BBC Annual Reportand Accounts 2015/16

The BBC’s mission is toinform, educate and entertain

Attenborough and the Giant Dinosaur

BBC Annual Reportand Accounts 2015/16

Presented to Parliament by the Secretary of State
for Culture, Media and Sport by command of Her Majesty
Extended versions of the financial statements provided in Part Two of this reportwere also laid before Parliament on 12 July 2016 and are available online at bbc.co.uk/annualreportBook 1 of 2

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Overview
The BBC exists to serve the public, and its mission is toinform, educate and entertain.
The BBC at a glanceOur role and purpose
Serving everybodyBetter value for money
The BBC’s objectives

02
02
03
04
05

Additional information
GlossaryIndex
Contacts

161
161
162
IBC

Part Two: the BBC Executive’s
review and assessment
The BBC Executive is responsible for the operational deliveryof BBC services and the direction of BBC editorial and creative
output in line with the framework set by the Trust.
Director-General’s introduction

56

Strategic report

Part One: the BBC Trust’s
review and assessment
The Trust is the governing body of the BBC and sets thestrategic direction, measures performance and holds the BBC
Executive to account.
Chairman’s foreword

08

Charter Review – Listening to audiences

11

Setting strategy and assessing performance
Delivering the public purposes
Setting strategy
Reviewing service performanceUpholding editorial standards
Demonstrating value for money
Serving audiences across the UK– Wales– Scotland– Northern Ireland– England
The BBC and the wider market
Overseeing other activities

17
18
20
22
29
31
35
35
37
37
39
40
43

Inside the Trust
BBC Trustees
Governance
Trust finances

45
46
48
51

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Delivering our strategyOur achievements
Delivering our strategy
The BBC’s objectives for the coming year

59
60
64
71

Performance
Performance by content area
Performance by reach and genre
The BBC in each of the nations

75
76
87
90

Governance and finance report
Finance
Review of the Managing Director
Financial achievements
Financial overview
Summary financial statement
Auditor’s report

99
100
103
104
113
114

OperationsOur people
Developing new talent and skills
OutreachPartnerships
Supporting good causes
Environmental sustainability

115
116
121
124
126
128
130

Governance
Executive BoardReport of the Senior Independent Director
Governance report and Nominations Committee
Executive Remuneration report
Audit Committee report
Risks and opportunities
Fair trading report
Viability statement

131
133
134
136
138
148
153
157
160

BBC Annual Report and Accounts 2015/16

01

The BBC at a glance

Our role and purpose
The BBC serves the public interest through the promotionof its six public purposes.

—— the BBC exists to serve the public and its
mission is to inform, educate and entertain.
Within the overall public purposes, the Trustsets the strategic framework for the BBC.
The Executive, led by the Director-General,delivers the BBC’s services and creative output—— the following pages outline the strategic objectives
agreed by the Trust and the Executive andprovide some highlights illustrating how the BBC
has worked to achieve them

The BBC’s public purposes:

Sustaining citizenship and civil society
Providing high quality news, current affairs
and factual programming to engage its
viewers, listeners and users in importantcurrent and political issues.

Promoting education and learning
Supporting formal education in schools
and colleges and informal knowledge andskills building.

Stimulating creativity and cultural excellence
Encouraging interest, engagement andparticipation in cultural, creative and sporting
activities across the UK.

Representing the UK, its nations,regions and communities
BBC viewers, listeners and users can relyon the BBC to reflect the many communities
that exist in the UK.

Bringing the UK to the world
and the world to the UK
Building a global understanding of international
issues and broaden UK audiences’ experienceof different cultures.

Delivering to the public the benefit of emerging
communications, technologies and services
Assisting UK residents to get the best outof emerging media technologies now andin the future.

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BBC Annual Report and Accounts 2015/16

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Overview02-05

This year in summary

Serving everybody
With a range of great content delivered in new ways.

Reaching new audiences
Audience reach
Percentage of UK adults who use
BBC Television, radio or online each week.

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

General impression (mean average)
Audience’s general impression of the BBC.

96%

18.3hrs

7/10

2014/15: 97%

2014/15: 18.3hrs

2014/15: 7/10

Leading the way with digital content

Content highlights

iPlayer Radio app
There were over one million
downloads of radio
programmes via the BBC
iPlayer Radio app in less thana month after its launch, with
Radio 4 drama proving themost popular.

General Election
Mobile was the preferred screen to access BBC News Online during
the election. Over 76.1m unique browsers globally used BBC News
Online and in the UK, the BBC’s coverage across all platforms
reached 89% of all adults and 84% of 18 to 34s in results week.

Biggest non-sport programme
The final of The Great British Bake Off reached more than 15 million
people, making it the most watched programme in 2015.
More news analysis
We’re now giving audienceseven more news analysis andexplanation of the day’s biggest
local, national and international
stories, by extending the BBC’s
News at Ten by an extra 15
minutes from Monday to Friday.

Apps
18.3 million individual stories
have been downloaded to the
CBeebies Storytime app so far.

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Biggest music audience
A clip from the world-exclusive
Adele at the BBC has become themost watched clip on the BBC
YouTube Channel with over48 million views.

BBC Annual Report and Accounts 2015/16

03This year in summary

Value for money

Cost per household

Ongoing savings

A six-year licence fee settlement was agreed in 2010 which hasfrozen the licence fee at £145.50 until 2017.

2015/16 was the penultimate year of the ‘Delivering Quality First’(DQF) savings programme, which has delivered £621m sustainablesavings by 31 March ’16. The programme remains on track to deliver
a total of £700m in annual recurrent savings by 31 March ‘17.

