radio, newspaper, magazine, website,
app or social media), which one does the most to/has the most...
BBC (%)

Nex t nearest provider (%)

To support learning forpeople of all ages

59
50

49

7
b

c

7
d

7
e

9

7
f

g

a. Help people in the UK understand and engage with the world around themb. Help people in the UK learn new things= ITV/Sky

ITV

ITV

ITV

= ITV/Sky

12= ITV/Google

38

7
a

49

43

42
Google=Facebook/Google

47

2

5
h

Read more on pages 24-27

c. High quality content and services for people in the UK
d. Creative content and services for people in the UK
e. Distinctive content and services for people in the UK
f. Content and services relevant to people in the UK
g. Reﬂect life in diﬀerent parts of the UK
h. Reﬂect the UK around the world
Source: Ipsos MORI for the BBC, 3,568 UK adults 16+, April- May 2018.

Strictly Come Dancing

18

BBC Annual Report and Accounts 2017/18

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S T R AT E G I C R E P O R T

43
To show the most creative,
highest quality and distinctive
output and services

Read more on pages 28 -37

To reflect, represent and serve
the diverse communities of allof the United Kingdom’s nations
and regions and, in doing so,
support the creative economy
across the United Kingdom
Read more on pages 38 -51

5
To reflect the United
Kingdom, its culture andvalues to the world

Read more on pages 52-58

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BBC Annual Report and Accounts 2017/18

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DELIVERING OUR PUBLIC PURPOSES

1

To provide impartial news
and information to help
people understand andengage with the world
around them

The BBC has no more important
purpose than to inform. All
citizens have a stake in the news.
In a democracy, it is an essential
public service. Every member ofthe public needs access to reliable
information in order to understandthe world around them and to
make decisions for themselves,
their communities, their countries
and their shared future.
In such consequential times – when
the news matters and the way stories
are told is so fiercely contested – theneed for an independent, impartial andaccurate BBC is greater than ever.
The BBC remains the most trusted
source of news in this country,
providing an unrivalled level of local,
regional, national and international
news and current affairs. But thestrategic context for that work has
become more challenging than ever.
Technology and social media havecontributed to a polarisation of ournational debate. Generational, politicaland social differences have widened
markedly. Fake news compounds thatchallenge by eating away at trust in
the media, including the BBC, andblurring the line between reality andso - called ‘alternative facts’. Given
these challenges, it ’s testament to
the quality of our journalism that BBC
News is the most trusted: when asked
to pick the one source they turn tofirst for news they trust the most, BBC
News is chosen most often, namedby 55% of audiences, five times morethan the next nearest provider (ITV).
But these trends are accentuatedin the demographics the BBC finds
hardest to reach. Under-35s especiallyare spending less time with BBC
News and this is particularly acute inless affluent socio - demographics.
Tackling these issues will bechallenging. BBC News continues
to make plans to deliver the annual
savings that were required by the2015 licence fee settlement.

Delivering these savings will
also help enable us to makeadditional investment in newcontent for our audiences.
This year we continued to provide
trusted and reliable information,
news, current affairs and factual
output to the highest editorial
standards. We have sought toreach and serve all audiences withthis output, to contribute to abetter-informed society, a moreengaged citizenship and a worldof greater understanding. We areproud of the fact that BBC News
services are used by eight out of
ten UK adults each week and 73%
of adults think that BBC Newsand Current Affairs is effective at
helping them understand what
is happening in the UK and world
today. But we are aware that, as theimportance of our role has grown,
so have the challenges we face.

8 out
of 10
Pan BBC News reach
Number of UK adults (16+) who
use BBC News services each week.

73%% of UK adults who think
BBC News & Current Affairs
is effective at helping themunderstand what is happening
in the UK/world today.
(ineffective 12%)Source: Kantar Media.

Source: Ipsos MORI

64%

65%

% of UK adults who think
BBC News & Current Affairs
is effective at helping themunderstand what is happening
in their part of the UK.

% of UK adults who think
BBC News & Current Affairs is
effective at informing them about
the day ’s issues so they can makeup their minds.

(ineffective 15%)

(ineffective 14%)

Source: Ipsos MORI.

Source: Ipsos MORI.

BBC Two’s Newsnight20

BBC Annual Report and Accounts 2017/18

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S T R AT E G I C R E P O R T

The need for an independent,
impartial and accurate BBC isgreater than ever… but thestrategic context for that work
has become more challenging
than ever.
Of all the news sources (TV, radio, newspaper, magazine, website, app or social media)
which one source are you most likely to turn to…
…if you want impartial…for news you trust the most…if you want accurate
news coveragenews coverage

47%

BBC
ITV
Sky
Channel 4
Other
None of these
Don’t know

55%

BBC
ITV
Sky
Guardian
Other
None of these
Don’t know

55%

BBC
ITV
Sky
Channel 4
Other
None of these
Don’t know

Source: Ipsos MORI, 2,467 UK adults 15+ who follow the news, March -April 2018.

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BBC Annual Report and Accounts 2017/18

21

DELIVERING OUR PUBLIC PURPOSES

Delivering impartial
news and information

This has once again been a year of
massive news events – the snap General
Election, terror attacks in London
and Manchester, and the devastating
Grenfell Tower fire, as well as theextreme weather which swept thecountry. It has also been another year
in which concerns about misinformationand fake news have loomed large.
Throughout this, BBC News continued
to be the biggest provider of news andthe UK’s favoured source of trustworthy
information, from the daily news bulletinsto radio current affairs, to ever moreinnovative ways of storytelling.
BBC News reached over 80% of adults in
the UK weekly on average and BBC News
Online continued to attract 30 million
UK browsers a week on average in 2017.
The unexpected General Election drewhuge audiences and led to an all-time
record for UK traffic to BBC News Online,with 47.8 million UK browsers coming to the
BBC site and app in the week of the vote.

Panorama continued to be the home ofinfluential undercover investigations,broadcasting the major Paradise Papers
investigation, and the BAFTA awardwinning undercover investigation of an
immigration removal centre, as wellas editions on Facebook and sepsis.

account of the fate of the residents ofthe 21st floor, we gave residents the
chance to tell their own stories.
We provided wide-ranging coverage
across all output of the shocking
terror attacks affecting the UK.
We continued to analyse the impactof Brexit, launching a monthly sectorby-sector analysis on issues suchas fishing and the tech sector.
BBC News continued to break stories
throughout the year, notably the poisoningof Sergei Skirpal in Salisbury and therevelations about the former International
Development Secretary’s meetings in Israel,
which ultimately led to her resignation.
As ever, the BBC brought brave andhard-hitting international reporting to
UK audiences – from Syria, although
access to the country is difficult anddangerous, to Myanmar to Yemen.

We hosted a range of special programmingfrom around the country, bringing
audiences to the fore. The BBC Election
Debate came live from Cambridge; Question
Time leaders’ specials were broadcast
from York and Edinburgh, with a further
special programme devoted to Northern
Ireland; Election Questions came from
Swansea and Bristol; and a Newsbeat
Youth Debate took place in Manchester.
Andrew Neil also interviewed the leadersof the biggest political parties.

It is evidence of the quality of ourjournalism that audiences continue toregard BBC News as the most trustworthy
provider. But we know impartiality requires
continued focus after a series of polarising
events – the vote on Scottish independence,the EU Referendum and the 2017 General
Election – and as public opinion on issuesof the day can transcend traditional party
lines. This year 54% of adults thought the
BBC was effective at providing news andcurrent affairs that is impartial but 26%
perceived it to be ineffective. Audiences
continue to regard BBC News as the mostimpartial provider of all though – when
asked to name the one source they turnto first for impartial news coverage, theBBC is chosen most often, far ahead of thenext nearest provider. However we are notcomplacent about this, and impartiality is
an area that the Board is looking at closely.
When it comes to engaging young people,
over 70% of 16-34 year olds were reachedweekly by BBC News on average. To try
to maintain this, we are continuing toseek ways to make our news even more
relevant, building on the high levels oftrust young people have in BBC News.

47.8m
The General Election drew hugeaudiences and led to an all-time recordfor UK traffic to BBC News online in
the week of the vote.

Large audiences came to BBC TV
for election coverage overnight
and throughout results day. Results
programming before 7am reached 19.1
million adults across all channels, andcoverage the next day reached almost
17 million viewers, rising to 24 million
with news bulletins and Question Time.
The fire at Grenfell Tower was a huge anddreadful story. The BBC reported fromthe scene for several weeks, including
outside broadcasts of Victoria Derbyshire.
We continued to focus on the story andnotably on BBC Newsnight, through Chris
Cook’s forensic investigative journalism
on cladding and fire safety, and Katie
Razzall’s detailed and award-winning
The BBC Election Debate

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BBC Annual Report and Accounts 2017/18

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S T R AT E G I C R E P O R T

Above: BBC News’ Clive Myrie reported fromthe frontline of the Rohingya refugee crisis
Left: Nikki Fox reported on the Ukraine’s state-run
institutions for children with disabilities

We have already been doing more
to reach a more varied audience.
Victoria Derbyshire, named network
presenter of the year at the RTS awards,
focused on a health issue blighting
the lives of many women across theUK, vaginal mesh implants, as well as
her award-winning interviews with the
footballers who survived sexual abuse.
Her programme continues to make an
impact beyond television on social media.
BBC Radio 5 live, which won six ARIA
awards, continued to innovate to reach newaudiences. The station’s #mumtakeover
project, which saw a live broadcast
discussing modern issues aroundmotherhood and mental health, reachedmore than 3.5 million people on social
media with the most engaged audience
being women aged 25 to 34 years.
BBC Breakfast focused on the experiencesof people with special educational needs
and their families, as well as challenging
their presenters to resit a GCSE in maths.
BBC Three continued to bring current
affairs to a young audience, with innovative
approaches such as the Sex, Drugs &Murder: Life in the Red Light Zone series,
an uncompromising look at the life of sex
workers in Holbeck in Leeds, the first placein the UK where selling sex is permitted.
The programme has had over 12 million
iPlayer requests since its launch.
Our BBC Stories brand has helped us toengage with a wider range of audiences,including women, young people and lesswell-off groups.
And BBC Radio 1’s Newsbeat has beentackling mental health issues with their
My Mind and Me project.
Concerns about online misinformation
have not diminished this year. The BBC’sfight against fake news and push for media
literacy accelerated as we launched an
online interactive game, BBC iReporter,
created by animation studios Aardman.

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The game allows players to experience
being a BBC reporter in the heart of
the newsroom, helping them learn
to identify ‘fake news’. This is one ofa range of free resources for schools
and sixth forms across the country.
Our expanded Reality Check fact-checking
team continued to cut through rumour andspeculation online. We introduced a special
TV version of Reality Check during theGeneral Election, in which Steph McGovern
tackled issues such as taxes and pensions.
Investing in our video and data journalism
has allowed us to give our audiences more
personalised experiences, such as theaward-winning NHS Tracker project, whichallows users to find out how their local
services are performing against key targets.

BBC News Online continued to attract 30 million
UK browsers a week on average in 2017

We’ve also been finding ever moreinnovative ways for people to explore
the world around them, with our virtual
reality project Damming The Nile, offering
a 360 degree video experience.
Weather has been a focus for us this year in
more ways than one. Working with our new
provider, MeteoGroup, we launched a newlook weather service, with more data, newon-air graphics and a more contemporary
design with more realistic mapping.

BBC Radio 5 live continued to innovate
to reach new audiences

And the harsh winter weather drew majoraudiences to the BBC. 69% of UK adults
came to BBC Network TV news coveragein the week of 26 February, as the ‘Beast
from the East’ hit parts of the UK, andthere were record-breaking figures for
BBC Weather online with 24.9 million UK
browsers in the same week. Audiences
also turned to regional coverage, withan 8.6 million average audience acrossthe UK for the 6.30pm bulletins on
1 March the highest seen in five years.
Throughout this year, BBC Newshas continued to inform its
audiences and to report impartially,
accurately and independently.

BBC Annual Report and Accounts 2017/18

23

DELIVERING OUR PUBLIC PURPOSES

2

To support learningfor people of all ages

From its earliest days, the BBC has
informed, educated and entertained
the nation’s children. Our children’s
output helps generations to develop
their language, reading and social
skills in fun, playful ways. As
they grow through childhood andapproach their teenage years, theBBC’s children’s content grows
with them, entertaining them,
but also helping them navigate
the world around them, discoverwhat ignites their enthusiasm
and inspiring them to learn.
In today ’s heavily commercialised,global media, there has never beena more important time to assert
the values of trust, safety, quality
and fun that the BBC is valued forby children and their parents.
This generation of children embody
the digital transformation. They are
the audience group that are changing
fastest. That ’s why last year weannounced an additional £34 million
into our content for children andwe’re investing more into digital while
ensuring that our terrestrial channels
continue to showcase quality content
that reflects all of our audience.
Although TV continues to be themain platform for children’s viewing,
what they consider to be ‘TV’ andhow they access this is rapidly
evolving. Children’s content hascontinued to thrive on iPlayer with
1.1 billion requests in the last year.
43% of 5-11 year olds now use theirmobile phone to watch TV andchildren aged 5-15 now spend moretime each week online than they dowatching TV. As a result, the average
weekly reach of CBBC among its
6 -12 year old target audience has
fallen to under 25% in 2017/18.

Online has not yet compensatedfor this fall. However, CBeebies’
reach amongst the under 6s has
stayed much steadier, despite
increased competition. And thepercentage of under 16s who use
BBC television, radio or online
each week remains high at 83%.
The BBC’s unique role in children’s
media has never been more
important. We are by far the UK’s
biggest investor in home-growncontent. We reflect national
diversity and British children’s
voices in a way no one else does.
And we play a unique role in formal
learning – with invaluable resourcesthat are trusted by children,
parents and teachers alike.
This year we also begantransforming our education
offer and in March we set out
a range of priorities, including
improving literacy rates andopening up the world of
employment to young people.
As we seek to reinvent the BBC
for a new generation, we face real
challenges in building a lifelong
relationship with young audiences.
At the same time we have begun
the transformation of our missionin education by working to enable
everyone to achieve their fullpotential through educational
content, services and participative
experiences from the BBC, frompartners and from each other.

CBeebies drama Apple Tree House

24

BBC Annual Report and Accounts 2017/18

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S T R AT E G I C R E P O R T

There has never been a more
important time to assert the valuesof trust, safety, quality and fun thatthe BBC is valued for by children
and their parents.

83%

06:12

Under 16s reach% of under 16s who use
BBC television, radio, or
online each week.

Total time spent (per head)
Length of time under 16s spend
with the BBC each week (hh:mm).
(Jun 17– Mar 18)(Jun 17– Mar 18)

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Source: Ipsos MORI.

Source: Ipsos MORI.

67%

62%

7/10

% of UK adults who think
the BBC is effective at helping
them learn new things.

% of parents who think the BBC
is effective at supporting children
and teenagers with their learning.

Perception of BBC by under 16s:
mean score out of 10.

(ineffective 14%)(ineffective 9%)

Source: Ipsos MORI.

Source: Ipsos MORI.

Source: Ipsos MORI.

BBC Annual Report and Accounts 2017/18

25

DELIVERING OUR PUBLIC PURPOSES

Delivering learningfor people of all ages

CHILDREN’S
The purpose of the BBC’s children’s output
remains the same: to inform, educate andentertain our youngest audiences. But weincreasingly have to evolve what we do andhow we do it as the consumption habits ofour youngest audiences continue to rapidlychange. We still help children develop theirlanguage, reading and social skills, but
we now also have a role in helping themnavigate the digital world and helping
to make their online experiences safe.
As children watch more content fromoverseas it’s critical that we invest in highquality, distinctive UK content that reflects
all of our audience. But it’s becoming
increasingly difficult to reach younger
audiences via traditional platforms.
YouTube and YouTube Kids reached 73%
of 6-12 year olds. This presents a real
challenge for the BBC and to effectively
respond we need to do things differently.
This year we have seen a strategic shift in
how we deliver our content to audiences.
Our two linear channels are still hugely
important to us and remain the ‘shop
window’ for our content, but we’re moving
towards a more developed, connected
multiplatform offer which will see ourdigital offers become more important.
We announced last year that we would be
investing an additional £34 million into ourcontent for children and we’ve begun to
do that across all of our platforms. We’ve
invested more into digital while ensuringthat our terrestrial channels continue to
showcase quality content that reflects
all of our audience. From new pre-school
animation Bitz and Bob to Creeped Out, athrilling drama aimed at our older audience,2017 saw fresh new content that continues
to push boundaries. Last year we wereby far the biggest commissioner of UK
content, with 95% of all our commissions
coming from our in-house team or UKbased indies. And we make content thatno one else does; in the last year we’ve
brought live-action drama Waffle theWonderdog to CBeebies, while The Tempest
wowed pre-schoolers and their parents
as we brought more Shakespeare to thechannel. We introduced a new generationof CBBC viewers to Dennis & Gnasher witha whole new reboot, while Jamie Johnson
brings footballing drama to appeal to
our young sports fans. And Newsround

26

BBC Annual Report and Accounts 2017/18

78%

41%

Bitesize: reach % pupils% of secondary school
pupils who use Bitesize.

Bitesize: reach % pupils% of primary school
pupils who use Bitesize.

2016/17: 80%

2016/17: 45%

Source: YouGov.

Source: YouGov.

82%

64%

Bitesize: % of under 16 users who
say Bitesize helps them with theirschoolwork/homework.

Bitesize: % of secondary school
users who say Bitesize helped
them to achieve better grades.

2016/17: 81%

2016/17: 57%

Source: YouGov.

Source: YouGov.

continues to deliver the news in a way thatkids can understand and relate to andhas received critical acclaim in the lastyear for its approach to national stories
including the Manchester bombing.
We’re also changing how we work to makesure we’re as efficient as possible, focusing
on fewer key brands that deliver across allof our platforms, and we’ve streamlined
our commissioning process to reflect this.
For our older audiences we’ve launched a
CBBC account on Instagram as we continue
to adapt to the ever-changing needs of theaudience, while our YouTube channels now
have a total of nearly 700,000 subscribers.
Children’s content has continued
to thrive on iPlayer, with 1.1 billion
requests in the last year.
In December we hosted the Children’s
Global Media Summit in Manchester.
With a keynote speech from the Duke ofCambridge, the Summit brought together
thought leaders from across the world
to discuss the issues facing the children’s
media industry right now and those that
we will need to tackle in the future.

In March we launched our first ever kids
festival, CBBC Summer Social. Taking
place in Liverpool in August 2018,
Summer Social will be our biggest everoutdoor event and represents our desire
to get even closer to our audience.
LEARNING
This year the BBC began to transform
what we do in education in order to fully
deliver our public purpose to support
learning for people of all ages, whilst
reinventing the BBC for a new generation.
Supporting learners
As it approaches its 20th anniversary,
BBC Bitesize remains the cornerstone of
our education proposition by supportingchildren and young people with their study
and revision needs, wherever they are in
the UK. It is the most popular dedicatededucation site in the UK – reachingaround 80% of secondary students andaround 40% of primary students. Of
those using Bitesize for GCSE/Nationals
study and revision, 78% think Bitesize
helped them to feel better prepared fortheir exams and 54% feel it helped themget better GCSE/Nationals results.

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BBC Bitesize is the most popular
dedicated education site in the UK

We have begun the process to transform
Bitesize to help students reach theiracademic potential by providing a morestructured service, tailored to theindividual learner. Older students can
now sign in to a personalised Bitesize
which remembers who they are andwhat they are studying. We will build onthese initial steps to deliver adaptive
learning and new interactive content.
Supporting teachers
We have continued to build our support
for teachers. 60% of them use BBCmaterial in their classrooms and BBC
Teach brings together the best BBC
content alongside award-winning shortfilms – all tagged to the curriculum. We
also deliver interactive Live Lessons forclassroom use and educational audio
content through Schools Radio.

Supporting adult learning
We support adult learning through ourpartnership with the Open University(OU). Each year the OU invests in 1215 BBC projects, ranging from major
series such as Civilisations and Blue
Planet II, to more experimental projects
such as digital shorts for BBC Threeand videocasts for BBC Ideas. In every
case the OU is looking to extend thelearning opportunities presented bythese programmes and offer onward
learning journeys to enable audiences to
explore subjects of interest to them.
Tomorrow’s World has been a pan-BBC
partnership aimed at adults aged 25-44,
that has connected audiences with thebrightest minds and biggest scienceorganisations in the country, including
the Science Museum Group, Wellcome,the OU and the Royal Society. It has beena public celebration of all things science,
including a Tomorrow’s World Live eventwith Eric Schmidt and Brian Cox.
New education vision
In an age when education is widely
recognised to be the most significant
element in determining life chances, we’vebeen considering how the BBC can build
on our existing strengths and ensure thateverything we do in this space is impactful.

We have consulted with stakeholders ineducation and business to identify key areas
where the BBC can have a positive effect.
In March we publicly set out the priorities,
which we will explore in partnershipwith a range of organisations:—Improving literacy rates by focusing on
pre-school children to counter the factthat the most disadvantaged five year
olds can be 19 months behind theirmore affluent peers in vocabularydevelopment on school entry—

Championing the wider needs ofchildren by building resilience andself-esteem and by supporting mental
health just as much as we currently
support their academic needs—

Opening up the world of employment
to young people at a time when recent
CBI research has revealed that 84% of
UK businesses feel the quality ofcareers advice young people receive
is not good enough—

Exploring opportunities that makeit easier for adults to retrain;equipping them to thrive in achanging labour market and anincreasingly digital world.

Education campaigns
We work in partnership with a wide rangeof organisations to deliver major campaigns
that address UK-wide challenges.
In the last 18 months, over 40% of primaryschools in the UK signed up to Terrific
Scientific, our major partnership with
Wellcome and 30 other organisations
and universities, designed to inspire
primary school science and help counterthe STEM crisis in the UK. There havebeen over 125,000 downloads of ourresources and nine out of ten teachers
using them say they intend to use thematerial again, demonstrating its legacy.
In January we launched Super Movers,a partnership with the Premier
League and the Scottish Professional
Football League to help get kids active.
Super Movers supports teachers andparents with simple, fun films that get
children moving while they learn.
Other campaigns have included The
Mind Set, offering practical advice
to students during their exams; Ten
Pieces, which continues to inspire
children through classical music; andthe Radio 1 Academy which encourages
young people to reach their potential.

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There were a recordbreaking 134,000
entries for Radio 2’s
500 Words short story
competition.
CBeebies’ The Tempest brought Shakespeare to pre-schoolers

BBC Annual Report and Accounts 2017/18

27

DELIVERING OUR PUBLIC PURPOSES

3

To show the most creative,
highest quality anddistinctive output
and services

Maintaining our unique breadth andrange of output with a commitment
to the highest production andeditorial standards is at the heartof what the BBC does. This year
we have continued to invest in new
and original content made all over
the UK; taking creative risks while
maintaining a balance between newseries and returning favourites, allaimed at serving our audiences.
The following pages demonstrate
how we have delivered this purpose.
Our reporting is broken down
by genre – factual, arts, drama,
entertainment, comedy, sport andmusic – and demonstrates that our
output on TV and radio is unique inits distinctiveness and in its focus on
British content from across the UK.
These pages tell a strong story of
the British creativity, quality andrisk-taking that is the first priority
for output on the BBC. They show anorganisation on top creative form,
setting the standards through delivery
of a staggering breadth of high qualityand distinctive content. Indeed 72%
of regular users think BBC Television
is effective at providing content andservices that set a high standard for
quality, while 81% of weekly users
rate BBC Radio as high quality.
But sustaining the quality thataudiences demand is increasingly
difficult in a world where inflation
in some genres is running at
unprecedented levels. The BBC
continues to seek out investment
from other providers to reducethe demand on the licence fee, butthese deals are not as available oras attractive as they used to be.
At the same time, maintaining thereach and time that audiences
spend with our output is equallydifficult, when they have so manyother choices at their disposal.

This challenge is most acute foryoung audiences. Our most recent
estimates suggest that 16 -34 year
olds spent similar amounts of timewith BBC One, ITV and Netflix a
week – around two hours a week foreach. 16 -24 year olds spend moretime with Netflix than all of BBC
TV, including iPlayer. Similarly, forthe first time, in 2017/18 estimatessuggest that 15-34 year olds spentaround as much time listening
to music streaming services as
they did to all of BBC Radio.

80%

But we are also aware of the scale ofthe challenge we face, particularly
from international competitors.
This report shows we are wellplaced to remain the championof home- grown, British content
that means so much to British
audiences, and the cornerstoneof the creative industries thatallows this country to punch well
above its weight worldwide.

% of UK adults (16+) in TV homes
who watch BBC TV each week.
2016/17: 82%
Source: BARB.

08:16

64%

Length of time UK adults (16+) inTV homes spend with BBC TV
each week (hh:mm).

% of UK adults (16+) who listen
to BBC Radio each week.

2016/17: 08:46

2016/17: 65%

Source: BARB.

Source: RAJAR.

10:03

74%

Length of time UK adults (16+)
spend with BBC Radio each week
(hh:mm).

% of UK adults (15+) who use
BBC Online each month.

2016/17: 10:09
Source: RAJAR.

Source: comScore MMX Multi-Platform,
ONS.

My Family, Partition and Me: India 1947 with
RTS award - winning presenter Anita Rani

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BBC Annual Report and Accounts 2017/18

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S T R AT E G I C R E P O R T

BBC quality and distinctiveness by platforms
Sets a high standard
for quality
Distinctive
BBC TV72%

68%

effective

effective(ineffective 7%)(ineffective 8%)

81%

77%

effective

effective(ineffective 6%)(ineffective 7%)

74%

70%

effective

effective(ineffective 6%)(ineffective 6%)

weekly users saying

BBC RADIO

65%

64%

% of UK adults who think the BBC
is effective at providing content/
services that set a high standard
for creativity.

% of UK adults who think the BBC
is effective at providing content/
services that set a high standard
for originality.

(ineffective 13%)

(ineffective 14%)

Source: Ipsos MORI.

Source: Ipsos MORI.

Source: Ipsos MORI.

69%

72%

66%

% of UK adults who think the BBC
is effective at providing content/
services that cater for a wide
range of tastes.

% of UK adults who think the BBC
is effective at providing content/
services that set a high standard
for quality.

% of UK adults who think the BBC
is effective at providing content/
services that are distinctive.

(ineffective 13%)

(ineffective 11%)

Source: Ipsos MORI.

Source: Ipsos MORI.

weekly users saying

BBC ONLINE

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weekly users saying

weekly users saying

weekly users saying

weekly users saying(ineffective 12%)Source: Ipsos MORI.

BBC Annual Report and Accounts 2017/18

29

DELIVERING OUR PUBLIC PURPOSES

Delivering creative, highquality and distinctive
output and services

FACTUAL
This year a unique combination ofentertainment and education across all
our platforms allowed powerful stories
to be heard, took audiences on journeysof discovery and created jaw-dropping
moments that got the nation talking.
On BBC One, eye-opening documentary
Alan Shearer: Dementia, Football and Me
and the hard-hitting The Betrayed Girls
moved viewers, while Ambulance and The
Met: Policing London gave unprecedented
access to Britain’s emergency services;
and Mind Over Marathon challenged
ten runners to compete in the London
Marathon for Heads Together, a campaign
set up by the Duke and Duchess ofCambridge and Prince Harry to tackle
the stigma around mental health.
On BBC Two, Hospital (averaging
2.4 million per episode in season one)and Chris Packham: Asperger’s and Me(2.8 million) were powerfully human in
their storytelling, winning awards andplaudits from viewers and critics alike.
Constructed documentary Exodus: My
Journey to Europe and longitudinal series
Generation Gifted played with ambitious
factual formats, while Abortion on Trial,and My Family, Partition and Me: India 1947,
brought hard-hitting conversation andstories to primetime. Louis Theroux: Dark
States gave viewers a unique insight into
the USA in a hugely timely series that was
popular with younger viewers, while The
Detectives: Murder on the Streets provided
a gripping insight into crime in the UK.

BBC One’s landmark Blue Planet II

30

BBC Annual Report and Accounts 2017/18

Back in Time for Tea returned stronger
than ever, while Absolutely Champers with
Joanna Lumley and Jennifer Saunders
transported 2.9 million viewers to
the Champagne region of France.
BBC Three led the charge with factual
films that resonated with young audiences
and tackled subjects important to them.
Single films with a personal story at theirheart, included Chasing Dad: A Lifelong
Addiction and factual drama Murdered
for Being Different proved popular, while
Drugsland proved to be an uncompromisingobservational series seen through theeyes of professionals, users and dealers.
Radio 4 reached record on-air audiences
and programmes like You and Yours andMoney Box played an important role inproviding advice and insight to listeners.
This year Gardeners’ Question Timemarked 70 years of answering the UK’shorticultural queries and Woman’s Hourlooked at the best and worst places in
the UK to be a woman. New series also
explored important political and social
subjects. In The Fix some of the country’s
brightest young minds tried to solve
complex policy problems and Across the
Red Line brought together people on
opposing sides of a political issue. Radio 1,
1Xtra and Asian Network produced arange of factual content providing insightA type of plankton
described as part of‘the beating heart’ of theoceans has been named
after Blue Planet II; thefirst time a species has
been named after a
British TV programme.

and a platform for younger people,
including High Street Hijabis, Growing
up in Care and My Extraordinary Skin.
The multi-award-winning Blue Planet II
captivated viewers and became the mostwatched TV programme of 2017, withmore than 14 million people tuning in toepisode one, and challenged views acrossthe globe on plastic pollution. Dawn
Chorus and Natural Histories on Radio 4
explored nature’s influence on culture andsociety and told the stories of the UK’s
flora and fauna, while the station’s Tweetof the Day remains popular. Sciencefocused Radio 4 programmes such as

BBC Two’s Hospital

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S T R AT E G I C R E P O R T

Presenter David Olusoga in Giza, Egypt

CIVILISATIONSThis was a big year for arts television
with BBC Two’s Civilisations – themost ambitious arts season since
The Big Read 15 years ago.
The landmark nine-part series,
in partnership with the Open
University, filmed in 31 countries,
was accompanied by a host ofadditional programming on BBC
television and radio, including
11 specially commissioned
films in the English Regions.
The series prompted the Civilisations
Festival – a collaboration with over
300 museums, galleries, libraries
and archives to shine a light on
UK collections and inspire debate
through the staging of over 260
public events. To support the festival,
the BBC opened up over 800 piecesof archive, a suite of digital tools
including the Civilisations Augmented
Reality app, and connected local
radio stations with museum events.
The Life Scientific and The Infinite Monkey
Cage examined topical scientific subjects
in ways that appeal to their audience.
Mars was a week of programming that
explored our relationship with the Red
Planet from the latest science, to science
fiction. Radio 4 also marked 50 years since
the first heart transplant, looking at thelatest surgical techniques as well as ourphilosophical relationship with the heart.
BBC Two again produced award-winningknowledge-building history content, with
Elizabeth I’s Secret Agents scooping an
RTS award, while David Olusoga’s A House
Through Time received plaudits andaveraged 2.5 million viewers across its run.
BBC Four sought to provide an expert andnew in-depth approach to well-known
stories. Successes included box set history
The Ruth Ellis Files: A Very British Crime
Story and England’s Forgotten Queen:
The Life and Death of Lady Jane Grey.

Radio 4 provides a space for listeners
to reflect on faith and explore the roleof religion in the world. For its latest
partnership with the British Museum, Neil
MacGregor examined the role of sharedbeliefs in the development of societies
throughout history in the landmark 30part series Living with the Gods. Radio 4’slong-running programmes Sunday and
Beyond Belief continued to explore theplace of belief in today’s world, while Moral
Maze debated the ethical issues behind
topical subjects. On television, Pilgrimage:
The Road to Santiago brought hard-hitting
conversation and stories of faith andspirituality to primetime on BBC Two.

BBC Research & Development
offered partners access to digitaltechnology, with 93 organisations
attending workshops, and 28 included
content in the augmented reality
app. Art Fund made 21 grants toparticipating organisations. Festival
partners also included Culture
24, Museum Association, National
Museum Directors’ Council, Societyof Chief Librarians, Association of
Independent Museums and Scottish
Library and Information Council.

0 Read more on page 144

Radio 1’s High Street HijabisRadio 4 continued to reflect significant
historical moments with a range ofcontent. Partition Voices highlighted theuntold stories from British Asians andColonial British who witnessed India’s
partition. To mark the centenary of theOctober Revolution the station broadcast
the seminal book Ten Days That Shook
The World. In Our Man in the Middle East
Jeremy Bowen’s 25 part series charted apersonal history of the region based on
his decades of reporting. While this year’s
Reith Lectures, which saw best-selling
writer Hilary Mantel explore history andfiction, was named the Broadcasting Press
Guild’s best radio programme of the year.

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DELIVERING OUR PUBLIC PURPOSES

Delivering creative, highquality and distinctive
output and services

BBC iPlayer recorded its
best year ever in 2017.
With a host of box sets,hits from the archive andgreater personalisation,
viewers streamed on
average 272 million
programmes per month.
ARTS
The BBC’s mission in arts is to ensure
the UK remains one of the most creative
countries in the world. We support artists,
and arts organisations, and commission
programmes to appeal to the widest
possible audiences – estimates indicate
BBC Arts reaches around 6.5 million
adults a week. We worked alongside
the Royal Opera House in a seasonof performances and digital activity
designed to engage a new audience.
#OperaPassion Day brought together theeight major opera companies in the UK
for a festival which was viewed 500,000
times on Facebook, with a television andradio audience of millions. Our creativearts television documentaries filled theentire shortlist for the Grierson Best
Arts Documentary Award 2017. BBC One
brought big audiences to the arts with
the Big Painting Challenge, Fake or Fortune
and imagine. BBC Two documentaries
covered J K Rowling, Picasso and Vera
Lynn, and BBC Four covered the arts
with depth and experimentation throughacclaimed seasons on the art of Japan and
Mexico, and documentaries on Leonora
Carrington, Muriel Spark and James Joyce.
On Radio 4, The Art of Living series explored
how art has transformed people’s lives,
including a powerful collaboration between
musicians and pupils with educational
needs. New programme Only Artists
brought together artists to talk about
the creative process in a free-flowing,
illuminating conversation. Over theyear, the BBC has offered unparalleledcoverage of the arts across Front Row
on Radio 4 and BBC Two, the Radio 2
Book Club, Radio 3’s Free Thinking andOpen Book and The Film Show on Radio4, BBC Northern Ireland’s The Arts Show
and BBC Scotland’s Culture Studio.

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BBC One’s global thriller McMafia

DRAMA
You do not have to look far to see we’reliving in a golden age of British drama
and the BBC is at the heart of that with
its commitment to producing original,
diverse and exceptional programming.
High-rating BBC One hits like Line Of Duty
(the final of which had an average audienceof 9.9 million viewers) and Doctor Foster(which averaged 8.9 million viewers overthe series), made without international
partners, offered unmissable appointmentto-view television and communal viewing
experiences for audiences, as did Peter
Capaldi’s regeneration into Jodie Whittakerin the Doctor Who Christmas special,
as well as Broken and Shetland. Whiledistinctive dramas such as the multi-awardwinning Three Girls and recent global
thriller McMafia (the opening episode was
the fourth most popular drama on BBC
iPlayer ever) contributed to public debate
and the understanding of the world welive in. BBC Two dramas continued to tellcompelling and bold stories, with thereturn of BAFTA award-winning Peaky
Blinders for its most successful series
ever, state-of-the-nation drama Collateral(BBC Two’s biggest new drama launchsince 2015, with 4.8 million viewers),
King Charles III and thought-provoking

programming like The Boy With The
Topknot and Man In An Orange Shirt whichshowcased the channel’s creative diversity.
BBC Three’s drama offering this year has
been ground-breaking, innovative andcreative, with Overshadowed told entirely
through the vlogs of the lead characterand Five By Five, a series of short films
from new writers curated by Idris Elba.
BBC Drama has taken risks and been
ambitious in producing original new British
drama this year, while also maintaining
the high quality of returning shows
like Silent Witness, which launched to
8.7 million viewers, and Death In Paradise,that viewers know and love. The BBC is
known for its sumptuous period dramas
and this year didn’t disappoint with
Little Women, The Miniaturist and Call
The Midwife (with a peak of 9.6 million
viewers in series seven), all with strong
female characters at their centres.
BBC iPlayer box sets such as Top Of
The Lake, Gunpowder and Requiem haveallowed viewers the opportunity to watch
the shows they want to watch, the way
they want to, which we know particularly
appeals to younger audiences. The hostof drama programming that returned to
BBC iPlayer as a Christmas treat resulted

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S T R AT E G I C R E P O R T

TOMORROW’S WORLD
A pan-BBC partnership that hasconnected audiences with the brightest
minds and biggest science organisationsin the country, including the Science
Museum Group, Wellcome, the Open
University and the Royal Society.
It has been a public celebrationof all things science, including a
Tomorrow’s World Live event with
Eric Schmidt and Brian Cox.

ENTERTAINMENTOver the last 12 months the BBC hasbrought a raft of entertainment into thehomes of the nation, from big Saturdaynight spectaculars on BBC One throughto clever and innovative quiz shows on
BBC Four, delivering on the promise
to fuel the national conversation andreflect the diversity of the UK.

and All Round to Mrs Brown’s all continuing
to draw big audiences. We also deliveredon our promise to introduce exciting new
Saturday night formats in the form of
All Together Now and Even Better Than
The Real Thing. All of this plus annual
events such as Eurovision, Children in Need,
and Comic Relief prove that when the nation
comes together, it comes to BBC One.

On BBC One Strictly Come Dancing enjoyedits most successful series to date, with
13 million viewers tuning in to watch
the live final. It is the perfect example
of a British format not only going fromstrength to strength here in the UK,
but seeing global success with now over
55 countries having bought the format
licence for the show. Elsewhere on BBC
One, successful returning series included
Michael McIntyre’s Big Show, The Apprentice

BBC Two is the home of intelligent quizshows as well as talked-about factual
entertainment. University Challenge,
Mastermind and Eggheads have been joinedby new stablemates such as Letterbox.
The Mash Report has been a stand-out hit
for the channel, with clips and content
from the show reaching millions ofpeople via social media, while Dragons’
Den and Top Gear continue to attract
younger and underserved audiences.

Chineke! and cellist Sheku Kanneh-Mason

in iPlayer’s best-ever weeks (the week
between Christmas and New Year saw
close to 80 million requests to view).
Radio 4 continued to experiment withdifferent forms of drama to reach newaudiences: the second series of the station’s
digital-first innovative conspiracy thriller
Tracks was the most visited Radio 4
programme online in the week it launched.
The station offers a huge variety of drama,
from adaptations of renowned literature
to new writing for radio. Dramas such asa big series on the Russian tsars reflected
the current affairs agenda. Across one day,Radio 4 broadcast a major dramatisation ofSalman Rushdie’s novel Midnight’s Children
as part of the BBC’s programming on thePartition of India anniversary. Neil Gaiman’s
Anansi Boys entertained listeners and theseries Riot Girls returned – dramas written
by women featuring extraordinary female
characters. Radio 3 also continued tobroadcast remarkable drama this year, withseasons including a focus on Joe Orton andBreaking Free a Century of Russian Culture,featuring an acclaimed dramatisationof Turgenev’s Fathers and Sons, as wella new production of Louis MacNeice’s
iconic radio play, The Dark Tower.

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PROMS 2017
Featuring more than 90 concertsof world-class music, theBBC Proms was attended byover 300,000 people.
Highlights included the debut ofChineke! – Europe’s first majority BME
orchestra – and the first Relaxed Prom,suitable for children and adults with
autism, communication or sensory
impairments and learning disabilities.

Plus, for the first time in recent
history, the BBC Proms travelled
outside London to Hull as part of
the Proms at… series and returned
to a Peckham car park for a widereaching programme featuring The
Multi-Story Orchestra and YouthChoir. Content was also sharedacross the BBC World Service.

BBC Annual Report and Accounts 2017/18

33

DELIVERING OUR PUBLIC PURPOSES

Delivering creative, highquality and distinctive
output and services

Boy Blue Entertainment’s
Emancipation of Expressionism

CULTURE UK
Culture UK, our new partnership strategy
launched and developed in collaboration
with the Arts Councils of England, Walesand Northern Ireland and Creative
Scotland, focused on UK-wide culturaldevelopment, artist-led commissioning
and technological innovation. As
part of this, a £4 million ‘Artists
First’ commissioning budget is being
dedicated to new television projects byarts organisations like Sadlers Wells, theNational Theatre and Hull, UK City of
Culture and artists like Wayne McGregor,
Phil Collins and Rachel Maclean.

BBC Three comedy Man Like Mobeen

COMEDYAs the home of British comedy, no otherbroadcaster is as committed to finding andnurturing future stars and championing
portrayals of our diverse national character.
From those taking their first performancesteps such as Charlie and Daisy-May
Cooper from multi-award-winning
mockumentary This Country, to showcasing
the most established stars such as Alison
Steadman and John Cleese in Hold The
Sunset. We are also dedicated to bringing
through talented faces and voices forthe mainstream, with BBC One’s Comedy
Playhouse, BBC Two’s New On Two andSlices on BBC Three which have resulted inlots of exciting new series commissions.
On BBC One Peter Kay’s Car Share,
Not Going Out, Mrs Brown’s Boys specials,
Still Game and Tracey Breaks The News
continued to delight audiences. On
BBC Two there was more criticallyacclaimed Inside No 9, Mum, Upstart Crow,
W1A, Frankie Boyle’s New World Orderand Two Doors Down, plus new series
with Motherland and the heralded returnof The League Of Gentlemen. BBC Foursaw the last series of Detectorists,
and biopics in the form of Brian Pern:
The Tribute and Eric, Ernie & Me.
BBC Three is still the natural home fortaking chances on distinct new voices;
this bold approach to commissioning has
resulted in many successes such as People
Just Do Nothing, The Young Offenders,
Man Like Mobeen, Josh and Witless.

BBC Radio continues to champion
rising stars in comedy and many of our
comedy programmes appeal to large coreaudiences and new younger listeners. This
year Radio 1 brought back comedy witha new late night slot and the distinctive
podcasts helped give a new generation ofyoung comedians a platform. With heats
all around the UK, Radio 4’s New Comedy
Award again recognised new comedians
and the station welcomed back the 2014
winner Lee Ridley, also known as Lost
Voice Guy. And award-winning standup Mae Martin returned with her Guide
to 21st Century… this year on addiction.
Comedy on Radio 4 gives listeners a mixof much-loved shows and new comedy.
Nicholas Parsons marked 50 years ofJust A Minute while The News Quiz has beenentertaining with topical comedy for 40
years. The classic The Hitchhiker’s Guide
to the Galaxy returned to Radio 4 with theoriginal cast and special guests including
the late Professor Stephen Hawking.
Miranda Hart’s Hampshire to Hollywood
was a three-hour special on Radio 4 Extra.

Performance Live, in partnership with
Arts Council England and Battersea Arts
Centre, showcases some of the most
exciting artists working in performance
today on BBC Two, and Opera Passion– a live digital festival – was launchedwith eight UK opera companies. BBC
R&D has opened itself up to the arts
sector, offering access and training
around specially developed digital tools,
including the Civilisations AR app.

£4m
‘Artists First’ commissioning budget
to support new television projects
by arts organisations.

Radio 4’s comedy podcasts regularly appear
near the top of the BBC podcast chart andthis year’s commissions included shortform, online comedy New Year New You byDavid Schneider. BBC Three continues to
explore opportunities with online shortform comedy, and shows such as Pls Likeand Big Field are making the most of thispipeline that offers a route to longer-form.

The Hitchhiker’s Guide to the Galaxy, Radio 4

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BBC Annual Report and Accounts 2017/18

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S T R AT E G I C R E P O R T

The Winter Olympics
22.2 million stream starts of ourcoverage via digital platforms

SPORT
The BBC’s aim is to bring audiences the big
sporting moments that unite the nation
while also providing up-to-the-minutenews and opinion from across the world ofsport. Despite the exceptional competitionin the sports broadcasting market, theBBC remains the nation’s favourite sports
broadcaster. We run the most popular TV,
radio and online sport services in the UK.
In 2017 we accounted for around 2% of the
sport broadcast on TV, but delivered morethan 34% of total TV viewing. Some sports,
football in particular, play an importantrole in maintaining a relationship withyounger and more diverse audiences. Our
weekly football output, centred around
Match of the Day, continued to entertain
and attract large audiences in 2017, withnearly 60% of those watching any Premier
League only watching it on BBC TV.
The BBC Sport website is the most popularin the UK, attracting 19 million unique
UK browsers every week. Indeed, oursport offer is at the forefront of the BBC’s
digital transition, bringing extra action andnews to audiences by supplementing ourlinear offer with increasingly personalised
content. Our online streaming service isreinventing free-to-air sports broadcastingwith the biggest increase of live sport
content for a generation. Over a thousand
extra hours of live sport will be available
for audiences to watch online every year
through BBC Sport and BBC iPlayer.
Sports fans can also personalise theservice to make sure they can watch
all the live sport they love, wheneverit’s on the BBC, across computers,
mobiles, tablets and connected TVs.
Beyond our big focus on the largest
events, we maintained a deep breadthof sports coverage.

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2017/18 SAW A NUMBER OF MAJOR SPORTING EVENTS ON THE BBC:WIMBLEDON— This year we celebrated the 80th
anniversary of BBC Television
coverage and the 90th anniversaryof BBC Radio’s coverage – marking
the longest-running partnership insports broadcasting.
THE FA CUP— The most famous domestic cup
competition in world football had
unprecedented coverage on all
broadcast platforms withcomplementary programming
across the BBC’s TV, radio anddigital portfolio and reached 28.1
million people on the TV set alone.
WORLD ATHLETICS CHAMPIONSHIPS— One of the biggest sporting eventsof the summer took place at the
Olympic Stadium in London and the
BBC had extensive live coverage
across all broadcast platforms.
TV coverage each night regularly
peaked at over 6 million, with a top
peak of just under 10 million.

Since the 2016 Olympics in Rio we haveshown on our network TV channels and Red
Button, major championships of all sports
where GB won gold; and BBC Radio 5 live
and 5 live sports extra have showcased
20 different sports in the last year.
BBC Radio 5 live and 5 live sports extra
continued to offer a wider range of sports
than any other UK broadcaster. Coverageof this year’s Winter Paralympic GamesSIX NATIONS RUGBY UNIONCHAMPIONSHIP 2018
— No other sporting event brings
together the nations of the UK
in such a friendly but fiercelycompetitive rivalry. The BBC
shared live coverage with ITV
on TV, with the BBC alone reachingover 19 million to great audienceappreciation. There was also fulllive coverage on BBC Radio.
THE WINTER OLYMPICS IN
SOUTH KOREA— The first major event in our new
seven-year partnership with
Discovery was delivered across allof our platforms. An exceptional
33.3 million watched our TV output.
And the Games saw a significant
shift in how our audiences arewatching, with 22.2 million stream
starts via our digital platforms.

in Pyeongchang was available on the
BBC Sport website and BBC Radio 5 live,
where JJ Chalmers presented updates andhighlights from South Korea. With 144
live radio commentaries, we broadcast
more Premier League matches thanany other radio broadcaster in the UK,
while Test Match Special covered every
England cricket match in the summer,
which was complemented by a digitalclips service on the BBC Sport website.

BBC Annual Report and Accounts 2017/18

35

DELIVERING OUR PUBLIC PURPOSES

Delivering creative, highquality and distinctive
output and services

MUSIC
Music is at the heart of many of the BBC’s
most popular services, inspiring andentertaining audiences with distinctive
programming and bringing the bestof the UK’s music and live events tomillions of people every week.
Radio 1 brought some of the biggest
names in music to the Teen Awards, which
recognises exceptional achievements ofTeen Heroes. 1Xtra celebrated its 15th
anniversary with a special 1Xtra Live inManchester and distinctive programming
included 1Xtra in Jamaica and coverage
from carnivals in London, Nottingham
and Leeds. For the first time, BBC
Asian Network’s flagship event, Asian
Network Live, was held in Birmingham
with outreach activity across the city.

BBC Music highlights on BBC One included
three At the BBC shows featuring Harry
Styles, Sam Smith and U2, and Sounds Like
Friday Night launched. BBC Music specials
included Children in Need Rocks the 80s andGospel Christmas as well as benefit concert
One Love Manchester. BBC Two celebrated
Later… with Jools Holland’s 25th year witha televised concert. The BBC’s extensive
Glastonbury coverage was watchedby almost 23 million people. BBC Four
broadcast from Radio 2’s In Concert,Radio 1’s Live Lounge, the Mercury Prize
as well as highlights of the Radio 2 Folk
Awards and Country Music Association
Awards. Gregory Porter explored Popular
Voices and fans were given a deeper insightto the music and lives of profiled artists.

With over 300 live
performances,
6 Music broadcast
more live music thanany other station in
the UK.

Radio 2, the most listened to station in theUK, marked its 50th birthday by taking its
Saturday night Soul Zone to Manchester
for the first Radio 2 All Star Party. The
station’s commitment to specialist
music was reflected in the Folk Awards,
In Concert series celebrating artists fromthe past five decades, and broadcasts from
Cheltenham Jazz festival, Glasgow’s Celtic
Connections and Evening Standard TheatreAwards. Radio 6 Music, which reachedrecord listeners this year, has championed
alternative and independent music
including Hip Hop Hooray. With over 300
live performances, 6 Music broadcast more
live music than any other station in the UK.
Accompanying landmark moments,
Radio 3 broadcast Music of the Reformation,and seven operas complementing BBC
television programmes, plus live events
around the UK including the London Jazz
Festival and Barbican concerts. A projectwith the Arts and Humanities ResearchCouncil to research forgotten works byfemale composers culminated in a galaconcert. Radio 3 again curated a day offemale composers to mark International
Women’s Day, and commissioned Lucyand Helen Pankhurst to write a newwork that was freely available to the
public to perform in their choirs.
Asian Network Live in Birmingham

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BBC Annual Report and Accounts 2017/18

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S T R AT E G I C R E P O R T

Radio 2’s I Feel Love concert

GAY BRITANNIA SEASON
A season of bold and provocative
stories marking the 50th
anniversary of The Sexual Offences
Act 1967.
Led by programming on BBC Two
and BBC Four, with other content
across radio and online, the season
featured stories celebrating
the LGBTQ community.
PODCASTS
The BBC is one of the largest podcast
producers in the world and this year has
also commissioned new series which
aren’t made up of on-air programmes
and exist first and foremost as podcasts.
Younger and different voices delve
into various topics analysing culture,
shedding light on the world around us
and sharing personal experiences. FromRadio 1’s new comedies to Radio 4’s
GrownUpLand, 5 Live’s Fit and Fearlessand podcasts such as The Boring Talks
and Unpopped, listeners have been able

to enjoy a range of different content
online as we reinvent BBC Radio fora new generation. These joined otherpopular podcasts with well-known
BBC presenters such as PoliticalThinking with Nick Robinson, Brexitcast,
Kermode and Mayo’s Film Review, The
Assassination and Fortunately with Fi
and Jane. Radio 4 Extra introduced
Podcast Radio Hour to give listeners
the chance to hear from the people
who make recommended podcasts.

The season was rated highly byviewers and listeners with resonanceparticularly high among thecommunity, having a positive impact
on their views about the BBC.
TV programmes included Against
the Law (nominated for a BAFTA forBest Single Drama), the acclaimed
Man In An Orange Shirt, Prejudice And
Pride: The People’s History Of LGBTQ
Britain (nominated for a Broadcast
Digital Award), Queers, Growing Up
Gay and Is It Safe To Be Gay In The UK?
Radio 2 broadcast a live Saturdaynight concert as well as a
documentary presented by Andrew
Scott exploring the last five decadesof British history through gay
culture and its impact on popular
music. In 6 Music’s Loud and Proudseason, Tom Robinson explored thechanging attitudes towards LGBTQ+
communities through the lens ofLabi Siffre’s life and music. Radio 4
highlights included the Queer Icons
list and From Shame to Pride with
Val McDermid, while Radio 1 also
carried Gay Britannia documentaries.

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BBC Annual Report and Accounts 2017/18

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DELIVERING OUR PUBLIC PURPOSES

4

To reflect, represent
and serve the diverse
communities of all of theUnited Kingdom’s nations
and regions and support
the creative economy

As an organisation, we endeavour
to represent everyone – all thecultures and diverse voices thatmake the UK what it is. Our businessis storytelling and we must makesure we tell stories that people all
across the country will recognise,
will understand and will relate
to. That is why the BBC, as a truly
creative organisation, must embraceas many voices and views as possible,
as well as giving opportunities topeople from all backgrounds.
It is fundamental to the BBC’s public
service mission that we strive torepresent the whole of the UK, toreflect the whole of the country toitself and make sure all of its diverse
voices are heard. We have set ourselves
on and off-air targets that are as
challenging as any in the UK media
industry – so that, with the range andbreadth of programming we make,audiences will be able to see and hear
diverse voices in everything we do.
We recognise that, at a time when the
country feels divided and fragmented,
when the UK is increasingly diverse anddevolved, this responsibility is perhaps
more important than ever. Across thewhole country, we know that the public
wants us to do more to represent andportray, as accurately as possible, thefull diversity of life and community
throughout our programmes andservices. Last year we reviewed ourprogrammes and services in thenations and announced significant
changes and major investments. Our
programmes need to be made acrossthe UK’s nations and regions. Our
local and nations services need to be
relevant to audiences in each place.

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BBC Annual Report and Accounts 2017/18

But as well as showing what makes
us different, we must also celebrate
what unites the country for sharedexperiences and a shared national
conversation. We believe the BBC’s
unique ability to highlight whatbrings the country together as wellas what sets its communities apartis an invaluable asset for the UK ata critical time. The following pages
demonstrate how we have met thispurpose through our diverse output
and through providing for audiencesin Wales, Scotland, Northern
Ireland and in the English Regions.

56%

62%

% of UK adults who think the BBC
is effective at reflecting people
like them.

% of UK adults who think the BBC
is effective at providing content/
services relevant to them.

(ineffective 20%)

(ineffective 17%)

Source: Ipsos MORI.

Source: Ipsos MORI.

55%

56%

% of UK adults who think the BBC
is effective at reflecting the partof the UK they live in.

% of UK adults who think the BBC
is effective at catering for thepart of the UK they live in.

(ineffective 20%)

(ineffective 19%)

Source: Ipsos MORI.

Source: Ipsos MORI.

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S T R AT E G I C R E P O R T

The BBC’s unique ability tohighlight what brings thecountry together as well as
what sets its communities
apart is an invaluable asset
for the UK at a critical time.

BBC Two drama The Boy With The Topknot

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BBC Annual Report and Accounts 2017/18

39

DELIVERING OUR PUBLIC PURPOSES

Reflecting and representing
the United Kingdom’s nations
and regions and supportingthe creative economy

DIVERSE CONTENT
Our aim is to be the most creative
organisation in the world – reflecting,representing and staying truly relevantto the communities across the UK.
All audiences should feel that the
BBC offers something for them.

New commissions also included Guz
Khan’s Man Like Mobeen and Chinese
Burn. The Idris Elba BBC Three takeover featured Marcus The Wheelchair
Boxer, Breaking Out In Bradford, Being A
Working Class Barrister and Five By Five,a drama told in five short episodes.

We are committed to measure our
performance against our ambition
to reach all audiences through arange of audience panels, focus
groups and satisfaction surveys.

Radio broadcast highlights included
1Xtra’s Carnival Weekend with coverage
from Notting Hill, Nottingham and Leeds
and Levi Roots’ series on reggae musicfrom across the decades for Radio 2.

Increased diversity of thought andexperience, achieved through a more
representative workforce, is a key driver ofthis creativity. That’s why we’re committed
to ensuring we have a variety of voices
across the whole of the BBC – fromentry level right up to the Board. We
achieved our 2017 diversity workforce
targets and we’re making steady progressagainst our 2020 targets (read morein the Our People section page 74).

This year the representation of people
with disabilities has been at the heartof schedules. We’ve been championing
disabled presenters in peak shows
and we‘re seeing and hearing more ofa mix right across our sports content.
Paralympian Jonnie Peacock featured
on Strictly Come Dancing. There wasan all disabled presenter/reporterline up for The Invictus Games andWithout Limits: Vietnam documented six
disabled travellers on an expedition.

Right across our services, you’ll findthe best in diverse on-screen andon-air content. And we’ve had anaward-winning year of programming
built on inclusive subject matters.
A strong sense of national identity isevident through our recent content.
The Moorside, Broken and Three Girls told
the complex stories of social class andcommunities in the North of England.
Paula was filmed in Northern Irelandand The Replacement and Trust Me werehigh-end dramas from Scotland.

Chris Packham provided a real insightin Asperger’s and Me and The A Word
returned for a second series. The BBC
Minds Matter mental health season
aimed to break through the stigma
associated with mental illness while

Women continued to lead the way
with a wider range of women’s voices
and experiences portrayed across ourprogrammes. Thandie Newton headlined
the cast of series four of Line of Duty
and the multi-award-winning femaleled Doctor Foster returned for a second
series to BBC One. Jodie Whittaker
was announced as the first female
Doctor and Shirley Ballas became Head
Judge on Strictly Come Dancing.
We showcased Black, Asian and Minority
Ethnic (BAME) talent through The Boy
With The Topknot which brought to life
the memoirs of a second generation
Indian growing up in Britain.

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BBC Annual Report and Accounts 2017/18

BBC Three’s short-form videos fromthe series Things Not To Say challenged
misconceptions about mental health.
And our seasons grew from strength tostrength. The 70th anniversary of thePartition of India featured Partition: The
Forgotten Story, Dangerous Borders: A
Journey Across India and Pakistan and My
Family, Partition and Me: India 1947. While
our Gay Britannia season, marking the50th anniversary of the Sexual Offences
Act 1967 featured range of content acrossTV, radio and online (see page 37).
Further LGBT portrayal included Two
Doors Down which featured a prominentinter-racial gay couple in lead roles, leadcharacter Miriam Margolyes starred in
Bucket and Pearl Mackie portrayed openly
gay companion, Bill Potts, in Doctor Who.
We’ve been working towards more
incidental inclusion on screen. We
are seeing more LGBT characters inroles unrelated to sexuality or gender,
in storylines and situations that are
universal to all, that are authentic
and as representative as possible.
Long-term health conditions that affectthe lives of large parts of our audience
are increasingly part of storylines. We
want everyone to participate – so we’rebuilding the highest levels of accessibility
and innovation into our digital products
across subtitling and audio description.
We acknowledge that our content
strategies need to be agile and forwardfacing in order to meet the needs of achanging, modern UK and all the groups
and communities we serve. We are
therefore building on knowledge about ouraudiences with new, more nuanced insightthat feeds back directly into editorial
decision making and commissioning.
more in Our People: Diversity pages
0 Read79-83 and the Equality Information Reporton pages 240-263

7/10
Without Limits: Vietnam
Our new Code of Practice puts diversity at the heart ofthe BBC’s commissioning process

The average general impression score
all audience groups give the BBC
regardless of age, gender, socialgrouping, ethnic origin or geography.
Source: Kantar Media.

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S T R AT E G I C R E P O R T% of each audience group who think the BBC informs, educates and entertains people in the UK/themMale 16+

Female 16+

ABC1 16+

C2DE 16+

16-34

35-54

55+

White 16+

BAME 16+

Effective

73%

74%

81%

65%

71%

76%

74%

75%

67%

Ineffective

10%

8%

7%

11%

8%

9%

10%

8%

12%

% of each audience group who think the BBC is effective at reflecting people like them
Male 16+

Female 16+

ABC1 16+

C2DE 16+

16-34

35-54

55+

White 16+

BAME 16+

Effective

56%

57%

64%

47%

51%

60%

58%

58%

48%

Ineffective

22%

18%

18%

23%

21%

18%

20%

19%

29%

BBC Television reach: % of each audience group in TV homes that watch BBC Television each week
Male 16+

Female 16+

ABC1 16+

C2DE 16+

16-34

35-54

55+

White 16+

BAME 16+2017/18

78%

82%

81%

80%

60%

82%

93%

81%

69%

2016/17

80%

84%

82%

82%

65%

85%

94%

83%

72%

BBC Radio reach: % of each audience group that listen to BBC Radio each week
Male 16+

Female 16+

ABC1 16+

C2DE 16+

16-34

35-54

55+

White 16+

BAME 16+2017/18

67%

62%

72%

56%

53%

64%

74%

68%

47%

2016/17

68%

61%

73%

55%

53%

64%

74%

68%

46%

White 16+

BAME 16+

BBC Online reach: % of each audience group that use BBC Online each month*

2017/18

Male 15+

Female 15+

ABC1 15+

C2DE 15+

15-34

35-54

55+

76%

71%

86%

58%

82%

84%

57%

BBC Television: Time spent watching BBC TV in TV homes per head, per week (hh:mm)
Male 16+

Female 16+

ABC1 16+

C2DE 16+

16-34

35-54

55+

2017/18

07:41 08:49 08:08 08:27 02:59 06:25 13:53 08:42 04:23

2016/17

08:17

09:13

08:37

08:56

03:28

06:55

14:33

09:13

04:54

35-54

55+

White 16+

BAME 16+

BBC Radio: Time spent listening to BBC Radio per head, per week (hh:mm)
Male 16+

Female 16+

ABC1 16+

C2DE 16+

16-34

2017/18

10:38 09:30 10:57 09:00 04:39 09:17 15:10

11:10

04:41

2016/17

10:49

11:16

04:38

09:32

11:11

08:58

04:44

09:31

15:16

* comScore MMX Multi-Platform measures from 15+ and monthly.
Source: Ipsos MORI, BARB, RAJAR. Online reach data on page 28 and here from comScore MMX Multi-Platform, UK, Total Unique Visitors per month, [P] BBC Sites, October
2017-March 2018 (desktop data 15+, mobile data 18+); percentages based on overall UK populations using ONS population estimates and the BARB Establishment Survey.
BBC TV and BBC Radio reach here and on page 28 based on 15+ mins.

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BBC Annual Report and Accounts 2017/18

41

DELIVERING OUR PUBLIC PURPOSES

Reflecting and representing
the United Kingdom’s nations
and regions and supportingthe creative economy

Providing for audiences across the UK
The BBC is committed to serving its audiences
across the UK, providing high-quality, distinctive
and relevant content for licence fee payers,
helping to maintain reach and providing aneffective vehicle to reflect the range of culturesand communities.
Dedicated services
The BBC also provides a range of dedicated,cross-genre output for Scotland, Wales andNorthern Ireland and the English Regions across
television, radio and online. Each area makes
television and radio programmes for their local
audience and for the network.
We have major production centres in Glasgow,
Cardiff, Belfast, Salford, Bristol, Birmingham
and London.

As part of our focus on providing for audiences acrossthe UK, we are making further improvements to how wemeasure our performance in different parts of the UK.
Comparable figures for BBC Online performance bygeography are not included this year, but this will berectified in subsequent years.

The Six Nations: Scotland v England

42

BBC Annual Report and Accounts 2017/18

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S T R AT E G I C R E P O R T

Network television programming spend byregion as a percentage of eligible spend

BBC Local Radio** and nations
radio hours of output

2017

2016

London

48.9%

49.4%

England (excl. London)

Scotland

9.1%

10.3%

London2017

2016

222,946

225,020

8,613

7,977

Wales

6.7%

5.8%

Scotland

11,866

11,977

Northern Ireland

2.4%

3.1%

Wales

14,366

14,594

Total nations

18.2%

19.2%

Northern Ireland

8,639

8,560

Midlands

1.9%

1.5%

North of England

18.4%

19.7%

South of England

8.7%

7.6%

Multi-region*

3.9%

2.6%

Total regions excl. London

32.9%

31.4%

Total nations and regions

51.1%

50.6%

Grand total

100%

100%

Network supply
Over half of network television production
is in the nations and regions, with 51.1%
from outside London and more than 18%
from Scotland, Wales and Northern Ireland.
Network television spend based on Ofcom definitions bycalendar year.
* Multi-region covers programmes made outside
London but which cannot be attributed to any one
region or nation.
** The BBC Local Radio and nations radio hours of
output only include BBC original programmes andexcludes any repeat programmes.

Read more on pages 150-167

9.1%
11,866hrs

2.4%
8,639hrs

32.9%
6.7%

222,946hrs

14,366hrs
48.9%

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8,613hrs

BBC Annual Report and Accounts 2017/18

43

DELIVERING OUR PUBLIC PURPOSES

The BBC in Wales
In the first year of an additional £8.5 million per annum
Charter reinvestment, the creative impact was immediate –and contributed to the BBC’s strong performance in Wales.

The Hour; and new specialist Welshcorrespondents for Brexit, Social
Affairs, Sport and Home Affairs.
The new current affairs strand, BBC Wales
Investigates, also made its markimmediately, with an exclusive report
into the conviction of Michael Stone forthe murders of Lin and Megan Russell.

Keeping Faith

With a focus on delivering major
landmark programming rooted inWales for audiences everywhere,
BBC Wales recorded its highest
audiences for both factual and drama
series in more than a decade.
Valley Cops – a revealing account ofcommunity policing in the South Wales
Valleys – was co-commissioned by BBC
Wales and BBC Three. The series attracted
an impressive 346,000 viewers on BBC One
Wales and was later broadcast on BBC One
across the UK. There was similar successfor Keeping Faith – an eight-part series
starring Eve Myles, jointly commissioned
by BBC Wales and S4C. The BBC One
Wales screening attracted an averageof 300,000 viewers per episode – withover 5 million further requests to view
the series on iPlayer before the end of
March 2018. In fact, such was its success,that a second series is in development.
Keeping Faith was in good company inthe biggest year of Welsh drama for
a generation, with the third and final
series of Hinterland and the supernaturalseries Requiem also attracting audiences
both in Wales and across the UK.
Alongside drama, BBC Wales continued
to develop its focus on younger audiences,with a new series of Hayley and Young,Welsh and Pretty Minted both making
their mark on BBC Three and BBC
iPlayer, as well as on BBC One Wales.
Looking across the BBC’s services,
the audience performance of both44

BBC Annual Report and Accounts 2017/18

BBC Television and Radio in Wales
continued to be high, driven by thestrong performance of BBC One Wales,Radio 1 and Radio 2. Radio Cymru also
saw audience gains over the period,
although Radio Wales’ reach continues
to face competitive pressure.
In January, BBC Radio Cymru marked its
birthday year with the launch of a second
breakfast service, Radio Cymru 2, across
DAB and mobile devices. For the firsttime, the new service provides real choice
to Welsh language listeners – with theentertainment and music mix providing
an alternative to the Post Cyntaf news
service on Radio Cymru’s main service.
Radio Wales continued to develop thediversity of output – with a new nightly live
show from Wrexham, with Janice Long, andthe addition of Eve Myles and Lucy Owen
to the presentation team. The station’scommitment to new comedy was also
strengthened with a brand new Ruth Jones
comedy, Splott, and a new partnershipwith the Machynlleth comedy festival.
Later this year, Radio Wales’ FM
coverage will be boosted – with 175,000
households receiving FM access tothe station for the first time.
In news, the Charter reinvestment saw
a slate of new output and editorial
enhancements, with the successful launchof a new political series BBC Wales Liveon BBC One Wales, presented by Bethan
Rhys Roberts and Jason Mohammad;a new monthly debate programme

The year also saw significant growth
in mobile usage for our online content.
The comedy short, Nige, and thedevelopment of a new social media
service, BBC Sesh – inspired by the
success of The Social in Scotland – bothharnessed Facebook and YouTube to help
build impact with younger audiences.
Across drama, factual and music,
network television production spend in
Wales represented 6.7% of total BBC
investment in 2017, once again aheadof the target of 5%. Highlights included
Peter Capaldi’s final series as the Doctor,
with Jodie Whittaker revealed as the firstfemale Doctor in the Christmas special.
BBC programming for S4C continued
to play an important role at the heart ofthe channel’s schedule, with the popular
drama Pobol y Cwm and Newyddion 9
forming the bedrock of the channel’snightly schedule. In addition, S4C
programming continued to perform
strongly on BBC iPlayer with around90,000 requests to view content each week
on average. Alongside this success, BBC
Cymru Fyw – the Welsh language online
and mobile service – attracted around50,000 unique browsers each week.
Across the year, the development of
BBC Wales’ new £100 million broadcast
centre at Central Square in Cardiff
continued apace. As part of this, S4C
announced they would share transmission
services at the new building from nextyear, building on our successful new
partnership agreement which we signed
under the new Charter. Meanwhile, Cardiff
University announced they would relocate
their journalism and media school to the
new site from September 2018, to buildon their existing strong partnership with
the BBC. The new centre is expected to
be operational from the end of 2019 once
the technology fit-out is completed.

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S T R AT E G I C R E P O R T

Performance by service
Dedicated
services

Content
We spent a total of£28.1 million on these
services in 2017/18

Reach% of population
who use the service
each week

Time spent watchingor listening to aservice each week
Length of time theaverage listenerspent each weekwith the service

Appreciation
Index by service
Aggregate of
how people
rated individual
programmes,
expressed as anumber out of 100

BBC Radio Wales is a speech-led
service for adults, which offers awide range of genres and reflects
the issues, events, culture andinterests of the people of Wales.

£14.6m

14.3%

08:05

85.5

9.3p

2016/17: £14.2m

2016/17: 13.9%

2016/17: 0 8:19

2016/17: 82.7

2016/17: 9.1p

BBC Radio Cymru is a speech andmusic radio service for Welsh
speakers, which offers a wide range
of genres and reflects the issues,
events, culture and interests of thepeople of Wales.

£13.5m

21.1%*

13:02

81.7

16.9p

2016/17: £13.6m

2016/17: 16.7%*

2016/17: 12:23

2016/17: 78.8

2016/17: 22.6p

Costs per user hour
How much it costs todeliver each service
for each hour used

Reach definition: 15+ minutes and audiences aged 15+.
Sources: RAJAR (radio reach and time per listener, data based on Total Survey Area – TSA); Appreciation Index – Pulse Panel of 20,000 UK adults 16+ by GfK (data based on adults
16+ living in the BBC Wales area).
* BBC Radio Cymru: RAJAR data (reach and time per listener) based on ‘Understand Welsh’; Appreciation Index data based on ‘Speak Welsh Fluently & Speak Welsh but not
Fluently’. BBC Radio Cymru reaches 5.0% of the overall 15+ population in Wales who listen for 11:59 a week on average and give an average Appreciation Index score of 81.8.

72%

51%

% of adults in Wales who think
the BBC is effective at informing,
educating and entertaining
people in the UK/them.

% of adults in Wales who think
the BBC is effective at reflecting
people like them.

(ineffective 10%)(ineffective 23%)

82%

72%

44%

BBC Television reach% of adults in Wales in TV
homes who watch BBC Televisioneach week.

BBC Radio reach% of adults in Wales who listen
to BBC Radio each week.

Dedicated Welsh news services
on television% of adults in Wales in TV homes
who view this content on BBC
Television each week.

2016/17: 85%

2016/17: 71%

09:35

11:49

BBC Television time per headTime spent watching BBC TV in
TV homes per head, per week in
Wales (hh:mm).

BBC Radio time per headTime spent listening to BBC Radioper head, per week in Wales(hh:mm).

2016/17: 10:18

2016/17: 11:39

Return to contents

2016/17: 47%
Sources: Ipsos MORI, BARB, RAJAR.
Note: All reach figures based on adults 16+ so the
2016/17 figures for BBC Television and BBC Radio will notmatch the 2016/17 Annual Report and Accounts because
they were based on 4+ years (TV) and 15+ years (Radio).
Time per head based on adults 16+. BBC TV and BBC
Radio reach based on 15+ mins. BBC TV dedicated news
services reach based on 3+ mins.

BBC Annual Report and Accounts 2017/18

45

DELIVERING OUR PUBLIC PURPOSES

The BBC in Scotland
In the year that we announced a major new investment in Scotland– including a new channel with a dedicated news hour at 9pm –Brexit, a snap General Election and the extreme weather that the‘Beast from the East’ brought to our shores were just three of the
major stories covered by BBC Scotland’s news teams.
Election coverage included a televised
leaders’ debate and a series of Ask the
Leader programmes, extended editionsof Reporting Scotland, radio interviews,
phone-ins and content delivered
via social media, tailored to reachunderserved and young audiences.
As the winter weather brought much of
the country to a standstill, audiences
tuned in to extended early evening
editions of Reporting Scotland – theaudience of 930,000 for the first halfhour of the 28 February programme
was the highest in the last 15 years.
In Humans for Sale, BBC Scotland
Investigates shone a spotlight on humantrafficking. The programme’s shocking
revelations were raised at First Minster’s
Questions in May and referenced
throughout a Holyrood debate in June.
Drama highlights on network included
Trust Me, a psychological thriller set
in Edinburgh, and the return of theacclaimed murder mystery, Shetland. Bothdrama series will make welcome returns
next year. Children’s favourite, Raven,also returned to our screens, on CBBC,
with Aisha Toussaint in the lead role.
It was another strong year for arts andfactual production from Scotland. The
Proclaimers: This is the Story, narrated byDavid Tennant, charted the 30-year career
history of Auchtermuchty’s famous musicaltwins; the Scots who made Russia theirown were the focus of the two-part Brian
Cox’s Russia; and Billy Connolly: Portraitof a Lifetime celebrated the Big Yin’s
75th birthday, drawing 580,000 viewers
and a 30% audience share in Scotland.
Major series included The Forest, which
followed those who work in the vast
Galloway Forest, and the 10-part
Island Medics, for BBC One network,
which went behind the scenes at the
Gilbert Bain Hospital in Lerwick.

46

BBC Annual Report and Accounts 2017/18

Two Doors Down

BBC Studios continued to produce
high-quality programmes for the BBC,including Earth’s Natural Wonders and
The Truth About Getting Fit for BBC One;and Imagine, Trust Me I’m a Doctor andThis Farming Life for BBC Two, as well as
bringing BBC Radio 4’s Front Row to TV.

Now in its 10th year, BBC ALBA continued
to reach out to Gaelic and non-Gaelic
speaking audiences with its rich variety
of programmes. The popular drama
Bannan returned for a new series andDhan Uisge followed Calum Maclean’s wild
swimming exploits around Scotland.

Network comedy favourites across the year
included two festive specials of Mrs Brown’sBoys (the Christmas Day episode attracted
9 million UK viewers), a new series of Two
Doors Down and an eighth series of the
comedy phenomenon that is Still Game.

There were new series on Radio Scotland,with the topical quiz Stop the Press, andhistory was to the fore with a new magazine
strand, Time Travels, and oral history
series, Our Story, with Mark Stephen.

The 70th anniversary of the Edinburgh
Festival was celebrated across BBC
broadcast platforms and services,
including televised highlights of theRoyal Military Tattoo, narrated byBill Paterson, and 33 classical music
events produced for BBC Radio 3.

On social media, The Social’s comedy andshort-form documentaries continue toresonate with audiences, with Natalie’s
Snow Day picking up over 13 million views
and just under one million engagements.

Shinty, rugby, curling, international footballand the Scottish Cup all featured in our
sports coverage across the year. And musicfans were treated to live and TV highlights
coverage of events such as Proms in thePark, the TRNSMT Festival from Glasgow
and Texas and the BBC SSO from theBarrowlands as part of BBC Music Day.

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S T R AT E G I C R E P O R T

Performance by service
Dedicated
services~malllllHil ~RADIO

ScotlandContent
We spent a totalof £34.5 million
on these services
in 2017/18

Reach% of population
who use the service
each week

Time spent watchingor listening to aservice each week
Length of time theaverage viewer/
listener spent eachweek with the service

Appreciation
Index by service
Aggregate of
how people
rated individual
programmes,
expressed as anumber out of 100

Costs per user hour
How much it costs todeliver each service
for each hour used

BBC ALBA offers, to Gaelic
speakers and learners, a distinctive
range of originated programmingthat reflects and supports Gaelic
culture, identity and heritage.

£7.9m

62.1%*

04:58

n/a

14.3p

2016/17: £6.0m

2016/17: 67.2%*

2016/17: 05:23

2016/17: n/a

2016/17: 9.6p

BBC Radio Scotland is a speech-led
service for adults. Mixed-genre
programming reflects the diversityof Scottish culture and covers
national and international issues
and events relevant to listeners
across the country.

£22.6m

19.2%

06:25

76.7

7.8p

2016/17: £21.1m

2016/17: 20.3%

2016/17: 07:18

2016/17: 75.8

2016/17: 6.0p

BBC Radio nan Gàidheal offers acomprehensive speech and music
radio service for Gaelic speakers.
Mixed-genre programmingreflects the diversity of Scottish
culture and, from a Gaelic
perspective and through themedium of the Gaelic language,
covers national and international
issues and events relevant tolisteners across the country.

£4.0m

61.1%**

07:43

n/a

20.8p

2016/17: £3.7m

2016/17: 68.4%**

2016/17: 08:40

2016/17: n/a

2016/17: 15.6p

BBC Radio Scotland: Reach definition: 15+ minutes and audiences aged 15+. Sources: RAJAR (Radio reach and time per listener; data based on Total Survey Area – TSA);
Appreciation Index – Pulse panel of 20,000 UK adults, 16+ by GfK (data based on adults 16+ living in the BBC Scotland area).
* BBC ALBA: TRP Panel based on Gaelic-speaking 16+ population in Scotland. BBC ALBA reaches 11.3% of the overall 16+ population in Scotland who use the service for 01:55
a week on average (source: TNS Scottish Opinion Survey based on all adults aged 16+ in Scotland).
** Radio nan Gaidheal: TRP Panel based on Gaelic-speaking 16+ population in Scotland.
n/a means Data does not currently exist for this measure.

69%

53%

% of adults in Scotland who think
the BBC is effective at informing,
educating and entertaining
people in the UK/them.

% of adults in Scotland who think
the BBC is effective at reflecting
people like them.

(ineffective 9%)(ineffective: 19%)

82%

58%

49%

BBC Television reach% of adults in Scotland in TV
homes who watch BBC Televisioneach week.

BBC Radio reach% of adults in Scotland who listen
to BBC Radio each week.

Dedicated Scottish news
services on television% of adults in Scotland in TV
homes who view this content on
BBC Television each week.

2016/17: 83%

2016/17: 56%

09:22

08:15

BBC Television time per headTime spent watching BBC TV in
TV homes per head, per week in
Scotland (hh:mm).

BBC Radio time per headTime spent listening to BBC Radioper head, per week in Scotland(hh:mm).

2016/17: 09:36

2016/17: 08:01

0 Return to contents

2016/17: 50%
Sources: Ipsos MORI, BARB, RAJAR.
Note: All reach figures based on adults 16+ so the
2016/17 figures for BBC Television and BBC Radio will notmatch the 2016/17 Annual Report and Accounts because
they were based on 4+ years (TV) and 15+ years (Radio).
Time per head based on adults 16+. BBC TV and BBC
Radio reach based on 15+ mins. BBC TV dedicated news
services reach based on 3+ mins.

BBC Annual Report and Accounts 2017/18

47

DELIVERING OUR PUBLIC PURPOSES

The BBC in Northern Ireland
The year started with the announcement of anadditional £11 million investment in our local services
and content in Northern Ireland, over a three-year
period and ended with approval of a significant
investment in our property and technology in Belfast.
Soft Border Patrolv,ewv•·NORTHERN/RELAND

With an increase in commissioning
spend in local television, we developed
the comedy series Soft Border Patrol.
This topical new mockumentary
follows a team of border patrol
officers as they carry out their duties
in a version of Northern Ireland where
Brexit has resulted in a soft border.
We created more content for younger
audiences. The Top Table – featuring
young people challenging politicians andothers in positions of power – reached
17% of the population in a short run offour programmes. Beauty Queen And
Single was our first series to be madeavailable as a box set on BBC iPlayer
immediately after the first episode wasbroadcast. It generated more than one
million iPlayer requests across the series.
BBC Bitesize and School Report also served
younger audiences. Our Make It campaign,
informed by extensive, evidence-based
research, used digital assets and outreach
events to reach boys and young men fromdisadvantaged backgrounds who are failingat school and seeking employment.
BBC News NI output, including BBC
Newsline and The View, reflected
the fast-changing news agenda andpolitical situation in Northern Ireland,with audiences amongst the highest
consumers of news in the UK across all
platforms. BBC News NI Online attracted
an average of 1.98 million weeklybrowsers, an increase of 11% on 2016/17,
and we began plans to enhance ouronline news coverage, including a better
service on week nights and weekends.
48

BBC Annual Report and Accounts 2017/18

BBC Radio Ulster remained one of the top
performing stations in the BBC’s entireradio portfolio, thanks to programmessuch as Good Morning Ulster, The Nolan
Show and Talkback, as well as the diversemix of music, speech and entertainment
programming. The station delivered aroundhalf of the total BBC radio consumption in
Northern Ireland, and accounted for a fifthof all listened-to radio hours in Northern
Ireland. The station continued to develop
upcoming talent in its New Voices strand.
We signed a new collaboration agreementwith local universities to support the latest
research and innovation in cutting edge
broadcasting. This builds on existing R&D
work for the BBC based in Belfast, including
the continuing release of value from thedigitised archive under Project Rewind. And
we renewed our successful partnership with
Northern Ireland Screen to help develop aninternationally competitive screen industry
in Northern Ireland. In drama, series four ofLine Of Duty achieved an average audience
across the UK of 8.2 million, was nominatedfor four BAFTA television awards and wascommissioned for a further two series.
Come Home, starring Christopher Ecclestonand Paula Malcomson, is the latest drama
to come from Belfast. The innovative new
CBeebies series Pablo, about a creative
autistic boy who draws imaginary animal
friends, was the first animated TV series tostar an autistic character and the first TV
programme with an all-autistic core cast.
BBC Gaeilge and Ulster-Scots content,
supported by Northern Ireland
Screen’s Irish Language and Ulster-

Scots Broadcast Funds, benefited fromdedicated collections on BBC iPlayer.
UK audiences experienced the beautyof Northern Ireland’s coastline when
The One Show travelled from Carrickfergus
to the Giant’s Causeway for a week ofspecial programmes. This illustrated thepositive impact of network portrayal,
with the programme achieving 29%
average share in Northern Ireland forthat week, compared to a 16% averagefor the year. The stunning scenery ofCastle Coole in County Fermanagh
was also broadcast to UK audiences
as part of the Last Night of the Proms.
BBC NI television reflected community
life with local programmes including thelong-running Nolan Live, Spotlight andTrue North attracting strong audiences andadding share to BBC One and BBC Two inNorthern Ireland. The BBC One NI series
Survivors reached 15% of the Northern
Ireland population and afforded a uniqueplatform for personal testimonies fromvictims of the Troubles. The mix of BBC NI
television opt outs, portrayal and resonant
network programming resulted in an
average BBC One share in Northern Irelandof 20%, the highest level since 2008/09.
Documentaries George Best: All By
Himself and Wild Ireland: The Edge
Of The World were broadcast to UK
audiences, with the latter being awarded
Best Natural History Documentary at
the British Documentary Awards.
In sport, we celebrated BBC Sports
Personality of the Year runner-up Johnny
Rea with the documentary Johnny
Rea: 3 In A Row, captured the action of
the North West 200 and Ulster GrandPrix and brought viewers the majority
of Ulster games in the GAA Ulster
Championship. Online, the NI women’s
team home World Cup qualifiers werestreamed live. Ulster Rugby matches
broadcast on BBC Two NI reached 30%of the Northern Ireland population.
The year ended with the approvalof a £77 million investment into
property and technology. This will
help us serve future generations while
retaining our heritage as a culturaldestination for the whole community.

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S T R AT E G I C R E P O R T

Performance by service
Dedicated
services

BBC Radio Ulster is a speechled service, providing a mix ofprogrammes that reflect news,
events and community life in all its
different aspects and diversity.
BBC Radio Foyle is a speechled service for audiences in the
North-West of Northern Ireland.
It provides a mix of news and otherprogramming which complements,
and contributes to, BBC Radio
Ulster’s region-wide service.

Content
We spent a total of£17.6 million on these
services in 2017/18

Reach% of population
who use the service
each week

Time spent watchingor listening to aservice each week
Length of time theaverage listenerspent each weekwith the service

Appreciation
Index by service
Aggregate of
how people
rated individual
programmes,
expressed as anumber out of 100

Costs per user hour
How much it costs todeliver each service
for each hour used

£17.6m

38.0%

10:18

77.1

5.8p

2016/17: £17.5m

2016/17: 34.3%

2016/17: 11:19

2016/17: 74.9

2016/17: 5.9p

Reach definition: 15+ minutes and audiences aged 15+.
Sources: RAJAR (Radio reach and time per listener; data based on Total Survey Area – TSA); Appreciation Index – Pulse panel of 20,000 UK adults, 16+ by GfK (data based on adults
16+ living in the BBC Northern Ireland area).

67%

55%

% of adults in Northern Ireland
who think the BBC is effectiveat informing, educating andentertaining people in theUK/them.

% of adults in Northern Ireland
who think the BBC is effective atreflecting people like them.
(ineffective: 24%)

(ineffective: 16%)

81%

62%

53%

BBC Television reach% of adults in Northern Irelandin TV homes who watch BBC
Television each week.

BBC Radio reach% of adults in Northern Ireland
who listen to BBC Radio
each week.

Dedicated Northern Irelandnews services on television% of adults in Northern Ireland in
TV homes who view this content
on BBC Television each week.

2016/17: 82%

2016/17: 60%

2016/17: 52%

07:22

07:43

BBC Television time per headTime spent watching BBC TV in
TV homes per head, per week inNorthern Ireland (hh:mm).

BBC Radio time per headTime spent listening to BBC Radioper head, per week in Northern
Ireland (hh:mm).

2016/17: 07:45

2016/17: 07:53

Return to contents

Sources: Ipsos MORI, BARB, RAJAR.
Note: All reach figures based on adults 16+ so the
2016/17 figures for BBC Television and BBC Radio will notmatch the 2016/17 Annual Report and Accounts because
they were based on 4+ years (TV) and 15+ years (Radio).
Time per head based on adults 16+. BBC TV and BBC
Radio reach based on 15+ mins. BBC TV dedicated news
services reach based on 3+ mins.

BBC Annual Report and Accounts 2017/18

49

DELIVERING OUR PUBLIC PURPOSES

The BBC in the English Regions
The BBC’s local and regional services in Englandcontinue to adapt to shifting audience behaviour
and the changing political landscape in the country.

The importance of the BBC’s local
and regional services in England wasunderlined this year when the DirectorGeneral announced a new strategy
for the 39 local radio stations on the50th anniversary of the service.
The Director-General renewed theBBC’s commitment to local radio andannounced that the BBC planned toreinvent the service for the future bymaking our stations even more local andmore creative. The new strategy focuseson content that brings communities
together, creates shared moments
and celebrates local successes.
Our 39 stations in England will be
more creative with a greater emphasis
on uncovering and nurturing newtalent and building partnerships withgroups not currently well represented
by their local radio station.
The shared evening programme broadcast
across all English local radio stations
will end in 2018 to be replaced by new
local programmes reflecting the diversityof the places each station serves.
In its 50th year, BBC Local Radio in
England still attracts more than six million
listeners each week. Demonstrating theimportance of the service, BBC Radio
Merseyside was awarded the Freedomof the City of Liverpool in recognitionof its services to the community.
Radio Humberside played a central role in
the Hull City of Culture 2017 activities. The
station completed 200 outside broadcasts
reporting on events in Hull. Radio Leeds
searched for a ‘Voice of Bradford’ andeventually discovered 24-year-old Faisal
Motin, an HMRC employee now helping thestation reach under-served communities.
Elsewhere, we have delivered an
improvement to BBC local news onlinethat has simplified the discovery of
local content. Online users can now
search for news stories by town andcity, so it is easier to find content that isrelevant to them. All our local services
in England continue to experiment withnew ways of telling stories on the BBC
online platforms and on social media.