Per day

40p

£621m

2014/15: 40p

2014/15: £484m

How your monthly licence fee is spent 2015/16

BBC spend in the external creative economy 2015/16£12.13 per household

Total of £1.1bn

1. Television £7.02(2014/15: £7.27)

1. Independent programmes
transmitted £460m(2014/15: £455m*)
2. Artists, contributors
and copyright £272m(2014/15: £280m)
3. External programme facilities
and resources £203m(2014/15: £216m*)
4. Acquired programmes
transmitted £67m
(2014/15: £66m)
5. External online
expenditure £33m
(2014/15: £22m)
6. BBC performing groups £24m
(2014/15: £25m)

2. Radio £2.06(2014/15: £1.94)

6

54

3. BBC World Service £0.83(2014/15: £0.73)

3

4. Other services andproduction costs £0.79(2014/15: £0.73)
5. Online £0.76(2014/15: £0.61)

12

6. Licence fee collection andpension deficit costs £0.67(2014/15: £0.85)

2014/15

2015/16Spend% ofper year licence£mfee
Television
Nine channels
Radio
15 network stationsand Local Radio
OnlineBBC Online and BBC iPlayer
BBC World Service
Other services andproduction costs
Licence fee collection
and pension deficit costs

Spend
% of
per year licence£m
fee2,201 58 2,366 60
642 17 652 16
238
261
247
210

6
7
6
6

201 5
253 6
248 6
290 7

4 56
1

3

2

The cumulative impact and spending power of over 20 million
television licences can deliver more than content alone. As wellas in-house staff, we are able to provide work for many freelance
individuals and thousands of large and small businesses acrossthe UK – delivering sustainable benefits to digital and creative
industries, as well as the wider British economy.
This external spend is in addition to the c.£1.1 billion internal spend the BBC makes within thecreative industries.
* The prior year balance has been updated following an adjustment to the data that has allowed amore accurate analysis.

The above analysis corresponds to UK PSB Group content expenditure on page 108, although thecosts incurred to generate other income are excluded as they are not funded from the licence fee.
The BBC has reviewed its analysis of PSB Group expenditure support costs during the year andconsequently restated to make the prior year classification consistent with the current year.

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Overview02-05

The BBC at a glance

The BBC’s objectives
The BBC has an enduring mission: to inform, educate and entertain. We provide highquality, distinctive programmes and services to audiences across the UK. This year wehave aimed to deliver four strategic objectives:
Make distinctive, world-class content

Transform our offer for younger audiences—— developing our portfolio of programmes,
services and partnerships to bring the mostBBC content to the most people—— transforming mainstream services to better
appeal to younger audiences—— ensuring services deliver a range of creative
highlights, engaging all audiences with high quality
programmes and services—— better reflecting the diversity of the UK across
our programmes and services

Develop a more personal BBC—— developing more personal, audience-focused
content across our portfolio of programmes
and services—— further develop existing services for younger
audiences—— innovating online to respond to the changing
media world

Demonstrate value for money in every areaof our work—— delivering savings plans so that we can reinvest in
strategic priorities—— getting more people to ‘sign in’ to gain a better,more personal, experience from the BBC—— making the BBC a simpler and better place
to work—— making the BBC a more open and collaborative
organisation—— delivering a comprehensive ‘compete or compare’plan for the whole organisation by July 2015

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BBC Annual Report and Accounts 2015/16

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BBC Annual Report and Accounts 2015/16

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Part
One
06-53

The BBC Trust’s review
and assessment
The central purpose of the Trust is to
get the best out of the BBC for licencefee payers. It is the governing bodyof the BBC and sets the strategic
direction, measures performance andholds the BBC Executive to account.

Chairman’s foreword

08

Charter Review – Listening to audiences

11

Setting strategy and assessing performance
Delivering the public purposes
Setting strategy
Reviewing service performanceUpholding editorial standards
Demonstrating value for money
Serving audiences across the UK– Wales– Scotland– Northern Ireland– England
The BBC and the wider market
Overseeing other activities

17
18
20
22
29
31
35
35
37
37
39
40
43

Inside the Trust
BBC Trustees
Governance
Trust finances

45
46
48
51

The BBC 6 Music Festival 2016 in Bristol
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BBC Annual Report and Accounts 2015/16

07Chairman’s foreword

Chairman’s foreword
While the Trust has continued to focus on assessing the performance of the BBC
on behalf of licence fee payers, this year we have also devoted a great deal of energy
to looking ahead to ensure the BBC can enjoy a bold and creative future.
The Trust and the BBC’s
performance in 2015/16
During the last year the BBC maintained
near-universal reach, with 96% of UK adults
using the BBC every week – a remarkable
performance given the proliferation of new
media, devices and other platforms competingfor people’s attention.
This performance appears to be underpinnedby the quality and breadth of programmes
and services. Our Purpose Remit Survey has
tracked the public’s perceptions of the BBC
since 2008 and shows that public appreciationof the BBC’s services remains very high, andindeed long-term impressions of the BBC have
improved still further.
We supplement our UK-wide audience
research with in-depth and regular reviewsof every individual BBC service. The Trust has
conducted 20 such reviews and covered every
service twice in the last ten years. In each case,
we have set actions for the BBC to deliver, toimprove services and to produce continuing
improvements for audiences. For example,
we have asked for even greater ambition andvariety in drama on BBC One and we, andaudiences, have been impressed by a whole
range of critically-acclaimed productions suchas The Night Manager, War and Peace and
The A Word.
In March 2016, we published the conclusionsof our review of BBC Local Radio and local
news and current affairs in England. The
review confirmed that audiences see theBBC’s local services as high quality,
trustworthy and reliable, with nothingcomparable in the commercial sector. We also
identified challenges for the BBC to address,
including a demand for greater explanation of
local political and policy issues, and to improve
the online offering. We will monitor progressover the remainder of the year.
The Trust’s final service review will be ofnews and radio services in Scotland, Walesand Northern Ireland, and will be publishedin the summer.
This year we have also entered into
commitments to allow greater accountability
to the Scottish Parliament, Welsh Assemblyand Northern Ireland Assembly. We will
formally lay this annual report before theseadministrations from this year, and we

08

BBC Annual Report and Accounts 2015/16

will answer questions about the BBC’s
performance from their relevant scrutiny
committees.

is sufficient capacity in the market, otherwise
it risks failing to achieve value for money forlicence fee payers.

Better serving younger and black, Asianand minority ethnic (BAME) adults remains
a key challenge for the BBC, which has beenaddressed but not yet resolved. The Trust
approved a new diversity and inclusion strategy
this year. The BBC’s services aimed at younger
adults were also transformed when we gave
approval for BBC Three to move online.

Spending public money wisely

This was a difficult decision and not one that
the Trust took lightly. There is clear evidenceof growth in online consumption and moving
the service online will help the BBC prepare
for an online future. However, in response toissues raised around accessibility to broadband
and the potential impact on younger
audiences, we have required the BBC to show
all BBC Three long-form programmes on
BBC One or BBC Two as well as online.

This year, the BBC has continued to focus onachieving a leaner organisation and meetingthe stretching efficiency targets set in 2011.
Audiences tell us that value for money is oneof their top priorities – 87% of people think it
is either important or very important.
This was the penultimate year of the
Delivering Quality First programme, designed
to reduce the BBC’s cost base by £700 million,
and all savings are expected to be achieved.
The Trust recognises how tough those savings
have been to make, especially in a market
where most of the BBC’s competitors are
growing their income and driving a rise in thecost of the entire creative sector.
Senior manager headcount has reducedby 109 individuals and the paybill by over
£10 million since 2011. The pay of performers
and presenters has continued to fall – since
the Trust’s first review of talent pay, overall
talent spend has fallen significantly.

While these are early days, the channel has
enjoyed successes with Murdered by my Father,
Thirteen and Life and Death Row since its
move online. We have committed the BBC
to a full review of the change within 18 months
The BBC’s new funding settlement will now
of our decision to assess how the service
require even harder spending decisions inis performing.
order to save a further £800 million per year
As part of the same process the Trustby 2022, while its main competitors’ incomesapproved an extension to CBBC’s broadcast
are growing. This is to address the cost of free
hours but rejected a proposal to create a
television licences for the over 75s, fund
BBC One +1 channel because it was felt thisinflationary cost increases in areas like drama
would have delivered only limited public value. and sport, and to meet increasing audience
expectations of the breadth and quality ofDuring the year the Trust also reviewed the
BBC services, particularly online. It is clear that
BBC’s supply arrangements for television,
tough decisions lie ahead, and the priority forradio and online. We concluded the 50%
the BBC Board will be to minimise the impact
television in-house guarantee should be
reduced to ensure the best creative decisions on audiences while reducing costs to meet
the budget.
can continue to be made. We also concluded
that BBC Studios, the BBC’s proposal to turnits in-house production into a commercial
venture, would be likely to best serve
the interests of audiences. Final proposals
for BBC Studios remain subject to a full
regulatory assessment.
For radio, the BBC has proposed significantly
increasing the number of eligible radio hours
available to independent producers. The Trust
believes that mixed supply, allowing BBC
audiences access to the most creative ideas,
is the best approach. However, the Trust hascautioned that this can only work where there

In 2015/16, the National Audit Office (NAO)
conducted two value for money studies – areview of how the BBC manages its mostimportant projects, which was published inMay, and an examination of how the BBC has
managed the World Service transition from
grant-in-aid to licence fee funding, which was
published in June.
The NAO work has been an important partof the risk control framework and has helped
the Trust satisfy its responsibility to ensure thelicence fee is spent wisely and effectively.

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Part One: Chairman’s foreword

08-10“It is clear that there
is no public appetite
for fundamental
change to the BBC’s
scale and scope.”
Rona Fairhead

The focus of the Trust
has been on what the
public – who pay for
the BBC – want from it,and ensuring their views
are heard.

Dame Janet Smith
This year, the BBC has also had to address
darker aspects of its past. In February, Dame
Janet Smith’s review into the BBC’s culture andpractices during the years Jimmy Savile andStuart Hall were at the organisation, waspublished. Her report made very troubling
reading. Both I and the Director-Generaloffered our heartfelt apologies to the victims– or survivors as many like to be known – andour thanks for the enormous courage they
have shown. We will ensure everything possible
is done to prevent this happening again.
Since the report was published, the BBC has
been acting on Dame Janet’s recommendations
to deliver substantial and permanent culturalchange. The Trust has received monthly
updates from the Director-General on
progress. We are confident he and the
Executive team are absolutely committed

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to a BBC which is a safe and supportive place
to work and does not tolerate abuse of
power. In establishing changes to the BBC’s
governance structure, it is even more
important that impetus is not lost.