50

BBC Annual Report and Accounts 2017/18

BBC English Regions has been tasked
with the delivery of the BBC’s Local
News Partnership work. As part of the
Local News Partnership, the BBC hascommitted to funding 145 new journalists
to report exclusively on the work of local
authorities. These 145 journalists are
based across England, Scotland andWales. There is a trial ongoing to extend
the partnership to Northern Ireland.
The Local Democracy Reporters are paid
for by the BBC but employed by outside
news organisations. The material they
produce is shared with the BBC and themore than 800 news outlets that arepart of our partnership. The reporters
ensure their public service journalism
scrutinises decisions taken by those inpower, which impact on local communities.
In addition to the Local Democracy
Reporters, we will continue to workwith external news organisations on
our Shared Data Unit, which produces
data-led journalism which is thenshared with our partners. In 2018,
we will share BBC content with ourpartners through our News Hub service,giving external organisations accessto the material we have produced.
On television, Inside Out remains England’s
only regional current affairs TV programme.
Our 11 Inside Out editorial teams continue
to produce agenda-setting, original
journalism. In 2018, we launched a 13th
regional television news service at 6.30pm,
as a short opt in Cambridge was expanded

to become a full programme, providing abetter service to an area of England thathas seen significant population growth.
Our regional television bulletins at
6.30pm on BBC One remain collectively
the most watched news broadcasts in
the UK based on average audience. In
March, their combined audience was thehighest for five years as people tuned
in for the latest information on the cold
weather. A total audience of 6.8 million in
England watched the 6.30pm bulletins on
1 March, the highest overnight audienceon television in England that day.
We will continue to make one-off
television series and programmes
reflecting life in England such as Sea
Cities, which focused on the ports ofSunderland, Bristol and Brighton. This
year we will broadcast a series about
pioneering English hospitals and anotherlooking into the history of some ofEngland’s oldest diverse communities.
We continue to forge partnerships acrossEngland, with the BBC taking a leading rolein both Hull City of Culture 2017 and now
an active role in Coventry City of Culture
2021. In 2018, the BBC is partneringwith the Great Exhibition of the North.
We also held major events to celebrate
BBC content made in England. A red
carpet screening of Peaky Blinders washeld in Birmingham while Sir David
Attenborough attended a special
screening in Bristol of Blue Planet II.

BBC Radio Manchester
Presenters Paul Lockitt, Chelsea
Norris and Inzy Rashid

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S T R AT E G I C R E P O R T

Performance by service
Dedicated
services

BBC Local Radio is a primarily
speech-based service of news,
information and debate, with astrong emphasis on interactivity.

Content
We spent a totalof £118.2 million
on these services
in 2017/18

Reach% of population
who use the service
each week

Time spent watchingor listening to aservice each week
Length of time theaverage listenerspent each weekwith the service

Appreciation
Index by service
Aggregate of
how people
rated individual
programmes,
expressed as anumber out of 100

Costs per user hour
How much it costs todeliver each service
for each hour used

£118.2m

14.3%

08:52

82.5

4.1p

2016/17: £112.9m

2016/17: 14.6%

2016/17: 08:36

2016/17: 82.7

2016/17: 4.0p

Reach definition: 15+ minutes for audiences aged 15+
Sources: RAJAR (Radio reach and time per listener; data based on Total Survey Area – TSA); Appreciation Index – Pulse panel of 20,000 UK adults, 16+ by GfK (data based on adults
16+ living in the BBC England area).

% of adults in different areas of England who think the BBC informs, educates and entertains people in the UK/them
England 16+

North of England 16+

Midlands 16+

South of England 16+

London 16+

Effective

74%

72%

77%

78%

69%

Ineffective

9%

9%

9%

8%

9%

% of adults in different areas of England who think the BBC is effective at reflecting people like them
England 16+

North of England 16+

Midlands 16+

South of England 16+

London 16+

Effective

57%

54%

61%

57%

57%

Ineffective

20%

20%

19%

20%

19%

BBC Television reach: % of adults in TV homes in different areas of England who watch BBC Television each week
England 16+

North of England 16+

Midlands 16+

South of England 16+

London 16+

2017/18

80%

81%

81%

82%

76%

2016/17

82%

83%

82%

84%

78%

BBC Radio reach: % of adults in different areas of England who listen to BBC Radio each week
England 16+

North of England 16+

Midlands 16+

South of England 16+

London 16+

2017/18

65%

62%

69%

75%

53%

2016/17

65%

63%

69%

76%

53%

Dedicated English Regions news services: % of adults in England in TV homes who view this content on BBC Television each week
England 16+

North of England 16+

Midlands 16+

South of England 16+

London 16+

2017/18

42%

44%

42%

46%

35%

2016/17

43%

45%

43%

47%

38%

BBC Television: Time spent watching BBC TV in TV homes per head, per week (hh:mm)
England 16+

North of England 16+

Midlands 16+

South of England 16+

London 16+

2017/18

08:07

08:24

07:57

09:02

07:00

2016/17

08:37

08:50

08:31

09:38

07:29

BBC Radio: Time spent listening to BBC Radio per head, per week (hh:mm)
England 16+

North of England 16+

Midlands 16+

South of England 16+

London 16+

2017/18

10:12

09:35

11:09

13:06

07:17

2016/17

10:22

09:34

11:13

13:22

07:36

Source: Ipsos MORI, BARB, RAJAR. BBC TV and BBC Radio reach based on 15+ mins. BBC TV dedicated news services reach based on 3+ mins.

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BBC Annual Report and Accounts 2017/18

51

DELIVERING OUR PUBLIC PURPOSES

5

To reflect the United
Kingdom, its culture
and values to the world

The BBC has an essential role toplay for the UK in carrying thedistinctive culture, voice and valuesof this country to the world. This
responsibility has arguably neverbeen more important at a moment
when the UK is looking to reshapeits national identity and redefine
its relationship with the world.
Once again, the past year has
highlighted the fact that, in many
parts of the world, the media is lessfree than it was ten years ago. There
has been the continued growth of big
state-sponsored news organisations
and from news aggregated by digitalplatforms. Al Jazeera, China Central
Television (CCTV) and RT (formerly
Russia Today) can command vast
resources and, while the services
offered by these organisations canbe of high quality production, theyalso reflect a particular world-view
and the agenda of their backers. With
the possibility of state services fromless free countries influencing global
debate and news provision, the value
to democracy and liberty of the BBC’s
global reach is higher than ever.
The BBC World Service is one of the
UK’s most important cultural exports.
It inspires and illuminates the livesof millions around the world, helping
them make sense of the world they
live in. Over the past year, it has
undergone its biggest expansion sincethe 1940s. We are now operating in
more than 40 languages around theworld, from Pidgin to Korean, with new
Government investment to increase
the international impact and reachof the BBC. As part of the expansion
we have opened new and expanded
bureaux from Cairo to Seoul, andemployed new journalists across theworld. This not only enhances ourcoverage for audiences abroad but
also gives our UK news audiences amore in- depth view of areas that havetraditionally received less coverage.

52

BBC Annual Report and Accounts 2017/18

The BBC’s two commercially
funded international news services,
BBC World News and bbc.com,
continue to provide consumers
with news from one of the mosttrusted and reliable news providers
in the world. Meanwhile, BBC
Worldwide – now part of the newly
merged BBC Studios – invests in,commercialises and showcases
content from the BBC aroundthe world, to build the reach andreputation of the BBC brandoverseas, champion British creativity
and at the same time delivercommercial returns to the BBC toinvest in public service content.

67%

59%

% of UK adults who think that the
BBC is effective at reflecting the
UK to the world.

% who agree the BBC helps
them to gain a more in - depth
understanding of the news.

(ineffective 11%)
Source: Ipsos MORI.

Source: BBC Brand Tracker 2017
(ex UK).

RankedNo.1 for:
Trust
Independence
Reliability
Source: BBC Brand Tracker 2017
(ex UK).

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S T R AT E G I C R E P O R T

This responsibility has
arguably never been more
important at a moment
when the UK is looking toreshape its national identity
and redefine its relationshipwith the world.

BBC Arabic ’s Trending

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BBC Annual Report and Accounts 2017/18

53

DELIVERING OUR PUBLIC PURPOSES

Reflecting the United
Kingdom, its culture
and values to the world

In another turbulent year, the BBC
has continued to reflect the world to
the UK, and the UK to the world.
The BBC once again attracted
record audiences internationally,
with the latest figures, the Global
Audience Measure, revealing a total
weekly audience of 376 million. This
includes all international content.
This year has been a remarkable one
for the BBC World Service, as it saw us
carry out our biggest expansion since the1940s, thanks to a £85 million investment
during the year from the UK Government.
This expansion is enabling us to bringtrusted news to more parts of the world,
including those in which access to free andimpartial information is severely limited.
We began our expansion with the launchof BBC News Pidgin, aimed at audiencesin West Africa.

Throughout the year new services
followed in Afaan Oromoo, Amharic,
Tigrinya, Korean, Gujarati, Marathi,
Punjabi, Telugu, Igbo and Yoruba, and ahistoric year of expansion was cappedwith the launch of BBC Serbian in March.
As part of the project we opened new
and expanded bureaux in locations
such as Dhaka, Mumbai, Nairobi, Delhi,
Seoul, Bangkok, Yangon, Tunis, Cairo,
Beirut and Belgrade and employed
more than 1,000 new staff across theworld. Having more journalists on the
ground also means that we’re able tocover more under-reported areas andimprove our offer to UK audiences.
The BBC World Service saw its audiencegrow from 269 million to 279 million,
in line with our projected targets forboth the new services and the overall
BBC goal of 500 million by 2022.

-·

-

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f

e

..

.; I

•
'

,

~

,
.I r
•

•

Throughout the year the BBC World
Service has continued producing hardhitting and in-depth journalism across theworld, in more than 40 different languages,
including brave and award-winning
reporting from Syria, Northern Iraq, Turkey,
Yemen, Venezuela and Afghanistan.
In Africa we have run outstanding
investigations into the impact of terrorism
and war across Nigeria, Sudan and Somalia.
African World Service journalists wereright at the heart of our global reportingof the fall of Mugabe in Zimbabwe. And
reporting from Brazil and Russia has
called out misleading and fake news.
We’re aiming our international news at
a new generation of users, to safeguard
the World Service for future generations.
This means focusing on new formats
and new audiences. It is clear, forinstance, that shortwave radio listening
has declined rapidly again this year,
and research has shown that with theincreased global availability of cheap
smartphones, audiences continue toswitch to digital platforms for news.
BBC World Service continues to do wellwith younger audiences internationally –a quarter of our weekly global
audience is aged between 15-24.
BBC Minute, a 60-second global news
round-up targeted specifically at
younger listeners, is now broadcast in
English by 28 radio partners aroundthe world, in 16 different countries.
Our 100 Women season, running acrossall of our international platforms and now
established as an annual highlight, took
on a new ‘solutions-focused journalism’
aspect as we challenged teams offemale experts to solve key problems
facing women around the world.
The World Service in English has also
benefited from the new funding boost,enabling a richer mix of content, inarts, culture, debate and science, andhelping us develop new formats.

BBC MinuteOur 60 -second global news round-up is broadcast
by 28 radio partners in 16 countries

54

BBC Annual Report and Accounts 2017/18

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S T R AT E G I C R E P O R T

Above: BBC News Pidgin Presenter Ogechi Obidiebube
Left: Award-winning coverage of starvation in Yemen
by RTS Young Talent of the Year, Nawal Al-Maghafi

Our live democracy debate programme,
World Questions, in which audiences holda panel of politicians and public figures
to account, has been held in locations asdiverse as Kathmandu, Moscow, Beirut,
Nairobi and Belgrade, shortly aheadof the launch of BBC News Serbian.
The appointment of our first dedicatedpodcast editor has heralded the releaseof some remarkable and successful
new podcast content – a million people
listen to BBC World Service podcasts
each week. Notable examples of content
are The Assassination, Owen Bennett
Jones’ remarkable podcast about themurder of Benazir Bhutto, and the newly
relaunched Global News podcast.
We’re involving the audience in new ways –our programme CrowdScience, whichtackles a listener’s question each week, has
answered questions from across the world,
and we staged live recordings in Sydney andat the Free Thinking Festival in Gateshead.
The World Service has continued to bring
the best of the UK’s culture to the restof the world, with our now annual Proms
series bringing one of the jewels in the
BBC’s crown to a global audience. Our
programmes have showcased British
festivals and events including the Oxford
Literary Festival and Free Thinking.

0 Return to contents

We have also worked in partnershipwith globally renowned UK museums
and institutions such as the Science
Museum and the British Museum.
The Arts Hour on Tour showcased arts andculture before enthusiastic audiences,with recordings in cities including Addis
Ababa, Seoul and St Petersburg.
The World Service in English increased
its geographical reach as well – a newpartnership arrangement with an FM
station in northern Norway meant
that, for the first time ever, we werebroadcasting from within the Arctic Circle.
Our international 24 hour TV news
channel, BBC World News, has continued
to bring English language news
programming to an audience of nearly
100 million around the globe this year.
100 Days, co-presented from London
and New York, became Beyond 100 Days,
analysing the latest developments
in President Trump’s America.

We brought UK cultural highlights
to the rest of the world with special
programming from the Hay Festival,
the Royal Academy Summer Exhibition
and the Imperial War Museum.
Our series of televised global debates
included putting a Spanish Government
minister head to head with a Catalan
Government representative, broadcast
live from Barcelona.
And our global commercial news website,
bbc.com, continued to bring both news andfeatures to a huge international audience.
The audience for bbc.com is growing within
the USA, the world’s largest media market.
We have restructured our business tomerge BBC Advertising with BBC Global
News Ltd, the commercial subsidiary
which runs both BBC World News andbbc.com. This means that the new
single integrated business can develop
our news content commercially.

We celebrated 20 years of theinternationally renowned interview show
HARDtalk. Other editorial highlights haveincluded Zeinab Badawi’s A History ofAfrica; a six-part series, Tales of Modern
China; and a season of women’s sport.

BBC Annual Report and Accounts 2017/18

55

DELIVERING OUR PUBLIC PURPOSES

Reflecting the United
Kingdom, its culture
and values to the world

The BBC has bureaux in 60 countries and76 cities. These include Newsgathering,
BBC World Service, BBC Monitoring,
BBC Global News Ltd and Media Action.

Toronto
ChicagoSan Francisco

Washington

Boston
New York

Los Angeles

347m

Mexico City

Miami
HavanaBBC News
Total international weekly audience.
2016/17: 345 million
Source: BBC Global Audience Measure.

160m

279m

Rio de Janeiro
Sao Paolo

Buenos Aires

BBC World Service radio
English and other languages.
2016/17: 155 million

BBC World Service
Includes TV, radio, online and social
media in English and other languages.
2016/17: 269 million

Source: BBC Global Audience Measure.

Source: BBC Global Audience Measure.

42m

111m

376m

BBC World Service online& social media
English and other languages.

BBC World Service television
Non-English languages.

Global reach
Including BBC News and BBC Studios.

2016/17: 39 million
Source: BBC Global Audience Measure.

2016/17: 110 million
Source: BBC Global Audience Measure.

Source: BBC Global Audience Measure.

The Global Audience Measure is an annual update of how many people are consuming the BBC weekly for
all services in all countries across all platforms (Television, Radio, website and social media). Key to this isde-duplication i.e. ensuring that a person who consumes multiple BBC services or platforms or on multiple
devices, is not counted many times in the top level totals. For example BBC World Service television, radio
and online audience is less than the sum of its parts to ensure we do not count people more than once whenlooking at the total World Service audience.

56

BBC Annual Report and Accounts 2017/18

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S T R AT E G I C R E P O R T

Riga

CologneBrussels

Moscow

Warsaw
BerlinParis
GenevaKiev
Tbilisi

Belgrade,,.,,'

AlmatyBishkek
Dushanbe

Tashkent
Rome

Tunis

Baku

Istanbul
BeirutJerusalem
Gaza

Ramallah

Baghdad Lahore
Amman

'

Cairo

'

Karachi

Dakar
Freetown
Abidjan

Abuja

Juba

Hargeisa

Accra
Lagos

Kampala'Kinshasa Bujumbura

'

Delhi
Patna

Mumbai

Addis
Ababa

Bangalore

Shanghai

Kathmandu

Dhaka

YangonTokyo

TaipeiHong Kong

Bangkok

Garissa
Nairobi

KigaliSeoul

BeijingIslamabad

Kabul

Dar es Salaam

Phnom Penh

Singapore

Jakarta

LusakaHarare'Johannesburg'

SydneyThis is an illustration and not to scale. It is for pictorial reference only.

95m

*

37m

BBC World News TV channel*
English language global news channel.

bbc.com* and social media
International English language website.

2016/17: 99 million

2016/17: 34 million

Source: BBC Global Audience Measure.

Source: BBC Global Audience Measure.

' '
' '

Newsgathering

World
ServiceBBC
MonitoringMedia
ActionGNL

BBCStudios

BBC World News channel and bbc.com arecommercially funded.

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BBC Annual Report and Accounts 2017/18

57

DELIVERING OUR PUBLIC PURPOSES

Reflecting the United
Kingdom, its culture
and values to the world

BBC World Service has again seen growth this year, especially digital growth on most services, with help in some markets from TV andradio syndication. However, the continuing decline of shortwave (SW) around the world and challenges with syndicated TV in somemarkets coupled with changes in the political environment have affected the performance of a few services.
BBC World Service reach across all platforms by language service

World Service English
Afrique
ArabicAzeri
Bengali
BrasilBurmeseChineseGreat Lakes
Hausa
Hindi
Indonesian
KyrgyzLearning English
Mundo

2017/18
Millions

2016/17
Millions

Year-on-yearchange
%

78.8
12.0
44.3
0.1
16.4
5.6
4.2
1.1
1.4
24.6
11.8
4.0
3.1
2.3
7.2

75.2
10.5
42.9
0.1
16.5
6.3
6.0
0.8
1.4
23.6
12.5
3.9
3.0
1.9
6.8

4.8%
14.3%
3.1%
-19.7%-0.6%-12.0%-30.4%
32.4%
0.0%
4.1%
-6.6%
2.5%
0.4%
17.2%
6.0%

Nepali
PashtoPersianRussianSinhalaSomali
Swahili
Tamil
Thai
TurkishUK China
Ukrainian
Urdu
Uzbek
Vietnamese

2017/18
Millions

2016/17
Millions

Year-on-yearchange
%

5.3
10.1
22.5
2.9
0.9
3.6
16.1
9.8
1.1
1.7
0.1
3.6
7.8
2.3
1.0

5.2
6.7
18.0
3.9
0.9
3.6
16.1
9.5
1.6
1.5
0.1
3.6
11.6
0.7
0.9

0.8%
50.9%
24.8%
-26.9%
-3.6%
1.8%
0.0%
2.2%
-34.6%
16.4%
10.1%
1.4%
-32.5%
247.7%
7.4%

The Global Audience Measure is an annual update of how many people are consuming the BBC weekly for all services in all countries across all platforms (Television, Radio, website
and social media). Key to this is de-duplication i.e. ensuring that a person who consumes multiple BBC services or platforms or on multiple devices, is not counted many times in the
top level totals. For example BBC World Service television, radio and online audience is less than the sum of its parts to ensure we do not count people more than once when looking
at the total World Service audience.
Note: Individual service level data for the new services launched as part of the World Service expansion have not been included in this table because these services have not yet had
a full year of operations.

58

BBC Annual Report and Accounts 2017/18

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S T R AT E G I C R E P O R T

Performance andmarket context
This section takes a look at the weekly reachof BBC television and radio versus the maincommercial groups in the UK, as well as theperformance of our network television andradio services.

p.60

p.63

Audience performanceand market context

Performance of television,
radio and online services

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BBC Two comedy Motherland

BBC Annual Report and Accounts 2017/18

59

PERFORMANCE

Audience performanceand market context
The BBC’s performance with audiences
remains strong. The 2017/18 BBC
Annual Plan specified targets for overall
audience performance for the financial
year, and all were achieved or exceeded.

are of this view with two-thirds or moreof each group rating the BBC as effective.
The majority of UK adults also think thatthe BBC has delivered each element of
the purposes effectively, with the highest
scores for helping people understand what
is going on in the UK and world today, andfor the quality of content and services.

Broad goals were set as the BBC is
improving the audience measurement
systems it uses which introduced someuncertainty into the objective-setting as
migration to the new approaches takes
place. 92% of online adults used the
BBC each week in 2017/18, in line withthe target of 92-95%, and UK adults
spent over 19 hours on average per week
consuming BBC services, within thetarget range of 18:15-19:45. They rated
the BBC at seven out of ten, on average,
in terms of their general impression,
scored the quality of programmes andservices at seven out of ten and value formoney at six out of ten, all within target.

Despite these strong outcomes,
there are significant differences in
the consumption and impact of BBC
output across the population.
Across each audience group, the largest
number of people feel that the BBC hasdelivered its mission and purposes. In eachage band, gender, social group and areaof the UK, and among white and BAME
audiences, the proportion rating the BBC
as effective on each measure outnumber
those saying ineffective by a considerable
margin. But those with lower levels ofusage of the BBC – C2DE groups, 1634s, BAME audiences, those in Northern
Ireland, Scotland and London – wereamong those who tended to give lower
effectiveness scores than the rest of UK
adults for delivery of the mission. As well
as reflecting the relative appeal of the

In terms of fulfilling the mission andpublic purposes, over 70% of adults thinkthat the BBC is effective at delivering its
mission to inform, educate and entertain in
2017/18*. And across all audience groups
regardless of age, gender, social group,
ethnic origin or geography, a clear majority

BBC’s offer, the absolute level of usage
can vary, in part, owing to the extent ofcompetition aimed at different groups,
and different generations and life stages.
Effectiveness scores across all purposes,
including the creativity, quality anddistinctiveness purpose, were lower among
C2DE than ABC1 audiences. Comparedwith older age groups, young audiences
gave lower effectiveness scores especiallyin terms of the extent to which the BBC
delivers the mission to them personally,caters for a wide range of tastes andreflects people like them. BAME audiences
gave lower scores than white audiences inparticular for the creativity purpose andthe representation purpose. Effectivenessratings in North of England tended to belower than the all-England average, andaudiences in Scotland and Wales also gave
lower scores for the extent to which the
BBC provides for their part of the UK.
In addition to seeking to narrow gaps
in consumption and impact of the BBC,
we are also responding to continuing
structural and competitive challenges
that affect audience performance.

Notes:
Ipsos MORI, 3,568 UK adults 16+, April-May 2018.
* Average score across informing, educating andentertaining people in the UK and them.
The weekly reach and time figures quoted in thisreport are average weekly reach and average weekly
time per head across financial year 2017/18 unlessotherwise stated.

92%

19:12

Adult reach
Percentage of UK adults in online
homes who use BBC television,
radio or online each week

Total time spent
Length of time UK adult audiences
spend with the BBC each week.

Target: 92-95%

Target: 18:15 -19:45 (hh:mm)
Sources: Ipsos MORI, Kantar Media (Jul 17-Mar 18).

60

7/10

7/10

6/10

General impression
UK adults’ general impressionof the BBC (mean score out of 10).

How UK adults rate the BBC on
providing high quality programmes
and services (mean score out of 10).

How UK adults rate the BBC on
providing value for money (meanscore out of 10).

Target: 6 -7/10

Target: 6 -7/10

Target: 5 -6/10

BBC Annual Report and Accounts 2017/18

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S T R AT E G I C R E P O R T

Weekly reach of BBC Television and Radio compared withother providers
Television set
Weekly reach

All BBC Television

All ITV television

All Channel 4
television

All Channel 5
television

Other broadcast
TV channels

Other uses of
the TV set*

Adults aged 16+

80.2%

69.7%

62.2%

44.9%

70.6%

55.3%

2016/17: 82.1%

2016/17: 71.2%

2016/17: 63.1%

2016/17: 45.3%

2016/17: 71.7%

2016/17: 51.4%

60.4%

53.2%

50.8%

29.0%

58.4%

64.6%

2016/17: 64.8%

2016/17: 55.9%

2016/17: 53.9%

2016/17: 32.0%

2016/17: 61.8%

2016/17: 60.4%

Young adults 16-34

Source: BARB (TV-owning households), 15+ minutes consecutive reach.
* Include SVOD, gaming, DVDs.

Radio services/music streaming
Weekly reach

All BBC RadioAll commercial
radioMusic streaming

Adults aged 15+

64.2%

65.4%

20.5%

2016/17: 64.3%

2016/17: 64.7%

2016/17: 16.8%

53.0%

70.8%

40.8%

2016/17: 53.3%

2016/17: 71.1%

2016/17: 32.8%

Young adults 15-34

Source: BBC and commercial radio from RAJAR, 15-minute reach. Music streaming estimates from MIDAS/RAJAR.

Usage of the BBC remains very high but
intense competition from both longstanding broadcasters and newer media
providers means overall weekly reach andtime spent with the BBC was down yearon-year in 2017/18. For BBC Television
the drop was greater than the rest of thebroadcast TV market, reflecting, in part,the absence of the Olympics in the BBCschedule in 2017/18 compared with Rio
2016 the previous year. Over the longer
term all broadcast television as well as
BBC Radio have trended downwards as
new competitors grow significantly. Thisis particularly the case among those aged
under 35, and public service broadcasting
will need to work hard to maintainrelevance to younger generations.

Return to contents

Estimates suggest that while under 6s
spend more time with the BBC than withany other media provider (around 7 hours
a week), 6-15 year-olds spend similar
amounts of time with the BBC and YouTube(around 5 and a half hours a week each).
And young adults aged 16-34 now spend
around seven-and-a-half hours per week
using the TV set for purposes that include
SVOD and gaming. They also spend morethan four-and-a-half hours per weekwith music streaming services – roughly
equivalent to the time they spend withBBC Radio. That said though, acrossall its platforms combined, the BBC
remains the single media provider withwhom adults of all age groups, including
young adults, spend the most time.

6 Music DJ Mary Anne Hobbs

BBC Annual Report and Accounts 2017/18

61

PERFORMANCETime spent using the TV set for different purposes per week 2013/14-2017/18, hours:minutes

Adults aged 16+: Average weekly time per head
(hh:mm)Other broadcast TV channels

Young adults aged 16-34: Average weekly time
per head (hh:mm)

09:34
08:16

All BBC television

07:29

All ITV television

06:35

07:26

Other uses of the TV set*
All Channel 4 television

03:09
02:05

All Channel 5 television

01:45

2013/14* Includes SVOD, gaming, DVDs.
Source: BARB (TV-owning households).

06:37
All BBC television
All ITV television

05:48
04:48
02:46
01:41
2014/15

2015/162016/172017/18

07:29

Other broadcast TV channels

Other uses of the TV set*

04:38
04:42
03:02

03:07

All Channel 4 television

03:10
03:36

All Channel 5 television

01:08

2013/14* Includes SVOD, gaming, DVDs
Source: BARB (TV-owning households)--02:59
02:20
00:54

2014/15

2015/162016/172017/18

Time spent using radio services/music streaming per week 2013/14-2017/18, hours:minutes

Adults aged 15+: Average weekly time per head
(hh:mm)All BBC Radio

10:33

All Commercial Radio

Young adults aged 15-34: Average weekly time
per head (hh:mm)
09:58
08:30

08:17

Music streaming

All BBC Radio

08:38

08:11

All Commercial RadioMusic streaming

05:24
04:49
04:34

02:07
01:47

00:47
Source: BBC and commercial
radio from RAJAR. Music
streaming estimates from
MIDAS/RAJAR.

2013/142014/15

2015/162016/172017/18

Source: BBC and commercial
radio from RAJAR. Music
streaming estimates from
MIDAS/RAJAR

2013/142014/15

2015/162016/172017/18

Right: BBC Four’s award-winning comedy Detectorists

Left: Radio 1Xtra DJ Jamz Supernova

62

BBC Annual Report and Accounts 2017/18

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S T R AT E G I C R E P O R T

Performance by Service
This year’s Annual Report sees a shift in the way we measure our performance; moving from a review of performance by platform (i.e.
television, radio, news, online) to a review of our performance measured against each of the public purposes. However, for comparability
with earlier Annual Reports, we have included performance by service where the data exists.
Television performance by service
Network
television--

Content
We spent a totalof £1570.6 million
on these services
in 2017/18

Reach
UK population who
use the service
each week

Time spent watchinga channel each week
Length of time theaverage viewer
spent each weekwith the service

Appreciation
Index by service
Aggregate of
how people
rated individual
programmes,
expressed as anumber out of 100

Costs per user hour
How much it costs todeliver each service
for each hour used

BBC One is our flagship service
and the UK’s most popular
television channel. It unites
and inspires the nation withhigh-quality programmes
across a range of genres that
includes news and current
affairs, drama, comedy,
entertainment and factual.

£1,009.4m 68.9%

07:21

79.1

6.2p

2016/17: £1,115.4m 2016/17: 71.5%

2016/17: 07:33

2016/17: 79.7

2016/17: 6.7p*

II

BBC Two is a mixed-genre
channel with programmesof depth and substance. It
includes the greatest amountand range of knowledgebuilding programming on
the BBC, complemented by
distinctive comedy, drama andarts programming.

£374.3m

44.6%

03:07

81.8

8.1p

2016/17: £403.3m

2016/17: 46.2%

2016/17: 03:08

2016/17: 82.0

2016/17: 9.0p*-

BBC Four aims to be British
television’s most intellectuallyand culturally enriching
channel, offering an ambitious
range of UK and internationalarts, music, culture and factual
programmes.

£37.8m

12.7%

01:45

82.8

4.9p

2016/17: £50.5m

2016/17: 13.5%

2016/17: 01:46

2016/17: 82.6

2016/17: 6.9p*

The CBBC channel offers adistinctive mixed schedule for
6-12 year olds, with mainly
UK programmes served ina stimulating, creative andenjoyable environment.

£67.9m

3.9%

02:33

n/a

17.0p

2016/17: £69.5m

2016/17: 4.3%

2016/17: 02:30

2016/17: n/a

2016/17: 20.9p*

CBeebies provides a mixof high-quality, mostly
UK-produced, programmes
designed to encouragelearning through play in aconsistently safe environment
for children under six.

£29.9m

7.3%

04:13

n/a

2.8p

2016/17: £28.7m

2016/17: 7.5%

2016/17: 04:10

2016/17: n/a

2016/17: 3.0p*

The BBC News Channel
is a 24-hour impartial
and independent news
service offering breaking
news, analysis and insight.
It provides fast andcomprehensive coverage of
local, UK and international
events as they unfold.

£49.7m

9.5%

02:46

n/a

5.9p

2016/17: £47.8m

2016/17: 9.9%

2016/17: 02:46

2016/17: n/a

2016/17: 5.7p*

BBC Parliament is the UK’s
only channel dedicated topolitics. It shows debates andcommittees from Westminster,Holyrood, Stormont, Cardiff
Bay and Strasbourg as wellas political programmes fromacross the UK.

£1.6m

0.5%

01:45

n/a

5.3p

2016/17: £1.8m

2016/17: 0.6%

2016/17: 01:52

2016/17: n/a

2016/17: 4.9p*

Ill-

Reach definition: 15+ minutes consecutive for all services and audiences in TV-owning households aged 4+.
Sources: BARB (TV reach and time per viewer – all channels include their simulcast HD channel where applicable); Appreciation Index: Pulse panel of 20,000 UK adults 16+ by GfK.
N.B. BARB data measures TV set viewing at present, meaning that iPlayer viewing on other devices is not included in any of the reach and time figures. iPlayer viewing is growing,
especially for young-skewed services such as CBeebies and CBBC.
* 2017/18 cost per user hour includes viewing on the TV set and on other devices so are not directly comparable with the 2016/17 cost per user hour figures as they include
viewing on the TV set only.
CBBC: among its target audience of 6-12 year olds reach was 17.9% and time spent per viewer was 02:52 (based on 15+ min reach). Based on 3+ minute reach, reach was 22.1% of
6-12 year-olds and time spent per viewer was 02:20.
CBeebies: among its target audience of 0-6 year olds (measured as children aged 4-6 and housepersons with children aged 0-3) reach was 38.1% and time spent per viewer was
04:49 (based on 15+ min reach). Based on 3+ minute reach, reach was 45.0% of 0-6 year-olds and time spent per viewer was 04:06.
BBC News and BBC Parliament: three-minute reach for BBC News Channel and BBC Parliament – in line with industry standards – would be 13.6% and 1.1% respectively (15.2% and1.3% among 16+ population).
n/a Data does not currently exist for this measure.

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BBC Annual Report and Accounts 2017/18

63

PERFORMANCE

Radio performance by service
Network radio

Content
We spent a totalof £289.9 million
on these services
in 2017/18

Reach
UK population who
use the service
each week

Time spent
listening to aservice each week
Length of time theaverage listenerspent each weekwith the service

Appreciation
Index by service
Aggregate of
how people
rated individual
programmes,
expressed as anumber out of 100

Costs per user hour
How much it costs todeliver each service
for each hour used

BBC Radio 1 broadcasts a
distinctive mix of new musicand entertainment for 15-29
year olds, as well as providing
tailored news, documentaries
and advice campaigns foryoung adults.

£37.5m

17.7%

06:18

79.2

1.2p

2016/17: £35.9m

2016/17: 17.5%

2016/17: 06:16

2016/17: 78.8

2016/17: 1.2p

BBC 1Xtra plays the bestin contemporary blackmusic, with a strongemphasis on deliveringhigh-quality live music andsupporting new artists.

£6.4m

1.9%

04:40

85.6

2.5p

2016/17: £6.6m

2016/17: 1.8%

2016/17: 04:45

2016/17: 82.5

2016/17: 2.8p

BBC Radio 2 broadcastsa unique mix of music
and speech programmes
covering a diverse mix oflive pop and rock, comedy,
documentaries and religious
output, as well as runningsocial action campaigns toover 14 million listeners.

£49.1m

28.1%

11:54

82.2

0.5p

2016/17: £51.2m

2016/17: 28.0%

2016/17: 11:54

2016/17: 82.0

2016/17: 0.5p

BBC Radio 3 centres onclassical music, aroundwhich it provides a broad
spectrum of jazz, worldmusic, arts programmes,
religion and drama. There is astrong emphasis on musicalperformance across the UK.

£37.7m

3.7%

05:56

83.4

6.1p

2016/17: £37.4m

2016/17: 3.7%

2016/17: 06:15

2016/17: 82.7

2016/17: 5.7p

BBC Radio 4 is a mixed-speechradio station, offering in-depth
news and current affairs anda wide range of other speechprogrammes including drama,
readings, comedy, factual andmagazine programmes.

£91.2m

20.6%

11:02

80.8

1.4p

2016/17: £87.9m

2016/17: 20.9%

2016/17: 11:12

2016/17: 80.8

2016/17: 1.3p

Originally launched in 2002

£2.9m

4.0%

05:38

79.4

0.5p

2016/17: £3.0m

2016/17: 3.8%

2016/17: 05:56

2016/17: 78.6

2016/17: 0.5p

=ora
Ai
.. ·
~ Q.1
em11

~I.r....,
em11

MDIQ
· .
mi111
. ~

,

a as BBC 7, the station was

relaunched in April 2011
as BBC Radio 4 Extra. The
digital-only network is theprincipal outlet for theBBC’s archive of speechentertainment, including
comedy, drama and readings.

Reach definition: 15+ minutes for all services and audiences aged 15+.
Sources: RAJAR (Radio reach and time per listener); Appreciation Index: Pulse panel of 20,000 UK adults 16+ by GfK.
Radio 1: among its target group of 15-29 year-olds reach was 33.3% and time spent per listener was 06:15.
1Xtra: among 15-24 year-olds reach was 5.7% and time spent per listener was 03:47.
Radio 2: among its target group of 35+ year-olds reach was 34.6% and time spent per listener was 12:56.
Asian Network: among its target group of Asians under 35 reach was 13.9% and time spent per listener was 06:18. Ethnicity definitions in RAJAR from FY 2014/15:
Asian = White & Asian, Indian, Pakistani, Bangladeshi, any Other Asian Background.

64

BBC Annual Report and Accounts 2017/18

0 Return to contents

S T R AT E G I C R E P O R T

Network radio

Content
We spent a totalof £289.9 million
on these services
in 2017/18

Reach
UK population who
use the service
each week

Time spent
listening to aservice each week
Length of time theaverage listenerspent each weekwith the service

Appreciation
Index by service
Aggregate of
how people
rated individual
programmes,
expressed as anumber out of 100

Costs per user hour
How much it costs todeliver each service
for each hour used

BBC Radio 5 live broadcasts
continuous news and live
sports coverage, bringing
major news stories and sports
events to its listeners as they
happen, and providing context
through wide-ranging analysis
and discussion.

£44.8m

9.7%

06:34

79.9

2.5p

2016/17: £45.5m

2016/17: 10.4%

2016/17: 06:41

2016/17: 79.9

2016/17: 2.3p

BBC Radio 5 live sports extra
brings a greater choice oflive action to sports fans byextending live coverage ofvarious sporting events.

£2.9m

2.3%

03:19

85.1

1.3p

2016/17: £2.7m

2016/17: 2.3%

2016/17: 02:52

2016/17: 85.3

2016/17: 1.5p

BBC 6 Music is a digital radio
station that entertains loversof popular music with a service
that celebrates the alternative
spirit of popular music fromthe 60s to the present day,complemented by music news
and documentaries.

£10.7m

4.4%

09:12

82.2

0.9p

2016/17: £10.9m

2016/17: 4.3%

2016/17: 09:39

2016/17: 81.1

2016/17: 0.9p

BBC Asian Network offers
speech and music appealing
to British Asians, with afocus on news and current
affairs. It broadcasts mainly
in English, but does offersome programmes inother languages.

£6.7m

1.2%

05:19

80.3

3.7p

2016/17: £7.1m

2016/17: 1.2%

2016/17: 06:11

2016/17: 80.3

2016/17: 3.4p

Content
We spent a totalof £182.4 million
on these services
in 2017/18

Reach
UK population who
use the service
each week

Time spent using
a service each week
Length of time
the average user
spent each weekwith the service

Appreciation
Index by service
Aggregate of
how people
rated individual
programmes,
expressed as anumber out of 100

Cost per user reach
How much it costs todeliver each service
to individual users£182.4m

n/a*

n/a

n/a

n/a*

2016/17: £185.5m

2016/17: 63.3%

2016/17: n/a

2016/17: n/a

2016/17: 11.2p

Excludes programme “Coming up on 5 live Sports Extra”.

Online performance by service

BBC Online comprises theBBC’s portfolio of online
products on desktop,
connected TV, mobile andtablet, including news, sport
and weather; our children’s
services CBBC and CBeebies;
and Knowledge & Learning –as well as IP-delivered TV andradio services, with both live
and on-demand programmes
available on BBC iPlayer.

Reach% of 16-34 year olds who use the service each week

BBC Three is constantly
innovating to provoke
thought and to entertain
audiences from 16 year olds to30-somethings with original
comedy, drama and factual
programming that celebrates
new British talent.

Apr-Jun 2017

Jul-Sep 2017

Oct-Dec 2017

Jan-Mar 2018

8.2%

7.8%

7.9%

8.3%

Apr-Jun 16: 3.5%

Jul-Sep 16: 4.7%

Oct-Dec 16: 5.3%

Jan-Mar 16: 8.1%

Source: BBC modelled data using inputs from: Facebook, comScore, BARB, Cross-Media Insight Survey. UK 16-34 year-olds.
* The BBC is updating its measurement systems. Comparable weekly reach figures for BBC Online and Red Button are not included this year but this will be rectified insubsequent years. As page 28 shows, BBC Online reaches 74% of UK adults per month.

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BBC Annual Report and Accounts 2017/18

65

F I N A N C E , P E O P L E A N D O P E R AT I O N S

Finance and operations

p.67

p.69

Finance Review by the
Deputy Director-General

Financial overview

BBC One drama Little Women66

BBC Annual Report and Accounts 2017/18

Return to contents

S T R AT E G I C R E P O R T

Finance Review by the
Deputy Director-General“Successfully
reinventing the BBC
for a new generation is
not just about what we
make and how we getit to our audiences.”
Anne Bulford
Deputy Director-General
Our focus this year has been on
reinventing the BBC for a new generation
along with modernising and simplifying
activities to improve services andensure we spend as much of the licence
fee as possible on the content andservices that matter to audiences.
Successfully reinventing the BBC for a newgeneration is not just about what we makeand how we get it to our audiences. It isalso about what we do behind the scenes tomodernise our organisation and make theBBC one of the very best places to work.
We are continuing to deliver real progressin organisational modernisation and reform.
Fairness and equal pay issues have beenvery much in the spotlight in recent months
and the scrutiny on the BBC has been
intense. Addressing these issues – alongwith historic tax demands being faced byfreelance presenters paid through personal
service companies – has been and continues
to be a priority. Our aim – both within our
workforce and day in, day out across our
output – is to represent the whole country
and help make the UK a fairer place.
In terms of governance and regulation,
this year has been one of transformationand change. We operated under the newCharter for the full year and the NAO
became our financial auditor. We alsoestablished a new Board, with executive
and non-executive directors, offering asingle point of leadership. Our mission

0 Return to contents– to inform, educate and entertain –remains the same as it’s always been.
In fact, it’s more necessary than ever.
And, because of that, we’re mindful of the
responsibilities we have to the millions ofpeople who count on the BBC every day.
At the start of the year, we launched BBC
Studios as a wholly owned commercial
subsidiary. This represented an opportunity
to bring creative ideas to new audiences
around the world, as – for the first time –BBC Studios is able to make British,bold, creative programmes for otherbroadcasters, as well as playing a vitalrole in the BBC’s future by delivering
quality programmes and creating
valuable intellectual property.

6%of controllable spend was spent
on running the organisation, with
94% directed to audience facing
content and services.

Delivering efficiencies
Our goal is to ensure that the organisation
is run as efficiently and effectively as
possible, and to redirect spending andsimplify procedures in a way that supportsa sustainable and more creative BBC.
Our strong track record of delivering
efficiencies continues. We delivered
over £1.6 billion in savings over the lastCharter period. We are addressing our
future financial challenges by seeking
to find another £800 million of savingsby 2021/22. This is a tough task. We aremaking good progress against this target,
delivering £160 million of annual savings
this year, taking the cumulative savingsto £244 million. A further £33 million
BBC Annual Report and Accounts 2017/18

67

F I N A N C E , P E O P L E A N D O P E R AT I O N S

of savings were delivered within thedivisions and BBC Worldwide to fundemerging priorities, taking the totalsavings achievement to £277 million.

to come – securing the long-term future of
our London base and demonstrating ourcommitment to the financial challenges
we have to meet during this Charter.

We have done a vast amount to make the
BBC simpler, leaner and more efficient.
We have reshaped business structuresand now have a BBC with fewer layers anddivisions, and half the senior managers
compared with 2011. We are providing
the technology to enable a modern andefficient workforce, including re-procuringsome of our technology services. This
has led to a BBC that is financially wellmanaged and less bureaucratic – a
BBC that is more streamlined, withmore visible and accessible leaders.

Of course, there is more to do. We know
we will need to push even harder: tofurther reduce management layers, keeppressure on overheads and manage risingcosts as best we can. And we know thatthe significant financial challenges we
now face will require tough choices.

We have brought down overheads toindustry-leading levels: just 6% of our total
costs. This puts us in the most efficient
25% of benchmarked regulated andnon-profit organisations in the country.
Between 2012/13 and 2017/18 we reduced
our spending on major strategic contractsby £288 million – a saving of 42%.
‘Compete or Compare’ has been
instrumental in finding efficiencies andwill continue to play an important role in
the identification of new savings, giving us
a sustainable framework for continuous
improvement. The framework ensuresthat everything we do is challenged in themarket or benchmarked against it, ensuring
value for money whilst maintaining
quality. ‘Compete or Compare’ has now
tested 94% of the BBC’s cost base.
Cutting our property bill is another key
part of our business strategy and ourproperty footprint is now around 40%
smaller than in 1998 – a significant
achievement. Overall, we have brought
down our property bill by approximately£90 million a year since 2011/12, exceeding
our original target by £35 million. Last year
we refinanced our London Broadcasting
House building which will save a further£10 million a year, maturing gradually toan estimated £34 million a year when thelease term ends in 2033. It is a deal thatprovides value for money for generations

68

BBC Annual Report and Accounts 2017/18

Looking forward
On 1 April 2018, BBC Worldwide wascombined with BBC Studios to forma single integrated brand, in line withindustry practice. The merger is expected
to strengthen IP generation and enhancecontent supply, helping to secure thefuture of the BBC as a long-term creatorand owner of the highest quality British
content. This represents a bold stepin the evolution of the BBC’s content
ambitions, and a critical priority for thebusiness in 2018/19 will be to ensure thesuccessful implementation of this merger.
The UK is changing and changing fast. The
media habits of our audiences are vastlydifferent compared with five years ago.
Younger audiences, in particular, consumeless output of the BBC owing to increased
competition for their time from other media
providers, especially online, and otherforms of entertainment. We will continue
to innovate online, keeping pace as moreaudiences choose to access services andcontent digitally. This will also require moreinvestment in the supporting infrastructure.
Major new entrants such as Amazon
and Netflix have meant that the
global media market is increasingly
dominated by a small number of USbased media giants with extraordinary
creative and financial firepower.
The last few years have seen high superinflation in areas such as drama andcomedy, and we are now seeing thiseffect moving into other key areas of our
output, such as factual programming.
The cost of sports broadcasting rights

94%
of the BBC’s cost base has
been tested in line with‘Compete or Compare’.

has skyrocketed whilst, overall, the costof ideas and talent has risen fast.
In this context, the BBC’s urgent challenge
is to develop new ways to grow our
income so that we can keep pace with themarket around us, as well as successfully
safeguarding distinctive British content
and Britain’s creative track record.
The creative and commercial success of
our teams in the newly combined BBC
Studios will be critical. Co-productions withthe very best global partners are alreadya big part of BBC commissioning – andseries like Blue Planet II are able to attract
investment from across the world. That is
a model we will continue to pursue where
it allows us to deliver for audiences.
But alongside the real potential for coproduction and commercial growth, wemust also explore other options to savemoney or increase income. It will meansome difficult decisions and is likely torequire a genuine public debate about thekind of BBC the country wants and needs.

Anne Bulford OBE
Deputy Director-General
21 June 2018

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S T R AT E G I C R E P O R T

Financial overview
How we use the licence fee
The way in which the BBC is funded
places significant responsibilities on
the organisation:—— to provide value for money by focusing
expenditure on the programmes andservices the public most want fromthe BBC;—— to ensure that the output is thendelivered as cost efficiently as possible;—— to ensure effective and efficientcollection of the licence fee; and—— to maximise funding from othersources in a manner consistent
with the terms of its Charter andother obligations.
Results for the year
Spend can vary significantly fromyear to year due to the timing ofmajor sporting events and investment
in change programmes, including
restructuring. Overall, the BBC’s
financial objective is to manage to abreakeven income and expenditure

result over time, whilst ensuring
adequate cash reserves and borrowing
facilities to manage timing differences
and provide financial contingency.
Our results for this year once again showthat we have successfully managed
the financial challenges facing us,
giving a sound base to meet our futurecommitments and deliver our strategic
ambitions. An increase in both licence fee
income and World Service grant, alongwith a reduction in operating costs throughour efficiency programmes, have resulted
in a group surplus of £180 million forthe year (2017: deficit of £129 million).
The table below provides a summaryof the income statement.
IncomeTotal licence fee income increasedby 1.1% or £43 million from £3,787
million to £3,830 million, which was due
predominantly to the CPI increase applied
to the licence fee after a six-year freeze,
from £145.50 to £147.00. This increase
was agreed with the Government during
the latest licence fee settlement.

How your monthly licence
fee is spent 2017/18£12.25 per household(2016/17: £12.13)

Television
2016/17

£6.40
£6.92

Radio
2016/17

£2.06
£2.02

BBC World Service
2016/17

£1.06
£0.90

Other Services andProduction Costs
2016/17

£0.67
£0.82

BBC Online
2016/17

£0.91
£0.90

Licence fee collection andpension deﬁcit costs
2016/17

£1.15
£0.57

Summary consolidated income statement
For year ended 31 March 2018
2018
£m

2017
£m

The total of licence feescollected

3,830

3,787

1.1% increase due mainly to inflationary increase.

Commercial income

1,233

1,167

Increase due to additional World Service income andexternal income being generated by BBC Studios.

5,063

4,954

Operating costs

The cost of producing allcontent and of running
the BBC(4,815)(4,943)

Restructuring costs

Sums provided to fund future
efficiency initiatives

(14)

(50)

Continued development of savings plans.

Share of results ofassociates and joint
venturesOur share of the profit ofbusinesses where we control
50% or less

36

46

The reduction reflects reduced UKTV profits(investment held by BBC Worldwide).

Gain on disposal of
non-current assets

Profit on disposal of operations
and fixed assets

58Profit generated from the disposal of availablefor-sale financial assets within BBC Worldwide.

Net financing costs

The net interest on the BBC’s
pension assets and liabilities,
interest on loans and fair value
movements on derivatives

(96)

(134)

Reduction due to exchange rate gains on
borrowings and variation in the charge relating
to pension liabilities.

Taxation charge

The net tax liability of the BBC
on its taxable profits

1

(10)

Tax charge arises on commercial activities. These areoffset by the impact of tax rate changes on deferred
tax in 2017/18.

180

(129)

Income statement classification

What is it?

Licence fee income
Other income
Total income

Group surplus/(deficit)
for the year

What has happened?

Reduction due to timing of major sporting events(such as the Olympic Games and UEFA Euro 2016)
and an accounting estimate change in prior year
relating to amortisation of distribution rights held
by BBC Worldwide.

For further details, please refer to the detailed financial statement on page 185.
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BBC Annual Report and Accounts 2017/18

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F I N A N C E , P E O P L E A N D O P E R AT I O N S

Licence fee collection
Effective financial management is a key
part of the BBC’s unique relationshipwith its audiences. This includes spending
the licence fee efficiently and collecting
a television licence fee from everyone
who is required to buy one. The BBC has
a number of contractual arrangements
covering collection, administration andenforcement of the licence fee, marketing,payment channel management and retail
networks. The majority of administrationis contracted to Capita Business Services
Ltd. This is the sixth year of the current
collection contract – which has delivered£140 million of savings to date. Total costsavings of £220 million are expected to
be delivered over the ten years of thecontract, releasing more funding to be
spent on our programmes and services.
Licence fee statement
As in previous years, the BBC preparesa licence fee revenue statement
audited by the NAO. This sets out theamounts collected and paid over to HM
Government during the year. Alongside
their audit work, the NAO examines
our collection arrangements andreports on them to Parliament. Moreon the licence fee revenue statement
can be found on the NAO website:www.nao.org.uk/report/bbc-licence.
Focusing spend
The BBC concentrates its expenditure on the
production of distinctive programmes andother content and its delivery to audiences
and users, and the essential infrastructure
to support this. Year-on-year spend canvary significantly because of the cycle ofmajor sports events. Total content spend
reduced by 4% to £2,623 million this year
(2016/17: £2,734 million), which was largely
due to additional investment in our coverageof the Rio 2016 Olympic Games and Euro2016 Football Championships in 2016/17.
Pension costs
At 31 March 2018, the accounting
pension deficit (as defined by IAS 19)
had decreased by 55% to £518 million,
compared to £1,149 million a year ago.
The reduction during the current year
was due to a net gain from changes in thevaluation assumptions of £737 million andcontributions paid of £155 million, offset byan annual operating charge of £236 million
and net finance costs of £25 million.
This accounting valuation is only a‘snapshot’ at a particular date, and istherefore sensitive to short-term market
fluctuations. It has no impact on theactual cash cost of paying down thepension scheme deficit, which is reviewed
at triennial actuarial valuations.

70

BBC Annual Report and Accounts 2017/18

The most recent triennial actuarial
valuation was completed in June 2017
and showed a funding shortfall of £1,769
million as at 1 April 2016. A repayment
plan was agreed between the BBC and thePension Scheme Trustees which runs until
31 December 2028. This plan is considered
to represent an affordable basis toaddress the deficit, without compromising
services to audiences or pension scheme
members. The next formal actuarial
valuation of the Scheme is expected tobe performed as at 1 April 2019. The
BBC continues to work actively with thePension Scheme’s Trustees to ensure the
Scheme delivers security for members
and value for the licence fee payers.
Cash
The BBC’s cash balance at the end of theyear is £523 million. The current strong
financial position of the BBC reflects the
positive impact of CPI uplift on licence
fee income and an agreed reduction in
Broadband obligations, and successful
delivery of recent savings plans. This cash
will be used to continue to deliver worldclass content to BBC audiences whilst
meeting future obligations (which include
pension deficit repayments) and managing
the cost and timing of delivering savings
programmes, in anticipation of funding
licences for the over 75 population.
Tax
The BBC is committed to paying the rightamount of tax (employment tax, VAT andcorporation tax) at the right time, in all thejurisdictions in which it operates. The BBC
recognises the importance of paying theright amount of tax for the communities
in which it operates, and takes its tax
compliance obligations seriously. The BBC
does not enter into any transactions with aview to artificially or aggressively reducing
its tax liability. The BBC published its tax
strategy in accordance with the FinanceAct 2016. It can be found on the BBC
website: www.bbc.co.uk/aboutthebbc/
insidethebbc/howwework/reports/
tax_strategy_17_18. The BBC complies
with its obligations under the ‘Off payroll
working in the Public Sector’ legislation
introduced in April 2017 and has actively
engaged with HMRC in relation to thismajor change in UK tax legislation.

Delivering efficiencies
Since 2010 the funding for BBC services
for UK audiences has fallen in real termsby 18%, as the licence fee was frozen forsix years and the BBC was required totake on responsibility for new obligations.
Despite this funding reduction, the BBC has
managed to maintain quality and reach due
to a substantial and extensive programmeof cost management. £1.6 billion ofannual recurring savings were delivered

during the last Charter period. Since
these savings were achieved, an additional£244 million of annual savings have beendelivered – £160 million of which wereachieved during 2017/18. This is aheadof the £226 million target to date and asignificant step towards the latest £800
million target by 2021/22. A further £33
million of savings were delivered within
the divisions and BBC Worldwide to fundemerging priorities, taking the totalsavings achievement to £277 million.
A vast amount has been done to make the
BBC simpler, leaner and more efficient.
Overheads have been reduced to industryleading levels: just 6% of total costs. Thisputs the BBC in the most efficient 25% ofbenchmarked regulated and non-profit
organisations in the country; along within the most efficient 25% of benchmarked
firms in the telecommunications and media
sector. The BBC’s property bill has reduced
by c.£90 million a year since 2011/12. Spendon major strategic contracts reduced by£354 million between 2011/12 and 2017/18– a saving of 48%. London Broadcasting
House was refinanced last year, saving£10 million per annum, maturing
gradually to an estimated £34 million ayear when the lease term ends in 2033.
‘Compete or Compare’, the BBC’s approach
to identifying efficiencies in the cost basethrough competition or benchmarking, isan integral strand of the BBC’s approach todriving ongoing efficiencies. The frameworkensures that everything the BBC does ischallenged in the market or benchmarked
against it. This drives up quality andreduces costs. An internal review during
the year concluded that 94% of BBC
controllable spend satisfied the ‘Competeor Compare’ criteria, either through directcompetition or rigorous comparisonand benchmarking (2016/17: 90%).
Property costs
Cutting property costs is a key strand of theBBC’s efficiency plan. The BBC has reduced
its property footprint by approximately
40% since 1998 and total property savings
since 2011 are now at approximately £90
million a year. The BBC continues to review
its buildings in London to explore ways
it can provide best value for money andmake more efficient use of space, as wellas to consolidate and improve property
to create modern, efficient working
environments. During 2017/18, the BBCvacated from several London properties
including Grafton House, Brock House,
Great Portland Street and Euston Square.
Further reductions to the size of theestate are expected in order to reach the
355,000m 2 UK property estate target by2020 – a reduction of over 20% since 2014.
These reductions are expected to deliver£14 million of further savings a year.

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S T R AT E G I C R E P O R T

Procurement
The BBC’s procurement team is rated
highly by industry-winning ‘Best Public
Sector Outsourcer’ as well as being theonly public body to achieve Global Sourcing
Association (GSA) accreditation with merit.
The cost of running the department is athird lower than its ‘world class’ benchmark.
The BBC regularly reviews the financial
standing of its major outsourced service
suppliers, which includes analysing
reports from external commercial credit
agencies. The contractual arrangementswith these suppliers include open bookaudit provisions as well as comprehensive
business continuity and exit obligations.
Between 2012/13 and 2017/18 spend on
major strategic contracts reduced from£684 million to £396 million, a saving of
42%. Managing supplier performance,
automation and transforming the
procurement process have all been
instrumental in securing these savings.
Dedicated supplier contract managers
are strengthening the BBC’s contract
management by tracking performanceagainst business requirements.
Technology
During the year, the BBC re-procured thecore technology services contract, which
provides critical IT and technology services
to programme makers and staff. The newcontract has transformed how the BBC
provides and manages its technology.
Since 2004 most of the BBC’s outsourced
technology services were delivered by one
external provider, but the new contract
is non-exclusive, delivering services by a
combination of third parties and in-houseteams. This approach gives the BBC greater
flexibility and access to new technology
as it emerges. These technology reprocurements will lead to long-termsavings that will amount to hundreds ofmillions of pounds over the course of thecontracts, including savings in the regionof £90 million per annum since 2014/15.
Our people
A broad range of organisational
reforms have been made from reducing
management layers to merging andrationalising divisions. Whilst staff levels
have been steady in the past three years,
the focus of employee roles has changed
significantly towards serving the audienceand building BBC technology capabilities.
Reductions in professional support andadministration services have allowed thelicence fee to support taking on the World
Service, create more original content andimprove digital services for BBC audiences.
Major staff moves to Media City in
Salford, Mailbox in Birmingham andPacific Quay in Glasgow, as well as theclosure of TV Centre and other London
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premises, have helped change thegeographical outlook of the BBC so it
is more representative of the country.
During the year, the NAO publishedthe findings of their review of how theBBC manages and plans its workforce.
The report acknowledged that the BBC
has reduced the cost and size of its
payroll workforce between 2010/11 and2015/16 by 6% and 4% respectively,
delivering £59 million in real termsavings for salaries and wages.
A simpler organisation inevitably requiresa more focused leadership team and fewer
managers, especially at senior levels. A
simpler BBC also means senior leadersthat are more visible, more accountable
and more approachable. The BBC has
achieved a 57% reduction in the numberof its senior managers, from 614 in March2010 to 267 by March 2018. This has
resulted in a saving of £38 million.
During the year, the BBC commissioned
an independent Equal Pay audit by
PricewaterhouseCoopers LLP andEversheds Sutherland (International) LLP.
The Equal Pay report highlighted theimportance of a consistent approach to
pay and allowances. The BBC has beendeveloping a fundamental set of reforms
in relation to its pay and grading systems
which include job evaluation, proposed
new terms and conditions and moretransparent market-informed pay ranges.
During the year ahead, the BBC will
independently review whether theorganisation has some responsibility
for freelance on-air presenters whom
are now facing historic demands from
HMRC after being paid through personal
service companies. A contingent liability
has been disclosed in the financial
statements in relation to this matter. No
amount has been provided due to theoutcome being uncertain. Discussions
with HMRC continue on these issues.

Commercial trading
and other income
The licence fee is supplemented by income
from the commercial exploitation of licencefee-funded content and infrastructure
through four commercial subsidiaries –BBC Worldwide, BBC Studios, BBC
Global News and BBC Studioworks.
Commercial trading

BBC Worldwide
BBC Worldwide supports the BBC public
service mission and generates income
for the BBC group. This year, the group
generated returns of £210 million to
the benefit of the BBC group (which
included dividends and investments inprogrammes), above £200 million for
the fourth year running (2017: £210
million). The group maximises the valueof the BBC’s intellectual property,
providing income to fund high-quality,
distinctive programming for the licencefee payer, whilst supporting the UK’s
television industry on the world stage.
During 2017/18, BBC Worldwide generated
headline sales (including income from JVs
and associates) of £1,044 million, which
is a 2% reduction from prior year (2017:£1,060 million). The business achieved
growth in BBC-branded channels, acquireda majority stake in Sid Gentle Films Limited(an independent production company)and matched the previous year recordin content sales with the business again
being the largest distributor of UK content.
Furthermore, production and formats grewin Global Markets whilst a reduction in theAmericas reflected fewer hours of Dancing
With The Stars. This sales growth was morethan offset by the inter-company transfer
of advertising sales to Global News,
continuing decline in the DVD market andthe impact of contract renewals in UKTV.
EBITDA of £118 million was 40% higher
than last year. This reflected a strong
performance in content sales, cost
efficiencies across branded services
and overhead savings. These offset
significant currency pressure and a
decline in consumer products. 2016/17
also included a one-off accounting
estimate change relating to amortisationof distribution rights (£68 million).
Free cash flow of £121 million was
33% higher than the prior year (2017:£91 million). Once adjusted for oneoff specific items, alongside foreignexchange and joint venture performance,
this represents a 41% increase inowned and operated free cash flow.
2017/18 saw the continuation of
BBC Worldwide’s transformation
programme, with an increased focus
on intellectual property (IP) ownership;on high-value customers and markets;and on global franchise brands.

Headline sales

BBC Worldwide
BBC Studios
BBC Global NewsBBC Studioworks

EBITDA (including tax credits)

2017/18£m

2016/17£m

2017/18£m

2016/17
£m

1,044
432
109
31

1,060
–
110
26

118
7
18
3

84
–
2
4

BBC Annual Report and Accounts 2017/18

71

F I N A N C E , P E O P L E A N D O P E R AT I O N S

savings were achieved to reduce thecompany’s cost base and a new flexible
operating model was introduced.
These measures have helped delivera successful first year of trading.
Headline sales were £432 million, andreductions in overheads helped drive
EBITDA (including tax credits) of £7
million. This excludes returns fromsecondary and global exploitation of
IP historically retained by the PublicService (e.g. Strictly Come Dancing).

Landmark series Blue Planet II, produced by BBC Studios

The group invested £171 million incontent in the year (2017: £174 million)
with investment in BBC commissioned
content increasing to £106 million (2017:£99 million), supporting on-screen
programmes across the BBC’s channels.
Relationships continued to be built acrossthe independent sector, with total return
to independent companies throughrights investments, royalties and profit
shares at £149 million during the year(2017: £146 million). BBC Worldwide
made equity investments in three British
independent drama production companies,
supporting British entrepreneurshipand IP generation whilst enhancing
the future of its own content supply.
International BBC-branded services
performed strongly, with BBC America
posting a record 13th straight year of prime
ratings growth, BBC First becoming theNetherlands’ most watched international
channel since the start of 2018, andSony BBC Earth (a joint venture channel
with Sony Pictures) marking its firstbirthday by becoming the most watchedinfotainment channel in six Indian metros.
BBC Earth’s linear channel footprint
expanded across Greece and the Balkans.
Blue Planet II proved a phenomenal successwith international audiences, with thepremiere becoming the most watchedadvertising-supported nature episodein nearly eight years in the USA. Blue
Planet II content amassed over 250 million
views on Chinese VOD platform Tencent
between September 2017 and year end.
BritBox, the subscription video on demand
service partnership with ITV plc, hada strong first year in the USA. It also
launched into Canada in February 2018
and reached a 250,000 total subscriber
milestone collectively for USA and
Canada by the end of February 2018.

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BBC Annual Report and Accounts 2017/18

The group entered into several new
global deals during 2017/18, including
with Shanghai Media Group Pictures (aleading Chinese media company) which
will see an expansion of the Doctor
Who brand in China; and partnerships
with Foxtel, ABC, Sky and Fetch were
cemented with new or continued deals
in Australia and New Zealand.
BBC Studios
BBC Studios is the television production
arm of the BBC, which creates distinctive,
much-loved content across a wide
range of genres. In a highly competitivemarket, BBC Studios provides a stable
and large-scale source of IP for the BBCgroup, generating value for audiences
and returns for licence fee payers.
As part of a major change to the BBC’scontent supply strategy, BBC Studios
became a wholly owned commercial
subsidiary of the BBC in April 2017. As
a result, BBC Studios no longer has
guaranteed business from the BBC, but for
the first time the company has been able to
make programmes for other broadcasters.
This represents a significant opportunity
to share creative ideas with new audiences
around the world and increase revenue
for the BBC group. BBC Studios is making
rapid progress in winning new commissions
and has already announced deals with
Discovery, Channel 4 and Channel 5.
BBC Studios’ priority this year has been
to transform the business for this morecompetitive, market-driven environment.
The group’s strategy is to develop a
more balanced portfolio of business bycontinuing to deliver existing programmes
to the highest creative standards whilst
investing in generating new IP anddiversifying its customer base beyond theBBC. To support this strategy, efficiency

BBC Studios produced over 2,000
hours of television and radio content in2017/18. It received widespread industry
recognition with more than 80 awards and
200 nominations, making the company
the most awarded producer in the UK. It
also delivered some of the most watched
programmes of the year with the One Love
Manchester concert, Strictly Come Dancing,and EastEnders and Mrs Brown’s Boys over
Christmas. The launch of Blue Planet II,
with an audience of 14 million, made it
the biggest natural history programme in
15 years, and the resulting anti-plastics
campaign demonstrated the positive
impact television can have on society.
BBC Studios made good progress thisyear in securing business beyond the BBC,a key proof point for the new strategy.
Commissions such as the Fatberg Autopsy
for Channel 4, Inside Hotel Chocolat for
Channel 5 and Cherry Healey’s explorationof plastic surgery for UKTV were secured.
BBC Global NewsBBC Global News operates the BBC’s
two commercially funded international
news services: BBC World News, the 24hour global news television channel, andthe digital platform bbc.com (including
the bbc.com website, a News app and aSport app). BBC Global News’ mission
is to be the best and most trusted
international news provider in the world,whilst growing the BBC’s international
news audiences and operating as acommercially efficient business.
In 2017/18, BBC World News’ global
footprint continued to expand, growing
by 2% over the year and the channel is
now available to a record 458 million
households (up from 450 million in
2016/17). The growth was driven by gains
in Europe, the Americas and South Asia.
The engagement levels of bbc.com
increased during the year, resulting in total
page views across all platforms (website,
apps and connected TV) remaining stable
at a monthly average of 1.3 billion, despitea drop in monthly audience, which averaged
88 million unique browsers in 2017/18.

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S T R AT E G I C R E P O R T

Off-platform consumption of BBC content
plays a key role in BBC Global News’content distribution and commercial
strategy. BBC Global News continued its
successful partnerships and entered into
a new agreement with News Republic.
BBC News’ social media presence is oneof the biggest in international news withover 46 million Facebook likes globallyand over 23 million followers on Twitter.
In 2017/18, BBC Global News wasrecognised for the excellence of its
journalism with a number of awards,
including a Peabody Award for BBC World
News’ reporting on the plight of Rohingya
refugees, ‘Best News Programme’ at the
Asian Television Awards for Newsday, and‘TV News Story Of The Year’ at the Foreign
Press Association for the Our World’s
Starving Yemen documentary. At the 2018
Broadcast Awards, Professor Robert Kelly’sinterview on BBC World News (which
was interrupted by his children) won ‘TV
Moment Of The Year’. Online, bbc.com’s
Culture feature site won a Webby for itssocial media presence and the Travelfeature site won a Gold Lowell Thomasaward for ‘Best Travel Journalism’ website.
During the year, BBC Advertising (formerly
part of BBC Worldwide) was integrated into
BBC Global News, doubling the headcountnext year to 350 staff. As identified in the
NAO’s Landscape Review of the BBC’scommercial activities, the integration of
BBC Advertising presented BBC Global
News with a significant financial challenge.
Rapid progress was made during the year tomeet this challenge and further profitability
improvements are planned during
2018/19 in order to ensure the continued
achievement of commercial targets.

Global News recorded EBITDA of£18 million and profit before taxation of£16 million in 2017/18. The significant
increases in EBITDA and profit before
taxation were driven by substantial
foreign exchange gains on the year-end
valuation of hedged positions (£15 million).
Excluding these foreign exchange gains,
BBC Global News returned an underlying
profit before taxation of £1 million
in 2017/18, due to a combination ofstrong revenue performance anda cost reduction programme.
BBC Studioworks
BBC Studioworks is a wholly owned
commercial subsidiary of the BBC,
serving both the BBC and externalclients. In September 2017, the company
opened new and refurbished studios
and post-production facilities at
Television Centre (TVC) in West London.
This marked a substantial expansion
for the company and supplements
its existing portfolio in Elstree.
BBC Studioworks delivered a strong
financial performance for the year,
generating £31 million of income (2017:£26 million) and EBITDA of £3 million(2017: £4 million). The 19% increase inincome was driven by the re-introduction of
TVC into the company’s portfolio, but thehigh establishment costs of this new facility
has resulted in a reduction in EBITDA.
During the year, BBC Studioworks
welcomed a number of existing and newclients to its studios and post-production
facilities. For the BBC and BBC Studios
it hosted the 2017 General Election
coverage, the quiz show Pointless, thecontinuing drama EastEnders and the15th series of Strictly Come Dancing. It also
worked with ITV on the relocation of Good
Morning Britain, Lorraine, This Morning andLoose Women to TVC along with othersuccessful studio productions such as
ITV’s The Voice UK live shows, Britain’s Got
Talent, The Jonathan Ross Show, Celebrity
Juice and Sky’s A League of their Own.
The post-production team worked on
numerous projects including BBC’s
Strictly Come Dancing, EastEnders andSounds Like Friday Night, ITV’s The Chaseand Sky’s The Russell Howard Hour.
BBC World Service
BBC World Service operates under a licencewhich sets out the remit and scope of its
services, its annual budget and its maincommitments. The performance of theservice is regularly reviewed against its
licence. The current Operating Licence
sets out a target for total spend of at least£254 million p.a. This year, the total BBC
World Service spend of £268 million was
higher than target (2017: £268 million).
The Foreign & Commonwealth Office (FCO)
invested £86 million during the year, as
part of their grant funding commitment
into BBC World Service over a four-year
period to March 2020. This investment
is funding the transformation of theWorld Service from a predominantly
short wave radio service to a fully digitalfirst operation, as well as providing
additional television content, launchingnews content in 12 new languages, anda material expansion in Russian, Arabic
and World Service English output.

42%
reduction in spend on major
strategic projects between
2012/13 and 2017/18.
BBC Studioworks provided
studios and post-production
facilities for shows such as
Strictly Come Dancing

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BBC Annual Report and Accounts 2017/18

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F I N A N C E , P E O P L E A N D O P E R AT I O N S

Our people
Our people are the bedrock of what makes the BBC special.
They come from diverse backgrounds, reflecting our different
audiences and are fundamental to the continued delivery ofoutstanding programmes and services. Throughout the year
we have worked together on our ambition to ‘make the BBCan even greater place to work’, seeking to address concerns
on gender, pay and fairness, and creating an environment
where our people can be at their creative best.

p.75

p.78

p.79

Our people
We are making the BBC an even greater place
to work, valuing and respecting diverse
contributions and celebrating successes.

Developing our people
Through our BBC Academy, training andprofessional development is provided for
all BBC staff.

Diversity
The more diverse our workforce, the better
able we are to respond to and reflect ouraudiences in all their diversity.
Read more: bbc.co.uk/diversity

p.84

p.86

Charitable work
We have been broadcasting and supporting
charity appeals since 1923 and our appeals
have become a vital part of our remit.

Environmental sustainability
Throughout the BBC we work hard to reduce
the environmental impact of our operations,having sustainable practices in programme making and inspiring our staff to take action.

Read more: bbc.co.uk/charityappeals

Read more: bbc.co.uk/responsibility/
environment

BBC staff event Grow Your Potential

74

BBC Annual Report and Accounts 2017/18

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S T R AT E G I C R E P O R T

Efficient and effective
organisation design
At the start of the year we moved ourStudios division out of the Public Service
into a new commercial entity. Subsequently,
we announced that effective 1 April 2018
we were creating a new single legal andoperational commercial entity merging
BBC Worldwide and Studios. This newentity will be known as BBC Studios.
Across the whole of the BBC, we havecontinued to focus on modernisingand making the BBC a more efficientand effective place to work. The
two-year simplification programme, tomerge technology and digital activities,
reduce professional support services,and minimise management layers, hasconcluded. Headcount has reduced inthese areas by 1,036 posts, leading tosavings of £57 million being delivered.
Organisation design principles continue
to be applied to all restructuring activity
across the BBC. Management layers
have been flattened further and over
96% of our structures now have sevenor fewer organisational layers. Senior
manager numbers have continued toreduce to 267 (1.5% of our employees),and overall we have one manager to every
8.3 employees. Spend on professional
services and supporting activities has
been minimised, enabling 94% of ourcontrollable spend to be directed toaudience-facing content and services.
Throughout the year we have been
simplifying job titles and introducing clearer
career structures through the introductionof the BBC Career Path Framework (CPF).
This now covers the vast majority of roles
across the BBC and has resulted in the
reduction of over 5,000 job titles to about
619, structured into 27 job families.
We remain committed to locating atleast 50% of our employees outside ofLondon and some 53% are currently
based outside of the M25. During the year,
BBC Three began the move from London to
Birmingham to develop a centre of digital
excellence there and staff were relocatedaway from our site at Caversham Park.

Our workforce numbers and mix
Over the course of a year, the scale andprofile of the BBC’s overall workforce isaffected by a number of factors. These
include the mix between in-house andindependent programme and content
supply; changes to our insourcing/outsourcing service model; the launchof new audience-facing initiatives; andheadcount reductions arising fromsavings programmes. Workforce plans
are in place to optimise the mix ofpermanent and flexible resource and wecontinuously review and control headcountto ensure value for money is achieved.

—— Additional 75 apprentices and trainees– at the end of the financial year
we had 1.9% of our workforce inthese roles.

The average annual salaried Public Service
headcount for financial year 2017/18
decreased by 1,147. Across the Groupoverall it increased by 312, largely due
to investments in World Service News.

On-screen roles
We want the BBC to be the place where thebest artists want to work and deliver great
programmes. Across radio, television andour digital services, our audiences expect
us to offer the best range of the most
loved, creative, engaging, authoritativeand diverse talent in British broadcasting.

Total average headcount(equivalent full time)
2018

2017

UK Public Service
Broadcasting

18,21019,357

BBC Worldwide

1,514

1,706

BBC Studios

1,601

–

Other commercial
businesses
Group total

258

208

21,583

21,271—— 1,546 staff in Studios divisiontransferring to a new commercial
entity on 1 April 2017.
—— The closure of 315 roles throughout
the year as a result of a variety of
initiatives, including the conclusionof the five-year DQF Programme(‘Delivering Quality First’), theSimplification Programme and othersignificant strategic initiatives.
—— Investments in 418 new roles and skills,
such as digital, which are required tosupport building the BBC of the future.
—— 774 new roles in World Service News,
both within the UK and internationally,
to enhance existing language services
and support 12 new ones.

31 March 2018

31 March 201731 March 2016

England (excl. London)

35

34

36

London47

47

45

Scotland

7

7

7

Wales

7

8

8

Northern Ireland

4

4

4

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Headcount continues to be monitored
closely and all divisions are required
to identify and deliver further savings
over the next three years. Plans
to achieve this are underway.

The BBC remains committed to keeping
spend on on-screen and on-air talent
to no more than 15% of overall internal
spend on content (with a 1% tolerance).
In 2017/18, total talent spend of£148 million represents 11.1% of theBBC’s internal spend on content.
This includes the World Service.
Remuneration
Our policy is to provide remunerationthat attracts, motivates and retains the
key talent required to lead and deliver
outstanding public service broadcasting,while recognising the BBC’s status as apublicly-funded corporation, which mustdeliver value to the licence fee payer.

Significant headcount movements
have been:

UK PSB staff by nation (equivalent full time) % (excl. BBC Studios in 2018)
Nation—— Recruiting 77 additional staff in thenations – Scotland, Wales andNorthern Ireland – as a result ofadditional investments announced
in February 2018.

Under the terms of the Charter, we are
required to publish an annual reportfor each financial year from the BBC
Remuneration Committee with thenames of people working for the BBC
who are paid more than £150,000 fromlicence fee revenue in a financial year,
set out in pay bands of £10,000. The
first of these new reports was publishedin July 2017. The 2018 report can befound on page 101 of this document.
We also closely manage the numbers
and pay of our senior managers. The
senior manager paybill (including
Board members) is now £37.7 million
compared to £79 million in 2009 andthe senior manager Remuneration
Committee continues to sign off all
salary adjustments for senior managers
and any others in excess of £75,000.

BBC Annual Report and Accounts 2017/18

75

F I N A N C E , P E O P L E A N D O P E R AT I O N S

We recently published our gender pay
gap figure has fallen to a median of 7.6%
(from 9.3% in October 2017), compared
to a national average median of 18.4%.
An Equal Pay Audit report was publishedin October 2017. This was conducted by
PwC and Eversheds and overseen by Sir
Patrick Elias, QC, and concluded thatthe BBC had no systemic discrimination
against women in pay arrangements.
If any individuals however have equalpay concerns they wish to raise withus, a review mechanism is in place.

—— Transparent – We are moretransparent in our reporting on pay
than required by law and commit to adegree of transparency about pay that
we believe is more wide-ranging thanother organisations.

In our Management Response to thesereports we committed to closing the gender
pay gap by 2020. We also introduced new
pay principles across the BBC:

Alongside this was a commitment toreview our approach to pay for on-air
presenters, editors and correspondents.
In January a report was published by PwC
concluding that there was no systemic
gender bias in our on-air pay, but madesome criticisms of the way aspects ofthis had historically been managed. It
made a number of recommendations forchange including a new pay framework
which we are currently consulting on.

—— Competitive – We balance the need to
pay competitively with the need toensure value for money for our licencefee payers.
—— Clear – We are clear on how pay
adjustments are made.

—— Fair – Pay fairness is a responsibility
we take very seriously – it goes to theheart of our values and it’s critical to
our creative ambition and success.
—— Consistent – We have consistentframeworks such as the career pathframework and market informed job
pay ranges that underpin our approach
to pay and that enable us to be clear
and consistent in our approach toindividual pay decisions.

We have committed to closing thegender pay gap and much work is
taking place at divisional level including
addressing the underlying issue ofrepresentation in particular roles.

Current senior manager numbers by salary band are:
UK senior manager headcount by salary band (2017/18 excl. Studios)Band

2017/18

2016/17£50,000–£99,999

76

92£100,000 –£149,999

94

124

£150,000–£199,999

70

67£200,000 –£249,999

15

17£250,000–£299,999

43£300,000–£349,999

4

3

1

–

264

306

£350,000+
Total**

Total excludes BBC Board members.

For more information on pay disclosures see page 101

Spend on on-air roles
2017/20182016/2017

Spend
£000s

Volumes

Spend
£000s

Volumes

Variance£000s

Less than £40k

48,782

27,03969,92240,328(21,140)£40k–£100k

62,812

1,098

72,346

1,278(9,534)£100k–£150k

11,983100

16,717136(4,734)£150k–£500k

13,81459

21,25689(7,442)£50 0 k–£1m

1,687

3

3,348

5

(1,661)£1m–£5m

3,418

2

3,959

2

(541)

Organisations*
Total
*

76

5,119

1,638

6,019

1,582

(900)

147,615

29,939193,567

43,420(45,652)

The BBC has identified a proposed
independent review process which would
consider, on request, certain cases forpresenters who have provided theirservices via a PSC (Personal Service
Company) and who are now facing HMRC
demands for Employer’s National Insurance
Contributions arising from the use of a PSC.
Throughout the year we have worked
together with our Joint Unions tofundamentally review and modernise ourTerms and Conditions – making themfairer, simpler and more consistent.
A set of proposals were developed
looking at five key areas – Pay andGrading, Policies, Contracts, Schedulingand Working Patterns, Wellbeing.
The Pay and Grading proposals build on
the new BBC Career Path Framework.
Market-informed job pay ranges havebeen developed for all 600 job titles
and individuals have been provided
with this information for their own
job. Where they are in a job title thathas over 20 incumbents, they haveadditionally been provided withinformation showing the spread of pay.
Following an 18-month consultation,
the BBC’s recognised trade unions haveaccepted all the proposals. Our annuallynegotiated pay agreement which would
normally have taken effect in August 2017
forms part of this Terms and Conditions
review. The agreement is a 2% pay
increase plus an additional 1.5% for thoseindividuals in the lower quarter of theirjob pay range. An advance payment of£400 was made to all staff in December
2017 while the consultation continued.
Supporting and getting the best fromour people
We continue to focus on our core ambition
to ‘Make the BBC an even greater place
to work’ aligned around four key pillars:—— Making ways of working simpler– looking to simplify or remove
complex practices and finding ways toenable staff to do their best work—— Acting as one BBC – working
collaboratively and recognising that weare stronger when we work together—— Valuing each other and celebrating
success – respecting our diverse
contributions and taking time torecognise the quality of work producedby all staff—— Being visible and involved – ensuring
all staff know what is expected of themand get fully involved, and thatmanagers and leaders are visible not
only to their teams, but across theorganisation, listening, sharing
and inspiring.

Organisations are groups of individuals contracted as one – for example external orchestras. It is not possible tolist numbers of individuals against this spend.

BBC Annual Report and Accounts 2017/18

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S T R AT E G I C R E P O R T

Severance payments: all staff (including senior management)
2017/18
Payment band

Spend
£000s

Under £10k

310

£10k–£50k£50k–£75k£75k–£100k£100k–£150k

VolumesVolumes

56

348

59

8,189

265

6,622

220

8,357

136

5,672

92

7,753

91

3,880

44

12,327

97

16,567

124

0

0

0

0

36,936645

33,089539

Over £150k
Total

The BBC is committed to building
positive and constructive relationships
with our trade unions and their elected
representatives across divisions, allowing
paid time off in line with the BBC/Trade
Union – Time off & Facilities Agreement.
As part of the Trade Union (Facility Time
Publication Requirements) Regulations
2017, public authorities are now required
to report information about facility time
taken by trade union officials for a 12month period. (Facility time refers to
the time taken for our recognised tradeunions to represent members bothindividually and collectively in a range ofissues across the BBC.) This is detailed
in the table below. During 2017/18
there was a single instance of strikeaction by one individual for 12 hours.
Severance
Driving efficiencies across the BBC
has an inevitable impact on jobs andwe continue to be fully committed to
managing job losses through redeployment
and retraining wherever possible.
Our severance policy is one month’s pay
for each year of service up to a maximumof 12 months’ pay. For those who joined
before January 2013 it is a maximum of
24 months. We have maintained a cap
on redundancy payments of £150,000
and a maximum notice period of six
months. We continue to await further
clarification on the Government’s
proposed cap on redundancy, which weunderstand will apply to the BBC.
Where redundancy severance is paid,
notice is served and worked in full. If an
individual wishes to leave earlier thanthe end of their notice period they must
waive the remaining notice period and will
receive no payment for it. In exceptional
cases, for example when there is a needto protect the confidentiality of sensitive
information, individuals may be asked
to work from home or be prepared toundertake other duties during their notice.
Redundancy payments over £75,000
and all other severance payments are

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2016/17
Spend
£000s

approved by the senior management
Remuneration Committee. During theyear, there were two instances where
employees received payment in lieu
of notice; one was in settlement of an
Employment Tribunal claim following a
resignation, and the other was alongside
a local statutory payment to an overseas
employee following performance concerns.
Three other severance payments weremade; one settling an Employment
Tribunal claim, and two as part of anagreed departure negotiated with theemployee (one with agreed severance
pay, and the other with redundancy pay
and compensation for personal injury).
Human rights
We are committed to respecting the humanrights of all those who work for or with us.
This applies to all employees, temporary
workers or workers in our supply chain, in
the UK and around the world. Everyone has
the right to a safe working environment;
to at a minimum be paid and work hours
in line with local legislation; to form tradeunions; and to be treated respectfully.

For those who work in higher risk
environments such as in hostilesurroundings, covert filming or covering
events such as terrorist incidents, weensure they are appropriately prepared.
Our High Risk Team advises and oversees
training and the provision of equipment.
Our Terms of Trade require any suppliers
we work with, and any sub-contractors
they use, to adhere to the codes of practice
published by the Equality and Human
Rights Commission and the Equality
Commission Northern Ireland. In addition,
suppliers, and sub-contractors, are required
to abide by our Code of Ethical Policy whichsets out our expectations with respect
to human rights and trading ethically.
Modern Slavery Statement
We recognise the need to prioritise
tackling the most severe human rights
abuses, including modern slavery. We
remain supportive of the aims of theModern Slavery Act 2015 and publish
our third Modern Slavery Statement inaccordance with this. We are committed
to actively engaging in the eradication ofmodern slavery, taking action within ourbusiness and influencing our suppliers
to do the same. In our statement we set
out further steps we have taken overthe last year to help ensure modern
slavery does not exist in our business or
supply chain. We have focused on further
understanding where risk lies and designinga targeted programme in response.
The full statement is available at:bbc.co.uk/corporate2/insidethebbc/
howwework/reports/bbcmsa2016.

Information provided in line with the Trade Union (Facility Time Publication
Requirements) Regulations 2017 – schedule 2 (1 April 2017 – 31 March 2018)
Relevant union officials
No of union officials

267 (EFT 259)
Percentage of time spent on facility time

No of employees

0%

0

1-50%

261

51%-99%

0

100%

6*

Total cost of facility time£721,817

Total Eligible Paybill**£965,005,430

Percentage of total paybill spent on facility time

0.07%

Paid trade union activities

Time spent on paid trade union activities as a percentage of total
paid facility time hours

80%

As this is the first year this information has been provided, approximated numbers based on known union
representatives has been included.
* Equivalent to five EFTs.
** Total paybill for a relevant period is calculated as stipulated in the TU legislation, which returns a nominallydifferent figure than the reported paybill on page 197, however, the percentage of time spent on facility timeis the same.

BBC Annual Report and Accounts 2017/18

77

F I N A N C E , P E O P L E A N D O P E R AT I O N S

Developing our people
Through our BBC Academy, training
and professional development isprovided for all BBC staff.

BBC Academy Training
Reach2017/18

2016/17

Total training completions*
Face to Face %Online %BBC staff who completed 1 or more course

70,15436%
64%
84%

64,93140%
60%
88%

Total L&D Hours Face to Face & Online

259,625

219,046

The majority of training is delivered online
or remotely, to offer staff flexibility andalso to increase efficiency and reduce
travel. Over the course of the year over
70,000 unique training sessions werecompleted, of which 64% were online.

Number of L&D days per EFT

1.57

1.51

Key training activities have included:

Total Online Usage**

44,826

38,695—

Value for Money

2017/18

2016/17£13,421£568.75£14,123£601.85—

Delivering over 50 three-week
new-joiner programmes to over
400 new recruits for the World Service
expansion project, in London andacross several international bureaux,
including Moscow, Lagos, Nairobi
and Delhi.
A new suite of courses to support ourinternal production roles. We have also
worked in partnership with Creative
Skillset and the National Film andTelevision School, amongst others, tosupport the wider industry and the
independent sector.

—‘OpenMedia’ training to more than
3,500 people in the News division to
support our move to a new platform.

—

Training 800 staff in mental healthawareness, half of whom have become
Mental Health First Aiders, and afurther 765 staff in emergency first aid.

—

A third season of digital upskilling for
all BBC staff, building online skills toreach and engage young and diverse
audiences. Total attendance over thelast three years is now over 13,000.

—

More than 40 events delivering
subjects ranging from podcasting,virtual reality, making short-form
content for BBC Three and the Futureof Social Media.

This year has seen us gain nationalrecognition as one of the UK’s leading
apprenticeship employers as we wereawarded a top three place in the Employerof the Year category at the National
Apprenticeship Awards 2018. We arealso in 11th place nationally in the Times
Top 100 graduate employers list.

78

BBC Annual Report and Accounts 2017/18

Training Delivery Spend (£m)***L&D Cost per EFT****

Notes:
Training data and EFT figures are BBC wide, including PSB, Worldwide and other commercial subsidiaries.
* Individual face to face and online training completions.
** Individual online course completions and those with ‘in progress’ status.
*** Total Academy training delivery spend excluding major projects.
**** Total Academy training delivery spend divided by total EFT.

We remain committed to investing inapprenticeships (aimed at non-graduates)
and trainees (who are mainly graduates)
and we are on target for 2.3% of ouremployees to be apprentices or trainees
by the end of 2019. As at the end of thefinancial year, we had 210 apprentices
and 133 graduate-level trainees and 37
on other development schemes. We also
gave almost 1,000 people work experienceplacements throughout the year.
Outreach and bringing new skills to
the industry
Working in partnership with BBC News, theAcademy School Report project reachedmore than 1,000 schools to help develop
media literacy skills around fake news;
journalism and digital content making
for 11-18 year olds. The initiative also
provided mentoring and volunteering
opportunities for BBC staff and culminatedin a successful ‘News Day’ on March 15 withyoung, diverse audiences creating content
across BBC News services and platforms.

Many of the women have since appeared
on-air with several making appearances
the next day.
The Academy/Creative Skillset Digital
Cities initiative is now in its third year,with digital skills and learning events in
Birmingham, Bristol, Belfast, Manchester
and Cardiff. Working with partners
such as Channel 4, Google and the Arts
Council, each city event offered free skills
workshops and new talent opportunities.
We continue our sponsorship of the
NFTS and the short course programme,with more than 40 students fromBAME and disadvantaged socioeconomic backgrounds taking up places.
Students from the short courses havealso secured work on number of BBC
Drama’s including, Call the Midwife,
Silent Witness and Holby City.
Notes: Schedule 3 paragraph 13 of the Agreement
provides that the BBC must make arrangements fortraining staff and work with partners across industry. We
deliver this via our Academy and Academy outreach work.

The award-winning Expert Women
initiative returned with three events in
London and Glasgow aimed at developing
new faces and voices for BBC News
output. Nearly 3,000 subject specialists
applied for 72 places and a day of free
training and media familiarisation.

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S T R AT E G I C R E P O R T

Diversity
Diversity and inclusion at the BBC is a creative imperative.
It is also the right thing to do. We know that by having anorganisation that reflects its audiences, we remain current,
relevant and produce the best TV, radio and online content
and services.
We are committed to promoting equal opportunities in employment
at the BBC. This section reports on our activities in line with our
duty under Schedule 3 paragraph 12 of the Agreement. For more
information see the Equality Information Report on page 240.

Our people
Since the launch of our Diversity andInclusion Strategy in April 2016, we
continue to drive progress to deliver
systemic change. We pledged that by 2020
the BBC will have a workforce at least as
diverse, if not more so, than any otherbroadcaster in the industry and we are wellon the way to achieving this commitment.
We have launched four new diversity
projects that focus on career progression
and culture for women, staff withdisabilities and those from ethnic minorities
and lower socio-economic backgrounds.
We have more women in senior positions
than ever before and overall female
representation in the workforce isimproving too. Four of the BBC Board
and Executive Committee members
are women. Overall, in March 2018, ourleadership roles are made up of 43.3%
women and 47.7% of our workforce.

To help us achieve this, as well as
our project which focuses on career
progression, we have a range ofprogrammes and development
opportunities to inspire, encourage andsupport women across our organisation.
Our new Hilda Matheson Women into
Leadership programme is a nations andregions based development programme
for women who want to develop theircareers at the BBC. Sandy Chalmers isa mentoring programme dedicated tothe personal development of women inRadio, with similar programmes runningin News and Design and Engineering.

Leadership roles are
made up of 43.3%
women, with 47.7%of the workforce
being female.

But we recognise that we need to doa lot more to increase the numbers ofBlack, Asian and Minority Ethnic (BAME)
and women senior leaders and we’re
actively looking at ways to do this.
We are making progress. For the firsttime we have been listed as a Times
Top 50 Employer for Woman 2018. We
know there is more to do to reach ourtarget of 50:50 gender balance and weare determined to get there by 2020.
We reported a gender pay gap of 7.6%
against a national average of 18.4%.
We want to do better and have pledged
to close the gap also by 2020.

The participants of Creative Access

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F I N A N C E , P E O P L E A N D O P E R AT I O N S

Mind Over Marathon led our Minds Matterseason looking at mental health

All BBC staff will haveunconscious bias
training and we havedeveloped a newdisability awarenesstraining package formanagers and staff.

2017 CREATIVE DIVERSITYNETWORK AWARDS
At the 2017 Creative Diversity
Network Awards, the BBC won
a total of six awards, many ofwhich highlighted the diverse
nature of our content.
—— Drama: Damilola, Our Loved Boy—— Factual: Life and Deaf—— Production Company of the Year:
BBC Children’s In-House
Production—— Author/Creative: Levi David Addai(Writer, Damilola, Our Loved Boy)—— Commissioner or Channelof The Year: BBC Three—— Diversity Champion: Damian
Kavanagh (BBC Three)Black, Asian and Minority Ethnic (BAME)
representation is currently 14.8% acrossthe workforce and 10.4% are within
leadership roles. The BBC is one of 66
employers and the only broadcasterand media organisation which made the2017 Best Employers for Race listing.
However while our workforce figure isclose to our 2020 target (15%), we are along way from our leadership target (also15%) and this requires attention. We also
recognise that the highest proportion of
BAME staff are currently in the Professional
Service and World Service Group areas,so we need to do more work to ensure there
is a spread across the whole of the BBC.
More detail, including a full breakdown ofdiversity by division, can be found in the
Equality Information Report, on page 240.
There are six placements per year available
on our BBC Clore Leadership programme

BBC Annual Report and Accounts 2017/18

A truly inclusive culture means everyone
feels comfortable to bring their wholeselves to work. Over 98% of our workforce
has given us information about theirethnicity, 94% about their disability
status and 84% have told us about
their sexual orientation. In our last staff
census we saw a sharp increase in sexual
orientation and disability disclosure.
We have mandated unconscious bias
training for all staff and have developed
a new disability awareness training
package for managers and staff which will
be rolled out in 2018/19. We’ve doubled
the number of places on ELEV8, ourmentoring scheme for disabled staff.

All staff and leadership: 31 March 2018
Workforce

80

which is aimed at potential leaders fromunderrepresented backgrounds and thisyear we have doubled the number of placeson our award-winning BAME development
and mentoring programme, RISE.

31 March 20182020 target

Women (all staff)

47.7%

50%

Women (leadership)

43.3%

50%

Disability (all staff)

10.4%

8%

Disability (leadership)

9.5%

8%

BAME (all staff)

14.8%

15%

BAME (leadership)

10.4%

15%

LGBT (all staff)

11.0%

8%

LGBT (leadership)

12.0%

8%

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S T R AT E G I C R E P O R T

Extend, a work placement scheme
for people with disabilities provides
just over 20 people six monthsof paid work with the BBC.
Socio-economic diversity remains ahigh priority for the BBC and is oneof the four key areas we are focusing
on. In our last staff census for the firsttime we asked questions on individuals’social economic background.
Most recently, the BBC was ranked at 28
amongst the top 50 UK employers in theSocial Mobility Index for taking the mostaction to improve social mobility in theworkplace. We are the only broadcasterto publish this data and listed within
the index. Our apprenticeships schemes
are a great way to ensure greater social
mobility within the organisation.
On-air and behind the camera diversity
BBC Television and Radio is now morediverse than ever, with countless examples
which reflect the diversity of the nation
we serve. At the end of March 2018, wepublished our first Diversity Commissioning
Code of Practice as part of our commitment
to increase diversity on and off air toreflect and represent today’s UK. The
new Code of Practice puts diversity at
the heart of the BBC’s commissioning
processes and reporting framework acrossTV, radio, online and digital content,
standardising the approach across all
output for the first time, so action on
diversity is agreed and progress checked.

380 people on new
talent schemes
across the BBC.

BBC Two drama Man In An Orange Shirt,
part of our Gay Britannia season

BBC Class Act is a new nationwide
search and skills programme for disabled
acting talent. Launched in 2017, we
received 330 auditions and 32 actors
with varying levels of experience wereselected to be part of the programme andattended a showcase bringing together
content makers, casting executives
and agents from across the industry.
Radio 3 has increased the number of female
record reviewers to over 50% on its weekly
show in order to increase the range ofvoices and has also committed to recording
and broadcasting a previously un-recorded
work each from five ‘forgotten’ femalecomposers with the BBC Orchestras andChoirs. Chineke!, the UK’s first majority
BME orchestra, made their BBC Proms
debut this year which included a BBC Radio
3 commission for the Proms from composer
Hannah Kendall, while Sheku KannehMason who won the prestigious BBC Young
Musician competition in 2016 has sinceregularly featured across our airwaves.
Elsewhere the Asian Network’s Comedy
Nights are championing diverse talent
and Radio 1 and 1Xtra’s output for young
people, are examples of services thathave already led the way and serve a wide
range of communities in different ways.
Sharing our first on-screen and behindthe camera (off-screen) report for all
our suppliers is an important milestone
in our commitment to improving themeasurement of diversity across our TV
content and reporting progress against ourtargets. We have used Diamond to do this.
Diamond is an online tool used by theBBC, ITV, Channel 4, Channel 5 and Sky
to obtain consistent diversity data on
programmes. The initiative is supported by
Pact and Creative Skillset, and delivered
through the Creative Diversity Network.
We know the diversity of production
teams and who our audience see andhear in our programmes is vital to how
we reflect modern Britain. The Diversity
and Inclusion Strategy we launched in2016 made clear our firm commitment
to change by 2020 and aim to have:

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50% women on screen, on-air and inlead roles across all genres from drama
to news;—

15% black, Asian and ethnic minorities
on screen, on-air and in lead roles
across all genres;—

8% disabled people on-screen andon-air including some lead roles; and—

8% LGBT on screen portrayal including
some lead roles.

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F I N A N C E , P E O P L E A N D O P E R AT I O N S

The MAMA Youth trainees

This first publication of our Diamond data
provides an initial view of the progress
we are making towards our targets. The
data represents 29% of all network
hours transmitted from 1 April 2017
to 31 March 2018 on BBC One, BBC
Two, BBC Four, CBBC and CBeebies.
BBC Three online content and news
programmes are excluded although work
is underway to collect data for both. The
principle is that everyone who works on a
programme is invited to submit diversity
data; currently we are only able to reporton the 26% of individuals who haveshared their data. We are working withall our suppliers to increase returns.
The off-screen data includes internal andexternal suppliers and highlights the needfor greater progress across the industry.
The publication of our Diversity Code ofPractice sets out how we are continuing towork with content producers to increase
the diversity of production teams.

Perceived on-screen diversity:
1 April 2017 to 31 March 2018
Data input by production companies
taking a viewer’s perspectiveof what they see and hear.

Actual on and off-screen diversity:
1 April 2017 to 31 March 2018
Data provided from contributions
by individuals who have a rolein eligible programmes.
Actualoff-screen

Actualon-screen

Female

53.8%

52.3%

Female

42.6%

BAME

8.6%

27.3%

BAME

20.7%

Disabled

5.4%

7.4%

Disabled

5.1%

LGB

12.3%

10.5%

LGBT

5.2%

Trans

0 .1%

0.6%

Trans

0 .1%

73,523

27,777

Number ofcontributions*

Perceived
on-screen

Number of contributions*

244,829% for whom diversity
characteristics were
determined

82.5%

Notes:
Data includes 29% of all network hours transmitted from 1 April 2017 to 31 March 2018.
Programmes commissioned before 15 August 2016 are not included.
Data is based on internal and external suppliers.
Of those who were invited to submit diversity data, we have a 26% response rate.
Channels: BBC One, BBC Two, BBC Four, CBBC, CBeebies (Excludes: BBC Three online content, news programmes,
BBC News and BBC Parliament).
Reporting period covered: 1 April 2017 to 31 March 2018.
Date report was generated on: 14 May 2018.
Data source: Diamond/Silvermouse.
* An individual may make multiple contributions to a programme or programmes.

For more information on Diamond see: creativediversitynetwork.com/diamond/82

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S T R AT E G I C R E P O R T

Our partners
We believe we can make the mostimpact by working collaboratively with
our partners within and outside theindustry in order to deliver our diversity
commitments. The BBC is working
closely with the Creative Diversity
Network to encourage participation
across the industry of Diamond.

Best
Employers
for Race
List 2017

Top 10We continue to meet with the DirectorGeneral’s Diversity Action Group to
increase awareness and engagement of
the range and scale of diversity initiatives.

Only broadcaster/
media organisation

With regard to socio-economic diversity,
we continue to work with Bridge Groupon further analysis of our social diversity
data. We’re also working with The
Business Disability Forum to ensurethat we have a culture that is accessible
and fit for purpose for disabled staff.

Top 100 2nd

Aimed at potential leaders from underrepresented backgrounds, the BBC Clore
Leadership Programme has run for the
past three years. A total of 16 employees
have taken up their 12-month placement
which includes personalised development.

VERCIDA –Gender and
BAME Employer

Apprenticeship
Employers List

LinkedIn Top
Companies list
2018

Top 50

Top 3

We once again teamed up with Creative
Access, a social enterprise that focuses
on finding internships within thecreative industries for young people
from black, Asian and other nonwhite minority ethnic backgrounds.

The Times, Top
50 Employers for
Women 2018

The Open University
Award for Macro
Employer of the YearThrough the MAMA Youth Project weprovided 20 four-week placements in
mid-June for 18-25 year olds from underrepresented groups or with limited
educational or employment opportunities.

Top 50Over the summer of 2017 we hosted nineinterns from Leonard Cheshire. The scheme,
run by the charity, seeks to create career
opportunities for young disabled people
through three-month work placements.

The Felix Dexter bursary offers two six
month traineeships and bursaries fortwo high potential comedy writers fromBAME backgrounds. Similarly, the Caroline
Aherne Bursary is aimed at northern
female comedy writers and performers.
We’ve signed up to the Tech Talent Charterto demonstrate our commitment toimplement IT industry guidelines for diverse
hiring. We’ve also renewed our membershipwith WISE to help work towards increasing
the number of women in the tech sector.

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Social Mobility
Employer Index
2017

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Charitable work
The BBC has been broadcasting appeals
for charities since 1923 and they are an
important part of our remit as a public
service broadcaster.

£50m
A phenomenal £50 million was
raised for BBC Children in Need, its
highest ‘on the night’ total to date.

BBC Children in Need

Alongside support for our two corporatecharities – BBC Children in Need and
BBC Media Action, and partnerships
with Comic Relief and St Martin-in-theFields – there are weekly and monthly
appeals for a broad range of charities.
Over £94 million was raised by the
BBC in the financial year 2017/18.
BBC Children in Need
BBC Children in Need exists to findand fund inspiring ideas that change
children’s lives. With the support of theBBC, the charity is currently funding
over 2,600 projects which tackle thediverse and complex challenges facedby young people all around the UK.
In 2017, people from every corner of the
UK united to make a positive difference
to the lives of disadvantaged children
and young people. As always, the BBC
supported the annual BBC Children in
Need appeal through a host of dedicatedprogramming and activities. This included
Radio 2’s fundraising led by Chris Evans;
special editions of Countryfile, DIY
SOS and The Big Life Fix, BBC Children
in Need Rocks the 80s; and a BBC One

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documentary, Saying Goodbye, which gave
a voice to a number of brave children
and young people facing bereavement.
The One Show’s Rickshaw Challenge saw
presenter Matt Baker and a team of young
people determinedly pedal an epic 500
miles from London to Glasgow, and BBC
colleagues across the UK embarked on
their own fundraising adventures, from
BBC Somerset’s Great Wellington Walk to
BBC Radio Lancashire’s Pedal for Pudsey.
All of this culminated in the BBC Children
in Need Appeal Show broadcast on BBC
One. Featuring inspiring stories of young
people overcoming challenges in theirlives, the programme struck a chordwith many generous supporters aroundthe UK. A record-breaking ‘on the night’fundraising total of around £50 million
was announced at the end of the show. In
2017/18 Stevie Spring stepped down as
BBC Children in Need Chair having served
three consecutive three-year terms. Sincebeing appointed to the board of trustees
in 2008, Stevie has helped the charity raiseover £470 million to change the lives ofhundreds of thousands of disadvantaged
children and young people around the UK.

BBC Media Action
BBC Media Action is the BBC’s international
development charity. It makes TV, radio
and multimedia content, and mentors
journalists and broadcasters to help people
in some of the poorest parts of the world.
As a result of BBC Media Action’s work
people understand more about their rights
and responsibilities; are better able toimprove their livelihoods; and take action
to protect their health and that of theirfamilies. In places affected by conflict andsocial tension, it helps to bridge political,
ethnic and social divides by providing
trusted platforms for discussion.
In 2017/18 the charity and its partners
ran 88 projects in Africa, Asia, the Middle
East and Eastern Europe. This included
supporting families to vaccinate theirchildren against polio in Nigeria andAfghanistan, helping more prematurebabies to survive in Kenya, and deliveringvital information to people living indrought-stricken regions of Somalia. It
responded to emergencies including theRohingya refugee crisis in Bangladesh
and devastating flooding in Sierra Leone
and South Asia. Here, BBC Media Action’s
training for local broadcasters gave themthe skills to make radio programming thatgave vital information to those affectedin the immediate aftermath and beyond.
In Sierra Leone a third of the populationis under 35, there are high levels ofyouth unemployment and widespread
negative attitudes towards young people.
BBC Media Action’s award-winning

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S T R AT E G I C R E P O R T

programming inspired people like Ishiaka
Amara, a former prisoner, to startsmall businesses or assume leadership
positions in their local communities.
“During my last release from prison I
was fortunate to listen,” he said. “Thisstory has transformed me completely.”
In India, where discrimination against
women is underpinned by deeplyentrenched ideas about what men andwomen ‘should be’, a multimedia projectencouraged young people to challengethese assumptions and stand up to peerpressure. A smartphone game called‘Nugget’, aimed at young people, wasamong the top ten most downloaded
games on Google Play in India.
BBC Media Action is not funded by thelicence fee and relies on donations fromindividuals, institutions and corporations.
In 2017/18 it was supported by arange of funders including the Bill andMelinda Gates Foundation, the UK’s
Foreign and Commonwealth Office,Swedish International Development
Cooperation Agency (SIDA), the UK’s
Department for International Development(DFID), UN agencies and USAID.
Total income in 2017/18 was £33 million.

0 Find out more – bbc.co.uk/mediaaction
Broadcast appeals
This year, the Radio 4 and BBC One Lifeline
appeals have raised over £1.1 million for
60 charities, with a wide range of causes
both in the UK and overseas. Charities
are now sharing the impact stories of
their radio and television appeals here:
http://www.bbc.co.uk/charityappeals/
about/amounts-raised. These appeals
enable them to raise not just money but
awareness of their work with a much wider
audience, something which is particularly
valuable to smaller charities. Those thatmeet the criteria can apply for a BBC
appeal here: http://www.bbc.co.uk/
charityappeals/appeals/apply-now
There is a separate selection process forbroadcast appeals on BBC Television
and Radio in Northern Ireland, which lastyear broadcast 15 appeals and a special
Christmas-time appeal on loneliness.
The BBC Radio 4 Christmas Appeal
with St Martin-in-the-Fields, now in
its 91st year, set a new record, raisingover £3 million. The charity works withhomeless people and those at riskof homelessness across the UK.
The BBC also broadcast a Rohingya
Crisis appeal for the Disaster
Emergency Committee, helping
towards a total of £26 million.

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Comic Relief
2018 saw the return of Sport Relief, Comic
Relief’s biennial fundraising campaign.
This culminated in a brilliant night oflive TV on the BBC, broadcast from thehome of BBC Sport in Manchester.
Under the banner ‘Whatever Moves You’,
Sport Relief set out to get people acrossthe UK active, raise money and change
lives. The whole BBC got behind this effort,
with great content full of purpose running
across BBC TV, digital and radio outlets. All
the English regions ran their own activities,
raising both funds and awareness – and forthe first time we had dedicated challenges
in Scotland and Wales, with comedian Des
Clarke taking on his fears and the elements
in a unique TRY-athlon and rugby legend
Gareth Thomas confronting a fear ofheights to complete his first ever skydive.
As ever, there were amazing challenges.
Radio 1 got behind Greg James as hecycled and hiked his way to the top of thehighest mountains in Wales, England andScotland for Radio 1’s Gregathlon: Pedal
to the Peaks, despite coming face to facewith ‘The beast from the East’ and someof the worst weather seen in decades.
Along the way he inspired an incredible
conversation with listeners about mental
health and raised more than £1 million.
Zoe Ball cycled from Blackpool to herhome in Brighton for The BT Sport Relief
Challenge: Zoe’s Hardest Road Home. The
BBC One documentary it inspired showed
Zoe’s incredible courage as she faced up to
her own personal tragedy and the loss ofher partner to raise the profile of mental
health and male suicide. Her bravery has
already helped countless others to comeforward to discuss their own experiences.
The public showed their support by helping
her raise over £1 million for Sport Relief.
Last but not least, The One Show got
behind the ‘Mother of All Challenges’, withnew mum Alex Jones teaming up withamazing mothers from across the UK toraise the profile of maternal health, andalmost £800,000 for Sport Relief. Eachof these challenges raised vital money
for the work that Comic Relief funds
but, as importantly, the conversation
they inspired showed the bigger impactthat Comic Relief’s unique approach andpartnership with the BBC makes possible.
The campaign finished with a night oflive BBC television. Through the evening,
the entertainment was interspersed withtruly compelling films showcasing someof the amazing projects that Comic Relief
supports in the UK and around the world.

£94m
Over £94 million was raised by the
BBC in the financial year 2017/18.

Over the course of Sport Relief, people
across the UK got involved in countless
ways. For the first time, Sport Relief useda new app to set the nation its very own
challenge – to try to beat a billion steps
a day during the week of Sport Relief.
Thanks to the popularity of the app, thisgoal was reached on the final day of thecampaign – a huge achievement anda demonstration of the ability of newtechnologies to bring people together in acollective effort. Around the whole of theUK, more than 10,000 schools, nurseries
and youth groups took part in activities
including running a mile, or daily challenges
to get active throughout the week. In
addition to getting thousands of pupils
around the country active, schools are on
track to raise an astonishing £4 million.
To date, Sport Relief 2018 has raisedalmost £40 million and counting. Thisis thanks to the enduring generosity ofthe public, the fantastic support of ahuge array of talent from the sports andentertainment worlds and the continued
support of our really committed partners.
External Scrutiny
All charities featured on the BBC
are registered with the Charity
Commission, who regulate and registercharities in England and Wales, or
the relevant regulatory bodies in
Scotland and Northern Ireland.
The BBC’s Appeals Advisory Committee(AAC) works with programme makers andthe BBC across a broad range of charities,
scrutinising governance to ensure legal
compliance and best practice. The selectionof all charities for broadcast appeals isa rigorous process and applications are
scrutinised by independent experts, before
final decisions are taken by the AAC.
More information about the Committee
can be found at: bbc.co.uk/charityappeals/
about/appeals-advisory-committee.

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Environmental sustainability
In 2017/18, our programmes, such as Blue Planet II, have brought
captivating environmental and sustainability issues direct toaudiences around the world, raising awareness and helping leadchange. Within the BBC we have continued to reduce ourenvironmental impacts, cutting carbon, recycling more andraising awareness with the people we work with.

Programmes including EastEnders were recognised for reducing their environmental impact

Our programme-makers have assessed
their carbon footprint and are taking
action to reduce it
We have continued to promote sustainableways of working across the industry,
especially through sustainable production.
Since April 2017, 39% of programmes
commissioned by BBC Content and
BBC Children’s have calculated theircarbon footprint using the BAFTA‘Albert’ calculator. 122 programmes,
including Blue Peter, The Winter Olympics,
Two Doors Down, EastEnders, Who Do
You Think You Are and Peaky Blinders
achieved Albert sustainable production
certification to recognise their efforts
in reducing environmental impact.
We are reducing environmental impacts,
recycling more and raising awarenessIn 2017/18 the majority of our UK sites
began using renewable electricity, which
sharply reduced our carbon footprintby 80%. Our energy consumption has
reduced by 3% because of changes
to our property portfolio and gas
boiler efficiency improvements.
We are now recycling more than ever before(69%) and have reduced the overall volume
of waste by 19%. We believe our work intraining our staff and raising awareness haslargely contributed to these successes.
In February 2018 the Director-Generalannounced an intention to eliminate singleuse plastic from our operations. By the endof 2018, single-use plastic consumables –such as cups and cutlery – will be removed
from our offices. We will then remove single
use plastic containers from catering outlets
by 2019 and single use plastic in all otherareas by 2020. Our MediaCityUK campus
is an early leader, having already removed
single-use plastic from its catering facilities
and introduced schemes for waste foodcollection and coffee cup recycling.

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We are also proud of our story-telling within
the BBC. During February 2018 we were
inspiring and educating BBC staff in MediaCity UK to live and work more sustainably
as part of a special sustainability season.
We have set a new strategy with clear
targets to continue to build on ourachievements and position the BBC
for the future‘Greener Broadcasting’ is the BBC’s
approach to creating a positiveenvironmental impact. We will achieve
this through reducing the direct
impact from our operations andstaff, building partnerships to drivea sustainable industry and using ourunique position to provide our audience
with inspiring and engaging content.

We have defined new environmental
targets against a 2015/16 baseline asoutlined in the table. The new targets
stretch the BBC to further reduce theenergy we use, to reduce greenhouse gas
emissions and improve recycling. As part of
the target setting process we worked with
the Carbon Trust to set a carbon reduction
target in line with an internationallyrecognised ‘science-based’ methodology.
Our purchase of renewable electricity has
enabled us to exceed the initial target andwill position us well for the future. We’ll
keep the targets under review and ensure
they remain relevant and challenging.

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The table below describes the targets we are aiming for by 2022, along with progress we have made to date. We will continue to takeaction in these areas and report annually on our progress. Where we have already exceeded our targets we will review, within the nextyear, our ambition for future years.
Greener BBC targets and measures
CO 2 eTarget/measure by 2022 (baseline 2015/16)

Progress 2017/18 vs 2015/16

ReduceReduced by

24%

80%

ReduceReduced by

10%

3%

ReduceReduced by

10%

19%

RecycleRecycled

75%

69%‘Zero waste to landfill’

Waste to landfill*

EnergyWaste

11%Programmes

No single-use plastic by 2020

In progress

100%
albert calculation

calculated

25%

production carbon albert certified

39%
23%
certified122

programmes*

CO 2 e reduction target addresses scope 1 and 2 emissions, following sectoral decarbonisation approach science-based target methodology.

Below we describe our greenhouse gas emissions and carbon intensity (gross and net), which we monitor and disclose annually.
Greenhouse Gas Emissions 2017/18‘Gross’ emissions‘Net’ emissions

Greenhouse gas emissions(tonnes CO 2 e emissions, scope 1 and 2)

75,713

19,474

Carbon intensity(tonnes CO 2 e emissions/total group income £m)

15.0

3.8

Greenhouse gas data is for UK-based and representative World Service bureaux. ‘Gross’ emissions uses location based grid average factor, ‘Net’ accounts for renewable electricity
purchase for the UK.

Further information and explanatory notes can be found at bbc.co.uk/responsibility/environment.

The Media City
campus in Salford is anearly leader having
already removed single
use plastic from its
catering facilities.

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GovernanceThis section looks in detail at the role of the
BBC Board and includes reports from theBoard’s delegated sub-committees. The
section also includes detail on our overall
approach to corporate governance, ourregulatory position and affirmation of theBoard’s duties in relation to the Annual Report.

p.90

p.92

p.93

BBC Board
The Board is responsible for ensuring the BBC
fulfils its mission and public purposes as set
out in the Charter.

Governance Report
We comply with corporate governancebest practice.

Remuneration Report
This report sets out the BBC’s remuneration
policy for executive directors and details theannual remuneration received by the membersof the BBC Board and Executive Committee
for the 2017/18 financial year.

BBC Newsroom, New Broadcasting House in London

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p.101

p.109

p.118

Pay disclosures
Under the terms of our Charter we are
required to publish the names of people
working for the BBC who are paid more than£150,000 from licence fee revenue.

Audit and Risk Committee Report
This reviews and maintains oversight of theBBC’s corporate governance, particularly withrespect to financial reporting, internal control
and risk management.

Editorial Guidelines and Standards
Committee Report
The committee is responsible for developing
and ensuring compliance with the BBC’s
editorial guidelines.

Read more at: bbc.co.uk/
aboutthebbc/insidethebbc/
howwework/accountability

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BBC Board
The Board is responsible for ensuring the BBC
fulfils its mission and public purposes as set out
in the Charter. It replaced the two-tier structureof the BBC Trust and the BBC Executive Board
as the Corporation’s governing body from
3 April 2017.
The Board is chaired by Sir David
Clementi and consists of ten nonexecutive directors, including the
Chairman, and four executive directors,
including the Director-General.
The Chairman and the four nations’
non-executive directors are appointed by
HM The Queen on the recommendationof Ministers and the remainder of theBoard are appointed by the BBC throughthe Board’s Nominations Committee.
Full biographies of all Board members,
including their other roles, can befound on the BBC’s website:
bbc.co.uk/corporate2/insidethebbc/
managementstructure/bbcboard.
The Board delegates some of its
responsibilities to a number of subcommittees and this section includes
reports from those committees, which are
predominantly made up of non-executive
directors, as required by the Charter.
This is the membership of the Board as
at June 2018. Please refer to page 94
for further details of changes to Board
and Executive Committee membershipduring the year. Detail on members’
attendance at Board and sub-committee
meetings is set out on page 108.
The Board member for Northern
Ireland is yet to be appointed, pending
a new Northern Ireland Executive.

Executive Committee
Alongside the Board, the DirectorGeneral chairs an Executive Committee,
which is responsible for the day-to-day
running of the BBC. Nine directors,
who manage large operational areas of
the Corporation, sat on this committee
during the year. The members were:
Tony Hall, Director-General
Anne Bulford, Deputy Director-General
Tim Davie, Chief Executive, BBC Studios
and Director, Global
Valerie Hughes-D’Aeth, Group HR Director
James Harding, Director, News andCurrent Affairs (resigned from the BBC
in January 2018)Mark Linsey, Director, BBC Studios
Ken MacQuarrie, Director, Nations
and Regions
Charlotte Moore, Director of Content
Matthew Postgate, Chief Technology
and Product Officer
James Purnell, Director of Radioand Education
Fran Unsworth, Director, News and Current
Affairs (started in role in January 2018)
The Executive Committee is responsible fordelivering the BBC’s services in accordancewith the strategy agreed by the Board, andfor all aspects of operational management.
Find out more: bbc.co.uk/aboutthebbc/
insidethebbc/managementstructure/seniormanagement.

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G OV E R N A N C E

Sir David Clementi
Chairman

Tony Hall , Lord Hallof Birkenhead CBE
Director-General and
Editor-in -Chief

Anne Bulford OBE

Simon BurkeTim Davie CBE

Deputy Director-General

Non -executive director
Chair, Audit andRisk Committee

Chief Executive Officer,
BBC Worldwide

Ian Hargreaves CBE

Tom Ilube CBE

Ken MacQuarrie

Steve Morrison

Non -executive director
Chair, Editorial Guidelines
and Standards Committee

Non -executive director
Chair, Fair Trading Committee

Director, Nations and Regions

Non - executive director
Member for Scotland
Chair, Remuneration
Committee

Tanni Grey-Thompson,
Baroness Grey-Thompson
DBE
Non -executive director

out more: bbc.co.uk/
0 Findaboutthebbc/insidethebbc/
managementstructure/
bbcboard

Sir Nicholas Serota CH

Dr Ashley SteelElan Closs Stephens CBE

Non -executive director

Non -executive director
Member for England

Non -executive director
Member for Wales

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Governance Report
We comply with corporate governancebest practice
The BBC’s corporate governanceframework is defined in its Charter and theaccompanying Framework Agreement. The
Charter and Agreement can be found on
the BBC website at: bbc.co.uk/corporate2/
insidethebbc/managementstructure/bbccharterandagreement.
The Charter requires the BBC to haveregard to generally accepted principles
of good corporate governance. Although
the BBC is not a listed company, it has
opted to apply best practice and follow
the provisions of the Financial Conduct
Authority’s Listing Rules and the Financial
Reporting Council’s 2016 UK Corporate
Governance Code, where appropriate.
This delivers the governance standards
applicable to companies quoted on
an EU regulated stock market.
The BBC has fully complied with thecorporate governance requirementsof the Charter and Agreement and has
also substantially complied with the
UK Corporate Governance Code. There
are a number of components of the UK
Corporate Governance Code that are either
not appropriate to the circumstances of
the BBC or where compliance with theBBC’s Charter or Agreement overrides
compliance with the UK Corporate
Governance Code, and these are set out
below. During 2017/18 the BBC’s Charter
overrode the UK Corporate Governance
Code in relation to the governing bodies.
The BBC was previously required to have a
two-tier governance structure, consistingof the BBC Trust and the Executive Board.
On 3 April 2017, following the grantingof a new Charter, this arrangement was
replaced by a single Board. During the year,
the Board conducted an external review
of its effectiveness and performance, toensure the new governance arrangements
under the Charter were working well. The
review took views from all members of
the Board and made recommendations
that have been considered by the Board.

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The BBC complied with therequirements of its Charter which
overrode the following principles of
the Corporate Governance Code:—Evaluation of the Chairman(UK Corporate Governance Codeprinciple B6.3).

—

Re-election of Directors (UK Corporate
Governance Code principle B.7).

—

Responsibility for making a
recommendation on the appointment,
reappointment and removal of theexternal auditors (UK Corporate
Governance Code principle C.3.7).

In addition, there are two areas where
the UK Corporate Governance Code is
not relevant to the BBC; these are:Make-up of remuneration (UK Corporate
Governance Code principle D.1.1):
The BBC sets levels for executive
remuneration that should be sufficient to
attract, retain and motivate directors of
the quality required to run the organisation
successfully, in line with this principle.
However, this principle also requiresaligning executive remuneration to thenotion of enhancing shareholder value bymaking performance-related elementsof remuneration a significant proportionof total remuneration. Due to the BBC’s
licence fee funding and its status as a public
corporation, the BBC has determined thatthe amount of variable (or performancerelated) remuneration that may be earned
by staff within the public service should
be limited. There is no variable pay for
any BBC Public Service executive director
and bonuses are not paid. Tim Davie
received an element of performancerelated pay in his role as Chief Executive
Officer of BBC Worldwide, as did Mark
Linsey in his role as CEO, BBC Studios.

Cost of compliance
In 2017/18, the BBC incurred costs
estimated at £19.3 million (2016/17:£15.6 million) to ensure that wecomplied with all relevant legislation.
This includes the BBC’s annual£11.6 million regulatory fee to Ofcom.
Regularity
The management of all of the BBC’s
resources must accord with the provisionsof the Charter, Framework Agreement
and other agreements the BBC enters intowith Government Ministers. Transactions
that meet the intended purposes andare in line with relevant authorities are
considered to be ‘regular’; those that do
not meet these criteria are considered‘irregular’. Fraudulent transactions andfines or penalties are treated as ‘irregular’.
In addition to the NAO’s review ofregularity, Internal Audit conducted areview of the BBC’s regularity complianceframework, including the processes,
controls and assurance mechanisms
in place to manage the regularity risk
in areas assessed as being at greatest
risk of irregularity. The scope of thereview considered the appropriate useof licence fee money, the assessmentof material changes, operating withinborrowing limits and the risk of fraud.
No material exceptions were identified asa result of this review and management
are not aware of any transactions that
could be considered as irregular.
See page 169 for the NAO’s opinion
on regularity.

Interaction with shareholders (UKCorporate Governance Code principles
B.7.1, B.7.2, D.2.4 and section E):
The BBC is not a profit-oriented
company with shareholders and so
provisions relating to interaction
with shareholders do not apply.

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Remuneration Report
Remuneration Committee
Chair’s statement
The last year has seen a significant
amount of scrutiny and attention paid
to issues of pay in the BBC. As the newly
formed Remuneration Committee of
the BBC Board, we have worked withBBC management to ensure that asmuch as possible is being done toaddress these issues, including theneed to increase the number of senior
female staff, closing the gender pay gap
and ensuring that the BBC is a fairer,
simpler – and better – place to work.
Following the publication of the Annual
Report and Accounts last year, a greatamount of attention was focused on
issues of gender pay, equal pay and pay
fairness, both in the BBC and in the UK asa whole. The BBC commissioned a numberof reports – including an equal pay audit,
conducted independently and overseen by
Sir Patrick Elias QC – and also published its
statutory report on the gender pay gap.
The Remuneration Committee notedthat these reports found no evidenceof systemic discrimination in pay basedon gender. The BBC’s reported mediangap of 9.3% for 2017/18 compares
to a national average median gap
of 18.4% and the information andcommunications industry publishedaverage median of 17.4%. Nevertheless,these reviews – along with the individual
cases raised by members of staff – drewattention to a number of instancesthat required further consideration.
Consequently, the BBC conducted anumber of initiatives during the year:—— a review of pay in the World Service
and BBC Monitoring, looking at how
pay ranges in these areas compare with
Network News and the wider market.
After this review a number of steps
were taken to align World Service pay
with Network News;—— continued work, along with the joint
unions, to modernise the BBC’s Terms
and Conditions, to make them simpler
and more consistent;—— continued work to implement a single
Career Path Framework in the BBC,with job pay ranges which allow staff tosee where they sit in the pay range of
their cohort of colleagues;—— a review of pay of the BBC’s on-air
presenters, on-air editors andcorrespondents; and—— a commitment to review cases raised
by individuals affected by changes tothe HMRC’s tax status assessment forfreelance presenters and contributors.

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As well as pay, the BBC is also looking at
how different groups in its staff population
progress into senior leadership roles.
Five workgroups have been set up undersenior BBC directors to look at ways tohelp women, employees from a BAME
background, disabled staff, LGBT staff andto retain inclusivity across socio-economic
backgrounds. Current performanceagainst BBC staff targets is set out inthe table below. This shows that good
progress is being made, but that more
focus is needed on getting BAME staff
and women into senior leadership roles.
All staff and leadership: 31 March 2018
Workforce

20182020 target

Women (all staff)

47.7%

50%

Women (leadership)

43.3%

50%

Disability (all staff)

10.4%

8%

Disability(leadership)

9.5%

8%

BAME (all staff)

14.8%

15%

BAME (leadership)

10.4%

15%

LGBT (all staff)

11.0 %

8%

LGBT (leadership)

12.0%

8%

During the year BBC Studios was launched
as a commercial subsidiary of the BBC
and the Committee has overseen the
integration of previous incentive schemesin BBC Studios and BBC Worldwide
into one new combined system.
Overall, the Remuneration Committee
continues to explore ways to attract
and retain the very best talent,in all areas of staff, in extremelycompetitive media markets, whilst at
the same time safeguarding licencefee payers’ value for money.

Steve Morrison
Chair
21 June 2018

The Committee also continues tomonitor progress against senior manager
paybill and headcount targets set under
the former BBC Trust in 2011. In thelast year, the senior manager paybill,including Board members, has reduced
by a further £4.5 million to £37.7 million
and senior manager numbers have
reduced by a further 42, to 270.
We are required to publish a full list of
all individuals who have been paid over
£150,000 during the year from licence fee
funds. This year, we have chosen to present
this information in narrower £10,000
bands, to aid transparency. The disclosuresthis year show that some progress has
been made in closing the gap between
the top paid men and women. It is also
pleasing to see the recent announcementof a lowered gender pay gap for thereporting year 2018/19, of 7.6%.
However, as a Committee we are clearthat the pace of this change needs toimprove and we expect to see the gap
close further. We also think more could
be done to provide greater clarity in thedisclosure lists. As such, we have asked
the BBC management to provide further
information and context to enable readers
to understand the work undertaken byindividuals in the year. We have also asked
that more be done to show the impact ofchanges that continue to be made. This
information is published here, alongside
the full disclosure list for 2017/18.

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Remuneration report
This report sets out the BBC’s remuneration
policy for executive directors and details
the annual remuneration received by themembers of the BBC Board and Executive
Committee for the 2017/18 financial year.
It has been prepared on the basis that therequirements of the Large and Mediumsized Companies and Groups (Accounts
and Reports) Regulations 2013 and Listing
Rules apply to the BBC wherever these
disclosure provisions are relevant. The
sections on pensions and remuneration
received by this group have been auditedby the NAO, the BBC’s statutory auditors.
Executive summary
This is the first remuneration report
made under the new Charter andAgreement. As part of the reorganisationof the Corporation, there were a numberof changes to the Board in the lastyear, both in terms of structure andmembership. For the purposes of thisreport, executive directors are classed
as those who sit on the Board along withthe other members of the executive
committee (see page 90 for details).
Under the new Charter, the BBC is now
subject to a new governance structure,
led by a single BBC Board. The Board is
supported by the Executive Committee,
which is responsible for the operational
leadership of the Corporation. Within theterms of the Charter, the Board is madeup of ten non-executive directors (theChairman, five BBC appointees and thefour Nations representatives) and four
executive members – see pages 90-91 formore details. The Executive Committee
in 2017/18 was made up of ten members– the four Board members, plus the
Directors of Content, News and Current
Affairs, Radio and Education, Studios,
HR and the Chief Technology Officer.
During the year, Elan Closs Stephens
was appointed to the Board as themember for Wales. There were no otherchanges to Board membership. On the
Executive Committee, James Harding
left the post of Director, News andCurrent Affairs in January 2018 and hisplace on the Executive Committee wastaken by Fran Unsworth. There were noother changes to membership of the
Executive Committee during the year.
In 2017/18, there has been significant
focus on pay at all levels of the BBC
allied to an increased rigour andconsistency in the management of thewhole workforce. Several initiatives havebeen undertaken to ensure fairness
and transparency of pay decisions.

94

BBC Annual Report and Accounts 2017/18

The BBC operates within a fast-changing
market with intense competition for
talent, and dramatic growth amongsome new media companies offering
highly attractive packages. It is worth
noting that we continue to significantly
discount our senior salaries to the market,
despite the fact that we are operating
in increasingly competitive commercial
markets for the best and brightest talent.
We believe that the initiatives we haveundertaken will ensure the organisation
continues to be able to appeal to all those
who are excited about the opportunities
of working in public service broadcasting.
Remuneration Committees: constitution
and operation
The Remuneration Committee, since 1 April
2017, has been responsible for setting the
remuneration strategy for the BBC Boardand for all aspects of the remuneration of
the Executive Committee and the nonexecutive directors. Its members are nonexecutive directors: Steve Morrison (Chair),Tanni Grey-Thompson and Nicholas Serota.
Complying with the UK Corporate
Governance Code 2016, the Remuneration
Committee takes specialist advice
from external professional advisers
on some matters, particularly thoserelating to market practice. During theyear, independent advice is received
from Willis Towers Watson on mattersrelated to market comparabilityof executive remuneration.
The Senior Manager Remuneration
Committee, established in September
2012, has responsibility for aligning
the operational needs of the BBC
within the strategic framework set by
the Board and implemented by the
Remuneration Committee. The Committee
has responsibility for approving any
remuneration, compensation or benefit
policy within the senior management
pay strategy, which includes thereview and approval of salaries for
employees who earn over £75,000 per
annum (full-time equivalent basis).

Progress continues to be made towards
these goals, including the phased
diminution of historic differences inapproaches to pay and benefits between
senior and other staff.
The BBC has undertaken several initiatives
over the course of the year, including thelaunch of a set of pay principles across theorganisation, to ensure remuneration is fair,consistent, transparent, competitive andclear. Reward continues to be at theforefront of our agenda: the BBC receives
regular feedback regarding senior pay from
employees during annual pay negotiations
through the trade unions and via the annual
staff engagement survey. This feedback is
considered when setting the pay strategy
for the executive directors. When reviewing
the pay for the executive directors, theCommittee considers each component of
the total remuneration package broken
down as follows across the page.
How does the executive pay policy in the
Public Service differ from that for all otherBBC employees?
Bonuses have not been paid to executive
directors in the Public Service since 2008,
and the BBC has moved away from theprevious two-tier benefit structure byphasing out private medical insurance andcar allowances. No new executive director
has received these benefits since August
2011. These changes have simplified
and equalised pay arrangements acrossour employee population. A full rangeof benefits can now be purchased by all
staff at all levels of the organisation under
our flexible benefits arrangements.
Executive directors and senior managers
are not entitled to the annual pay review
agreed with the Joint Unions and are notautomatically entitled to any form of annual
increment or progression payment. Pay
decisions for executive directors can only betaken by the Remuneration Committee andpay decisions for senior managers by the
Senior Manager Remuneration Committee
to ensure consistency and fairness.

Executive director pay components
The Remuneration Committee iscommitted to setting appropriate levels of
pay for executive directors that attract,
motivate and retain the best people to leadthe BBC and provide value for the licencefee payer. The BBC’s executive pay strategy
is to be fair, transparent and broadly
consistent with the approach to pay for all
employees at the BBC.

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G OV E R N A N C E

Component

Purpose and link to strategy

Operation

Maximum opportunity

Base pay

Base pay is aligned to the market
median for total direct remuneration(salary, annual bonus andannualised long-term incentive).

Three factors are used todetermine the level of base pay
set for an executive director:— would the rate be consistent withthe discounted market rate forthe job?
— does the personal performance ofthe executive justify the level ofbase pay?
— is the level affordable to the BBC
and not deemed excessive?
Executive directors in the PublicService are not entitled toreceive a performance bonus.

There is no prescribed maximum
salary or maximum increase.

A discount of 50-80% against
total direct remuneration in thecommercial sector is applied
to executive director roles.

Variable pay

Benefits

Executive directors employed in
the BBC’s commercial businesses
are eligible for a performancerelated annual bonus funded by
the commercial business and not
the licence fee. It is reward forthe achievement of short-term
strategic goals and profit growth.

Pensions are offered inaccordance with the all-employee
pension arrangements.

Payment of a bonus in the BBC’scommercial businesses is subject tothe achievement of an overall target
based on a mix of headline profit
and cash flow for their business.

Executive directors can electto join the defined contribution
scheme LifePlan.

In addition to pensions, the other main The BBC’s defined benefit scheme
contractual benefit is life assurance.
is closed for new joiners.

No executive director in the PublicService has received a bonus since 2008.
For 2017/18, two executive directors
within BBC commercial businesses
participated in a bonus scheme.
For the CEO BBC Worldwide, themaximum bonus payable is 70% ofsalary, where target bonus is 50%
of salary. For the CEO BBC Studios,
the maximum bonus payable is 50%
of salary, where target bonus is45%. The Remuneration Committee
agreed this year that the new BBC
Studios should have a combined
incentive scheme with a target bonusof 40% and a maximum of 50%.
Current policy provides a defined
contribution scheme with no salary
cap and a maximum employer
contribution of 10% of salary.
Existing members of a defined
benefit pension scheme are cappedat the maximum salary for theirpension scheme or are subject to acap in pensionable salary growth.
Executive directors are provided withdeath in service life assurance coverof two times their basic salary.

In April 2012, the BBC removed
the car allowance benefit for all
new executive directors to ensurethat future policy aligns witharrangements for all BBC employees.

In April 2011, the BBC removed
the private health care benefit
for all new executive directors toensure that future policy aligns witharrangements for all BBC employees.

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For members of either the BBC
Pension Scheme or LifePlan (the BBC’s
defined contribution plan), death inservice life assurance cover of fourtimes their basic salary is provided.
No executive director hasreceived a car allowance.

No executive director receives
a car allowance.
The Director-General is entitled tothe use of a car and driver but has
no entitlement to a personal car
allowance or fuel allowance. The
Chairman is subject to the samearrangements. During 2017/18
access to these arrangements has
also been made available to all otherexecutive directors on a shared basis.
Executive directors who werealready entitled to funded private
medical insurance have retained it.

The maximum level of coveroffered is family cover.
This is an historic benefit.

Executive directors who elected
to take up funded private medical
insurance in 2017/18 were: Tim Davie,
Charlotte Moore, Mark Linsey, Ken
MacQuarrie and Fran Unsworth.
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Component

Operation

Maximum opportunity

Employment Employment contracts of executive
contracts and directors have a maximum notice
severance
period of six months, but are subject
to earlier termination for cause.

Purpose and link to strategy

There is no contractual entitlement
to any additional remuneration in
the event of early termination otherthan in the case of termination
for reason of redundancy.

In the event of redundancy, all executive
directors are entitled to payments
equal to one month per year served up
to maximum payment of £150,000.

Other
There is no entitlement toremuneration any other remuneration, so
no such payments in year.

Should any additional remuneration
be proposed, full consideration is
given to the reputational risk to
the BBC and any such payment
would require the approval of theRemuneration Committee on a caseby-case basis, prior to implementing.

There is no prescribed maximum.

PensionExecutive directors who joined the BBC before 1 December 2010 are eligible to continue to participate in the BBC Pension Scheme (theScheme), which provides for pension benefits on a defined benefit basis. Executive directors who joined the BBC on or after 1 December
2010 are eligible to join LifePlan, which is the BBC’s defined contribution arrangement. The BBC pays matching contributions to LifePlan
for employee contributions between 4% and 5%. Employee contributions between 6% and 7% are matched plus an additional 1%.
Employee contributions of 8% or more receive the maximum employer contribution of 10%. There is no maximum pensionable salaryfor contributions to LifePlan.
Executive directors who decide not to join LifePlan or are not already an existing member of the Scheme are, subject to meeting therelevant criteria, automatically enrolled into the National Employment Savings Trust (NEST). The BBC and employees pay 1% ofqualifying earnings to NEST. Individuals can choose to opt out of this.
Executive directors’ pension arrangements may be reviewed and amended in response to changes in legislation or similar developments.
Features of the BBC’s pension arrangements that our executive directors participate in alongside other BBC employees are provided in
the table below.
Details of the BBC Pension Scheme are available at www.bbc.co.uk/mypension/.
BBC Pension Scheme Defined Benefit
LifePlan defined
contribution

National Employment
Savings Trust (NEST)
defined contribution(auto enrolment
arrangement)

1 January
2012

Open toall eligible
employees

Open toall eligible
employees

1.67% accrual
Adjusted in linewith inflation

1.67% accrual
Adjusted in linewith CPI

Career averagerevalued earnings

Career averagerevalued earning

BBC will
contribute a
maximum of
10% of salary
if employee
contributes
8% with lower
sliding scale

BBC will
contribute 1%of qualifying
earnings(2017/18)

Old benefits

New benefits

CAB 2006

CAB 2011

Date closed

30 September
1996

31 October
2006

30 November
2010

Accrual60ths accrual

60ths accrual

Final pensionable Final pensionable

SchemeSalaryNormalpensionable age

60

60

65

65

N/A

N/A

Earnings cap

Joined before
1 June 1989
uncapped,
capped otherwise£154,200

Capped at£154,200

Capped at£154,200

Capped at£145,800

Uncapped

Minimum
earnings£5,876p.a.
Maximum
earnings£45,000p.a.
(2017/18)

Pensionablesalary growth
before theearnings cap
is applied

Limited at
1% p.a.

Limited at
1% p.a.

Limited at
1% p.a.

No restriction

N/A

N/A

7.5%

7.5%

4%

6%

Minimum
employeecontribution
is 4%

1% of qualifying
earnings

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BBC Board Annual
Remuneration Report
Annual remuneration of the BBC Board and Executive Committee – detail of remuneration
received (Audited)
The table below provides full details of the remuneration received by all BBC Board members for 2017/18. The Board was first
constituted on 3 April 2017 under the implementation of the 2016 Charter and Agreement, which set out new governance arrangements
for the BBC. As a result, prior year figures are not applicable for the Board.
Simon Burke, Ian Hargreaves, Tom Ilube and Steve Morrison are all chairs of various BBC Committees (see page 91). As chairs, they each
receive £5,000 per annum in addition to their base fees. The roles of chair commenced with effect from 1 May 2017 and their fees havebeen pro-rated for the year accordingly. Elan Closs Stephens was appointed by DCMS to the new BBC Board effective 20 July 2017.
Fees shown are pro-rata.
BBC Board
Details of remuneration received (values in £000s)
2017/18
2017/18
Taxable Pension related
benefits*
single figure

2017/18
Performance
related2017/18
Total

£0

£0

£114

£0

£0

£0

£37

£33

£0

£0

£0

£33

02/04/20

£37

£0

£0

£0

£37

03/04/17

02/04/20

£37

£0

£0

£0

£37

Steve Morrison

03/04/17

02/04/21

£37

£0

£0

£0

£37

Nicholas Serota

03/04/17

02/04/21

£33

£0

£0

£0

£33

Ashley Steel

03/04/17

02/04/20

£33

£0

£0

£0

£33

Elan Closs Stephens

20/07/17

19/07/20

£23

£0

£0

£0

£23

£370

£14

£0

£0

£384

Appointment
term start dateAppointment
term end date2017/18
Base pay

Non-executive directors
David Clementi**

16/02/17

16/02/21

£100

£14

Simon Burke

03/04/17

03/07/19£37

Tanni Grey-Thompson

03/04/17

02/04/21

Ian Hargreaves

03/04/17

Tom Ilube

Total non-executive directors
Executive directors
Tony Hall**

03/04/17

n/a***

£450

£30

£0

£0

£480

Anne Bulford

03/04/17

n/a***

£435

£0

£0

£0

£435

Tim Davie****03/04/17

02/04/19

£400

£2

£41

£248

£691

Ken MacQuarrie

03/04/17

02/04/19

£250

£2

£0

£0

£252

Total executive directors£1,535

£34

£41

£248

£1,858

Total Board£1,905

£48

£41

£248

£2,242***

Taxable benefits: car allowance, private medical insurance and other taxable expenses.
The Chairman and Director-General are entitled to a car and driver but have no entitlement to a personal car allowance or fuel allowance. During 2017/18 access to thesearrangements has also been made available to all other executive directors on a shared basis.
*** The roles of Director-General and Deputy Director-General are permanent members of the Board.
**** Tim Davie’s role as CEO, BBC Worldwide (now also BBC Studios Group) is funded entirely by the BBC’s commercial revenues and not paid for or subsidised by the licence fee.
Payment of any bonus is subject to the achievement of an overall headline profit and cash for that subsidiary, with targets approved by the Remuneration Committee. The
performance-related remuneration relates to amount earned in the year.

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The table below provides full details of the remuneration received by all BBC Executive Committee members for 2017/18, compared tothe previous year. In previous years remuneration disclosures were provided for executive members of the former Executive Board.
Under the new governance arrangements details are now provided for all members of the BBC Executive Committee.
BBC Executive Committee members
Details of remuneration received (values in £000s)
Date appointed toCommittee

Year

Base pay

Taxablebenefits

Pension related
single figure***Performance
related

Total

Tony Hall

02/04/13

2017/18
2016/17

£450
£450

£30
£17

£0
£0

£0
£0

£480
£467

Anne Bulford

21/06/13

2017/18
2016/17

£435
£424

£0
£0

£0
£0

£0
£0

£435
£424

Tim Davie*

01/11/12

2017/18
2016/17

£400
£400

£2
£2

£41
£40

£248
£223

£691
£665

Ken MacQuarrie

22/09/16

2017/18
2016/17

£250
£131

£2
£1

£0
£0

£0
£0

£252
£132

Valerie Hughes-D’Aeth

01/08/14

2017/18
2016/17

£310
£310

£0
£0

£0
£7

£0
£0

£310
£317

Mark Linsey*

26/04/16

2017/18
2016/17

£340
£316

£2
£2

£50
£41

£136
£0

£528
£359

Matthew Postgate

01/04/16

2017/18
2016/17

£310
£310

£0
£0

£34
£44

£0
£0

£344
£354

Charlotte Moore

06/07/16

2017/18
2016/17

£333
£233

£2
£2

£36
£31

£0
£0

£371
£266

James Purnell

19/03/13

2017/18
2016/17

£295
£295

£0
£0

£25
£30

£0
£0

£320
£325

Fran Unsworth**

01/01/18

2017/18
2016/17

£85
–

£0
–

£0
–

£0
–

£85
–

2017/18
2016/17

£283
£340

£0
£0

£26
£34

£0
£0

£309
£374

2017/18
2016/17£3,491£3,209

£38
£24

£212
£227

£384
£223

£4,125£3,683James Harding**

12/08/13
Left 31/01/18

Total Executive Committee*

Tim Davie’s role as CEO, BBC Worldwide (now also BBC Studios Group), and Mark Linsey’s former role as CEO BBC Studios are both funded entirely by the BBC’s commercial
revenues and are not paid for or subsidised by the licence fee. Payment of any bonus is subject to the achievement of an overall headline profit and cash for that subsidiary,with targets approved by the Remuneration Committee. The performance-related remuneration for both Tim Davie and Mark Linsey relate to amounts earned in the year.
** James Harding left the BBC on 31 January 2018, after a handover period with the incoming Director of News, Fran Unsworth, who joined the Executive Committee on 1 January
2018. Their remuneration (including taxable benefits) is shown pro-rata for the period shown in the table.
*** Employee pension contributions are ordinarily made via salary sacrifice arrangement as an employer contribution, with a corresponding reduction in salary. Base salaries for
executive directors have not been adjusted to reflect the impact of salary sacrifice to enable like-for-like comparison with prior years before salary sacrifice was introduced.
The pension-related single figure is generally calculated at 20 times the increase in the accrued pension over the year net of inflation, less the directors’ defined benefit
contributions, plus the employer’s defined contributions. This is also shown in detail in the defined benefits pension prospective entitlements table.

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Total remuneration (values in £000s)

2017/18

2016/17*

Total Executive Committee (including Board Executive Directors)£4,125£3,683

Board non-executive directors£384£205**

Total Trustees

N/A

£535

£4,509£4,423

Total annual remuneration***

We are operating under a different governance structure to 2016/17, comparisons may not be exact with previous years. We are electing, voluntarily, to publish Executive
Committee director salaries alongside the Board.
As part of the new governance structure, all non-executive directors have been appointed since 3/4/17 therefore there is no data to show for 2016/17. The figure of £205,000
is representative of the previous non-executive body in place in 2016/17.

Defined benefit pension prospective entitlements (values in £000s)

Age at31/03/2018

SectionAccrued pension
31 March 2018
(or retirement/leaving the Board
if earlier)Accrued pension
1 April 2017(or joining theBoard if after)

Director DB
contributions(via salary sacrifice)2017/18

Pension related
single figure

Tim Davie

50

CAB 2011

£15

£12

£9

£41

Mark Linsey

57

CAB 2006

£27

£24

£6

£50

Charlotte Moore

49

New benefits

£28

£25

£11

£36

Matthew Postgate

43

New benefits

£32

£29

£11

£34

Fran Unsworth

60

Old benefits

£114

£113

£3

£0

Notes:Tim Davie is an active member of the CAB 2011 section from January 2012 and retains a deferred benefit in the new benefits section for service up to that date. The accrued pension
shown relates to CAB 2011 only.
Mark Linsey joined the BBC on 1 May 2007. The pension figures shown include the period before he was appointed as an executive director.
Charlotte Moore joined the BBC on 1 May 2006. The pension figures shown include the period before she was appointed as an executive director.
Matthew Postgate joined the BBC on 1 June 2005. The pension figures shown include the period before he was appointed as an executive director.
Fran Unsworth joined the BBC in 1983 and joined the Scheme on 1 July 1984. She was reappointed as an executive director on 1 January 2018, having previously been a director
in 2013. The pensions shown include the period before she was appointed as an executive director.

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Comparative pay across the BBC: how does executive director pay compare to that of other BBC employees?
In 2011 the BBC voluntarily agreed to report the top to median public service earnings multiple as proposed in the Hutton report‘Fair Pay in the Public Sector’. Since 2011 the BBC has published these figures on an annual basis.
The table below provides a summary of the Director-General to BBC staff median earnings and executive directors to median earnings
figures since 2011. The sample group for the executive directors group has now expanded to include all those Directors on the Executive
Committee, as opposed to just the Board. The sample group for staff has also changed, to remove all those employed by BBC Studios,
as it became a commercial entity for 2017/18. As a result of this change, the Public Service staff median has lowered and the DirectorGeneral multiple has increased from 10.2 to 10.7. Note that, had these employees not transferred, the Director-General multiple would
remain at 10.2, and the executive director multiple would decrease to 7.4.
2018

2017

2016

2015

2014

2013

2012

2011

Director-General earnings

10.7

10.2

10.4

10.7

10.9

11.0

16.5

16.8

Executive directors’ medianearnings

7.7

7.7

8.19

8.2

8.2

8.1

8.7

8.9

Earnings calculation includes: basic pay, bonus, continuing allowances, overtime and other non-continuing allowances. Median earnings figures are calculated using
Director-General and Executive Directors annual salaries.
These figures exclude the CEO, BBC Worldwide and CEO, BBC Studios, whose roles are funded entirely by the BBC’s commercial operations.

The table below provides a summary of the changes to the Director-General’s cash earnings for 2017/2018 versus the change in pan-BBC
median earnings over the same period. The drop in pan-BBC median earnings is driven by the exclusion of BBC Studios staff from themedian calculation for this year.
There have been no changes to the Director-General’s remuneration in 2017/18.
2017/18(values in£000s)

Change from2016/17

Director-General earnings

£450

0%

Pan-BBC median earnings

£42

-2%

*

Note that the pan-BBC median earnings figure would remain at £44,000 had BBC Studios employees not transferred.

Severance
No severance was paid to executive directors during the year ended 31 March 2018.
Outside interests
With the prior agreement of the Director-General, Executive members of the BBC Board may hold remunerated external directorships.
The prime purpose of the external directorship should be to support personal and career development and thereby give back to the BBC.
Remuneration which arises from external directorships may be retained by the individual, but is subject to formal approval. Executive
directors may also hold non-remunerated posts outside the BBC. No more than one to two days per month are permitted to fulfil all
external duties.
During the year one executive director held another remunerated external directorship, where fees were waived.
The BBC’s commercial businesses
During 2017/18, the BBC has staff employed with four commercial subsidiaries:—— BBC Worldwide—— BBC Studios—— BBC Studioworks—— BBC Global News Ltd
The remuneration policy for the subsidiaries includes the contractual provision of an annual bonus available to eligible staff, including
directors, and it varies between commercial entities. The full cost of base pay and annual bonus are self-funded by the commercial
revenues of each subsidiary company and are not subsidised by the licence fee.
Remuneration within the commercial subsidiaries is not governed by the BBC’s remuneration policy but is subject to the BBC’s
governance and approval processes.

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Pay disclosures
In 2016/17, c.25% ofpresenters paid over
£150,000 were women(excluding BBC Studios)

2018/19 projections
show c.40% ofpresenters paid over
£150,000 will be women

2017/18: A year of transition
The BBC is an organisation committed to equality and 2017/18 has been a year of transition towards that ambition.
In the following pages, we set out details of those individuals who received more than £150,000 from licence fee revenue. The Charter
requirement is simply to publish amounts paid during the year, for these individuals, set out in bands. In this report, though, we are going
beyond that requirement by publishing more detail of the work that on-air individuals, in particular, did for the remuneration theyreceived. We are doing this to improve transparency, and to aid comparisons.
This last year has seen considerable activity across the BBC to address the issues of pay and equality for our staff and for our highestpaid on-air presenters. We completed our review of Terms and Conditions and developed a new pay framework for our news presenters.
So payments made during 2017/18 – which began in April 2017, now over 15 months before the date of this report – reflect an out-ofdate picture, and do not show all the changes we have been making recently.
That is why we are publishing not just those BBC presenters paid over £150,000 from licence fee revenue during 2017/18, but an
up-to-date summary snapshot showing where we are in June 2018, projecting ahead for the whole of 2018/19.
In projecting pay for 2018/19 at this point we are making some assumptions about the pattern of work throughout the next nine months.
We have relied on contractual commitments, pay data from June 2018 and any publicly known changes to programmes, roles andschedules. Whilst we have reflected latest approved pay information in this analysis, we expect discussions with a few individuals tocontinue. Given the provisional nature of this 2018/19 data, this table has not been audited by the National Audit Office but has been
subject to internal audit assurance procedures.
The table below shows significant progress in three key areas:
1.

Across the BBC, we are projecting a c.60:40 male to female split in our highest-profile presenters in 2018/19, a shift from c.75:25
two years ago.

2.

BAME representation in 2018/19 is projected to be c.20%, against our target of 15% by 2020.

3.

The pay between men and women has narrowed, with the number of women paid over £200,000 increasing from 7 to 14, and thenumber of men paid over £500,000 reducing from 5 to 3.

This time next year, we are confident that the position will again show more change. As we head into 2019/20, we expect the genderbalance of our most up-to-date snapshots in News and Radio will be close to 50:50. We aim to have reached 50:50 representation of
women as guests, contributors and experts across the BBC, as well as increased BAME representation. And whilst it remains the casethat the most highly paid individuals paid from licence fee revenue are men, the work we are doing to address this will also demonstratesignificant change next year.
It will require another year of hard, sustained effort. But it will be an important year as we build a BBC that is a standard-bearer for
equality, and that truly reflects the diversity of this country.
On-air talent paid more than £150,000 of licence fee revenue
2016/17(excluding BBC Studios)
Number2017/18%

Number2018/19%

Number%Men£150,000–£199,999£200,000–£299,999£300,000–£399,999£400,000–£499,999£500,000+

18
12
4
5
5

16
11
3
7
5

14
16
4
4
3

Women
£150,000–£199,999£200,000–£299,999£300,000–£399,999£400,000–£499,999£500,000+

7
6
1
–
–

12
8
2
–
–

14
12
2
–
–

TotalsTotal Men

44

76%

42

66%

41

Total Women

14

24%

22

34%

28

41%

Total

58

100%

64

100%

69

100%

Of which BAME

7

12%

10

16%

13

19%

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BBC Annual Report and Accounts 2017/18

59%

101

PAY D I S C L O S U R E S

Report from the BBC Remuneration Committee of people paid more than £150,000 of licencefee revenue in the financial year 2017/18.
On-air talent
Under the terms of our Charter, we are required to publish the names of individuals working for the BBC, paid more than £150,000 fromlicence fee revenue in the financial year, set out in pay bands. These are shown by category: News, Radio, Sport, Television and presenters
who work regularly across multiple parts of the BBC. These figures also include payments from licence fee revenue made to individuals
working under a contract for services. These figures exclude any recharges, amounts paid, and investments into programmes made by
our commercial entities – for example BBC Studios and BBC Worldwide. Payments made by independent producers, royalties, repeat fees,
contractual recoverables and expenses are also excluded. In 2016/17 BBC Studios was part of the BBC’s licence-fee funded operations
and therefore individuals paid by BBC Studios were disclosed accordingly. Programme commitments have been drawn from contractual
commitments or other patterns of work, and have been stated to the nearest 10. These have been consistently disclosed for each principal
programme or genre. Single episodes have been excluded, unless this represents a significant part of an individual’s work.
News and Current Affairs
Principal programme

Name

Programme commitments

Pay

Today

John Humphrysc.140 programmes£400,000 – £409,999

Nick Robinsonc.140 programmes
c.40 episodes of Political Thinking£250,000 – £259,999

Mishal Husainc.100 programmes
c.40 days for BBC One bulletins
From Our Home Correspondent£220,000 – £229,999

Sarah Montague

c.140 programmes£160,000 – £169,999

Justin Webb

c.150 programmes

World at One

Martha Kearneyc.180 programmes£200,000 – £209,999

PM

Eddie Mairc.220 programmes£330,000 – £339,999

BBC News at Six and
BBC News at Ten

Huw Edwardsc.180 presentation days for BBC One &News Channel
Elections and News Specials£520,000 – £529,999

George Alagiahc.180 presentation days for BBC One£290,000 – £299,999

Fiona Brucec.100 presentation days for BBC One£180,000 – £189,999

BBC News at One

Sophie Raworthc.180 presentation days for BBC One(including News at 6 and 10 cover)£200,000 – £209,999

The Andrew Marr Show

Andrew Marrc.40 programmes
BBC One documentaries
c.20 editions of Start the Week

£400,000 – £409,999

Newsnight

Evan Davisc.110 days
The Bottom Line on Radio 4£250,000 – £259,999

Emily Maitlisc.100 days

£220,000 – £229,999

Victoria Derbyshire

Victoria Derbyshirec.220 programmes£210,000 – £219,999

BBC News Channel

Ben Brown

BBC News Channel
BBC One bulletin coverInternational location work

£150,000 – £159,999

Newsbeat

Tina Daheley

Newsbeat and News events
Cover for BBC Breakfast and Victoria Derbyshire£150,000 – £159,999

On-air Editors andCorrespondents

Jon Sopel

North America Editor£230,000 – £239,999

Laura Kuenssberg

Political Editor£220,000 – £229,999

Jeremy Bowen

Middle East Editor£200,000 – £209,999

Amol Rajan

Media Editor and the Media Show
Other programmes on BBC Radio

Katya Adler

Europe Editor

Mark Easton

Home Editor

James Naughtie

Presenter and Correspondent

Kamal Ahmed

Economics Editor

John Simpson

World Affairs Editor

Simon Jack

Business Editor

Fergal Keane

Africa Editor

John Pienaar

Deputy Political Editor and Pienaar’s Politics

Sarah Smith

Scotland Editor and Sunday Politics

102

BBC Annual Report and Accounts 2017/18£170,000 – £179,999£160,000 – £169,999£150,000 – £159,999

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RadioPrincipal station

Name

Programme commitments

Pay

BBC Radio 1

Nick Grimshaw

c.230 editions of Radio 1 Breakfast ShowRadio 1 Big Weekend
Teen Awards£400,000 – £409,999

Scott Millsc.190 programmes on Radio 1
Radio 1 Breakfast Show cover£280,000 – £289,999

Greg Jamesc.230 programmes on Radio 1£170,000 – £179,999

Chris Evansc.200 editions of the Chris Evans Breakfast Show

£1,660,000 – £1,669,999

Steve Wrightc.220 editions of Steve Wright in the Afternoon
c.50 editions of Sunday Love Songs£550,000 – £559,999

Simon Mayo

c.230 editions of Simon Mayo Drivetime
c.40 Kermode and Mayo on 5 live

£340,000 – £349,999

Ken Bruce

c.220 programmes on Radio 2
Additional programmes on Radio 2£300,000 – £309,999

Mark Radcliffec.200 editions of Radcliffe and Maconiec.50 editions of the Folk Show

£190,000 – £199,999

Jo Whileyc.180 programmes on Radio 2£170,000 – £179,999

Moira Stuart

c.200 appearances on Chris Evans Breakfast Showc.30 programmes on Radio 2£160,000 – £169,999

Trevor Nelsonc.50 Rhythm Nation on Radio 2
c.140 programmes on 1Xtra£150,000 – £159,999

Nicky Campbell

c.210 editions of 5 live Breakfast
c.210 editions of Your Call

£410,000 – £419,999

Rachel Burdenc.230 editions of 5 live Breakfast
Cover for Your Call

£150,000 – £159,999

Lauren Laverne

c.210 programmes on 6 Musicc.40 episodes of Recommends£230,000 – £239,999

Shaun Keavenyc.220 programmes on 6 Music£170,000 – £179,999

Stephen Nolanc.210 shows on Radio Ulsterc.20 editions of Nolan Livec.30 Question Time Extra Timec.120 Stephen Nolan on 5 live

£400,000 – £409,999

Vanessa Feltz

c.210 programmes on Radio 2c.230 programmes on Radio London£330,000 – £339,999

Jane Garveyc.140 Woman’s Hour programmes
c.20 programmes on 5 livec.40 episodes of Fortunately£150,000 – £159,999

BBC Radio 2

BBC Radio 5 live

BBC 6 Music

Multiple stations

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BBC Annual Report and Accounts 2017/18

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PAY D I S C L O S U R E S

SportPrincipal sport

Name

Programme commitments

Pay

Men’s football

Gary Lineker

Match of the Day: Premier League and FA Cup
Sports Personality of the Year

£1,750,000 – £1,759,999

Alan Shearer

Match of the Day: Premier League and FA Cup£410,000 – £419,999

Ian Wright

Weekly editions of 606 on 5 live
Match of the Day: Premier League and FA Cup
5 live Sport£170,000 – £179,999

CricketJonathan Agnew

International test, one-day and Twenty20 series
BBC cricket Correspondent£180,000 – £189,999

TennisSue Barker

Wimbledon, Queen’s, ATP World Tour Finals,
Australian Open

£190,000 – £199,999

Multiple sports

John McEnroe

Wimbledon

Gabby Logan

Athletics
Premier League Show
Other football
Rugby Autumn Internationals and Six Nations
Sports Personality of the Year

£230,000 – £239,999

Mark Chapman

Twice weekly editions of 5 live Sport
Weekly Premier League highlights and
MOTD 2 Extra
Other football
Rugby League World Cup and Challenge
Cup matches£220,000 – £229,999

Clare Balding

Winter Olympics
Wimbledon
Equestrian
The Boat Race
World Track Cycling
Sports Personality of the Year
Ramblings on Radio 4
Good Morning Sunday on Radio 2£180,000 – £189,999

Multiple genres and Television
There are a small number of individuals who have pre-existing multi-year relationships with BBC commissioning. Payments from BBC
Studios have been removed from the disclosure, and they may also receive payments from independent producers. We also include inthis section presenters who spend close to 50% of their time in more than one of TV, Radio, News and Sport.
Principal activity

Name

Programme commitments

Pay

Television

Nick Knowles

BBC TV fee for a range of programmes and series
Includes presenter fee for Who Dares Wins and Close
Calls: On Camera£230,000 – £239,999

Mary Berry

BBC TV fee for a range of programmes and series£190,000 – £199,999

Radio and Sport

Jason Mohammad

Daily Radio Wales programme
Weekly 5 live programme
Final Score and other football
Snooker
Good Morning Sunday on Radio 2£260,000 – £269,999

News and SportDan Walker

Football Focus
BBC Breakfast£220,000 – £229,999

Radio and Television

Graham Norton

Weekly show on Radio 2
BBC TV fee for a range of programmes and series£600,000 – £609,999

Jeremy Vine

Daily show on Radio 2
c.60 episodes of Eggheads£440,000 – £449,999

Claudia Winkleman

Weekly show on Radio 2
BBC TV fee for a range of programmes and series£370,000 – £379,999

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BBC Annual Report and Accounts 2017/18

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Senior executives
Every quarter, we disclose exact salaries, expenses, gifts and hospitality for all senior leaders in the BBC’s public services. Under theterms of our Charter, we are required to publish a report from the Remuneration Committee listing all senior executives of the BBC paid
more than £150,000 from licence fee revenue in the financial year, set out in pay bands. These figures exclude any recharges or amounts
paid from our commercial entities.
Pay

Name

Role

Tony Hall

Director-General

Ken MacQuarrie

Director, Nations and Regions

Fran Unsworth

Director, News and Current Affairs£290,000 – £299,999

James Purnell

Director, Radio and Education£300,000 – £309,999

Valerie Hughes-D’Aeth

Group HR Director

Matthew Postgate

Chief Technology and Product Officer£330,000 – £339,999

Charlotte Moore

Director, BBC Content£430,000 – £439,999

Anne Bulford

Deputy Director-General

Rhona Burns

Finance and Operations Director, Radio and Education

Tim Cavanagh

Director, Corporate Real Estate

Pipa Doubtfire

Head of Revenue Management

Peter Farrell

Head of Legal

Claire PaulHR Director, Leadership, Development and New Talent

John Shield

Director, Communications

Charlie Villar

Former Director, Corporate Finance Tax and Treasury

Gautam Rangarajan

Director, StrategyPeter Ranyard

Head of Corporate Legal

Clare Sumner

Director, Policy

Gillian Taylor

HR Director, Reward

Rachel Currie

HR Director, Content, Radio and Education

David Jordan

Director, Editorial Policy and Standards

Noel Scotford

HR, Programme Manager

Shirley CameronGroup Financial Controller

Anna Gronmark

HR Director, DDG GroupJoe Godwin

Director, BBC Academy

Dale Haddon

HR Director, News and Employee Relations£200,000 – £209,999

Balram Veliath

Director, Quality Risk and Assurance£240,000 – £249,999

Sarah JonesGroup General Counsel£320,000 – £329,999

Bal Samra

Group Commercial Director

Richard Cooper

Controller, Digital Distribution

Matt Grest

Director, Platform

Andrew Kaczor

Finance and Operations Director

Mike Ford

Programme Director

Sarah Hayes

Director, BBC Archives

Gary Payne

Chief Information Security Officer

Jatin Aythora

Chief Architect

Chris Condron

Director, Product and Systems, North and Nations

Andy Baker

Director, Engineering Operations

Kieran Clifton

Director, Distribution and Business Development

Andy Conroy

Controller, Research and Development

Colin Burns

Chief Design Officer

Stuart Page

Director, Product and Systems, Commercial and Corporate

Neelay Patel

Director, Product and Systems, TV and Radio

Robin Pembrooke

Director, Product and Systems, News

Director-General£450,000 – £459,999
Executive Committee£240,000 – £249,999

Corporate functions£150,000 – £159,999£160,000 – £169,999£170,000 – £179,999£180,000 – £189,999£190,000 – £199,999

Design and Engineering£150,000 – £159,999£160,000 – £169,999£170,000 – £179,999£180,000 – £189,999£190,000 – £199,999£200,000 – £209,999

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105

PAY D I S C L O S U R E S

Pay

Name

Role

£150,000 – £159,999

Justin Bairamian

Director, BBC Creative£160,000 – £169,999

Nick North

Director, Audiences£180,000 – £189,999

Charlotte Lock

Director, Marketing and Audiences, Content, Radio and Education£210,000 – £219,999

Philip AlmondDirector, Marketing and Audiences£150,000 – £159,999

Peter Johnston

Director, BBC Northern Ireland£160,000 – £169,999

David Holdsworth

Controller, English Regions

Rhodri Talfan Davies

Director, BBC Wales£170,000 – £179,999

Donalda MacKinnon

Director, BBC Scotland£240,000 – £249,999

Ian Haythornthwaite

Chief Operating Officer, Nations and Regions

David Brindley

Head of Popular Factual

Clare Sillery

Head of Commissioning, Documentaries

Philip Bernie

Head of TV Sport

Tessa Finch

Head of Development Television, Content

Rose Garnett

Director, BBC Films

Cassian Harrison

Channel Editor, BBC Four

Elizabeth Kilgarriff

Commissioning Editor, Drama

Tom McDonald

Head of Commissioning, Factual

Lucy Richer

Commissioning Editor, Drama

Richard Dawkins

Chief Operating Officer

Kate Phillips

Controller, Entertainment Commissioning

Patrick Holland

Controller, BBC Two

Alison Kirkham

Controller, Factual Commissioning

Dan McGolpin

Controller, Programming and Daytime

Barbara Slater

Director, BBC Sport

Shane Allen

Controller, Comedy Commissioning

Damian Kavanagh

Controller, BBC Three

Piers Wenger

Controller, Drama Commissioning

Gavin Allen

Controller, Daily News Programming

Jamie Angus

Director, World Service Group

Joanna Carr

Head of Current Affairs

James Gray

Deputy Head of Current Affairs

Fiona Campbell

Controller, BBC News, Mobile and Online

Mary Hockaday

Controller, World Service English

Jonathan Munro

Head of Newsgathering£180,000 – £189,999

Alan Dickson

Chief Financial and Operating Officer£190,000 – £199,999

Adrian Van Klaveren

Head of Strategic Change, BBC News

Isabel Begg

Head of Commercial and Business Development

Helen Bullough

Head of Content Production

Mark Friend

Controller, Radio and Music Multiplatform

Cheryl Taylor

Controller, CBBC

£170,000 – £179,999

Alan DaveyController, Radio 3, BBC Proms and Performing Groups£190,000 – £199,999

Ben Cooper

Controller, Radio 1, 1Xtra and Asian Network

Alice Webb

Director, Children’s

Gwyneth Williams

Controller, Radio 4 and Radio 4 Extra£210,000 – £219,999

Graham Ellis

Controller, Production£270,000 – £279,999

Bob Shennan

Director, Radio and Music£160,000 – £169,999

Keith Blackmore

Managing Editor£280,000 – £289,999

James Harding

Director, News and Current Affairs

Marketing and Audiences

Nations and Regions

Content£150,000 – £159,999£160,000 – £169,999£170,000 – £179,999£190,000 – £199,999£200,000 – £209,999£210,000 – £219,999£240,000 – £249,999
News and Current Affairs£150,000 – £159,999£160,000 – £169,999

Radio and Education£150,000 – £159,999£160,000 – £169,999

Former staff

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BBC Annual Report and Accounts 2017/18

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G OV E R N A N C E

Independent Assurance Report to theBoard of the British Broadcasting
Corporation, acknowledging that
Parliament also places reliance on
the Group Accounts and Report
I have conducted independent assurance
procedures on the disclosures includedin the British Broadcasting Corporation(BBC) Annual Report arising from therequirement under the Royal Charter forthe continuance of the BBC (the Royal
Charter) to publish the names of allsenior executives of the BBC paid morethan £150,000 from licence fee revenue
in that financial year; and the names ofall other staff of the BBC paid more than£150,000 from licence fee revenue inthat financial year set out in pay bands
for the year-ended 31 March 2018. These
disclosures are set out on pages 101 to
106 of the BBC’s Annual Report (the“subject matter”) (“Pay Disclosures”).

In conducting this work, my staff andI have complied with the Financial
Reporting Council’s Revised EthicalStandard 2016. I am independent of
the BBC in accordance with the ethicalrequirements that are relevant to myassurance engagement. My staff and I havefulfilled our other ethical responsibilities
in accordance with these requirements.

My work is conducted in accordance with
International Standards on Assurance
Engagements (ISAE) 3000 Assurance
Engagements Other Than Audits or
Reviews of Historic Financial Information.

—— Understanding the process adopted by
the BBC to derive the Pay Disclosures,in particular the completeness andaccuracy of information used;

Respective responsibilities of the
BBC Board and the Comptroller and
Auditor General
For the reporting year covered by thisreport, the BBC Board was responsible
for publishing information requiredby the Royal Charter as follows:

My approach
I have performed a reasonable assurance
engagement as defined in ISAE 3000.
A reasonable assurance engagement isto perform such procedures as to obtain
information and explanations which
I consider necessary to express an opinion
on whether, in all material respects, thePay Disclosures are complete and accurate
and haves been properly prepared inaccordance with the basis set out therein.

OpinionBased on the results of my procedures,in my opinion, in all material respects the
Pay Disclosures are complete and accurate
and have been properly prepared inaccordance with the basis set out therein.

My work consisted of:—— Testing the completeness of the Pay
Disclosures, including:

Sir Amyas CE Morse KCB
Comptroller and Auditor General
National Audit Office157-197 Buckingham Palace Road
London SW1W 9SP
21 June 2018—— cross-reference to statutory audit
procedures relating to payroll
and expenditure;—— comparison to the prior year andour understanding of the BBC; and—— the names of all senior executives of
the BBC paid more than £150,000 fromlicence fee revenue in that financial
year; and—— review of individuals paid in thesubsequent month who have been
paid close to the disclosure
threshold in 2017/18.

—— the names of all other staff of the BBC
paid more than £150,000 from licencefee revenue in that financial year set
out in pay bands for the year-ended
31 March 2018.

—— Agreement of staff disclosure to
payroll data or, where staff are not paid
via BBC payroll, agreement of spendback to other BBC systems;

I am responsible for providing an opinion
on whether, in all material respects,
the Pay Disclosures are complete andaccurate and has been properly prepared inaccordance with the basis set out therein.

Inherent limitations
My assurance procedures have been
designed to provide reasonable assurance.
The objective of a reasonable assurance
engagement is to reduce engagement
risk to an acceptably low level in thecircumstances of the engagement as thebasis for a positive form of expressionof my conclusion. It does not, however,
eliminate this risk entirely. In particular,
in preparing the Pay Disclosures,the BBC Board is required to make anumber of judgements which inherently
introduces an element of risk.

—— Agreement of the spend per individual
paid more than £150,000 of licencefee revenue into the appropriatesalary banding;—— Recalculation of the volume ofindividuals included within each
£10,000 band; and—— Review of the accompanying
commentary for reasonableness andclarity around the basis of disclosure.

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BBC Annual Report and Accounts 2017/18

107

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Nominations Committee Report
Board appointments
Under the 2016 Charter, the Nominations
Committee of the Board is responsible for
executive appointments and non-executive
appointments to the Board, with the
exception of the Chairman and the nations’members. The current Board was appointed
under the transitional arrangements forappointments set out in the Charter.

In addition to its responsibility fornominating appointments to the Board,
the Committee is also responsible
for nominating members to the subcommittees of the Board, and its maincommercial subsidiaries. The Nominations
Committee also considers and reviews
the independence of Board members,
including any conflicts of interest, andensures compliance with the Board Codeof Practice. It assesses the composition of
the Board and its associated committees
in terms of the balance of skills andexperience required, and to develop
a succession planning strategy.

The Nominations Committee consistsof the Chairman, Sir David Clementi,
Simon Burke, the senior independent
director, Sir Nicholas Serota andAshley Steel who are all non-executive
members of the Board. The DirectorGeneral is also a member.

This year the Nominations Committee
has met twice formally and its work
has focused on appointing membersof the Board to its associated subcommittees, as required by the Charter.

Sir David Clementi
Chairman
21 June 2018

Board committee attendance

Number of meetings forthe period

Editorial
Nominations Remuneration Guidelines &Committee
Committee
Standards

Audit and Risk
Committee

Fair Trading
Committee

Ordinary

MemberMemberMemberMember

11

5

2

2

7

Board

Nations
Committee– England

Nations
Committee– Scotland

Nations
Nations
Committee Committee– Wales– N. Ireland

MemberMemberMemberMemberMember

2

1

1

1

2

Non-executives
David Clementi

11

Simon Burke

9

Tanni Grey-Thompson

10

Ian Hargreaves

11

Tom Ilube

11

Steve Morrison

11

Nicholas Serota

11

Ashley Steel10

Elan Closs Stephens

7/7

2
5

1
7

2
5

2

2
2
2

2

1

2

7
1

4

1

7

1
2

2

1

2

1

2

Executives
Tony Hall

11

Anne Bulford

11

Tim Davie

11

Ken MacQuarrie

10

2

2
2
1

1

1

2

This table does not include business conducted offline and update meetings where no formal business was considered.

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G OV E R N A N C E

Audit and Risk Committee Report
Audit and Risk Committee
Chair’s Statement
I am pleased to present this, thefirst report of the Audit and Risk
Committee of the BBC’s new Board.
Our key tasks this year included:—

overseeing the transition of thestatutory audit of the BBC from EY
to the National Audit Office (NAO);—

ensuring that the work of theCommittee is geared to therequirements of the new Charter;—

bedding in the new Committee andarranging for the proper inductionof new members;—building on the work of the former
Executive Audit Committee in
improving our risk management
processes; and—continuing the good progress inassurance activity and clear-up
of internal audit actions.

We had five meetings during the year, eachof which was attended by executives asappropriate, including, at each meeting,the Director-General and Deputy DirectorGeneral. We also held private meetings with
the NAO on each occasion. I believe that wehave built a positive and open relationshipwith the NAO and it is working well.

0 Return to contents

Much of our work remains the same as it
was under the previous Charter, but there
are also some changes. For example, theCommittee has considered in detail theapplication of regularity to the BBC’s
activities. This seeks to ensure that theBBC’s resources have been utilised tomeet the intended purposes as set out
in the Charter, Framework Agreement
and other agreements with Government.
We took assurances on this frommanagement and also undertook a review
to confirm that a suitable framework ofcontrols exists to ensure that the BBC
keeps within the regularity rules.
We routinely take a close interest in
significant projects and their governance.
During this year, a number of key
projects concluded successfully, whilst
others were commenced or re-based.
A major project re-based this year was
the proposed redevelopment of the
EastEnders set in Elstree, which continues
to be monitored by the Board and theCommittee. The BBC now has a wellestablished project management office
and we meet with them periodically toreview the governance of major projects.
We also consider material issues whicharise outside the normal course of theBBC’s activities. We have been engaged
with several matters related to pay,
especially equal pay and the historic
application of IR35 tax rules. The latter
is a particularly complex issue and we
expect to be closely involved as the BBC
works its way through to resolving it.

We have spent much time overseeing
the improvement of risk management,in particular putting in place a moredetailed picture of risk, clearly linked
to the Corporation’s main objectives,
and with metrics and measures being
developed to provide the Board withmore in-depth data on the handling,
mitigation and residual level of key risks.
We continue to pay close attention to thefindings from assurance activity, and issues
raised are closely monitored to ensurecompletion within agreed timescales. This
reflects how seriously the disciplines ofaudit and assurance are taken within theBBC, something entirely appropriate forthe handling of licence fee payers’ money.
I am ably supported by my fellow
Committee members, who have quickly
got to grips with the work we do, and by ahighly professional risk and assurance team.
Although the BBC faces many challenges
as it reshapes itself for the digital world anda rapidly changing media market, I believethat we have the controls and assurance
systems to ensure, as far as possible, thatlicence fee payers’ money is well spentand the risk of financial loss is minimised.