Charter Review
In a year when the BBC’s very existence has
been widely debated, the focus of the Trust
has been on what the public – who pay for
the BBC – want from it, and on ensuring theirviews are heard by government as it drafts thenext BBC Charter.
We had 50,000 responses to our Charter
consultations; and we undertook extensive
UK-wide polling, focus groups and face to faceseminars across the four Nations.
The Government’s own consultation received
the second largest response ever to a public
consultation.
BBC Annual Report and Accounts 2015/16

09Chairman’s foreword

It is clear from both that there is no public
appetite for fundamental change to the BBC’s
scale and scope.
85% of the public still believe the mission of
the BBC should be to inform, educate andentertain. 80% of respondents to theGovernment’s consultation said the BBCserves audiences well or very well. Thereis no public demand for a narrower BBC –in fact 56% of respondents want the BBC
to provide more.
The Government’s White Paper sets out
three important principles that are firmly
rooted in what the public want:—— a BBC that serves all audiences, free at the
point of use, on a wide range of devices
and platforms—— a BBC with the same mission and scope,delivering bold, distinctive programmes
and services

On a personal note, it is a real privilege
to have been asked to take on the roleas the first Chairman, and to oversee theestablishment of the inaugural BBC Unitary
Board. I am working closely with theGovernment, Director-General and Ofcom
to get the details right and deliver a clear
and effective new structure.

Tough decisions lie ahead
and the priority for the BBC
Board will be to minimise
the impact on audiences.

I would like to conclude with my sincerest
thanks to my fellow Trustees for their
dedicated service. And on behalf of all theTrustees who have been members of theTrust over the past ten years I want to pay
tribute to our staff at the Trust Unit, who haveacted with great skill and professionalism –no more so than over the recent months of
uncertainty about the Trust’s future – andhave worked tirelessly to ensure that the BBC
delivers the best possible service to licencefee payers.

—— and a BBC that is independent of politicaland commercial influence
We are working with the Government, on
behalf of licence fee payers, to ensure that in
the drafting of the Charter there are sufficientguarantees of these principles.

Rona Fairhead
Chairman
16 June 2016

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Part One: Charter Review – Listening to audiences

11-15

Charter Review –Listening to audiences
The Royal Charter is theconstitutional basis for the BBC.
It sets out the BBC’s public
purposes, guarantees the BBC’s
independence and outlines theduties of the Trust and the
Executive Board. In July 2015,
the Government began theprocess for the review andrenewal of the Charter.

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11

Charter review – Listening to audiences

Charter review
The Royal Charter is the constitutional basis for the BBC. In July 2015 the Government
began the process for the review and renewal of the BBC’s Charter.

The Royal Charter is the constitutional basis
for the BBC. It sets out the BBC’s public
purposes, guarantees the BBC’s independence
and outlines the duties of the Trust andthe Executive Board. Last summer, theGovernment began the process for the review
and renewal of the Charter, the current
iteration of which expires at the end of 2016.
We have been clear from the start of thisprocess that the audience’s voice should be
absolutely central to discussions about theBBC’s future. This is why, to help inform theGovernment’s decision-making, the Trust has
undertaken a programme of widespread
public engagement – in our Charter Review
consultations, we had over 50,000 responses– and drawn on nine years of detailed
research and analysis. What is overwhelmingly
clear from this work is that there is no public
appetite for fundamental change of the BBC’s
scale and scope and we are encouraged that
the Government’s White Paper, A BBC for the
Future, published on 12 May, recognises this.

Principles of ‘distinctiveness’
Over this Charter, the Trust has pushed the BBC to make sure it delivers content that has
high creative and editorial ambitions, standards and services that provide a varied range
and depth of output. This ‘distinctiveness’ is an essential part of how the BBC delivers its
public purposes and justifies the use of funding from the licence fee, which gives the BBC
greater freedom to take risks and be more innovative than others who may beconstrained by market forces. We believe it is a mistake to look at distinctiveness throughthe lens of ‘market failure’ as the effective delivery of the public purposes can only be done
through output that is popular and has wide appeal, as well as that which no otherbroadcaster would produce.
We welcome the Government’s intention to recognise the importance of distinctivenessin the BBC’s mission and in its Operating Licences. However, it is important that themeasurement and assessment should remain at a service level and be sufficiently flexible
to avoid stifling risk-taking, innovation and creativity.

was still appropriate in a changing media
landscape. We think that these three words
continue to remain relevant and capture theMission, purpose and values essence of the BBC. Our research found that,
overwhelmingly (85%), the public believe that
One of the areas of focus for the Government the central mission of the BBC should remain
in its consultation was the BBC’s mission,unchanged. The Government’s White Paper
purpose and values. The Government wanted has endorsed this position and we welcome
to explore whether the original rationale forthe reinforcement of the BBC’s enduring
the BBC – to inform, educate and entertain – mission with a wide range of services andcontent, popular as well as distinctive.
Alongside this central mission, the current
Charter establishes six public purposes for the
BBC (these are set out at the front of thisreport on page 2 and covered in more detailon pages 18 & 19). Our consultation andresearch explored the effectiveness of these
purposes and understanding of them among
licence fee payers. As a result of this extensive
testing and consultation the Trust believes that

Chairman Rona Fairhead at the BBC Trust’s Charter Review seminar in Cardiff
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Part One: Charter Review – Listening to audiences

11-15

 ase studyC
The Trust’s
Charter Review
seminar series
In autumn 2015, the Trust ran a series ofpublic seminars which debated a range ofissues. These included:—— how the BBC should be governed
and regulated in the future—— future funding options for theorganisation—— the BBC’s mission, scale and scope
The seminars, which featured panels of
academics and industry experts, were
held across the UK in Belfast,
Birmingham, Cardiff, Glasgow, London
and Sunderland.
Videos of the discussions are available tostream on the BBC Trust website.

clarification and simplification of the BBC’s
current public purposes would be helpful.
We proposed to government some revisions
to ensure the purposes set out more clearly
what the BBC is there to achieve and how
they could be measured. The Government
agreed that the public purposes should be
updated and clarified and its White Paperbuilds on the Trust’s suggestions.
The Government also questioned whether,in addition to the purposes, a set of values
for the BBC should be formally establishedand what they might be. Our consultation

50,000
responses were received to the BBC
Trust’s Charter Review consultationbbc.co.uk

therefore asked respondents to rank a seriesof values in terms of importance to the BBC.
This found that the BBC having the ‘highest
quality/highest editorial standards’ was top
at 92%, with being ‘impartial’ (90%) and‘independent’ (88%), second and third.
Although the Government has not set out
in its White Paper a separate set of values
for the BBC, we think that the inclusion ofmany of these in the mission and the public
purposes is appropriate.

Scale and scope
The second area of focus for the Government
in Charter Review was around the scale andscope of the BBC. The public have been clearthat they want high quality programmes andservices and a BBC that delivers somethingfor everyone. For example, our consultation
and research findings indicate that there is no
public demand for a narrower BBC. We foundthat over half (56%) of respondents wanted
the BBC to provide more, and only 7%
thought the BBC should provide less.

Principles of ‘universality’
The Trust’s view is that ‘universality’ is madeup of a number of components:—— ensuring that BBC services are withineasy reach for all audiences, by making
content available, free at the point ofuse, on a wide range of platforms—— providing a range of content andservices that reflect the varied interestsof the whole UK population—— reflecting the diversity of the UK andbringing it together for key eventsand moments—— ensuring that services and content
provide a social good to the UK.
Providing both popular and niche
output that is high quality, ensuring thatthe BBC provides licence fee payerswith something they value
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13

Charter review – Listening to audiences

We also found that the majority of audienceswere happy with the quality of the content
provided by the BBC. Our quantitative
research found that 73% of the public think
the BBC offers content and programmes
which are high quality and 60% say its content
is distinctive.
Linked to the BBC’s scope is the theme of‘universality’. Our research indicated that 58%
of the public positively support a BBC which
provides something for everyone who pays
the licence fee, with only 8% disagreeing.
While the White Paper does not settle on
one definition of universality, it does support
the principle of providing something foreveryone by specifying in the BBC’s missionthat it must ‘serve all audiences’. We are clearthat the new Charter needs to capture all the
aspects of universality we have identified.

The BBC Trust’s Charter Review seminar series provided an opportunity to hear directlyfrom the audience about the future of the BBC

Governance and regulation
A further area of focus for the Government
was reform of the governance and regulationof the BBC. Since early 2015, the Trust has
called for the current model of governanceto be reformed in the future. The Chairman
outlined this position in her speech to the
Oxford Media Convention in March that year,
explaining that, as a minimum, the Trust should
be reformed, but that preferably the future
regulation of the BBC would be taken on bya bespoke external regulator.
To look into this issue further, the Government
commissioned Sir David Clementi to conduct
a review of the regulation and governance of
the BBC. The BBC Trust engaged fully withSir David’s review, including running a seriesof seminars to explain the Trust’s current
work. Sir David’s report made a number ofkey recommendations including a new Unitary
Board for the BBC and external regulationby the communications regulator Ofcom.
The Government’s White Paper endorsed
Sir David’s recommendations and announced
that the Trust’s current Chairman, Rona
Fairhead, would become the first Chairmanof the new Unitary Board.
To be truly effective this new structure willneed absolute clarity on the relationships
between the various parties – government,
Ofcom, and the BBC.

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BBC Annual Report and Accounts 2015/16

Getting the detail right in this area will beessential, not only in ensuring the future
regulator of the BBC has the confidenceof the industry and the public, but also
in ensuring the BBC has a system ofbespoke regulation that recognises its
unique role in the UK broadcasting sector
and that it continues to meet the highest
editorial standards.
The new arrangements set out in the White
Paper would mean that the Trust would nolonger be needed and the implications for
Trust Unit staff are still being considered.
While we welcome the intention to createa clearer model of the governance andregulation of the BBC, we are proud of thehigh quality and thorough work that the Trust
has undertaken over the last ten years, such as
the development and assessment of service
licences, detailed and thorough handling ofeditorial complaints, and work on assessing
the public value of proposals from the BBC.
We hope that these strengths and positive
aspects can be built upon in the future system– both by the new Board and by Ofcom as
the new regulator.

Future funding
The final area of focus in the Government’s
Green Paper was the mechanism for funding
the BBC. The Green Paper proposed anumber of possible approaches in the
future, including a modernised licence fee, ahousehold levy, and elements of subscription.

In our quantitative research into these
options, fewer than a quarter of respondentsfavoured a part-subscription model andnearly 60% favoured a universal style fee(either the existing licence fee updated ora household levy). Similarly, the results fromour consultation found that modernising theexisting television licence fee system (so thatit also applies to catch-up services) had thehighest support of any option to fund the BBC
for the next five years.
An area that both the public and the Trust
have voiced concern over is the way thatthe level of the BBC’s funding is determined.
While we welcome the commitment fromgovernment in the July 2015 Budget to provide
a financial framework for the BBC for the
next five years – including increasing thelicence fee in line with inflation over the whole
Charter period – the lack of transparency
in the process that was followed by theGovernment in reaching its decisions wasvery concerning. We therefore proposedto the Government that any future Charterand Framework Agreement should set out aclear and public process for determining theappropriate level of funding (and therefore
the level of the licence fee) for the BBC. We
believe that the Government’s proposals in its
White Paper are a step in the right direction.
In its White Paper, the Government has
confirmed the funding for the BBC for the
next five years. The BBC will be able to makeuse of all the licence fee and the ‘iPlayer loophole’
will be closed. We support the White Paper’s
suggestion that the BBC should continue tomaximise its commercial revenue where it can.