Simon Burke
Chair
21 June 2018

BBC Annual Report and Accounts 2017/18

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Audit and Risk Committee
ReportRole
The main purpose of the Audit andRisk Committee (ARC) is to review andmaintain oversight of the BBC’s corporate
governance, particularly with respect tofinancial reporting, internal control andrisk management. In order to gain thisassurance, the ARC has responsibility for:—reviewing and overseeing theeffectiveness of the BBC’s internal
control and risk management
processes;—

providing oversight of the key risksfacing the BBC and the actions being
taken to mitigate those risks to an
acceptable level;—

reviewing and challenging, where
necessary, the actions and judgementsof management in relation to the BBC’s
Annual Report and Accounts andrelated formal statements;

—

—

—

—

—

110

overseeing and directing the workof the BBC’s Internal Audit function,
meeting with the Director of Quality,
Risk and Assurance privately to discuss
issues as necessary;giving due consideration to
Parliament’s expectations of the
management of BBC resources, as
expressed in reports of the Public
Accounts Committee and Valuefor Money reports by the National
Audit Office;reviewing the external auditors’
proposed audit scope and strategy,
ensuring no unjustified restrictions
or limitations are made;reviewing the auditors’ quality control
procedures and steps taken by theauditor to respond to changes inregulatory and other requirements;
meeting separately with the external
auditors to discuss any matters theCommittee or the auditors believe
should be discussed privately;

BBC Annual Report and Accounts 2017/18—

considering the independence of theexternal auditor;—

overseeing regularity considerations,
including compliance with the BBC’s
Framework of Authorities;—

reviewing the BBC’s systems for thedetection and prevention of fraud,
bribery and money laundering; and—reviewing arrangements by which staffof the company may, in confidence,
raise concerns about possible
improprieties in matters of financial
reporting, illegality or other matters.

The ARC’s Standing Orders set out
in more detail our responsibilities.
These were approved by the BBC
Board in June 2017 and will be
reviewed regularly by the Committee.
They can be read on our website:
bbc.co.uk/aboutthebbc/insidethebbc
Membership
The ARC comprises three nonexecutive directors, of whom one musthave recent and relevant financial
experience. The members who
served during the past year are:

The Committee also meets privately,
without any member of management
present, with both Internal Audit andthe auditors, on a regular basis.
Meetings
The Committee met five times
during 2017/18, at key times in thereporting and audit calendar.
Minutes from the meetings are madeavailable to the Board and summary
minutes are published on the BBC website:
bbc.co.uk/aboutthebbc/insidethebbc.
Additionally the Chairman of theCommittee reports back to the Board after
each meeting on any issues where action or
improvement is required. The Committee
also provides views on the integrity of thefinancial statements before the Annual
Report is approved by the Board as a whole.
Committee time was spent on thefollowing areas in the past year.
Integrity of financial reporting
The Committee reviewed theintegrity of the financial statementsof the BBC. In doing so it:—

identified, through discussion withboth management and the external
auditor, the key risks of misstatement
within the BBC’s financial statements,
including those areas where significant
financial judgements were required
and which have influenced thefinancial statements;—

discussed these risks with the auditor
as part of the agreement of theexternal auditor’s audit plan and also
at the conclusion of the audit of thefinancial statements;—

reviewed and challenged detailed
papers received from managementon those areas requiring significant
financial judgement, taking accountof the views of the auditor.

Simon Burke (Chair)
Tom Ilube
Ashley Steel
Simon Burke, the Committee chairman, hassignificant, recent and relevant financial
experience. In addition, all of the membersof the Committee are individuals who holdor have held senior positions in similar sizedorganisations and have the experience andskills to properly fulfil their responsibilities.
When appropriate, the skills andexperiences of members are augmented
with advice from internal and external
professionals – for example on matterssuch as developments in financial reporting.
Committee meetings are also attended
by the Director-General, the Deputy
Director-General, the BBC’s LegalCounsel, the Director of Quality, Risk andAssurance and senior representatives
from Internal Audit, Risk Management,
Finance and the National Audit Office,as the BBC’s statutory auditors.

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G OV E R N A N C E

Set out below are the key areas of judgement and how the Committee has addressed them:
Area of judgement

Pension scheme – assumptions impacting the accounting pension deficit
The financial statements include a significant deficit on the balance sheetof £510.2 million for the BBC’s defined benefit pension scheme.
Judgements are required regarding the underlying assumptions used by theactuaries in calculating the pension deficit. Changes in these assumptions
can result in large swings in the final numbers disclosed.

Property – accounting treatment of BBC buildings and New Broadcasting
House refinancing
The BBC holds a significant property portfolio, which continues to berationalised in order to reduce costs. The estate includes properties
held under freehold and those held under finance and operating leases.
Buildings which have been sub-let or available for sub-let may be classified
as investment properties. Judgements relate to the future intentions
for any vacant buildings and the related timescales. This can change
the appropriate accounting treatment and affect the carrying value on
the balance sheet. During the prior year, refinancing took place of theunderlying Broadcasting House lease structure, including an option tosecure re-acquisition of the underlying freehold by the BBC. Through thetransaction, the BBC eliminated inflation volatility and achieved a cash
flow benefit through to 2033. The transaction required a series of new
accounting entries (including accounting for the derivative assets andliabilities arising from the transactions). The derivative assets and liabilities
are subject to sensitivities in market data in addition to an adjustment
to the discount rate to take account of risk. As a result, net liabilities of£98.3 million have been recognised in relation to this arrangement. The
transaction was implemented in a manner that limited any increase in the
BBC’s credit exposure to the derivative counter-parties involved.

The Committee’s response

The Committee took advice from independent actuaries on theappropriateness of the assumptions used, including how these comparewith those used by other organisations. Scrutiny focused in particular on theassumptions used regarding discount rates, inflation rates and mortality/
life expectancy and how changes in these assumptions would affect thefinancial statements, including any movements in these from prior years.
The Committee was satisfied that the assumptions used in the financial
statements were reasonable, appropriate to the BBC and supported byindependent actuarial specialists.
The Committee reviewed reports from management, which explained
the treatment for the most significant buildings, including the projected
timescales for future activity and rationale for treatment. It also
considered the auditors’ views on the accounting treatment for thesebuildings. The detailed treatment of the transaction continued to bemonitored throughout the year. The Committee was satisfied thatthe treatment of these properties within the financial statements wasconsistent with management intention and in line with international
financial reporting standards.

The special purpose vehicle established to redevelop Broadcasting House,
Daunus Limited, is accounted for as a joint venture following an assessmentof control. The BBC’s interest in the entity is at cost, and no indicators of
impairment have been identified.
Capital projects
The BBC undertakes multiple capital projects at any one time, which
contribute to the overall strategy of the BBC. An assessment over theappropriateness of capitalisation, along with the valuation of any capitalised
asset, is required.

Reports from management were reviewed, which explained the status ofmajor capital projects and the approach taken to assess whether or not
any impairment charge was required. The Committee was satisfied that theassessments of impairment undertaken by management were appropriate
and in line with international financial reporting standards.

If a material capital project cannot be completed on time, or will not derive
future benefit to the BBC, this could trigger an impairment charge.
Revenue recognition
There is an inherent financial risk around revenue recognition relating totiming of recognition of revenue. The nature of the risk varies between
the licence fee revenue in the public service and the commercial income.
Licence fee revenue is treated as an amount due from the relevant
Government department, principally the DCMS, on the basis that amounts
receivable from licence fee payers will be paid across.

The Committee considers that the BBC’s existing financial control systems
should ensure that income is properly treated in the financial statements.
There is confidence that management understand the risks in this area andhave suitable controls in place.

Employment provisions and contingent liabilities
The financial statements include provisions of £17.3 million as part of theBBC’s programme of restructuring. Judgements in this area are largely
related to the timing of recognition of these provisions, the amount to berecognised and the amount which has been utilised in previous years.

The Committee received reports on employment-related matters which
could result in the recognition of potential liabilities before subsequently
reviewing and discussing the level of provisions with management. This
included consideration of new provisions and any release and utilisationof existing provisions. Management confirmed that they have applieda consistent approach to the identification, recognition and release ofprovisions across the BBC group. The Committee concluded it was
satisfied with the level of provisions carried and the disclosure in respectof those provisions.

A number of other employment-related provisions exist in instanceswhere the BBC has a present obligation as a result of a past event that isprobable and can be reliably measured. The BBC also recognises a numberof contingent liabilities relating to the same matter. A contingent liability isrecognised where there is uncertainty regarding the probability, timing or
amount of any present obligation.

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G OV E R N A N C EManagement confirmed to the Committeethat they were not aware of any
material misstatements or immaterial
misstatements made intentionally toachieve a particular presentation. The
auditors reported any misstatements thatthey had found in the course of their workand that no material amounts remain
unadjusted. The Committee can confirm
that it is satisfied that the external auditors
have fulfilled their responsibilities withdiligence and professional scepticism.
After reviewing the presentations andreports from management and consulting
where necessary with the external auditors,
the Committee is satisfied that the financial
statements appropriately address thecritical judgements and key estimates(both in respect to the amounts reported
and the disclosures). The Committee
is also satisfied that the significant
assumptions used for determining
the value of assets and liabilities
have been appropriately scrutinised,challenged and are sufficiently robust.
The Committee reviewed the groupfinancial statements and how theseare positioned within the wider Annual
Report. To assist this review, reports frommanagement and from the internal andexternal auditors were considered, covering:—the quality and acceptability ofaccounting policies, including theircompliance with accounting standards;—

compliance with legal and regulatory
requirements;—

the clarity of disclosures and theircompliance with relevant reporting
requirements;—

whether the Annual Report as a wholeis fair, balanced and understandable
and provides the informationnecessary to assess the BBC’s
performance and strategy.

Effectiveness of internal controls andrisk management framework
Internal controls assurance
The Committee reviewed the effectivenessof the system of internal controls, taking
account of the findings from internaland external audit reports and otherassurance activity, considering a numberof specific areas during the year:
—

—

112

the trends and themes from Internal
Audit activity, questioning
representatives of Internal Audit on
the outcomes of their work. A summaryof every internal audit, including key
findings and assurance rating, wasreviewed by the Committee;
actions arising from independent
assurance activity, including internaland external audit and NAO Value for
BBC Annual Report and Accounts 2017/18

Money reviews are monitored by theCommittee for completion. This is anarea followed up at every meeting toensure that agreed actions in respectof any weaknesses found are being
properly addressed;—

for areas which are considered highprofile or have received criticalassurance findings, the Committee
ensures there is suitable follow up andscrutiny over the completion of any
improvement plans or agreed actions;—the Committee approved the BBC’s
Modern Slavery statement andreviewed the approach forensuring compliance;—

regular whistleblowing reports andupdates on levels of fraud and theft,along with the mechanisms in place
to minimise and prevent these; and—the findings and progress of actions
from the audits of BBC commercial
subsidiaries were considered. The
CFO of BBC Worldwide and the COO
of BBC Studios attended to provide
assurance on the control environment
and management of risk in thesesubsidiaries.

Risk management
The Committee considered the processes
for managing significant risks within
the BBC. This work is influenced by
the assessment of the BBC’s principal
risks (as set out at page 113). Thereis a regular Committee agenda item
where changes to the risk profile arereviewed and the effectiveness of therisk management process is assessed.
The Committee focused significantly thisyear on making improvements to the BBC’s
overall management of risk, introducing
greater detail into risk reporting andensuring that mitigations and actions arealigned to the key strategic and operational
objectives of the Corporation. Greateruse of risk metrics and measures will
enable the Committee to review risk at
a more detailed level in the coming year.
Effectiveness of Internal Audit
The work of Internal Audit is overseenby the Committee. This is a regular
item at each meeting which the Headof Internal Audit also attends. During
the year the Committee has:—approved the plan of work for the
coming year, ensuring that it is risk
based and strikes a balance between
providing assurance over core businessprocesses and areas of emerging
strategic risk;—

considered the findings from audit
activity, focusing on audits with
unsatisfactory outcomes andmanagement’s plans to addressthese; and—considered the resource requirements
for Internal Audit and its capability.

The Committee continues to monitor
the structure of the Internal Audit
function and the operation of the current
resourcing model, with a proportion ofaudits provided by an external partner.
The Committee is satisfied that thisarrangement is functioning well.
The ARC Chairman also meets with the
Director of Quality, Risk and Assurance
before each Audit Committee meeting,without management present, to provide
the opportunity for open discussions.
Independence and effectiveness of
our external auditors
Appointment of our external auditors
Under the 2016 Charter andAgreement, the NAO are appointed
the BBC’s statutory auditor for theduration of the Charter period.
Relationship with external auditors
The Committee oversaw the relationshipwith the NAO, including the scope ofand approach to their work. Specificareas of focus this year have included:—

audit risk identification and alignmentof this with management risk
assessment;—

understanding of the elementsof the audit process, including therequirements expected of the BBC
under the regularity opinion andpropriety considerations; and—private discussions with the auditors
without management present.

Non-audit services
As one of the safeguards over the
independence of the external auditors, theCommittee has developed, and oversees,
the BBC’s policy on the commissioning of
the auditors to provide non-audit services.
This policy defines the types of services
which the external auditors can and cannot
provide. Additionally it includes thresholds
above which any proposed non-audit
work to be carried out by the external
auditors must be approved in advance by
the ARC. It also defines when work mustbe submitted for competitive tender.
The NAO have not undertaken any
additional non-audit work during theyear. The NAO is not considered for work
which might compromise its ability togive independent opinion on the BBC’s
financial statements. Recruitment fromthe NAO into any senior management
position in the BBC would require
the prior approval of the ARC.

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Risks and Opportunities
Risks and opportunities affect the ability of the
BBC to fulfil its Charter obligations and public
purposes. Our approach to risk needs to reflect
the unique nature of the BBC.

Our approach to risk management
In a rapidly changing media environment, the BBC must be able to confidently manage
both strategic and operational risks, ensuring that it can continue to deliver our public
purposes and value to all audiences. We must also take seriously our regulatory andstatutory responsibilities. Just as taking risk is core to fulfilling our purposes andstrategic ambitions, rigorous risk assessment and mitigation is the foundation ofdelivering what we do.
The BBC acknowledges the challenges of audience needs, as well as the opportunities
this offers over the coming years. Throughout the Corporation, careful considerationof risks and opportunities contributes to the quality of our programmes, theexcellence of the service we provide and our ability to serve our audiences.
Evolving our risk management approach
During 2017/18 we strengthened our risk management processes, undertaking adetailed refresh of our strategic risks. For each of our strategic priorities we confirmed
the key risks to their successful delivery, as well as the events that might cause themand the mitigating activities in place. In addition, we took a fresh look at operationalrisk to ensure that we were focusing on those risks that could have the greatest
impact on the BBC, should they materialise, again identifying potential causes andmitigations. We also introduced risk metrics against the key risks, to provide better
insight into how those risks are managed, and to support improved risk-based
decision-making across the BBC.
These improvements provide a platform to further evolve our risk management
approach during 2018/19. A key area of focus will be ensuring the availability of
reliable data for all of the defined metrics, the delivery of which is linked to a numberof strategic projects. Other areas for development include: defining our tolerance for
specific risks more formally to support the ongoing monitoring of risk management
effectiveness through the various governance bodies within the BBC; and revisiting thecriteria by which we assess the likelihood and impact of key risks, and the adequacy of
our risk preparedness.

-----------

Our principal strategic and operational risks and opportunities are set out overleaf.

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Key to risk movement:
anticipated movement inrisk over the next 12 months

A Risk increasing> No risk movement
V Risk decreasing
Public purposes






1

To provide impartial news andinformation to help people
understand and engage withthe world around them2

To support learning for peopleof all ages

3

To show the most creative,
highest quality and distinctive
output and services

4

To reflect, represent and serve
the diverse communities of all of
the UK’s nations and regions and,in doing so, support the creative
economy across the UK5

To reflect the UK, its culture andvalues to the world

BBC Annual Report and Accounts 2017/18

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G OV E R N A N C E

Strategic risks and opportunities

Note: Strategic risks and opportunities are mapped to the Public Purposes (1-5) below.
Principal risks and opportunities

1. Making sure everyone gets value from the BBC
There is a risk that, as consumer behaviours change and online
business models develop, the BBC does not continue to provide
high-quality and relevant content and services to all licence fee
payers. There is also a risk that, in adapting to these challenges,
audiences on traditional platforms are not maintained. We may
also not meet the needs of underserved audiences, including
youth, Nations and Regions and BAME.


1

2

3

4

5

>

2. World class creativity
Competition from other broadcasters for content and talentcontinues to increase; in an external environment of cost
inflation, there is a risk that we do not secure the best quality
content supply. There is also a risk that we do not achieveauthentic diversity in programme content and on-air talent,or that this is not balanced with our commitment to deliver
impartial reporting.


2

3

4

5

A

3. Global reachOur ambition to grow global reach may be impacted by theincreasingly challenging market environment (with more choicefor users and consumption turning to social media), especiallywhere there is an over-reliance on news updates (rather thananalysis and original journalism). There is a risk that content
developed by BBC Studios is not globally appealing, or that
Worldwide does not obtain distribution rights. The reliance ofWorld Service on syndication creates a risk that audiences don’t
attribute content to the BBC.

Key mitigations– Additional investment in content for children, with a multiplatform offer andincreased focus on digital.
– Continual focus on ensuring that we maintain a range of high-quality content acrossall genres.
– Ongoing initiatives focusing on user experience for our online products, both for those
who are familiar with new technology and those who are not.
– Focus on the next generation and diversity to help ensure that the BBC continues tomeet the needs of all our audiences, with new, diverse audience panels established toget closer to our under-represented audience groups.
– Focus on Nations and Regions, including the planned launch of a new dedicated TV
channel in Scotland and existing dedicated cross-genre content centres for drama
production in Glasgow, Cardiff, Belfast, Salford, Bristol, Birmingham and London.
– Audience metrics monitored, including reach, time spent with the BBC, audiencedemographics and audience feedback, to drive informed decision-making.
– Regular review of audience objectives, performance and trends at Executive
Committee and Board meetings.
– Next Generation Committee and Diversity Steering Group in place, focused on
meeting the needs of underserved audiences.
– Focus on digital investment to address competition and deliver greater
personalisation, including the introduction of sign in.
– Challenging on and off-air diversity targets in place to drive a variety of voices acrossthe BBC.
– Merger of BBC Studios and BBC Worldwide brings content and sales together, better
positioning us to manage programme supply in a changing marketplace.
– Focus on investing in a broad range of genres and content.
– Focus on attracting and retaining the best creative talent, supported by a marketcompetitive reward strategy.
– On-air talent and programme diversity targets in place, with improved measurement
tools.
– Well-established editorial policy, with extensive monitoring and Executive
Committee and Board review of exceptions.
– Processes in place to ensure compliance with Ofcom regulatory requirements, also
supported by reporting and monitoring.
– Ongoing focus on editorial plans to ensure competitive programming.
– New Government-funded investment in the BBC World Service, allowing us toenhance existing services and to launch new services (including new territories).
– Investment in marketing and in technical innovation to improve audience andperformance measurement.
– Greater attribution of content to the BBC (by audiences) to be addressed throughimproved branding and distinctive content.
– Organisational focus on digital (especially owned), over third party, syndicated TV.

 v
1

3

5

4. Financial stability
There is a risk that we do not effectively manage and/or offset
the increasing cost of procuring intellectual property and rights,
in an increasingly competitive environment, with rising content
prices and increasing rights scarcity requiring new ways ofworking and a focus on cost management. A rise in licence fee
evasion, or increased cost of collection, would put our financial
model under stress. There is a risk that the BBC’s commercial
entities under-perform, or fail to respond to market challenges,
reducing financial returns. Adverse changes to the actuarial
valuation of the pension scheme represent a risk. A reduction in
the BBC’s credit rating would increase the cost of funding.


1

2

3

4

5

>

5. Making the BBC an even greater place to work
The extent of operational, organisational and cultural change
in progress creates a risk that the organisation is placed undersignificant strain. There is a risk that we are not able to retain
employees in key areas due to pay challenges. Failure to meet
our diversity and inclusion targets could demoralise employees.
Should these risks arise, we may suffer a loss of key talent and/or an increase in staff turnover, an increased risk of grievances
and the threat of industrial action.

 A
4

114

– Multi-year savings targets are defined, underpinned by detailed plans, with outer
years in progress. 94% of controllable spend covered by benchmarking (meeting
Compete or Compare criteria).
– Licence fee to increase in line with inflation until 2021/22. Cost of collection closely
monitored, with actions in progress to reduce evasion rates.
– Merger of BBC Studios and BBC Worldwide will enable us to better compete with themarket and to improve commercial performance.
– Clarity on pension costs through to the next valuation in 2019, and plans in place toeliminate the deficit and make the scheme self-sufficient by 2028.
– Annual going concern and viability reviews to assess ongoing financial stability.

5

BBC Annual Report and Accounts 2017/18– Ways of Working group ensures that business change is implemented in a consistent,
coordinated way. Extensive staff communications, with engagement monitored
through focus groups and biennial employee survey.
– Clear diversity targets in place, with regular reporting to the Board. Centre of
Excellence for diverse talent established and Diversity Commissioning Code ofPractice implemented to ensure shared values and commitments.
– Significant Board attention to equal pay and gender pay gap challenges, with acommitment to close the gender pay gap by 2020 and new pay principles introduced.
– Clearer career structures provided through the introduction of the BBC Career
Path Framework.
– Terms and conditions reviewed and modernised together with the Joint Unions.

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Operational risks and opportunities
Principal risks and opportunities

1. Health, safety and security
There is a risk that we fail to meet our corporate responsibility to protect
staff and visitors to the BBC at home and abroad, resulting in threatsor harm, or that security measures are breached resulting in loss ofassets or disruption to services. The risk of terrorist-related incidents isrising, driving the overall increase to this risk. Failure to protect children,or other vulnerable people, on BBC premises, or participating in BBC
activities, would result in reputational damage and a loss of trust. Healthand safety failures may also result in loss of life or limb, fines or otherenforcement actions.

A
2. Business management and change
Failure to deliver savings targets, an increase in licence fee evasion orcommercial subsidiaries not delivering expected returns could impact
overall financial performance. This, in turn, may prevent the achievement of
our strategic ambitions. There is a risk that our critical projects don’t deliver
expected benefits in support of our strategy, or that they are not deliveredon time, on budget and to quality requirements. Inappropriate supplierselection, inadequate contracts or poor supplier management may prevent
us achieving value for money. Disruption may be extended if appropriate
continuity plans are not in place or recovery priorities not defined. Assets
may be lost as a result of theft and loss or poor control systems, which may
also result in reputational damage.

>
3. Compliance
Regulatory compliance failures could result in reputational damage, lossof trust, legal action, fines or other penalties. This includes compliancewith Ofcom regulations, contractual provisions and laws governing thefreedom of information, data protection, tax, equal opportunities, etc. The
implementation of the General Data Protection Regulation (GDPR) in May
2018 brings greater compliance requirements and higher penalties forbreaches, driving the overall increase in this risk.
A breakdown of editorial compliance may also result in reputational damage
and loss of trust in the BBC, and could give rise to legal exposure.

Key mitigations– Specialised training in place for staff on high-risk deployments (and their
managers) and each deployment subject to thorough risk assessment.
– Child protection controls include mandatory background checks foranyone working with children, supported by mandatory training andpolicies and compliance monitoring.
– Ongoing security reviews for BBC premises and outside broadcasts,
and close links in place with UK security authorities and cross-sector
security forums.
– Health and Safety risk assessment process in place, supported by training
and safety monitoring audits. All reported incidents investigated to
identify any corrective action required.
– Detailed plans underpin savings targets and actions in progress to reduce
licence fee evasion. Merger of BBC Studios and BBC Worldwide supports
financial performance.
– Ongoing progress monitoring of critical projects by the ProjectManagement Office, with status reported to the Board, including
confidence in delivery of benefits. Integrated assurance plans in place
for major projects.
– Procurement monitor spend to ensure that supplier contracts are inplace, and to assess the adequacy of supplier management to deliver
value for money.
– Business continuity plans and crisis management processes in place, withregular exercises performed.
– Detailed fraud risk assessment completed, with scope including risks ofbribery, asset misappropriation, conflicts of interest, expenses, payroll,procurement and payment processes.
– Policies in place, aligned with legal and regulatory requirements,
supported by training, advice from subject matter experts, and detailed
monitoring and reporting.
– GDPR compliance managed through a dedicated project office.
– Established editorial policy in place, with review in progress to ensure it
remains fit for purpose.
– New Ofcom reporting processes implemented in 2017/18, withcomplaints monitored, regular reporting to the Director-General andExecutive Committee, and monthly Board reporting. Specialist teams inplace to support compliance.

A
4. Technology
Failure to maintain resilient systems, or the lack of adequate recovery
plans, could cause service disruption. The risk of cyber-crime is increasing
both in volume and severity, with threats evolving and becoming more
complex, driving the overall increase in this risk. At the same time, ourdigital activities and reliance on data is growing. An external or internalcyber-attack may result in disruption to services. A breach of customer
data would impact our reputation and customers’ trust in the BBC, andcould result in regulatory enforcement action, including significant fines.
Failure to adequately train our employees and to raise awareness across theorganisation would increase this risk.

– Single points of failure identified and actions taken as appropriate.
Recovery plans in place and tested. Outages and adherence to recovery
time objectives closely monitored to ensure minimal disruption tobroadcast services.
– Extensive policies and procedures in place to prevent/detect cyberthreats and liaison with the National Centre for Cyber Security to provide
cyber risk intelligence.
– Updated, mandatory Data Protection & Cyber Security training rolled out.

A
Note: The risks listed do not comprise all those associated with the BBC and the numerical referencing does not denote an order of priority. Additional risks and uncertainties notpresently known to management, or currently deemed to be less material, may also have an adverse effect on the Corporation. These less material risks are kept in view in case theirlikelihood or impact should show signs of increasing.

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Risk management and internal
control framework
The BBC’s process for identifying,evaluating and managing significant
risks is aligned with the Financial
Reporting Council’s Guidance on
Risk Management, Internal Control
and Related Financial and Business
Reporting. Risk management mechanisms
are embedded within each division,
with central coordination to identify,
escalate and manage pan-BBC risks.
Assessing the effectiveness of risk
management and internal control
The Board used a number of mechanisms
to help it assess the effectiveness ofthe system of risk management andinternal control across the BBC:
Risk oversight: The Board delegatedresponsibility for the specific review of risk
and control processes to the Audit and Risk
Committee. The Audit and Risk Committee
met regularly to provide scrutiny andoversight over the effectiveness of controls
and the management of risks (further
information is provided on page 109).

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BBC Annual Report and Accounts 2017/18

Internal Audit: The Internal Audit function
maintained its independent reporting
line into the Chair of the Audit and Risk
Committee and conducted a programme ofaudits aligned to the principal risks facing
the BBC. Findings from these audits havebeen reported to senior management
and the Audit and Risk Committee, withremediating actions tracked to completion.
External Audits: The findings of external
audit work performed by the National
Audit Office have been reviewed by
the Audit and Risk Committee, and any
recommended actions are tracked tocompletion. In addition, the National
Audit Office continued its programmeof Value For Money audits.
Whistle-blowing: A protected disclosure
policy is in place, supported by a‘whistle-blowing’ hotline, administeredby an independent external company
to ensure anonymity. The Senior
Independent Director was namedon the policy as the contact for theraising of the most serious concerns.

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Viability Statement
In accordance with provision C2.2 ofthe 2014 revision of the UK Corporate
Governance Code, the BBC Board
has assessed the prospects of the
Corporation over a longer period than
the 12 months required by the ‘going
concern’ provision. On an annual
basis, the BBC Board considers arolling three-year plan for the BBC.
The latest three-year plan, covering theperiod to 31 March 2021, was consideredby the BBC Board in March 2018. A threeyear horizon is considered appropriate
as this is in line with the BBC’s budgetingand planning process. The three-yearplan considers cash flows as well as thefinancial covenants and credit facilities.
Key assumptions underpinning the threeyear plan, and the associated cash flow
forecast, are the licence fee settlementthat set the financial parameters for the
BBC from 2017/18 to 2021/22 and our2015 document British Bold Creativethat set out the BBC’s vision, strategic
aims and its offer to the public.

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A robust assessment of the principal risksfacing the Corporation, as described in the
Annual Report and Accounts from page
109, has been undertaken, including thosethat would threaten its business model,
future performance, solvency or liquidity.
Sensitivity analysis is applied to the cash
flow to model the potential effects should
principal risks actually occur, individually orin unison. The peak borrowing requirement
was calculated by modelling a combinationof severe but plausible risks, howeverwith the inclusion of mitigations, the cash
flows remained within the borrowing
limit throughout the three-year period.
Taking account of the BBC group’s
current position, principal risks and theaforementioned sensitivity analysis, theBoard has a reasonable expectationthat the Corporation will be able tocontinue in operation and meet its
liabilities as they fall due over thethree-year period of the assessment.

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Editorial Guidelines andStandards Committee Report
Membership and remit of the Editorial
Guidelines and Standards Committee
The Editorial Guidelines and Standards
Committee (EGSC) is responsible fordeveloping, and ensuring compliancewith, the BBC’s Editorial Guidelines.
The EGSC comprises three non-executive
directors and one executive director: Ian
Hargreaves (chair), Tanni Grey-Thompson,
Nicholas Serota and Tony Hall. The
EGSC meetings are also attended by
the Director, Editorial Standards as the
Principal Adviser to the Committee.

BBC complaints 2017/18:

Ofcom:
Editorial complaints
within remit: 140
Number of complaints
upheld: 0

Stage 2, Editorial complaints:
405, 75% answered on time

Responsibilities of the EGSC include:—

overseeing the development of,and compliance with, the BBC’s
Editorial Guidelines—

ensuring that the BBC complies
with its complaints framework—

reviewing findings and directions
from Ofcom with regard to editorial
matters, and compliance with the
Ofcom Broadcasting CodeOne of the first tasks of the Committee
was to oversee the publication of the
new Complaints Framework. This cameinto effect on 3 October 2017, following
a public consultation. Under the newframework, the majority of complaints
at Stage 1 and Stage 2 of the complaints
process have been handled within thestated timeframe: 10 days for Stage 1
complaints; 20 days for standard Stage
2 complaints and 35 days for complex
Stage 2 complaints. Where response
times have fallen below the targets set
by the Board, the reasons are reported
to the Board. The ‘BBC First’ process,as set out in the Agreement, is working
as planned. The BBC has, at Ofcom’s
request, been publishing on a fortnightly
basis details of complaints which number
over 100 and fall under the remit of the
Broadcasting Code. These bulletins are
published at: http://www.bbc.co.uk/
complaints/comp-reports/reports-archive/.
In addition, responses to significant
complaints, and the findings of the
Executive Complaints Unit (ECU –Stage 2 of the complaints framework)
are published on the BBC Complaints
site: http://www.bbc.co.uk/complaints/.
Another key function of the EGSC thisyear has been to ensure that the BBC
fulfils the requirement in the Agreement
to “set, publish, review periodically, andobserve guidelines designed to secure
appropriate standards in the context of118

BBC Annual Report and Accounts 2017/18

Stage 1, Editorial andgeneral complaints:
223,500, 96% answered on time

the UK Public Service”. The Committee hascommissioned BBC Editorial Policy to revise
the current Editorial Guidelines. This is a
substantial piece of work and is ongoing.
Editorial complaints and lessons learned
As in previous years, the overwhelming
majority of the BBC’s content compliedwith the demanding standards set by theBBC’s Editorial Guidelines. However, thefollowing serious breaches of standards in
BBC output were noted by the Committee:
Reggie Yates: Hidden Australia – Black in
the Outback
BBC Three, January 2017
This portrayal of an aboriginal community
in Australia included a sequence whichgave the misleading impression that a wake
following a funeral was in fact a drunken
party. In view of this breach of the Editorial
Guidelines on accuracy and misleadingaudiences, action was taken against the
Independent Production company, Sundog
Pictures, and other material delivered bythis company to the BBC was re-examined.
One of these programmes was found not tohave complied with the Editorial Guidelines,
and was removed from BBC Store.
Breakfast ShowBBC Radio Leeds, 21 May 2017
The programme included a competition
to guess the name of Moors murderer Ian
Brady (who had died recently), througha series of musical clues, including
Suffer Little Children and Psycho Killer.

The BBC issued an apology for the offensive
content, and the relevant material was
removed from BBC iPlayer and Facebook.
BBC Soir
BBC Afrique, 31 January 2018
A statement on behalf of BBC Afrique
employees, about their industrial
dispute with BBC management, wasread out on air, in breach of the Editorial
Guidelines on impartiality and conflictof interest. Editorial Policy was asked
to provide bespoke training to prevent
any further breaches of this kind.
BBC Asian Network Reports
In a live interview about a trial, thereporter inadvertently used a victim’s
real name, rather than a pseudonym,
contrary to Sexual Offence legislation.
Action was taken swiftly to prevent thereport being available on BBC iPlayer
and legal advice was followed.
In addition to these breaches, the Executive
Complaints Unit found a total of 41
breaches of editorial standards in thisfinancial year (including nine cases in which
the issue of complaint had been resolved byaction taken by the relevant division before
the complaint was escalated to the ECU).
These have been reported to the EGSC,
together with information on action taken.

Ian Hargreaves CBE
Chair
21 June 2018

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Nations Committee Reports
Wales

ScotlandDuring the year, I was privileged to become
Chair of the new Wales Committee. Its remit
is to ensure that the BBC provides output
and services that meet the needs of Wales.

I am pleased to be Chair of the Board’s
Scotland Committee. The Committee
met for the first time last September in
Glasgow, where we discussed a rangeof business including the proposed
new Scotland Channel. We also spentsome time discussing differing audienceviews and attitudes in Scotland andwere joined by a number of audience
members for a feedback session.

The Committee mirrors the new Unitary
Board with a mix of non-executive andexecutive members. I was joined by
non-executive Director Ian Hargreaves,the Director of Nations and Regions Ken
MacQuarrie and the Director of BBC Wales,
Rhodri Talfan Davies. Other executive
staff and external experts attended forindividual items and audience members
discussed their views of the BBC.
It has been a very good year for BBC Wales
which recorded its highest audiences forboth factual and drama series in morethan a decade. This follows the supportof the Director-General for increased
investment. The Committee discussed
the investment plans for the next three
years, the strategic choices facing
Radio Wales and the BBC’s partnershipwith S4C. Providing for a linguisticallychanging nation on radio, TV and online
remained a live issue. The successful
drama Keeping Faith was an example ofwork originally broadcast in Welsh on
S4C, then on BBC One Wales in English
which subsequently performed strongly
UK-wide on iPlayer. The Committee also
welcomed the choice offered to listeners
by the new Radio Cymru 2 service.
The Committee looked at the impactsof the Ofcom ‘Out of London’ Quotas
on network production in Wales andnoted an update on BBC Wales’s brandnew broadcast centre at Central Square,
Cardiff – expected to be operational in
Q4 2019. The Committee also noted
both diversity and news as areas for alonger discussion in the year ahead.

My fellow Committee members are BBC
Chairman David Clementi, Ken MacQuarrie(Director, Nations and Regions) and
Donalda MacKinnon (Director, Scotland).
It’s been a great year for Scottish content.
The award-winning drama Shetland
returned and The Forest took viewers into
the heart of the Galloway Forest. BBC
Scotland comedy continued to perform
extremely well, with Mrs Brown’s Boys
pulling in record audiences, returningwith a record 57% audience share Still
Game, and Two Doors Down continuing
to entertain millions. BBC Scotland’s
The Social showcased the work andtalents of young people from acrossScotland, with highlights including
Kilted Yoga, which has reached a global
audience of over 64 million viewers.

And our partnership with MG ALBA will
see BBC ALBA reach a landmark 10th
anniversary in September. I visited BBC
Inverness during the year and watched
the Gaelic language drama, Bannan,being filmed for BBC ALBA on Skye.
Next year will see the launch of the new
Scotland Channel, which has now received
provisional approval from Ofcom. I am
confident that it will provide Scottish
audiences with a fresh perspective acrossa range of content genres, and will also
showcase the best of BBC Scotland content
to network audiences. Over the courseof the next year the Scotland Committee
looks forward to considering the content
and launch plans for the Scotland
Channel and celebrating its launch.
Further information on the BBC’s spend
and financial performance in Scotland canbe found on pages 46-47 and 155-158of this report.

Steve Morrison
Chair, Scotland Committee
21 June 2018

As Radio Scotland prepares to celebrate
its 40th birthday in November, I was
reminded just how crucial the services arefor audiences, provided by Radio Scotland
and Radio nan Gaidheal during coverage of
the Beast from the East – Scotland’s firstever red weather warning due to snow.

Further information on the BBC’s
performance in Wales can be found on
pages 44-45 and 151-154 of this report.

Elan Closs Stephens CBE
Chair, Wales Committee
21 June 2018

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Northern Ireland

EnglandI have been pleased to Chair the
Board’s Northern Ireland Committee
during the last year, as we await theappointment of a Nations member for
Northern Ireland to the BBC Board.

I am pleased to be taking on the role of
Chair of the England Nation Committee
and thank Ken MacQuarrie, the BBC’s
Director of Nations and Regions, forchairing the Committee in the first yearof its existence. The year has been acritical time for establishing the roleof all the Nation Committees andensuring each meets the requirements
as set out in the Royal Charter.

The BBC has provided comprehensive
reportage on the politics of Northern
Ireland throughout the year. As weset out on page 48-49 of this Annual
Report, BBC users in Northern Ireland
are amongst the highest consumers of
BBC News across all platforms. A corerole of the Northern Ireland Committee
is to monitor the performance of the
BBC for these audiences, and also toensure we are delivering our mission
and public purposes on their behalf.
During the year, I have been joined on theCommittee by non-executive members
David Clementi and Elan Closs Stephens,and executive members Anne Bulford(Deputy Director-General) and Peter
Johnston (Director, Northern Ireland).
The Committee holds its meetings in
Belfast and met twice during the year.
In both our meetings we have been
joined by audience members to hearfrom them about how the BBC isperforming – these sessions have beenchallenging, open and very informative.
They have helped to guide and focus thework of the BBC in Northern Ireland.
During our meetings, we also focusedon the audience profile and strong
local provision in Northern Ireland, tounderstand the issues that are pertinent
to our audiences there. Local radio,
for example, is a particular strength inNorthern Ireland, where Radio Ulster
is one of the top performing radio
stations in the BBC’s portfolio. We also
noted the proposals to refurbish Belfast
Broadcasting House, which have been
approved by the Board, and discussed thesuccessful partnership in place between
the BBC and Northern Ireland Screen.
Further information on the BBC’s spend
and financial performance in Northern
Ireland can be found on pages 48-49 and159-162 of this report. In the coming year,
we look forward to continuing to deepen
the BBC’s relationship with audiences
and stakeholders in and will continue tohold the BBC to account for performanceagainst the targets we have set ourselves
and the delivery of our public purposes.

In the past year, I have been joined on theCommittee by non-executive member
Tom Ilube and executive directors Ken
MacQuarrie, Director, Nations andRegions, Alice Webb, Director, North,
Joe Godwin, Director, Midlands, Pat
Connor, Director, South West and David
Holdsworth, Controller, English Regions.
An important part of the Committee’s role
is to assess how well the BBC is meeting
audience needs in the regions of England.
To help achieve this, the Committee met inBristol where we discussed audience data,
received reports from the BBC regional
leaders and met with representatives of ouraudience across the local area. More detailsof the BBC’s achievements in England canbe found on pages 50-51 and 163-166 of
this report. Notable is the commitment
made by Director-General Tony Hall toprovide extra investment to local radio
and news to help bring communities
together and to recognise the importanceour audience places on localism.
Also, as the non-executive director for
England, in 2017 I personally led audience
discussions at employer sites in Bristol,
Bath and Newcastle and at schools inSomerset. I also met with BBC staff in
Salford, Newcastle, Birmingham, Bristol,
Cambridge, Coventry and London.
The Committee has agreed to hold our
future meetings around the regions,with Leeds, Leicester and the South
East planned for 2018. At each meeting
we will meet audiences in a variety oflocations, be these, for example, placesof work, schools or community centres.

Dr Ashley Steel
Chair, England Committee
21 June 2018

Ken MacQuarrie
Chair, Northern Ireland Committee
21 June 2018

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Fair Trading Report
Fair Trading Committee
Chairman’s statement
The last year has been a year of transition
for the BBC, with the establishmentof a new Charter and a new regulatory
framework. This has resulted in changes
to the BBC’s established approach toFair Trading issues, which govern theseparation between the Public Service
and the commercial activities of the
Corporation. Under these new rules, we
now have in place a new Fair Trading
Committee of the Board and, as Chair ofthat Committee, I’m pleased to present
this first Fair Trading report on our work.
As a public service broadcaster, funded by
the licence fee, the BBC has a responsibility
to ensure that it trades fairly and pays
regard to the impact of its activities on
the wider market. The new framework andoversight processes the BBC has put inplace to oversee this are derived from therequirements set out by Ofcom, under theirtrading and separation rules. These rules
have evolved throughout the last year andwe continue to engage closely with Ofcomon the application of their framework.
The rules and frameworks establishedby the BBC continue to be as important
as ever, not least as the corporation
continues to expand and develop its
Commercial activities, for example
through the creation of the newly merged
BBC Studios. The Board has set up the
Fair Trading Committee to oversee thetrading and separation rules and to ensurecompliance with Ofcom’s criteria.
During the past year, the Committee
has been establishing its core roleand developing productive working
relationships with both Ofcom and theNAO. The membership of the Committee
is strong, with a broad set of skills andexperiences amongst the group. The workof the Committee is supported by central
policy, regulatory, legal and finance teams,
who advise both the Committee and wider
organisation on issues and areas where
focus is required. It was encouraging thisyear to hear, from our Fair Trading auditors,
that a strong culture of advice and referral
exists within the BBC, acting as a control
to ensure that any potential concerns areacted on early within policy development.

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Another core requirement of theCommittee has been to review, approveand oversee the trading and separation
arrangements for each of the BBC’scommercial subsidiaries. We have looked
closely at the group trading manuals foreach subsidiary (which sets out clearly
what services are traded between thecommercial subsidiary and the public
service, and how prices for these services
are calculated) and approved these forpublication. We have also debated andapproved the reporting of transparent
and detailed financial informationon the subsidiaries to Ofcom – wewelcome the continued discussion weare having with them on this reporting,and the positive relationship we aredeveloping between our organisations.
Throughout the year the Committee has
also taken regular management reports
on trading and separation issues, andwe continue to monitor the training
programme that is in place for all staff
likely to encounter Fair Trading issues.
Lastly, we were pleased to receive thisyear’s Fair Trading audit, conducted by
Deloitte, and to see that it has in place
good processes to achieve compliancewith our requirements, as at the endof the financial year. This is a welcome
achievement at the end of a year when theframework has been in flux. In the coming
year, the audit will cover the full year, toassess how these processes are bedding in.
I am looking forward to developing thework of the Committee over the next year,
particularly as the BBC faces increasing
competitive challenges from fast-paced
markets, both at home and abroad.

Tom Ilube CBE
Chair
21 June 2018

Membership and remit of the Fair
Trading Committee
The Fair Trading Committee (FTC) has
been established by the Board as a means
to monitor and assure the appropriate
separation between the BBC’s public
service and commercial activities, inline with the relevant frameworks forcommercial activities, as set by Ofcom.
The Committee has been establishedvoluntarily by the Board, in recognitionof the importance the BBC places ontransparency and commercial efficiency inthe operation of its commercial subsidiaries.
The key function of the FTC is tooversee the BBC’s compliance with ourregulatory obligations for trading andseparation between the public service
and the commercial subsidiaries. The FTC
comprises four non-executive directors:
Tom Ilube (Chair), Elan Closs Stephens, Ian
Hargreaves and Steve Morrison. The FTC
meetings are also attended by the Deputy
Director-General, Director of Policy andthe Head of Regulation and Economics.
Three Committee meetings were held
during the year, with papers also approved
offline where necessary. See page 108
for the Committee attendance table.
Responsibilities of the FTC include:—considering reports on the extent towhich the activities of the BBC areconsistent with Ofcom’s trading andseparation requirements;—

keeping under review the BBC’s
compliance with Ofcom’s trading andseparation regulatory requirements;—

commissioning the annual independent
audit of compliance controls;—considering and approving for
publication the BBC’s transfer pricing
methodologies; and—ensuring that the BBC’s transfer
pricing methodologies arereviewed regularly.

This has been the first year in which
the BBC has operated under therequirements of Ofcom’s Operating
Framework, which regulates the BBC’sinteraction with the market boththrough its Public Service activities andthose of its commercial arm. Ofcom
initially published its new requirements
in March 2017, and issued further
requirements in July and October 2017.

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The framework requires the BBC toensure that:—

all commercial activities areundertaken by commercial subsidiaries;—

any subsidiaries must haveoperational separation from the
Public Service BBC;—that it provides goods and services tocommercial subsidiaries on arm’s
length commercial terms;—

that subsidiaries achieve a commercial
rate of return; and—that it ensures appropriate
transparency, monitoring andreporting on the activities ofthe subsidiaries.

As part of the compliance framework thepolicy team manages a targeted training
programme for staff likely to encounter
Fair Trading issues. As a result of the
new regulatory framework, this training
programme has been comprehensively
reviewed and relaunched. The Fair Trading
Committee has overseen these processes
and monitored compliance with them.
The Committee is also briefed on relevant
regulatory and Fair Trading complaints
received and handled by the BBC. Detailsof these are reported elsewhere in the
Annual Report on page 123, though theCommittee noted that no specific Fair
Trading complaints were received in the year.
To support the framework, and to assure
the BBC’s approach to regularity and theuse of public funds, the BBC continues tobe subject to annual audit by independent
auditors and separately has been accreditedwith the ISO 9001:2008 quality standard.
The auditor’s report is set out below.
Having received reports from relevant
senior management, and having considered
the findings of the Fair Trading Audit,
the Fair Trading Committee is satisfied
that the BBC has sufficient policies andprocess in place, and all commercial
services have met the above criteria forthe period 1 April 2017 to 31 March 2018.

INDEPENDENT FAIR TRADING
AUDITORS’ REPORT TO THE BBC FOR
THE YEAR ENDED 31 MARCH 2018
We have audited, in our role as theBBC’s fair trading auditors, the system
of internal controls established within
the BBC to provide the BBC withreasonable assurance that it has compliedwith Ofcom’s Trading and Separation
requirements as at 31 March 2018.
Our instructions for this engagement,
including the scope of work to beundertaken, were agreed with the BBC’s
Fair Trading Committee (FTC), a subcommittee of the BBC Board. These
instructions include agreement that our
audit should be conducted in accordancewith International Standard on Assurance
Engagements (ISAE) 3000, agreementon the limit of our liability in respect of
this work and agreement that our dutyof care in respect of this work is solely to
the BBC. We are satisfied that the agreed
scope of our audit was sufficient to enable
us to express the opinion set out below.
Respective responsibilities of BBC Boardand fair trading auditors
The Board has a duty to ensure complianceby the BBC with its obligations under the
Ofcom Operating Framework, including the
Trading and Separation requirements. As
part of discharging this duty, the Board has
charged the Fair Trading Committee withoversight of this area, including identifying
and assessing risks that could threaten fairtrading between the BBC public service andits commercial subsidiaries and designingand implementing responses to such risks.
As the BBC’s fair trading auditors, it is
our responsibility to form an independentview, based on our audit work, as to theextent to which the BBC has established,
and applied, a system of internal controls
which provide reasonable assurance thatit has complied with Ofcom’s Trading and
Separation requirements as at 31 March2018. We have reviewed specific decisions
reached by the BBC on such fair trading
issues only in so far as is necessary
to form an opinion on the applicationof the system of internal controls.
Our opinion has been prepared for andonly for the BBC in accordance with our
instructions which were agreed with the
FTC on behalf of the BBC. We do not,in giving this opinion, accept or assume
responsibility for any other purpose or
to any person other than those within
the BBC to whom this report is shownor in to whose hands it may come, andno other person shall be entitled to rely
on our opinion, save where expressly
agreed by our prior consent in writing.

Our approach
We have performed a reasonableassurance engagement as defined in
ISAE 3000. The objective of a reasonableassurance engagement is to perform
such procedures as to obtain informationand explanations which we consider
necessary in order to provide us with
sufficient appropriate evidence to express
a conclusion on the BBC’s compliancewith Ofcom’s Trading and Separation
requirements as at 31 March 2018.
Our work consisted of enquiry and testing
to enable us to form a view as to whether
an appropriate system of internal controls
was in place. We conducted a risk-based
analysis to identify those aspects of theBBC’s trading and separation control
regime that represents the most significant
risk, and focused our detailed testingon those areas. Individual cases wereselected from the BBC’s fair trading log forreview. In each case we examined written
records and interviewed relevant parties
to provide us with reasonable assurance
that the system of internal control had
been applied. Cases examined, and theareas of significant risk around which thework was focused, included examinationof transfer pricing and separation
arrangements, use of and payment for
the BBC brand, and the application of
the Royal Charter requirement that its
commercial activities do not, as a resultof their relationship with the UK PublicServices, non-service activities or trading
activities, distort the market or gain
an unfair competitive advantage. We
observed, through the course of our work,a culture of consultation and referral
in respect of fair trading matters.
Inherent limitations
As with any system of control, it is notpracticable to ensure that no errors or
irregularities have occurred without being
detected. Our audit work was designed
to give the FTC reasonable assurance as
to the adequacy of the system of internal
controls which was in place and being
applied to deliver compliance with Ofcom’s
Trading and Separation requirements as
at 31 March 2018. Further, because fairtrading issues require judgements which
ultimately might be tested in a court oflaw, competition authority or elsewhere,
there is always a risk of challenge even
where the system of internal controls
has been followed and decisions havebeen taken with the greatest care.
OpinionBased on the results of our procedures,in our opinion the BBC has establishedand has applied a system of internal
controls that provide reasonableassurance that it has complied with
Ofcom’s Trading and Separation
requirements as at 31 March 2018.

Deloitte LLP
London, UK
21 June 2018
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Regulatory Report
On 3 April 2017, regulation of the
BBC transferred from the BBC Trust
to Ofcom. Although some of Ofcom’s
new regulatory framework was
introduced before the start of 2017/18,
much of it has been published during
the past year. It has, therefore, beena year of understanding the new
regulations, developing frameworks
and embedding new policies.
Over the year we have engaged with
Ofcom on the development of the
Operating Framework. The framework
covers evaluating the BBC performance,
regulating the market impact of theBBC’s Public Service, how the BBC
conducts its commercial activities, anddistribution of the Public Service.
Operating Licence
Ofcom issued the first BBC Operating
Licence on 13 October 2017. The Operating
Licence replaces the previous BBC Trust
Service Licences, and sets regulatory
conditions for the UK Public Services
such as quotas for news and current
affairs, levels of original productions,
TV production in the nations andregions, and diversity. The majority of
the conditions did not come into force
until either 1 January or 1 April 2018.
Our new ‘BBC Diversity Commissioning
Code of Practice’ came into force on 1 April
2018, having been approved by Ofcom on
28 March 2018. The new Code is part of theBBC’s commitment to increase diversity
on and off air – across television, radio andonline – to reflect and represent today’s UK.

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Changes to the BBC’s UK Public Services
Under the Charter and Agreement, theBBC has to assess whether changes to UK
Public Services are material. If the changes
are material we are required to carry out
a Public Interest Test. We have described
how we do this in our published policy
on material changes to the BBC’s PublicService activities and commercial activities.
During 2017/18, we have conducted sevendetailed materiality assessments. Of
these, we decided six were not material:—

increased investment in Children’s
online content—

increased investment in Wales—

new investment in BBC Northern
Ireland to boost local content—

live streaming of niche sports—

BBC Ideas initiative—changes to the BBC iPlayer Radio and
BBC Music products

The proposed launch of the BBC Scotland
channel, as a new public service channel,
was a material change. The BBC therefore
conducted a Public Interest Test, which
the Board approved and submitted to
Ofcom for consideration in November
2017. On 20 April 2018, Ofcom published
its provisional decision to approve thelaunch of the new channel. It has said it
will publish its final decision by July 2018.

Changes to the BBC’s commercial
activities
Under the Charter and Agreement, theBBC has to assess whether changes to
its commercial activities are material.
During 2017, we assessed whether
the merger of BBC Studios and BBC
Worldwide was material. The BBC Board
concluded that whilst important for theBBC, this was not a material change.
However, given the BBC’s commitment toaccountability and transparency we havepublished some voluntary commitments
to provide reassurance around how
the new BBC Studios will work.
The BBC has also published its transfer
pricing and brand fee methodologies for
all internally traded goods and services, inline with Ofcom’s requirements on Trading
and Separation. Alongside this Annual
Report and Accounts we are publishingdetails of the financial performance of
the BBC’s commercial arm, meeting
another of Ofcom’s requirements.
Regulatory complaints
Under the Agreement between the BBC
and the Secretary of State, the BBC is
responsible for handling complaints,
in a BBC First approach. This year wehave received two complaints. In bothcases we found that there was no breachof any of the BBC’s obligations.

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Statement of Board
responsibilities in respectof the Annual Reportand Accounts
The Charter requires the BBC to prepare
an audited annual report and statementof accounts.
The Board has accepted its responsibility
for the preparation of a strategic report,
statements of compliance with applicable
codes and regulations (including the Board
remuneration report) and the statementof accounts which are intended by themto give a true and fair view of the stateof affairs of the BBC and its subsidiaries(the ‘Group’) and of the income andexpenditure for that period. The Board
has prepared the accounts in accordancewith International Financial ReportingStandards (IFRS’s) as adopted by the EU.
The Board must not approve the statementof accounts (or ‘financial statements’)unless it is satisfied that they give a trueand fair view of the assets, liabilities andfinancial position of the Group and of
the surplus or deficit for that period.
In preparing the financial statements theBoard has:—selected suitable accounting policies
and applied them consistently.

—

made judgements and estimates thatare reasonable and prudent.

—

stated whether they have been
prepared in accordance with IFRS as
adopted by the EU.

—

prepared the financial statements on
the going concern basis as they believethat the BBC will continue in business.

The Board is responsible for keeping
proper accounting records that are
sufficient to show and explain the BBC’stransactions and disclose with reasonableaccuracy at any time the financial positionof the Group and enable them to ensurethat the financial statements and the124

BBC Annual Report and Accounts 2017/18

Board remuneration report comply
with the Charter. It also has a general
responsibility for taking such steps as
are reasonably open to it to safeguard
the assets of the BBC and to prevent anddetect fraud and other irregularities.
The responsibilities of the Boardfor ensuring that the BBC exercises
rigorous stewardship of public money,
including responsibility for the propriety
and regularity of management of
the BBC’s resources, are set out
in article 16 of the Charter.
The Board is responsible for the
maintenance and integrity of the BBC’s
website. Legislation in the UK governing
the preparation and dissemination offinancial statements may differ fromlegislation in other jurisdictions.
The Board members who held officeat the date of approval of the Annual
Report and Accounts, whose names andfunctions are listed in the Governancesection of the Annual Report andAccounts, confirm that, to the best ofeach of their knowledge and belief:———

the financial statements, prepared inaccordance with IFRS as adopted by
the EU, give a true and fair view of theassets, liabilities, financial position anddeficit of the Group.
the Annual Report includes a fairreview of the development andperformance of the business and theposition of the Group, together with adescription of the principal risks anduncertainties that it faces.
the Annual Report, taken as a whole, isfair, balanced and understandable andprovides the information necessary forlicence fee payers to assess theGroup’s performance, business modeland strategy.

Statement of disclosure of information
to auditors
The Board members who held office atthe date of approval of the Annual Reportand Accounts confirm that, so far as they
are each aware, there is no relevant audit
information of which the BBC’s auditors
are unaware; and each Board member
has taken all the steps that they ought tohave taken as a Board member to makethemselves aware of any relevant audit
information and to establish that the BBC’s
auditors are aware of that information.
Going concern
The directors have prepared cash
flow forecasts for a period in excess
of a year from the date of approval ofthese financial statements, and havereviewed these forecasts, together withthe sensitivities and mitigating factors
in the context of available funds.
The directors are satisfied that the BBC
is well placed to manage the risks andhas adequate resources to continue inoperation for the foreseeable future.
As a result, the going concern basis
has been adopted in the preparationof the financial statements.
This statement was approved by the Board.

],v\J C[,~,,;··············~···················································

Sir David Clementi
Chairman
21 June 2018

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Performance against
public commitments
This section sets out our progress towards various
public commitments. These commitments comefrom the Charter, the Agreement, our Licenceobligations and commitments we have madeto deliver services for our audiences.

p.141

p.150

General Duties
The Board is responsible for ensuring the
BBC fulfils its mission and public purposes
as set out in the Charter.

Nations’ data packs
Detailed performance data by service
in Wales, Scotland, Northern Irelandand England.

BBC Media Editor Amol Rajan reporting outside
BBC New Broadcasting House, London

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Regulatory complianceThis section sets out the BBC’s performance against its commitments in the UK Public Services. The former BBC Trust Service
Licence Conditions ceased to have effect on 1 January 2018, when Ofcom’s Operating Licence came into force. However, in the interestof consistency and transparency we have reported against the Trust Service Licence Conditions for the full financial year. Most of theconditions in the Ofcom Operating Licence will first apply for either the 2018 Calendar Year or the 2018/19 Financial Year. We willreport against those conditions in next year’s Annual Report and Accounts. Some Ofcom Operating Licence Conditions are ongoing(i.e. not measured over any particular period) and we have continued to report against these below. The commitments are arranged
by public purpose.

Purpose One: To provide impartial news and information to help people understand andengage with the world around themNews and current affairs programmes
Hours of news on BBC One
Hours of news on BBC One in peak
Hours of current affairs on BBC One and BBC Two
Hours of current affairs on BBC One and BBC Two in peak
BBC One current affairs in peakNews at intervals throughout the day
CBBC
Hours of news
Hours of factual programming
News at intervals throughout the day
BBC Radio 1
News during the daytime
Hours of news in daytime each weekday, including two extended bulletins
Regular bulletins during daytime at weekends
BBC Radio 1Xtra
News during the daytime
Hours of news in daytime each weekday, including two extended bulletins
Regular bulletins in daytime at weekends
BBC Radio 2
News at intervals throughout the day
Weekly hours of news and current affairs, including regular news bulletins
BBC Radio 3
News at intervals throughout the day
BBC Radio 4
Hours of news and current affairs programmes
Daily reports of Parliamentary proceedings when Parliament is sitting
BBC Radio 5 live
% of output that is news coverage
Extensive coverage of local and general elections, and of elections to the United
Kingdom’s devolved chambers, as well as regular coverage of European and international
politics
BBC Radio 6 Music
Weekly hours of news
BBC Radio Asian Network
Hours of news and current affairs per week

Quota

2017/18

1,380
275
365
105
40

1,677
313
603
120
58

✓

✓

85
550

91
1,255

✓

✓

✓

✓

1 hour

1 hour 3 mins

✓

✓

✓

✓

1

1

✓

✓

✓

✓

17 (3 in peak) 18 (3.5 in peak)
✓

✓

2,500

3,334

✓

✓

c.75

76

✓

✓

6

6

24 hours 24 hour 4 mins

BBC News Channel
More international news than other main continuous news channel(s) in the UK
More local/regional news and perspectives than other main continuous news channel(s)in the UK
Sports news throughout the day, including evening round-up
Hours of sports news

✓

✓

100

291

BBC Parliament
Hours of programming (including repeats) from Brussels and Strasbourg

100

211

✓

✓

BBC Online
Provide adequate links to material provided by third parties

126

BBC Annual Report and Accounts 2017/18

✓

✓

✓

✓

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Purpose Two: To support learning for people of all ages
BBC OneHours of arts and music
Hours of religious programmes
BBC Two
Hours of arts and music
CBeebies
A range of content which supports pre-school children in their learning

Note

Commitment

2017/18

1

40
110

56
146

150

224

✓

✓

BBC Radio 1
Number of new documentaries

40

41

BBC Radio 1Xtra
Number of documentaries

40

42

1,100
100
130
170

1,130
122
153
201

BBC Radio 3
Number of new documentaries on arts and cultural topics (excluding repeats)

30

41

BBC Radio 4
Hours of original documentaries (excluding repeats)
Hours of original religious programming (excluding repeats)

350
200

388
226

BBC ALBA
Hours per week aimed at Gaelic language learners (originations only)

5

14

BBC Online
Deliver content which supports children and teenagers in their formal learning in allparts of the United Kingdom✓✓

BBC Radio 2
Hours of specialist music programmes
Hours of arts programming
Hours of new documentaries
Hours of religious output covering a broad range of faiths

Notes
1 BBC One and BBC Two shared.

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Purpose Three: To show the most creative, highest quality and distinctive output and services
Network Television
Note

Quota

2017/18

70
90
70
80
70
50
70
70
90
90

85
99.5
91
97
88
85
71
74
99
98

70
25

73
58

BBC Four
Hours of arts and music
Hours of new factual programming

150
60

224
93

CBBC
Hours of drama programming
Hours of news
Hours of factual programming

665
85
550

1,589
91
1,255

% of original production
BBC OneBBC One in peak
BBC Two
BBC Two in peak
BBC Four
BBC Four in peak
CBeebies
CBBC
BBC News Channel
BBC Parliament

1

BBC Three% of long-form content% of factual long-form

2

BBC One peak time repeats %BBC Two peak time repeats %

10

40

8

8.4
6.4

6

30

7.1
5.7

28.2

28.4

25.8

27.4

25.3

26.7

20

4.8
4

4.0
10

2
2011/12

128

31.1

6.6

2012/132013/142014/15

2015/16

BBC Annual Report and Accounts 2017/18

2016/172017/18

2011/122012/132013/142014/15

2015/162016/172017/18

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Network RadioNote

BBC Radio 1
Hours of specialist music per week
% of music from UK acts in daytime% of new music in daytime
Number of live events and festivals broadcast
Number of new sessions (excluding repeats)
Number of major social action campaigns
Play a broader range of music than comparable providers, taking into account both thenumber of plays and the size of the playlist, at both peak listening time and daytime
BBC Radio 1Xtra% of new music in daytime% of music from UK acts in daytime
BBC Radio 2% of music from UK acts in daytime% of new music in daytime
Hours of live music
Play a broader range of music than comparable providers, taking into account both thenumber of plays and the size of the playlist, at both peak listening time and daytime

Quota

2017/18

60
40
45
10
160
2

68
51
55
16
195
3

✓

✓

3
3

60
35

59.7
48

3
3

40
20
260

51
27
258

3
3

✓

✓

BBC Radio 3% of live or specially recorded music
Number of live or specially recorded performances
Number of new musical works commissioned (excluding repeats)
Number of new drama productions broadcast (excluding repeats)

40
400
20
25

54
837
35
28

BBC Radio 4
Hours of original drama and readings
Hours of original comedy (excluding repeats)

600
180

601
260

BBC Radio 4 Extra
Weekly hours of comedy
Weekly hours of drama% of Radio 4 catch-up programming

55
55
<15

62
67
11.5

30
400
6,500 (1,150)
300
10

32
415
6,624 (1,200)
300
10

50:50
30
30
10
10

50:42
30
32
7.4
11

Note

Commitment

2017/18

5

25

30.9

BBC Radio 6 Music% of new music
Hours of archive concert performances
Number of concert tracks or sessions from the BBC music archive (daytime)
Number of new sessions (excluding repeats and acquisitions)Average weekly hours of speech-based features, documentaries and essays
BBC Radio Asian Network
Proportion of speech to music daytime% of music from UK artists% of new music% of music from South Asia
Coverage of live events or festivals

3

4
4

BBC Online
BBC Online% of eligible content and services commissioned from external suppliers (by value)Notes
1 Original production includes all BBC commissioned programmes, including repeats.
2 BBC Three online commitments.
3 Data based on monitoring from 8 to 14 July 2017 (currently only one wave undertaken each year).
4 Data based on monitoring from 27 January to 2 February 2018 (currently only one wave undertaken each year).
5 Full year is an estimate based on the first three quarters of the year.

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Purpose Four: To reflect, represent and serve the diverse communities of all the United
Kingdom’s nations and regions and, in doing so, support the creative economy across theUnited Kingdom
Network Television
Note

Independent production quota% of hours of qualifying programmes across all channels% of hours of qualifying programmes on BBC One% of hours of qualifying programmes on BBC Two
Regional programme making% of spend on qualifying programmes% of hours of qualifying programmes
Network programmes made in the UK made outside the M25 area must constitutea suitable range of programmes

1

Regional programming
Hours of regional programming% of hours of programmes made in the relevant area
Hours of BBC One news
Hours of BBC One news in peak
Hours of non-news programming in peakAll non-news programmes adjacent to peak2

BBC One Scotland
Hours of news and current affairs
Hours of other (non-news) programming each year
Provide a range of genres in its programming that reflects Scotland’s culture
BBC One Wales
Hours of news and current affairs
Hours of other (non-news) programming each year
Provide a range of genres in its programming that reflects Wales’s culture
BBC One Northern Ireland
Hours of news and current affairs
Hours of other (non-news) programming each year
Provide a range of genres in its programming that reflects Northern Ireland’s culture

3

3

3

BBC Two Scotland
Hours of other (non-news) programming each year including Gaelic output
Provide a range of genres in its programming that reflects Scotland’s culture3

BBC Two Wales
Hours of other (non-news) programming each year
Provide a range of genres in its programming that reflects Wales’s culture3

BBC Two Northern Ireland
Hours of other (non-news) programming each year
Provide a range of genres in its programming that reflects Northern Ireland’s culture

3

BBC Parliament
Hours of proceedings of the Scottish Parliament, Northern Ireland Assembly andWelsh Assembly

Quota

2017/18

25
25
25

30.0
28.4
37.5

30
25

51
60

✓

✓

6,270
95
3,920
2,010
655
280

6,452
99.9
4,825
2,185
689
304

265
140

358
197

✓

✓

250
60

348
94

✓

✓

280
80

312
178

✓

✓

190

256

✓

✓

160

185

✓

✓

55

213

✓

✓

260

427

Quota

2017/18

40

45

Network RadioBBC Radio 3% of relevant spend incurred outside the M25

130

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Nations and Regional Services
Note

BBC Local Radio% of speech content in core hours (Monday-Friday, 6am-7pm)% of speech content at breakfast peak time
Average minimum weekly hours per station of original, locally made programming
BBC Radio Guernsey
BBC Radio Jersey
BBC Radio Somerset
Each BBC Local Radio station provides news and information of particular relevance tothe area and communities it serves at intervals throughout the day
Each BBC Local Radio station provides other content of particular relevance to the area
and communities it serves
BBC Radio Scotland
Weekly hours of radio news and current affairs
Hours of arts coverage (including narrative repeats of daily arts show)
Several regional opt-outs each weekday, offering news, sport and information, and someregional opt-out programming in the evening
Provide content and music of particular relevance to Scotland
BBC Radio nan Gàidheal
Provide news frequently across the day, particularly between 07:00 to 08:30 and 16:00 to
19:00 on Mondays to Fridays and 07:00 to 11:00 on Saturdays and Sundays
Provide content and music of particular relevance to Scotland
BBC ALBA
Weekly hours of originated programming (excluding news), including current affairs andtransfers from other BBC services
Live news programmes each weekday evening (including peak time) and news review atweekends

4

Quota

2017/18

60
100
95
80
80
70

67.3
100
109.9
89.8
88.5
91.4

✓

✓

✓

✓

50
200

59
483

✓

✓

✓

✓

✓

✓

✓

✓

c.5 hours 9 hours 14 min✓✓

BBC Radio Wales
Weekly hours of news and current affairs
Provide content and music of particular relevance to Wales

32

34

✓

✓

BBC Radio Cymru
Weekly hours of news and current affairs
Provide content and music of particular relevance to Wales

23

25

✓

✓

BBC Radio Ulster/BBC Radio Foyle
Weekly hours of news and current affairs on Radio Ulster
Weekly hours of news and current affairs on Radio Foyle
Hours of new comedy
Hours of indigenous minority language programming, including Ulster Scots and Irish
Content and music of particular relevance to Northern Ireland

35
20
20
220

41
22
24
288

✓

✓

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BBC Online
BBC Online
Provide news and information for the English regions
Provide dedicated coverage of sport for the English regions
Provide news and information for Scotland
Provide content in Gaelic
Provide dedicated coverage of sport for Scotland
Provide news and information for Wales
Provide content in Welsh
Provide dedicated coverage of sport for Wales
Provide news and information for Northern Ireland
Provide content in Irish and Ulster Scots
Provide dedicated coverage of sport for Northern Ireland

Quota

2017/18

✓

✓

✓

✓

✓

✓

✓

✓

✓

✓

✓

✓

✓

✓

✓

✓

✓

✓

✓

✓

✓

✓

Notes
1 The BBC is subject to a overall 25% independent production quota and both BBC One and BBC Two are subject to 25% individually.
2 These figures represent regional programmes across BBC One and BBC Two.
3 This output may include repeats and acquisitions.
4 Radio nan Gàidheal does not go on air at weekends until 09:05. Currently, there is news provision in mornings and afternoons on RnG on weekdays but there is no weekend
morning news offer.

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Annual Plan commitments
Under the Charter, the BBC is required to publish an Annual Plan. As part of the Annual Plan we made 129* public commitments aspart of making the BBC distinctive. These commitments in the main relate to specific events or outcomes on our services that occurred
over 2017/18.
PurposeAdditional BBC commitment

MeasureA mix of different genres
and output

BBC One will continue to broadcast a demonstrably broader range
of genres in peak time than any comparable channel

YES

A mix of different genres
and output

BBC One will continue to broadcast arts and music in peak this year,
including The Big Painting Challenge, Fake or Fortune and The Proms

YES

A mix of different genres
and output

BBC One will continue to broadcast more news in peak time thanany other comparable channel

YES

Creative ambition

As part of a programme of creative renewal, BBC One will continue
to launch new titles in daytime, re-commissioning those which
are successful

YES

Creative ambition

BBC One will broadcast a new Nations strand at 7.30pm called
Our Lives which will reflect diverse voices from across the country

YES

Creative ambition

BBC One will refresh its mix of new and returning dramas, including
a substantial number of new drama titles in peak time

YES

Range of audiences

BBC One will aim to be the channel that reaches the most 1634 year olds

YES – 52.3%

Range of audiences

BBC One will aim to reach more than half of BAME audienceseach week

YES – 52.9%

A mix of different genres
and output

BBC Two will broadcast at least 50 hours of arts and music inpeak time

YES – 81 hours

Creative ambition

BBC Two will innovate across genres, with six major series bringing
new factual entertainment formats, new factual forms andinnovative scripted pieces

YES

Range of audiences

As the third-largest broadcast channel in the UK for adults,
BBC Two will reach broad audiences with its distinctive mixof programming

YES – 45%

A mix of different genres
and output

At least 25% of BBC Three’s new long-form hours will be factual
content (including current affairs)

YES – 58%

A mix of different genres
and output

BBC Three will commission substantial scripted content – including
aiming to commission at least five long-form comedies, subject todelivery timing

YES – 9UK original output

More than 90% of long-form commissions will be UK originations

YES – 96%

Creative ambition

BBC Three will commission at least five Comedy Feeds (pilots forbreaking new comedy talent and made available on BBC iPlayer)

YES – 5

Range of audiences

BBC Three will aim to reach 5-10% of 16-34s a week (using a four
weekly average)

YES – 8%UK original output

BBC Four will broadcast at least 60 hours of originated factual
programmes this year

YES – 93 hours

Creative ambition

BBC Four will bring some of the very best of the world’s creativity to
UK audiences with at least three foreign acquisitions alongside theStoryville strand

YES – 3Creative ambition

BBC Four will also explore different shapes of programming –including super long-form and multi-episode short-form formats

YES

BBC ONE

BBC TWO

BBC THREEBBC FOUR*

11 of these commitments were made in correspondence with Ofcom on 10 August 2017.

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PurposeAdditional BBC commitment

MeasureA mix of different genres
and output

CBBC will broadcast a broader range of genres than otherchildren’s channels, including drama, news, factual and factual
entertainment programming

YES

A mix of different genres
and output

CBBC will increasingly deliver our public service content andinteractive experiences on digital platforms to reflect the way
children and young people are consuming media.

YES

CBBC

Creative ambition

See section 3.2 of the BBC Annual Plan 2017/18

YES

Range of audiences

Increase our content offer for UK teenagers, whilst retaining ourcore focus on younger children

YES

Range of audiences

Reflect the diversity of UK children to ensure everyone sees
themselves and their lives represented on screen

YES

A mix of different genres
and output

Offer a unique multi-genre mix of content for pre-school age
children, including drama and factual entertainment programming

YES

Creative ambition

See section 3.2 of the BBC Annual Plan 2017/18

YES

Range of audiences

Reflect the diversity of UK children to ensure everyone sees
themselves and their lives represented on screen

YES

A mix of different genres
and output

We will continue our commitment to daily in-depth sports news

YES

Creative ambition

The News channel will continue output that expands the rangeof the channel, like Victoria Derbyshire and Business Live

YES

Range of audiences

It will be the UK news channel with the biggest reach

YES

We will continue our commitment to cover European Parliamentary
institutions

YES

A mix of different genres
and output

Young audiences will be a focus for BBC ALBA in 2017/18

YES

A mix of different genres
and output

A new live-action pre-school series will be created and scheduled

YES

A mix of different genres
and output

A new comedy format will be piloted

YES

A mix of different genres
and output

Short-form content will be commissioned and scheduled within thelinear channel as well as on social media

YES

A mix of different genres
and output

A weekend news format will be developed for launch in autumn 2018 YES

UK original output

100 additional hours’ commitment through co-commissioning
and collaboration

This commitment is a
future aspiration linked tocommissioning for the new BBC
Scotland TV channel, which will
begin broadcasting in 2019.

Range of audiences

BBC ALBA seeks to offer a credible and relevant service to Gaelic
speakers, those learning the language and those interested in thelanguage and culture

YES

Range of audiences

BBC ALBA also seeks to create impact with mainstream audiences in YES
Scotland and the UK through factual, music and sports genres

CBEEBIES

BBC NEWS

BBC PARLIAMENT
A mix of different genres
and output
BBC ALBA

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Network Radio
PurposeAdditional BBC commitment

MeasureA mix of different genres
and output

Radio 1 will play a more distinctive mix of music than comparable
providers, with a daytime playlist that features a greater rangeof songs

Over 3,600 different songs wereplayed on Radio 1 across the day
in 2017, around three times as
many as on typical comparable
commercial stations. There
was limited overlap, with just a
third (33%) of Radio 1’s Top 500‘Most Played’ songs during theyear also appearing in the listof the most played songs on UK
commercial radio.

UK original output

Radio 1 will support the discovery and development of new andemerging UK artists, including through BBC Introducing and new
initiatives such as The Brit List

YES

Creative ambition

Radio 1 will continue its year-long campaign focused on mental
health issues

YES

Creative ambition

The Radio 1 Teen Awards will celebrate the achievements of some of YES
the UK’s most inspiring young people

Creative ambition

There will be coverage from a diverse mix of live events including
Creamfields, V Fest and Glastonbury

YES

Range of audiences

Radio 1 will maintain an editorial focus on its key audience oflisteners aged 15-29

YES

A mix of different genres
and output

1Xtra has commissioned a special selection of documentaries for
its 15th birthday

YES

UK original output

1Xtra will continue its commitment to supporting UK artists
in daytime

YES

Creative ambition

1Xtra will continue its commitment to new music in daytime,retaining its position as the home of new urban music

YES

Range of audiences

1Xtra will focus editorially on young and BAME audiences

YES

A mix of different genres
and output

Radio 2 will play a more distinctive mix of music than comparable
providers, with a daytime playlist which features a greater rangeof songs

We estimate around 10,000
different songs were featured
on Radio 2 across the day in2017, compared to around
1,200 on a typical comparable
commercial station. There waslimited overlap, with under athird (31%) of Radio 2’s Top 500‘Most Played’ songs during theyear also appeared in the list of
the most played songs on UK
commercial radio.

A mix of different genres
and output

Radio 2 will broadcast a broad mix of genres and programming,
including The Arts Show, 500 Words as well as specialist music
output from jazz, folk, blues and soul to the popular Sounds of the
80s on the Red Button

YES

UK original output

Radio 2 will act as a showcase for new and heritage UK artists aswell as BBC Introducing artists

YES

Creative ambition

Radio 2 will continue to be a champion of new and heritage artists,
with a variety of live events coverage such as Radio 2 in Hyde Park,
Glastonbury, Radio 2 Folk Awards and the Edinburgh Festival. It
will stage a special concert from Hull as part of the City of Culture
celebrations. It will introduce more live music into daytime with the
Piano Room as part of the Ken Bruce Show

YES

Range of audiences

Radio 2 will maintain its editorial focus on listeners aged over 35

YES

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PurposeAdditional BBC commitment

MeasureA mix of different genres
and output

Radio 3 will maintain its role in unique and challenging drama – theonly place on UK radio where audiences can consume full-length
stage plays of over two hours duration

YES

UK original output

Radio 3 will continue to promote new talent – whether through New
Generation Artists, New Generation Thinkers, BBC Introducing forclassical musicians and conductors or Ten Pieces III

YES

Creative ambition

Radio 3 will broadcast definitive seasons to accompany landmark
YES
moments, from the celebration of 450 years since Monteverdi’s birth
to Music of the Reformation and New Music Biennial from Hull. It
will also work in partnership with Wellcome and 6 Music on a Musicand Memory season

Creative ambition

The 2017 Proms will include pioneering new approaches to live
classical music with a special performance from Stage@TheDock in
Hull, the UK’s 2017 City of Culture. The season will also include thefirst ever Relaxed Prom from Cardiff in collaboration with the BBC
National Orchestra of Wales

YES

A mix of different genres
and output

Radio 4 will sustain its commitment to drama and comedy, and will
look to innovate in format and focus with new digital drama suchas Quake and Tracks. It will celebrate milestones such as 50 years
of Just a Minute

YES

Creative ambition

Radio 4 will continue to produce significant landmark content
to mark significant events and anniversaries such as the Russian
Revolution and the partition of India

YES

A mix of different genres
and output

Radio 4 Extra will continue its commitment to drama and comedy
as well as archive. It will evolve its drama and comedy offer witha focus on younger and changing audiences, from a new Podzone
for podcast content to an extension of NewsJack and the New
Comedy Awards

YES

RADIO 3

RADIO 4 and 4 EXTRA

RADIO 5 LIVE and 5 LIVE SPORTS EXTRA
A mix of different genres
and output

5 live and Sports Extra will broadcast a broader range of sport
than any comparable service, including a huge variety of sport in2018 from events such as the Winter Olympics and Paralympics,
Commonwealth Games and World Cup to regular season coverageof mainstream and specialist sports

YES

A mix of different genres
and output

5 live will showcase a range of seasons on news and current affairs,such as Brexit – One Year On, Trump – The First 6 Months

YES

UK original output

5 live will continue to be a showcase for voices from across the UK
through daily debate and regular outside broadcasts such as the
Marginal Mystery Tour for the UK elections

YES

Creative ambition

It will have regular seasons across the schedule on issues such as
mental health and cyber security

YES

Creative ambition

It will continue to innovate in its content mix with a range of new
podcasts on specialist sport as well as new news titles such as
Eye of The Storm and I Was There

YES

Range of audiences

5 live and Sports Extra will continue to review their schedules,
talent and on-air contributors to reflect the diversity of the UK

YES

A mix of different genres
and output

Sports Extra will broadcast a broader range of sport than any
comparable service, including a huge variety of sport in 2018from events such as the Winter Olympics and Paralympics,
Commonwealth Games and World Cup to regular season
coverage of mainstream and specialist sports

YES

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PurposeAdditional BBC commitment

MeasureA mix of different genres
and output

6 Music will continue to provide a mix of specialist musicprogrammes and documentaries, including a season on
Gay Britannia

YES

UK original output

6 Music remains committed to championing new andalternative music

YES

Creative ambition

6 Music will showcase a range of landmarks and events, including
celebrations of Radiohead and events such as Carnival, WOMAD,
The Proms and SXSWYESRADIO 6 MUSICBBC ASIAN NETWORK
A mix of different genres
and output

Asian Network remains committed to a balance of speech and music YES
across daytime that reflects and represents the views and interestsof its audience

UK original output

Asian Network will continue to act as a showcase for the British
Asian sound and a platform for the best new music and artists

YES

Creative ambition

Asian Network will be a key platform for creative talent and events,from new comedy voices to landmark events such as Ramadan
and the London Mela. The station will broadcast a special Asian
Underground season for 2017/18

YES

Range of audiences

The station will evolve to remain relevant and engaged with ayounger British Asian audience with blend of new talent, new UK
and South Asian music

YES

Additional BBC commitment

MeasureA mix of different genres
and output

BBC Radio Scotland will maintain a distinctive mix of speechprogramming in daytime covering a broad range of genres

YES

A mix of different genres
and output

The station’s music offer will include specialist music programmes
in the evening and support for new talent, with enhanced coverageof live music and sessions. This will include new live events inconjunction with the BBC Scottish Symphony Orchestra

YES

UK original output

The station will offer weekday localised news bulletins from
Aberdeen, Inverness, Selkirk and Dumfries

YES

UK original output

News and community programmes will be offered as opt-outs
in Orkney and Shetland

YES

Creative ambition

New comedy strands including quiz format Stop the Press

YES

Range of audiences

The station will aim to maintain its appeal to a broad rangeof audiences in Scotland

YES

A mix of different genres
and output

Speech programming on BBC Radio nan Gàidheal will include awide range of genres

YES

A mix of different genres
and output

Music programming will offer an eclectic mix of genres with aparticular focus on traditional Gaelic and Celtic music and including
coverage of a range of events

YES

Creative ambition

Both daily speech programming and output for children andteenagers will provide a platform for new contributors and newpresenting talent

YES

Creative ambition

The station will work with BBC ALBA to support learners ofGaelic online

YES

Range of audiences

The station will aim to appeal to all Gaelic-speaking audiences,including children and young people through programming
specifically for them

YES

Nations and Regions
PurposeBBC RADIO SCOTLAND

BBC RADIO nan GÁIDHEAL

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PurposeAdditional BBC commitment

MeasureA mix of different genres
and output

Radio Wales news programmes will offer greater analysis andscrutiny of devolved policy issues following new investment inspecialist journalism

YES

UK original output

Radio Wales will continue to provide a national stage for the best
creative artists in Wales, working with partners including Arts
Council Wales, BBC National Orchestra of Wales and Creative UK

YES

Creative ambition

The station will champion Welsh comedy and become a platformthat nurtures both new home-grown talent alongside moreestablished Welsh comedy names

YES

Creative ambition

As part of its 40th anniversary, the station will launch a national
debate about the condition of Wales looking at the nation’s history
and future

YES

Range of audiences

Overall, the strategic aim is to build reach by the end of 2018
(Radio Wales’ 40th anniversary year)

YES

Range of audiences

We aim to strengthen the performance and appreciation of Radio
Wales with a refreshed tone and sound to daytime and a continued
focus on relaunched evening and weekend programmes

YES

Range of audiences

This will be supported by a commitment that Radio Wales will be
more widely available on FM to ensure every part of Wales getsvalue from the station

YES

RADIO WALESRADIO CYMRU
A mix of different genres
and output

Radio Cymru news and current affairs programmes will provide high- YES
quality coverage of key public policy issues, including the changing
UK, a commitment underpinned by new investment in specialist
journalism to provide Welsh-speaking audiences with news whichis as relevant as it is authoritative

UK original output

Radio Cymru will work with the creative sector in Wales to help
YES
develop new voices and talents, including with key partners suchas National Eisteddfod, BBC National Orchestra of Wales and Arts
Council Wales (including the Gorwelion/Horizons music partnership)

Creative ambition

Radio Cymru will continue to focus on digital innovation

YES

Creative ambition

There will be coverage from a number of existing and new live
music events

YES

Creative ambition

Radio Cymru will develop its Sgript Slam initiative using new comedy YES
writers to nurture comedy formats in Welsh

Range of audiences

Radio Cymru will aim to strengthen performance and appreciation
with a focus on maintaining reach and developing potential newroutes to younger audiences, including a new entertainmentoriented breakfast show on digital platforms to complement thenews programme on the main Radio Cymru service

YES

RADIO ULSTER and RADIO FOYLE
A mix of different genres
and output

In addition to extensive news and current affairs programming, theYESstation will continue to deliver a varied multi-genre mix in its speechprogramming as well as a range of music from specialist to local

UK original output

Radio Foyle will feature multiplatform coverage of potential
implications of Brexit in the border region

YES

UK original output

There will be new documentary and feature content reflecting therich diversity of Northern Ireland, e.g. Stories in Sound

YES

Creative ambition

The station will feature cross-platform country music and rural
culture seasons

YES

Creative ambition

Diversity will be celebrated across programmes, in particularfocusing on female contributors and people with disabilities

YES

Creative ambition

The station will participate in local and pan-BBC multiplatform arts
initiatives, including Get Creative and Two Minute Masterpiece

YES

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PurposeAdditional BBC commitment

MeasureRange of audiences

In addition to continuing Irish language and Ulster Scots strands,
there will be further cultural and language content, e.g. Summerof Songs

YES

Range of audiences

The station will aim to engage a broad audience via a wide range ofmusic genres e.g. Irish country music and classical music outside
broadcasts, including the Ulster Orchestra

YES

Range of audiences

Proms in the Park will come from rural County Fermanagh for the
first time

YES

A mix of different genres
and output

Local Radio will continue to offer a broad mix of content genres
relevant to local audiences across speech and music, including
BBC Introducing

YES

A mix of different genres
and output

Local Radio will enter into more partnerships to promote local artsand events, and each station will partner with at least one local
music festival as part of a BBC Music project

YES

UK original output

An impact fund will finance investigative journalism at local stations
and allow stations to join up on editorial projects to create moreaudience impact

YES

UK original output

Output will also draw on original journalism provided by 150
local democracy reporters recruited by local news providers inpartnership with the BBC

YES

Range of audiences

Local Radio will continue to reach audiences with locally relevant
content across the whole of England

YES

PurposeAdditional BBC commitment

MeasureA mix of different genres
and output

We will commit to maintain a broad range of output on BBC Online,
covering all BBC video and audio output, children’s, news and sport

YES

A mix of different genres
and output

We will continue to serve the whole of the UK, with dedicated sites
in the nations and which support local indigenous languages

YES

UK original output

We will open up to BBC audiences the broader web and UK content
in particular, by highlighting content from other providers anddriving click-throughs to other websites

YES

Creative ambition

We will continue to refresh all our major products so that they keep
pace with market changes and audience expectations

YES

Range of audiences

We will aim to increase the reach of BBC Online, and the frequency
of usage

YES

LOCAL RADIOONLINE

ADDITIONAL COMMITMENTS (Letter of 10 August 2017)
PurposeAdditional BBC commitment

MeasureRADIO 1 and RADIO 2

We will measure the overlap of the Top 100 most played tracks
on Radio 1 and Radio 2 against a range of key commercial radio
competitors on a monthly basis; and commit to ensuring that on
average at least half of these tracks on both Radio 1 and Radio 2 are
distinct from the most played tracks on each relevant competitor

Average monthly overlap of theTop 100 songs on Radio 1 has
been: 34 vs Capital; 40 vs Kiss;
and 6 vs Radio X.

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Average monthly overlap of theTop 100 songs on Radio 2 hasbeen: 11 vs Heart; 7 vs Magic;
and 2 vs Smooth.

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PurposeAdditional BBC commitment

MeasureRADIO 1 and RADIO 2

We will report on the range and depth of support for new music onRadio 1 and Radio 2 through analysis of their respective published
Playlists; and compare performance against the Playlists of key
commercial stations

371 different tracks were added
to Radio 1’s Daytime Playlist
in 2017, 60% of which werefrom UK artists, with 41% bya ‘new or emerging’ UK artist(for comparison, the equivalent
figures for a key comparable
commercial station were 155
additions, 46% UK and 21% ‘newand emerging’ UK artist).
327 different tracks were added
to Radio 2’s Daytime Playlist
in 2017, 59% of which werefrom UK artists, with 19% bya ‘new or emerging’ UK artist(for comparison, the equivalent
figures for a key comparable
commercial station were 66
additions, 61% UK and 9% ‘newand emerging’). There was alsosignificant support on Radio 2 forolder, more established artists
who gain little airplay elsewhere.

RADIO 1

We will commit to two social action campaigns on Radio 1 for2017/18. We would also welcome a conversation with Ofcom overthe next 12 months on defining what we mean by social action
content, ensuring we remain relevant to our younger audiences

YES

6 MUSICWe propose that, subject to Ofcom’s decision on the definition of
new music, 6 Music will broadcast a minimum of 30% new music
across daytime as part of its plans over the next 12 months.
Previously, this threshold acted as a ceiling, not a floor, on 6 Music’s
overall music output. We believe that this undervalues the key rolethat 6 Music plays in supporting new and alternative music, much ofwhich is sourced from specialist and independent labels. We believe
our proposals would receive widespread support within the UK
music industry

YES

1XTRA

For 1Xtra we propose to commit to the same stretching quota within YES
the previous Service Licence that at least 35% of daytime music
will be from UK artists; however, in addition, we believe the current
depth of UK urban music talent allows us to commit to ensuring atleast half of the UK music played in daytime will be ‘new’ over the
next 12 months

ASIAN NETWORKThe BBC Asian Network plays a key role in providing a platform for
YES
new and established British Asian talent and we propose to commit
to the same stretching levels for new and UK music as applied under
the station’s Service Licence, ensuring at least 30% of daytime
music is from UK artists and 30% of daytime music is new

RADIO 4We are happy to commit to 600 hours of original drama
and readings

YES – 630 hours

RADIO 4180 hours of original comedy on Radio 4

YES – 262 hours

RADIO 4 EXTRA

55 hours of comedy per week on Radio 4 Extra

YES – 62 hours

RADIO 4 EXTRA

55 hours of drama per week

YES – 67 hours

RADIO 325 new drama productions broadcast on Radio 3, i.e. the same level
as contained in the previous Trust Service Licence quotas

YES

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General Duties
The Charter sets out a number of General Duties that apply to the BBC. This section sets out the BBC’s progress against these –the measures for reporting which were set out in the BBC Annual Plan for 2017/18.
1. Acting in the public interest
The BBC must act in the public interest, aiming to serve its audiences not just as consumers, but as members of a wider society, with
programmes and services which, whilst seeking to inform, educate and entertain audiences, also serve wider public purposes. As a result,the BBC must ensure that the benefits (whether direct or indirect) of decisions relating to the mission or purposes outweigh the costs(whether direct or indirect); and have regard to economic, social and cultural benefits and costs.
MeasureResultWe will publish an Annual Plan and an Annual Report

MET

We will publish the number of complaints upheld where we have failed to comply with the BBC’s
obligations under the Charter and Agreement or with the Ofcom Operating Framework or World
Service Licence0

We will publish the number of complaints upheld on BBC editorial matters and overall volumes ofcomplaints made

MET – see page 118

We will publish performance measurement data, including data on the fulfilment of the public purposes MET
2. Engagement with the public
The BBC must assess the views and interests of the public and audiences, including licence fee payers, across the whole of the United
Kingdom. The BBC must make arrangements to ensure that the diverse perspectives and interests of the public and audiences, including
licence fee payers, across the whole of the United Kingdom are taken into account in its decision-making.
MeasureResultWe will publish annually data on audiences’ views about the BBC as part of the Annual Report

MET – see throughout
Annual Report

We will ensure around six face-to-face events are held every year and report on the findings in the
BBC’s Annual Report6

3. Market impact
The BBC plays a crucial role in the UK media and broadcasting market. In addition to serving audiences directly by providing content andservices, it can contribute to the market more broadly, for example by promoting competition, supporting supply chains and encouraging
sector-wide innovation. Whilst the BBC recognises that there are risks that it may be viewed as stifling commercial activity or harming
competition, it is possible equally that the BBC’s activities can be seen as promoting commercial activity by increasing people’s interest
in and familiarity with new technology, helping to stimulate demand for services that competition can then also provide.
The BBC must have particular regard to the effects of its activities on competition in the UK. In complying with this duty the BBC must (a)seek to avoid unnecessary adverse effects on competition and (b) promote positive market impact.
MeasureResultWe will consult on and publish a policy on material changes

MET – see downloads.
bbc.co.uk/aboutthebbc/
insidethebbc/howwework/
policiesandguidelines/pdf/
policy_material_changes.pdf

We will publish annually the number of competition complaints upheld and actions taken in response0

The BBC will publish the outcomes of any Public Interest Tests

MET – BBC Scotland channel(see bbc.co.uk/aboutthebbc/
insidethebbc/howwework/
accountability/consultations/scotland_tv)

4. Openness, transparency and accountability
The BBC must observe high standards of openness and seek to maximise transparency and accountability. It must publish Board minutes,
important decisions concerning changes to remit/services, and minutes of Committee meetings. The Board also needs to have regard to
the benefits of consultation with interested persons.
MeasureResultWe will publish an Annual Plan that sets out the BBC’s strategic priorities, creative plans, budget
and any planned material changes to services

MET

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G OV E R N A N C E

MeasureResultWe will publish the following as soon as possible after the relevant event:

MET—

Minutes of the meetings of the Board—

Important decisions concerning changes to the creative remit, work plan and material changes
to the UK Public Services, non-service activities and commercial activities—

Minutes of the meetings of committees of the Board

We will publish the new disclosures required under the Charter relating to pay over £150,000

MET – see page 101

We will, from 2017/18 onwards, publish data showing how the promotion of any output of a
UK Public Service or any such service in the UK Public Services focuses on output contributing
substantially to the fulfilment of the mission and promotion of the public purposes

MET

We have consulted on our complaints framework and we will consult on our distribution policy.
We will follow best practice in the delivery of these consultations

MET

We will publish transfer pricing methodologies for all commercial subsidiaries by the end of 2017

MET

5. Partnership
The BBC will work collaboratively and in partnership, especially in the creative economy, in the public interest. It should partner with a wide
range of organisations of all sizes, including commercial and non-commercial, throughout the UK. Partnerships should be fair and beneficial
to all with due attribution and recognition for partners.
MeasureResultWe will collect and publish performance data on partnership output and activities, including on the
BBC’s range of partnerships, range of partners, geographical breadth and impact

MET – see page 144

6. Diversity
The BBC must ensure it reflects the diverse communities of the whole of the United Kingdom through its output, the means by which its
output and services are delivered, and in the organisation and management of the BBC. This includes support for the regional and minority
languages of the UK.
MeasureResultWe will continue to publish diversity and inclusion data in the Annual Report and Equality Information
Report, plus through updates to the Diversity and Inclusion Strategy on the BBC website

MET – see Equality Information
Report page 240

We will publish performance measurement data collected as described above on the fulfilment of the
fourth public purpose which relates to this duty, including production targets and the performance ofindigenous language services

MET – see Nations data packs
page 150

7. Technology
The BBC must promote technological innovation and maintain a leading role in research and development. To do this, it needs to seek towork in partnership with other organisations and share, as far as is reasonable, its research and development knowledge and technologies.
MeasureResultOur Innovation Review will inform future measurement of our performance in this area

We are still assessing themeasure for performanceagainst our duty for technology.
We have also publishedour review of Research andDevelopment activity

8. Stewardship of public money— Regularity – Management of all of the BBC’s resources must accord with the provisions of the Charter, Framework Agreement andother agreements the BBC enters into with Government Ministers—

Propriety – Management of all of the BBC’s resources must meet high standards of public conduct, robust governance and duly
consider the expectations of Parliament (including those of the Public Accounts Committee), which have been formally communicatedto the BBC—

Value for money – Procurement, projects and processes must be systematically evaluated and assessed to provide confidence aboutsuitability, effectiveness, prudence, quality, value and avoidance of error and other waste, taking into account the wider public interest,
not just that of the BBC itself—

Feasibility – Proposals using public funds should be implemented accurately, sustainably and to the intended timetable

MeasureResultTrue and fair statutory accounts prepared in line with IFRS, based on unqualified audit opinion fromthe BBC’s independent external auditors

MET – see financial statements
page 168

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MeasureResultNo reporting on regularity matters by the BBC’s independent external auditors to assure thatthe transactions reflected in the BBC’s financial statements have been applied to the purposes
intended and conform to the relevant framework of authorities that govern them

MET – the C&AG’s regularity
opinion is unmodified

No reporting on propriety matters by the BBC’s independent external auditors to assure that the
management of the BBC’s resources has met high standards of public conduct

MET – see the C&AG’s audit
certificate and reportCompliance with funding conditions as part of separate funding agreement, e.g. grant funding for
the BBC World Service

MET

Our response to Value for Money reviews conducted by the NAO or other commissioned parties

MET

9. Guidance and best practice
The BBC has to have regard to general guidance concerning the management of the affairs of public bodies and generally accepted
principles of good corporate governance, where applicable and appropriate.
MeasureResultWe will audit our compliance with the UK Corporate Governance Code and principles of good
corporate governance based on a general aim of compliance with the Code wherever possible

MET

Our Annual Report will set out the BBC’s performance against the Code; areas where the Codedoes not apply to the BBC; areas where the Charter overrides the Code; and areas where the BBC
does not comply

MET

We will also publish an annual Equality Information Report, in compliance with the Public Sector
Equality Duty

MET – see Equality Information
Report page 240

An annual statement on licence fee collection will be audited by the NAO and laid
before Parliament

MET – see page 70

10. General duties in relation to commercial activities
The BBC’s commercial activities need to act in the public interest, engage with the public, and ensure openness and transparency. They
must not distort the market nor gain an unfair competitive advantage.
MeasureResultWe have published a policy on material changes to commercial activities

MET – see downloads.bbc.co.uk/
aboutthebbc/insidethebbc/
howwework/
policiesandguidelines/pdf/
policy_material_changes.pdf

Our complaints framework includes a procedure for complaints about a failure to meet any
commercial activities requirements

MET

We will publish forthcoming potential material changes to commercial services in the BBC’s Annual
Plan, subject to issues of commercial confidentiality

MET

We will publish annual reports and transfer pricing methodologies concerning our commercial
subsidiaries as required under Ofcom’s Operating Framework

MET

By the end of October 2017 we will publish our principles and methodologies for transfer pricing
for BBC Studios and by the end of 2017 we will publish the detailed methodologies for the othercommercial subsidiaries

MET

By the end of October 2017, we will provide Ofcom with our first quarterly financial reports on
the commercial activities. At the same time as our Annual Report, we will publish annual financial
results of the commercial activities, by line of business

MET

We will publish the number of upheld complaints about compliance with the commercial activities
requirements under the Charter and Agreement or in the Ofcom Operating Framework, and our
response to such complaints

0

We will publish the number of Ofcom enforcement actions in relation to compliance with the Ofcom
Operating Framework0

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Partnerships and collaboration
This section provides a snapshot ofpartnerships activity in 2017/18. The BBC
has around 240* partnerships andcollaborations, large and small, focused on
public service activity that supports the UK
creative economy. Around half originate in
the nations and network production centres
in England, 40 support training and skills
and 22 are for Research and Development.
The BBC has worked with over 330
organisations. Partners include nationaland regional cultural institutions, funders,festivals, trade and membershiporganisations, universities, training
organisations, venues, local councils,
charities, voluntary groups and commercialorganisations including other broadcasters.
Around 200 report an ongoing relationshipwith the BBC. Some partners are umbrellaorganisations with access to many othersaround the UK.
The ten case studies below highlight2017/18 outcomes: a focus on science,joining up creative relationships around the
UK to engage different audiences, anddigital innovation and capacity building in
the creative sector.
With five core partners and 17 stakeholders,Tomorrow’s World delivered thecommitment in British Bold Creative toengage mainstream audiences with science.
It has developed ways to increase interest in
STEM through content created, curated andaggregated under the brand by the BBC andpartners. TV and iPlayer highlights included
Tomorrow’s World Live with Eric Schmidt andBrian Cox, Britain’s Greatest Invention andAstronauts: Do you have what it takes?
TV and online reach were above thebenchmarks set with digital content such as
Tim Peake’s five facts about space (Science
Museum Group) which reached over 85,000
browsers in its launch week; the Tomorrow’sWorld podcast with over 60,000 downloads
alongside online social activity; and at peaknearly 40,000 browsers visited the Global
Change Calculator in a week.
Britain’s creative partner
The partnership with Hull City of Culture
has been a highlight, with strong impact
in Humberside and Yorkshire. Perceptionsof the BBC were higher amongst those
who consumed coverage of Hull (8.1 vs7.7 average) and amongst those aware of
the partnership (8.3 vs 7.7 average). 65%of people nationally claimed to be awarethat Hull was UK City of Culture in 2017(49% amongst 16-34s). The BBC provided
coverage led locally by BBC Humberside.
Reach was built for landmarks like Hull Flood
which aired on BBC Two. The BBC created
new events like Contains Strong Language,a spoken word festival and Radio 1’s Big
Weekend came to Hull. Conversations with
Coventry City of Culture 2021 have started,building on the learnings from Hull.
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BBC Annual Report and Accounts 2017/18

CBeebies’ partnership with NorthernBallet has brought children’s ballet to awider audience, creating a new appetitefor dance. As well as broadening diversity
for CBeebies productions, screenings
have helped venues in areas in the North
East with less arts engagement.
BBC Sport has streamed over 1,000 extra
hours of live sport’s coverage, working
in ongoing partnership with governing
bodies overseeing some 80 organisations,to help them deliver and promote content
for BBC Live and iPlayer. With over 7.4
million stream starts, this has increased
our capacity and lowered the cost ofentry for partners to BBC platforms.
The outcome is greater reach for smaller
events and better representation ofunderserved audiences and women’s sport.
In BBC Arts, new editorial collaboration
models have been developed to extend
the use of BBC Live to cultural events,
increasing the digital prominenceof Edinburgh International Festival,
Manchester International Festival and
Hay Festival. Opera Passion with ROH andthe V&A brought UK opera companies
together for the first time with eight
hours of live streams and special events
supported by social media, building
capacity in the sector and aiming to appeal
to new audiences as well as aficionados.
All partners had access to workshops.
BBC Two’s landmark series Civilisations,
made in partnership with the Open
University, prompted the Civilisations
Festival, a collaboration with over 300
museums, galleries, libraries and archives toshine a light on UK collections and inspire
debate by staging over 260 public events.
Social media broadcast coverage across theUK, including 11 specially commissioned
films in English regions, extended reach. BBC
R&D has offered partners access to digitaltechnology with 93 organisations attending
workshops. 28 have included content in
the augmented reality app. 800 pieces
of BBC archive have been made available
to partners. Art Fund made 21 grants
to participating organisations. Festival
partners also included Culture 24, Museum
Association, National Museum Directors’Council, Society of Chief Librarians,
Association of Independent Museums andScottish Library and Information Council.
The partnership between Radio 4 andthe British Museum reached 3.5 million
weekly listeners with Living With The Gods,a new 30-part series by Neil MacGregor.
Objects and stories related to Islam,Hinduism, Sikhism, Buddhism, Judaism,
as well as Christianity, sought to reflect
diverse audiences. Through the animationof six episodes, syndicated through digitaland social media and with over a million

podcast downloads so far, it has extended
Radio 4 reach to younger audiences.
Lasting legacies
BBC Wales has taken significant steps
towards the creation of a National
Broadcast Archive for Wales with the
National Library of Wales, securing Phase
1 funding from the Heritage Lottery fund.
The aim is to open up Wales’s archives
including broadcast heritage, engaging
communities and securing the longterm preservation of the BBC’s assets.
As a founding partner of Get Creative, theBBC continues to support the campaign’s
festival, which this year saw more than
1,400 creative and participatory events
across the UK. Engagement and reachwere up with almost 10 million views onsocial media platforms and 500,000 pageviews to Get Creative’s website, whereaudiences can find links to a map listing
creative events as part of the festival.
The end of Make It Digital has led to thesetting up of a not-for-profit foundation
with key partners to ensure a lasting legacy
for the micro: bit. The Micro:bit Educational
Foundation has focused on global interest.
The micro:bit is now available in 50 countries
with national rollouts in Iceland, Croatia
and Singapore to date. Microbit.org is in 13
languages and there is a global partnershipecosystem of 132 partners and counting.
The following table presents asnapshot of the main collaborations
and creative partnerships across the
public service BBC as of March 2018.
No.
Partnerships/
collaborations

BBC area**

Archive

11

Arts/Arts North

18

Academy (Birmingham)

19Children’s (BBC North)

4

Content/TV

16

Learning (BBC North)

15

Sport (BBC North)

14

News

5

Music

14

Radio

44

R&D

22

England Network Centres

14

Scotland

12

Wales

28

Northern Ireland
Total
*
**

7
243*

This includes programme making divisions, R&D
and Training in network production centres acrossthe UK.
This table does not include World Service or global
activity, commercial partnerships in WW/Studios,co-productions or distribution arrangements.

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Access services
The following table reports on the prevalence of access services across the BBC’s network television channels.
Audio
Audio described hours

Total hours

Actual for year (%)

Target for year (%)

2017/18

2016/172017/18

2017/18

2016/172017/18

2016/17

BBC One
BBC Two
BBC Four
CBBC
CBeebies

1,966
2,526
1,257
1,850
1,443

1,896
2,408
1,205
1,771
1,320

8,736
8,736
3,165
5,083
4,704

22.5
28.9
39.7
36.4
30.7

21.7
27.6
36.6
35.0
28.0

20.0
20.0
20.0
20.0
20.0

20.0
20.0
20.0
20.0
20.0

Total

9,042

8,600

30,424Sign interpreted
Sign interpreted hours

BBC One
BBC Two
BBC Four
CBBC
CBeebies
BBC News
Total

Total hours

Actual for year (%)

Target for year (%)

2017/18

2016/172017/18

2017/18

2016/172017/18

2016/17

462
458
198
297
253
506

460
453
177
261
244
514

8,736
8,736
3,165
5,083
4,704
8,736

5.3
5.2
6.2
5.8
5.4
5.8

5.3
5.2
5.4
5.2
5.2
5.9

5.0
5.0
5.0
5.0
5.0
5.0

5.0
5.0
5.0
5.0
5.0
5.0

2,174

2,109

39,160Subtitled
Subtitled hours

Total hours

Actual for year (%)

Target for year (%)

2017/18

2016/172017/18

2017/18

2016/172017/18

2016/17

BBC One
BBC Two
BBC Four
CBBC
CBeebies
BBC Parliament
BBC News

14,268
9,542
3,165
5,080
4,704
1,390
8,733

14,213
9,634
3,294
5,062
4,706
1,379
8,733

14,283
9,552
3,165
5,083
4,704
8,736
8,736

99.9
99.9
100
100
100
15.9
100

99.9
99.9
100
100
100
15.8
100

100
100
100
100
100
–
100

100
100
100
100
100
100
100

Total

46,88247,021

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Expenditure by genre
The Charter requires the BBC to report on expenditure on the UK Public Television Services by genre (as defined in accordance withindustry standards). The table below represents this information.
£ millions

News and Current Affairs
Factual and Learning
Film and Drama
Entertainment and Comedy
Sport Production
Children’s

318.5
294.1
339.9
177.2
65.1
88.8

Total genre spend

1,283.6

Other content spend

294.9

Total cost of content

1,578.5

Contestability
Under the Agreement between the BBC and the Secretary of State, the BBC must secure competition between BBC producers andexternal producers, whether independent producers or not, for television, radio and online production.
The BBC Agreement requires the BBC to ensure that, for relevant television programmes, at least 40% of the previous in-houseguarantee for drama, comedy, entertainment and factual is opened up to competition by 31 December 2018. As at 31 March 2018,
the BBC had opened up 24% of the in-house guarantee by putting a number of series out to competitive tender (Holby City, Songs ofPraise, Question of Sport, Doctors and Bargain Hunt), by offering invitations to pitch ideas (Horizon) and by opening up a range of otheropportunities for new programming. The BBC is on track to achieve the 40% requirement by the end of 2018.
Target (%) of relevant hours

TV—% Contested hours

By 31 Dec 2018
Drama, comedy, entertainment
and factual in-house guarantee1,240

24

By 31 Dec 2022
Network Radio 3

60

20

By 31 Dec 2027
Online content 4,5100

30.9 of spend online was external 6

Notes
1 Relevant TV programmes includes all television programmes included in the UK Public Services except: (a) programmes reserved for independent productions; (b) news andnews-related current affairs programmes; (c) any programme where the BBC considers that complying with the obligation would not secure value for money.
2 ‘In-house guarantee’ means the guaranteed allocation of air time to programmes made by the BBC under clause 56 of the 2006 Agreement.
3 The BBC Agreement requires the BBC to ensure that for relevant radio programmes it secures competition for at least 60 % of relevant broadcasting time by the end of 2022.
Relevant radio programmes means all network radio programmes included in the UK Public Services except-(a) news programmes; and (b) repeats, continuity, simulcasts, EBU
material and autoplayed music.
4 The BBC Agreement requires the BBC to secure competition for 100 % of relevant online material by the end of 2027. Relevant online material is all online material included in
the UK Public Services except: (a) programmes included in the UK Public On Demand Programme Services; (b) news and news-related current affairs material; and (c) any
material where the BBC considers that complying with the obligation would not secure value for money.
5 Given the broad range of content that fulfils relevant online material the BBC are still considering the most appropriate metric to track performance against this commitment.
6 Full year is an estimate based on the first three quarters of the year.

146

BBC Annual Report and Accounts 2017/18

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Network television supply
The following table shows the proportion of BBC network television hours levels produced by different supplier types.
Proportion of all hours produced by
Qualifying Independent
producers for BBC television (%)
2017/18

2016/17% pointchangeProportion of all hours produced by
Non-Qualifying Independent
producers for BBC television (%)
2017/18

2016/17% pointchangeProportion of all hours produced by
PSB in-housefor BBC television (%)
2017/18

2016/17% pointchangeProportion of all hours produced by
BBC Studios
for BBC television (%)*
2017/18

2016/17% pointchange

Drama

25

24

+1

19

12

+7

0

65

-65

56

0

N/A

Entertainment

26

29

-3

40

38

+2

0

33

-33

34

0

N/A

Comedy

39

46

-7

20

19

+2

0

36

-36

41

0

N/A

Factual

30

26

+5

11

16

-5

5

58

-53

53

0

N/A

Daytime

40

39

+1

27

28

-1

0

33

-33

33

0

N/A

Sport

23

27

-4

0

0

0

77

73

+4

0

0

N/A

Children’s

35

32

+3

19

12

+7

45

56

-11

1

0

N/A

Total

31

30

+1

17

15

+1

23

55

-32

30

0

N/A

Figures are based on qualifying programmes (as defined in the Independent Productions Order) delivered within each financial year. This means they exclude repeats andacquisitions. Data includes only network hours delivered within the relevant year.
* BBC Studios became a commercial subsidiary of the BBC on 1 April 2017 and therefore separated from PSB in-house. There is therefore no comparator for 2016/17.

Network radio supply
The following table shows the levels of all BBC network radio hours from different suppliers.
Proportion of all hours produced by
Independent producers
for BBC Network Radio (%)

Proportion of all hours produced by
In-house PSB producers
for BBC Network Radio (%)

2017/18

2016/172017/18

2016/17

Radio 1

15.9

15.1

84.1

84.9

1 Xtra

12.6

15.0

87.4

85.0

Radio 2

24.5

13.3

75.5

86.7

Radio 3

15.7

25.1

84.3

74.9

Radio 4

18.4

14.5

81.6

85.5

Radio 4 Extra

50.4

24.3

49.6

75.7

Radio 5 live & 5 live sports extra

21.8

24.8

78.2

75.2

6 Music

25.0

23.1

75.0

76.9

Asian Network

15.0

16.0

85.0

84.0

Total

18.8

18.1

81.2

81.9

Notes:The data presented excludes repeats, simulcasts, core news, education/social action, presentation, EBU output, World Service and Radio 5 live broadcasts on Asian Network overnight.

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Distribution
Distribution of BBC content is key to delivering our mission and public purposes. The Charter sets out that the BBC must report on how
it has made its output and services available to the public. This section sets out our progress this year.
How we distribute our services

98.5% 99%

97.5%

Digital Terrestrial
Television (DTT) coverageof UK households

AM/FM coverageof UK households

DAB coverageof UK households

BBC iPlayer is available on

BBC iPlayer is available ontypes of TV device

types of device overall

98%
Services via satellite
to UK households>2,500

The goal of the BBC’s distribution
activity is to ensure that audiences havefull and convenient access to all of theservices that are relevant to them. To
this end, in 2017/18 we ensured that:—the broadcast coverage of our linear
TV and Radio services reached as many
households as is economicallypracticable—

the BBC’s video-on-demand (VOD)
service was available on moreconsumer devices (from Smart TVs, togames consoles, to tablets) than any
other VOD service in the UK througha popular, easy-to-integrate solution—

the BBC created content tailored to
the needs and expectations of users
on popular social platforms, such as
Facebook, Twitter and YouTube

148

Editorial control – in all distribution
arrangements for its TV and Radio
programmes, the BBC sought toexercise editorial control over theselection and ordering of its linear
and on-demand programmes wherever
they were distributed, curating services
to highlight and bring audiences tolesser-known programmes anddistinctive public service gems.
BBC iPlayer has become increasingly
effective at achieving this objective.
Our research shows that, on average,
simply featuring such programmes on
the BBC iPlayer homepage doubles
their on-demand consumption, thataudiences are highly receptive to theBBC’s ‘watch next’ recommendations;

BBC Annual Report and Accounts 2017/18

features developed to enhance its
services (such as the ability to restartor rewind a live programme in BBC
iPlayer as it is being broadcast) are as
widely available as possible.

and BBC iPlayer’s focus in 2017/18 onoffering a more personalised service
has enhanced this.
——In addition to widespread availability, theBBC successfully delivered against seven
distribution conditions that are critical tothe continued delivery of its public mission:—>15,000

Data – in order to deliver more
effective curation (above) and a more
personal experience of BBC services,
as well as to monitor and improve
performance, the BBC has continued
to work with its distribution partners
to ensure that it has access to timely,
accurate and granular data on the
consumption of its services. The needto negotiate effectively with third party
platforms for such data washighlighted in the National Audit
Office’s recent report ‘The BBC’s
Understanding of its Audiencesand Users’.
Prominence – throughout 2017/18, theBBC has continued to ensure that its
content and services featureprominently within the interfaces ofthe platforms on which it is carried,and has worked with platforms toensure that its content is discoverable
in innovative new interfaces such as
mobile aggregator apps (e.g. Virgin TV
Anywhere) and voice assistants (e.g.
Amazon Alexa) and platform discovery
areas (e.g. Samsung).

—

Attribution – it is important thatlicence fee payers are able to identify
when they are accessing programmes
provided by the BBC, and so the BBC
has continued to take measures toensure its services are clearly branded
and easily attributable wherever they
are available.

—

Quality – the BBC has continued toensure that audiences can reliably
access BBC services in high quality. In
addition, the BBC has ensured that theThe broadcast network coverage figures
relate to the transmission networks
operated by the BBC. In addition, theBBC also makes its services available
through third party transmission
networks – most of our TV and Radio
services are available via satellite to98% of UK households, some of our HD
services are available via commercial
DTT multiplexes and our nations andregions radio services are available via
the commercial DAB network.

—

Value for money – the BBC seeks tominimise the costs associated with the
distribution of its content, in order tomaximise the proportion of the licencefee spent on programming. This has
continued to inform the distribution
technologies the BBC invests in, as wellas our typical approach of distributing
a standard BBC iPlayer product thatcan be widely deployed with minimal
marginal costs.

—

Free – the BBC has continued toensure that audiences pay no
incremental cost to users to accessthe BBC’s services: our services areavailable on the entry-level tier of any
subscription service, and containno advertising.

These conditions are reflected in
the BBC’s Distribution Policy which
was consulted on this year.
Throughout 2017/18 the BBC hascontinued to play a leading role in planningthe clearance of TV services from the
700MHz band of broadcast spectrum.
This spectrum will then be used by future
mobile broadband services. The project
has moved from planning into delivery
and the BBC is working with stakeholders
to ensure our audiences are supported
and impacts to our services are limited.
The BBC has also been at the forefrontof preparation for 5G mobile standards
in the UK, and has had bids accepted for
Government-backed trials for 5G deliveryof radio and immersive experiencesa s part of two industry consortia.

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G OV E R N A N C E

BBC Public Service promotions
The Agreement between the BBC and the Secretary of State sets out that the BBC must ensure that the promotion of any output
of a UK Public Service or any such service in the UK Public Services focuses on output contributing substantially to the fulfilmentof the mission and promotion of the public purposes. The BBC must publish information on such promotion, including:(a)the number of minutes of promotions in each UK Public Service;(b) the time of day of such promotions;(c)such other information it considers would be in the public interest to publish.

BBC Public Service

IIII

Total minutesof promotions

Proportion of air time

9,008

1.7%

7,543

1.2%

3,468

-

BBC Public Service

Total minutesof promotions

Proportion of air time

3,754

0.7%

7,474

1.4%

N/A

N/A

1m111
10 · five

8,690

1.7%

em11
0·.... ,..,ve

N/A

N/A

=~

10,463

2.0%

7,483

1.5%

6,155

1.5%

N/A

N/A

5,125

1.2%

4,590

1.1%

3,952

1.0%

6,769

1.5%

1.8%
l\,WIO

5,105

1.7%

.

~

~

••
~

4,555

1.6%

13,870

2.6%

N/A

N/A

N/A

N/A

N/A

N/A

~muz

lillillil~
RADIO

Scotland'lilm·ll· o·· .
I

7,483

1.5%

lillillil®
~
lillillil
@
RADIO

•

ULSTER= o \ira

6,327

1.2%

RADIO

~

FOYLE

11,332

2.2%

lillilril 'LOC:AL!l:ADlO

Promotions take place at intervals through out the day.
Promotions on BBC ALBA, Parliament, Radio 4 Extra and 5 live sports extra not tracked due to very low volume and frequency. Data is not available for promotions on Red Button.

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BBC Annual Report and Accounts 2017/18

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Nations’ data packs

p.151

p.155

Wales

Scotland

p.159

p.163

Northern Ireland England

BBC Scotland drama Shetland

150

BBC Annual Report and Accounts 2017/18

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G OV E R N A N C E

The BBC in WalesThe BBC’s expenditure in Wales during 2017/18 was £176.2 million across all services and platforms, compared to £185.9 million
in 2016/17.
Network TV programmes made in Wales in the 2017/18 financial year included Doctor Who, Casualty, Bargain Hunt, Requiem, Only Connect
and inserts for The One Show. Online and Red Button spend in 2016/17 included the BBC Three drama premiere of Class. Network TV
production in Wales remains strong – on the Ofcom calendar year measure Wales contributed 6.7% in 2017 (2016: 5.8%) of the BBC’s
eligible network television spend.
Local content reflects the additional investment in English language TV for Welsh audiences with big drama titles such as Keeping Faithand Hinterland.
Headcount in 2017/18 now excludes BBC Studios staff in Wales.
The following pages provide additional detail on the BBC’s performance in Wales, including income, high level expenditure andperformance across services provided in Wales.
IncomeThese numbers are estimated as figures for each nation and have been calculated by applying the proportion of licensed premises to thetotal number of licences in force. The exact number of licences in force varies on a daily basis. The number of licenced premises aredifferent to the number of licences in force as, in some cases, a premise may need more than one licence. Figures exclude concessionary
licences for those living in residential care.
2018
£m

2017
£m

3,830.2
190.9

3,787.2
188.5

2018
£m

2017
£m

Network content
TV (inc. sport and children’s)*Radio
Online and Red Button

49.8
3.0
1.4

54.8
3.3
5.3

Total network spend

54.2

63.4

Local content
TV – BBC One
TV – BBC Two
Radio WalesRadio Cymru
Online and Red Button

25.5
9.6
14.6
13.5
7.9

22.5
8.7
14.2
13.6
7.5

Total local spend

71.1

66.5

National Orchestra of Wales
S4C**
Development
Distribution

4.6
25.6
0.2
20.5

4.7
29.2
1.4
20.7

Total

176.2

185.9

Estimated income
UK
Wales
Expenditure by service
Direct and indirect spend relating to programmes produced in the nation.

***

Network content is attributed on an Ofcom basis, which excludes foreign productions.
This represents the television programmes commissioned and produced by BBC Wales and supplied to S4C (excluding programmes commissioned directly by S4C fromother producers).

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Television hours
Local opt-out hours^ (including repeats) on BBC One and BBC Two
2018
Hours

2017
Hours

Drama, comedy, entertainment, music and arts
Daily, weekly news and current affairs
Sport and leisure
Education, factual and religion

37
383
144
98

22
392
141
108

Total

662

663

2018
Hours

2017
Hours**

Drama, comedy, entertainment, music and arts*
Daily, weekly news and current affairs
Sport and leisure
Education, factual and religion
Children’s

256
264
134
5
11

270
273
168
8
17

Total

670

736

^

Television content commissioned specifically for audiences in the nation.

S4C*

*
**

This represents the television programmes commissioned, produced and funded by BBC Wales and supplied to S4C (excluding programmes commissioned directly by S4C fromother producers). The total of hours for 2018 include 135 hours of repeats (2017: 187 hours). This includes repeats where BBC Wales has incurred a charge associated with thetransmission of the programmes.
The 2017 figures have been restated to include all BBC Wales repeats supplied to S4C. In previous years repeats were only included where BBC Wales incurred a charge
associated with the repeated hours.

Radio hours
BBC Radio Wales
2018
Hours

2017
Hours

News and current affairs
General

1,789
5,685

1,868
5,725

Total

7,474

7,593

2018
Hours

2017
Hours

News and current affairs
General

1,295
5,763

1,335
5,927

Total

7,058

7,262

2018
Number

2017
Number

950

1,187

2018
Number

2017
Number

1,208

1,418

BBC Radio Cymru

Headcount
Average headcount reflects those individuals employed to directly support the services produced in Wales.

Average number of persons employed in the year
Average headcount of individuals based in Wales across all services including support functions.

Average number of persons employed in the year152

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Wales’ performance by service – Television

Content (£m)
We spent a total of£84.9 million on these
services last year
in WalesReach (%)
Wales population
who use the service
each week

Time spent watchinga channel each week(h:m)
Length of time theaverage Wales viewer
spent each week withthe channel

BBC One is our flagship service and the UK’s most popular television channel.
It unites and inspires the nation with high-quality programmes across a range ofgenres which includes news and current affairs, drama, comedy, entertainment
and factual.

£71.5m

72.7%

08:21

2016/17: £72.1m

2016/17: 76.6%

2016/17: 08:34

BBC Two is a mixed-genre channel with programmes of depth and substance.
It includes the greatest amount and range of knowledge-building programmingon the BBC, complemented by distinctive comedy, drama and arts programming.

£12.2m

48.7%

03:18

2016/17: £11.3m

2016/17: 50.4%

2016/17: 03:20

BBC Four aims to be British television’s most intellectually and culturally
enriching channel, offering an ambitious range of UK and international arts,
music, culture and factual programmes.

£1.1m

12.4%

01:43

2016/17: £2.6m

2016/17: 13.6%

2016/17: 01:44

The CBBC channel offers a distinctive mixed schedule for 6-12 year
olds, with mainly UK programmes served in a stimulating, creative andenjoyable environment.

–

3.7%

02:17

2016/17: –2016/17: 3.7%

2016/17: 02:37

CBeebies provides a mix of high-quality, mostly UK-produced, programmes
designed to encourage learning through play in a consistently safe environment
for children under six.

£0.1m

5.6%

04:06

2016/17: –2016/17: 6.3%

2016/17: 03.52

Reach definition: 15+ minutes consecutive for all channels and services and audiences in TV-owning households aged 4+ (TV).
Source: BARB (TV reach and time per viewer – all channels include their simulcast HD channel where applicable).
N.B. BARB data measures TV set viewing only at present, meaning that iPlayer viewing on other devices is not included in any of the reach and time figures. iPlayer viewing is
growing, especially for young-skewed services such as CBeebies and CBBC.

Wales’ performance by service – News

Content (£m)
We spent a totalof £nil on these
services last year
in WalesReach (%)
Wales population
who use the service
each week

Time spent watchingor listening to aservice each week(h:m)
Length of time theaverage Wales viewer
or listener spent eachweek with the service

The BBC News Channel is a 24-hour impartial and independent news service
offering breaking news, analysis and insight. It provides fast and comprehensive
coverage of local, UK and international events as they unfold.

–

11.0%

03:07

2016/17: –2016/17: 11.7%

2016/17: 02.59

BBC Parliament is the UK’s only channel dedicated to politics. It shows debates
and committees from Westminster, Holyrood, Stormont, Cardiff Bay andStrasbourg as well as political programmes from across the UK.

–

0.8%

01:38

2016/17: –2016/17: 0.9%

2016/17: 01:40

Reach definition: 15+ minutes for all channels and services and audiences in TV-owning households aged 4+.
Source: BARB (TV reach and time per viewer).
Three-minute reach for BBC News Channel and BBC Parliament – in line with industry standards – would be 15.0% and 1.5% respectively (17.1% and 1.7% amongst 16+ population).

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Wales’ performance by service – Radio

Content (£m)
We spent a totalof £3.0 million onthese services lastyear in Wales

Reach (%)
Wales population
who use the service
each week

Time spent listening
to a service eachweek (h:m)
Length of time theaverage Wales listenerspent each week withthe service

BBC Radio 1 broadcasts a distinctive mix of new music and entertainment for
15-29 year olds as well as providing tailored news, documentaries and advice
campaigns for young adults.

–

23.5%**

06:17

2016/17: –2016/17: 21.9%

2016/17: 07:16

BBC 1Xtra plays the best in contemporary black music, with a strong emphasis
on delivering high-quality live music and supporting new artists.

–

2.0%+

02:46

2016/17: –2016/17: 1.8%

2016/17: 05:47

BBC Radio 2 broadcasts a unique mix of music and speech programmes covering
a diverse mix of live pop and rock, comedy, documentaries and religious output,
as well as running social action campaigns to over 14 million listeners.

–

36.8%^

12:36

2016/17: –2016/17: 37.1%

2016/17: 12:45

BBC Radio 3 centres on classical music, around which it provides a broad
spectrum of jazz, world music, arts programmes, religion and drama. Thereis a strong emphasis on musical performance across the UK.

£2.0m

3.6%

05:25

2016/17: £2.3m

2016/17: 3.3%

2016/17: 05:54

BBC Radio 4 is a mixed-speech radio station, offering in-depth news and current
affairs and a wide range of other speech programmes including drama, readings,
comedy, factual and magazine programmes.

£1.0m

18.5%

12:05

2016/17: £1.0m

2016/17: 16.7%

2016/17: 12:02

Originally launched in 2002 as BBC 7, the station was relaunched in April 2011 as
BBC Radio 4 extra. The digital-only network is the principal outlet for the BBC’sarchive of speech entertainment, including comedy, drama and readings.

–

3.5%

06:34

2016/17: –2016/17: 3.0%

2016/17: 07:41

BBC Radio 5 live broadcasts continuous news and live sports coverage, bringing
major news stories and sports events to its listeners as they happen, andproviding context through wide-ranging analysis and discussion.

–

8.4%

07:34

2016/17: –2016/17: 8.5%

2016/17: 07.44

BBC Radio 5 live sports extra brings a greater choice of live action to sports fansby extending live coverage of various sporting events.

–

2.3%

03:11

2016/17: –2016/17: 1.6%

2016/17: 02:38

BBC 6 Music is a digital radio station that entertains lovers of popular music witha service that celebrates the alternative spirit of popular music from the 60s to
the present day, complemented by music news and documentaries.

–

3.0%

07:53

2016/17: –2016/17: 2.8%

2016/17: 08:57

BBC Asian Network offers speech and music appealing to British Asians, with afocus on news and current affairs. It broadcasts mainly in English, but does offersome programmes in other languages.

–

0.4%

*

2016/17: –2016/17: 0 .1%

2016/17: *Reach definition: 15+ minutes for all stations and audiences aged 15+.
Source: RAJAR (Radio reach and time per listener).
Excludes programme ‘Coming up on 5 live sports extra’.
** Radio 1: amongst its target group of 15-29 year-olds reach was 49.0% and time spent per listener was 05:57.
+ 1Xtra: amongst 15-24 year-olds reach was 6.3%. Lower sample size may be responsible for greater variability in the time per listener data.
^ Radio 2: amongst its target group of 35+ year olds reach was 43.6% and time spent per listener was 13:49.
* Sample size for time per user too low to report.

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The BBC in Scotland
In 2017/18, BBC Scotland produced a wide range of content across all its platforms, including compelling drama, popular comedy,a range of diverse documentaries and events coverage for audiences in Scotland and across the UK.
The BBC’s expenditure in Scotland during 2017/18 was £222.6 million across all services and platforms. Whilst this is a decrease from2016/17 (£233.0 million), the phasing of transmission dates impacted spend figures; consequently, there will be a proportionate risein 2018/19.
The value of qualifying BBC network television content from Scotland (relative to all BBC qualifying spend) exceeded the Ofcom calendar
year target of 8.6%, reaching 9.1% (2016: 10.3%) and included drama titles Trust Me and the return of the acclaimed murder mystery
Shetland. In children’s programming there was the return of Raven.
The following pages provide additional detail on the BBC’s performance in Scotland, including income, high-level expenditure andperformance across services provided in Scotland.
IncomeThese numbers are estimated as figures for each nation have been calculated by applying the proportion of licenced premises to the total
number of licences in force. The exact number of licences in force varies on a daily basis. The number of licensed premises is different to
the number of licences in force as, in some cases, premises may need more than one licence. Figures exclude concessionary licences for
those living in residential care.
2018
£m

2017
£m

3,830.2
323.7

3,787.2
321.7

2018
£m

2017
£m

Network content
TV (inc. sport and children’s)*Radio
Online and Red Button

79.9
3.2
2.5

84.2
3.5
5.5

Total network spend

85.6

93.2

Local content
TV – BBC One
TV – BBC Two
TV – BBC ALBARadio Scotland
Radio nan Gàidheal
Online and Red Button

42.0
12.0
7.9
22.6
4.0
8.0

43.0
17.0
6.0
21.1
3.7
6.6

Estimated income
UK
ScotlandExpenditure by service
Direct and indirect spend relating to programmes produced in the nation

Total local spend

96.5

97.4

National Orchestra
Development
Distribution

4.8
2.2
33.5

4.8
1.6
36.0

Total

222.6

233.0

*

Network content is attributed on an Ofcom basis, which excludes foreign productions.

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Television hours
Local opt-out hours^ (including repeats) on BBC One and BBC Two
2018
Hours

2017
Hours

Drama, comedy, entertainment, music and arts
Daily, weekly news and current affairs
Sport and leisure
Education, factual and religion

129
453
186
113

131
499
196
101

Total

881

927

2018
Hours

2017
Hours

602
189
220
969
639

659
186
225
884
700

2,619

2,654

2018
Hours

2017
Hours

News and current affairs
General

3,098
5,429

3,213
5,338

Total

8,527

8,551

2018
Hours

2017
Hours

News and current affairs
General

656
4,241

663
4,258

Total

4,897

4,921

2018
Number

2017
Number

924

1,104

2018
Number

2017
Number

1,108

1,199

^

Television content commissioned specifically for audiences in the nation.

BBC ALBA

Drama, comedy, entertainment, music and arts
Daily, weekly news and current affairs
Sport and leisure
Education, factual and religion
Children’s
Total
Radio hours
BBC Radio Scotland

BBC Radio nan Gàidheal

Headcount
Average headcount reflects those individuals employed to directly support the services produced in Scotland.

Average number of persons employed in the year
Average headcount of individuals based in Scotland across all services including support functions. 		

Average number of persons employed in the year

156

BBC Annual Report and Accounts 2017/18

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Scotland’s performance by service – Television

Content (£m)
We spent a total of£133.9 million onthese services lastyear in Scotland

Reach (%)
Scotland population
who use the service
each week

Time spent watchinga channel each week(h:m)
Length of time theaverage Scotland
viewer spent eachweek with the channel

BBC One is our flagship service and the UK’s most popular television channel.
It unites and inspires the nation with high-quality programmes across a range ofgenres which includes news and current affairs, drama, comedy, entertainment
and factual.

£85.0m

71.8%

08:14

2016/17: £83.8m

2016/17: 74.0 %2016/17: 0 8:17

BBC Two is a mixed-genre channel with programmes of depth and substance.
It includes the greatest amount and range of knowledge-building programmingon the BBC, complemented by distinctive comedy, drama and arts programming.

£35.0m

48.4%

03:13

2016/17: £45.6m

2016/17: 50.0%

2016/17: 03:12

BBC Four aims to be British television’s most intellectually and culturally
enriching channel, offering an ambitious range of UK and international arts,
music, culture and factual programmes.

£4.1m

13.5%

01:56

2016/17: £4.4m

2016/17: 14.0 %2016/17: 01:46

The CBBC channel offers a distinctive mixed schedule for 6-12 year
olds, with mainly UK programmes served in a stimulating, creative andenjoyable environment.

£7.8m

2.6%

01:58

2016/17: £7.7m

2016/17: 3.4%

2016/17: 02:15

CBeebies provides a mix of high-quality, mostly UK-produced, programmes
designed to encourage learning through play in a consistently safe environment
for children under six.

£2.0m

6.2%

04:11

2016/17: £2.7m

2016/17: 5.5%

2016/17: 03:54

Reach definition: 15+ minutes consecutive for all channels and services and audiences in TV-owning households aged 4+ (TV).
Source: BARB (TV reach and time per viewer – all channels include their simulcast HD channel where applicable).
N.B. BARB data measures TV set viewing only at present, meaning that iPlayer viewing on other devices is not included in any of the reach and time figures. iPlayer viewing
is growing, especially for young-skewed services such as CBeebies and CBBC.

Scotland’s performance by service – News

Content (£m)
We spent a total of£nil on these services
last year in Scotland

Reach (%)
Scotland population
who use the service
each week

Time spent watchingor listening to aservice each week(h:m)
Length of time theaverage Scotland
viewer or listenerspent each week withthe service

The BBC News Channel is a 24-hour impartial and independent news service
offering breaking news, analysis and insight. It provides fast and comprehensive
coverage of local, UK and international events as they unfold.

–

9.5%

03:38

2016/17: –2016/17: 9.9%

2016/17: 03:27

BBC Parliament is the UK’s only channel dedicated to politics. It shows debates
and committees from Westminster, Holyrood, Stormont, Cardiff Bay andStrasbourg as well as political programmes from across the UK.

–

0.8%

02:05

2016/17: –2016/17: 0.8%

2016/17: 02.14

Reach definition: 15+ minutes for all channels and services and on audiences in TV-owning households aged 4+.
Source: BARB (TV reach and time per viewer).
Three-minute reach for BBC News Channel and BBC Parliament – in line with industry standards – would be 13.6% and 1.7% respectively (15.0% and 1.9% amongst 16+ population).

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Scotland’s performance by service – Radio

Content (£m)
We spent a total of£3.2 million on these
services last year
in Scotland

Reach (%)
Scotland population
who use the service
each week

Time spent listening
to a service eachweek (h:m)
Length of time theaverage Scotland
listener spent eachweek with the service

BBC Radio 1 broadcasts a distinctive mix of new music and entertainment for
15-29 year olds as well as providing tailored news, documentaries and advice
campaigns for young adults.

£0.1m

16.7%**

06:07

2016/17: £0 .1m

2016/17: 16.1%

2016/17: 06:45

BBC 1Xtra plays the best in contemporary black music, with a strong emphasis
on delivering high-quality live music and supporting new artists.

–

0.9%+

05:55

2016/17: –2016/17: 0.8%

2016/17: *BBC Radio 2 broadcasts a unique mix of music and speech programmes covering
a diverse mix of live pop and rock, comedy, documentaries and religious output,
as well as running social action campaigns to over 14 million listeners.

–

27.8%^

11:40

2016/17: £0.1m

2016/17: 25.6%

2016/17: 11:33

BBC Radio 3 centres on classical music, around which it provides a broad
spectrum of jazz, world music, arts programmes, religion and drama. Thereis a strong emphasis on musical performance across the UK.

£1.6m

2.6%

06:42

2016/17: £1.8m

2016/17: 2.7%

2016/17: 05:20

BBC Radio 4 is a mixed-speech radio station, offering in-depth news and current
affairs and a wide range of other speech programmes including drama, readings,
comedy, factual and magazine programmes.

£1.5m

14.7%

09:41

2016/17: £1.5m

2016/17: 12.7%

2016/17: 09.30

Originally launched in 2002 as BBC 7, the station was relaunched in April 2011
as BBC Radio 4 extra. The digital-only network is the principal outlet for theBBC’s archive of speech entertainment, including comedy, drama and readings.

–

2.7%

04:24

2016/17: –2016/17: 1.9%

2016/17: 05:43

BBC Radio 5 live broadcasts continuous news and live sports coverage, bringing
major news stories and sports events to its listeners as they happen, andproviding context through wide-ranging analysis and discussion.

–

5.8%

06:25

2016/17: –2016/17: 6.9%

2016/17: 06:24

BBC Radio 5 live sports extra brings a greater choice of live action to sports fansby extending live coverage of various sporting events.

–

1.1%

03:06

2016/17: –2016/17: 1.2%

2016/17: 02:03

BBC 6 Music is a digital radio station that entertains lovers of popular musicwith a service that celebrates the alternative spirit of popular music from the
60s to the present day, complemented by music news and documentaries.

–

3.8%

09:57

2016/17: –2016/17: 3.7%

2016/17: 09:45

BBC Asian Network offers speech and music appealing to British Asians, with afocus on news and current affairs. It broadcasts mainly in English, but does offersome programmes in other languages.

–

0.3%

*

2016/17: –2016/17: 0.4%

2016/17: *Reach definition: 15+ minutes for all stations and audiences aged 15+.
Source: RAJAR (Radio reach and time per listener).
Excludes programme ‘Coming up on 5 live sports extra’.
** Radio 1: amongst its target group of 15-29 year olds reach was 33.0% and time spent per listener was 06:02.
+ 1Xtra: amongst 15-24 year-olds reach was 2.2%. Lower sample size may be responsible for greater variability in the time per listener data.
^ Radio 2: amongst its target group of 35+ year olds reach was 33.5% and time spent per listener was 12:45.
* Sample size for time per user too low to report.

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The BBC in Northern Ireland
Investment in content spend in Northern Ireland decreased year-on-year for network services but increased on local services. The
reduction in network spend was linked to specific drama and entertainment commissions produced in 2016/17 which were not replicatedin 2017/18 (e.g. My Mother and Other Strangers, The Fall 3, Can’t Touch This!). Despite the reduction in spend, Northern Ireland, throughnetwork services, has still provided quality drama commissions in 2017/18 (e.g. Paula, Come Home, Line of Duty 4) and continued with thesuccessful commission of children’s titles such as Pablo. The spend on local content increased by over £1 million reflecting the firsttranche of Nations reinvestment funding and this was targeted at expanding the digital news and sport services as well as increasing
comedy output on BBC One.
The following pages provide additional information about the BBC’s performance in Northern Ireland, including income, high-level
expenditure and local consumption of different BBC services.
IncomeThese numbers are estimated as figures for each nation and have been calculated by applying the proportion of licenced premises tothe total number of licences in force. The exact number of licences in force varies on a daily basis. The number of licensed premises aredifferent to the number of licences in force as, in some cases, a premise may need more than one licence. Figures exclude concessionary
licences for those living in residential care.
2018
£m

2017
£m

3,830.2
101.0

3,787.2
99.8

2018
£m

2017
£m

Network content
TV (inc. sport and children’s)*Radio
Online and Red Button

20.1
1.5
1.1

27.3
1.4
1.5

Total network spend

22.7

30.2

Local content
TV – BBC One
TV – BBC Two
Radio Ulster/Foyle
Online and Red Button

25.1
5.5
17.6
6.4

24.0
5.8
17.5
6.0

Total local spend

54.6

53.3

Estimated income
UK
Northern Ireland
Expenditure by service
Direct and indirect spend relating to programmes produced in the nation.

Distribution

11.6

13.7

Total

88.9

97.2

*

Network content is attributed on an Ofcom basis, which excludes foreign productions.

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Television hours
Local opt-out hours^ (including repeats) on BBC One and BBC Two
2018
Hours

2017
Hours

Drama, comedy, entertainment, music and arts
Daily, weekly news and current affairs
Sport and leisure
Education, factual and religion

46
421
88
156

57
489
78
176

Total

711

800

2018
Hours

2017
Hours

News and current affairs
General

3,253
5,114

3,219
5,480

Total

8,367

8,699

^

Television content commissioned specifically for audiences in the nation.

Radio hours
BBC Radio Foyle/Ulster

Headcount
Average headcount reflects those individuals employed to directly support the services produced in Northern Ireland.

Average number of persons employed in the year

2018
Number

2017
Number

610

631

2018
Number

2017
Number645

663

Average headcount of individuals based in Northern Ireland across all services including support functions.

Average number of persons employed in the year160

BBC Annual Report and Accounts 2017/18

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Northern Ireland’s performance by service – Television

Content (£m)
We spent a total of£50.6 million on these
services last year in
Northern Ireland

Reach (%)
Northern Ireland
population who use
the service each week

Time spent watchinga channel each week(h:m)
Length of time theaverage Northern
Ireland viewer spenteach week withthe channel

BBC One is our flagship service and the UK’s most popular television channel.
It unites and inspires the nation with high-quality programmes across a range ofgenres which includes news and current affairs, drama, comedy, entertainment
and factual.

£35.5m

70.2%

06:31

2016/17: £38.0m

2016/17: 71.7%

2016/17: 06:40

BBC Two is a mixed-genre channel with programmes of depth and substance.
It includes the greatest amount and range of knowledge-building programmingon the BBC, complemented by distinctive comedy, drama and arts programming.

£8.4m

41.2%

02:42

2016/17: £13.3m

2016/17: 42.1%

2016/17: 02:51

BBC Four aims to be British television’s most intellectually and culturally
enriching channel, offering an ambitious range of UK and international arts,
music, culture and factual programmes.

£2.0m

11.4%

01:41

2016/17: £1.5m

2016/17: 10.4%

2016/17: 01:34

The CBBC channel offers a distinctive mixed schedule for 6-12 year olds,
with mainly UK programmes served in a stimulating, creative andenjoyable environment.

£3.4m

5.0%

02:35

2016/17: £3.6m

2016/17: 5.4%

2016/17: 02:53

£1.3m

7.3%

04:00

2016/17: £0.7m

2016/17: 6.9%

2016/17: 03:35

CBeebies provides a mix of high-quality, mostly UK-produced, programmes
designed to encourage learning through play in a consistently safe environment
for children under six.

Reach definition: 15+ minutes consecutive for all channels and services and audiences in TV-owning households aged 4+ (TV).
Source: BARB (TV reach and time per viewer – all channels include their simulcast HD channel where applicable).
N.B. BARB data measures TV set viewing only at present, meaning that iPlayer viewing on other devices is not included in any of the reach and time figures. iPlayer viewing
is growing, especially for young-skewed services such as CBeebies and CBBC.

Northern Ireland’s performance by service – News

Content (£m)
We spent a total of£0.1 million on these
services last year in
Northern Ireland

Reach (%)
Northern Ireland
population who use
the service each week

Time spent watchingor listening to aservice each week(h:m)
Length of time theaverage Northern
Ireland viewer or
listener spent eachweek with the service

The BBC News Channel is a 24-hour impartial and independent news service
offering breaking news, analysis and insight. It provides fast and comprehensive
coverage of local, UK and international events as they unfold.

£0.1m

7.1%

02:43

2016/17: –2016/17: 6.9%

2016/17: 03:22

BBC Parliament is the UK’s only channel dedicated to politics. It shows debates
and committees from Westminster, Holyrood, Stormont, Cardiff Bay andStrasbourg as well as political programmes from across the UK.

–

0.6%

02:37

2016/17: –2016/17: 0.8%

2016/17: ^Reach definition: 15+ minutes for all channels and services and audiences in TV-owning households aged 4+.
Source: BARB (TV reach and time per viewer).
Three-minute reach for BBC News Channel and BBC Parliament – in line with industry standards – would be 11.0% and 1.2% respectively (12.7% and 1.4% amongst 16+ population).
^ Sample size for time per user low.

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Northern Ireland’s performance by service – Radio

Content (£m)
We spent a total of£1.5 million on these
services last year in
Northern Ireland

Reach (%)
Northern Ireland
population who use
the service each week

BBC Radio 1 broadcasts a distinctive mix of new music and entertainment for
15-29 year olds as well as providing tailored news, documentaries and advice
campaigns for young adults.

–

18.1%**

04:34

2016/17: –2016/17: 19.2%

2016/17: 05:33

BBC 1Xtra plays the best in contemporary black music, with a strong emphasis
on delivering high-quality live music and supporting new artists.

–

1.1%+

*

2016/17: –2016/17: 0.6%

2016/17: *BBC Radio 2 broadcasts a unique mix of music and speech programmes covering
a diverse mix of live pop and rock, comedy, documentaries and religious output,
as well as running social action campaigns to over 14 million listeners.

–

15.2%^

08:14

2016/17: –2016/17: 13.8%

2016/17: 08:20

BBC Radio 3 centres on classical music, around which it provides a broad
spectrum of jazz, world music, arts programmes, religion and drama. Thereis a strong emphasis on musical performance across the UK.

£0.8m

1.5%

03:27 §

2016/17: £0.8m

2016/17: 2.0%

2016/17: 0 4:15

BBC Radio 4 is a mixed-speech radio station, offering in-depth news and current
affairs and a wide range of other speech programmes including drama, readings,
comedy, factual and magazine programmes.

£0.7m

10.8%

07:51

2016/17: £0.6m

2016/17: 9.6%

2016/17: 08:05

Originally launched in 2002 as BBC 7, the station was relaunched in April 2011 as
BBC Radio 4 extra. The digital-only network is the principal outlet for the BBC’sarchive of speech entertainment, including comedy, drama and readings.

–

1.9%

03:56§

2016/17: –2016/17: 2.0%

2016/17: *BBC Radio 5 live broadcasts continuous news and live sports coverage, bringing
major news stories and sports events to its listeners as they happen, andproviding context through wide-ranging analysis and discussion.

–

10.6%

04:15

2016/17: –2016/17: 9.2%

2016/17: 05:05

BBC Radio 5 live sports extra brings a greater choice of live action to sports fansby extending live coverage of various sporting events.

–

1.5%

01:56§

2016/17: –2016/17: 1.7%

2016/17: 02:36

BBC 6 Music is a digital radio station that entertains lovers of popular music witha service that celebrates the alternative spirit of popular music from the 60s to
the present day, complemented by music news and documentaries.

–

1.9%

05:11§

2016/17: –2016/17: 1.5%

2016/17: *BBC Asian Network offers speech and music appealing to British Asians, with afocus on news and current affairs. It broadcasts mainly in English, but does offersome programmes in other languages.

–

0.2%

*

2016/17: –2016/17: –2016/17: *Time spent listening
to a service eachweek (h:m)
Length of time theaverage Northern
Ireland listener spenteach week withthe service

Reach definition: 15+ minutes for all stations and audiences aged 15+.
Source: RAJAR (Radio reach and time per listener).
Excludes programme ‘Coming up on 5 live sports extra’.
** Radio 1: amongst its target group of 15-29 year olds reach was 37.5% and time spent per listener was 04:15.
+ 1Xtra: amongst 15-24 year olds reach was 4.7%.
^ Radio 2: amongst its target group of 35+ year olds reach was 17.3% and time spent per listener was 09:05.
* Sample size for time per user too low to report.
§ Lower sample size may be responsible for greater variability in the data.

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The BBC in England
The BBC in England has seen an increase in estimated income of £37.2 million in 2017/18 which was primarily due to the CPI increase
applied to the licence fee after a six-year freeze, raising it from £145.50 to £147.00.
When comparing the movements of expenditure in England between 2017/18 and 2016/17 it should be noted that the figures for
2016/17 are inflated due to the inclusion of two major sporting events (the Olympics and the European Football Championships).
Expenditure in news also decreased in 2017/18 as 2016/17 included costs associated with the coverage of the EU referendum.
The following pages provide additional detail on the BBC’s performance in England, including income, high-level expenditure andperformance across services provided in England.
IncomeThese numbers are estimated as figures for each nation have been calculated by applying the proportion of licensed premises to the total
number of licences in force. The exact number of licences in force varies on a daily basis. The number of licenced premises are different to
the number of licences in force as, in some cases, a premise may need more than one licence. Figures exclude concessionary licences for
those living in residential care.
2018
£m

2017
£m

3,830.2
3,200.7

3,787.2
3,163.5

2018
£m

2017
£m

Network content
TV (inc. sport and children’s)*Radio
Online and Red Button

1,138.1
275.9
136.3

1,290.1
275.8
139.9

Total network spend

1,550.3

1,705.8

Local content
TV – BBC One
BBC Local Radio
Online and Red Button

100.2
118.2
14.8

97.8
112.9
12.4

Total local spend

233.2

223.1

Orchestras and performing groups
Development
Distribution

17.1
54.1
99.6

13.8
53.4
98.8

1,954.3

2,094.9

Estimated income
UK
England
Expenditure by service
Direct and indirect spend relating to programmes produced in the nation.

Total
*

Network content is attributed on an Ofcom basis, which excludes foreign productions.

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Television hours
Local opt-out hours^ (including repeats) on BBC One and BBC Two
2018
Hours

2017
Hours

Drama, comedy, entertainment, music and arts
Daily, weekly news and current affairs
Sport and leisure
Education, factual and religion

–
4,108
24
22

4
4,115
26
20

Total

4,154

4,165

2018
Hours

2017
Hours

General216,023

215,885

Total

216,023

215,8852018
Number

2017
Number

2,590

2,600

2018
Number

2017
Number13,74014,716^

Television content commissioned specifically for audiences in the nation.

Radio hours
BBC English Regions

Headcount
Average headcount reflects those individuals employed to directly support the services produced in England.

Average number of persons employed in the year
Average headcount of individuals based in England across all services including support functions.

Average number of persons employed in the year

164

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England’s performance by service – Television

Content (£m)
We spent a total of£1,193.6 million onthese services lastyear in England

Reach (%)
England population
who use the service
each week

Time spent watchinga channel each week(h:m)
Length of time theaverage Englandviewer spent eachweek with the channel

BBC One is our flagship service and the UK’s most popular television channel.
It unites and inspires the nation with high-quality programmes across a range ofgenres which includes news and current affairs, drama, comedy, entertainment
and factual.

£774.0m

68.4%

07:14

2016/17: £892.7m

2016/17: 71.0%

2016/17: 07:26

BBC Two is a mixed-genre channel with programmes of depth and substance.
It includes the greatest amount and range of knowledge-building programmingon the BBC, complemented by distinctive comedy, drama and arts programming.

£309.0m 44.1%

03:07

2016/17: £328.9m

2016/17: 45.7%

2016/17: 03:07

BBC Four aims to be British television’s most intellectually and culturally
enriching channel, offering an ambitious range of UK and international arts,
music, culture and factual programmes.

£30.5m

12.6%

01:44

2016/17: £41.9m

2016/17: 13.5%

2016/17: 01:46

The CBBC channel offers a distinctive mixed schedule for 6-12 year
olds, with mainly UK programmes served in a stimulating, creative andenjoyable environment.

£55.1m

3.9%

02:36

2016/17: £55.6m

2016/17: 4.4%

2016/17: 02:31

CBeebies provides a mix of high-quality, mostly UK-produced, programmes
designed to encourage learning through play in a consistently safe environment
for children under six.

£25.0m

7.5%

04:14

2016/17: £23.5m

2016/17: 7.8%

2016/17: 0 4:13

Reach definition: 15+ minutes consecutive for all channels and services and audiences in TV-owning households aged 4+ (TV).
Source: BARB (TV reach and time per viewer – all channels include their simulcast HD channel where applicable).
N.B. BARB data measures TV set viewing only at present, meaning that iPlayer viewing on other devices is not included in any of the reach and time figures. iPlayer viewing
is growing, especially for young-skewed services such as CBeebies and CBBC.

England’s performance by service – News

Content (£m)
We spent a total of£44.7 million on these
services last year in
EnglandReach (%)
England population
who use the service
each week

Time spent watchingor listening to aservice each week(h:m)
Length of time theaverage Englandviewer or listenerspent each week withthe service

The BBC News Channel is a 24-hour impartial and independent news service
offering breaking news, analysis and insight. It provides fast and comprehensive
coverage of local, UK and international events as they unfold.

£43.1m

9.5%

02:39

2016/17: £43.5m

2016/17: 9.9%

2016/17: 02:40

BBC Parliament is the UK’s only channel dedicated to politics. It shows debates
and committees from Westminster, Holyrood, Stormont, Cardiff Bay andStrasbourg as well as political programmes from across the UK.

£1.6m

0.5%

01:43

2016/17: £1.8m

2016/17: 0.6%

2016/17: 01:43

Reach definition: 15+ minutes for all channels and services and on audiences in TV-owning households aged 4+.
Source: BARB (TV reach and time per viewer).
Three-minute reach for BBC News Channel and BBC Parliament – in line with industry standards – would be 13.6% and 1.1% respectively (15.1% and 1.2% among 16+ population).

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England’s performance by service – Radio

Content (£m)
We spent a total of£275.9 million onthese services lastyear in England

Reach (%)
England population
who use the service
each week

Time spent listening
to a service eachweek (h:m)
Length of time theaverage Englandlistener spent eachweek with the service

BBC Radio 1 broadcasts a distinctive mix of new music and entertainment for
15-29 year olds as well as providing tailored news, documentaries and advice
campaigns for young adults.

£37.4m

17.2%**

06:19

2016/17: £35.8m

2016/17: 17.3%

2016/17: 06:07

BBC 1Xtra plays the best in contemporary black music, with a strong emphasis
on delivering high-quality live music and supporting new artists.

£6.4m

2.1%+

04:44

2016/17: £6.6m

2016/17: 1.9%

2016/17: 04:44£48.7m

27.6%^

11:55

2016/17: £50.8m

2016/17: 27.7%

2016/17: 11:54

BBC Radio 2 broadcasts a unique mix of music and speech programmes covering
a diverse mix of live pop and rock, comedy, documentaries and religious output,
as well as running social action campaigns to over 14 million listeners.

£33.2m

3.9%

05:57

2016/17: £32.5m

2016/17: 3.9%

2016/17: 06:23

BBC Radio 4 is a mixed-speech radio station, offering in-depth news and current
affairs and a wide range of other speech programmes including drama, readings,
comedy, factual and magazine programmes.

£83.5m

21.6%

11:04

2016/17: £81.9m

2016/17: 22.2%

2016/17: 11:16

Originally launched in 2002 as BBC 7, the station was relaunched in April 2011 as
BBC Radio 4 extra. The digital-only network is the principal outlet for the BBC’sarchive of speech entertainment, including comedy, drama and readings.

£2.9m

4.1%

05:38

2016/17: £3.0m

2016/17: 4.1%

2016/17: 05:53

BBC Radio 5 live broadcasts continuous news and live sports coverage, bringing
major news stories and sports events to its listeners as they happen, andproviding context through wide-ranging analysis and discussion.

£43.6m

10.0%

06:36

2016/17: £45.5m

2016/17: 10.8%

2016/17: 06:42

BBC Radio 5 live sports extra brings a greater choice of live action to sports fansby extending live coverage of various sporting events.

£2.9m

2.4%

03:18

2016/17: £2.7m

2016/17: 2.5%

2016/17: 02:53

BBC 6 Music is a digital radio station that entertains lovers of popular music witha service that celebrates the alternative spirit of popular music from the 60s to
the present day, complemented by music news and documentaries.

£10.7m

4.7%

09:15

2016/17: £10.9

2016/17: 4.6%

2016/17: 09:45

BBC Asian Network offers speech and music appealing to British Asians, with afocus on news and current affairs. It broadcasts mainly in English, but does offersome programmes in other languages.

£6.6m

1.4%

05:27

2016/17: £7.1m

2016/17: 1.4%

2016/17: 06:20

BBC Radio 3 centres on classical music, around which it provides a broad
spectrum of jazz, world music, arts programmes, religion and drama. Thereis a strong emphasis on musical performance across the UK.

Reach definition: 15+ minutes for all stations and audiences aged 15+ .
Source: RAJAR (Radio reach and time per listener).
Excludes programme “Coming up on 5 live Sports Extra”.
** Radio 1: among its target group of 15-29 year-olds reach was 32.0% and time spent per listener was 06:21.
+ 1Xtra: among 15-24 year-olds reach was 6.1% and time spent was 03:45.
^ Radio 2: among its target group of 35+ year-olds reach was 34.2% and time spent per listener was 12:57.

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G OV E R N A N C E

Independent Assurance Report to theBoard of the British Broadcasting
Corporation, acknowledging that
Parliament also places reliance on theGroup Accounts and Report
I have conducted independent assurance
procedures on the disclosures includedin the British Broadcasting Corporation(BBC) Annual Report arising from therequirement under the Royal Charter forthe continuance of the BBC (the Royal
Charter) to publish the provision for theUnited Kingdom’s nations and regions,
including how the BBC delivered thecreative remit in the nations and regions.
These disclosures are set out on pages
150 to 166 of the BBC’s Annual Report(the subject matter) (“Nations Report”).
My work is conducted in accordance with
International Standards on Assurance
Engagements (ISAE) 3000 Assurance
Engagements Other Than Audits or
Reviews of Historic Financial Information.
Respective responsibilities of the
BBC Board and the Comptroller and
Auditor General
For the reporting year covered by thisreport, the BBC Board was responsible
for publishing information requiredby the Royal Charter as follows:—— the provision for the United Kingdom’s
nations and regions, including how theBBC delivered the creative remit in thenations and regions for the year-ended
31 March 2018.

In conducting this work, my staff andI have complied with the Financial
Reporting Council’s Revised EthicalStandard 2016. I am independent of
the BBC in accordance with the ethicalrequirements that are relevant to myassurance engagement. My staff and I havefulfilled our other ethical responsibilities
in accordance with these requirements.
My approach
I have performed a reasonable assurance
engagement as defined in ISAE 3000.
A reasonable assurance engagement isto perform such procedures as to obtain
information and explanations which
I consider necessary to express an opinion
on whether, in all material respects, theNations Report is complete and accurate
and has been properly prepared inaccordance with the basis set out therein.
My work consisted of understanding theprocess adopted by the BBC to derive thedisclosures, in particular the completenessand accuracy of information used. This
enabled me to design procedures in
response to risks identified. I performed
procedures in relation to the figures
disclosed which included: agreement tothird party evidence such as data issued
by the Broadcasters Audience Research
Board (BARB); agreement to schedulingreports; cross-reference to disclosures
made in the BBC Group financial
statements; recalculation and confirmationof mathematical accuracy; and agreementof headcount data to payroll reports.

Inherent limitations
My assurance procedures have been
designed to provide reasonable assurance.
The objective of a reasonable assurance
engagement is to reduce engagement
risk to an acceptably low level in thecircumstances of the engagement
as the basis for a positive form of
expression of my conclusion. It does
not, however, eliminate this risk entirely.
In particular, in preparing the Nations
Report, the BBC Board is required tomake a number of judgements which
inherently introduces an element of risk.
OpinionBased on the results of my procedures,in my opinion, in all material respects the
Nations Report is complete and accurate
and has been properly prepared inaccordance with the basis set out therein.

Sir Amyas CE Morse KCB
Comptroller and Auditor General
National Audit Office157-197 Buckingham Palace Road
London, SW1W 9SP
21 June 2018

I am responsible for providing an opinion
on whether, in all material respects, theNations Report is complete and accurate
and has been properly prepared inaccordance with the basis set out therein.

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Financial statements

p.169

p.184

The Certificate and Report of theComptroller and Auditor General

The BBC’s consolidated financial statements

BBC One’s Howards End

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F I N A N C I A L S TAT E M E N T S

The Certificate and Report of theComptroller and Auditor General to
the Board of the British Broadcasting
Corporation, acknowledging that
Parliament also places reliance on
the Group Accounts and Report
Opinion on financial statements
I certify I have audited the financial
statements of the British Broadcasting
Corporation (BBC) for the year ended
31 March 2018, which comprise:

Opinion on regularity
In my opinion, in all material respects, theincome and expenditure recorded in the
consolidated financial statements conformto the authorities which govern them.

—— the consolidated income statement;

Basis of opinions
I conducted my audit in accordance with
International Standards on Auditing (ISAs)(UK) and Practice Note 10 ‘Audit ofFinancial Statements of Public Sector
Entities in the United Kingdom’. My
responsibilities under those standards arefurther described in the Respective
Responsibilities of the BBC Board and theComptroller and Auditor General section of
my certificate. Those standards require me
and my staff to comply with the Financial
Reporting Council’s Revised EthicalStandard 2016. I am independent of the
BBC in accordance with the ethicalrequirements that are relevant to my audit
and the financial statements in the UK. My
staff and I have fulfilled our other ethicalresponsibilities in accordance with theserequirements. I believe that the audit
evidence I have obtained is sufficient andappropriate to provide a basis for my
opinion.

—— the consolidated statement ofcomprehensive income/loss;—— the consolidated balance sheet;—— the consolidated statement of changes
in equity;—— the consolidated cash flow
statement; and—— the related notes, including thesignificant accounting policies
The financial reporting framework thathas been applied in their preparation is
the Royal Charter for the continuanceof the British Broadcasting Corporation
and International Financial ReportingStandards as adopted by the European
Union. I have also audited the informationin the Remuneration Report that is
described as having been audited.
In my opinion the consolidated
financial statements:—— give a true and fair view of the state of
the group’s affairs as at 31 March 2018
and of its surplus for the year thenended; and—— have been properly prepared inaccordance with International Financial
Reporting Standards as adopted by theEuropean Union.

The regularity framework that has been
applied comprises:—— the Royal Charter for the continuanceof the British Broadcasting
Corporation;—— the Agreement between Her Majesty’s
Secretary of State for Digital, Culture,
Media and Sport and the British
Broadcasting Corporation; andKey Audit Matters
Key audit matters are those mattersthat, in my professional judgment, wereof most significance in my audit of thefinancial statements of the current period
and include the most significant assessedrisks of material misstatement (whether
or not due to fraud) that I identified.
I consider the following areas of particular
audit focus to be those areas that had thegreatest effect on my overall audit strategy,
the allocation of resources in my audit anddirecting the efforts of the audit team in thecurrent year. These matters were addressedin the context of my audit of the financial
statements as a whole, and in forming
my opinion thereon, and I do not provide
a separate opinion on these matters.
This is not a complete list of all risks
identified by my audit but only those areasthat had the greatest effect on my overall
audit strategy, allocation of resources anddirection of effort. I have not, for example,
included detailed information relating to
the general work I have performed aroundthe presumed risk of management overrideof controls, which are areas where my work
has not identified any matters to report.
The areas of focus were discussed with
the Audit and Risk Committee; theirreport on matters that they considered
to be significant to the financial
statements is set out on pages 109-112.
The description of the risks below
should be read in conjunction with the
Audit and Risk Committee’s report.

—— other agreements the BBC has enteredinto with Government Ministers.

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Key Audit Matter description

The scope of my audit work in response

Key audit matters relating to my opinion on the financial statements
Accounting for employment-related issues
Refer to the Audit and Risk Committee
I have made enquiries of management
report page 111 and note F9 ofand the BBC’s legal team to
the financial statements.
understand these issues and I haveassessed the reasonableness of
Recently, a number of issues relating tomanagement’s key judgements andpay at the BBC have risen to prominence.
assumptions as to the financial,
These include equal pay claims; thedisclosure or regularity implications,gender pay gap; the BBC’s review of
if any, arising from these matters.
its terms and conditions for staff; andits engagement with personal service
My audit procedures have included
companies and the associated impact
reviewing board papers and minutesof changes to IR35 taxation rules.
and assessing management’s processes
and controls for identifying andIn relation to some of these matters,
evaluating the financial reporting
the BBC may need to recognise
implications of these matters.
provisions or report contingent
liabilities in its financial statements.
I have tested key provisions and contingent
liabilities relating to employment issues,
I have assessed a significant risk to
as well as a sample of other provisions
my audit because establishing thebased on risk and value. My procedures
existence, completeness and valuation
included agreeing liabilities andof provisions or contingent liabilities
disclosures to underlying evidence, andinvolves management’s judgement andrecalculating the amounts recognised or
estimation; moreover, there are high levels
disclosed in the financial statements.
of parliamentary interest in these issues.
I reviewed the disclosure of provisions
Under the current Royal Charter the BBC isand contingent liabilities in the financial
required to make disclosures in its Annual
statements to assess their accuracy,
Report in relation to people paid more thancompleteness and consistency with
£150,000 from the licence fee. The results
financial reporting requirements andof my separate reporting engagement on
my understanding of the issues.
these disclosures are set out on page 107.
Complex property transactions
Total cost of Property, Plant and Equipment– £2,378.6 million (2016-17: £2,340.6
million). Refer to note D1 (financial
disclosures) and note H (accounting
policies) and the risks set out in the Audit
and Risk Committee report on page 111.
The BBC has a large and diverse portfolio
of properties. The arrangements forthese properties include owned assets,
investment properties and assets held
under finance or operating leases.
The BBC has a borrowing limit set by the
Secretary of State for Digital, Culture,
Media and Sport; this affects the ways
the BBC can finance major projects. Saleand leaseback arrangements, including
those facilitated through special purpose
vehicles as a means to raise finance on thebond markets, are one method the BBC
has used to fund certain estates projects.
In managing its property portfolio
and related financing arrangements,
certain past transactions have given

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I have carried out work to understandthe BBC’s overall property strategy
and any changes that could have aconsequent financial statement impact.
My procedures included making
enquiries of management; review ofboard minutes and business plans
and visiting certain key properties.
A: Properties held under leasingarrangements—— For the BBC’s material leases, I haveassessed whether these leases shouldbe accounted for as finance oroperating leases. My audit procedures
included considering thereasonableness of management’s key
assumptions and judgements andchecking these for consistency with theunderlying contractual documentation.
—— I have considered the reasonablenessof the key assumptions used bymanagement in the finance leaseaccounting models. I checked the key

The findings I communicated to the
Audit and Risk Committee

I am satisfied that provisions andcontingent liabilities have been
appropriately recognised and disclosed.

I identified an audit difference inrelation to the inflation assumptions
used to determine the valuation of the
cash-flow swaps. On drawing this to
management’s attention, management
considered that it was appropriate toadjust the valuations to reflect actual
retail price index figures where available,
rather than forecast retail price index
figures. Accordingly, management
adjusted the financial statements.
I identified an audit difference in relation
to deferred sales proceeds arising from apast disposal of land. On bringing this to
management’s attention, management
decided that it was appropriate to
make this adjustment, and updated
financial statements accordingly.
I consider that the accounting treatment
adopted for these complex propertytransactions is appropriate.

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F I N A N C I A L S TAT E M E N T S

Key Audit Matter description

The scope of my audit work in response

The findings I communicated to the
Audit and Risk Committee

Key audit matters relating to my opinion on the financial statements
Complex property transactions
rise to accounting treatments whichmodel inputs to the terms of the lease
are not straightforward and require
agreements and other expected
the application of judgement. I have
inputs. I assessed the mechanicaldeemed complex transactions arising
accuracy of the models and refrom the BBC’s property strategy to be
performed the calculation of the leasea significant risk area for my audit. The
amounts included in the financial
following complex property transactions
statements. I assessed the
involve significant judgement and havereasonableness of management’s
been key areas of focus for my work:
calculations by comparing the outputsof my work to the amounts calculated
A: Properties held under leasingby management.
arrangements—— The classification of significant legacy
B: New Broadcasting House financing
leasing arrangements in respect of theI have assessed the reasonableness ofBBC’s New Broadcasting House andthe accounting treatment in relation to
White City sites in London and its
the classification and valuation of the
Pacific Quay site in Glasgow, as finance cash flow swaps used in the past reor operating leases;
financing of the New Broadcasting House
sale and leaseback. My audit procedures—— The valuation of the BBC’s major
included assessing the reasonableness offinance lease assets and liabilities
management’s key valuation assumptions
involves the use of complex models toand judgements. Using corporate financecalculate the valuations and was
specialists, I checked management’s
subject to a prior period adjustment in
key assumptions and judgements for
2016-17consistency with underlying contracts,
published rates and market practice; and I
B: New Broadcasting House re- financing
assessed the sensitivity of management’s—— The valuation of the series ofvaluations to changes in key assumptions.
significant derivative cash flow swaps
which form the basis of the 2016-17
C: Property disposals
refinancing of the New Broadcasting
I have considered management’s key
House sale and lease backjudgements in relation to the accounting
arrangement. The valuation of thesetreatments adopted for certain past andswaps involves judgement and is highly
planned disposals of property. My audit
sensitive to the assumptions made.
procedures included checking the basisof deferred sale proceeds and overage
C: Property disposals
agreements to underlying contracts; and—— The existence and valuation ofreviewing board minutes and business
deferred sales proceeds and theplans to confirm the completeness oftreatment of an overage clause inproperty disclosed as held for sale
relation to a past disposal of land,
where judgement is required regarding
the treatment of these items in thefinancial statements.
—— The classification, completeness andvaluation of property available-for-salewhich could have a material impact on
the financial statements.
Risk of fraud in revenue recognition
Total revenue recognised – £5,062.7 million(2016-17: £4,954.0 million). Refer to note A1(financial disclosures) and note H (accounting
policies) and the risks set out in the Audit
and Risk Committee report on page 111.
International Standards on Auditing(UK) require me to consider whether
or not there is a risk of fraud in respectof revenue recognition. Given thescale and nature of the BBC’s income
streams, I have not rebutted this risk.
My scoping work has identified thefollowing transactions streams as
areas of specific focus for my audit:

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Key Audit Matter description

The scope of my audit work in response

Key audit matters relating to my opinion on the financial statements
Risk of fraud in revenue recognition
Licence Fee revenue (£3,830.2 million
In relation to the licence fee revenue grant(2016-17: £3,787.2 million)
recognised in the BBC’s consolidated
financial statements, I have assessed
The BBC’s primary source of funding is
the reasonableness of the BBC’s licencederived from the Television Licence Fee
fee revenue recognition policy. I have(the “licence fee”). The Telecommunications
substantively tested the amounts and the
Act 2003 requires that licence fees must
timing of licence fee revenue funding paid
be paid to the BBC which, in turn, must
to the BBC by the Secretary of State for
remit the amounts collected to theDigital, Culture, Media and Sport; and theConsolidated Fund. The BBC Licence Feeamounts and timing of payments made by
Unit uses an outsourced service provider,
the Department for Work & Pensions to
Capita, to collect licence fees on its behalf.
the BBC in respect of television licences
issued free-of-charge to over-75s.
Licence fees collected are broughtto account within the BBC Television
Given that the licence fee revenue andLicence Fee Trust Statement (“the Trustbalances recorded in the Trust Statement
Statement”). This is a separate account,provide an authoritative expectation as
which I also audit. The licence fee revenue
to the related licence fee grant funding
recorded in the BBC consolidated financial
and balances recorded in the consolidated
statements is a grant-in-aid funding
financial statements, I have carried out
settlement, paid directly to the BBC
audit procedures on the BBC Licence Feefrom the Secretary of State for Digital,
Unit collection systems and processes
Culture, Media and Sport from sums
and on related transactions and balances
drawn down for the Consolidated Fund inreported in the Trust Statement. These
respect of licence fees issued in the year.
included obtaining assurance on thecompleteness and occurrence of licence fee
The licence fee income and balances
income recorded in the Trust Statement byrecorded in the Trust Statement provide anusing IT audit procedures on key licence fee
authoritative expectation of the amount ofcollection systems and testing a sample oflicence fee funding the BBC receives in thein-year transactions and year-end balances.
year from the Secretary of State, and which
it recognises in its financial statements.
I have also obtained assurance over theproper operation of cut-off by examining
Licence fee funding includes a settlement
evidence showing cash receipts andof £655.3million in 2017-18 from thelicences issued around the year end.
Department for Work and Pensions,in relation to the provision of free
Television Licences to over-75s.

The findings I communicated to the
Audit and Risk Committee

On the basis of the procedures I have
performed I consider licence fee revenue
funding and related balances to beappropriately recognised and reported.
I have considered the recognition pointof licence fee revenue within the BBC’s
consolidated financial statements andconsider this to be appropriate.
I made recommendations to management
to enhance the disclosures relating tolicence fee revenue funding so as to provide
a clearer link between the payments madeby licence fee payers and the funds received
by the BBC. Management consideredthat it was appropriate to enhance these
disclosures and adjusted them accordingly.

The grant-nature of the licence feerevenue recorded by the BBC means thatrevenue recognition for this income stream
is, generally, not complex. Licence feerevenue recognition in the related Trust
Statement is also, generally, not complex.
This is because income is recognised on
issuance of a licence and the amountfor each licence type is a fixed price.
I have assessed a risk in this area becauseof the importance of licence fee funding
to the BBC and the parliamentaryand public interest in it, as well as thesignificant sums involved. Consequently,
I consider that there may be an incentive
to manage and report this revenue inways that meet management’s or licencefee payers’ expectations. This might
involve the BBC or other parties involvedin the licence fee revenue collection andreporting process. I consider that there
is a heightened risk around the year endof revenue recognition being managed
to achieve particular results and this has
been a key focus of my testing in this area.

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Key Audit Matter description

The scope of my audit work in response

Key audit matters relating to my opinion on the financial statements
Risk of fraud in revenue recognition
Commercial revenue and profit recognition
I have carried out work to understand(£1,232.5 million (2016-17: £1,166.8 million))
the nature of the BBC’s commercial
profits including reviewing contractual
There are a number of revenue streams
documentation and managementfrom different sources within the BBC’s
reporting, making enquires ofcommercial subsidiaries, including
management responsible for BBC
subscriber revenues, distribution, andcommercial activities (both within the UKsale of BBC branded products. Audit
and at significant territories overseas,risk arises from the level of judgement inboth by value and by risk). I have also
respect of the completeness and cutresearched wider market practice inoff of revenue. This is particularly the
relation to revenue recognition in thecase within BBC Worldwide (part of themedia sector. I used this understanding
BBC Studios Group from 1 April 2018
to assess the reasonableness of revenue
but known as BBC Worldwide during therecognition policies adopted by the BBC’s
reporting period) as the largest commercial
commercial subsidiaries, focussing my
subsidiary and where most revenue isattention on the highest risk and mostearned from outside of the BBC Group.
significant revenue streams: channels,
distribution, and format sales.
One of the largest revenue streams within
BBC Worldwide relates to the distribution
My testing included: undertakingof content. Commercial distribution
detailed analyses of key revenue streams
rights acquired by the BBC relating toand identifying transactions withthis content are treated as intangible
the greatest risk for further analysis,
assets within BBC Worldwide’s financial
reviewing significant revenue contracts
statements. BBC Worldwide’s expenditure
to understand the key features andis affected by judgements in relation to theconfirming that they have been treatedamortisation of commercial distribution
appropriately in the financial statements;rights. Amortisation is based on theand, considering transactions arising
expected revenue profile of the programmearound the year-end, for evidence of
portfolio. As a key area of judgement, risks
delivery and licence period start dates.
arise as changes in assumptions could have
I have particularly focussed on the yeara material impact on operating profit.
end, as the timing of BBC Worldwide
revenue is skewed towards March tocoincide with the BBC Showcase event.

The findings I communicated to the
Audit and Risk Committee

I have concluded that commercial revenue
and profit is appropriately recognised andreported. I have considered the principles
adopted by the BBC, in particular the pointof revenue recognition and the policies
adopted to amortise distribution rights,
and found these to be appropriate.

I have also assessed the judgements
made in respect of amortising commercial
distribution rights. I reviewed the basis onwhich the amortisation principles were
determined, comparing these to the known
and forecast timing of the realisation of
the value of these rights. I considered
whether any amendments were required tothe policy in light of developments in BBC
Worldwide’s business, and wider market
practice, during the reporting period.
Creation of BBC Studios Limited
Total value of net assets transferred –£49.0 million.
On 1 April 2017, BBC Studios Limited wasestablished as a separate legal entity,
having previously been a division of the
BBC Public Service Broadcaster (BBCPSB). To establish BBC Studios Limited,the division was carved-out, including
the transfer of a number of assets andliabilities and employees, from BBC PSB
to BBC Studios Limited. There are risks
around the complete and accurate transfer
of balances relating to the former BBC
Studios division to the new entity, as well as
opening balances for the first year of BBC
Studios Limited’s financial statements.
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I have sample tested balances transferredfrom BBC PSB to BBC Studios Limited,
comparing these to the transfer agreement
and confirming that these balances havebeen completely and accurately reflectedin the BBC Studios Limited statutoryfinancial statements. I have also assessed
whether these balances were transferred inaccordance with the requirements set out
by the BBC Trust when this arrangement
was agreed in December 2016.

I have found that balances relating
to the previous BBC Studios divisionwere appropriately transferred from
BBC PSB to BBC Studios Limited.
I consider that BBC Studios Limited
has been appropriately consolidated
into the BBC’s consolidated financial
statements and that related
disclosures are appropriate.