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81%

Principles of independence
The independence of the BBC fromgovernment, politicians, commercial andvested interests is vital. This is recognisedby the Government, ensuring that the
BBC is a public broadcaster and not astate broadcaster.
There are two essential elements of theBBC’s independence:of consultation respondents felt
the BBC should be independent
from politiciansStrengthening theindependence of the BBC
Central to the Trust’s work with government
on Charter Review has been the need toensure continued protection of the BBC’s
independence, both from politicians andfrom vested interests. This is a crucial issue
for the BBC and for the public – nearly 90%
of consultation respondents say the BBC’s
independence is important to them andindependence was the dominant theme
in responses from the public to theGovernment’s own consultation.

11-15—— editorial and creative independence,with no scope for interference or
improper influence over the BBC’s
output, especially in editorial
decision-making

including the ability to generate its own
income, and autonomy about how it isspent, so that government decisions on
funding cannot be used to influence theBBC’s decision-making
However, as the BBC is in receipt of licencefee payers’ money and exists to fulfil amission to inform, educate and entertain
the public, it is important that it isaccountable for how it spends their money.
It is this accountability that ensures that the
BBC cannot use its valued independence tofurther self-interests within the organisation.

—— financial independence, ensuring thatthe BBC has certain and stable funding,

We are therefore reassured that theGovernment’s White Paper recognises thatthe independence of the BBC is vital. There
are a number of ways in which the White
Paper seeks to achieve this. One step towards
ensuring independence is the commitment toimplementing an 11-year Charter, separating
the process from electoral cycles. Another isthat an unambiguous duty will be placed on
the new BBC directors to uphold the BBC’s
independence. However, there remains work
to do, in the detail and drafting of the Charterand Agreement, to ensure the independenceof the BBC.

Next steps
We await the draft Charter and Agreementthat will implement the White Paper proposals
and we welcome the Government’s commitment
to debates in Parliament. The existing Charterends on 31 December and we will work until
then to ensure a smooth transition to the
new arrangements.
It is vital that the final Charter and Agreement
deliver a strong, independent system ofgovernance that attracts wide support andcan deliver what licence fee payers want now
and over the coming 11 years.

 ase study
C
Understanding the audiencein Charter Review
The Trust commissioned a range ofindependent research to inform the debate:—— ICM Unlimited conducted interviews in2014 and 2015 with a representative
sample of adults, looking at the BBC’s
services, funding, accountability, values
and independence—— MTM held 18 extended group
discussions around the UK, looking at
a range of issues including the BBC’srole, values and funding model—— PwC conducted independent
work looking into BBC efficiency,
comparing the BBC’s overheads against
public and private sector benchmarks
bbc.co.uk—— KPMG undertook independent analysis
to provide evidence about the BBC’s
market impact (further information canbe found on page 40 of this report)—— The Policy Institute at King’s College
London explored ways to better
protect the BBC’s financial
independence, alongsidecomplementary reports from Dr Xeni
Dassiou and Dieter Helm CBE, whichlooked at the role that independent
regulators play in determining funding
requirements in other sectors

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Setting strategy andassessing performance
Reporting on the BBC’s progressagainst its four strategic objectives;
make distinctive, world-class content;transform the offer for younger
audiences; develop a more personal
BBC; and demonstrate value formoney in every area of its work.
Delivering the public purposes
Setting strategy
Reviewing service performanceUpholding editorial standards
Demonstrating value for money
Serving audiences across the UK
The BBC and the wider market
Overseeing other activities

bbc.co.uk

18
20
22
29
31
35
40
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Setting strategy and assessing performance

Delivering the public purposes
The BBC’s public purposes are set out by the Royal Charter and Agreement.
These purposes underpin the values the BBC holds when striving to achieve
its mission to inform, educate and entertain.
The public purposes have been central to thework which the Trust has carried out during
this Charter period and they will remain
crucial as the BBC begins the new Charter.
The public purposes were evaluated in thework the Trust conducted during Charter
Review. Our consultation and researchshowed that updating and clarifying the public
purposes for the audience would be beneficial
and we welcome the endorsement of thisin the Government’s White Paper (you canread more about this in the Charter Review –Listening to audiences chapter of this report).
Since 2008, the Trust has assessed each year
how well the BBC is performing against its six
public purposes and in our annual Purpose
Remit Survey we ask UK licence fee payers
for their views on the BBC’s performanceon a number of statements which cover the
purposes and their remits, as well as how
important each statement is personally tothem. These two measures, performanceand importance, allow us to gauge a‘performance gap’. We use this data to help
set the BBC’s strategic objectives in line withthe public’s expectations.
The survey also asks licence fee payers fortheir overall impression of the BBC. The
average score1 for the BBC is 7.3, which isconsistent with the scores seen over thelast three years (7.4 in 2014, 7.3 in 2013 and7.3 in 2012) and is also above the long-term
average of 6.7.