I have completed a separate auditof the BBC Studios Limited financial
statements, which form a significant
component of the BBC Commercial
Holdings Group which, in turn, is asignificant component of the BBC Group.
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Key Audit Matter description

The scope of my audit work in response

The findings I communicated to the
Audit and Risk Committee

Key audit matters relating to my opinion on the financial statements
Creation of BBC Studios Limited
The creation of BBC Studios Limited
coincides with the new ‘compete andcompare’ strategy, whereby BBC Studios
Limited is required to compete, alongsideindependent producers, for returning
series network commissions. At a BBC
PSB level, this involves new processes
for awarding tenders and operating at anarm’s length from BBC Studios Limited,
requiring consideration from a regularity
perspective, which I set out below.
Capitalisation and major projects
Total value of Assets Under Construction– £103.2 million (2016-17: £131.7 million).
Refer to note D1 (financial disclosures) andnote H (accounting policies). Refer to the
Audit and Risk Committee report section 111.
A number of significant projects support
the BBC’s strategy, many of which
are capitalised in the BBC’s financial
statements. These projects relate todigitalisation, enhancing technology, andchanges in the way the BBC engages withaudiences, as well as capital construction
projects. Judgement is required around theappropriate capitalisation of expenditure
and also the valuation of assets generated
where there are risks that the expected
benefits may not be delivered as planned.
Valuation of the pension scheme liability
Total value of pension scheme liability –£518.3 million (2016-17: £1,149.1 million).
Refer to note C7.1 (financial disclosures)and note H (accounting policies) andthe risks set out in the Audit and Risk
Committee report on page 111.
The BBC has a significant pension deficit.
The scheme was subject to triennial
valuation at March 2016, and the BBC
and pension scheme trustees have agreed
a revised repayment plan to reduce thescheme deficit. The valuation of the net
pension liability reported in the accounts
is highly judgemental, and changes
to assumptions can result in materialchanges to the valuation. The pension
scheme liability recognised by the BBC
has moved significantly over the financial
year, reducing by £630.8m. Given this, I
have assessed the valuation of the pension
deficit as a significant risk to my audit.

I have assessed the governance andcontrol arrangements relating to themost significant projects currently
in progress. I have sample tested
transactions and balances relating tothese projects to confirm these havebeen appropriately recognised as assets
under construction or asset additions.
I have reviewed the procedures
implemented by the BBC to determine
whether impairment is necessary.
Alongside this, I have reviewed board
minutes, made enquires with project
managers and undertaken my own
research to determine whether there
are any indicators of impairment.

I have understood the BBC’s pension
scheme arrangements and assessed
the processes and controls used bymanagement to account for them.
Using actuarial experts I have assessed
the reasonableness of key assumptions
used in determining the scheme
liability, benchmarking them against
other schemes; and I have assessed
the nature and appropriateness of
BBC context-specific assumptions.
I have also assessed the expertise andindependence and of the BBC’s actuaries.

I identified a number of projects whereamounts were incorrectly recorded asassets under construction when theseassets had, in fact, been bought into
use. Upon drawing these matters tomanagement’s attention, management
determined that it was appropriate toadjust these amounts and amended
the financial statements accordingly.
I consider major projects to beappropriately accounted for in the BBC’s
consolidated financial statements.

I am satisfied that the methodology
and approach adopted by the BBC isappropriate for the valuation of thepension scheme liability in the BBC’s
consolidated financial statements.
My challenge of the reasonableness ofassumptions has found that these all sit
within the range I would expect whencompared to market practice. I consider
that the disclosures relating to pension
assets and liabilities comply with therequirements of accounting standards.

I have taken assurance from the workof the BBC Pension Scheme auditors in
relation to the valuation of scheme assets.
I have tested data inputs usedin determining the valuation,
including employer contributions
and scheme membership data.
I have tested the accounting entries
recognised to the underlying work
performed by the BBC’s actuaries
and reviewed disclosures made toconfirm these are in accordancewith accounting standards.

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Key Audit Matter description

The scope of my audit work in response

Key audit matters relating to my opinion on the financial statements
Service spend disclosures
Refer to note B3.1 (financial disclosures)
I have assessed management’s processes
and controls for the complete and
The BBC includes detailed analysis in its
accurate compilation of expenditure
financial statements on expenditure byanalysed by service, and carried out
service and genre. The preparation ofdetailed sample testing to agree thethese disclosures, involves judgement in
disclosures to supporting information.
determining the appropriate allocations
This has included assessing theof costs and overheads. Given this, andreasonableness of the assumptions
because of the high levels of publicmanagement have used in allocatinginterest in these disclosures I havecosts and overheads and assessing theassessed significant risk to my audit.
proper operation of cut-off in relation
to costs arising around the year-end.
The BBC’s annual report includes
detailed disclosures on how much has
been spent and on what services in eachof the United Kingdom Nations. The
current Royal Charter requires the BBC
to provide this information. The resultsof my separate reporting engagement onthese disclosures are set out on page 167.
Accounting for investments in associates and joint ventures
Total value of interests in associates andGiven the significant levels of management
joint ventures – £239.5 million. (2016-17:
judgement involved in determining the£258.5 million). Refer to note E3 (financial
appropriate group accounting treatment
disclosures) and note H (accounting
and the sensitivity of the consolidated
policies and the risks set out in the Audit
financial statements to these judgements
and Risk Committee report on page 111.
I have assessed the accounting treatmentof the following BBC investments as giving
The BBC Group comprises over 100
rise to a significant risk to my audit:
separate subsidiaries and over 60
associates and joint ventures. On preparing
A. Daunus Limited: Daunus Limited is a
its consolidated financial statements,
special purpose vehicle established as
the BBC must make judgements aroundpart of the sale and leaseback
the control exercised over each entity
arrangement which facilitated theto determine whether to consolidate
redevelopment of New Broadcasting
the entity or recognise it as an
House. The financial statements areassociate, joint venture, investment.
highly sensitive to the accounting
treatment adopted, as this judgement
When consolidating entities into thehas a material impact on the financial
BBC’s consolidated financial statements,
statements and the BBC’s outturn
there are risks associated with theagainst its borrowing limits.
completeness of adjustments madeB. UKTV Media Limited: given UKTV’s
to eliminate intra-group transactions
significance to the BBC’s financial
and adjustments made to recognise
statements.
the assets, liabilities and results ofsubsidiaries, associates and joint ventures.
C. New Video Channel America LLC: as
the BBC Worldwide owns 50.1% of thisManagement must also exercise
entity but does not consolidate it.
judgement as to the valuation
attributed to its investments, within the
I performed the following procedures in
consolidated financial statements.
relation to each of these investments:
A.

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The findings I communicated to the
Audit and Risk Committee

I am satisfied that the disclosuresin note B3.1 are appropriate.

I am satisfied that the Group consolidation
has been properly performed.
I am content that the accounting
treatment adopted in respect of the
BBC Groups’ investments in associatedand joint ventures is appropriate.

Daunus Limited: I assessed thereasonableness of management’s past
judgement on the treatment of its
investment in Daunus Limited as anequity-accounted joint venture. My
audit procedures included considering
the reasonableness of management’s
key assumptions and judgements,
checking these for consistency with theunderlying contractual documentationand obtaining evidence that, inpractice, joint control is exercised over

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Key Audit Matter description

The scope of my audit work in response

The findings I communicated to the
Audit and Risk Committee

Key audit matters relating to my opinion on the financial statements
Accounting for investments in associates and joint ventures
the relevant activities of Daunus. I haveassessed the reasonableness of thevaluation of the Daunus investment byreference to Daunus’s audited accounts.
B.

UKTV Media Limited: I have reviewed
the underlying contractual
documentation in place and assessedmanagement’s treatment of UKTV asa joint venture in the financial
statements. Through my group audit
procedures I have confirmed the BBCGroup’s share of UKTV Media Limited’s
underlying profits.

C.

New Video Channel America LLC:
I have reviewed the past judgement
that, although BBC Worldwide owns
50.1% of New Video Channel America,
it does not control the entity andtherefore does not consolidate it ona line by line basis. I have reviewed
underlying contractual agreements
and minutes of the relevant board andcommittee meetings to understandthe substance of the arrangement inplace. Through my group audit
procedures I have confirmed the BBCGroup’s share of New Video Channel
America LLC’s underlying profits.

I assessed the controls established by
the BBC to consolidate the transactions
and balances relating to its subsidiary
entities, and to completely and accurately
process consolidation adjustments andappropriately eliminate intra-grouptransactions. I tested the consolidation
process using group audit procedures andsample testing of intra-group transactions.
I set out further information on my groupaudit procedures later in this report.

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F I N A N C I A L S TAT E M E N T S

Key Audit Matter description

The scope of my audit work in response

Key audit matters relating to my opinion on regularity
Implementing new regularity requirements
As has been the case previously, the current I have understood the overall regularity
Royal Charter sets out responsibilities
framework and assessed areas of risk thisfor the BBC in respect of its stewardshipgives rise to. I have done this by makingof licence fee funding. The current Royalenquiries of management, and reviewing
Charter, however, explicitly includes, formanuals, key policies and procedures.
the first time, the concepts of regularity
I have assessed the reasonableness ofand propriety. Regularity is concernedmanagement’s judgement of the risks towith whether transactions recorded inregularity that flow from the framework.
the financial statements conform to the
A: the risk of the BBC using licenceauthorities which govern them. I have set
fee money inappropriately to fundout the relevant framework of authorities
commercial activities
for the BBC above. Transactions are regular
I have assessed the design, implementation
if they accord with these authorities;
and effectiveness of the key elements
otherwise they are irregular. Propriety isof management’s overall governanceconcerned with how business is conducted.
arrangements, systems, processes
My regularity opinion on the BBC
and controls. My procedures included
Group financial statements considers
attending a meeting of the Fair Trading
whether licence fee funding has been
Committee, reviewing the scope andused for its intended purpose, as set
findings of the external assurance
out in the framework of authorities.
review of Fair Trading, and assessing
I am not required to issue an opinion
whether Fair Trading Guidance accords
on propriety, but I consider andwith the framework of authorities.
report on concerns as necessary.
I have also tested a sample of intraI consider the general requirements ofGroup transactions between the BBC
the framework, as well as the specific.
Public Service Broadcaster (BBC PSB)
My general considerations of the BBC’s
and its commercial subsidiaries, andstewardship of licence fee funding would
assessed whether these have been
include taking account of any significant
undertaken in accordance with the BBC’s
frauds or losses if such matters have
Fair Trading Guidance. I have particularly
occurred and come to my attention during
focussed on the creation of BBC Studios
the course of my engagement. This is
Limited as a separate commercial
because I always consider fraudulent
activity and transactions between
transactions to be irregular and, in the case BBC PSB and BBC Studios Limited.
of any significant losses, I would consider
B: entering into transactions in relation to
the cause as this could be indicative of anmaterial changes to the BBC’s activities
underlying irregularity or impropriety.
that have not been approved by Ofcom
Understanding and assessing theI have understood changes made by theframework of authorities and the
BBC during the year, or soon after the yearregularity risks that this gives rise to,end, that may require Ofcom consideration
along with understanding and assessing
as a material change. To inform mymanagement’s response to controllingunderstanding I have made enquiries ofand managing those risks have been
management and reviewed board papers
key areas of focus for my audit.
and minutes and the BBC’s business plans.
I have also met with officials from Ofcom.
As these arrangements are new for 201718, I have assessed there is a risk that
I have particularly focussed on the creation
management’s controls and processesof BBC Scotland and the merger of BBC
to respond to the new requirements
Worldwide Limited and BBC Studios
may not have been sufficiently wellLimited. My procedures included reviewing
developed or may not have operated
the Board papers and minutes and Ofcom’s
effectively throughout the year. In turn, this published reports on these matters.
increases the risk of there being irregular
C: the risk that the BBC breaches
transactions in the financial statements.
borrowing limits set out by the
In this regard I have assessed a significant
Secretary of State Direction issued
risk in the following areas and theseunder the Framework
have been a key focus for my work:
I have understood these limits and how
financial statement items score against
A: the risk of the BBC using licence feethem. I have substantively reviewed
money inappropriately to fund commercial
the outturn against these limits.
activities – for example, cross-subsidy ofI have assessed the reasonableness

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The findings I communicated to the
Audit and Risk Committee

My audit has provided me withreasonable assurance that consolidated
income and expenditure is freefrom any material irregularity.
I have been able to take assurance for myaudit from the key systems, procedures
and controls introduced by the BBC.
This assurance extends to the necessary
requirements for my audit only.
I have observed that these key controls
have evolved over the year and continue tomature. I recommended to the Audit & Risk
Committee that it obtain formal assurancesfrom management or internal audit inrelation to the design, implementationand effectiveness of the systems andprocedures that management haveestablished to ensure compliance with theframework of authorities. The Committee
decided that it would be appropriate to do
this. I have further recommended that thisbecomes a routine feature of the Board’s
assurance arrangements. Management
have decided that this is an appropriate
course of action and have adopted it.

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F I N A N C I A L S TAT E M E N T S

Key Audit Matter description

The scope of my audit work in response

The findings I communicated to the
Audit and Risk Committee

Key audit matters relating to my opinion on regularity
Implementing new regularity requirements
the BBC’s commercial subsidiaries whereof management’s choice in accounting
transactions are not on arm’s length terms;
treatment of financial statement items
where this involves judgement and where
B: the risk of entering into transactions in
the accounting treatment would have an
relation to material changes to the BBC’s
impact on outturn against the limits. In
activities that have not been approved
particular, I have assessed and challenged
by Ofcom, as the BBC’s regulator; andthe accounting treatment adopted by the
C: the risk that the BBC breaches borrowing BBC for its investment in Daunus Limited.
limits set out in the Secretary of State
I have made enquiries of those charged with
Direction issued under the Framework.
governance and internal audit about therisk of material fraud or losses. ThroughThe high levels of public interest in
my review of board minutes, internalmatters relating to regularity means I
audit reports and my audit of the financial
consider the nature of any irregularity,
statements. I have remained alert to theseas well as its value, when forming myrisks. I have also obtained management
view as to whether or not any breach
representations on these matters.
constitutes a material irregularity.

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F I N A N C I A L S TAT E M E N T S

Application of materiality
I applied the concept of materiality
in both planning and performing myaudit, and in evaluating the effect of
misstatements on my audit and on thefinancial statements. This approach
recognises that financial statements are
rarely absolutely correct, and that anaudit is designed to provide reasonable,
rather than absolute, assurance that thefinancial statements are free from material
misstatement or irregularity. A matter ismaterial if its omission or misstatement
would, in the judgement of the auditor,
reasonably influence the decisions ofusers of the financial statements.
Groupmateriality

Overallmateriality£25 million(2016-17:£10 million)—— Remuneration disclosures;—— Matters that could result in a
modification of the regularity
opinion; and—— Any adjustment that would affect theoverall position of the primarystatements at the margin; for example
that would result in the surplus
reported in the consolidated income
statement becoming a deficit, or
vice-versa.

BenchmarkAssessment of such matters would
need to have regard to the nature of
the misstatement and the applicablelegal and reporting framework, as wellas the size of the misstatement.

0.5% of Grouprevenue(2016-17:
0.2% ofoperatingcosts)

I have also reported any unadjusted
misstatements exceeding my reporting
threshold of £250,000 to the BBC Audit& Risk Committee, as well as differences
below this threshold that, in my view,
warranted reporting on qualitative grounds.

Performance £18.75 million 75% of overallmateriality (2016-17:
materiality£5 million)(2016-17:75%)

Total unadjusted audit differences
reported to the Audit Committee
have decreased/increased net
expenditure/assets by £2.7 million

Reportingthreshold

Respective responsibilities of the
BBC Board and the Comptroller and
Auditor General
As explained more fully in the Statementof Board Responsibilities, the Board
are responsible for the preparation of
the consolidated financial statements
and for being satisfied that they givea true and fair view and conform to
the authorities which govern them.

£250,000(2016-17:£500,000)

Based on my professional judgement, I
determined that overall materiality for theBBC’s consolidated financial statements at£25 million, which is approximately 0.5% of
BBC Group revenue. I chose this benchmark
because, in my professional judgement,
income is the key driver of the BBC’s
business; in particular licence fee revenue
and commercial income generated by the
BBC is a key driver of stakeholder interest.
Parliament and the public have an interestin the way in which the BBC is funded
and how it spends its funds. The level oflicence fee revenue and commercial income
determines the resources available to the
BBC and drives strategic decisions aroundspending and investment. I considered thatsetting materiality at £25 million, comparedto the level of £10 million used previously,
facilitated appropriate focus on thosetransactions and balances that represented
the greatest risk and judgement.
In addition in those areas of greatest
sensitivity and therefore greatest
stakeholder interest I have applied a lower
level of qualitative materiality. These
are certain matters that, by their very
nature, would if not corrected influence
the decisions of users, for example:

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My responsibility is to audit andexpress an opinion on the financial
statements in accordance withapplicable law and International
Standards on Auditing (ISAs) (UK).
An audit involves obtaining evidence about
the amounts and disclosures in the financial
statements sufficient to give reasonableassurance that the financial statements arefree from material misstatement, whether
caused by fraud or error. Reasonableassurance is a high level of assurance, but
is not a guarantee that an audit conductedin accordance with ISAs (UK) will always
detect a material misstatement when
it exists. Misstatements can arise fromfraud or error and are considered material
if, individually or in the aggregate, they
could reasonably be expected to influence
the economic decisions of users taken on
the basis of these financial statements.

As part of an audit in accordancewith ISAs (UK), I exercise professional
judgment and maintain professional
scepticism throughout the audit. I also:—— identify and assess the risks of material
misstatement of the financial
statements, whether due to fraud or
error, design and perform audit
procedures responsive to those risks,and obtain audit evidence that is
sufficient and appropriate to provide abasis for my opinion. The risk of notdetecting a material misstatement
resulting from fraud is higher than for
one resulting from error, as fraud may
involve collusion, forgery, intentionalomissions, misrepresentations, or theoverride of internal control.
—— obtain an understanding of internal
control relevant to the audit in order todesign audit procedures that areappropriate in the circumstances, but
not for the purpose of expressing an
opinion on the effectiveness of theBBC’s internal control.
—— evaluate the appropriateness ofaccounting policies used and thereasonableness of accounting
estimates and related disclosures
made by management.
—— conclude on the appropriateness ofmanagement’s use of the going
concern basis of accounting and, basedon the audit evidence obtained,
whether a material uncertainty exists
related to events or conditions that
may cast significant doubt on the
BBC’s ability to continue as a going
concern. If I conclude that a material
uncertainty exists, I am required to
draw attention in my auditor’s reportto the related disclosures in thefinancial statements or, if suchdisclosures are inadequate, to modify
my opinion. My conclusions are basedon the audit evidence obtained up to
the date of my auditor’s report.
However, future events or conditions
may cause the entity to cease tocontinue as a going concern.
—— evaluate the overall presentation,
structure and content of the financial
statements, including the disclosures,and whether the consolidated financial
statements represent the underlying
transactions and events in a mannerthat achieves fair presentation.

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F I N A N C I A L S TAT E M E N T S—— obtain sufficient appropriate audit
evidence regarding the financial
information of the entities or businessactivities within the group to express
an opinion on the consolidated
financial statements. I am responsible
for the direction, supervision andperformance of the group audit.
I remain solely responsible for myaudit opinion.
I communicate with those charged withgovernance regarding, among othermatters, the planned scope and timing of
the audit and significant audit findings,
including any significant deficiencies ininternal control that I identify during
my audit.
In addition, I am required to obtain evidence
sufficient to give reasonable assurance
that the income and expenditure reported
in the financial statements conform to
the authorities which govern them.
Group audit approach
The BBC Group comprises over 100
subsidiaries, along with a number ofassociates and joint ventures. There
are three levels of consolidation
within the BBC Group:—— Level 1: BBC Group, comprising the
BBC Public Service Broadcaster (PSB),
PSB subsidiaries, and BBC Commercial
Holdings Group;—— Level 2: BBC Commercial HoldingsGroup, comprising BBC Commercial
Holdings Limited and subsidiarycompanies, including BBC Worldwide
Group, BBC Studios Limited, BBC
Global News companies, BBC
Studioworks Limited; and—— Level 3: BBC Worldwide Group,comprising BBC Worldwide Limited
and subsidiary companies.
This audit opinion relates to the BBCGroup, at level 1. My group audit approachhas been designed to enable me to form
an opinion on these consolidated financial
statements, and my assessment ofsignificant components and the nature of
the work I have performed is as follows:

Level 1: BBC Group
Significant components and auditors –full scope audit— BBC Public Service Broadcaster (NAO)—

Sampled non-significant components –full scope audit
None – due to coverage achieved
from significant components
Other procedures on non-significant
components
I performed other work, including analyticalprocedures, on the remaining components.

Level 2: BBC Commercial
Holdings Group
Significant components and auditors –full scope audit— BBC Commercial Holdings Ltd (NAO)—

BBC Studios Ltd (NAO)—

BBC Worldwide Group Ltd (NAO)—

BBC Global News entities (NAO)—

BBC Children’s Productions Ltd (Grant
Thornton)—

BBC Grafton House Productions Ltd(Grant Thornton)

Sampled non-significant components –full scope audit— BBC Studioworks Ltd (NAO)—

BBC Ventures Ltd (NAO)

Level 3: BBC Worldwide
Group
Significant components and auditors –full scope audit— BBC Worldwide Ltd (NAO)—

2 entertain & 2 entertain Video Ltd
(NAO)

—

BBC Worldwide Australia pty (Grant
Thornton)—

BBC Worldwide Americas Inc (noauditor)—

UKTV Ltd (KPMG)—

BBC America (KPMG)—

BBC Annual Report and Accounts 2017/18

Full scope audit
Analytical procedures

BBC Commercial Holdings Group(NAO)

Sampled non-significant components –full scope audit— BBC Worldwide France SARL (KPMG)

180

Total revenue: £5,062.7m

UK Programme Distribution Ltd (NAO)

Total revenue: £1,555.2m
Full scope audit
Analytical procedures

Other procedures on non-significant
components
I performed other work, including analyticalprocedures, on the remaining components.

Total headline revenue: £1,044.0m
Full scope audit
Analytical procedures

Other procedures on non-significant
components
I performed other work, including analyticalprocedures, on the remaining components.

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F I N A N C I A L S TAT E M E N T S

I have had direct involvement in theaudit strategy of the BBC’s significant
components, including those significant
components where I have not been
appointed as auditor. I have issued Group
Audit Instructions to all significant
components by size and risk and also to asample of other components, which enable
me to obtain the necessary assurances
required for my audit opinion on the
BBC’s consolidated financial statements.
For significant components where I havenot been appointed as auditor, I havemet and discussed the audit strategy,
significant audit risks and findings fromcomponent auditors’ work. For thesecomponent audits I have also met withcomponent management and attended
planning and closing meetings. Under
the terms of the Group Audit Instructions
I issued, full statutory audit proceduresin accordance with local adaptationsof International Standards on Auditing
have been conducted and I have satisfied
myself that sufficient work has been
undertaken to provide the necessary
assurances for my audit opinion on the
BBC’s consolidated financial statements.
The components subject to theseprocedures are described as ‘full scope
audit’ components in the table above.

materially inconsistent with the financial
statements or my knowledge obtainedin the audit or otherwise appears to bematerially misstated. If, based on the work
I have performed, I conclude that there
is a material misstatement of this otherinformation, I am required to report thatfact. I have nothing to report in this regard.

The Strategic and Governance reports
In my opinion, based on the work
undertaken in the course of the audit,
the information given in the Strategicand Governance reports for the financial
year are consistent with the financial
statements and have been preparedin accordance with applicable law.

I am specifically required to address thefollowing items and to report uncorrectedmaterial misstatements in the otherinformation, where I conclude that those
items meet the following conditions:

Based on my knowledge andunderstanding of the BBC and its
environment obtained during the courseof the audit, I have identified no material
misstatements in these reports.

—— Fair, balanced and understandable: thestatement given by the directors thatthe annual report and accounts taken
as a whole are fair, balanced andunderstandable and provide thenecessary information to enable users
to assess the entity’s performance,business model and strategy, ismaterially inconsistent with myknowledge obtained in the audit; orThe corporate governance statement
In my opinion, based on the work
undertaken in the course of the audit,
the information given in the corporate
governance statement in respect of internal
control and risk management systems in
relation to financial reporting processes is
consistent with the accounts and has been
prepared in accordance with applicable law.

For other components I have undertaken
other procedures to gain the necessary
assurances for my audit opinion on the
BBC’s consolidated financial statements.
This included evaluating and testing theBBC’s group wide controls, and performing
analytical and enquiry procedures toaddress the risk of residual misstatement.

I also have nothing to report in this regard.

Other Information
The BBC Board is responsible for theother information. The other information
comprises information included in theannual report, other than the parts of
the Remuneration Report described inthat report as having been audited, thefinancial statements and my auditor’sreport thereon. My opinion on the financial
statements does not cover the otherinformation and I do not express any
form of assurance conclusion thereon. In
connection with my audit of the financial
statements, my responsibility is to readthe other information and, in doing so,
consider whether the other information is

Return to contents—— Audit Committee reporting: thesection describing the work of theGroup Audit Committee does not
appropriately address matterscommunicated by me to the
Audit Committee.

Other matters prescribed by the termsof my engagement
Remuneration
In addition to my audit of the BBC’s
consolidated financial statements, theBoard has engaged me to audit the
information in the Board remuneration
report that is described as having been
audited, which the Board has decided
to prepare as if the BBC were required
to comply with the requirements of
Schedule 8 to The Large and Medium-sizedCompanies and Groups (Accounts andReports) Regulation 2008 (SI 2008 No 410)
made under the Companies Act 2006.
In my opinion the parts of the Board
remuneration report which I have been
engaged to audit have been properly
prepared in accordance with Schedule 8 to
the Large and Medium-sized Companies
and Groups (Accounts and Reports)
Regulation 2008, as if those requirements
were to apply to the BBC Group.

In my opinion, based on the work
undertaken in the course of the audit,
rules 7.2.2, 7.2.3 and 7.2.7 in the
Disclosure Rules and Transparency Rules
sourcebook made by the Financial Conduct
Authority have been complied with.
Based on my knowledge andunderstanding of the BBC and its
environment obtained during the courseof the audit, I have identified no material
misstatements in this information.
Matters on which I report by exception
Adequacy of accounting records
information and explanations received
I report to you if, in my opinion:—— adequate accounting records have notbeen kept, or returns adequate for myaudit have not been received frombranches not visited by my staff;—— the financial statements and the partof the Remuneration report to beaudited are not in agreement with theaccounting records and returns; or—— I have not received all of theinformation and explanations I require
for my audit.
I have nothing to report arising fromthis duty.

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F I N A N C I A L S TAT E M E N T S

The Boards’ assessment of principal risks
and future prospects
Under International Standards on Auditing(UK & Ireland), I am required to report
to you if I have anything material to add,
or to draw attention to, in relation to
the Boards’ disclosures in the annual
report and financial statements:—— confirming that they have carried out
a robust assessment of principal risksfacing the BBC, including those thatwould threaten its business model,
future performance, solvency
or liquidity;—— describing those risks andexplaining how they are being
managed or mitigated;—— on whether they considered it
appropriate to adopt the going
concern basis, and their identificationof any material uncertainties to theentity’s ability to continue over a
period of at least twelve months fromthe date of approval of the financial
statements; and182

BBC Annual Report and Accounts 2017/18—— explaining how they have assessed theprospects of the entity, over what
period they have done so and why they
consider that period to be appropriate,
and their statement as to whether they
have a reasonable expectation that the
BBC will be able to continue inoperation and meet its liabilities as
they fall due over the period of theirassessment, including any related
disclosures drawing attention to any
necessary qualifications orassumptions.
I have nothing material to add, or to
draw attention to, on these matters.
ReportMy report is set out on page 183.

Sir Amyas C E Morse KCB
Comptroller and Auditor General
National Audit Office157-197 Buckingham Palace Road
London, SW1W 9SP
21 June 2018

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F I N A N C I A L S TAT E M E N T S

The Report of the Comptroller and
Auditor General to the Board of
the British Broadcasting Corporation,
acknowledging that Parliamentalso places reliance on theGroup Accounts and Report
In March 2018*, the BBC announced
its intention “…to determine the rightapproach in cases where on-air presentersbelieve the BBC bears some liability
in relation to demands for Employers’
National Insurance Contributions...” forindividuals engaged via Personal Service
Companies (PSC) before 6 April 2017.
Tax collection arrangements for PSCs in
the public sector changed in April 2017,
however, under the PSC arrangements
in place pre-April 2017, the BBC was not
responsible for collecting employment tax
and National Insurance Contributions onbehalf of individuals engaged via a PSC,
or making Employers National Insurance
Contributions, as would be the case forthose employed directly by the BBC.
The BBC has engaged a third party
service, the Centre for Effective Dispute
Resolution (CEDR), to assess whether it
is appropriate or reasonable for the BBC
to make any contribution towards historicdemands for Employers National Insurance
Contributions. The CEDR arrangements
are still in the process of being developedand implemented at the date of this report,
alongside the BBC’s ongoing discussions
with HM Revenue and Customs.

The BBC describes this matter in Note
F9 Provisions and Contingent Liabilities
within the consolidated financial
statements. In the key audit matterssection of my audit certificate, I set out
my consideration of, and my conclusions
on, this issue insofar as it impacts on the
BBC’s 2017-18 consolidated financial
Statements. Later this year, I will publish an
investigation into the BBC’s use of PSCs.
The BBC recognises there is a “…very highhurdle where public money is concerned…”
and “…that we cannot assume the tax
liability of others in the absence of acompelling justification for doing so…”.
I shall, of course, expect the BBC tohave proper regard to its obligation,
set out in the Royal Charter for thecontinuance of the BBC, to exercise
rigorous stewardship of public moneyin accordance with the principles ofregularity, propriety, value for money andfeasibility, and shall take this into accountas necessary in my reports next year.

Sir Amyas CE Morse KCB
Comptroller and Auditor General
National Audit Office157-197 Buckingham Palace Road
London, SW1W 9SP
21 June 2018*

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http://www.bbc.co.uk/mediacentre/
latestnews/2018/personal-service-companies.

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F I N A N C I A L S TAT E M E N T S

The BBC’s consolidated financial statements
These financial statements comprise both theprimary statements and additional supporting
disclosure notes. The primary statements are:Consolidated income statement
The income the BBC receives and expenditure incurred by theGroup’s operations during the financial year.
Consolidated statement of comprehensive income/(loss)
Items of income and expense, including reclassification
adjustments, that are not directly recognised in the income
statement and hence are charged or credited directly against
or to reserves.
Consolidated balance sheet
The statement of the assets and liabilities of the BBC at a specificpoint in time, the financial year end.
Consolidated statement of changes in equity
Components that make up the capital and reserves of the Groupand the changes to each component during the financial year.
Consolidated cash flow statement
Cash generated by the BBC from its operations and how thosecash flows have been used.

184

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F I N A N C I A L S TAT E M E N T S

Consolidated income statement
Note

2018
£m

2017
£m

Licence fee income
Other income

A1
A1

3,830.2
1,232.5

3,787.2
1,166.8

Total income

A1

5,062.7

4,954.0

Operating costs excluding restructuring costs
Restructuring costs

C3(4,815.3)(13.8)(4,943.7)(49.6)

Total operating costs

A1(4,829.1)(4,993.3)

Group operating surplus/(deficit)
Gain on disposal of non-current assets
Share of results of associates and joint ventures
Net financing costs

E3
F10

233.6
4.8
35.8
(95.6)(39.3)
8.3
45.7(134.0)Surplus/(deficit) before taxation
Taxation

G1.1

178.6
1.0

(119.3)(9.8)

Surplus/(deficit) for the year

179.6

(129.1)Attributable to:BBC
Non-controlling interests

178.3
1.3

(129.1)–

Surplus/(deficit) for the year

179.6

(129.1)

2018
£m

2017
£m

179.6

(129.1)736.9(248.0)736.9(248.0)(28.6)
25.9
(4.9)

30.4
(10.1)
1.8

(7.6)

22.1

Consolidated statementof comprehensive income/(loss)
Note

Surplus/(deficit) for the year
Other comprehensive income:Remeasurement on defined benefit pension schemes

C7.2

Total items that will not be reclassified to the income statement in the future
Exchange differences on translation of foreign operations
Gains/(losses) on cash flow hedges
Deferred tax (charge)/credit on financial instruments
Total items that may be reclassified to the income statement in the future

G5.3
G5.2

Other comprehensive income/(loss) net of tax

729.3(225.9)Total comprehensive income/(loss) for the year

908.9

(355.0)Attributable to:BBC
Non-controlling interests

907.6
1.3

(355.0)–Total comprehensive income/(loss) for the year

908.9

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F I N A N C I A L S TAT E M E N T S

Consolidated balance sheet
As at 31 March
Note

Non-current assets
Intangible assets (including goodwill)
Property, plant and equipment
Investment properties
Interests in associates and joint ventures
Trade and other receivables
Assets available for sale
Derivative financial instruments
Deferred tax assets
Current assets
Programme-related assets and other inventories
Trade and other receivables
Derivative financial instruments
Current tax assets
Cash and cash equivalents
Current liabilities
Trade and other payables
Borrowings
Provisions
Derivative financial instruments
Current tax liabilities
Non-current liabilities
Trade and other payables
Borrowings
Provisions
Derivative financial instruments
Deferred tax liabilities
Pension liabilities

E1
D1
D2
E3
F7.1
G3.2
G1.5

B5
F7.2
G3.2
G1.4
F1

F8.2
F4.1
F9
G3.2

F8.1
F4.2
F9
G3.2
G1.5
C7.1

2018
£m

2017
£m

232.6
1,038.3
73.8
239.5
64.6
0.6
429.4
6.1

238.3
1,076.4
78.1
258.5
90.4
7.9
490.8
11.3

2,084.9

2,251.7

725.6
975.0
9.1
36.2
523.0

612.9
1,022.4
6.6
40.0
256.3

2,268.9

1,938.2(1,053.2)(18.9)(55.6)(5.4)(12.5)(1,069.7)(14.5)(62.5)(34.0)(10.5)(1,145.6)(1,191.2)(79.1)(838.0)(48.3)(517.9)(13.9)(518.3)(48.4)(876.7)(50.6)(533.9)(31.4)(1,149.1)(2,015.5)(2,690.1)

Net assets

1,192.7

308.6

Attributable to the BBC
Operating reserve
Hedging reserve
Translation reserve
Other reserves

1,198.9(0.3)
19.3(26.8)

283.7(21.3)
47.9(2.1)

Non-controlling interests

1,191.1
1.6

308.2
0.4

Total capital and reserves

1,192.7

308.6

The financial statements were approved by the Board and authorised for issue on 21 June 2018, and signed on their behalf by:

Tony Hall
Lord Hall of Birkenhead
Director-General

186

Anne Bulford OBE
Deputy Director-General

BBC Annual Report and Accounts 2017/18

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F I N A N C I A L S TAT E M E N T S

Consolidated statement of changes in equity
Operatingreserve£m

Hedging
reserve£m

Translation
reserve£m

Otherreserves
£m

Total
£m

Noncontrollinginterests
£m

Total
£m

At 1 April 2016

660.8

(13.0)

17.5

1.3

666.6

0.1

666.7

Deficit for the year
Exchange differences ontranslation of foreign operations
Cash flow hedges
Deferred tax on financial
instruments
Remeasurement on defined
benefit pension scheme(129.1)–––(129.1)–(129.1)–––(10.1)

30.4
–

–
–

30.4
(10.1)––

30.4(10.1)

–

1.8

–

–

1.8

–

1.8

(248.0)–––(248.0)–(248.0)(377.1)

(8.3)

30.4

–

(355.0)–(355.0)–283.7–(21.3)

–
47.9

(3.4)
(2.1)

(3.4)
308.2

0.3
0.4

(3.1)
308.6

178.3

–

–

–

178.3

1.3

179.6

–
–

–
25.9

(28.6)–––(28.6)
25.9––(28.6)
25.9

–

(4.9)

–

–

(4.9)

–

(4.9)

736.9

–

–

–

736.9

–

736.9

915.2

21.0

(28.6)

–

907.6

1.3

908.9

–

–

–

(2.9)

(2.9)

–

(2.9)

–

–

–

(21.8)(21.8)(0.1)(21.9)

1,198.9

(0.3)

19.3

(26.8)

1,191.1

1.6

1,192.7

Note

G5.3
G5.2

C7.2

Total comprehensive (loss)/income for the year
Changes in non-controllinginterest
At 31 March 2017
Surplus for the year
Exchange differences ontranslation of foreign operations
Cash flow hedges
Deferred tax on financial
instruments
Remeasurement on defined
benefit pension scheme
Total comprehensive income/(loss) for the year
Release of available for sale
reserve
Changes in non-controllinginterest
At 31 March 2018

Return to contents

G5.3
G5.2

C7.2

BBC Annual Report and Accounts 2017/18

187

F I N A N C I A L S TAT E M E N T S

Consolidated cash flow statement
2018
£m

2017
£m

582.7
6.3

301.1
13.3

589.0

314.4

6.0
10.1
39.3
–
–
8.8
1.9
–
(11.8)(8.2)(157.0)(126.1)

5.3
20.8
24.8
2.7
27.9
–
–
(0.4)
(43.7)–(169.9)(123.3)

Net cash used in investing activities(237.0)(255.8)Financing activities
Interest paid
Repayments of borrowings
Payment of obligations under finance leases

(7.9)
(3.7)
(74.0)(9.7)(54.0)(72.9)Net cash used in financing activities(85.6)(136.6)

Net increase/(decrease) in cash and cash equivalents

266.4(78.0)

Note

Operating activities
Cash generated from operations
Tax received

F6

Net cash from operations
Investing activities
Interest received
Financing income relating to swap transactions
Dividends received from associates and joint ventures
Proceeds from sale of operations
Proceeds from disposal of property, plant and equipment
Proceeds from disposal of available for sale investments
Proceeds from disposal of associates and joint ventures
Acquisition of investments
Acquisition of interests in associates and joint ventures
Acquisition of subsidiary net of cash acquired
Purchases of other intangible assets
Purchases of property, plant and equipment

F10

Cash and cash equivalents at beginning of the year
Effect on foreign exchange rate changes on cash and cash equivalents

F2

256.3
0.3

334.8
(0.5)

Cash and cash equivalents at the end of the year

F2

523.0

256.3

188

BBC Annual Report and Accounts 2017/18

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F I N A N C I A L S TAT E M E N T S

Key themes for the BBC
Page

A. Where the BBC’s funding comes from
Income and operating results

Contribution of commercial operations

190

Analysis of total operating costs by commercial activities

192

Licence fee income
B. How the BBC spends the funds
Total operating costs
Auditor’s remuneration

Programme-related assets and other inventories

PSB Group expenditure

PSB ring-fenced expenditure

C. What the BBC spends on its people
Persons employed

197

Group pension plan

Employee remuneration

Key management personnel compensation

Restructuring costs

Related party transactions with key management personnel

D. The property, technology and equipment used by the BBC to make and distribute its programmes
Property, plant and equipment
Investment properties

202

E. Investments in the BBC’s commercial activities
Intangible assets

Interests in associates and joint ventures

204

Trade and other payables

208

Goodwill
F. Managing funding (including future costs)
Analysis of net funds
Cash generated from operations

Provisions and contingent liabilities

Trade and other receivables		Net financing costs

Borrowings and borrowing facilities

Long-term commitments not reflected in the balance sheet

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BBC Annual Report and Accounts 2017/18

189

F I N A N C I A L S TAT E M E N T S

Notes to the accounts
A. Where the BBC’s funding comes fromThe Group generates its income from a number of key sources, each source funding different parts of the BBC’s activity. The notes in thissection provide information on the performance in the year for each segment of the BBC Group.
The distinction between the various income sources is important as the BBC must not cross-subsidise its commercial activities throughits PSB Group or grant-funded activities; however, the performance of the Group’s commercial activities generates profits that are
distributed back to the BBC and contribute towards the funding of PSB Group activities.
The BBC Group’s operating segments are reported in a manner consistent with the internal reports provided to the BBC Board, andpreviously to the BBC Executive Board. The BBC Board is responsible for making strategic decisions, allocating resources and assessing
performance of the operating segments.
Segmental information provided to the BBC Board is aligned to the BBC Group’s income sources. The reportable segments are:—— PSB Group – This primarily receives licence fee income and is responsible for the Group’s Public Service activities. During 2016/17
this included delivery of its obligations under the Service Licence Operating Framework issued by the BBC Trust. With the transfer
of regulation of the BBC from the BBC Trust to Ofcom on 3 April 2017, this reporting framework is no longer part of the BBC
governance. However, the BBC has continued to use this general approach to review its performance;—— BBC Worldwide – Generates revenue from exploiting the various assets of the BBC, for example by licencing programme formats,selling international rights, merchandising and production facilities. Revenue is also generated through subscription fees from thebroadcast of the Group’s channels on pay television platforms;—— BBC Studios – On 1 April 2017, BBC Studios Limited (the television production arm of the BBC) became a wholly owned commercial
subsidiary. Together with the special purpose vehicles Grafton House Limited, Comedy Productions Limited and Natural History &Factual Production Limited (which were previously grouped within the ‘Other commercial’ segment) a new BBC Studios reporting
segment was formed. This group generates revenue from the production of programme content across factual, drama, comedy andentertainment genres; and—— Other commercial – These have been aggregated for reporting purposes as they meet the conditions set out in IFRS 8, Operating
Segments. This includes the Global News group, BBC Studioworks Limited, BBC Childrens Productions Limited and the commercial
holdings companies. The prior year also included the special purpose vehicles transferred to BBC Studios above.
The prices charged for services provided between the PSB Group and the commercial activities are determined on an arm’s length basis
in accordance with Ofcom’s Trading and Separation Obligations and the BBC’s published transfer pricing methodologies.
For additional information on the relevant accounting policies applied in this section please see section H Basis of preparation of thefinancial statements and other accounting policies.
A1 Income and operating results
BBC
Worldwide£m

BBC Studios
£m

Other
commercials
£m

Group
adjustments
£m

Group
£m

2018

Note

PSB Group£m

Licence fee income

A2

3,830.2

–

–

–

–

3,830.2

Other revenue
Intra-group trading
Grant income
Royalties
Rental income

73.9
96.8
87.8
30.7
25.7

818.0
–
–
48.9
1.4

15.1
416.9
–
–
–

130.6
33.2
–
–
–

0.4
(546.9)–––1,038.0
–
87.8
79.6
27.1

Other income

314.9

868.3

432.0

163.8

(546.5)1,232.5

Total income
Restructuring costs
Depreciation and amortisation
Pension deficit reduction contributions
Other operating costs
Total operating costs
Group operating surplus/(deficit)
Gain on disposal of non-current assets
Share of results of associates and joint
ventures4,145.1

868.3

432.0

163.8

(546.5)

5,062.7

C3
B1(13.3)(153.0)(267.4)(3,675.4)–(184.1)–(626.3)

(0.2)
(0.6)
–
(438.7)

(0.3)
(1.5)
–
(148.9)

–
–
267.4
413.2

(13.8)(339.2)–(4,476.1)

B3.1, B4

(4,109.1)(810.4)(439.5)(150.7)680.6(4,829.1)

36.0
–

57.9
4.8

(7.5)
–

13.1
–

134.1
–

233.6
4.8

E3

Operating segment result

–

35.8

–

–

–

35.8

36.0

98.5

(7.5)

13.1

134.1

274.2
25.7
(121.3)Financing income
Financing costs

F10
F10

Net financing costs

F10(95.6)

G1.1

178.6
1.0

Surplus before taxation
Taxation
Surplus for the year190

BBC Annual Report and Accounts 2017/18

179.6
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F I N A N C I A L S TAT E M E N T S

A. Where the BBC’s funding comes from continued
A1 Income and operating results continued
BBCWorldwide£m

BBC Studios*
£m

Other
commercials
£m

Group
adjustments
£m

Group
£m

2017

Note

PSB Group£m

Licence fee income

A2

3,787.2

–

–

–

–

3,787.2

Other revenue
Intra-group trading
Grant income
Royalties
Rental income

72.8
76.5
39.1
32.9
25.0

828.3
–
0 .1
46.6
1.3

–
–
–
–
–

120.7
15.7
–
–
–

–
(92.2)–––

1,021.8
–
39.2
79.5
26.3

Other income

246.3

876.3

–

136.4

(92.2)

1,166.8

Total income
Restructuring costs
Depreciation and amortisation
Pension deficit reduction contributions
Other operating costs
Total operating costs
Group operating (deficit)/surplus
Gain on disposal of non-current assets
Share of results of associates and joint
ventures

4,033.5

876.3

–

136.4

(92.2)

4,954.0

C3
B1(47.8)(154.1)(100.0)(3,796.9)(1.5)(218.9)–(655.1)

–
–
–
–

(0.3)
(0.9)
–
(144.8)

–
–
100.0
27.0

(49.6)(373.9)–(4,569.8)

B3.1, B4

(4,098.8)(875.5)–(146.0)127.0(4,993.3)(65.3)
0.6

0.8
7.7

–
–

(9.6)
–

34.8
–

(39.3)
8.3

(2.4)

48.1

–

–

–

45.7

(67.1)

56.6

–

(9.6)

34.8

14.7

E3

Operating segment result
Financing income
Financing costs

F10
F10

5.3
(139.3)

Net financing costs

F10(134.0)

Deficit before taxation
Taxation

G1.1(119.3)(9.8)

Deficit for the year*

(129.1)On 1 April 2017, BBC Studios, the television production arm of the BBC, became a wholly owned commercial subsidiary of the BBC. This activity was therefore recognised within
the PSB Group segment during 2016/17. Several production companies previously recognised within the ‘Other commercials’ segment were also transferred into this group onthat date. The impact of this restructure has also increased intra-group eliminations significantly.

A2 Licence fee income
Licence fee
2018£

Licences in force
2018
Number‘000

Total income
2018£mLicence fee
2017£

Licences in force
2017
Number‘000

Total income
2017£m147.00
49.50
7.50
–

21,611
6
167
4,455

3,157.0
0.3
1.1
655.3

145.50
49.00
7.50
–

21,667
6
176
4,385

3,138.8
0.3
1.2
630.4

26,2393,813.7
16.5

26,234

Quarterly payment scheme premium

3,770.7
16.5

Total licence fee income

3,830.2

Colour
Monochrome
Concessionary
Over 75s

3,787.2

During the year, 3.3 million (2017: 3.3 million) colour licences were issued under the quarterly payment scheme at a premium of £5 each(2017: £5).
Households in which one or more persons over the age of 75 reside, as their primary residence, are entitled to a free licence. The BBC was
reimbursed for these free licences by the relevant Government department during the year.
A3 Contribution of commercial operations
In the year ended 31 March 2018, a dividend of £71.4 million (2017: £89.3 million) was declared by BBC Worldwide to BBC Commercial
Holdings Limited (via BBC Ventures Group Limited). A dividend of £37.9 million (2017: £86.5 million) was subsequently declared by BBC
Commercial Holdings to PSB Group. The dividends paid are not identifiable in the consolidated primary statements as these amounts are
eliminated during the consolidation process.

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BBC Annual Report and Accounts 2017/18

191

F I N A N C I A L S TAT E M E N T S

B. How the BBC spends the funds
This section analyses the total operating costs incurred by the BBC Group. It also analyses the PSB Group’s expenditure by service.
Spend on the BBC’s services
During 2016/17 service licences were used by the BBC Trust to regulate the BBC’s licence fee-funded activities and ensure that eachservice provided public value and contributed to delivering the BBC’s public purposes.
Service licence reporting against authorised baseline budgets was discontinued following the closure of the BBC Trust. Although thisis no longer a regulatory requirement, the BBC’s PSB spend has continued to be analysed by service in 2017/18.
Spend by BBC service shows the cost to the licence fee payer of providing the relevant service and therefore exclude any costs funded
by a co-producer. The table presented in note B3 sets out the PSB Group content expenditure by service.
Where a programme is broadcast on more than one channel, the full cost of the programme is recognised as a cost of the channel where
the programme is first broadcast. However, where a programme is commissioned by two channels, the cost of the programme isrecognised as a cost of the primary channel irrespective of the channel holding the first transmission.
For BBC Online and BBC Red Button, the service spend reflects the incremental costs of getting content to audiences unless the content
is specifically commissioned for this service.
This means the costs reported against individual services are not necessarily equivalent to the costs which would be incurred by sucha service on a stand-alone basis.
Development spend (see note B3.1) funds the near-term development of new platforms and services, particularly for BBC Online and Red
Button. This is primarily focused on new features for existing services and also includes related support and overhead costs. It is distinct
from research department costs (see note B3.2) which is focused on much longer-term research of new technology and standards that
benefit the whole industry.
World Service Operating Licence
The BBC committed to protect its annual spend on World Service for a period of five years from 1 April 2017 to ensure it remains a valued
public broadcaster for the future. In order to deliver this commitment, the BBC must spend at least £254.0 million per annum on thisservice over this period.
World Service grant funding
In 2016/17 the Foreign & Commonwealth Office (FCO) awarded a grant to the BBC of £291.0 million, to be spent over the following four
years, to assist in the expansion of the World Service.
For additional information on the relevant accounting policies applied in this section please see section H Basis of preparation of thefinancial statements and other accounting policies.

192

BBC Annual Report and Accounts 2017/18

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F I N A N C I A L S TAT E M E N T S

B. How the BBC spends the funds continued
B1 Total operating costs
Total operating costs have been arrived at after charging the following items:

Intangible fixed assets, property, plant and equipment and other investments
Depreciation– owned assets– leased assets
Amortisation of intangible fixed assets
Impairment of intangible assets

Note

2018
£m

2017
£m

D1
D1, D2
E1
E1

105.4
35.0
198.8
0.5

109.9
35.6
228.4
14.1

5.4

7.8

51.7
8.4
65.0
7.0
17.4
65.9
21.7
2.6
1,445.4

47.0
9.2
48.5
3.8
15.1
71.3
(16.9)
6.1
1,387.0

Inventories
Write-downs of programme-related assets recognised as an expense
Other operating costs
Payments under operating leases– land and buildings– plant and machinery– other
Net loss on disposal of tangible fixed assets*
Research costs1
Online and TV development
Net exchange differences on settled transactions
Impairment of trade debtors
Staff costs
*

B3.2

F7.2
C2

The loss on disposal of tangible fixed assets represent adjustments to depreciation on disposals made in the ordinary course of business.

B2 Auditor’s remuneration
The National Audit Office were appointed as Group auditors in the current financial year and served as independent external auditors
for the year ended 31 March 2018. Ernst & Young LLP served as external auditors for the year ended 31 March 2017.
The following table presents the aggregate fees for professional services and other services rendered by the external auditors to
the BBC:
2018
£m

2017
£m

For the audit of the BBC’s annual accounts
For the audit of subsidiaries of the BBC
Audit-related assurance services

0.8
0.9
–

0.6
0.7
0.2

Total audit and audit-related assurance services with the National Audit Office(2017: Ernst & Young LLP)
Audit and audit-related assurance services with other auditors

1.7
0.2

1.5
0 .1

Total audit and audit-related assurance services

1.9

1.6

Taxation compliance services
Other services

0.2
–

0.2
0.2

Total non-audit services with other auditors

0.2

0.4

Total fees paid

2.1

2.0

1

See Glossary for further details.

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BBC Annual Report and Accounts 2017/18

193

F I N A N C I A L S TAT E M E N T S

B. How the BBC spends the funds continued
B3.1 PSB Group expenditure by service
Content£m

Distribution£mContent anddistribution
support£m

BBC One
BBC Two
BBC Four
CBBC
CBeebies
BBC ALBA
BBC News Channel*
BBC Parliament

1,009.4
374.3
37.8
67.9
29.9
7.9
49.7
1.6

36.3
20.5
4.4
10.1
4.4
0.9
7.5
6.7

151.9
56.8
7.2
12.6
6.8
1.2
8.5
1.7

78.0
29.6
2.9
5.5
2.3
0.7
2.5
0.1

1,275.6
481.2
52.3
96.1
43.4
10.7
68.2
10.1

Television

1,578.5

90.8

246.7

121.6

2,037.6

BBC Radio 1
BBC Radio 2
BBC Radio 3
BBC Radio 4
BBC Radio 5 live
BBC Radio 5 live sports extra
BBC 1Xtra
BBC 6 MusicBBC 4 Extra
BBC Asian Network
BBC Local RadioBBC Radio Scotland
BBC Radio nan Gàidheal
BBC Radio Wales
BBC Radio Cymru
BBC Radio Ulster/BBC Radio Foyle

37.5
49.1
37.7
91.2
44.8
2.9
6.4
10.7
2.9
6.7
118.2
22.6
4.0
14.6
13.5
17.6

6.3
6.3
6.3
6.7
4.6
1.7
1.9
1.9
1.9
2.3
17.0
2.8
1.2
1.6
1.5
1.9

5.2
4.7
6.2
14.0
7.0
1.3
3.0
2.0
1.2
1.7
15.6
4.3
0.7
3.2
3.0
4.0

1.2
1.8
2.9
6.4
3.4
0.2
0.3
0.6
0.2
0.5
9.0
1.8
0.3
1.1
1.1
1.4

50.2
61.9
53.1
118.3
59.8
6.1
11.6
15.2
6.2
11.2
159.8
31.5
6.2
20.5
19.1
24.9

Radio

480.4

65.9

77.1

32.2

655.6

BBC Online and Red Button

182.4

49.9

43.6

14.4

290.3

2,241.3

206.6

367.4

168.2

2,983.5

Orchestras and performing groups
S4C (service spend)
Development spend
BBC World Service grant
BBC World Service Operating Licence**

26.5
25.6
45.1
58.2
226.6

–
–
–
–
–

3.5
4.2
7.5
7.6
27.4

2.2
2.0
4.7
4.7
14.3

32.2
31.8
57.3
70.5
268.3

Other service spend

382.0

–

50.2

27.9

460.1

Total service spend

2,623.3

206.6

417.6

196.1

3,443.6

2018

Note

Spend by service

4,071.9

Total PSB Group content expenditure

4.7
80.0

Local TV***
Broadband rollout***

4,156.6

Total PSB Group expenditure(47.5)

Lease reclassification****194

BBC Annual Report and Accounts 2017/18

Total
£m

101.0
74.8
5.5
267.4
94.2
72.1
13.3

Licence fee collection costs
S4C (direct funding)
Monitoring
PSB Group pension deficit reduction payment
Costs incurred to generate intra-group income
Costs incurred to generate third-party income
Restructuring costs

PSB Group expenditure

Generalsupport£m

A1

4,109.1

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F I N A N C I A L S TAT E M E N T S

B. How the BBC spends the funds continued
B3.1 PSB Group expenditure by service continued
Content£m

Distribution£mContent anddistribution
support£m

BBC One
BBC Two
BBC Four
CBBC
CBeebies
BBC ALBA
BBC News Channel*
BBC Parliament

1,115.4
403.3
50.5
69.5
28.7
6.0
47.8
1.8

35.7
20.4
4.4
9.9
4.3
0.9
7.4
6.7

157.1
59.4
8.5
12.1
6.4
0.9
7.8
1.3

78.2
28.9
3.6
5.1
2.0
0.4
1.9
0 .1

1,386.4
512.0
67.0
96.6
41.4
8.2
64.9
9.9

Television

1,723.0

89.7

253.5

120.2

2,186.4

35.9
51.2
37.4
87.9
45.5
2.7
6.6
10.9
3.0
7.1
112.9
21.1
3.7
14.2
13.6
17.5

6.3
6.3
6.3
6.7
4.6
1.8
1.9
1.9
1.9
2.3
16.1
2.9
1.3
1.6
1.5
2.0

5.1
4.9
6.5
12.9
6.8
1.3
2.7
2.2
1.3
1.8
14.4
4.3
0.6
3.1
3.0
3.8

1.0
1.8
2.6
5.4
3.1
0.2
0.3
0.5
0.2
0.5
7.7
1.5
0.3
1.0
1.0
1.3

48.3
64.2
52.8
112.9
60.0
6.0
11.5
15.5
6.4
11.7
151.1
29.8
5.9
19.9
19.1
24.6

Radio

471.2

65.4

74.7

28.4

639.7

BBC Online and Red Button

185.5

45.7

41.2

13.2

285.6

2,379.7

200.8

369.4

161.8

3,111.7

Orchestras and performing groups
S4C (service spend)
Development spend
World Service grant
BBC World Service Operating Licence**

23.2
29.2
57.0
15.1
229.6

–
–
–
–
–

2.9
4.4
7.0
1.8
25.3

1.7
2.1
4.3
1.1
12.9

27.8
35.7
68.3
18.0
267.8

Other service spend

354.1

–

41.4

22.1

417.6

Total service spend

2,733.8

200.8

410.8

183.9

3,529.3

2017

Note

BBC Radio 1
BBC Radio 2
BBC Radio 3
BBC Radio 4
BBC Radio 5 live
BBC Radio 5 live sports extra
BBC 1Xtra
BBC 6 MusicBBC 4 Extra
BBC Asian Network
BBC Local RadioBBC Radio Scotland
BBC Radio nan Gàidheal
BBC Radio Wales
BBC Radio Cymru
BBC Radio Ulster/BBC Radio Foyle

Spend by service

Generalsupport
£m

Total
£m

Licence fee collection costs
S4C (direct funding)
Monitoring
PSB Group pension deficit reduction payment
Costs incurred to generate intra-group income
Costs incurred to generate third-party income
Restructuring costs

82.2
74.5
6.0
100.0
83.3
70.9
47.8

Total PSB Group content expenditure

3,994.0

Local TV***
Broadband rollout***

3.9
150.0

Total PSB Group expenditure

4,147.9

Lease reclassification****PSB Group expenditure(49.1)
A1

4,098.8*	Included within BBC News channel are production costs of £30.0 million, newsgathering costs of £18.3 million and other costs of £1.4 million (2017: production costs of£25.4 million, newsgathering costs of £20.8 million and other costs of £1.7 million).
**
The BBC World Service Operating Licence includes distribution spend of £35.5 million (2017: £38.2 million).
***
Under the terms of the 2015 licence fee agreement, the BBC has committed to contribute funding toward broadband rollout across the UK and for the development ofLocal TV channels.
**** In order to reflect the full cost of the PSB Group expenditure by service, finance lease interest is included, although it is not included in the Group operating expenditure.

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F I N A N C I A L S TAT E M E N T S

B. How the BBC spends the funds continued
B3.2 PSB Group support costs
PSB Group support costs include the following:
Content anddistribution support

General support

Total

2018
£m

2017
£m

2018
£m

2017
£m

2018
£m

2017
£m

Property
HR and training
Policy and strategy
Finance and operations
Marketing, audiences and communication

72.3
27.3
–
11.5
86.0

64.8
13.6
–
12.0
86.8

52.5
14.7
5.9
33.6
–

48.3
26.3
7.8
39.7
–

124.8
42.0
5.9
45.1
86.0

113.1
39.9
7.8
51.7
86.8

Total central costs
Technology
Libraries, learning support and community events
Production and digital support
Research department
Contribution to JVs and spend in other PSB entities
Regulatory charges*
Exchange losses/(gains)
Other

197.1
121.0
22.5
25.9
17.4
26.0
–
–
7.7

177.2
125.7
28.0
25.8
15.1
28.1
–
–
10.9

106.7
39.9
–
–
–
–
11.6
7.2
30.7

122.1
47.2
–
–
–
–
11.2
(14.4)
17.8

303.8
160.9
22.5
25.9
17.4
26.0
11.6
7.2
38.4

299.3
172.9
28.0
25.8
15.1
28.1
11.2
(14.4)
28.7

Total support costs

417.6

410.8

196.1

183.9

613.7

594.7

*

Regulatory charges reflects payments made to Ofcom and the cost of the BBC Trust unit in the prior year.

B4 Analysis of total operating costs by commercial activities
BBC Worldwide

BBC Studios

Other commercials

Total commercials

2018
£m

2017
£m

2018
£m

2017
£m

£2018
£m

2017
£m

2018
£m

2017
£m

Cost of sales
Distribution costs
Administration expenses

603.4
52.3
154.7

653.8
69.8
151.9

432.7
–
6.8

–
–
–

127.9
–
22.8

113.7
–
32.3

1,164.0
52.3
184.3

767.5
69.8
184.2

Total operating costs

810.4

875.5

439.5

–

150.7

146.0

1,400.6

1,021.5

B5 Programme-related assets and other inventories
The main output of the BBC Group is the production of programmes for broadcast and the sale of rights for others to broadcast. This
note discloses the amounts for those programmes that are in production, completed programmes that are ready for broadcast but not
yet aired, and rights secured to broadcast programmes produced independently of the BBC Group. Other inventory for our commercial
activities are also contained in this note.
Originated programmes are stated at the lower of cost and net realisable value, and the full value is expensed on first transmission.
The costs of acquired programmes and films are also expensed on first transmission, except for contracts that agree a number of further
showings. The cost is then expensed across the transmissions.
2018
£m

2017
£m

Programme-related assets– Rights to broadcast acquired programmes and films– Prepayments to acquire future programme-related rights– Completed programmes– Programmes in production

94.6
381.6
52.6
189.9

99.9
308.8
57.5
136.9

Total programme-related assets
Other inventories

718.7
6.9

603.1
9.8

Total programme-related assets and other inventories

725.6

612.9

1

See Glossary for further details.

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F I N A N C I A L S TAT E M E N T S

C. What the BBC spends on its people
The BBC Group employs a significant number of people. It also provides pension benefits to both current and past employees. Thissection is broken into two main parts; the first details employee numbers (excluding freelancers and agency staff), costs and transactions
with members of the BBC Executive Committee and BBC Board who served during the year. The second part presents the key
information relating to the BBC Group’s pension plans.
The analysis provided in the pension notes is based on the IAS 19 Employee Benefits estimate of the scheme’s assets and liabilities as
at 31 March 2018. The most recent actuarial valuation of the pension scheme completed by Willis Towers Watson showed a funding
shortfall of £1,769 million at 1 April 2016.
The deficit of the BBC Pension Scheme can change significantly. In this section we provide information to explain the following:—— why the pension liabilities on the balance sheet have changed from one year to another;—— what makes up the charge in the income statement in the year;—— the amount of the scheme assets and liabilities totalling the net defined benefit pension liability on the balance sheet;—— how sensitive the liabilities are to changes in key assumptions; and—— the steps being taken by the BBC to fund the defined benefit pension liability.
The movement in the IAS 19 Employee Benefits estimate of the defined benefit scheme liability during the year, specifically the BBC
Pension Scheme, is the item which singularly has the greatest impact on the balance sheet position of the Group. The pension note in thissection explains in further detail the reasons behind the movements in the defined benefit pension liability in the year and its degree ofsensitivity to changes in the underlying assumptions used.
Further information on the analysis of the BBC Pension Scheme assets and the assumptions underlying the liabilities are set out innote G2.
For additional information on the relevant accounting policies applied in this section please see section H Basis of preparation of thefinancial statements and other accounting policies.
C1 Persons employed
The average number of persons employed in the year was:Average for the year
2018
Number

2017
NumberPSB Group
BBC Worldwide
BBC Studios
Other commercials

18,210
1,514
1,601
258

19,3571,706–
208Group total

21,583

21,271

Within the averages above, 2,855 (2017: 2,882) part-time employees have been included at their full-time equivalent of 1,786 (2017: 1,773).
In addition to the above, the Group employed an average full-time equivalent of 1,187 (2017: 988) persons on a casual contract.
C2 Employee remuneration
Note

Salaries and wages
Social security costs
Pension costs
Main scheme (defined benefit)
Other schemes
Restructuring costs

C7.3
C7.3
C3

2018
£m

2017
£m

1,053.2
119.7

1,018.1
106.6

227.5
31.2
13.8

183.2
29.5
49.6

1,445.4

1,387.0

Comprising:
PSB Group
BBC Worldwide
BBC Studios
Other commercials
Group adjustments*

1,365.5
127.8
79.0
18.1
(145.0)1,259.9
142.9
–
15.3
(31.1)

Group total

1,445.4

1,387.0*

Relates to Group adjustments for the BBC Pension Scheme, reflecting the difference between the operating charge and contributions paid.				

The actual employer cash contributions to the defined benefit pension scheme are borne by each business.
Employee pension contributions made via salary sacrifice are included within pension costs, with a corresponding reduction in salaries
and wages.
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F I N A N C I A L S TAT E M E N T S

C. What the BBC spends on its people continued
C3 Restructuring costs
2018
£m

2017
£m

PSB Group
BBC Worldwide
BBC Studios
Other commercials

13.3
–
0.2
0.3

47.8
1.5
–
0.3

Group total

13.8

49.6

The table above reflects the BBC’s cost of redundancy during the year. For further information on total restructuring costs, please see
note F9.
The PSB Group restructuring costs relate to ongoing savings initiatives.
In the prior year, BBC Worldwide included redundancy costs arising as a result of changes within the Group’s organisation structure.
C4 Remuneration of the BBC Board
The total emoluments of the members of the BBC Executive Committee and BBC Board are disclosed in the remuneration report.
C5 Key management personnel compensation
Key management personnel are those people who have authority and responsibility for planning, directing and controlling the activitiesof the BBC. This includes members of the BBC Executive Committee and BBC Board, including the non-executive directors (see the
BBC Executive remuneration report). Ofcom began full regulatory responsibility for the BBC on 3 April 2017, at the same time as the new
BBC Board took over the governance from the BBC Trust. The prior year comparatives therefore include the Trustees and the Director of
the Trust Unit.
Information about the BBC’s structure, senior staff salaries and expenses are published on the BBC’s website.
Key management personnel compensation is as follows:

Short-term employee benefits
Post-employment benefits

2018
£m

2017
£m

4.7
0.3

4.2
0.4

5.0

4.6

C6 Related party1 transactions with key management personnel
Executive directors
Elan Closs Stephens has a close family member who is a director of Cube Entertainment Limited, Charlotte Moore has a close family
member who is a director of Perry Images Limited and Sir Nicholas Serota has a close family member who is a director of Words andPictures Limited. All of these companies provided services to the BBC during the year. In addition, Ian Hargreaves has a close family
member who provided services to the BBC during the year. The amount of services provided in each instance is less than £100,000, whichis the level of rounding used in the financial statements. There were no outstanding balances as at 31 March 2018 relating to any of thesearrangements. Tanni Grey-Thompson received £8,000 as an on-air contributor during the year.
C7 Group pension plans
The following section includes the key notes relating to BBC Group pension plans and, more specifically, the BBC Pension Scheme1.
Further supplementary notes on the assumptions underpinning the value of the BBC Pension Scheme assets and liabilities are disclosed
in note G2.
As the BBC Group has two defined benefit pension schemes, the BBC Pension Scheme and the Unfunded Scheme, the information in thissection analyses the liability and income statement charge between the two schemes (note C7). Separate analysis follows in respect of
the BBC Pension Scheme to highlight the points outlined below (note C8).
The defined benefit pension schemes give rise to liabilities which are included on the BBC Group balance sheet as the BBC bears the risks
of investment returns, life expectancies and inflation, which impact the future pension payment amounts. The net liability consists of two
component parts:—— scheme liabilities: the present value of the future pension payments the BBC is required to pay in respect of employee service
performed up to the balance sheet date; and—— scheme assets: the assets held by the pension fund, into which the BBC pays annual contributions. These assets are used to fund thepayments to retired members and to generate returns to fund future pension payments.
The BBC Group’s defined contribution plans do not give rise to balance sheet pension assets/liabilities as there is no ongoing liability forthe employer from these plans once the contributions due for the year have been settled. The expenditure on the defined contribution
scheme shown in these accounts represents the BBC’s contributions during the financial year.

1

See Glossary for further details.

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F I N A N C I A L S TAT E M E N T S

C. What the BBC spends on its people continued
C7.1 Pension liabilities included in the balance sheet
The pension liabilities included in the BBC Group balance sheet comprise both the BBC Pension Scheme and the Unfunded Scheme andare analysed below:
Pension liabilities

BBC Pension Scheme
Unfunded Scheme

2018
£m

2017
£m

(510.2)(8.1)(1,140 .7)(8.4)(518.3)(1,149.1)

C7.2 Group pension plans
BBC Pension
Scheme2018£mUnfunded
Scheme
2018
£m

Total
2018
£m

BBC Pension
Scheme2017£mUnfunded
Scheme
2017
£m

Total
2017
£m

Deficit in scheme at the start of the year
Movement in the year:
Current service cost1
Contributions (from employer)*
Past service costs1
Administration costs incurred
Net finance cost1
Remeasurement1 recognised in
the consolidated statement ofcomprehensive income(1,140.7)(8.4)(1,149.1)(1,003.4)(7.3)(1,010.7)(227.2)
154.7
(0.3)
(9.1)
(24.5)

–
0.4
–
–
(0.1)

(227.2)
155.1
(0.3)
(9.1)
(24.6)(186.1)
334.3
2.9
(9.8)
(31.9)

–
0.4
–
–
(0.2)

(186.1)
334.7
2.9
(9.8)
(32.1)

736.9

–

736.9

(246.7)(1.3)(248.0)

Deficit in scheme at the end of the year

(510.2)(8.1)(518.3)(1,140 .7)(8.4)(1,149.1)*

The contribution shown for the Unfunded Scheme represents the pension amounts paid to members during the year.

The assumptions for pension scheme liabilities of the Unfunded Scheme are the same as the main scheme. As the scheme is unfunded
there are no assets.
C7.3 Pension charges in consolidated income statement
BBC Pension

Note

2018
Current service cost
Past service costs
Administration costs

C2
C2

Total operating charge
Net finance cost

F10

Net cost in consolidated income statement
2017
Current service cost
Past service costs
Administration costs

C2
C2

Total operating charge
Net finance cost
Net cost in consolidated income statement

1

F10

BBC Pension
Scheme£m

Unfunded
Scheme£m

DefinedContribution
Scheme£m

All schemes£m(227.2)
(0.3)
(9.1)

–
–
–

(31.2)––(258.4)
(0.3)
(9.1)

(236.6)–(31.2)(267.8)(24.5)(0.1)–(24.6)(261.1)(0.1)(31.2)(292.4)(186.1)
2.9
(9.8)

–
–
–

(29.5)––(215.6)2.9(9.8)(193.0)–(29.5)(222.5)(31.9)(0.2)–(32.1)(224.9)(0.2)(29.5)(254.6)

See Glossary for further details.

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C. What the BBC spends on its people continued
C8 BBC Pension Scheme
The BBC Pension Scheme is closed to new entrants. It provides pensionable salary-related benefits on a defined benefit basis.
The pension scheme is administered by a fund that is legally separated from the BBC Group. The Trustees of the pension fund are
required by law to act in the interest of the fund and of all relevant stakeholders of the scheme. The pension scheme Trustees manage
the plan in the short, medium and long term. They make funding decisions based on valuations which take a longer-term view of theassets required to fund the scheme’s liabilities.
The pension scheme exposes the BBC to the following actuarial risks:
Risk

Description

Investment risk

Actual returns may differ from expected returns. If the return on assets is below the discount rate, it will create a
deficit. Investments are diversified, across and within asset classes, to avoid over-exposure to any one asset classor market.

Currency risk

Movements in exchange rates can impact the sterling value of overseas assets held. The scheme ensures thatoverseas investments are diversified across currencies and buys forward rate contracts in order to partially hedge
against US dollar and euro exposures.

Counterparty risk

A counterparty may default whilst owing money to the scheme. Collateral is posted by the counterparty for longterm transactions when the valuation of the transaction is favourable to the scheme.

Interest risk

A fall in interest rates would cause the present value of liabilities to rise. To mitigate this risk, the scheme’s
Trustees invest in bonds, derivatives and other investments with predictable long-term cash flows that will tend
to rise in price if interest rates fall.

Longevity risk

Longer life expectancy would increase the scheme’s liabilities. The scheme’s Trustees regularly assess thepossibility and value of hedging the scheme’s longevity risk.

Inflation risk

An increase in expected inflation will cause the present value of liabilities to rise if it is not accompanied by a risein interest rates. To mitigate this risk, the scheme’s Trustees invest in index-linked bonds, derivatives and otherassets whose value is likely to increase if inflation rises.

Liquidity risk

The scheme may not have sufficient liquid assets to allow it to meet its liabilities and other obligations as theyfall due. The amount of cash held to pay benefits is assessed well in advance to minimise unforeseen sales andtransaction costs and the large majority of the scheme’s assets are invested in highly liquid assets.

Custody risk

The collapse of the scheme’s custodian could result in a significant proportion of the scheme’s assets being
frozen or put at risk of loss. The scheme undertakes rigorous due diligence of the custodian relationship andconducts regular service level reviews.

C8.1 Scheme financial position
Accounting valuations of the scheme are performed by Willis Towers Watson, consulting actuaries. Formal actuarial valuations areundertaken at least every three years.
IAS 19 valuation1

Note

2018
£m

2017
£m

Scheme assets
Scheme liabilities

G2.2
G2.1

16,476.3(16,986.5)

15,745.2(16,885.9)(510.2)(1,140 .7)

97%

93%

Deficit
Percentage by which scheme assets cover liabilities
Key movements in the year are shown in note G2.1 and G2.2.

A deferred tax asset or liability in relation to the scheme does not arise for the BBC Group because most of the BBC Group’s public
service activity is not subject to taxation.
The sensitivities of the scheme’s liabilities to changes in the principal assumptions are set out below:

2018

Assumption used

Movement

Impacton scheme
liabilities%

Discount rate
Discount rate
Retail price inflation rate
Retail price inflation rate
Mortality rate
Mortality rate

2.4%
2.4%
3.1%
3.1%
See note G2.5
See note G2.5

decrease 0.1%
increase 0.1%
decrease 0.1%
increase 0.1%
decrease 1 year
increase 1 year

2.3%
1.7%
1.8%
1.9%
3.9%
4.0%

200

BBC Annual Report and Accounts 2017/18(Increase)/decreaseon scheme
liabilities
£m

(391)
289
309
(316)
659
(684)

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F I N A N C I A L S TAT E M E N T S

C. What the BBC spends on its people continued
C8.1 Scheme financial position continued

2017

Discount rate
Discount rate
Retail price inflation rate
Retail price inflation rate
Mortality rate
Mortality rate

Assumption used

Movement

Impacton scheme
liabilities
%

2.5%
2.5%
3.2%
3.2%
See note G2.5
See note G2.5

decrease 0.1%
increase 0.1%
decrease 0.1%
increase 0.1%
decrease 1 year
increase 1 year

2.5%
1.8%
2.0%
2.0%
3.4%
3.6%

(Increase)/decreaseon scheme
liabilities
£m

(416)
307
331
(340)
581
(602)

The sensitivity analysis presented above may not be representative of the actual change in the defined benefit obligation due to thelikelihood of some correlation between assumptions.
In presenting the above sensitivity analysis, the present value of the defined benefit obligation has been calculated using the projected
unit credit method at the end of the reporting period, which is the same as that applied in calculating the defined benefit obligation
liability recognised in the statement of financial position.
C8.2 Funding the scheme
The 2016 actuarial valuation by Willis Towers Watson of the pension scheme showed a funding shortfall of £1,769 million. Consequently,
a recovery plan was agreed between the BBC and the pension scheme Trustees which details the contribution amounts to be paid by
the BBC over an 11-year period starting in 2017. Future contributions are to be paid to the pension scheme on or before the due dates
shown below.
Due date

31 March 2019
31 March 2020
31 March 2021
31 March 2022
31 March 2023
31 March 2024

Amount
£m

125
145
195
180
185
195

Amount£m

Due date

31 March 2025
31 March 2026
31 March 2027
31 March 2028
31 December 2028

195
195
195
195
195

The next formal actuarial valuation is to be performed as at 1 April 2019.
Contribution rates

Employer
Employee (Old and New Benefits)
Employee (Career Average Benefits 2006)
Employee (Career Average Benefits 2011)

Projection
2019
%

2018
%

2017
%

31.4
7.5
4.0
6.0

16.7
7.5
4.0
6.0

16.7
7.5
4.0
6.0

The member contributions to the scheme are mainly paid via a salary sacrifice arrangement. These have been treated as employer
contributions.
On the basis of the pension assumptions above, contributions totalling £152.0 million are expected to be paid in 2018/19.
C8.3 Scheme cash flows (day-to-day liquidity)
Below are the cash flows related to the BBC Pension Scheme (not included in the Group results). As the scheme is closed to new entrants,
the level of contribution from employees will decrease (as members retire, there are no new entrants to replace the reduction in
employee contributions).
2018
£m

2017
£m

Contributions including additional voluntary (employer and employee)
Investment income

157.3
253.4

337.5
231.4

Cash inflows
Payments of pensions and transfers out
Expenses

410.7(508.5)
(9.1)

568.9
(459.1)(29.0)Net cash (outflow)/inflow(106.9)80.8

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D. The property, technology and equipment used by the BBC to make and distribute its programmes
The BBC Group uses a significant number of assets in its operations. This section sets out those assets the BBC Group intends
to continue to use, those to be disposed of and any disposals made during the year.
In accordance with IAS 17 Leases the BBC Group includes assets leased under finance leases on the balance sheet. For these assets
the BBC Group has obtained substantially all the risks and benefits of ownership, but does not have legal ownership.
For additional information on the relevant accounting policies applied in this section please see section H Basis of preparation of
the financial statements and other accounting policies.
D1 Property, plant and equipment
Land andbuildings*£mPlant andmachinery£m

Furnitureand fittings£m

Assets underconstruction
£m

Total
£m

Cost
At 1 April 2016
Additions
Transfer to intangible assets
Brought into service
Disposals
Exchange movements

994.3
0.9
–
8.8
–
0.9

1,0 49.1
7.7–
51.1(33.9)
0.5

122.8
1.7
–
6.5
(2.3)
0.8

98.2
117.5
(17.6)(66.4)––

2,264.4
127.8(17.6)–(36.2)
2.2

At 31 March 2017
Additions
Transfer to intangible assets
Brought into service
Disposals
Exchange movements

1,004.9
–
–
25.1
(9.2)
(0.6)

1,074.5
9.6–
88.5(50 .1)
(0.4)

129.5
1.4
–
9.2
(6.4)
(0.6)

131.7
120.8
(26.5)(122.8)––2,340.6
131.8(26.5)–(65.7)(1.6)

At 31 March 2018

1,020.2

1,122.1

133.1

103.2

2,378.6

Depreciation
At 1 April 2016
Charge for the year
Disposals
Exchange adjustments

329.1
41.8
–
0.7

738.3
90.0
(30 .1)
0.4

86.4
9.4
(2.3)
0.5

–
–
–
–

1,153.8
141.2(32.4)
1.6

At 31 March 2017
Charge for the year
Disposals
Exchange adjustments

371.6
41.6
(6.9)
(0.4)

798.6
85.5
(46.1)
(0.2)

94.0
9.0
(6.0)
(0.4)

–
–
–
–

1,264.2
136.1(59.0)(1.0)

At 31 March 2018

405.9

837.8

96.6

–

1,340.3

Net book value
At 31 March 2018

614.3

284.3

36.5

103.2

1,038.3

At 31 March 2017

633.3

275.9

35.5

131.7

1,076.4

Land andbuildings*£mPlant andmachinery£m

Furnitureand fittings£m

Assets underconstruction
£m

Total
£m

At 31 March 2018

471.3

73.8

5.1

–

550.2

At 31 March 2017

500.6

78.1

1.3

–

580.0

Included above are assets held under finance leases at net book value of:*Land and buildings are not separable and therefore reported collectively.

1

See Glossary for further details.

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F I N A N C I A L S TAT E M E N T S

D. The property, technology and equipment used by the BBC to make and distribute its programmes continued
D2 Investment properties
2018
£m

2017
£m

Cost at 1 April and 31 March

130.9

130.9

Depreciation
At 1 April
Charge for the year

52.8
4.3

48.5
4.3

At 31 March

57.1

52.8

Net book value (held under finance lease)

73.8

78.1

At 31 March 2018, the BBC held investment properties valued at £174.6 million (2017: £181.4 million). The valuation of these investment
properties was carried out by Lambert Smith Hampton, independent valuers not connected with the Group, in accordance with the RoyalInstitution of Chartered Surveyors (RICS) Valuation Professional Standards. The valuation conforms to International Valuation Standards.
In estimating the fair value1 of the properties, the highest and best use of the properties is their current use.
The property rental income earned by the Group from its investment properties, which are leased out under operating leases, amounted
to £19.3 million (2017: £19.0 million). Direct operating expenses incurred on the investment properties which generated rental income
during the year, amounted to £16.5 million (2017: £3.1 million). There were no direct operating expenses incurred on the investment
properties which did not generate rental income during the year (2017: £0.1 million).

1

See Glossary for further details.

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F I N A N C I A L S TAT E M E N T S

E. Investments in the BBC’s commercial activities
This section is primarily driven by the commercial activities of the BBC Group and includes information on assets used to generate
economic benefits for the BBC Group. Also included are intangible assets such as goodwill and programme rights, balances held torepresent the BBC’s interest in associates and joint ventures and the results of any sale of operations that have occurred.
For additional information on the relevant accounting policies applied in this section please see section H Basis of preparation of thefinancial statements and other accounting policies.
E1 Intangible assets
Goodwill£m

Programmerights1£m

Software£m

Other
intangibles
£m

Total
£m

Cost
At 1 April 2016
Additions
Disposals
Transfer from property, plant and equipment
Exchange movements

34.2
–
–
–
1.3

712.5
155.8
–
–
2.9

189.1
10.4
(1.3)
17.6
–

10.0
3.7
(0.2)
–
1.4

945.8
169.9
(1.5)
17.6
5.6

At 31 March 2017
Additions
Disposals
Transfer from property, plant and equipment
Exchange movements

35.5
1.8
–
–
(1.1)

871.2
151.2
–
–
(2.6)

215.8
5.1
(67.5)
26.5
–

14.9
10.7
–
–
(1.2)

1,137.4
168.8(67.5)
26.5(4.9)

At 31 March 2018

36.2

1,019.8

179.9

24.4

1,260.3

–
–
–
–
–

537.9
201.8
–
–
2.7

111.9
24.8
(1.3)
14.1
–

4.7
1.8
(0 .1)
–
0.8

654.5
228.4
(1.4)
14.1
3.5

At 31 March 2017
Charge for the year
Disposals
Impairment
Exchange adjustments

–
–
–
0.5
–

742.4
169.4
–
–
(2.4)

149.5
25.4
(67.5)
–
–

7.2
4.0
–
–
(0.8)

899.1
198.8
(67.5)
0.5(3.2)

At 31 March 2018

0.5

909.4

107.4

10.4

1,027.7

Net book value
At 31 March 2018

35.7

110.4

72.5

14.0

232.6

At 31 March 2017

35.5

128.8

66.3

7.7

238.3

2018
£m

2017
£m

25.4
10.3

25.4
10 .1

35.7

35.5

Amortisation and impairment
At 1 April 2016
Charge for the year
Disposals
Impairment
Exchange adjustments

Impairments in the prior year included the impairment of BBC Store assets (£12.5 million).
E2 Goodwill1
All goodwill is recognised in BBC Worldwide.
Goodwill, allocated by cash-generating unit1 (CGU), is analysed as follows:

Consumer Distribution
Other

The recoverable amounts of the CGUs are determined from value in use calculations. The key assumptions in these calculations are thoseregarding discount rates and growth rates. Management estimates discount rates using pre-tax rates that reflect current market
assessments of the time value of money and the risk specific to each CGU.
BBC Worldwide tests goodwill for impairment in the accounting period in which a business combination takes place. Thereafter it istested on an annual basis, or more frequently if there are indications that goodwill might be impaired. £0.5 million of goodwill relating
to the South African production business was impaired during the year (2017: £nil).
BBC Worldwide acquired Sid Gentle Films Limited on 25 January 2018. As this was so close to year end, no impairment tests havebeen conducted.

1

See Glossary for further details.

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F I N A N C I A L S TAT E M E N T S

E. Investments in the BBC’s commercial activities continued
Consumer Distribution business
The goodwill in this CGU arose as a result of the acquisition of 2entertain on 6 August 2009. The cash flow projections used indetermining value in use are based on the current five-year business plan approved by management, and extrapolated cash flows
using an expected growth rate of -4% (2017: -6%) thereafter.
A discount rate of 15.3% (2017: 13.9%) has been applied to the cash flows.
Management believes that no reasonable change in the key assumptions would result in an impairment.
E3 Interests in associates1 and joint ventures1
This note details the BBC Group’s share of net assets in associates and joint ventures, along with the impact that they have on the income
statement. Details of significant associates and joint ventures along with principal subsidiary undertakings, including their activities, areprovided in note G4.
2018
£m

2017
£m

Interest in associates
Interest in joint ventures

191.4
48.1

205.0
53.5

Total interest in associates and joint ventures

239.5

258.5

Share of results of associates
Share of results of joint ventures

12.3
23.5

14.3
31.4

Total share of results of associates and joint ventures

35.8

45.7

The following table presents financial information for associates:
New Video
ChannelAmerica LLC£m

YouView
Limited
£m

Other
£m

Total
2018
£m

Non-current assets
Current assets
Current liabilities
Non-current liabilities

145.1
89.6
(28.4)
(8.2)

0.3
5.0
(8.2)
(45.1)

24.7
74.7(44.5)(14.8)

170.1
169.3(81.1)(68.1)Net assets/(liabilities)

198.1(48.0)

40.1

190.2

Group’s share of net assets
Provision for unrealised profit
Goodwill

99.2
(4.7)
61.7

–
–
–

7.6
(0.3)
27.9

106.8
(5.0)
89.6

Group’s share of net assets of associates

156.2

–

35.2

191.4

The net book value is presented within:
Interest in associates and joint ventures

191.4
191.4

Income

130.5

11.9

95.6

238.0

Profit/(loss) after tax
Adjustment to reflect the BBC Group’s effective
obligation

24.0(30.8)

(2.3)

(9.1)

(11.8)

30.8

2.4

21.4

Share of results of associates

12.2

–

0.1

12.3

1

See Glossary for further details.

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F I N A N C I A L S TAT E M E N T S

E. Investments in the BBC’s commercial activities continued
E3 Interests in associates1 and joint ventures1 continued
New Video
ChannelAmerica LLC£m

YouView
Limited
£m

Other
£m

Total
2017
£m

Non-current assets
Current assets
Current liabilities
Non-current liabilities

162.9
92.1
(28.0)(13.5)

0.3
4.9
(8.6)
(34.1)

7.1
72.9(37.1)(16.8)

170.3
169.9(73.7)(64.4)Net assets/(liabilities)

213.5(37.5)

26.1

202.1

Group’s share of net assets
Provision for unrealised profit
Goodwill

107.0
(3.8)
69.6

–
–
–

6.3
(0.3)
26.2

113.3
(4.1)
95.8

Group’s share of net assets of joint ventures

172.8

–

32.2

205.0

The net book value is presented within:
Interest in associates and joint ventures

205.0
205.0

Income

128.9

11.9

56.9

197.7

Profit/(loss) after tax
Adjustment to reflect the BBC Group’s effective
obligation

26.3

(2.9)

(0.7)

22.7

(12.7)

2.9

1.4

(8.4)

Share of results of associates

13.6

–

0.7

14.3

DaunusLimited£m

UKTV Media
Limited
£m

Other
£m

Total
2018
£m

Non-current assets
Current assets
Current liabilities
Non-current liabilities

558.3
60.2
(53.0)(702.7)8.9
241.3(128.5)(51.2)

3.1
32.6(15.1)(36.6)

570.3
334.1(196.6)(790.5)

Net (liabilities)/assets(137.2)70.5(16.0)(82.7)

Adjustment to reflect the BBC Group’s effective obligation
Provision for unrealised profit

137.2
–

(35.4)
(4.2)

20.5
(0.8)

122.3
(5.0)

–

30.9

3.7

34.6

The following table presents financial information for joint ventures:Group’s share of net assets of joint ventures
The net book value is presented within:
Interest in associates and joint ventures
Interest in Daunus Limited recognised at cost

48.1
(13.5)
34.6

Income

15.1

328.0

55.5

398.6

Profit/(loss) after tax
Adjustment to reflect the BBC Group’s effective obligation

4.6
(4.6)

53.7
(26.9)(11.3)
8.0

47.0(23.5)

–

26.8

(3.3)

23.5

Share of results of joint ventures

Daunus Limited prepares its financial statements to a 30 November accounting reference date and under Financial Reporting Standard
102. Adjustments are therefore made to align these to the Group.
The Group is unable to receive dividends from Daunus Limited until 2033 due to restrictions mandated within this entity.

1

See Glossary for further details.

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F I N A N C I A L S TAT E M E N T S

E. Investments in the BBC’s commercial activities continued
E3 Interests in associates1 and joint ventures1 continued
DaunusLimited£m

UKTV Media
Limited
£m

Other
£m

Total
2017
£m

Non-current assets
Current assets
Current liabilities
Non-current liabilities

561.7
57.9
(53.0)(720.4)8.9
261.8(140.0)(54.1)

2.8
31.1
(9.4)
(35.6)

573.4
350.8(202.4)(810 .1)

Net (liabilities)/assets(153.8)76.6(11.1)(88.3)

Adjustment to reflect the BBC Group’s effective obligation
Provision for unrealised profit

153.8
–

(38.4)
(5.1)

10.6
(0.8)

126.0
(5.9)

–

33.1

(1.3)

31.8

Group’s share of net assets/(liabilities) of joint ventures
The net book value is presented within:
Interest in associates and joint ventures
Provisions1Interest in Daunus Limited recognised at cost

53.5
(8.4)
(13.3)
31.8

Income

22.4

348.7

50.0

421.1

Profit/(loss) after tax
Adjustment to reflect the BBC Group’s effective obligation

13.2(13.2)

72.5(36.3)(10.0)
5.2

75.7(44.3)

–

36.2

(4.8)

31.4

Share of results of joint ventures

1

See Glossary for further details.

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F I N A N C I A L S TAT E M E N T S

F. Managing funding (including future costs)
This section contains the notes to the balance sheet that detail the funding of the BBC Group as well as the assets and liabilities thatare primarily used in the day-to-day transactions of the BBC Group.
The BBC collects licence fees from UK households on behalf of the Consolidated Fund. This is passed to the fund as reflected in the
BBC’s Television Licence Fee Trust Statement. Licence fee revenue, whilst derived from the amount collected directly from licencefee payers, therefore represents a grant-in-aid from DCMS within the Group financial statements.
It also sets out the external borrowings of the BBC Group. The BBC Group is subject to two specific limits to its borrowings:—— the Public Service net borrowing limit of £1,050 million is set by the Secretary of State for the DCMS in accordance with the
Framework Agreement between the BBC and DCMS. Of this limit, £850 million is specifically for finance leases; and—— under a direction granted by the Secretary of State for the DCMS a net borrowing limit of £350 million has been set for the
BBC commercial group.
Throughout 2016/17 the Public Service borrowing limit was £200 million, covering all borrowings with the exception of certain financeleases. From 1 April 2017, the permitted PSB borrowing limit as agreed with the DCMS was changed to specifically include all financeleases via a separate £850 million limit.
Included within this section are the disclosures required by the DCMS in respect of the above limits.
For additional information on the relevant accounting policies applied in this section please see section H Basis of preparation of thefinancial statements and other accounting policies.
F1 Cash and cash equivalents

Cash at bank, available on demand
Short-term deposits

2018
£m

2017
£m

119.0
404.0

126.3
130.0

523.0

256.3

F2 Analysis of net funds for DCMS borrowing limits
Restated*
At 1 April
2017
£m

Cash
flows
£m

Non-cashchanges£m

Exchange£m

At 31 March2018£mTotal cash and cash equivalents

256.3

266.4

–

0.3

523.0

Loans and loan notes
Derivatives associated with borrowings
Finance leases(201.2)26.6(690.0)

(0.9)
–
74.0

0.2
(19.0)(58.7)

19.7––(182.2)
7.6(674.7)

Net debt(608.3)(326.3)

Made up of:
PSB Group
Centre House Productions
BBC Worldwide
Other commercial businesses(499.2)
1.5
44.3(154.9)(239.3)1.2
38.8(127.0)Net debt(608.3)(326.3)*The comparatives have been restated to reflect the revised borrowing limits agreed under the Charter and Agreement which came into effect from 1 January 2017.

F3 Reconciliation of net funds to the DCMS borrowing limits
Public Services1
Net funds
excludingfinance leases£mFinance leaseborrowings£m

Net debts£mCommercial
businesses*£m

2018
Net funds/(debt)
Net borrowing limit

434.6(200.0)(673.9)(850.0)(239.3)(1,050.0)(88.2)(350.0)

Headroom

634.6

176.1

810.7

261.8

2017 restated**
Net funds/(debt)
Net borrowing limit

190.7(200.0)(689.9)(850.0)(499.2)(1,050.0)(110 .6)(350.0)

Headroom390.7

160 .1

550.8

239.4

*
**
1

Under the terms of the DCMS agreement, the BBC Commercial Holdings group must satisfy two financial covenants, which need to be satisfied throughout the respective
period. During 2017/18 and 2016/17, BBC Commercial Holdings Limited was in compliance with both of these covenants.
The comparatives have been restated to reflect the revised borrowing limits agreed under the Charter and Agreement which came into effect from 1 January 2017.
See Glossary for further details.

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F I N A N C I A L S TAT E M E N T S

F. Managing funding (including future costs) continued
F4 Borrowings
F4.1 Borrowings due within one year
2018
£m

2017
£m

0.9
18.0

–
14.5

18.9

14.5

2018
£m

2017
£m

181.3
656.7

201.2
675.5

838.0

876.7

Minimum
lease
payments£m

Interest£mPrincipal
£m

64.1
278.2
786.1

46.1
166.6
241.0

18.0
111.6
545.1

1,128.4

453.7

674.7

61.8
273.8
855.0

47.3
173.5
279.8

14.5
100.3
575.2

1,190 .6

500.6

690.0

Bank loan
Obligations under finance leases

F4.2 Borrowings due after more than one year

Bank loan
Obligations under finance leases

Analysis of the BBC Group’s borrowing facilities is set out in note F5.		
F4.3 Obligations under finance leases1
Finance lease liabilities are payable as follows:

2018
Within one year
Between one and five years
Over five years
2017
Within one year
Between one and five years
Over five years

Under the terms of the lease agreements, the BBC has the right to share in the residual value of its key finance lease properties(Broadcasting House and Pacific Quay). This share will be passed to the BBC as either a cash flow at the end of the lease arrangement,
or a reduction in rentals if the lease agreement is extended for a further term. In addition, the BBC has the right to repurchase each
property at the end of the respective lease agreements.
Interest rates are fixed at the contract date. Leases with a carrying value of £668.6 million (2017: £688.5 million) have contingent
elements included within their contracts and result in contingent rents of £29.0 million (2017: £27.4 million) being included inoperating costs.
F4.4 Operating leases1
The total future minimum lease payments under non-cancellable operating leases are payable as follows:

Within one year
Between one and five years
Over five years

2018
£m

2017
£m

107.2
280.6
417.8

97.9
288.4
521.8

805.6

90 8.1The BBC Group’s operating lease agreements primarily relate to land, office space, computers and other IT equipment. Certain contracts
include renewal options, stepped rents or annual RPI uplifts (which are accounted for on a straight-line basis) or periodic rent reviews.
All leases have been entered into on commercial terms.

1

See Glossary for further details.

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F I N A N C I A L S TAT E M E N T S

F. Managing funding (including future costs) continued
The BBC Group has entered into a number of sublease arrangements. The total future minimum sublease income expected to bereceived under non-cancellable subleases at 31 March is:Within one year
Between one and five years
Over five years

2018
£m

2017
£m

26.0
94.2
245.2

24.5
89.5
263.6

365.4

377.6

F5 Borrowing facilities
Total
available
31 March
2018
£m

Drawn
down at
31 March
2018
£m

Total
available
31 March
2017
£m

Drawn
down at
31 March
2017£mExpiryor review
date

LIBOR* plus 0.3% rising to LIBOR*
plus 0.15% on utilisations over
1/3 and LIBOR* plus 0.45% on
utilisations over 2/3

200

–

200

–

15 July 2020

Uncommitted money market
lines (short-term borrowings)

The interest on uncommitted
money market lines are
determined when traded withthe bank

25

–

25

–

Reviewed
annually

GBP overdraft

Bank base rate plus 1.5%

5

–

5

–

Reviewed
annually

Multicurrency overdraft

Banks’ short-term offered rates forthe relevant currency plus 1%

5

–

5

–

Reviewed
annually

Overdraft*

Bank base rate plus 1%. Excess
usage at bank base rate plus 2%

1

–

1

–

Reviewed
annually

210

–

210

–

July 2019

Facility

Interest rate

PSB Group
Sterling revolving credit facility
agreement

BBC Commercial Holdings Limited
Multicurrency, revolving credit
LIBOR* plus 0.6% rising to LIBOR*
facility agreement for loans and plus 0.15% on utilisations overletters of credit
1/3 and LIBOR* plus 0.15% on
utilisations over 2/3
Overdraft or money market
lines

Money market line – margin of
1.0% (2017: 1.0%)

20

–

20

–

Reviewed
annually

US Private Placement

Fixed interest at 2.36%

28

28

28

28

June 2020

US Private Placement**

Fixed interest at 2.71%

153

153

173

173

June 2020

Bank base rate plus 1% if drawn
down in sterling. Bank currency
overdraft rate plus a 1% margin if
drawn down in other currencies

2

–

2

–

Reviewed
annually

Bank loan

Three month GBP LIBOR plus 1%

9

1

–

–

31 August2018

Overdraft or working capitalloan for Indian rupees

Not in place at 31 March 2018(2017: market rate at drawdown)

–

–

1

–

Reviewed
annually

BBC Worldwide
Overdraft****

The base rate used varies according to the currency drawn. GBP drawings are linked to LIBOR.
The US$216 million US placement is hedged to a sterling value of £143 million, valued at the time of the facility being put in place.

There have been no defaults or breaches of covenants on these facilities during the year (2017: none).

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F I N A N C I A L S TAT E M E N T S

F. Managing funding (including future costs) continued
F6 Cash generated from operations
2018
£m

2017
£m

Group surplus/(deficit) before taxation
Depreciation, amortisation and impairment
Difference between pension charge and cash contribution
Fair value impact of derivatives associated with loans
Fair value impact of other derivatives
Loss on disposal of tangible and intangible fixed assets
Gain on disposal of available for sale investment
Gain on disposal of associates and joint ventures
Other gains
Share of results of associates and joint ventures
Financing income
Financing costs (excluding fair value swaps)(Increase)/decrease in programme-related assets and inventories
Decrease/(increase) in debtors(Decrease)/increase in creditors(Decrease)/increase in provisions

178.6
339.7
81.5
19.2
6.0
6.9
(4.4)
(0.4)
–
(35.8)(25.7)
79.7(112.7)81.0(21.7)(9.2)(119.3)388.5(141.6)(108.7)
87.0
3.8
–
–
(2.7)
(45.7)
(5.3)
139.3
71.8
(49.8)
80 .1
3.7

Cash generated from operations

582.7

301.1

F7 Trade and other receivables
This note discloses the balances that are owed to the BBC Group by third parties and prepayments made by the BBC Group.
F7.1 Other receivables due after more than one year

Trade receivables
Other receivables
Prepayments
Amounts owed by associates and joint ventures

2018
£m

2017
£m

44.3
15.7
2.4
2.2

66.9
14.5
3.1
5.9

64.6

90.4

2018
£m

2017
£m

236.9
405.3
32.1
31.1
79.6
132.3
57.7

276.9
396.0
30.3
31.4
97.7
125.3
64.8

975.0

1,022.4

F7.2 Trade and other receivables due within one year

Trade receivables
Licence fee receivables
Amounts owed by associates and joint ventures
VAT recoverable
Prepayments
Accrued income
Other receivables

Included in the BBC Group’s trade and other receivables at 31 March 2018 are balances of £50.5 million (2017: £20.8 million) which are
past due at the reporting date but not impaired. The aged analysis of these balances is as follows:

Up to three months
Three to six months
Over six months

2018
£m

2017
£m

34.6
5.4
10.5

15.4
1.6
3.8

50.5

20.8

In determining the recoverability (likelihood of receiving payment) of a trade and other receivable the Group considers any change in thecredit quality of the receivable from the date credit was initially granted up to the reporting date. Receivables are provided for based on
estimated irrecoverable amounts, determined by reference to age, past default experience of the counterparty and an analysis of thecounterparty’s financial situation.
There are no significant impairment provisions relating to balances of any individual debtor. Amounts charged to the impairment
provision are written off when there is no expectation of recovery. Subsequent recoveries of amounts previously written off are credited
to the income statement. The impairment provision stands at £5.3 million at 31 March 2018 (2017: £7.9 million).
1

See Glossary for further details.

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F I N A N C I A L S TAT E M E N T S

F. Managing funding (including future costs) continued
F7.2 Trade and other receivables due within one year continued
The movement in the impairment provision is set out below:
2018
£m

2017
£m

Balance at the beginning of the year
Impairment losses recognised
Amounts written off as uncollectable
Amounts recovered during the year

7.9
2.6
(1.9)
(3.3)

5.2
6.1
(1.2)
(2.2)

Balance at the end of the year

5.3

7.9

2018
£m

2017
£m

5.5
39.3
34.3

7.7
20.2
20.5

79.1

48.4

2018
£m

2017
£m

376.5
44.0
9.1
248.7
306.4
25.6
42.9

376.9
45.4
14.6
231.1
338.7
28.2
34.8

1,053.2

1,069.7

No significant amount has been provided for items that are not yet due for payment.
F8 Trade and other payables
This note details the amounts payable to third parties by the BBC Group.
F8.1 Trade and other payables due after more than one year

Accruals and deferred income
Rights creditors
Other payables

F8.2 Trade and other payables due within one year

Trade payables
Licence savings stamp deposits and savings cards
Amounts owed to associates and joint ventures
Accruals
Deferred income (including licence fee payables)
Other taxation and social security
Other payables

F9 Provisions and contingent liabilities

Note

Restructuring
Litigation and insurance
Property
Share of joint ventures net liabilities
Other
Included in current liabilities
Included in non-current liabilities

E3At
1 April
2017£m

Charge forthe year£m

Utilisedduringthe year£m

Releasedduringthe year£m

At
31 March
2018
£m

37.8
17.5
42.0
8.4
7.4

18.2
3.0
2.2
–
27.8

(34.4)
(1.5)
(2.5)
–
(6.5)

(4.3)
–
(0 .1)
(8.4)
(2.7)

17.3
19.0
41.6
–
26.0

113.1

51.2

(44.9)(15.5)

103.9

62.5
50.6

55.6
48.3

113.1

103.9

Restructuring provisions are determined by the probable costs relating to reorganisations, relocations and redundancies in the BBC. The
restructuring charge for the year mainly relates to the savings and restructure programmes within the PSB Group and BBC Worldwide.
The restructuring balance at 31 March 2018 predominantly relates to the redundancies generated through ongoing savings strategies.
Litigation and insurance provisions relate to ongoing legal, insurance and compensation claims against the BBC. The BBC makes specificprovision for its best estimate of any damages and costs which may be awarded. A provision is only made to the extent that the BBCGroup considers it probable that there will be an outflow of economic benefits and the amount can be reliably estimated. There are
currently no known individually material outstanding litigations.

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F I N A N C I A L S TAT E M E N T S

F. Managing funding (including future costs) continued
F9 Provisions and contingent liabilities continued
The BBC Group has obligations to restore leased properties to their original condition at the end of the lease term. Property provisions
are made for the cost of such restoration works as determined by the properties’ discounted net present value or the market value of thegross square footage.
Other provisions include amounts relating to employment matters and other items arising across the BBC Group in the normal course ofbusiness, none of which are individually material.
Contingent liabilities
In 2017, the Government introduced new legislation relating to the tax accountability for payments to intermediaries in the public sector.
Alongside it, HMRC introduced a new analysis tool (the Check Employment Status for Tax – the CEST) and other written guidance which
continues to be revised and updated in relation to its application to the production and broadcast industry. These changes have led to anumber of new questions and issues arising in relation to the assessment of tax status across the industry, as the new guidance indicatesthat a larger proportion of on-air presenters should be treated as employed for tax purposes than previously. Concurrently a number ofon-air presenters, across the industry, are now facing investigations from HMRC about how tax and NI has been applied in the past to
their engagements via a Personal Service Company. The BBC’s discussions with HMRC on these matters continues.
The BBC has announced that it is to establish a fair and independent process under the supervision of the Centre for Effective Dispute
Resolution (CEDR) to determine the right approach in cases where on-air presenters believe the BBC bears some liability in relation to
demands for Employers’ National Insurance Contributions. The terms of this process are intended to be subject to consultation andbecause the scope and outcome of this process remain uncertain, no provision in relation to this matter has been recognised in thesefinancial statements.
F10 Net financing costs
Set out below is an analysis of the financing income and expenses incurred in the year. These amounts include interest relating to financelease liabilities (see note F4.3) and defined benefit pension schemes (see note C7).
Note

Financing income
Interest income
Exchange gain on borrowings
Financing costs
Interest expense
Investment expense on liabilities available for trading
Exchange loss on borrowings
Fair value loss on swaps
Interest on obligations under finance leases
Interest cost on pension plan liabilities1
Net financing costs

C7.3

2018
£m

2017
£m

6.0
19.7

5.3
–

25.7

5.3

(7.6)
–
–
(41.6)(47.5)(9.7)(0 .1)(23.3)(25.0)(49.1)(96.7)(24.6)(107.2)(32.1)(121.3)(139.3)(95.6)(134.0)

2018
£m

2017
£m

(47.5)(24.6)(23.5)(49.1)(32.1)(52.8)(95.6)(134.0)The net impact of financing can be analysed as:

Net financing costs of leasing arrangements
Net financing costs related to pension obligations
Net financing cost related to loans and financial instruments

1

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F I N A N C I A L S TAT E M E N T S

F. Managing funding (including future costs) continued
F11 Long-term commitments not reflected in the balance sheet – contracts placed for future expenditureThis note shows amounts to which the BBC Group is contractually committed, but which do not meet the criteria for inclusion in thebalance sheet. It includes fixed (but not variable) payments due under outsourcing contracts for the life of those contracts.
Functions covered by these long-term outsourcing contracts include IT support, content distribution and transmission, facilities
management and elements of finance support.

Fixed asset additions
Programme acquisitions and sports rights
Independent programmes
Other fixed payments on long-term outsourcing arrangements

2018
£m

2017
£m

39.7
1,369.8
149.8
2,345.5

34.5
1,263.0127.7
2,070.7

3,904.8

3,495.9

2018
£m

2017
£m

875.1
2,101.1
928.6

743.0
1,642.3
1,110 .6

3,904.8

3,495.9

Long-term commitments not reflected in the balance sheet are payable as follows:

Within one year
Between one and five years
Over five years

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F I N A N C I A L S TAT E M E N T S

G. Other
For additional information on the relevant accounting policies applied in this section please see section H Basis of preparation of thefinancial statements and other accounting policies.
G1 Taxation
G1.1 Recognised in the income statement
The charge for the year, based on the rate of corporation tax of 19% (2017: 20%) comprised:
2018
£m

2017
£m

Current tax
UK corporation tax
Foreign tax
Adjustments in respect of prior years(13.3)
27.2(0.9)(12.1)
22.4(8.5)

Total current tax

13.0

1.8

Deferred tax1
Origination and reversal of temporary differences
Changes in tax rate
Adjustments in respect of prior years

(5.0)
(7.7)
(1.3)

(1.4)
0.7
8.7

Total deferred tax(14.0)

8.0

(1.0)

9.8

Note

Total taxation (credit)/expense in the consolidated income statement

G1.2

G1.2 Reconciliation of taxation expenses
The PSB Group is liable to taxation on those activities carried out with a view to making a profit and on rent, royalties and interest
receivable; it does not therefore receive relief for all its expenditure. The commercial subsidiaries in the BBC Group are taxed inaccordance with tax legislation. As the BBC Group’s public sector ‘free-to-air’ broadcasting activities are not subject to taxation, the tax
charge is primarily driven by the results of the commercial businesses. The items affecting the standard rate of corporation tax are
explained below:
Note

Surplus/(deficit) before tax
Surplus/(deficit) before tax multiplied by standard rate of corporation tax in the UK of
19% (2017: 20%)
Effects of
Public service activities
Public service taxable external income
Non-taxable public service activities
Commercial activities
Disallowed expenditure (including goodwill impairment)
Losses (utilised)/carried forward
High-end television tax relief
Tax-exempt capital gain
Tax differential on overseas earnings
Tax differential in associates and joint ventures
Changes in the tax rate
Adjustments in respect of prior years
Total tax charge for the year

G1.1

2018
£m

2017
£m

178.6

(119.3)33.9(23.9)

5.6(13.4)

6.5
30.7

3.4
(4.8)
(20.8)(0.9)
16.1(10.2)
(7.7)
(2.2)

(2.0)
2.3
(9.5)
–
11.9
(7.1)
0.7
0.2

(1.0)

9.8

G1.3 Factors that may affect future tax charges
The Finance Bill 2016 was enacted on 6 September 2016. This reduced the corporation tax rate to 17% from April 2020. As this rate
reduction has been substantively enacted at the balance sheet date, the deferred tax assets have been calculated at 17% in line withwhen the company anticipates temporary differences to unwind.
As part of the 2016 Budget the Chancellor announced the Business Tax Road Map, which included measures to limit the utilisation ofbrought forward losses and interest deductions. These were included in Finance (No. 2) Act 2017, which was substantively enacted on
31 October 2017, and applies from 1 April 2017.
There are many future changes to worldwide taxation systems as a result of the potential adoption by the UK and individual territoriesof measures relating to the OECD Base Erosion and Profit Shifting Actions. The Group continues to actively monitor developments andevaluate their potential impact. The Group does not expect the future tax rate to be materially impacted by these changes to theinternational tax landscape.

1

See Glossary for further details.

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F I N A N C I A L S TAT E M E N T S

G. Other continued
G1.4 Current tax assets
The current tax assets totalling £36.2 million (2017: £40.0 million) includes £27.8 million (2017: £15.0 million) due in respect of film tax
credits outstanding on high-end drama and comedy productions following over-provisions made in 2017/18.
G1.5 Deferred tax assets/(liabilities)
Fixed asset
temporarydifferences£m

At 1 April 2017
Net credit/(charge) to the income statement
Charge to reserves
Exchange differences
At 31 March 2018

Provisions£mFinancial
instruments£m

Associates andjoint ventures£m

Programmerights
£m

Other
£m

Net deferredtax (liability)/asset
£m

6.1
0.7
–
–

1.9
0.7
–
2.6

0.4
(0 .1)(4.9)–(20.7)
–
–
–

(7.0)
–
–
–

(0.8)
12.7
–
0.6

(20 .1)
14.0
(4.9)
3.2

6.8

5.2

(4.6)

(20.7)

(7.0)

12.5

(7.8)

Deferred tax asset/(liability) presented within:

Non-current assets
Non-current liabilities

2018
£m

2017
£m

6.1
(13.9)

11.3(31.4)(7.8)(20 .1)The Group has unrecognised deferred tax assets arising on capital losses totalling £139.2 million (2017: £137.3 million) and trade losses
totalling £28.2 million (2017: nil). These assets have not been recognised on the basis that there is insufficient certainty that future gains
or profits will arise against which the Group can utilise these losses.
The Group also has unrecognised deferred tax assets arising on excess management expenses totalling £3.7 million and non-trade loan
relationship losses totalling £9.3 million. These assets have not been recognised on the basis that there is insufficient certainty that
future gains or profits will arise against which the Group can utilise these losses.
There is no time limit for the utilisation of either of these losses.
G2 Pension plans
This note sets out the additional detailed disclosures related to the BBC Pension Scheme which were not included in note C7 or C8.
G2.1 Changes in the present value of plan liabilities1
The table below illustrates the movement on the scheme liabilities during the year. The key items which affect this are the additional yearof pension benefits earned, any gains or losses relating to participants leaving the pension scheme, changes in assumptions made andbenefits paid out during the year.
2018
£m

2017
£m

Opening present value of plan liabilities
Current service cost
Past service cost/(credit)
Administration cost
Interest on pension plan liabilities
Remeasurement losses/(gains):– Experience gains arising on plan liabilities– Changes in financial assumptions1– Changes in demographic assumptions1
Contributions by plan participants
Benefits paid and expenses

16,885.9
227.2
0.3
9.1
407.9

13,824.8
186.1
(2.9)
9.8
462.7

111.4
(151.5)–0.6(504.4)(141.3)
3,703.6(695.3)0.9(462.5)

Closing present value of plan liabilities

16,986.5

16,885.9

1

See Glossary for further details.

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F I N A N C I A L S TAT E M E N T S

G. Other continued
G2.2 Changes in the fair value of plan assets
The table below illustrates the movement on the plan assets during the year. The key items which affect this are the additional year ofcontributions made, changes in the value of the pension plan assets (including the investment return) and benefits paid during the year.
The employee contributions to the scheme by members are mainly paid via a salary sacrifice arrangement. These have been treated as
employer contributions.
2018
£m

2017
£m

Opening fair value of plan assets
Interest income on assets
Remeasurements on plan assets1
Contributions by employer
Contributions by plan participants
Benefits paid and expenses

15,745.2
383.4
696.8
154.7
0.6
(504.4)

12,821.4
430.8
2,620.3334.3
0.9(462.5)

Closing fair value of plan assets

16,476.3

15,745.2

G2.3 Plan assets
The allocation of assets by the pension fund Trustees is governed by the need to manage risk against the desire for high returns and any
liquidity needs. A high percentage of assets are held in equities which the Trustees expect will produce higher returns in the long term.
2018
£m

%

2017
£m

%

1,260.6
1,259.4(1,569.9)
3,072.6
6,500.7
97.4

8
8
(10)
19
38
1

1,499.0
2,624.7(1,639.3)
1,450 .1
6,144.0
112.8

10
17
(10)
9
39
1

943.7
491.7
4,101.4
318.7

6
3
25
2

885.2
456.4
3,710.9
501.4

5
3
23
3

Total assets

16,476.3

100

15,745.2

100

Actual return on pension plan assets**

1,049.1

Type of asset

Held at quoted market prices:
Equities
Pooled vehicles
Repurchase agreements
Fixed interest bonds
Index-linked bonds
Derivatives
Other assets:
Property– UK– Pooled investment vehicles
Alternatives*
Cash and other current assets***

3,051.1

Alternatives are investments in asset classes other than the traditional quoted equities, bonds, property and cash. They include investments in private equity, private credit,
hedge funds, infrastructure and renewable energy investments. They are generally illiquid investments as some may require sufficient time to find buyers willing to pay fullmarket value. They are useful for managing risk as they enhance portfolio diversification and potentially reduce risk as their cash flows can be well suited to meeting thescheme’s liabilities.
This constitutes realised gains from the receipt of investment income (e.g. dividends and rent), transactions where assets are sold and unrealised fair value changes.

The pension fund Trustees and the BBC have agreed to a long-term plan of achieving full funding on a discount rate equal to the yield on
liability-matching gilts plus 0.5% p.a. The Trustees have also established a framework for setting the scheme’s strategic asset allocation
based on the scheme’s funding ratio, with the intention of not taking more risk than is necessary to return to full funding over the horizonof the plan.
G2.4 BBC Pension Scheme gains/(losses) in the consolidated statement of comprehensive income/(loss)
2018
£m

2017
£m

Return on plan assets (excluding amounts included within interest)
Remeasurement (losses)/gains1 arising from:– Experience (losses)/gains on plan liabilities– Changes in demographic assumptions– Changes in financial assumptions

696.8

2,620.3(111.4)
–
151.5

141.3
695.3
(3,703.6)

Net gain/(loss) recognised in the consolidated statement of comprehensive income/(loss)

736.9(246.7)

1

See Glossary for further details.

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F I N A N C I A L S TAT E M E N T S

G. Other continued
G2.5 Principal actuarial assumptions
The calculation of the scheme liabilities requires a number of financial and demographic assumptions to be made. The principal
assumptions used by the actuaries at the balance sheet date were:Principal financial assumptions

Rate of increase in salaries
Rate of increase in pension payments:
Old Benefits*
New Benefits*
Career Average Benefits (2006)*
Career Average Benefits (2011)*
Inflation assumption (RPI)
Inflation assumption (CPI)
Discount rate1
*

2018
%

2017
%

1.00

1.00

3.10
2.90
2.40
2.00
3.10
2.10
2.40

3.20
3.00
2.40
2.10
3.20
2.20
2.45

2018
Number of
years

2017
Number of
years

27.1
28.6

27.0
29.3

29.4
31.0

28.5
31.0

For more information on the different pension arrangements, please refer to the remuneration report.

The average life expectancy assumptions, for members after retirement at 60 years of age, are as follows:
Principal demographic assumptions

Retiring today:
Male
FemaleRetiring in 20 years:
Male
FemaleThe mortality assumptions have been selected to reflect the characteristics and experience of the membership of the scheme. These arebased on the assumptions used for the actuarial valuation which was carried out for funding purposes as at 1 April 2016. The standard‘S2’ series of tables, published by the CMI, reflect recent research into mortality experience in the UK. A subset of these tables has beenused for males and females, with a multiplier of 118% for males and 96% for females. For the allowance for future improvements, theCMI 2016 core projection has been adopted with a long-term trend of 1.25% for both males and females.
G2.6 Scheme membership analysis and maturity1 profile
Principal demographic assumptions

2018
Number

2017
NumberContributors
Pensioners
Dependants
Deferred pensioners

9,827
19,763
4,316
28,927

10,636
19,636
4,308
29,036

The total number of scheme beneficiaries as at 31 March 2018 was 49,272 (2017: 50,037). Membership numbers in the table above arehigher as members can hold more than one record. For example, contributing members who have transferred to the Career Average
Benefits 2011 section from another section of the scheme may have a deferred pensioner record for their benefits built up in the
Old Benefits, New Benefits or Career Average Benefits 2006 sections and a contributing record for their Career Average Benefits
2011 benefits.
The average duration of the benefit obligation at the end of the reporting period is 21 years (2017: 21 years). This number can be
subdivided into the duration related to:—— contributors: 26 years (2017: 26 years)—— pensioners: 14 years (2017: 14 years)—— deferred pensioners: 28 years (2017: 28 years)
G3 Financial instruments
This section details the financial instruments held by the BBC Group. A financial instrument is a contract that results in one entity
recording a financial asset (a contractual right to receive financial assets, e.g. cash) in their accounts and another entity recording
a financial liability.
The BBC Group’s financial instruments, other than those used for treasury risk management purposes, comprise cash and cash
equivalents, borrowings and various items such as trade receivables and payables that arise directly from its operations.
The BBC Group’s financial risk management operations are carried out by a BBC Group Treasury function, within parameters definedformally within the policies and procedures manual agreed by the BBC Board. BBC Group Treasury’s activity is routinely reported andis subject to review by internal auditors.

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F I N A N C I A L S TAT E M E N T S

G. Other continued
G3.1 Financial risk management
The BBC Group Treasury function uses financial instruments to raise finance and to manage financial risk arising from the BBC’s
operations in accordance with its objectives, which are:—— to ensure the business of the BBC Group, both PSB Group and Commercial, is funded in the most efficient manner and remains
compliant with borrowing ceilings;—— to protect the value of the BBC’s assets, liabilities and cash flows from the effects of adverse interest rates and foreign exchange
fluctuations; and—— to maximise the return on surplus funds, whilst ensuring sufficient cash is retained to meet foreseeable liquidity requirements.
The BBC Group takes a risk averse approach to the management of foreign currency trading and has implemented a clear economic
hedging policy to minimise volatility in the financial results. A small number of the forward foreign currency contracts entered into by
the BBC Group were designated as hedging instruments in effective cash flow hedges. Hedge accounting is only applied where there isappropriate designation and documentation.
The BBC Group is exposed to the following areas of risk arising from financial instruments:—— market risk, principally currency and interest rate risk;—— liquidity risk; and—— credit risk1. The largest element is the licence fee debtor, £405.3 million (2017: £396.0 million). The amount of income that the BBC
receives is directly related to the amount of licence fee collected from households in the UK.
The material risks to the BBC Group are:
Currency risk
Foreign exchange transaction risk arises from forecast future transactions that are denominated in a currency that is not the entity’sfunctional currency. Foreign exchange translation risk arises from the retranslation of overseas subsidiaries’ income statements andbalance sheets into sterling.
The BBC Group is principally a UK-based organisation with the majority of transactions, assets and liabilities being sterling based;
however, the BBC Group undertakes some transactions in currencies other than sterling.
The BBC’s commercial operations are undertaken in a range of global markets and a significant proportion of BBC Worldwide’s revenues
are generated outside the UK. Over the past few years, BBC Worldwide Limited has increasingly expanded internationally and as a resultis exposed to foreign exchange risk arising from various currency exposures, principally in relation to the US dollar, the euro and theAustralian dollar. Due to movements in exchange rates over time, the amount the Group expects to receive or pay when it enters intoa transaction may differ from the amount that it actually receives or pays when it settles the transaction.
The Group takes a risk averse approach to the management of foreign currency trading and has implemented a clear economic hedging
policy to minimise volatility in the financial results. A substantial proportion of the Group’s material net foreign currency exposures are
economically hedged.
The most significant foreign currency exposure, by total value of transactions, is to US dollars. Due to the relative size of this exposurein comparison to the BBC Group’s sterling-denominated business, the BBC does not consider this to be significant for the BBC Group.
However, it does generally enter into forward currency contracts to manage, or hedge, this currency risk, which allows the BBC Groupto reduce uncertainty by settling transactions at known exchange rates.
The overall income or expenditure to be recognised in relation to contracts denominated in foreign currency (and the related hedges) istherefore fixed; however, where these contracts span financial years, the recognition of the fair value of the forward currency contracts
results in timing gains/losses in each financial year. These timing gains/losses are therefore a result of market conditions and notvariances in underlying contract value.
As a result of this certainty of cash flows the BBC Group has mitigated its underlying sensitivity to currency fluctuations and therefore
has not presented sensitivity analysis as any potential variation is insignificant.
At 31 March 2018, the BBC Group had entered into a net commitment to sell foreign currencies amounting to £82.2 million (2017:£224.8 million) that mature in the period through to 2021 in order to fix the sterling cost of commitments through this period(mainly euros and US dollars). These forward foreign exchange contracts mean the BBC Group had no significant currency exposure.
Interest rate risk
The Group’s main exposure to interest rate fluctuations arises on external borrowings. BBC Commercial Holdings’ 2013 private
placement included a tranche of fixed rate sterling debt alongside a tranche of fixed rate US dollar debt, with the latter swapped to
fixed rate sterling throughout the period of the instrument. Since March 2003 the Group has been borrowing under its revolving credit
facilities at floating rates of interest and then using interest rate swaps, caps and collars to manage the Group’s exposure to interest
rate fluctuations and provide greater certainty of cash flows. Interest rate swaps, caps and collars are entered into based on projectedborrowing requirements, therefore differences will occur between the notional amount of the swaps, caps and collars and the actual
borrowing requirements. The effect of taking out the interest rate swaps, caps and collars is that in the longer term the Group has
no significant underlying sensitivity to interest rate fluctuations and hence no sensitivity analysis has been presented.

1

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F I N A N C I A L S TAT E M E N T S

G. Other continued
G3.1 Financial risk management continued
Other price risk of financial assets: The Group invests surplus cash in money market funds and money market deposits, therefore it is not
subject to other price risks, such as market price risk.
Sterling fixed rate borrowings are achieved by entering into interest rate swap transactions; all outstanding swaps mature by the endof June 2020. In total, £153.6 million (2017: £173.2 million) of swaps were entered into. The coverage is £27.7 million lower (2017:£28.0 million lower) than the current level of bank loans of £181.3 million (2017: £201.2 million).
Fair value movements in respect of interest rate swaps and interest rate options are recorded through the income statement within
financing income/financing costs as hedge accounting is not applied.
Liquidity risk
Liquidity risk is the risk that the BBC Group will not be able to meet its financial obligations as they fall due. The BBC is subject to ceilings
on its borrowings set by the Secretary of State in accordance with the Agreement between the BBC and DCMS (see note F2). In order tocomply with these ceilings, together with the terms of any individual debt instruments, the BBC’s Group Treasury function manages the
BBC Group’s borrowings by regularly monitoring BBC Group cash flow forecasts. The BBC holds its surplus liquidity in term deposit
accounts with highly rated financial institutions.
The bank loans of the BBC’s commercial operations are subject to debt covenants based on the Group’s earnings before interest andtaxation. The covenants are in respect of net borrowings and net interest coverage. The Group is active in the monitoring of its debt
covenants which have been met at 31 March 2018.
Credit risk
Credit risk is the risk of financial loss to the Group if a customer or counterparty to a financial instrument fails to meet its contractual
obligation.
Depending on how exchange rates and interest rates move between the time the Group enters into the transaction and at the year end,
these derivatives can either be profitable (‘in the money’) or loss-making in their own right. However, the rationale in entering into thesederivatives is not to profit from currency markets or interest rate fluctuations, but to provide stability to the BBC’s cash flows. Other thanwhere hedge accounting is applied, the movements relating to these derivatives (i.e. where they are either in profit or loss-making) aretaken to the Group’s statement of income and expenditure for the year.
The Group’s credit risk management policy in relation to other trade receivables involves regularly assessing the financial reliabilityof customers, taking into account several factors such as their financial position and historical performance. The carrying amount offinancial assets included in the financial statements represents the Group’s maximum exposure to credit risk in relation to these assets.
G3.2 Fair value of financial instruments
The following table shows the fair value of the BBC Group’s financial instruments, in categories according to how the financial instrument
is measured. It also shows the maturity profile for each category of financial asset and liability.

2018 – Fair value
Financial assets at fair value
Derivative financial instruments:
Derivatives that are designated in hedge relationships
Derivatives through the income statement
Loans and receivables
Trade and other receivables
Cash and cash equivalents
Available for sale financial assets
Other investments
Investment properties
Financial liabilities at fair value
Derivative financial instruments:
Derivatives that are designated in hedge relationships
Derivatives through the income statement
Trade and other payables
Financial liabilities measured at amortised cost
Bank loans, overdrafts and loan notes
Trade and other payables
Obligations under finance leases

1

Amountsdue inless than
one year£m

Amountsdue between
two andfive years£mAmounts
due after
more than
five years
£m

Total
£m

1.2
7.9

–
11.8

–
417.6

1.2
437.3

642.5
523.0

–
–

3.1
–

645.6
523.0

–
–

–
–

193.9
174.6

193.9
174.6

(1.7)
(3.7)
–

–
(2.0)
(25.2)–(515.9)–(1.7)(521.6)(25.2)(0.9)(392.3)(46.9)(181.3)–(202.2)––(687.5)(182.2)(392.3)(936.6)

See Glossary for further details.

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F I N A N C I A L S TAT E M E N T S

G. Other continued
G3.2 Fair value of financial instruments continued

2017 – Fair value
Financial assets at fair value
Derivative financial instruments:
Derivatives that are designated in hedge relationships
Derivatives through the income statement
Loans and receivables
Trade and other receivables
Cash and cash equivalents
Available for sale financial assets
Other investments
Investment properties
Financial liabilities at fair value
Derivative financial instruments:
Derivatives that are designated in hedge relationships
Derivatives through the income statement
Trade and other payables
Financial liabilities measured at amortised cost
Bank loans, overdrafts and loan notes
Trade and other payables
Obligations under finance leases

Amountsdue inless than
one year£m

Amountsdue between
two andfive years£mAmounts
due after
more than
five years
£m

Total
£m

0 .1
6.5

0 .1
31.2

–
459.5

0.2
497.2

673.8
256.3

–
–

2.8
–

676.6
256.3

–
–

–
–

230.2
181.4

230.2
181.4

(21.5)(12.5)
(1.4)

(5.0)
(3.7)
(0.6)

–
(525.2)(8.5)(26.5)(541.4)(10.5)–(369.4)(61.8)(201.2)–(273.8)––(855.0)(201.2)(369.4)(1,190 .6)

G3.3 Fair value hierarchy
When calculating the fair value of the BBC Group’s financial instruments (subsequent to the initial recognition), the technique used ineach calculation has to be allocated to the relevant level of hierarchy in the table below. This disclosure helps to show the level ofjudgement that the BBC Group has used in calculating fair values, subsequent to the initial recognition.
Categorisation into the following headings is based on the inputs used for the valuation technique as opposed to the technique itself:—— level 1 fair value measurements are those derived from quoted market prices (unadjusted) in active markets;—— level 2 fair value measurements are those derived from inputs other than quoted prices included within level 1 that are observablefor the asset or liability, either directly (i.e. as prices) or indirectly (i.e. derived from prices); and—— level 3 fair value measurements are those derived from valuation techniques that include inputs for the asset or liability that are notbased on observable market data (unobservable inputs).
No transfers between these categories have occurred during the period.

1

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F I N A N C I A L S TAT E M E N T S

G. Other continued
G3.3 Fair value hierarchy continued

2018
Greater than one year
Forward foreign currency contracts1
Cash flow swaps1
Interest rate swaps
Embedded derivatives1
Investment properties
Other investments
Other payables
Finance leases
Less than one year
Forward foreign currency contracts
Embedded derivatives
Finance leases

2017
Greater than one year
Forward foreign currency contracts
Cash flow swaps
Interest rate swaps
Embedded derivatives
Investment properties
Other investments
Other payables
Finance leases
Less than one year
Forward foreign currency contracts
Other payables
Finance leases

Fair value
hierarchy level

Assets£m

Liabilities
£m

1
2
2
3
3
3
3
3

3.9
417.6
7.6
0.3
174.6
193.9
–
–

(1.4)
(515.9)–(0.6)––(25.2)(889.7)797.9(1,432.8)

9.0
0.1
–

(5.4)
–
(46.9)

9.1(52.3)

Fair value
hierarchy level

Assets£m

Liabilities
£m

1
2
2
3
3
3
3
3

4.6
459.4
26.8
–
181.4
230.2
–
–

(6.9)
(525.2)
–
(1.8)
–
–
(5.8)
(943.9)902.4(1,483.6)

6.6––(34.0)(1.4)(46.3)

6.6(81.7)

1
3
3

1
3
3

The fair value and carrying value of financial instruments is the same, with the exception of finance leases and other investments(including the investment in Daunus Limited).

1

See Glossary for further details.

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F I N A N C I A L S TAT E M E N T S

G. Other continued
G3.3 Fair value hierarchy continued
Included within level 2 financial instruments are cash flow swaps. This represents derivative financial assets of £417.6 million (2017:£459.4 million) and derivative financial liabilities of £515.9 million (2017: £525.2 million) relating to the financing arrangement of
Broadcasting House. These swaps, which expire between 2033 and 2045, are valued with reference to relevant SONIA and LIBOR yield
curves, subject to an appropriate credit risk adjustment of 250 basis points. These assumptions and inputs are reviewed on an annual
basis, along with the completion of a sensitivity analysis. A change in the adjustment applied to the respective discount rate of +1%
would result in an increase in the net liability by £42.6 million (2017: £40.0 million) whilst a reduction in the respective discount rate of-1% would result in a decrease in the net liability of £54.9 million (2017: £52.6 million).
In order to facilitate the redevelopment and subsequent financing arrangement relating to Broadcasting House the BBC holds aninvestment in Daunus Limited, which is included within level 3 financial instruments with a fair value of £193.3 million (2017: £233.3
million). The BBC holds a 20% (2017: 20%) share of the issued share capital (preferential in nature), which is due to mature in 2033, at
which point the BBC receives certain rights in respect of Broadcasting House. The BBC’s share in Daunus Limited entitles it to the first£125.0 million (plus RPI from the start of the lease) of any proceeds on termination of the lease. The fair value has therefore been derived
from £125.0 million, inflated by RPI and subsequently discounted to 31 March 2018. The estimated interest rate used was 3.6% (2017:1.0%) and the rate used to discount the future cash flows was 1.8% (2017: 1.5%). These assumptions and inputs are reviewed on anannual basis, along with the completion of a sensitivity analysis. A change in the adjustment applied to the respective interest rate of+1.0% would result in an increase in the net liability of £32.3 million (2017: £42.2 million) whilst a reduction in the respective interest rateof -1.0% would result in a decrease in the net liability of £27.9 million (2017: £35.7 million).
The fair value of the investment in Daunus Limited is not included on the balance sheet as it is equity accounted for (see note E3). Thisis due to the BBC sharing joint control with other investors, including voting power and right to veto over relevant activities, along withsignificant shared exposure to variable returns. The assumptions relating to Daunus Limited are reviewed on an annual basis, along withthe completion of a sensitivity analysis. Whilst the reported profit or loss of Daunus Limited is not a significant input, the decision that
Daunus Limited is a joint venture is a significant judgement.
Level 3 financial liabilities also include the Group’s obligations under finance leases, with a fair value of £936.6 million (2017:£1,190.6 million), which predominantly relate to the lease of three properties. This is £261.9 million higher than their carrying value (2017:£500.6 million). The fair value has been determined by recalculating the finance lease liability using current market interest rates with anappropriate risk adjustment. The movement in interest rates between inception of each finance lease and the balance sheet date createsa difference between carrying value and fair value. These assumptions and inputs are reviewed on an annual basis, along with thecompletion of a sensitivity analysis relating to the aforementioned three property leases. A change in the interest rate applied of +0.25%
would result in a decrease in the liability of £17.9 million (2017: £20.0 million) whilst a reduction in the respective interest rate of -0.25%
would result in an increase in the net liability of £18.3 million (2017: £20.6 million).
These leases also include provisions to provide for the BBC’s share of any appreciation in market value.
The change in fair value of level 3 financial instruments is reconciled as follows:
2018
£m

2017
£m

FinancialassetsFinancialliabilities

FinancialassetsFinancialliabilities

Opening balance
Settlements and payments
Unwinding of discount recorded within finance expense
Disposal of available for sale asset
Additions
Change in fair value recorded in operating costs
Change in fair value

411.6
–
–
(7.3)
0.4
–
(35.8)(999.2)
69.1(48.1)–(21.8)
3.9
33.7

326.7
–
–
–
14.0
–
70.9

(985.8)67.2(50 .1)–(3.4)
2.3(29.4)

Closing balance

368.9(962.4)411.6(999.2)The BBC Group applies cash flow hedge accounting for trades taken out by some of its commercial subsidiaries in respect of theirforecast foreign currency transactions1. Hedge accounting is only applied where appropriate designation and documentation exists. Net
gains (before tax and non-controlling interests) recognised in the hedging reserve on forward foreign exchange contracts in cash flow
hedge relationships at 31 March 2018 were £25.9 million (2017: £10.1 million net losses). These amounts will be recognised in the income
statement in the period when the hedged forecast transaction affects the income statement, at various dates over the next three years.

1

See Glossary for further details.

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223

F I N A N C I A L S TAT E M E N T S

G. Other continued
G3.3 Fair value hierarchy continued
The following table details the BBC Group’s remaining contractual maturity for its non-derivative financial liabilities (including
obligations under finance leases) but excludes trade and other payables that were settled in the normal course of business and are due
within one year. The table has been drawn up based on the undiscounted cash flows of financial liabilities based on the earliest date on
which the BBC Group can be required to pay:

2018
Fixed interest rate instruments
Not later than one year
Later than one year but not later than five years
Later than five years
2017
Fixed interest rate instruments
Not later than one year
Later than one year but not later than five years
Later than five years

Cash flow£mInterest£mPrincipal
£m

69.8
474.3
785.8

50.9
181.1
241.0

18.9
293.2
544.8

1,329.9

473.0

856.9

67.2
493.7
855.0

52.7
192.2
279.8

14.5
301.5
575.2

1,415.9

524.7

891.2

G4 Interests in associates, joint ventures and subsidiaries
G4.1 Significant associates and their activities
The BBC Group holds (directly and indirectly) interests in the following joint ventures, associates and subsidiaries listed below which,except where otherwise stated, are incorporated in Great Britain and registered in England and Wales.
Name of entity

Place of incorporation andprincipal place of businessHolding of issued
ordinary shares%

Activity

YouView TV Limited
New Video Channel America LLC*
3sixtymedia Limited**

England and Wales
United States
England and Wales

14.2%
50 .1%
10.0%

Multiplatform broadcasting
TV channel operator
Production***

Whilst BBC Worldwide Limited retain a significant influence over New Video Channel America LLC and has the rights to variable returns, it is not deemed to have control and istherefore recognised as an associate undertaking.
The BBC holds 10% of the total share capital of 3sixtymedia Limited but 20% of the Class A ordinary shares, which gives it significant influence.

G4.2 Significant joint ventures and their activities
The BBC Group has an interest in the following joint ventures which are all incorporated in Great Britain and registered in England andWales, unless otherwise stated:
Name of entity

Place of incorporation andprincipal place of businessHolding of issued
ordinary shares%

Activity

Commercial joint ventures:
UKTV Media Holdings Limited
Daunus Limited*

England and Wales
England and Wales

50%
20%

TV channel operator
Property*

The BBC holds 20% of the total share capital of Daunus Limited but 66% of the voting rights. Other shareholders retain certain veto rights and therefore this entity isrecognised as a joint venture.

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F I N A N C I A L S TAT E M E N T S

G. Other continued
G4.3 Subsidiary undertakings1
Name of entity

Registered address

Directly owned commercial subsidiaries: (all 100% owned unless stated)
BBC Commercial Holdings Limited
BBC Property Limited
BBC Property Investment Limited
BBC Property Development Limited
Centre House Productions Limited
BBC News Limited
BBC Free to View (Satellite) Limited
BBC Free To View Limited
Media Applications Technologies Limited
BBC Subscription Television Limited
BBC Investments Limited
BBC Digital Programme Services Limited

Broadcast Centre Media Village 201 Wood Lane, London W12 7TP

World Service Trading Limited
BBC World Service Holdings Limited

London Broadcasting House, Portland Place, London W1A 1AA

DSHS Limited

The Lighthouse, 201 Wood Lane, London, W12 7TQ

Indirectly owned commercial subsidiaries: (all 100% owned unless stated)
BBC Studios Group Limited(formerly BBC Ventures Group Limited)
BBC Worldwide Limited
2 Entertain Limited
2 Entertain Management Limited
2 entertain Video Limited
BBC Video Limited
MCI Music Publishing Limited
Demon Music Group Limited
Crimson Productions Limited
F-Beat Records Limited
Demon Records Limited
BBC Earth MD (WWD) Limited
BBC Earth Productions (Africa) Limited
BBC Earth Productions (Life) Limited
BBC Earth Productions Limited
BBC Earth Productions (Giant Films) Limited
Earth Film Productions Limited
BBC Magazine Holdings Limited
BBC Worldwide Corporate Services Limited
BBC Worldwide Investments Limited
BBC Worldwide Productions (UK) Limited
Tonto Films and Television Limited
DVDS3 Limited
Worldwide Channel Investments Limited
Mortimer Productions Limited
UK Programme Distribution Limited (92.683% owned)
beeb Rights Limited (88.402% owned)

1 Television Centre, 101 Wood Lane, London W12 7FA

BBC Global News Holdings Limited
BBC Global News Limited
BBC World Distribution Limited
BBC.com Limited

Broadcasting House, Portland Place, London, United Kingdom, W1A 1AA

BBC Studios Limited
BBC Grafton House Productions Limited
BBC Children’s Productions Limited
BBC Comedy Productions Limited
BBC Natural History and Factual Productions Limited
BBC Store Limited

Bc2 A5 Broadcast Centre Media Village 201 Wood Lane, London, W12 7TP

BBC Studioworks Limited*

Formerly BBC Ventures Group Limited

1

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Room N101 Neptune House BBC Elstree Centre, Clarendon Road,
Borehamwood, Hertfordshire WD6 1JF

BBC Annual Report and Accounts 2017/18

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F I N A N C I A L S TAT E M E N T S

G. Other continued
G4.3 Subsidiary undertakings1 continued
Name of entity

Registered address

Baby Cow Productions Limited (72.994% owned)
Baby Cow Manchester Limited
Baby Cow Pictures Limited (80% owned)
Baby Cow Productions (Hunderby) Limited
Baby Cow Productions (Partridge) Limited
Baby Cow Productions (Red Dwarf) Limited
Baby Cow Films Limited
Alan Partridge Limited
Baby Cow Animation (Warren) Limited
Baby Cow Animation (Wussywat) Limited
Baby Cow Animation Limited
Baby Cow Films (Zoe) Limited
The Last Holiday Limited
Sid Gentle Films Limited (51% owned)

Charles House, 5-11 Regent Street, St James’s Way, London SW1Y 4LR

Lookout Point Limited

4 Daventry Road, Dunchurch, Rugby CV22 6NS

BBC Worldwide (Africa) (Pty) Limited

Office 003H3 Ground Floor, 10 Melrose Boulevard, Melrose Arch,
Melrose North, Gauteng, 2196

BBC Worldwide Australia Pty Limited
BBC Worldwide Australia Holdings Pty Limited
BBC Worldwide Australia Publishing Pty Limited

Level 1, 35-51 Mitchell Street, McMahons Point NSW 2060, Australia

BBC Worldwide Intermediadora de Programadora
Estangeira Ltd

Rua Ferreira de Araujo, 741, Andar 1, Pinheiros, São Paulo SP 05.428-002
BrazilNine Productions1 Inc

650-699 Howe Street, Vancouver, British Columbia, V6 0B4, Canada

Worldwide Channel Investments (Ontario) Ltd
2004370 Inc

Toronto Dominion Bank Tower, Toronto Dominion Center, Toronto,
ON M5K 1E6Worldwide Knowledge (Beijing) Business Consulting
Company Ltd

Unit 7, Floor 9, West Tower, Genesis Building, 8 Xinyuan South Road,
Chaoyang District, Beijing 100027

BBC Worldwide Productions Nordics ApS

Mosedalvej 14 , 2500 Valby, Denmark

BBC Worldwide Germany GmbH
Erste Weltweit Medien GmbH

Kaiser-Wilhelm-Ring 17-21, 50672 Köln, Germany

BBC Worldwide Media Private Ltd

Flat No. 401, 4th Floor, Construction House ‘A’, Off Linking Road, 24th Road,
Khar (W), Mumbai 400 052

BBC Worldwide Channels Mexico S.A de C.V
BBC Worldwide Mexico S.A de C.V

Avenida Paseo de la Reforma No 115, Piso 4 Lomas de Chapultepec,
Distrito Federal 11000 Mexico

BBC Worldwide Polska

Pl. Bankowy 1, 00-139 Warszawa, Poland

BBC Worldwide Channels (Singapore) Pte. Ltd

3 Anson Road, #17-03 Springleaf Tower, Singapore 079909

BBC.com US, Incorporated
Worldwide Americas Investments Incorporated

c/o Corporation Trust Centre, 1209 Orange Street, Wilmington New Castle,
Delaware 19801

BBC Worldwide Americas (401) k Plan Trustees
BBC Worldwide Americas Incorporated

1120 Avenue of the Americas, 5th Floor, New York, NY 10036-6700

BBC Worldwide France Sarl

18-20 Quai du Point du Jour, Bat. A, 92100 Boulogne-Billancourt, France

BBC Worldwide Holdings B.V

Prins Bernhardplein 200, 1097 JB Amsterdam, Netherlands

Global Hybrid Productions LLC
Lime Grove Productions LLC
Sun Never Sets Productions LLC
Bad Wolf Productions LLC
Adjacent Productions, LLC
BBC Worldwide Reality Productions LLC
Worldwide Competition Productions LLC

10351 Santa Monica Boulevard, Suite 250, Los Angeles, CA 90025

BBC Worldwide Canada Limited

409 King Street West, 5th Floor, Toronto, ON, M5V 1K1

BBC Worldwide Japan Limited

Tokyo Club Bldg., 10F, 3-2-6 Kasumigaseki, Chiyoda-ku, Tokyo 100-0013,
Japan

BBC Worldwide Productions (Africa) (PTY) Limited

24 18th Street, Menlo Park 0081, Mazars House, 5 St Davids Place,
Parktown 2193, South Africa

1

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F I N A N C I A L S TAT E M E N T S

G. Other continued
G4.3 Subsidiary undertakings1 continued
Name of entity

Registered address

Rapid Blue

263 Oak Avenue, Ferndale, Randburg, 2194, South Africa

BBC World Japan Limited (Incorporated in Japan)

BBC World Japan Limited, Tokyo Club Bldg., 3-2-6, Kasumigaseki,
Chiyoda-ku, Tokyo, 100-0013, Japan

BBC World (Singapore) Private Limited(Incorporated in Singapore)#12-08/08 Shaw Tower, 100 Beach Road, Singapore, 189702

BBC Global News (India) Private Limited(Incorporated in India)

Unit No. 301, 3rd Floor, D-2, Southern Park, District Centre, Saket,
New Delhi, 110017

BBC Global News US LLC

Corporation Service Company, 80 State Street, Albany, New York,
12207-2543

BBC Holdings M LLC
LLC BBC R News

115054 Moscow, Bakhrushina street no. 32/1

G5 Reserves
G5.1 Operating reserve
The operating reserve reflects accumulated profits to date.
G5.2 Hedging reserve
The hedging reserve is used to record the effective portion of cumulative net changes in the fair value of cash flow hedging instruments,
related to hedged transactions that have not yet occurred (net of tax). During the current year, losses of £17.4 million were removed fromthe hedging reserve and debited to revenue in the income statement (2017: £28.1 million).
G5.3 Translation reserve
The translation reserve comprises all foreign exchange differences arising since the transition to IFRS, from the translation of thefinancial statements of foreign operations, as well as from the translation of liabilities that hedge the Group’s net investment inforeign subsidiaries.
G5.4 Other reserves
Other reserves includes revaluation of available for sale financial assets and the fair value of the put option liabilities arising on
acquisition of new subsidiaries. There has been a decrease in the fair value of the available for sale asset of £2.9 million due to a disposal
during the period, and an additional put option liability of £21.8 million has been recognised during the year in relation to the acquisitionof Sid Gentle and Clerkenwell.
G6 Post-balance sheet events
On 3 April 2018 BBC Ventures Group Limited was renamed BBC Studios Group Limited, which acts as the holding company for BBC
Studios Limited and BBC Worldwide Limited. As a result, BBC Studios Group is a global content group, embodying the very best of bold
British creativity, and investing in quality content across premium genres including factual, scripted and entertainment. Its profits
contribute to significant financial returns that are reinvested into the BBC for the benefit of the UK licence fee payer.
On 1 April 2018 the Global News Group began a restructuring programme to simplify their legal structure and better align it with theway the business operates.
Although the former represents a significant operational change and the latter a legal restructure, no material impact is expected to the
BBC Group financial statements.

1

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F I N A N C I A L S TAT E M E N T S

G. Other continued
G7 Related party transactions
The following table represents transactions with related parties excluding key management personnel.
Associates, joint venturesand other investments

Rendering of services
Receiving of services
Pension contributions
Dividends received

BBC Pension Scheme

2018
£m

2017
£m

2018
£m

2017
£m

89.7
(102.0)
–
39.3

79.4
(95.3)
–
24.8

–
–
154.7
–

–
–
334.3
–

27.0

8.9

154.7

334.3

Amounts owed by related parties

BBC Pension Scheme
Associates, joint ventures and other investments

Amounts owed to related parties

2018
£m

2017
£m

2018
£m

2017
£m

0.4
34.3

–
36.2

(0.4)
(9.1)

(0.8)
(14.5)

34.7

36.2

(9.5)

(15.3)In all transactions, terms were negotiated on an arm’s length basis.
The BBC Group also enters into various transactions with Government and local authorities on an arm’s length basis. These transactions
include council tax agreements and corporation tax payments.
Related party transactions with key management personnel are disclosed in note C6.
During the year the BBC Group received less than £100,000 of income and incurred less than £100,000 of expenditure with BBC Children
in Need, which is the level of rounding used in these financial statements. At 31 March 2018, the BBC Group had a debtor balance of £0.5
million (2017: £1.0 million) with this entity, predominantly relating to the recharge of employee costs. At year end, the BBC Group also
had a debtor balance of £0.6 million with Media Action UK (£2017: £1.4 million).
G8 Segment reporting
Geographical location of income and non-current assets
2018

PSB Group£m

BBC Worldwide£m

BBC Studios
£m

Other
commercials
£m

Group
adjustments
£m

Group
£m

Non-current assets excluding deferred
tax and financial instruments:
UK
Rest of world

1,334.3
71.9

296.4
209.5

1.5
–

526.9
0.2

(791.3)–

1,367.8
281.6

1,406.2

505.9

1.5

527.1

(791.3)

1,649.4

243.1

179.0

2.1

146.1

(262.3)308.0

4,133.7
11.4

199.4
668.9

432.0
–

52.9
110.9

(546.5)–

4,271.5
791.2

4,145.1

868.3

432.0

163.8

(546.5)

5,062.7

2017

PSB Group£m

BBC Worldwide£m

BBC Studios
£m

Other
commercials*
£m

Group
adjustments*
£m

Group
£m

Non-current assets excluding deferred
tax and financial instruments:
UK
Rest of world

1,148.6
48.9

332.3
244.3

–
–

420.3
0.3

(445.1)–

1,456.1
293.5

1,197.5

576.6

–

420.6

(445.1)

1,749.6

117.7

203.4

–

0 .1

5.2

326.4

4,018.1
15.4

206.8
669.5

–
–

26.0
110 .4(92.2)–

4,158.7795.3

4,033.5

876.3

–

136.4

(92.2)

4,954.0

Additions included in non-current assets
and investments
External income:UK
Rest of world

Additions included in non-current assets
and investments
External income:UK
Rest of world*

A presentational adjustment has been made between the Other commercials and Group adjustments segments to more accurately reflect the Group’s eliminations.		
		

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F I N A N C I A L S TAT E M E N T S

H. Basis of preparation of the financial statements and otheraccounting policies
The BBC is incorporated in the United Kingdom by Royal Charter.
Statement of accounting policies
The BBC Group is required to select and apply accounting policies
for each type of transaction entered into throughout the year andin the preceding year. An accounting policy will specify the timing
for recognising and derecognising assets, liabilities, income andexpenditure, how those items will subsequently be measured andwhere they are presented in the statement of total income andexpenditure, balance sheet and statement of cash flows.
Use of estimates and judgements
The preparation of financial statements requires the use of certain
critical accounting estimates that affect the reported performanceand position of the Group, or areas where assumptions or
estimates are significant to the consolidated financial statements.
It also requires management to exercise judgement in applying the
BBC Group’s accounting policies. These areas involve a higher
degree of judgement or complexity.
The areas involving a higher degree of judgement or complexity are
set out below and in more detail in the related notes:—— Revenue recognition (note A)—— Provisions and accruals (note F9)—— Property, plant and equipment (note D1)—— Pension scheme and actuarial assumptions (note C7)—— Derivative financial assets and liabilities (note G3)
Basis of preparation
These consolidated financial statements for the BBC Group havebeen prepared in accordance with IFRS as adopted by the EU.
Additional analysis is also presented to meet additional regulatory
requirements including those prescribed by DCMS, Ofcom or
the Charter.
The financial statements are principally prepared on the historicalcost basis. Exceptions are noted within the relevant section of
the notes.
Where items are sufficiently significant by virtue of their size or
nature, they are disclosed separately in the financial statements inorder to aid the reader’s understanding of the BBC Group’s
financial position and performance.
Adoption of new and revised accounting standards
The following new and revised EU endorsed accounting standards
have been adopted for the first time. They have been applied since
1 April 2017 and have not had a significant impact on the results orfinancial position of the Group:—— Recognition of Deferred Tax Assets for Unrealised Losses(Amendments to IAS 12)—— Disclosure Initiative (Amendments to IAS 7)

Going concern1
The financial statements are prepared on a going concern basis.
The directors believe this to be appropriate for the reasons set
out below.
The directors have prepared and reviewed cash flow forecasts forthe 24-month period to 31 March 2020, a period in excess of a year
from the date of approval of these financial statements. In the
directors’ judgement, the key factors in these forecasts are thecontinuity of the Charter and licence fee, the BBC Pension Scheme
deficit and the resultant deficit recovery payments agreed with thepension scheme Trustees and the realisation of planned costsavings under the ‘Strategic Plan’ programme.
The Charter and licence fee give the BBC Group a secure sourceof income, however the timing of cash flows is an important factor
in the consideration of going concern given the borrowing
restrictions agreed with the DCMS for both the PSB Group (£200
million) and the commercial operations of the BBC (£350 million).
An additional £850 million is available to the PSB Group to fundfinance leases only.
The BBC Group has external funding available, including a £200
million sterling revolving credit facility which expires on 31 March
2020, which is currently unutilised. PSB net debt at 31 March 2018was £239.3 million, which equates to a headroom of £810.7 million
against the external funding available.
The BBC Group also has a £380 million multicurrency revolving
credit facility available to the BBC commercial operations, withfunding split between a US$259 million US Private Placement(fixed through foreign exchange swap transactions at £171 million)
until June 2020 and a £210 million facility until July 2019. As at theyear end, the Group had drawn down £181.3 million of the facilities
available (2017: £201.2 million).
The directors of the BBC Group have reviewed the forecasts
and available external borrowing facilities. Together with thesensitivities and mitigating factors in the context of available
funds, they expect the BBC Group to be able to meet its debts
as they fall due for the foreseeable future.
As a result, the directors are satisfied that the going concern basis
is appropriate for the preparation of these financial statements.
Basis of consolidation
The BBC Group financial statements include the results of the BBC
and all businesses controlled by the BBC (subsidiaries) together
with the BBC’s share of the results of businesses over which the
BBC has significant influence but not control (associates) and thosewhich the BBC jointly controls (joint ventures).
The BBC Group accounts for its interests in associates and joint
ventures using the equity method. The equity method means thatthe BBC presents its interest in associates or joint ventures as asingle line item in the balance sheet, measured at the cost of theinvestment plus the share of the net result, less dividends received.
The equity accounted result for the year is presented as a single
line item in the statement of income and expenditure.

—— Annual Improvements to IFRS 2014-16 (Amendments to
IFRS 12 Disclosure of Interests in Other Entities)

1

See Glossary for further details.

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H. Basis of preparation of the financial statements and otheraccounting policies continued
Changes in the BBC Group’s interests in subsidiaries that do not
result in a loss of control are accounted for as equity transactions,being movements between reserves attributable to the BBC andnon-controlling interests. A non-controlling interest is the interestin a subsidiary that is not owned, directly or indirectly, by the BBC.
The non-controlling interest reflects the amount of the net result
for the year and the net assets/(liabilities) which are not
attributable to the BBC. The carrying amounts of non-controllinginterests are adjusted to reflect any changes in their, and the BBCGroup’s, relative interests in the subsidiaries. Any difference
between the amount by which the non-controlling interests areadjusted and the fair value of the consideration paid or received
is recognised directly in equity and attributed to the BBC.
When the BBC Group loses control of a subsidiary, the profit orloss on disposal is calculated as the difference between (i) the
aggregate of the fair value of the consideration received and thefair value of any retained interest and (ii) the previous carrying
amount of the net assets of the subsidiary (including attributable
goodwill) and any non-controlling interests. Amounts previously
recognised in other comprehensive income in relation to thesubsidiary are reclassified to the income statement or transferred
directly to retained earnings as appropriate. The fair value of any
interest retained in the former subsidiary at the date when control
is lost is regarded as the cost on initial recognition of aninvestment in an associate or joint venture.
Business combinations
The acquisition of subsidiaries is accounted for using theacquisition method. The cost of an acquisition is measured at theaggregate of the fair values, at the date of exchange, of assets
given by the BBC Group in exchange for control of the acquiree.
The acquiree’s identifiable assets, liabilities and contingent
liabilities that meet the conditions for recognition under IFRS 3 arerecognised at their fair value at the acquisition date. Subsequentadjustments to the fair values of net assets acquired are madewithin 12 months of the acquisition date where original fair values
were determined provisionally. These adjustments are accounted
for from the date of acquisition. Transaction costs that the BBCGroup incurs in connection with a business combination, such aslegal fees, due diligence fees and other professional and consulting
fees, are expensed as incurred. On acquisition, the BBC Group
recognises any non-controlling interest either at fair value or at the
non-controlling interest’s proportionate share of net assets.
When control is obtained in successive share purchases (a ‘step
acquisition’) it is accounted for using the acquisition method at theacquisition date. The previously held interest is remeasured to fairvalue at the acquisition date and a gain or loss is recognised in theincome statement.
Foreign currency transactions
Transactions in foreign currencies are translated into sterling at
the rates of exchange ruling at the date of the transactions.
Monetary assets and liabilities denominated in foreign currencies
at the balance sheet date are translated into sterling at the rateof exchange ruling at that date. Foreign currency gains or losses
arising from the translation of assets and liabilities at these rates
of exchange, together with exchange differences arising fromtransactions settled during the year, are included in the income
statement within operating costs. Non-monetary assets andliabilities measured at historical cost are translated into sterlingat the rate of exchange on the date of initial recognition.

1

Financial statements of foreign operations
The assets and liabilities of foreign operations are translated into
sterling at the rate of exchange ruling at the balance sheet date.
The income and expenses of foreign operations are translated into
sterling at average rates of exchange ruling during the financial
period, which is a good approximation for the actual rate. Exchange
differences arising on translation are recognised directly in thetranslation reserve.
On disposal of an investment in a foreign operations the associatedtranslation reserve balance is released to the income statement.
Accounting policies relevant to section A
Licence fee income
Income from television licences is treated as an amount due fromthe relevant Government department, principally the DCMS. This
represents the value of licences issued in the year, less a deduction
for refunds and cancellations.
Where an element of the licence fee income has been ring-fenced
by the Government for a specific purpose, that income isrecognised when it is due, except if it becomes virtually certainthat the BBC’s expenditure on the ring-fenced purposes will beless than the ring-fenced income already received. In this case,the relevant amount of licence fee income, as agreed with theGovernment, will be repayable and recognised as such in theyear the obligation to repay arises.
Other income
Other income arises from activities such as the sale of goods,
provision of services and granting of licences. Revenue is measured
after deductions for value added tax, any other sales taxes, trade
discounts and sales between BBC Group companies.
Other revenue
In respect of the supply of goods, revenue is recognised once thesignificant risks and rewards of ownership have been passed to thecustomer. Sales of goods are stated after deduction of the sales
value of actual and estimated returned goods. Examples of goods
sold include magazines, books and DVDs.
With regard to the provision of a service, revenue is recognised
at the point the service has been delivered and the receipt of theincome is probable. Where the delivery is over a period of time, therevenue is recognised on a straight-line basis. Examples of services
sold include advertising and commercial licences for specific rights
associated with TV programmes.
Royalties
Royalty income is recognised on receipt or on an accruals basis,in accordance with the detail of the relevant agreements, where
sufficient information is available.
Rental income
Rental income is recognised on a straight-line basis over the termof the lease.
Grant income
Grants from Government departments are recognised as incomein the financial year that they relate to. Grants from other publicbodies are recognised as income consistently with the related
costs, provided that there is reasonable assurance that the BBC
will comply with any conditions attached to the grant and that the
grant will be received.

See Glossary for further details.

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F I N A N C I A L S TAT E M E N T S

H. Basis of preparation of the financial statements and otheraccounting policies continued
Use of estimates and judgements – Commercial income
Revenue recognition in the BBC’s commercial operations iscomplex, with a number of different revenue streams, including
sale of content to global broadcasters, subscription income andrevenue from the sale of physical and digital products.
The complexity of individual contractual terms may require theGroup to make judgements in assessing when the triggers forrevenue recognition have been met, particularly whether theGroup has sufficiently fulfilled its obligations under the contract
to allow revenue to be recognised.
Accounting policies relevant to section B
Completed originated programmes, programmes in production
and prepayments to acquire future programme-related rights
Completed originated programmes and programmes in production
are held at cost.
Cost includes all direct costs, production overheads and a
proportion of other attributable overheads. The proportion ofprogrammes necessarily taking a substantial period of time to
produce is small and, as such, no borrowing costs are included
in cost.
Where, exceptionally, it becomes certain that a programme isunable to be broadcast, the full value of the programme is written
off to the income statement.
Programme development costs are expensed to the income
statement until such time as there is a strong indication that thedevelopment work will result in a commissioned programme1, when
any further costs are recognised as programme-related assets.
Originated programmes that are still in production at the balance
sheet date are recognised as programmes in production, exceptthat prepayments to acquire future programme-related rights areshown separately where the BBC has made payments to
independent producers, or the holders of certain rights (forexample, rights to broadcast sporting events), to receive theprogramme on completion.
Rights to broadcast acquired programmes and films
The rights to broadcast acquired programmes and films arerecognised at cost. The costs of acquired programmes and films
are expensed on first transmission except to the extent that the
number of further showings are contractually agreed, when they
are expensed according to the expected transmission profile.
Assets and liabilities relating to acquired programmes arerecognised at the point of payment or commencement of thelicence period, whichever is earlier. Agreements for the futurepurchase of rights whose licence period has not commenced andwhere there has been no payment by the balance sheet date aredisclosed as purchase commitments.
Where the BBC has invested in independent productions, inaddition to broadcasting rights, the BBC may obtain rights tofuture royalties from the sale of rights associated with the
production. These residual interests are recognised initiallyat cost subject to amortisation as royalties are received andimpaired if anticipated royalties do not materialise.

1

Accounting policies relevant to section C
Other employee benefits
Other short and long-term employee benefits, including holiday
pay and long service leave, are recognised as an expense over theperiod in which they accrue.
Termination benefits
Termination benefits are expensed at the earlier of when the Group
can no longer withdraw the offer of those benefits and when theGroup recognises costs for a restructure.
Defined contribution plans
The amounts charged as expenditure for the defined contributionplans represent the contributions payable by the BBC for theaccounting period.
Defined benefit plans
The defined benefit plans, of which the majority of staff are
members, provide benefits based on pensionable pay. The assetsof the BBC’s Pension Scheme are held separately from those of the
BBC Group.
Pension scheme assets are measured at fair value. Pension scheme
liabilities are measured using the projected unit credit method.
The present value of scheme liabilities is calculated by discounting
estimated future cash outflows at the current rate of return on ahigh-quality corporate bond of equivalent term and currency tothe liabilities.
Remeasurement comprising gains and losses and the return on
scheme assets (excluding interest) are recognised immediately
in the balance sheet with a charge or credit to the statementof comprehensive income in the period in which they occur.
Remeasurement recorded in the statement of comprehensive
income is not recycled. When the benefits of a plan are changed
the resulting change in benefit that relates to past service isrecognised immediately in the income statement. Net interestis calculated by applying a discount rate to the net defined
benefit liability or asset. Defined benefit costs are split into
three categories:—— current service cost, past-service cost and gains and losses
on settlements and curtailments;—— net interest expense or income; and—— remeasurement.
The current service cost and past-service cost are included
within operating costs in the consolidated income statement.
Curtailments gains and losses are accounted for as past-service
cost. Net interest expense or income relating to the funded defined
benefit pension plans is included within ‘finance income’ or ‘financecosts’, as relevant, in the consolidated income statement.
Administration costs directly related to the management of plan
assets are deducted from the return on plan assets, which arerecorded as remeasurements in the statement of comprehensive
income. Other administrative scheme expenses associated withrunning the scheme are recorded within operating expenses
when incurred.
The retirement benefit obligation recognised in the consolidatedbalance sheet represents the deficit or surplus in the Group’s
defined benefit schemes. Any surplus resulting from thiscalculation is limited to the present value of any economic benefits
available in the form of refunds from the schemes or reductions infuture contributions to the schemes.

See Glossary for further details.

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H. Basis of preparation of the financial statements and otheraccounting policies continued
Use of estimates and judgement – post-retirement benefits
The pension costs and obligations of the BBC Group’s defined
benefit schemes are calculated on the basis of a range ofassumptions, including the discount rate, inflation rate, salary
growth and mortality. Differences arising as a result of actual
experience differing from the assumptions, or future changes in
the assumptions, will be reflected in subsequent periods. A smallchange in assumptions can have a significant impact on thevaluation of the liabilities. Further analysis on the sensitivityof pension assumptions is given in note C8.1.
Accounting policies relevant to section D
Owned assets
Other than as noted below, items of property, plant and equipment
are stated at cost less accumulated depreciation and any
accumulated impairment losses.
Cost includes expenditure that is directly attributable to theacquisition of the asset.
Leased assets
Assets held under finance leases are capitalised within property,
plant and equipment and depreciation is provided as appropriate.
On initial recognition the asset is measured at the lower of its fairvalue and the present value of the minimum lease payments.
Depreciation
Depreciation is provided to write off the cost of each item ofproperty, plant and equipment, less its estimated residual value,
on a straight-line basis over its estimated useful life. The major
categories of property, plant and equipment are depreciatedas follows:
Land and buildings
Freehold land – not depreciatedFreehold buildings – 50 years
Freehold building improvements – 10 to 50 years
Leasehold buildings – shorter of 50 years or life of lease
Leasehold building improvements – shorter of 50 years or lifeof lease
Plant and machinery
Computer equipment – 3 to 5 years
Electrical and mechanical infrastructure – 10 to 25 years
Other – 3 to 10 years

Investment properties
Investment properties are initially recognised at cost andsubsequently carried at cost less accumulated depreciation andaccumulated impairment losses. Depreciation is calculated using
a straight-line method to allocate the depreciable amounts overthe estimated useful lives of the properties (see depreciation onland and buildings above). The residual values, useful lives anddepreciation method of investment properties are reviewed, andadjusted as appropriate, at each balance sheet date. The effects
of any revision are included in the profit and loss when thechanges arise.
Lease payments
Payments made under operating leases are recognised in theincome statement on a straight-line basis over the lease term.
Payments made under finance leases are apportioned between
financing costs and the reduction of the outstanding liability.
The financing costs are allocated to each period so as to produce
a constant periodic rate of interest on the remaining balance ofthe liability.
Use of estimates and judgements – leases
The determination of whether an arrangement is, or contains, alease, is based on the substance of the arrangement and requires
an assessment of whether the fulfilment of the arrangement isdependent on the use of a specific asset or assets and whether
the arrangement conveys the right to use the asset.
In assessing whether a lease is an operating lease or a financelease, judgement needs to be exercised in determining whether
or not substantially all the risks and rewards of ownership of theleased asset are held by the BBC Group. Given that finance leases
are recognised as liabilities, and operating leases are not, this canhave a significant effect on the reported financial position of theBBC. Another key judgement is the determination of thecommencement date of a lease.
When determining the accounting for a finance lease, the BBC
has assessed whether it has the right to use the leased asset at the
inception of the lease, or whether this right passes at a later date(‘the commencement date’).
Where a significant site is being redeveloped, occupation may
occur in distinct phases; consequently, the leased asset andliabilities are recognised based on the proportion of the site
occupied at each commencement date.

Furniture and fittings – 3 to 10 years
Depreciation methods, estimated useful lives and residual values
are reviewed at each reporting date.
Use of estimates and judgements – capital projects
The BBC is completing a number of significant capital projects
for which amounts have been capitalised on the Group’sbalance sheet.
The recoverability of these assets is dependent on the achievementof project completion and the assets being used in the mannerintended as part of the original business case.

1

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H. Basis of preparation of the financial statements and otheraccounting policies continued
Accounting policies relevant to section E
Programme-related intangible assets
Programme-related intangible assets, which include programme
rights and residual programme rights, are stated at cost, after
writing off the costs of programmes that are consideredirrecoverable, less accumulated amortisation. The cost andaccumulated amortisation of programme-related intangible
assets are reduced by programmes which are fully written off.
Research and development expenditure – internally generated
intangible assets
Expenditure on research activities is written off in the income
statement when incurred.
Expenditure on development activities is included on the balance
sheet as an asset only if both of the following conditions are met:—— it is probable that the asset will generate future economic
benefits; and—— the development costs of the asset can be measured reliably.
The assets are measured at cost less accumulated amortisation
and any accumulated impairment losses.
For the PSB Group it is generally unlikely that future economic
benefits in the form of cash inflows will be received, and as a result,
other than assets created for use by the business in delivering its
public purposes, development costs are only capitalised by the
BBC Group’s commercial businesses.
Other intangible assets
Other intangible assets acquired separately by the BBC Groupare stated at cost less accumulated amortisation and any
accumulated impairment losses. The identifiable intangible assets
acquired as part of a business combination are shown at fair value
at the date of acquisition (in accordance with IFRS 3 Business
Combinations) less accumulated amortisation and any accumulated
impairment losses.
Amortisation1
Amortisation is charged to the income statement on a systematic
basis over the estimated useful lives of intangible assets, from thedate that they are available for use, unless such lives are indefinite.
Amortisation methods, useful lives and residual values arereviewed at each balance sheet date and adjusted if appropriate.
The useful lives and amortisation methods of other classes ofintangible asset are as follows:
UKTV carrier agreement

Straight line

Software
Other

Straight line
Straight line

Unexpired termof agreement
2 – 5 years
3 – 8 years

Amortisation of distribution rights is charged to the income
statement to match the average revenue profile over its estimatedaverage marketable life. The Group reviewed the amortisation
profile of distribution rights during the 2016/17 financial year andupdated it in line with the overall revenue profile based on
experience. The review resulted in a change in the expected
average marketable life of investments to be over a three-year
period, instead of the previous range of one to ten years. This
resulted in an additional amortisation charge in the 2016/17
financial year as a result of the change in estimates.

1

Impairment1: Non-financial assets
At each balance sheet date, the BBC Group reviews the carrying
amount (net amount held on the balance sheet) of those assetsthat are subject to amortisation to determine whether there is any
indication that any of those assets has suffered an impairment loss.
If any such indication exists, the recoverable amount of the asset isestimated in order to determine the extent of any impairment loss.
For goodwill, the recoverable amount is estimated each year at thesame time.
The recoverable amount of an asset is the higher of fair valueless costs to sell and value in use. For the purposes of impairment
testing, assets are grouped at the lowest level at which theygenerate separately identifiable cash flows (cash-generating units).
In assessing value in use, the estimated future cash flows are
discounted to their present value using a pre-tax discount rate thatreflects current market assessments of the time value of money
and the risks specific to the asset for which the estimates of future
cash flows have not been adjusted.
An impairment loss is recognised in the income statement for
the amount by which the asset’s carrying amount exceeds its
recoverable amount. Where a cash-generating unit is impaired, theimpairment loss will first be allocated to reduce goodwill and thento the other assets of the cash-generating unit on a pro rata basis,
except that the carrying amount of any individual asset will not be
reduced below its separately identifiable recoverable amount.
Impairment losses in respect of goodwill are not reversed. In
respect of assets other than goodwill, an impairment loss isreversed if there has been a change in the estimates used todetermine the recoverable amount. An impairment loss is reversed
only to the extent that the asset’s carrying amount does notexceed the carrying amount that would have been determined,
net of depreciation or amortisation, if no impairment loss has
been recognised.
Goodwill
Goodwill is recorded in the balance sheet as the difference
between the fair value of the consideration transferred by the
BBC and the recognised amount of non-controlling interestsin the acquiree compared to the fair value of the identifiable
assets and liabilities acquired. These are all measured at thedate of acquisition. Where the consideration is less than the net
assets acquired, the difference is recognised immediately in theincome statement.
Acquisitions prior to 1 April 2007 – as part of the adoption of IFRS,
in accordance with IFRS 1 First-time adoption of IFRS, the Groupelected to restate only those business combinations that occurredon or after 1 April 2007. In respect of acquisitions prior to 1 April
2007, goodwill is recognised at deemed cost, being the amountpreviously recognised under UK accounting standards, subject tobeing tested for impairment at that date. Goodwill arising inperiods up to 1 April 1998 remains offset against the operating
reserve, as was permitted by UK GAAP at the time.
Goodwill arising on the acquisition of associates and joint ventures
is included in the carrying amount of the associate or joint venture
and is tested for impairment as part of the overall balance.
Subsequent measurement of separately recognised goodwill –goodwill is tested annually for impairment and is measured at costless any accumulated impairment losses. For the purposes of
impairment testing the goodwill is allocated to cash-generating
units on the basis of those expected to benefit from the relevantbusiness combination.

See Glossary for further details.

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H. Basis of preparation of the financial statements and otheraccounting policies continued
Accounting policies relevant to section F
Trade and other receivables
Trade receivables are recognised initially at fair value andsubsequently measured at fair value less an allowance for estimatedimpairment. The allowance is based on objective evidence that the
BBC Group will not be able to recover all amounts due.
Changes in the carrying amount of the allowance are recognisedin the income statement.
Trade and other payables
Trade and other payables are recognised initially at fair value andsubsequently measured at amortised cost using the effective
interest method.
Borrowing costs
Borrowing costs directly attributable to the acquisition,
construction or production of qualifying assets (those necessarily
taking a substantial period of time to get ready for their intendeduse) are added to the cost of those assets, until such time as theassets are ready for their intended use.
Originated programmes can be qualifying assets, but thosenecessarily taking a substantial period of time to get ready forbroadcast are a small proportion of overall programme
investment. Any borrowing costs that could be attributed to those
programmes are not significant and, therefore, no borrowing costs
are capitalised.
All finance income and other borrowing costs are recognised inincome and expense in the period in which they are incurred.
Use of estimates and judgements – provisions
Judgement and estimation techniques are employed in thecalculation of the best estimate of the amount required to settle
obligations, including determining how likely it is that expenditure
will be required by the BBC. This can be very complex, especiallywhen there is a wide range of possible outcomes.
The BBC Group recognises decommissioning liabilities as part ofthe initial cost of the asset, discounted to present value. The Groupreassesses whether there has been a change in this liability basedon the facts and circumstances at each balance sheet date.
Accounting policies relevant to section G
Taxation
The tax charge for the period comprises both tax currently payableand deferred tax. Taxation is recognised in the income statement
except to the extent that it relates to items recognised directly inreserves, in which case it is recognised in reserves.
Current tax is the expected tax payable for the year, using tax rates
that are enacted or substantively enacted at the balance sheet
date, and any adjustment to tax payable in respect of previous
years. In respect of tax currently payable:—— the PSB Group is not liable to corporation tax on any surplus
licence fee income or grants received from Government
departments; however, it is fully liable for corporation tax on
capital gains and on all its other external income. Expenditureon capital assets is not eligible for capital allowances giving
rise to temporary differences that would lead to deferred tax
assets or liabilities. Movements of fair value adjustments in
the income statement give rise to deferred tax balances.

Current tax assets and current tax liabilities are offset if, and only
if, there is a legally enforceable right to set off the recognised
amounts; and the entity intends either to settle on a net basis,or to realise the asset and settle the liability simultaneously.
Deferred tax is provided using the balance sheet liability method
on any temporary differences between the carrying amounts ofassets and liabilities for financial reporting purposes and theamounts used for taxation purposes. The amount of deferred tax
provided is based on the tax rates expected to apply in the period
when the liability is settled or the asset is realised using tax rates
enacted or substantively enacted at the balance sheet date.
Deferred tax assets and deferred tax liabilities are offset only
where there is a legally enforceable right to set off current tax
assets against current tax liabilities; and the deferred tax assets
and the deferred tax liabilities relate to income taxes levied by thesame taxation authority on either:—— the same taxable entity; or—— different taxable entities which intend either to settle current
tax liabilities and assets on a net basis, or to realise the assets
and settle the liabilities simultaneously, in each future period
in which significant amounts of deferred tax liabilities orassets are expected to be settled or recovered.
Financial instruments
The BBC Group holds various derivative and non-derivative
financial instruments (including assets such as trade investments
and liabilities such as borrowings). All financial assets arerecognised and derecognised on a trade date. The accounting
policy for the major categories of financial instruments is set
out below.
Cash and cash equivalents
Cash and cash equivalents comprise cash balances and calldeposits with maturities of less than three months (short-term
deposits). Cash and cash equivalents also includes licence fee
funds collected on behalf of HM Treasury, which are excluded fromthe Group’s net funds and in respect of which a separate creditor
is recognised.
Derivative financial instruments
The BBC Group does not enter into speculative derivative
contracts; however, some derivative financial instruments areused to manage the BBC’s exposure to fluctuations in interest
rates (interest rate swaps1, caps1 and collars1) and foreign
currency exchange rates (foreign currency forwards contracts
and currency options).
Derivative financial instruments, excluding derivatives held as
qualifying hedges, are initially recognised at fair value and aresubsequently remeasured to fair value at the balance sheet datewith movements recorded in the income statement.
The fair value of interest rate swaps, caps and collars is theestimated amount that the BBC Group would receive or pay toterminate the swap, cap or collar at the balance sheet date, taking
into account current interest rates, the current creditworthinessof swap, cap or collar counterparties and the creditworthiness of
the BBC.
The fair value of foreign currency forward contract rates isdetermined using forward exchange rates at the balance
sheet date.

—— the BBC’s commercial subsidiaries are liable for corporation
tax based on taxable profit for the year.

1

See Glossary for further details.

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F I N A N C I A L S TAT E M E N T S

H. Basis of preparation of the financial statements and otheraccounting policies continued
Hedge accounting
The BBC Group designates certain derivatives as cash flow hedges
by documenting the relationship between the hedging instrument
and the hedged item, along with the risk management objectives
and its strategy for undertaking various hedge transactions. Where
the hedge is deemed to have been effective, the effective portionof any changes in the fair value of the derivatives that aredesignated in the hedge are recognised in other comprehensive
income. The accumulated amount in the cash flow hedge reserve isreclassified to profit or loss in the same period as the hedged cash
flows affect profit or loss. Any ineffective portion of the hedge isrecognised immediately in the income statement.