BBC programmes were of high quality – thesecond highest result of all questions asked in
the survey. It has received the same scoresince its introduction in 2012.
An important part of demonstrating creativity
is having ‘fresh and new’ ideas in order tocreate distinctive content. Again, the public
has high expectations of the BBC for this –with 75% thinking that it is important. In termsof performance, three in five (60%) people
agree that the BBC has lots of ‘fresh and new’ideas. This figure has been stable over the last
three years following an improvement in 2013.
This supports the Trust’s view that increasing
distinctiveness should continue to be a key
strategic objective for the BBC and we
acknowledge that this is a theme outlined in
the White Paper. As a result of reviewing partof the new service licence for BBC Three
online, the Trust has also set a requirement
for the service licences for BBC One andTwo to ensure there is creative risk-taking andexperimenting with new talent and ideas.

The score for ‘offering high quality independentjournalism’ remains the same for 2015 as lastyear at 65%, although this score has decreased
from 70% in 2008. For those in Scotland, theBBC ‘helping me to understand politics in
Scotland’ has continued the improvement thatwas seen last year (59% in 2015 vs 55% in2014), although it has not yet returned to its
pre-referendum score.

Bringing the UK to the world
and the world to the UK
The BBC received the highest rating for thispurpose, with an average performance scoreof 71% (vs an average of 73% since 2008).
The statement, ‘the BBC helps me understandwhat is going on in the wider world’ scoredhighest of all statements in the survey, at 77%.
However, there was a slight decline seen interms of ‘the BBC being good at presenting a
positive image of the UK to the rest of theworld’ which is down to 65%, from 69% in theprevious year.

Sustaining citizenshipand civil society

One of the ways the BBC delivers the global
purpose is through the World Service, which
recently received a funding boost from theThis purpose continues to be a priority for
Government. They will provide £34 million
audiences, with an average importance scorein 2016/17 and £85 million a year for theof 69%, and has steadily increased from 65% in following three years, to help enhance World
2008. The average performance score for this Service television, radio and digital services.
purpose is 63%, which has been consistentover previous years.

Below is a summary of the results for eachof the six public purposes in 2015/16.

Stimulating creativity
and cultural excellence
Licence fee payers believe that creativity isimportant for the BBC and its performancein delivering this purpose overall remains
relatively high. The average performance
score across all statements is 61% and has
increased gradually from 55% in 2008.
Providing a wide range of entertaining andenjoyable content continues to be a strengthof the BBC. This year, 76% of the public felt

% people who think ‘fresh and new’ ideas are importantGap% people who agree that the BBC has lots of fresh and new ideas

76
-21

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-24

55
52
2008

1 This average score is calculated by asking respondents thefollowing question: Thinking about the BBC generally, what isyour overall impression on a scale of 1 to 10, where 1 means
extremely unfavourable and 10 means extremely favourable?

76

2009

77

79

77

76

-16

-14

74
-20
54
2010

-21

-23

56

56

2011

2012

61

2013

62

2014

75
-15
60

2015

Stimulating creativity: the gap between the number of people who think the BBC has‘fresh and new’ ideas and the number who think this is important has narrowed since 2008
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The BBC has continued to improve on helping viewers
to understand politics in Scotland

Representing the UK,
its nations, regions
and communities

16-43

This year, 76% of the public felt BBC programmes
were high quality

Promoting educationand learningThis year’s drop in performance may be asa result of a lack of significant technologicaladvancement since the launch of iPlayer.
People see education as a critical role for the
However, we saw in our Charter Review
BBC and continue to score this, along with
The nations, regions and communities
research that the public’s expectation of
purpose remains challenging, although average ‘Bringing the UK to the world and the world
the BBC is not necessarily as a pioneer inperformance scores (51% vs 44% in 2008) and to the UK’, as the BBC’s most importantthe technology space, but there is a strong
importance scores (62% vs 58% in 2008) have public purpose. It received the second highest desire for the BBC to keep pace with the
improved since the first Purpose Remit Survey performance rating of all questions in thetechnological change necessary to deliver
survey, with an average score of 68%, although its content and services in a convenient andin 2008. The gap between the importancethis has decreased from 76% in 2008.
placed on this purpose and its performanceflexible way across a variety of platforms
has also narrowed, indicating progress madeand devices. This is reflected in the small
Although slightly lower than the previousby the BBC in this area.
performance gap for this purpose whichyear (74%), ‘I have learned new thingsshows that the BBC is generally meetingfrom the BBC’ scored 71%, while almost
There were some declines seen for ‘content
people’s needs.
two thirds (64%) agree that ‘the BBC helps
that is for people like me’ (59% vs 64% lastchildren/teenagers with what they learn
year), ‘representation of my nation/region in
Members of the audience between the ages
drama’ (55% vs 59% last year) and ‘representing at school/college’.
of 25 and 44 and those who are users of the
my nation/region in news’ (54% vs 59%).
BBC website, BBC iPlayer, BBC apps andDelivering to the public
These scores have been particularly driven
access BBC content on social media are
the benefit of emerging
by declines seen in England and Northernmarkedly more positive about the BBC’s
Ireland. Despite editorial improvements, incommunications
performance against the digital purpose.
the Trust’s review of BBC Local Radio andtechnologies and services
local news and current affairs in England,
The BBC’s digital provision remains highly
we recommended to the BBC that it give
regarded, although the average performance
greater explanation of local political andpolicy issues on its local services and continue score is lower than the previous year at 56%(down from 59% in 2014). However, since
to work collaboratively with other local
2008 it has markedly improved from 35% due
news providers.
to various innovations such as the BBC iPlayer.