—— Classification and Measurement of Share-based Payment
Transactions (Amendments to IFRS 2)

Embedded derivatives
These derivatives are found embedded within other financial
instruments or other host contracts. Once identified they aretreated as derivatives in their own right if their risks andcharacteristics are not closely related to those of the host contract
and the host contract is not carried at fair value.

The directors do not expect that the adoption of the standards andinterpretations above would have a material impact on the financial
statements of the Group in future periods, except for the following:

Embedded derivatives are carried on the balance sheet at fair value
from inception1 of the host contract. Unrealised changes1 in fairvalue are recognised as gains/losses within the income statement
during the period in which they arise.
Use of estimates and judgements – Impairment of financial assets
Financial assets are assessed at each balance sheet date todetermine whether there is any objective evidence of impairment.
Factors considered in determining whether there is objective
evidence of an impairment include significant financial difficultyof the counterparty and breach of contract. Individually significant
financial assets are tested for impairment on an individual basis.
The remaining financial assets are assessed collectively in groups
that share similar credit risk characteristics.
The amount of the loss is measured as the difference between
the asset’s carrying amount and the present value of estimatedfuture cash flows discounted at the financial asset’s original
effective interest rate1. All impairment losses are recognisedin the income statement.
Reserves
The operating reserve is the accumulated surplus/deficit to date.
Available for sale reserve includes fair value gains and losses onavailable for sale financial assets.
The hedging reserve is used to record the effective portion of the
cumulative net change in the fair value of cash flow hedging
instruments related to hedged transactions that have not yet
occurred (net of tax).
The translation reserve is used to record exchange differences
arising from the retranslation of the net assets and results ofoverseas subsidiaries.
New standards and interpretations not yet adopted
At the date of authorisation of these financial statements, thefollowing standards and interpretations, which have not been
applied in these financial statements, were in issue but not yet
effective (and in some cases had not yet been adopted by the EU):—— IFRS 9 Financial Instruments—— Applying IFRS 9 Financial Instruments with IFRS 4 Insurance
Contracts (Amendments to IFRS 4)—— Transfers of Investment Property (amendments to IAS 40)—— Annual Improvements to IFRS 2014-2016 Cycle (Amendments
to IFRS 1)—— Annual Improvements to IFRS 2014-2016 Cycle (Amendments
to IAS 28)—— IFRIC 22 Foreign Currency Transactions and Advance
Consideration

IFRS 9 Financial Instruments (date of adoption: 1 April 2018)
replaces the existing guidance in IAS 39. It includes revised
guidance on the classification and measurement of financial
instruments, including a new expected credit loss model for
calculating impairment on financial assets, and the new generalhedge accounting requirements. Other than new disclosure
requirements, the most significant impact on the Group is
expected to relate to the impairment of financial assets. The
three-stage expected credit loss model is likely to result in earlier
recognition of credit losses as it is no longer necessary for an
impairment event to have occurred before a credit loss isrecognised. The Group has performed an initial review of its
material financial assets to determine the scope of IFRS 9. No
material changes are currently expected as a result of adopting
IFRS 9.
IFRS 15 Revenue from Contracts with Customers (date ofadoption: 1 April 2018) replaces IAS 18 and IAS 11. IFRS 15 requires
the identification of distinct promises within contracts withcustomers in order to determine the ‘performance obligations’that exist. The transaction price receivable from customers issubsequently allocated between the identified performanceobligations. In order to apply IFRS 15, entities are required tofollow the five-step model below:
1

Identify the contract with a customer

2

Identify the performance obligations in the contract3

Determine the transaction price4

Allocate the transaction price to the performance obligations

5

Recognise revenue when the entity satisfies each performanceobligation

An assessment of the impact on the Group has been undertakenwith specific revenue streams identified where revenue recognition
will change. Revenue recognition under IFRS 15 is expected to beconsistent with current practice with the exception of certain
programme production contracts and certain commercial licencing
agreements, where the timing of revenue recognition will change.
Licence Fee revenue will continue to be accounted for in line withIAS 20 Accounting for Government Grants and Disclosure ofGovernment Assistance. No material changes are currently
expected as a result of adopting IFRS 15.

—— IFRS 15 Revenue from Contracts with Customers(including Clarifications to IFRS 15 Revenue fromContracts with Customers)

1

See Glossary for further details.

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235

F I N A N C I A L S TAT E M E N T S

H. Basis of preparation of the financial statements and otheraccounting policies continued
IFRS 16 Leases (date of adoption: 1 April 2019) replaces IAS 17.
IFRS 16 will impact the accounting for lessees. For applicable leaseagreements, IFRS 16 will require the recognition of lease assets
and lease liabilities, representing the right to use the leased item
and the respective future lease payments. The rental expensepreviously recognised within the income statement will be replaced
by a depreciation charge and a finance charge. This will apply to allleases unless the term is less than 12 months or the underlying
asset has a low value.
A significant number of lease transactions will be impacted by IFRS
16, with a number of judgements being required to both identify
and account for leases. Work is ongoing to ensure completeness ofleases, collate all necessary data, and implement system changes.
The application of certain practical expedients allowed for upon
adoption is also being considered by the Group.
Lessor accounting, relating to the Group’s investment property
portfolio, is deemed to be similar to IAS 17 and, given the size of
the Group’s investment property portfolio, is not expected to havea material impact on the Group.
The impact of IFRS 16 on the Group is being assessed by the Groupand cannot currently be reasonably estimated, given the numberof lease arrangements in place. However, given the value of theGroup’s lease commitments, the changes will have a material
impact on the consolidated income statement, consolidated
statement of financial position and consolidated statementof cash flows.
When IFRS 9, 15 and 16 are adopted, they can be applied either
on a fully retrospective basis, requiring the restatement of thecomparative periods, or with the cumulative impact of the newstandard applied as an adjustment to reserves on the date ofadoption. The Group is expected to apply the latter approach,which will require the disclosure of the impact of the relevant
accounting standard change on each line item in the financial
statements in the reporting period.

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F I N A N C I A L S TAT E M E N T S

Glossary
The table below explains the financial terms used within the financial statements:
Term

Note

Definition

Amortisation

H

Amortisation is the reduction reflected in the carrying value of the asset asa consequence of the regular use of that asset by the organisation.

Associate

E3

An associate is an entity that the BBC Group has significant influence over, butthat does not meet the definition of a joint venture or subsidiary. Significant
influence is the power to participate in the financial and operating decisions ofan entity but is not control or joint control over those policies.

Cash flow swaps

G3.3

The BBC’s cash flow swaps exchange a series of variable cash flows for a seriesof fixed cash flows.

Cash-generating units

E2

Cash-generating units are the smallest group of assets that can independently
generate cash flows.

Changes in demographic andfinancial assumptions

G2.1

Changes in demographic and financial assumptions represent the changes in
estimates used to value the future liability. Demographic assumptions include
mortality rates, staff turnover and early retirement. Financial assumptions
encompass items such as discount rate and future salary levels.

Commissioned programme

H

A commissioned programme is where an agreement has been made for the
programme to be produced for broadcast.

Credit risk

G3.1

Credit risk is the risk of financial loss to the Group if a customer or counterparty
to a financial instrument fails to meet its contractual obligation.

Current service cost

C7.2

The current service cost is the underlying cost to the BBC of pension rights earned
by employees during the year.

Deferred tax

G1.1

Deferred tax is the amount of income tax payable or recoverable in future periods
in respect of taxable or deductible temporary differences, the carry forward ofunused losses, and/or the carry forward of unused tax credits. Temporary
differences are differences between the carrying amount of an asset or liability inthe statement of financial position and its tax base, where the tax base of an asset
or liability is the amount attributed to that asset or liability for tax purposes.

Derivative

G3.3

A derivative is an asset or liability that is dependent on, or derives its value from,another asset or liability and is to be settled in the future.

Discount rate

G2.5

The discount rate for the IAS 19 valuation has been derived with reference
to market yields at the end of the reporting period on AA-rated sterlingdenominated corporate bonds with maturities consistent with the estimated termof the post-employment benefit obligations. Certain types of bonds are excluded
from the calculating model, either because they have unusual features, arerelatively small or potential outliers, in order to remove the distortion that mightotherwise occur from including unusual, less liquid or potentially misrated bonds.
Extrapolation is performed when the profile of the scheme’s expected benefit
outflow is longer than the cash flows of the available bonds.

Effective interest rateH

An effective interest rate is the rate used to discount future cash flows over thelife of the contract back to present value.

ExerciseG3.3

Exercise is the point at which the rights in the option are implemented or
acted upon.

Fair value

D, G

The fair value of an asset is the amount for which the asset could be exchanged
between knowledgeable, willing parties in an arm’s length transaction.

Finance lease

F4.3

A finance lease is a lease where the lessee has substantially taken on the risks andrewards of ownership and operating the asset. As such, both the asset and future
liability are recognised on the balance sheet.

Foreign currency transactions

G3.3

As these financial statements are prepared in sterling, the BBC’s foreign currencytransactions and balances must be translated at appropriate exchange rates, into
sterling. This means that variations in exchange rates can cause the valuation of
investments to fluctuate even when there has been no change in the health of theunderlying business.

Forward foreign currency contracts

G3.3

Under forward exchange contracts you buy or sell a currency at a fixed exchange
rate with delivery made on a given date or dates in the future.

Going concern

H

The directors are required to make a statement that the BBC is a going concern,
which means it can meet its debts and continue trading for a period of at least
12 months from the date on which these financial statements were signed.

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237

F I N A N C I A L S TAT E M E N T S

Term

Note

Definition

Goodwill

E2

Goodwill is the difference between the monetary value paid for a business and thefair value of its net assets. It represents the premium the purchaser is prepared to
pay for the business.
Where the BBC does not own an entity outright, the other shareholders are
known/disclosed as non-controlling interests.

IAS 19 valuation

C8.1

The IAS 19 valuation takes assets at their market value and discounts the accrued
liabilities by reference to the discount rate of an AA-rated corporate.

Impairment

H

An impairment occurs when the carrying value of an asset is higher than theamount that is recoverable from its use or sale.

Inception

H

Inception is the point at which a contract is confirmed; this is normally the point
at which the contract is signed.

Interest cost on pension
plan liabilities

F10

The interest cost on pension plan liabilities represents the increase during theyear in the value of the plan liabilities because the benefits are one year closer
to settlement.

Interest rate caps

G3.1

Interest rate caps protect against interest rates rising, by setting an upper limit(cap) on the floating interest rate, whilst still allowing the benefit of fallinginterest rates.

Interest rate collars

G3.1Interest rate collars are the same as interest rate caps except that there is also
a lower limit set to the floating interest rate.

Interest rate swaps

G3.1

Interest rate swaps effectively swap a floating rate loan into a fixed rate loan,
or vice versa.

Joint venture

E3

A joint venture is where the BBC Group has joint control over an entity withanother partner(s).

Maturity

G2.6

The maturity of a scheme provides an indication of the cash requirements of thescheme and the likely attitude of the Trustees to risk within their investment
policy. The more mature a scheme, the more likely that Trustees will favour
low-risk investments.

Net finance income/(cost)

C7.2

Net finance income/(cost) is the difference between the expected return on assets
and the interest liabilities.

Operating lease

F4.4

An operating lease is a lease where the lessee has not taken on the risks andrewards of owning and operating the asset. The lessee (the BBC) is hiring rather
than buying an asset.

Past service cost

C7.2

The past service charges arise from changes to the terms and conditions relating
to members’ defined retirement benefits, resulting in a credit for years of service
already given.

Pension Scheme

C7

On retirement, members of the BBC’s defined benefit pension scheme are paid
their pensions from a fund which is kept separate from the Group, to which the
BBC makes cash contributions.

Plan liability

G2.1

The plan liability represents the expected amount of money that will be needed in
the future to pay employees for their current and future service to the company.

Programme rights

E1

Programme rights are rights held by the BBC that permit a future transmissionof a particular programme or event.

Public services

F3

Public services in this context represent the PSB Group.

Put option

G3.3

A put option issued by the BBC provides the holder the rights, but not the
obligation, to require the BBC to buy shares at a future date and price determinedby the option agreement.

Related parties

C6

Related parties include key management personnel, their immediate families andexternal entities controlled by them.

Remeasurement gains and losses

G2.4

These gains and losses arise from actual performance being different from thatpredicted. Only defined benefit schemes give rise to gains and losses in thestatement of comprehensive income/(loss).

Remeasurements

C7.2

Remeasurements which arise from actual performance being different from thatpredicted give rise to gains and losses in the statement of comprehensive income.

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F I N A N C I A L S TAT E M E N T S

Term

Note

Definition

Remeasurements on plan assets

G2.2

Remeasurements on plan assets represent the amount by which the assets heldby the scheme (such as equities, bonds and property) have performed better orworse than the expected prior year value.

Research costs

B1

Research costs are incurred to explore ideas for new programmes or assets, suchas the BBC iPlayer. Research costs are where the ideas are generated, some ofwhich are then developed further into a plan or design where the costs are thencategorised as development.

Subsidiary undertaking

G4.3

A subsidiary undertaking is an entity that is directly or indirectly controlled by
the Group. Control exists where the Group has the power to govern the financial
and operating policies of the entity so as to obtain benefits from its activities.
In assessing control, potential voting rights that are currently exercisable orconvertible are taken into account.

Unrealised changes

H

Unrealised changes are those changes that occur to the value of the embedded
derivative prior to the point at which the derivative is exercised.

1

See Glossary for further details.

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239

E Q UA L I T Y I N F O R M AT I O N R E P O R T

Equality Information Report
Our annual Equality Information
Report provides an update on
the progress we have made in
relation to equality, diversity
and inclusion for our workforce.

Doctor Who

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A D D I T I O N A L I N F O R M AT I O N

Staff (reporting is shown separately for our staff and freelancers)
All staff and leadership: 31 March 2018
WorkforceAll staff

Leadership2020 target

Women
BAME
Disability
LGBT

47.7%
14.8%
10.4%
10.9%

43.3%
10.4%
9.5%
12.0 %

50.0%
15.0 %
8.0%
8.0%

Age
All staff age distribution by division: 31 March 2018
Age band (numbers)

Age band (%)

Division

Total

<20

20-29

30-39

40-49

50-59

60+

<20

20-29

30-39

40-49

50-59

60+

Content
Corporate, Policy
and External Affairs
Deputy DirectorGeneral Group
English Regions
Nations andRegions
Network News
Radio and
Education

886

*

162

301

291

110

20

0.2

18.3

34.0

32.8

12.4

2.3

212

–

38

81

51

30

12

–

17.8

38.2

24.1

14.2

5.7

5,402
3,003

92
–

1,074
289

1,655
794

1,436
934

958
774

187
212

1.7
–

19.9
9.6

30.6
26.4

26.6
31.1

17.7
25.8

3.5
7.1

2,732
3,246

*
*

263
325

660
885

885
988

762
895

157
152

0.2
–

9.6
10.0

24.2
27.3

32.4
30.4

27.9
27.6

5.7
4.7

1,912

*

307

555

483

458

108

0.1

16.1

29.0

25.2

24.0

5.6

UK Public
Service

17,393

101

2,458

4,931

5,068

3,987

848

0.6

14.1

28.4

29.1

22.9

4.9

World Service
Group
BBC Studios
Worldwide
Other

1,316
1,409
1,105
236

–
*
*
–

102
385
237
45

443
439
429
80

405
343
307
45

282
201
117
62

84
35
14
*

–
0.4
0.1
–

7.8
27.3
21.4
19.1

33.7
31.2
38.8
33.8

30.8
24.3
27.8
19.1

21.4
14.3
10.6
26.3

6.3
2.5
1.3
1.7

Grand Total

21,459

108

3,227

6,322

6,168

4,649

985

0.5

15.0

29.5

28.7

21.7

4.6

Senior leadership staff age distribution by division: 31 March 2018
Age band (numbers)

Age band (%)

Division

Total

<20

20-29

30-39

40-49

50-59

60+

<20

20-29

30-39

40-49

50-59

60+

Content
Corporate, Policy
and External Affairs
Deputy DirectorGeneral Group
English Regions
Nations andRegions
Network News
Radio and
Education

176

–

*

36

92

40

*

–

0.5

20.5

52.3

22.7

4.0

67

–

–

20

24

15

*

–

–

29.9

35.8

22.4

11.9

978
111

–
–

10
–

245
*

408
36

286
55

29
13

–
–

1.0
–

25.1
6.3

41.7
32.4

29.2
49.6

3.0
11.7

202
537

–
–

–
–

12
69

90
210

88
224

12
34

–
–

–
–

5.9
12.9

44.6
39.1

43.6
41.7

5.9
6.3

223

–

*

38

90

79

14

–

0.9

17.0

40.4

35.4

6.3

UK Public
Service

2,294

–

13

427

950

787

117

–

0.6

18.6

41.4

34.3

5.1

World Service
Group
BBC Studios
Worldwide
Other

173
206
366
21

–
–
–
–

*
*
14
–

18
23
129
*

69
98
158
*

72
72
59
*

13
11
*
*

–
–
–
–

0.6
1.0
3.8
–

10.4
11.1
35.3
23.8

39.9
47.6
43.2
28.6

41.6
35.0
16.1
42.8

7.5
5.3
1.6
4.8

Grand Total

3,060

–

30

602

1,281

999

148

–

1.0

19.7

41.9

32.6

4.8

All staff data reflects UK based employee contracts only.
Senior leadership is defined as grades 10 and above.
Totals for each characteristic differ due to varying disclosure rates.
* Data has been replaced with an asterisk where figures are below sample size.

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E Q UA L I T Y I N F O R M AT I O N R E P O R T

All staff age distribution by job family: 31 March 2018
Age band (numbers)
Job Family

Age band (%)

Total

<20

20-29

30-39

40-49

50-59

60+

<20

20-29

30-39

40-49

50-59

60+

Commissioning
Programming
Technical/
Engineering
Sales/Marketing
Support/Admin
Not Allocated143
10,216

–
*

*
1,354

21
3,113

67
3,161

40
2,156

*
426

–
0.1

4.9
13.3

14.7
30.4

46.8
30.9

28.0
21.1

5.6
4.2

5,338
599
3,261
1,902

*
*
*
95

774
159
416
517

1,470
242
1,001
475

1,368
138
981
453

1,387
51
732
283

334
*
130
79

0.1
0.2
–
5.0

14.5
26.5
12.8
27.1

27.5
40.4
30.7
25.0

25.6
23.1
30.1
23.8

26.0
8.5
22.4
14.9

6.3
1.3
4.0
4.2

Grand Total

21,459

108

3,227

6,322

6,168

4,649

985

0.5

15.0

29.5

28.7

21.7

4.6

Senior leadership staff age distribution by job family: 31 March 2018
Age band (numbers)
Job Family

Age band (%)

Total

<20

20-29

30-39

40-49

50-59

60+

<20

20-29

30-39

40-49

50-59

60+

Commissioning
Programming
Technical/
Engineering
Sales/Marketing
Support/Admin
Not Allocated

99
1,244

–
–

–
*

12
154

48
527

32
483

*
75

–
–

–
0.4

12.1
12.4

48.5
42.4

32.3
38.8

7.1
60

396
101
841
379

–
–
–
–

*
–
14
10

90
39
207
100

175
42
325
164

116
19
261
88

14
*
34
17

–
–
–
–

0.3
–
1.8
2.6

22.7
38.6
24.6
26.4

44.2
41.6
38.6
43.3

29.3
18.8
31.0
23.2

3.5
10
4.0
4.5

Grand Total

3,060

–

30

602

1,281

999

148

–

1.0

19.7

41.9

32.6

4.8

All staff age distribution by grade bands: 31 March 2018
Age band (numbers)
Grade band

Age band (%)

Total

<20

20-29

30-39

40-49

50-59

60+

<20

20-29

30-39

40-49

50-59

60+

Worldwide nonSM equivalentBands 1-4
Bands 5-7
Bands 8/9
Bands 10/11
Bands SM2/1

812
2,262
9,542
5,783
2,715
345

–
100
*
–
–
–

231
739
1,941
286
30
–

337
410
3,148
1,825
591
11

172
419
2,278
2,018
1,143
138

63
418
1,756
1,413
835
164

*
176
411
241
116
32

–
4.4
0.1
–
–
–

28.4
32.7
20.3
4.9
1.1
–

41.5
18.1
33.0
31.6
21.8
3.2

21.2
18.5
23.9
34.9
42.1
40.0

7.8
18.5
18.4
24.4
30.7
47.5

1.1
7.8
4.3
4.2
4.3
9.3

Grand Total

21,459

108

3,227

6,322

6,168

4,649

985

0.5

15.0

29.5

28.7

21.7

4.6

All staff leaver and joiner distribution by age: 31 March 2018
Age band (numbers)

Age band (%)

Category

Total

<20

20-29

30-39

40-49

50-59

60+

<20

20-29

30-39

40-49

50-59

60+

Leavers
Joiners

3,464
3,915

25
98

1,162
1,786

1,127
1,181

613
554

389
243

148
53

0.7
2.5

33.6
45.6

32.5
30.2

17.7
14.1

11.2
6.2

4.3
1.4

All staff data reflects UK based employee contracts only.
Senior leadership is defined as grades 10 and above.
Totals for each characteristic differ due to varying disclosure rates.
* Data has been replaced with an asterisk where figures are below sample size.

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A D D I T I O N A L I N F O R M AT I O N

All staff leaver distribution by age and reason for leaving: 31 March 2018
Age band (numbers)
Reason for leaving

Age band (%)

Total

<20

20-29

30-39

40-49

50-59

60+

<20

20-29

30-39

40-49

50-59

60+

Voluntary
Redundancy
End FTC
Other involuntary
Other

1,248
626
1,478
52
60

*
–
23
–
–

366
22
763
*
*

528
138
446
12
*

238
217
141
12
*

96
197
73
14
*

18
52
32
*
40

0.2
–
1.6
–
–

29.3
3.5
51.6
15.4
5.0

42.3
22.0
30.2
23.1
5.0

19.1
34.7
9.5
23.1
8.3

7.7
31.5
4.9
26.9
15.0

1.4
8.3
2.2
11.5
66.7

Grand Total

3,464

25

1,162

1,127

613

389

148

0.7

33.6

32.5

17.7

11.2

4.3

All staff internal mover distribution by age: 31 March 2018
Age band (numbers)
Internal move typeAge band (%)

Total

<20

20-29

30-39

40-49

50-59

60+

<20

20-29

30-39

40-49

50-59

60+

Attachment
Promotion
Transfer

1,738
463
1,788

–
*
*

264
173
683

789
179
618

492
88
336

177
21
136

16
*
11

–
0.2
0.2

15.2
37.4
38.2

45.4
38.7
34.6

28.3
19.0
18.8

10.2
4.5
7.6

0.9
0.2
0.6

Grand Total

3,989

*

1,120

1,586

916

334

28

0.1

28.1

39.8

22.9

8.4

0.7

All staff age distribution by contract type: 31 March 2018
Age band (numbers)
Contract typeAge band (%)

Total

<20

20-29

30-39

40-49

50-59

60+

<20

20-29

30-39

40-49

50-59

60+

Continuing
Fixed term lessthan 1 yr
Fixed term 1 yr+
Flexicon18,378

*

1,765

5,456

5,762

4,474

920

–

9.6

29.7

31.4

24.3

5.0

2,283
728
70

24
83
–

1,117
328
17

673
179
14

306
84
16

125
39
11

38
15
12

1.1
11.4
–

48.9
45.0
24.3

29.5
24.6
20.0

13.4
11.6
22.9

5.5
5.4
15.7

1.7
2.1
17.1

Grand Total

21,459

108

3,227

6,322

6,168

4,649

985

0.5

15.0

29.5

28.7

21.7

4.6

All staff age distribution by length of service: 31 March 2018
Age band (numbers)
Length of service (yrs)

Age band (%)

Total

<20

20-29

30-39

40-49

50-59

60+

<20

20-29

30-39

40-49

50-59

60+

Less than 1
1<3
3<5
5<10
10+

3,043
3,088
2,359
3,528
9,441

87
21
–
–
–

1,324
1,137
545
219
*

928
1,113
1,015
1,864
1,402

465
524
515
948
3,716

201
254
227
411
3,556

38
39
57
86
765

2.9
0.7
–
–
–

43.5
36.8
23.1
6.2
–

30.5
36.0
43.1
52.8
14.9

15.3
17.0
21.8
26.9
39.4

6.6
8.2
9.6
11.7
37.6

1.2
1.3
2.4
2.4
8.1

Grand Total

21,459

108

3,227

6,322

6,168

4,649

985

0.5

15.0

29.5

28.7

21.7

4.6

All staff data reflects UK based employee contracts only.
Senior leadership is defined as grades 10 and above.
Totals for each characteristic differ due to varying disclosure rates.
* Data has been replaced with an asterisk where figures are below sample size.

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BBC Annual Report and Accounts 2017/18

243

E Q UA L I T Y I N F O R M AT I O N R E P O R T

Disability
All staff disability distribution by division: 31 March 2018
Disability (numbers)
Division

Disability (%)

Total

Disabled

Not disabled

Disabled

Not disabled

Content
Corporate, Policy and External Affairs
Deputy Director-General Group
English Regions
Nations and Regions
Network News
Radio and Education

809
191
4,869
2,790
2,554
3,004
1,757

83
25
627
248
242
291
219

726
166
4,242
2,542
2,312
2,713
1,538

10.3
13.1
12.9
8.9
9.5
9.7
12.5

89.7
86.9
87.1
91.1
90.5
90.3
87.5

UK Public Service

15,974

1,735

14,23910.9

89.1

World Service GroupBBC Studios
Worldwide
Other

1,182
1,293
981
213

83
125
81
17

1,099
1,168
900
196

7.0
9.7
8.3
8.0

93.0
90.3
91.7
92.0

19,6432,041

17,602

10.4

89.6

Grand Total

Senior leadership staff disability distribution by division: 31 March 2018
Disability (numbers)

Disability (%)

Division

Total

Disabled

Not disabled

Disabled

Not disabled

Content
Corporate, Policy and External Affairs
Deputy Director-General Group
English Regions
Nations and Regions
Network News
Radio and Education

162
60
912
106
193
510
213

17
*
96
16
13
43
29

145
52
816
90
180
467
184

10.5
13.3
10.5
15.1
6.7
8.4
13.6

89.5
86.7
89.5
84.9
93.3
91.6
86.4

UK Public Service

2,156

222

1,934

10.3

89.7

World Service GroupBBC Studios
Worldwide
Other

158
192
337
19

13
15
21
–

145
177
316
19

8.2
7.8
6.2
–

91.8
92.2
93.8
100.0

2,862

271

2,591

9.5

90.5

Total

Disabled

Not disabled

Disabled

Not disabled

Commissioning
Programming
Technical/Engineering
Sales/Marketing
Support/Admin
Not Allocated

128
9,486
4,837
537
3,014
1,641

12
892
566
70
352
149

116
8,594
4,271
467
2,662
1,492

9.4
9.4
11.7
13.0
11.7
9.1

90.6
90.6
88.3
87.0
88.3
90.9

Grand Total

19,6432,041

17,602

10.4

89.6

Grand Total
All staff disability distribution by job family: 31 March 2018

Disability (numbers)
Job Family

Disability (%)

All staff data reflects UK based employee contracts only.
Senior leadership is defined as grades 10 and above.
Totals for each characteristic differ due to varying disclosure rates.
* Data has been replaced with an asterisk where figures are below sample size.

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A D D I T I O N A L I N F O R M AT I O N

Senior leadership staff disability distribution by job family: 31 March 2018
Disability (numbers)
Job Family

Disability (%)

Total

Disabled

Not disabled

Disabled

Not disabled

Commissioning
Programming
Technical/Engineering
Sales/Marketing
Support/Admin
Not Allocated

92
1,173
373
93
779
352

*
107
40
*
79
28

84
1,066
333
84
700
324

8.7
9.1
10.7
9.7
10.1
8.0

91.3
90.9
89.3
90.3
89.9
92.0

Grand Total

2,862

271

2,591

9.5

90.5

Total

Disabled

Not disabled

Disabled

Not disabled

710
1,963
8,737
5,371
2,541
321

62
244
935
529
240
31

648
1,719
7,802
4,842
2,301
290

8.7
12.4
10.7
9.8
9.4
9.7

91.3
87.6
89.3
90.2
90.6
90.3

19,6432,041

17,602

10.4

89.6

All staff disability distribution by grade bands: 31 March 2018
Disability (numbers)
Grade band

Worldwide non-SM equivalentBands 1-4
Bands 5-7
Bands 8/9
Bands 10/11
Bands SM2/1
Grand Total

Disability (%)

All staff leaver and joiner distribution by disability: 31 March 2018
Disability (numbers)

Disability (%)

Category

Total

Disabled

Not disabled

Disabled

Not disabled

Leavers
Joiners

3,020
3,247

307
290

2,713
2,957

10.2
8.9

89.8
91.1

All staff leaver distribution by disability and reason for leaving: 31 March 2018
Disability (numbers)
Reason for leaving

Disability (%)

Total

Disabled

Not disabled

Disabled

Not disabled

Voluntary
Redundancy
End FTC
Other involuntary
Other

1,105
592
1,218
48
57

105
54
131
*
*

1,000
538
1,087
39
49

9.5
9.1
10.8
18.8
14.0

90.5
90.9
89.2
81.2
86.0

Grand Total

3,020

307

2,713

10.2

89.8

All staff internal mover distribution by disability: 31 March 2018
Disability (numbers)
Internal move type

Disability (%)

Total

Disabled

Not disabled

Disabled

Not disabled

Attachment
Promotion
Transfer

1,649
427
1,558

194
52
180

1,455
375
1,378

11.8
12.2
11.6

88.2
87.8
88.4

Grand Total

3,634

426

3,208

11.7

88.3

All staff data reflects UK based employee contracts only.
Senior leadership is defined as grades 10 and above.
Totals for each characteristic differ due to varying disclosure rates.
* Data has been replaced with an asterisk where figures are below sample size.

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BBC Annual Report and Accounts 2017/18

245

E Q UA L I T Y I N F O R M AT I O N R E P O R T

All staff disability distribution by contract type: 31 March 2018
Disability (numbers)
Contract type

Disability (%)

Total

Disabled

Not disabled

Disabled

Not disabled

Continuing
Fixed term less than 1 yr
Fixed term 1 yr+
Flexicon16,998
1,991
589
65

1,764
205
64
*

15,234
1,786
525
57

10.4
10.3
10.9
12.3

89.6
89.7
89.1
87.7

Grand Total

19,6432,041

17,602

10.4

89.6

All staff disability distribution by length of service: 31 March 2018
Disability (numbers)
Length of service (yrs)Disability (%)

Total

Disabled

Not disabled

Disabled

Not disabled

Less than 1
1<3
3<5
5<10
10+

2,661
2,487
2,265
3,387
8,843

208
282
220
368
963

2,453
2,205
2,045
3,019
7,880

7.8
11.3
9.7
10.9
10.9

92.2
88.7
90.3
89.1
89.1

Grand Total

19,6432,041

17,602

10.4

89.6

All staff data reflects UK based employee contracts only.
Senior leadership is defined as grades 10 and above.
Totals for each characteristic differ due to varying disclosure rates.
* Data has been replaced with an asterisk where figures are below sample size.

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A D D I T I O N A L I N F O R M AT I O N

Ethnicity
All staff ethnicity distribution by division: 31 March 2018
Ethnicity band (numbers)

Ethnicity band (%)

Division

Total

BAME

Other whitebackgroundContent
Corporate, Policy andExternal Affairs
Deputy Director-General
Group
English Regions
Nations and Regions
Network News
Radio and Education

843

123

48

672

14.6

5.7

79.7

208

25

13

170

12.0

6.3

81.7

5,134
2,888
2,644
3,099
1,853

875
241
82
464
204

316
78
290
230
92

3,943
2,569
2,272
2,405
1,557

17.0
8.3
3.1
15.0
11.0

6.2
2.7
11.0
7.4
5.0

76.8
89.0
85.9
77.6
84.0

UK Public Service

16,669

2,014

1,067

13,588

12.1

6.4

81.5

World Service GroupBBC Studios
Worldwide
Other

1,196
1,345
1,046
227

651
130
204
24

115
75
108
*

430
1,140
734
195

54.4
9.6
19.5
10.6

9.6
5.6
10.3
3.5

36.0
84.8
70.2
85.9

20,483

3,023

1,373

16,087

14.8

6.7

78.5

Grand Total

White UK

BAME

Other whitebackground

White UK

Senior leadership staff ethnicity distribution by division: 31 March 2018
Ethnicity band (numbers)

Ethnicity band (%)

Division

Total

BAME

Other whitebackgroundContent
Corporate, Policy andExternal Affairs
Deputy Director-General
Group
English Regions
Nations and Regions
Network News
Radio and Education

166

14

10

142

8.4

6.0

85.6

66

*

*

57

6.0

7.6

86.4

944
106
194
520
219

88
*
*
45
23

67
*
26
24
*

789
94
164
451
187

9.3
8.5
2.1
8.7
10.5

7.1
2.8
13.4
4.6
4.1

83.6
88.7
84.5
86.7
85.4

UK Public Service

2,215

187

144

1,884

8.4

6.5

85.1

World Service GroupBBC Studios
Worldwide
Other

163
201
348
21

56
15
49
–

12
11
30
*

95
175
269
20

34.3
7.5
14.1
–

7.4
5.5
8.6
4.8

58.3
87.0
77.3
95.2

2,948

307

198

2,443

10.4

6.7

82.9

Grand Total

White UK

BAME

Other whitebackground

White UK

All staff data reflects UK based employee contracts only.
Senior leadership is defined as grades 10 and above.
Totals for each characteristic differ due to varying disclosure rates.
* Data has been replaced with an asterisk where figures are below sample size.

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247

E Q UA L I T Y I N F O R M AT I O N R E P O R T

All staff ethnicity distribution by job family: 31 March 2018
Ethnicity band (numbers)
Job FamilyCommissioning
Programming
Technical/Engineering
Sales/Marketing
Support/Admin
Not AllocatedGrand Total

Ethnicity band (%)

Total

BAME

Other whitebackground

White UK

BAME

Other whitebackground

137
9,772
5,065
567
3,134
1,808

19
1,500
657
60
509
278

14
651
308
46
218
136

104
7,621
4,100
461
2,407
1,394

13.9
15.3
13.0
10.6
16.2
15.4

10.2
6.7
6.1
8.1
7.0
7.5

White UK

75.9
78.0
80.9
81.3
76.8
77.1

20,483

3,023

1,373

16,087

14.8

6.7

78.5

Senior leadership staff ethnicity distribution by job family: 31 March 2018
Ethnicity band (numbers)

Ethnicity band (%)

Total

BAME

Other whitebackground

Commissioning
Programming
Technical/Engineering
Sales/Marketing
Support/Admin
Not Allocated

95
1,201
377
100
814
361

*
143
37
*
79
37

11
61
24
*
69
27

77
997
316
90
666
297

7.4
11.9
9.8
4.0
9.7
10.2

11.6
5.1
6.4
6.0
8.5
7.5

81.0
83.0
83.8
90.0
81.8
82.3

Grand Total

2,948

307

198

2,443

10.4

6.7

82.9

Job Family

White UK

BAME

Other whitebackground

White UK

All staff ethnicity distribution by grade bands: 31 March 2018
Ethnicity band (numbers)
Grade band

Worldwide non-SM
equivalentBands 1-4
Bands 5-7
Bands 8/9
Bands 10/11
Bands SM2/1
Grand Total

Ethnicity band (%)

Total

BAME

Other whitebackground

White UK

BAME

Other whitebackground

White UK

769
2,152
9,095
5,519
2,615
333

167
318
1,443
788
286
21

86
106
627
356
170
28

516
1,728
7,025
4,375
2,159
284

21.7
14.8
15.9
14.3
10.9
6.3

11.2
4.9
6.9
6.4
6.5
8.4

67.1
80.3
77.2
79.3
82.6
85.3

20,483

3,023

1,373

16,087

14.8

6.7

78.5

All staff leaver and joiner distribution by ethnicity: 31 March 2018
Ethnicity band (numbers)
Category

Total

BAME

Other whitebackground

Leavers
Joiners

3,265
3,608

535
637

253
280

Ethnicity band (%)
White UK

BAME

Other whitebackground

White UK

2,477
2,691

16.4
17.7

7.7
7.7

75.9
74.6

All staff data reflects UK based employee contracts only.
Senior leadership is defined as grades 10 and above.
Totals for each characteristic differ due to varying disclosure rates.
* Data has been replaced with an asterisk where figures are below sample size.

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A D D I T I O N A L I N F O R M AT I O N

All staff leaver distribution by ethnicity and reason for leaving: 31 March 2018
Ethnicity band (numbers)

Ethnicity band (%)

Total

BAME

Other whitebackground

Voluntary
Redundancy
End FTC
Other involuntary
Other

1,167
604
1,384
51
59

222
69
233
*
*

93
43
107
*
*

852
492
1,044
38
51

19.0
11.4
16.8
15.7
5.1

8.0
7.1
7.7
9.8
8.5

73.0
81.5
75.5
74.5
86.4

Grand Total

3,265

535

253

2,477

16.4

7.7

75.9

Reason for leaving

White UK

BAME

Other whitebackground

White UK

All staff internal mover distribution by ethnicity: 31 March 2018
Ethnicity band (numbers)

Ethnicity band (%)

Total

BAME

Other whitebackgroundAttachment
Promotion
Transfer

1,687
451
1,697

245
66
317

114
28
127

1,328
357
1,253

14.5
14.6
18.7

6.8
6.2
7.5

78.7
79.2
73.8

Grand Total

3,835

628

269

2,938

16.4

7.0

76.6

Internal move typeWhite UK

BAME

Other whitebackground

White UK

All staff ethnicity distribution by contract type: 31 March 2018
Ethnicity band (numbers)

Ethnicity band (%)

Total

BAME

Other whitebackgroundContinuing
Fixed term less than 1 yr
Fixed term 1 yr+
Flexicon17,603
2,136
679
65

2,517
367
137
*

1,148
162
54
*

13,938
1,607
488
54

14.3
17.2
20.2
3.1

6.5
7.6
8.0
13.8

79.2
75.2
71.8
83.1

Grand Total

20,483

3,023

1,373

16,087

14.8

6.7

78.5

Contract typeWhite UK

BAME

Other whitebackground

White UK

All staff ethnicity distribution by length of service: 31 March 2018
Ethnicity band (numbers)

Ethnicity band (%)

Total

BAME

Other whitebackgroundLess than 1
1<3
3<5
5<10
10+

2,792
2,936
2,264
3,353
9,138

505
524
369
583
1,042

223
258
191
223
478

2,064
2,154
1,704
2,547
7,618

18.1
17.8
16.3
17.3
11.4

8.0
8.8
8.4
6.7
5.2

73.9
73.4
75.3
76.0
83.4

Grand Total

20,483

3,023

1,373

16,087

14.8

6.7

78.5

Length of service (yrs)White UK

BAME

Other whitebackground

White UK

All staff data reflects UK based employee contracts only.
Senior leadership is defined as grades 10 and above.
Totals for each characteristic differ due to varying disclosure rates.
* Data has been replaced with an asterisk where figures are below sample size.

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BBC Annual Report and Accounts 2017/18

249

E Q UA L I T Y I N F O R M AT I O N R E P O R T

GenderAll staff gender distribution by division: 31 March 2018
Gender band (numbers)
Division

Gender band (%)

Total

FemaleMale

FemaleMale

Content
Corporate, Policy and External Affairs
Deputy Director-General Group
English Regions
Nations and Regions
Network News
Radio and Education

886
212
5,402
3,003
2,732
3,246
1,912

409
149
2,227
1,388
1,219
1,480
1,085

477
63
3,175
1,615
1,513
1,766
827

46.2
70.3
41.2
46.2
44.6
45.6
56.7

53.8
29.7
58.8
53.8
55.4
54.4
43.3

UK Public Service

17,393

7,957

9,436

45.7

54.3

World Service GroupBBC Studios
Worldwide
Other

1,316
1,409
1,105
236

636
899
617
132

680
510
488
104

48.3
63.8
55.8
55.9

51.7
36.2
44.2
44.1

Grand Total

21,45910,241

11,21847.7

52.3

Senior leadership staff gender distribution by division: 31 March 2018
Gender band (numbers)

Gender band (%)

Division

Total

FemaleMale

FemaleMale

Content
Corporate, Policy and External Affairs
Deputy Director-General Group
English Regions
Nations and Regions
Network News
Radio and Education

176
67
978
111
202
537
223

79
38
381
49
77
233
107

97
29
597
62
125
304
116

44.9
56.7
39.0
44.1
38.1
43.4
48.0

55.1
43.3
61.0
55.9
61.9
56.6
52.0

UK Public Service

2,294

964

1,330

42.0

58.0

World Service GroupBBC Studios
Worldwide
Other

173
206
366
21

71
103
178
*

102
103
188
13

41.0
50.0
48.6
38.1

59.0
50.0
51.4
61.9

3,060

1,324

1,736

43.3

56.7

Grand Total
All staff gender distribution by job family: 31 March 2018

Gender band (numbers)
Job Family

Gender band (%)

Total

FemaleMale

FemaleMaleCommissioning
Programming
Technical/Engineering
Sales/Marketing
Support/Admin
Not Allocated143
10,216
5,338
599
3,261
1,902

83
5,342
1,328
375
2,131
982

60
4,874
4,010
224
1,130
920

58.0
52.3
24.9
62.6
65.3
51.6

42.0
47.7
75.1
37.4
34.7
48.4

Grand Total

21,45910,241

11,21847.7

52.3

Senior leadership staff gender distribution by job family: 31 March 2018
Gender band (numbers)
Job Family

Gender band (%)

Total

FemaleMale

FemaleMaleCommissioning
Programming
Technical/Engineering
Sales/Marketing
Support/Admin
Not Allocated

99
1,244
396
101
841
379

53
549
72
54
425
171

46
695
324
47
416
208

53.5
44.1
18.2
53.5
50.5
45.1

46.5
55.9
81.8
46.5
49.5
54.9

Grand Total

3,060

1,324

1,736

43.3

56.7

All staff data reflects UK based employee contracts only.
Senior leadership is defined as grades 10 and above.
Totals for each characteristic differ due to varying disclosure rates.
* Data has been replaced with an asterisk where figures are below sample size.

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A D D I T I O N A L I N F O R M AT I O N

All staff gender distribution by grade bands: 31 March 2018
Gender band (numbers)
Grade band

Gender band (%)

Total

FemaleMale

Female

Male

Worldwide non-SM equivalentBands 1-4
Bands 5-7
Bands 8/9
Bands 10/11
Bands SM2/1

812
2,262
9,542
5,783
2,715
345

471
1,280
4,675
2,491
1,197
127

341
982
4,867
3,292
1,518
218

58.0
56.6
49.0
43.1
44.1
36.8

42.0
43.4
51.0
56.9
55.9
63.2

Grand Total

21,45910,241

11,21847.7

52.3

All staff leaver and joiner distribution by gender: 31 March 2018
Gender band (numbers)

Gender band (%)

Category

Total

FemaleMale

FemaleMale

Leavers
Joiners

3,464
3,915

1,987
2,127

1,477
1,788

57.4
54.3

42.6
45.7

All staff leaver distribution by gender and reason for leaving: 31 March 2018
Gender band (numbers)
Reason for leaving

Gender band (%)

Total

FemaleMale

FemaleMale

Voluntary
Redundancy
End FTC
Other involuntary
Other

1,248
626
1,478
52
60

656
385
900
28
18

592
241
578
24
42

52.6
61.5
60.9
53.8
30.0

47.4
38.5
39.1
46.2
70.0

Grand Total

3,464

1,987

1,477

57.4

42.6

All staff internal mover distribution by gender: 31 March 2018
Gender band (numbers)
Internal move type

Gender band (%)

Total

FemaleMale

FemaleMale

Attachment
Promotion
Transfer

1,738
463
1,788

1,036
208
964

702
255
824

59.6
44.9
53.9

40.4
55.1
46.1

Grand Total

3,989

2,208

1,781

55.4

44.6

All staff gender distribution by contract type: 31 March 2018
Gender band (numbers)
Contract type

Gender band (%)

Total

FemaleMale

FemaleMaleContinuing
Fixed term less than 1 yr
Fixed term 1 yr+
Flexicon18,378
2,283
728
70

8,551
1,328
321
41

9,827
955
407
29

46.5
58.2
44.1
58.6

53.5
41.8
55.9
41.4

Grand Total

21,45910,241

11,21847.7

52.3

All staff gender distribution by length of service: 31st March 2018
Gender band (numbers)
Length of service (yrs)Gender band (%)

Total

FemaleMale

FemaleMaleLess than 1
1<3
3<5
5<10
10+

3,043
3,088
2,359
3,528
9,441

1,576
1,599
1,162
1,697
4,207

1,467
1,489
1,197
1,831
5,234

51.8
51.8
49.3
48.1
44.6

48.2
48.2
50.7
51.9
55.4

Grand Total

21,45910,241

11,21847.7

52.3

All staff data reflects UK based employee contracts only.
Senior leadership is defined as grades 10 and above.
Totals for each characteristic differ due to varying disclosure rates.
* Data has been replaced with an asterisk where figures are below sample size.

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BBC Annual Report and Accounts 2017/18

251

E Q UA L I T Y I N F O R M AT I O N R E P O R T

Religion
All staff religion and belief distribution (numbers): 31 March 2018
Religion and belief (numbers)

Total

BBC total

Total

AtheistBuddhist

Christian

Hindu

JewishMuslim

Sikh

Other

None

Prefer not
to say/excluded

21,459

3,518

117

6,056

268

187

518

134

685

8,196

1,780

All staff religion and belief distribution (percentages): 31 March 2018
Religion and belief (%)
Prefer not
to say/None excluded

Total

AtheistBuddhist

Christian

Hindu

JewishMuslim

Sikh

Other

BBC total

16.4

0.5

28.2

1.3

0.9

2.4

0.6

3.2

38.2

8.3

Senior leadership staff religion and belief distribution (numbers): 31 March 2018
Religion and belief (numbers)

Total

BBC total

Total

AtheistBuddhist

Christian

Hindu

JewishMuslim

Sikh

Other

None

Prefer not
to say/excluded

3,060

533

15

1,001

38

47

48

21

81

1,036

240

Senior leadership staff religion and belief distribution (percentages): 31 March 2018
Religion and belief (%)

Total

BBC total

Prefer not
to say/None excluded

AtheistBuddhist

Christian

Hindu

JewishMuslim

Sikh

Other

17.4

0.5

32.7

1.2

1.5

1.6

0.7

2.7

33.9

7.8

All staff religion and belief distribution by grade bands (numbers): 31 March 2018
Religion and belief (numbers)

Total

AtheistBuddhist

Christian

Hindu

JewishMuslim

Sikh

Other

None

Prefer not
to say/excludedWorldwide non-SM equivalentBands 1-4
Bands 5-7
Bands 8/9
Bands 10/11
Bands SM2/1

812
2,262
9,542
5,783
2,715
345

127
314
1,565
979
475
58

*
*
62
28
13
*

240
636
2,612
1,567
874
127

31
17
105
77
36
*

*
11
74
46
41
*

24
43
271
132
41
*

*
16
61
32
20
*

29
71
332
172
74
*

271
963
3,648
2,278
923
113

71
185
812
472
218
22

Grand Total

21,459

3,518

117

6,056

268

187

518

134

685

8,196

1,780

Grade band

All staff data reflects UK based employee contracts only.
Senior leadership is defined as grades 10 and above.
Totals for each characteristic differ due to varying disclosure rates.
* Data has been replaced with an asterisk where figures are below sample size.

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A D D I T I O N A L I N F O R M AT I O N

All staff religion and belief distribution by grade bands (percentages): 31 March 2018
Religion and belief (%)
Prefer not
to say/None excluded

Grade band

AtheistBuddhist

Christian

Hindu

JewishMuslim

Sikh

Other

Worldwide non-SM equivalentBands 1-4
Bands 5-7
Bands 8/9
Bands 10/11
Bands SM2/1

15.6
13.9
16.4
16.9
17.5
16.8

0.7
0.3
0.7
0.5
0.5
0.6

29.6
28.1
27.4
27.1
32.2
36.8

3.8
0.8
1.1
1.3
1.3
0.6

1.1
0.5
0.8
0.8
1.5
1.7

3.0
1.9
2.8
2.3
1.5
2.0

0.5
0.7
0.6
0.6
0.7
0.3

3.6
3.1
3.5
2.9
2.8
2.0

33.4
42.6
38.2
39.4
34.0
32.8

8.7
8.1
8.5
8.2
8.0
6.4

Grand Total

16.4

0.5

28.2

1.3

0.9

2.4

0.6

3.2

38.2

8.3

All staff leaver and joiner distribution by religion and belief (numbers): 31 March 2018
Religion and belief (numbers)

Category

Total

AtheistBuddhist

Christian

Hindu

JewishMuslim

Sikh

Other

Leavers
Joiners

3,464
3,915

671
755

28
24

877
932

49
51

29
34

74
102

27
26

145
141

Prefer not
to say/None excluded

1,007
1,245

557
605

All staff leaver and joiner distribution by religion and belief (percentages): 31 March 2018
Religion and belief (%)

Category

AtheistBuddhist

Christian

Hindu

JewishMuslim

Sikh

Other

Leavers
Joiners

19.4
19.3

0.8
0.6

25.3
23.8

1.4
1.3

0.8
0.9

2.1
2.6

0.8
0.7

4.2
3.6

Prefer not
to say/None excluded

29.1
31.8

16.1
15.4

All staff leaver distribution by religion and belief and reason for leaving (numbers): 31 March 2018
Religion and belief (numbers)

Reason for leaving

Prefer not
to say/None excluded

Total

AtheistBuddhist

Christian

Hindu

JewishMuslim

Sikh

Other

Voluntary
Redundancy
End FTC
Other involuntary
Other

1,248
626
1,478
52
60

234
109
314
*
*

*
10
10
–
–

298
192
349
20
18

27
*
15
*
–

10
*
14
*
–

30
*
36
–
*

13
*
11
–
*

57
20
67
–
*

380
158
442
10
17

191
118
220
13
15

Grand Total

3,464

671

28

877

49

29

74

27

145

1,007

557

All staff data reflects UK based employee contracts only.
Senior leadership is defined as grades 10 and above.
Totals for each characteristic differ due to varying disclosure rates.
* Data has been replaced with an asterisk where figures are below sample size.

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BBC Annual Report and Accounts 2017/18

253

E Q UA L I T Y I N F O R M AT I O N R E P O R T

All staff leaver distribution by religion and belief and reason for leaving (percentages): 31 March 2018
Religion and belief (%)
Prefer not
to say/None excluded

Reason for leaving

AtheistBuddhist

Christian

Hindu

JewishMuslim

Sikh

Other

Voluntary
Redundancy
End FTC
Other involuntary
Other

18.8
17.4
21.3
13.5
11.6

0.6
1.6
0.7
–
–

23.9
30.7
23.6
38.5
30.0

2.2
1.0
1.0
1.9
–

0.8
0.6
1.0
1.9
–

2.4
1.1
2.4
–
1.7

1.0
0.3
0.7
–
1.7

4.6
3.2
4.5
–
1.7

30.4
25.2
29.9
19.2
28.3

15.3
18.9
14.9
25.0
25.0

Grand Total

19.4

0.8

25.3

1.4

0.8

2.1

0.8

4.2

29.1

16.1

Prefer not
to say/None excluded

All staff religion and belief distribution by contract type (numbers): 31 March 2018
Religion and belief (numbers)

Contract type

Total

AtheistBuddhist

Christian

Hindu

JewishMuslim

Sikh

Other

Continuing
Fixed term less than 1 yr
Fixed term 1 yr+
Flexicon18,378
2,283
728
70

2,921
450
139
*

101
14
*
–

5,246
589
201
20

227
24
17
–

157
26
*
*

432
65
21
–

111
20
*
–

559
91
29
*

7,252
684
231
29

1,372
320
82
*

Grand Total

21,459

3,518

117

6,056

268

187

518

134

685

8,196

1,780

All staff religion and belief distribution by contract type (percentages): 31 March 2018
Religion and belief (%)

Contract type

Prefer not
to say/None excluded

AtheistBuddhist

Christian

Hindu

JewishMuslim

Sikh

Other

Continuing
Fixed term less than 1 yr
Fixed term 1 yr+
Flexicon

15.9
19.7
19.1
11.4

0.5
0.6
0.3
–

28.5
25.8
27.6
28.6

1.2
1.1
2.3
–

0.9
1.1
0.4
1.4

2.4
2.8
2.9
–

0.6
0.9
0.4
–

3.0
4.0
4.0
8.6

39.5
30.0
31.7
41.4

7.5
14.0
11.3
8.6

Grand Total

16.4

0.5

28.2

1.3

0.9

2.4

0.6

3.2

38.2

8.3

All staff religion and belief distribution by length of service (numbers): 31 March 2018
Religion and belief (numbers)

Length of service (yrs)Prefer not
to say/None excluded

Total

AtheistBuddhist

Christian

Hindu

JewishMuslim

Sikh

Other

Less than 1
1<3
3<5
5<10
10+

3,043
3,088
2,359
3,528
9,441

563
627
476
582
1,270

19
19
10
20
49

753
855
687
1,001
2,760

42
73
30
53
70

26
27
25
28
81

81
85
85
129
138

19
35
17
13
50

102
125
95
110
253

965
966
758
1,341
4,166

473
276
176
251
604

Grand Total

21,459

3,518

117

6,056

268

187

518

134

685

8,196

1,780

All staff religion and belief distribution by length of service (percentages): 31 March 2018
Religion and Belief (%)
Prefer not
to say/None excluded

Length of service (yrs)AtheistBuddhist

Christian

Hindu

JewishMuslim

Sikh

Other

Less than 1
1<3
3<5
5<10
10+

18.5
20.3
20.2
16.5
13.5

0.6
0.6
0.4
0.6
0.5

24.7
27.7
29.1
28.4
29.2

1.4
2.4
1.3
1.5
0.7

0.9
0.9
1.1
0.8
0.9

2.7
2.8
3.6
3.7
1.5

0.6
1.1
0.7
0.3
0.5

3.4
4.0
4.0
3.1
2.7

31.7
31.3
32.1
38.0
44.1

15.5
8.9
7.5
7.1
6.4

Grand Total

16.4

0.5

28.2

1.3

0.9

2.4

0.6

3.2

38.2

8.3

All staff data reflects UK based employee contracts only.
Senior leadership is defined as grades 10 and above.
Totals for each characteristic differ due to varying disclosure rates.
* Data has been replaced with an asterisk where figures are below sample size.

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A D D I T I O N A L I N F O R M AT I O N

Sexual orientation & gender identity
All staff sexual orientation and gender identity distribution by division (numbers): 31 March 2018
Sexual orientation (numbers)
Division

Total

Bisexual

Gay manGay woman/lesbianHeterosexual/straight

Other

Prefer not tosay/excluded

TransgenderLGBT

Content
Corporate, Policy
and External Affairs
Deputy DirectorGeneral Group
English Regions
Nations and Regions
Network News
Radio and Education

886

16

23

15

667

*

163

13

66

212

*

16

–

167

*

26

*

24

5,402
3,003
2,732
3,246
1,912

115
32
23
62
34

213
107
83
134
74

66
17
15
30
29

4,183
1,991
1,869
1,986
1,277

31
18
*
22
11

794
838
733
1,012
487

110
59
46
57
45

509
221
170
292
183

UK Public Service

17,393

284

650

172

12,140

94

4,053

335

1,465

World Service
Group
BBC Studios
Worldwide
Other

1,316
1,409
1,105
236

21
45
18
*

31
65
44
*

4
18
*
*

850
1,032
917
182

10
10
*
*

400
239
119
45

11
34
36
*

76
168
101
10

Grand Total

21,459

369

794

202

15,121

117

4,856

417

1,820

All staff sexual orientation and gender identity distribution by division (percentages): 31 March 2018
Sexual orientation (%)
Division

Bisexual

Gay manGay woman/lesbianHeterosexual/straight

Other

Prefer not tosay/excluded

TransgenderLGBT

Content
Corporate, Policy and External
Affairs
Deputy Director-General Group
English Regions
Nations and Regions
Network News
Radio and Education

1.8

2.6

1.7

75.3

0.2

18.4

1.8

9.1

0.9
2.1
1.0
0.9
1.9
1.8

7.5
3.9
3.6
3.0
4.1
3.9

–
1.2
0.6
0.6
0.9
1.5

78.8
77.5
66.3
68.4
61.2
66.8

0.5
0.6
0.6
0.3
0.7
0.6

12.3
14.7
27.9
26.8
31.2
25.4

2.7
2.4
2.7
2.3
2.6
3.2

12.9
11.0
10.2
8.5
13.1
12.8

UK Public Service

1.6

3.7

1.0

69.8

0.6

23.3

2.5

11.0

World Service GroupBBC Studios
Worldwide
Other

1.6
3.2
1.6
0.4

2.3
4.6
4.0
1.7

0.3
1.3
0.5
1.3

64.6
73.2
83.0
77.1

0.8
0.7
0.2
0.4

30.4
17.0
10.7
19.1

1.2
2.9
3.7
0.5

8.3
14.4
10.2
5.2

Grand Total

1.7

3.7

1.0

70.5

0.5

22.6

2.5

11.0

All staff data reflects UK based employee contracts only.
Senior leadership is defined as grades 10 and above.
Totals for each characteristic differ due to varying disclosure rates.
* Data has been replaced with an asterisk where figures are below sample size.

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BBC Annual Report and Accounts 2017/18

255

E Q UA L I T Y I N F O R M AT I O N R E P O R T

Senior leadership staff sexual orientation and gender identity distribution by division (numbers): 31 March 2018
Sexual orientation (numbers)
DivisionGrand Total

Total

Bisexual

Gay manGay woman/lesbian

3,060

40

156

33

Heterosexual/straight

Other

Prefer not tosay/excluded

Transgender

LGBT

2,274

16

541

71

303

Senior leadership staff sexual orientation and gender identity distribution by division (percentages): 31 March 2018
Sexual orientation (%)
DivisionGrand Total

Bisexual

Gay manGay woman/lesbian

1.3

5.1

1.1

Heterosexual/straight

Other

Prefer not tosay/excluded

Transgender

LGBT

74.3

0.5

17.7

2.8

12.0

All staff sexual orientation and gender identity distribution by job family (percentages): 31 March 2018
Sexual orientation (%)
Bisexual

Gay manGay woman/lesbianTransgenderLGBT

Commissioning
Programming
Technical/Engineering
Sales/Marketing
Support/Admin
Not Allocated

0.7
1.7
1.9
1.0
1.3
2.2

6.3
3.7
3.5
6.5
3.5
3.6

1.4
0.9
1.0
1.2
1.1
0.5

76.9
67.2
69.3
79.0
81.9
68.7

–
0.6
0.6
0.3
0.5
0.4

14.7
25.9
23.7
12.0
11.7
24.6

4.1
2.8
1.8
1.9
2.8
2.9

13.1
11.6
10.5
11.8
9.7
11.2

Grand Total

1.7

3.7

1.0

70.5

0.5

22.6

2.5

11.0

Job Family

Heterosexual/straight

Other

Prefer not tosay/excluded

All staff data reflects UK based employee contracts only.
Senior leadership is defined as grades 10 and above.
Totals for each characteristic differ due to varying disclosure rates.
* Data has been replaced with an asterisk where figures are below sample size.

256

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A D D I T I O N A L I N F O R M AT I O NSocio-economic background (school type)All staff socio-economic background (school type) distribution by division: 31 March 2018
School type (numbers)
A state-run orstate-fundedschool – selectiveon academic, faithor other ground

School type (%)

Independent or
fee-paying school

A state-run orstate-fundedschool – nonselective

A state-run orstate-fundedschool – selectiveon academic, faithor other ground

Independent or
fee-paying school

Division

Total

A state-run orstate-fundedschool – nonselective

Content
Corporate, Policy andExternal Affairs
Deputy Director-General
Group
English Regions
Nations and Regions
Network News
Radio and Education

519

284

134

101

54.7

25.8

19.5

143

77

38

28

53.8

26.6

19.6

3,278
1,424
1,396
1,370
1,042

1,974
858
866
704
583

825
349
416
332
258

479
217
114
334
201

60.2
60.3
62.0
51.4
55.9

25.2
24.5
29.8
24.2
24.8

14.6
15.2
8.2
24.4
19.3

UK Public Service

9,172

5,346

2,352

1,474

58.3

25.6

16.1

World Service GroupBBC Studios
Worldwide
Other

338
843
651
140

166
514
350
80

96
186
178
40

76
143
123
20

49.1
61.0
53.8
57.1

28.4
22.0
27.3
28.6

22.5
17.0
18.9
14.3

11,144

6,456

2,852

1,836

57.9

25.6

16.5

Grand Total

Senior leadership staff socio-economic background (school type) distribution by division: 31 March 2018
School type (numbers)
A state-run orstate-fundedschool – selectiveon academic, faithor other ground

School type (%)

Independent or
fee-paying school

A state-run orstate-fundedschool – nonselective

A state-run orstate-fundedschool – selectiveon academic, faithor other ground

Independent or
fee-paying school

Division

Total

A state-run orstate-fundedschool – nonselective

Content
Corporate, Policy andExternal Affairs
Deputy Director-General
Group
English Regions
Nations and Regions
Network News
Radio and Education

115

67

21

27

58.3

18.3

23.4

46

23

*

14

50.0

19.6

30.4

675
71
131
242
167

369
39
78
106
88

161
21
44
49
42

145
11
*
87
37

54.7
54.9
59.5
43.8
52.7

23.9
29.6
33.6
20.2
25.1

21.4
15.5
6.9
36.0
22.2

UK Public Service

1,447

770

347

330

53.2

24.0

22.8

World Service GroupBBC Studios
Worldwide
Other

80
123
239
15

30
65
105
10

24
27
62
*

26
31
72
*

37.5
52.8
43.9
66.7

30.0
22.0
26.0
20.0

32.5
25.2
30.1
13.3

1,904

980

463

461

51.5

24.3

24.2

Grand Total

All staff data reflects UK based employee contracts only.
Senior leadership is defined as grades 10 and above.
Totals for each characteristic differ due to varying disclosure rates.
* Data has been replaced with an asterisk where figures are below sample size.

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BBC Annual Report and Accounts 2017/18

257

E Q UA L I T Y I N F O R M AT I O N R E P O R T

All staff socio-economic background (parental degree) distribution by division: 31 March 2018
Parental degree (numbers)
Division

Parental degree (%)

Total

No

Yes

No

Yes

Content
Corporate, Policy and External Affairs
Deputy Director-General Group
English Regions
Nations and Regions
Network News
Radio and Education

524
150
3,497
1,399
1,379
1,546
1,067

273
66
1,686
784
694
675
481

251
84
1,811
615
685
871
586

52.1
44.0
48.2
56.0
50.3
43.7
45.1

47.9
56.0
51.8
44.0
49.7
56.3
54.9

UK Public Service

9,562

4,659

4,903

48.7

51.3

World Service GroupBBC Studios
Worldwide
Other

562
843
726
132

202
364
305
67

360
479
421
65

35.9
43.2
42.0
50.8

64.1
56.8
58.0
49.2

11,825

5,597

6,228

47.3

52.7

Grand Total

Senior leadership staff socio-economic background (parental degree) distribution by division: 31 March 2018
Parental degree (numbers)

Parental degree (%)

Division

Total

No

Yes

No

Yes

Content
Corporate, Policy and External Affairs
Deputy Director General Group
English Regions
Nations and Regions
Network News
Radio and Education

117
50
719
72
131
275
175

62
23
331
48
75
105
84

55
27
388
24
56
170
91

53.0
46.0
46.0
66.7
57.3
38.2
48.0

47.0
54.0
54.0
33.3
42.7
61.8
52.0

UK Public Service

1,539

728

811

47.3

52.7

World Service GroupBBC Studios
Worldwide
Other

106
131
271
14

29
56
115
*

77
75
156
*

27.4
42.7
42.4
50.0

72.6
57.3
57.6
50.0

2,061

935

1,126

45.4

54.6

Grand Total

All staff socio-economic background (parental occupation) distribution by division: 31 March 2018
Parental occupation (numbers)

Parental occupation (%)

Division

Total

Higher managerial
and professional
occupations

Content
Corporate, Policy andExternal Affairs
Deputy Director-General
Group
English Regions
Nations and Regions
Network News
Radio and Education

540

329

66

145

60.9

12.2

26.9

149

106

20

23

71.2

13.4

15.4

3,588
1,392
1,406
1,529
1,057

2,098
758
781
1,008
671

445
196
195
174
134

1,045
438
430
347
252

58.5
54.5
55.5
65.9
63.5

12.4
14.1
13.9
11.4
12.7

29.1
31.4
30.6
22.7
23.8

UK Public Service

9,661

5,751

1,230

2,680

59.5

12.7

27.8

World Service GroupBBC Studios
Worldwide
Other

558
831
738
140

407
535
493
78

49
101
87
17

102
195
158
45

72.9
64.4
66.8
55.8

8.8
12.1
11.8
12.1

18.3
23.5
21.4
32.1

11,928

7,264

1,484

3,180

60.9

12.4

26.7

Grand Total

Intermediate
occupations

Routineand manual
occupations

Higher managerial
and professional
occupations

Intermediate
occupations

Routineand manual
occupations

All staff data reflects UK based employee contracts only.
Senior leadership is defined as grades 10 and above.
Totals for each characteristic differ due to varying disclosure rates.
* Data has been replaced with an asterisk where figures are below sample size.

258

BBC Annual Report and Accounts 2017/18

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A D D I T I O N A L I N F O R M AT I O N

Senior leadership staff socio-economic background (parental occupation) distribution by division: 31 March 2018
Parental occupation (numbers)

Parental occupation (%)

Division

Total

Higher managerial
and professional
occupations

Content
Corporate, Policy andExternal Affairs
Deputy Director-General
Group
English Regions
Nations and Regions
Network News
Radio and Education

119

69

11

39

58.0

9.2

32.8

49

32

*

14

65.3

6.1

28.6

724
68
132
264
170

449
30
61
182
93

99
13
18
33
31

176
25
53
49
46

62.0
44.1
46.2
68.9
54.7

13.7
19.1
13.6
12.5
18.2

24.3
36.8
40.2
18.6
27.1

UK Public Service

1,526

916

208

402

60.0

13.7

26.3

World Service GroupBBC Studios
Worldwide
Other

107
127
270
14

78
86
183
*

14
11
33
*

15
30
54
*

72.9
67.7
67.8
64.3

13.1
8.7
12.2
14.3

14.0
23.6
20.0
21.4

2,044

1,272

268

504

62.2

13.1

24.7

Grand Total

Intermediate
occupations

Routineand manual
occupations

Higher managerial
and professional
occupations

Intermediate
occupations

Routineand manual
occupations

All staff socio-economic background (school type) distribution by Job Family: 31 March 2018
School type (numbers)

Total

A state-run orstate-fundedschool – nonselective

A state-run orstate-fundedschool – selectiveon academic, faithor other ground

Commissioning
Programming
Technical/Engineering
Sales/Marketing
Support/Admin
Not Allocated

97
4,875
2,717
364
2,135
956

55
2,781
1,684
209
1,223
504

Grand Total

11,144

6,456

Job Family

School type (%)

Independent or
fee-paying school

A state-run orstate-fundedschool – nonselective

A state-run orstate-fundedschool – selectiveon academic, faithor other ground

Independent or
fee-paying school

24
1,197
706
85
569
271

18
897
327
70
343
181

56.7
57.0
62.0
57.4
57.3
52.7

24.7
24.6
26.0
23.4
26.7
28.4

18.6
18.4
12.0
19.2
16.0
18.9

2,852

1,836

57.9

25.6

16.5

Senior leadership staff socio-economic background (school type) distribution by Job Family: 31 March 2018
School type (numbers)
A state-run orstate-fundedschool – selectiveon academic, faithor other ground

School type (%)

Independent or
fee-paying school

A state-run orstate-fundedschool – nonselective

A state-run orstate-fundedschool – selectiveon academic, faithor other ground

Independent or
fee-paying school

Job Family

Total

A state-run orstate-fundedschool – nonselective

Commissioning
Programming
Technical/Engineering
Sales/Marketing
Support/Admin
Not Allocated

71
654
261
71
597
250

39
339
155
38
303
106

20
155
63
12
149
64

12
160
43
21
145
80

54.9
51.8
59.4
53.5
50.7
42.4

28.2
23.7
24.1
16.9
25.0
25.6

16.9
24.5
16.5
29.6
24.3
32.0

1,904

980

463

461

51.5

24.3

24.2

Grand Total

All staff data reflects UK based employee contracts only.
Senior leadership is defined as grades 10 and above.
Totals for each characteristic differ due to varying disclosure rates.
* Data has been replaced with an asterisk where figures are below sample size.

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BBC Annual Report and Accounts 2017/18

259

E Q UA L I T Y I N F O R M AT I O N R E P O R T

All staff socio-economic background (parental degree) distribution by job family: 31 March 2018
Parental degree (numbers)
Job Family

Parental degree (%)

Total

No

Yes

No

Yes

Commissioning
Programming
Technical/Engineering
Sales/Marketing
Support/Admin
Not Allocated

100
5,217
2,869
398
2,217
1,024

55
2,353
1,433
182
1,139
435

45
2,864
1,436
216
1,078
589

55.0
45.1
49.9
45.7
51.4
42.5

45.0
54.9
50.1
54.3
48.6
57.5

Grand Total

11,825

5,597

6,228

47.3

52.7

Senior leadership staff socio-economic background (parental degree) distribution by job family: 31 March 2018
Parental degree (numbers)

Parental degree (%)

Job Family

Total

No

Yes

No

Yes

Commissioning
Programming
Technical/Engineering
Sales/Marketing
Support/Admin
Not Allocated

74
716
281
76
634
280

39
319
127
35
288
127

35
397
154
41
346
153

52.7
44.6
45.2
46.1
45.4
45.4

47.3
55.4
54.8
53.9
54.6
54.6

2,061

935

1,126

45.4

54.6

Grand Total

All staff socio-economic background (parental occupation) distribution by job family: 31 March 2018
Parental occupation (numbers)

Total

Higher managerial
and professional
occupations

Commissioning
Programming
Technical/Engineering
Sales/Marketing
Support/Admin
Not Allocated

98
5,190
2,964
400
2,237
1,039

Grand Total

11,928

Job Family

Parental occupation (%)

Intermediate
occupations

Routineand manual
occupations

Higher managerial
and professional
occupations

Intermediate
occupations

Routineand manual
occupations

48
3,308
1,713
249
1,256
690

14
620
372
47
311
120

36
1,262
879
104
670
229

49.0
63.8
57.7
62.3
56.1
66.5

14.3
11.9
12.6
11.7
13.9
11.5

36.7
24.3
29.7
26.0
30.0
22.0

7,264

1,484

3,180

60.9

12.4

26.7

Senior leadership staff socio-economic background (parental occupation) distribution by job family: 31 March 2018
Parental occupation (numbers)

Parental occupation (%)

Job Family

Total

Higher managerial
and professional
occupations

Commissioning
Programming
Technical/Engineering
Sales/Marketing
Support/Admin
Not Allocated

72
701
288
76
631
276

38
425
177
52
400
180

10
91
39
*
81
38

24
185
72
15
150
58

52.8
60.6
61.5
68.5
63.4
65.2

13.9
13.0
13.5
11.8
12.8
13.8

33.3
26.4
25.0
19.7
23.8
21.0

2,044

1,272

268

504

62.2

13.1

24.7

Grand Total

Intermediate
occupations

Routineand manual
occupations

Higher managerial
and professional
occupations

Intermediate
occupations

Routineand manual
occupations

All staff data reflects UK based employee contracts only.
Senior leadership is defined as grades 10 and above.
Totals for each characteristic differ due to varying disclosure rates.
* Data has been replaced with an asterisk where figures are below sample size.

260

BBC Annual Report and Accounts 2017/18

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A D D I T I O N A L I N F O R M AT I O NFreelance (reporting is shown separately for our staff and freelancers)
All staff age distribution by division: Freelance 2017/18
Age band (numbers)
Division

Total

Deputy DirectorGeneral Group
1,281
Content
627
Corporate, Policy
and External Affairs
31
Nations andRegions
1,608News and Current
Affairs
3,012
Radio and
Education
1,501

Age band (%)

<20

20-29

30-39

40-49

50-59

60+

<20

20-29

30-39

40-49

50-59

60+

*
*

227
178

326
183

340
146

269
93

116
23

0.2
0.6

17.7
28.4

25.5
29.2

26.5
23.3

21.0
14.8

9.1
3.7

–

*

*

13

*

*

–

9.7

16.1

41.9

19.4

12.9

36

394

297

361

308

212

2.2

24.4

18.5

22.5

19.2

13.2

26

846

694

669

474

303

0.9

28.1

23.0

22.2

15.7

10.1

*

426

407

330

212

117

0.6

28.4

27.1

22.0

14.1

7.8

Sub Total

8,060

78

2,074

1,912

1,859

1,362

775

1.0

25.7

23.7

23.1

16.9

9.6

BBC Studios

6,910

52

1,679

1,855

1,776

1,076

472

0.8

24.3

26.8

25.7

15.6

6.8

BBC Total

14,970

130

3,753

3,767

3,635

2,438

1,247

0.9

25.0

25.2

24.3

16.3

8.3

All staff disability distribution by division: Freelance 2017/18
Disability (numbers)
Division

Disability (%)

Total

Disabled

Not disabled

Disabled

Not disabled

Deputy Director-General Group
Content
Corporate, Policy and External Affairs
Nations and Regions
News and Current Affairs
Radio and Education

777
410
20
929
1,902
831

49
25
*
44
106
56

728
385
17
885
1,796
775

6.3
6.1
15.0
4.7
5.6
6.7

93.7
93.9
85.0
95.3
94.4
93.3

Sub Total

4,869

283

4,586

5.8

94.2

BBC Studios

3,534

203

3,331

5.7

94.3

BBC Total

8,403

486

7,917

5.8

94.2

All staff ethnicity distribution by division: Freelance 2017/18
Ethnicity band (numbers)
Division

Total

BAME

Other whitebackground

Ethnicity band (%)
White UK

BAME

Other whitebackground

White UK

Deputy Director-GeneralGroup
Content
Corporate, Policy andExternal Affairs
Nations and Regions
News and Current Affairs
Radio and Education

1,168
560

117
90

85
23

966
447

10.0
16.0

7.3
4.1

82.7
79.9

27
1,460
2,695
1,387

*
59
525
116

*
158
208
77

22
1,243
1,962
1,194

14.8
4.1
19.5
8.3

3.7
10.8
7.7
5.6

81.5
85.1
72.8
86.1

Sub Total

7,297

911

552

5,834

12.5

7.5

80.0

BBC Studios

6,138

470

306

5,362

7.7

5.0

87.3

BBC Total

13,435

1,381

858

11,196

10.3

6.4

83.3

All staff data reflects UK based employee contracts only.
Totals for each characteristic differ due to varying disclosure rates.
* Data has been replaced with an asterisk where figures are below sample size.

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E Q UA L I T Y I N F O R M AT I O N R E P O R T

All staff gender distribution by division: Freelance 2017/18
Gender band (numbers)
Division

Gender band (%)

Total

FemaleMale

FemaleMale

Deputy Director-General Group
Content
Corporate, Policy and External Affairs
Nations and Regions
News and Current Affairs
Radio and Education

1,281
627
31
1,608
3,012
1,501

469
236
16
626
1,360
790

812
391
15
982
1,652
711

36.6
37.6
51.6
38.9
45.2
52.6

63.4
62.4
48.4
61.1
54.8
47.4

Sub Total

8,060

3,497

4,563

43.4

56.6

BBC Studios

6,910

3,011

3,899

43.6

56.4

BBC Total

14,970

6,508

8,462

43.5

56.5

All staff religion and belief distribution (numbers): Freelance 2017/18
Religion and belief (numbers)

Total

AtheistBuddhist

Christian

Hindu

JewishMuslim

Sikh

Other

None

Prefer not
to say/excluded

14,970

2,582

110

3,838

64

143

215

54

653

4,124

3,187

Total

BBC Total

All staff religion and belief distribution (percentages): Freelance 2017/18
Religion and belief (%)

Total

AtheistBuddhist

Christian

Hindu

JewishMuslim

Sikh

Other

BBC Total

17.3

0.7

25.6

0.4

1.0

1.4

0.4

4.4

Prefer not
to say/None excluded

27.5

21.3

All staff sexual orientation and gender identity distribution by division (numbers): Freelance 2017/18
Sexual orientation (numbers)
Division

Total

Bisexual

Gay manGay woman/lesbianHeterosexual/straight

Other

Prefer not tosay/excluded

LGB

Deputy Director-General Group
Content
Corporate, Policy and External
Affairs
Nations and Regions
News and Current Affairs
Radio and Education

1,281
627

12
12

42
13

16
7

942
466

*
*

261
125

78
36

31
1,608
3,012
1,501

*
14
52
23

*
31
86
45

–
12
26
22

21
1,255
2,260
1,118

–
*
18
14

*
289
570
279

*
64
182
104

Sub Total

8,060

114

220

83

6,062

51

1,530

468

BBC Studios

6,910

87

190

60

4,929

51

1,593

388

BBC Total

14,970

201

410

143

10,991

102

3,123

856

All staff sexual orientation and gender identity distribution by division (percentages): Freelance 2017-18
Sexual orientation (%)
Bisexual

Gay manGay woman/lesbian

Deputy Director-General Group
Content
Corporate, Policy and External Affairs
Nations and Regions
News and Current Affairs
Radio and Education

0.9
1.9
3.2
0.9
1.7
1.5

3.3
2.1
9.7
1.9
2.8
3.0

1.3
1.1
–
0.7
0.9
1.5

73.5
74.3
67.7
78.0
75.0
74.5

0.6
0.6
–
0.5
0.6
0.9

20.4
20.0
19.4
18.0
19.0
18.6

7.6
7.2
16.0
4.9
7.5
8.5

Division

Heterosexual/straight

Other

Prefer not tosay/excluded

LGB

Sub Total

1.4

2.7

1.1

75.2

0.6

19.0

7.2

BBC Studios

1.3

2.7

0.9

71.3

0.7

23.1

7.3

BBC Total

1.3

2.7

1.0

73.4

0.7

20.9

7.2

All staff data reflects UK based employee contracts only.
Totals for each characteristic differ due to varying disclosure rates.
* Data has been replaced with an asterisk where figures are below sample size.

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BBC Annual Report and Accounts 2017/18

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A D D I T I O N A L I N F O R M AT I O N

Volume of internal complaints
The following table summarises the volume of internal complaints received in relation to allegations of bullying, harassment
and sexual harassment.
Data of this sort is not published by other, similar organisations, so we are unable to compare our performance.
Complaints made and investigated2017/18

2016/172015/16

2014/15

Bullying andHarassment
Grievance complaints
notified either direct
to HR, via a grievance
being raised, or via
the confidential
B&H helpline.

51 formal cases1, 2—— 5 sexual harassment—— 46 bullying andharassment—— 37 closed—— 13 ongoing—— 1 withdrawn
Average time to close
case: 78 days

41 formal cases—— 3 sexual harassment—— 38 bullying andharassment—— 26 closed—— 8 ongoing—— 7 withdrawn
Average time to close
case: 62 days

41 formal cases—— 1 sexual harassment—— 40 bullying andharassment—— 28 closed—— 8 ongoing—— 5 withdrawn
Average time to close
case: 58 days

47 cases—— 1 sexual harassment—— 46 bullying andharassment—— 13 upheld
partially or fully—— 31 not upheld—— 2 withdrawn
Average time to close
case: 83 days

Whistleblowing cases
Whistleblowing
allegations are received
either via Expolink, whomanage an independentwhistleblowing hotline
on our behalf, via senior
management including
the Senior Independent
Director, or directly to theBusiness Assurance andInvestigations teams.

15 cases in total(covering a range ofissues covering safety,
theft, fraud):—— 2 upheld—— 8 unsupported—— 5 on-going

26 cases in total(covering a range ofissues covering safety,
theft, fraud):—— 5 upheld—— 19 unsupported—— 2 on-going

31 cases in total

20 cases in total

1
2

In addition, in 2017/18, Eight cases were heard as disciplinaries, relating to complaints of misconduct made outside the grievance process.
In October 2017, the Me Too movement emerged, highlighting international sexual harassment and assault. The movement became known by its hashtag #metoo. The BBC
has continued to raise awareness of how staff can raise concerns. In total the BBC had 48 #metoo cases in 2017/18, nine are included in the statistics above (four of the ‘Formal
Cases’ above and five of the ‘disciplinaries’ under footnote 1). The remaining 39 did not become formal cases or disciplinaries for a variety of reasons: e.g. the complaint waswithdrawn, the individual who was complained about was no longer working at the BBC or the complainant wasn’t able to identify the person concerned (or the person
concerned was deceased). In all #metoo cases, where appropriate, the BBC has advised the individuals how to refer their concerns to the relevant authorities e.g. the police
and/or the BBC has offered support.

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BBC Annual Report and Accounts 2017/18

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A D D I T I O N A L I N F O R M AT I O N

Index
Subject index

Page numberAwards

04-05

BBC Studios

71, 72

BBC Studioworks

71, 73

BBC World Service

52-58, 73

BBC Worldwide

71, 72

Charities

84-85

Commercial trading

71-73

Committee reports

93, 108, 109, 118, 119, 121Content spend by service – by nation

45, 47, 49, 51, 150-166

Content spend by service – network

63-65

Developing our people

78

Diversity and inclusion

40, 79-83, 93, 101, 240-263

Efficiency savings

67-68, 70-71

Environmental sustainability

86-87

Equality Information Report240-263

Financial statements

168-239

Governance
Human rights
Licence fee income and expenditure
Market context
Nations and regions

88-124
77
69-73
61-62
42-51, 151-167

Pay disclosures

101-107

Performance against public commitments

125-149

Public purposes

18-58

Reach by service

45, 47, 49, 51, 56-58, 63-65, 153, 154, 157, 158, 161, 162, 165, 166

Remuneration – BBC Board
Remuneration – BBC senior managers
Risks and opportunities
Service performance
Severance pay
Spend by service
Staff – headcount and location
Talent costs
Time spent with each service
Trading fairly
Viability statement264

BBC Annual Report and Accounts 2017/18

97
75, 76113-11645, 47, 49, 51, 63-65
77
45, 47, 49, 51, 63-65
75
75, 7645, 47, 49, 51, 63-65, 153, 154, 157, 158, 161, 162, 165, 166
121-122
117

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A D D I T I O N A L I N F O R M AT I O N

Copyright andphotographer credits
Front coverBlue Planet II – BBC/Lisa Labinjoh/Joe Platko

Pages 24-25
Apple Tree House – BBC/Cool Riddims/Guy Levy

Page 61
6 Music – BBC/Andrew Hayes-Watkins

Contents page
Recording Radio 4’s The Hitchhiker’s Guide to the
Galaxy – BBC/Richard Ansett
Doctor Who – BBC
BBC Newsroom – BBC/Jeff Overs
Little Women – Playground Television UK/
Patrick RedmondPage 27
BBC Bitesize – BBCThe Tempest – BBC/Guy Levy

Page 62
Radio 1Xtra – BBC/Ray Burmiston
Detectorists - BBC/Channel X/Chris Harris

Pages 28-29
My Family, Partition and Me: India 1947 – BBC/
Wall to Wall Media/Lorian Reed-Drake

Page 66
Little Women – Playground Television UK/
Patrick RedmondPage 30
Blue Planet II – BBC/Gavin Thurston
Hospital – Label1 Television/BBC Ryan McNamara

Page 67
BBC Deputy Director-General, Anne Bulford – BBC/Liam Bailey Ltd

Page 31
Civilisations – BBC/Nutopia
High Street Hijabis – BBCPage 72
Blue Planet II – BBC NHU 2016/Steve Benjamin

Pages 02-03
Blue Planet II – BBC/Tony Wu
BBC Local Radio at 50 logo – BBCChildren’s: Blue Peter – BBCGeneral Election – BBC
BBC Studios: Strictly Come Dancing – BBC/Guy Levy
BBC iPlayer – BBC
BBC Sport – BBCThree Girls – BBC/Sophie MutevelianPages 04-05
BAFTAs: Murdered for Being Different – BBC/Des Willie
RTS Programme Awards: This Country – BBC/
Sophie Mutevelian
British Academy Children’s Awards: Hey Duggee –StudioAKA
ARIAs: Flintoff, Savage and the Ping Pong Guy – BBC
RTS Television Journalism Awards: Victoria
Derbyshire – BBC/Jeff Overs
Broadcast Awards: Rio Ferdinand: Being Mum and
Dad – BBC
Writers’ Guild Awards: Holby City – BBC
Pages 06-07
Peaky Blinders – Caryn Mandabach Productions Ltd
2017/ Robert Viglasky
Page 08
BBC Chairman – BBC/Liam Bailey Ltd
Page 10BBC Director-General – BBC/Liam Bailey Ltd
Page 11This Country – BBC/Ollie Upton
Page 12BBC iPlayer – BBCThree Girls – BBC/Ewan Spencer
Page 13
Hull, UK City of Culture – Danny Lawson/PA Wire/
PA Images
Pages 16-17
New Broadcasting House – BBC/Victoria Roberts
Pages 18-19
Strictly Come Dancing – BBC/Guy Levy
Pages 20-21
Newsnight – BBC/Jeff Overs
Page 22
BBC Election Debate – BBC/Jeff Overs
Page 23
This World, Nikki Fox – BBC
BBC News, Clive Myrie – BBC
BBC News on devices – BBCRadio 5 live, Emma Barnett – BBC/Roscoe & Rutter

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Page 32
McMafia – BBC Worldwide
Page 33
Tomorrow’s World – BBC
BBC Proms – BBC/Mark Allan
Page 34
Culture UK, Boy Blue Entertainment’s Emancipationof Expressionism – BBC/Nicole Guarino
The Hitchhiker’s Guide to the Galaxy – BBC/
Richard Ansett
Man Like Mobeen – BBC/Cave Bear and Tiger Aspect
Productions
Page 35
BBC Sport – BBCPage 36
Asian Network Live – BBCPage 37
Gay Britannia – Radio 2’s I Feel Love concert –BBC/James Stack
Podcasts – BBC
Pages 38-39
The Boy With The Topknot – BBC/Kudos/
Parti Productions
Page 40
Without Limits: Vietnam – BBC/John Livesay
Pages 42-43
Six Nations, Scotland v England – Getty Images/AFP
Page 44
Keeping Faith – Vox Pictures/BBC Wales
Page 46
Two Doors Down – BBC Studios/Alan Peebles
Page 48
Soft Border Patrol – BBC NI
Page 50
BBC Radio Manchester – BBCPage 73
Strictly Come Dancing – BBC/Guy Levy
Page 74
BBC staff event – BBCPage 79
Creative Access – BBC
Pages 80-81
Mind Over Marathon – BBC/Paul Ploman
Man In An Orange Shirt – BBC/Kudos/Nick Briggs
Page 82
The MAMA Youth trainees – BBCPage 84
Children in Need – BBC Children in Need/Guy Levy
Page 86
EastEnders – BBC/Jack Barnes
Page 87
BBC Media City – BBC/Emma Gibbs
Pages 88-89
BBC Newsroom – BBC/Jeff Overs
Page 91
BBC Board – BBC/Liam Bailey Ltd
Page 125
Amol Rajan – BBC/Elizabeth Needham-Bennett
Page 150
Shetland – BBC/ITV Studios/Mark Mainz
Page 168
Howards End – Playground Television UK/
Laurie Sparham
Page 240
Doctor Who – BBC
Inside back cover
Inform: Blue Planet II – BBC/Gavin Thurston
Educate: Pablo – BBC/Paper Owl Films
Entertain: Strictly Come Dancing – BBC/Guy Levy

Pages 52-53
BBC Arabic – BBC
Pages 54-55
BBC Minute; BBC News Pidgin; Nawal Al-Maghafi– all BBC
Page 59
Motherland – BBC/Delightful Industries/Merman/
Colin Hutton

BBC Annual Report and Accounts 2017/18

265

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266

BBC Annual Report and Accounts 2017/18

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