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Setting strategy and assessing performance

Setting strategy
How the BBC meets its public purposes is defined in its objectives. The Trust
agreed four strategic objectives with the BBC for this year and we have assessed
its performance in delivering these.
Make distinctive, world-class content

Transform the offer for younger audiences

Objective

Objective

The BBC aimed to:

The BBC aimed to:—— develop a portfolio of programmes, services and partnerships
to bring the most BBC content to the most people—— transform mainstream services to better appeal to younger
audiences—— ensure services deliver a range of creative highlights, engaging
all audiences with high quality programmes and services—— develop existing services for younger audiences—— innovate online to respond to the changing media world—— reflect better the diversity of the UK across its programmes
and services
Assessment

Assessment

The Trust notes that audience perceptions of the BBC’s content
remain high this year and there has been a further slight increasein the audience’s perception that BBC television is ‘fresh and new’.
Through our extensive audience engagement as part of theCharter Review process, we have seen plenty of evidenceof how valued the BBC and its programmes and content are.

The BBC has faced a long-term challenge in seeking to serve young
adults as well as it does older ones. This has become tougher as
young people are at the forefront of adoption of online services
and their overall consumption of TV and radio is falling. However,contrary to some reports, we know that young people do stillwant TV and radio. From our audience engagement activity andfrom the data we see on their habits, we know that they want bothmainstream programming which appeals to them and programmingthat is made specifically for them.

The Trust has focused much of its work on the issue of
distinctiveness, including making sure the notion is defined andunderstood – it does not mean that the BBC should retreat to‘market failure’ programming or that it should not make popular
programmes. We are pleased to see evidence this year that thisambition to be distinctive is now embedded firmly within the BBC.
With regard to diversity, the Trust has approved a new BBC
diversity and inclusion strategy this year. This has set new andambitious on and off-screen targets to be met by 2020. The Trustis very aware that monitoring success of the strategy will be vitaland the Creative Diversity Network’s project to set up on-screen
monitoring for all broadcasters will be an important part of this.
The Trust is pleased that its proposal to include diversity in the
BBC’s public purposes for the first time ever was accepted by
the Government in the White Paper.

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We have highlighted in our service reviews the challenges facing theBBC’s mainstream services, particularly BBC One and Two, and thetrend in viewing of these channels by young people this year showsthat the challenge remains. Our view is that these services mustremain relevant to a broad audience as they are critical to how wellthe BBC delivers its public purposes. So finding ways to appeal toyounger viewers is an important strategic challenge.
The BBC’s services targeted at younger adults were transformed
this year as we gave approval for BBC Three to move online. Its
long-form programmes remain available on BBC One and Two andearly signs are that this dual strategy is working well. Radio 1 remains
a powerful way for the BBC to get public service content to young
people and we welcome its increasing success at doing so online.

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Develop a more personal BBC

Demonstrate value for money in every area of its work

Objective

Objective

The BBC aimed to:

The BBC aimed to:—— develop more personal, audience-focused content acrossits programmes and services—— deliver its savings plans in order to reinvest in strategic priorities—— get more people to ‘sign in’ online to gain a better more
personal experience from the BBC—— deliver a comprehensive ‘compete or compare’ plan—— make the BBC a simpler and better place to work—— make the BBC a more open and collaborative organisation

Assessment

Assessment

The BBC is increasingly enabling people to personalise its online
services in tailoring news to topics they are most interested in andbeing given recommendations of programmes they may enjoy on
iPlayer. It is clear that this adds greatly to people’s enjoyment andvalue of these services. As people’s use of online for news, informationand entertainment grows, this will become increasingly important.
For this reason, we strongly support the work which the BBC
is undertaking to enable greater personalisation.

As a public service broadcaster in receipt of £3.7 billion of publicmoney each year, the BBC must aim to provide value for money
in everything that it does.

Transforming the BBC’s online offer has been a major technical andoperational project for the BBC and, as a critical strategic project,
the Trust has been monitoring its implementation. By April 2016
the BBC had registered over six million ‘signed in’ users of its online
services and the project had already delivered a number ofbenefits for audiences including the personalised BBC Sport app.
Nevertheless, a significant amount of further work is required if
the BBC is to complete the project successfully by the 31 March 2017target completion date.
The Trust has been clear about the challenge facing the BBC incollaborating and partnering effectively with external organisations.
We have been keen to see improvements in this area.
This year we are pleased to see the number and scale of someof the BBC’s partnerships: from cultural partnerships around the
Shakespeare anniversary, to powerful technology initiatives, suchas the micro:bit – coding devices given free to pupils in year 7 orequivalent, on which the BBC worked with 29 other organisations.

To become more efficient, the BBC has embarked on a £700 million,
five year cost saving programme – Delivering Quality First. Four years
in, this has already delivered a permanent £621 million reduction in the
BBC’s annual cost. The National Audit Office concluded last year thatthe programme had delivered value for money and since then the
programme’s savings have continued to be delivered in line with plans.
To build on cost reductions, and to embed a culture of continuous
improvement, the BBC established a programme of work called‘compete or compare’. This programme involves ensuring that all
costs are either challenged in the marketplace or benchmarked
against it. This helps the BBC to assess whether value for money has
been secured, and provides valuable insights which enable the BBC
to reduce costs further. Last summer, PwC reviewed the programme
and found that the BBC had assessed 87% of controllable spend.
PwC also carried out an independent review of the BBC’s overheads
and concluded that these compare well to public and private sector
benchmarks. PwC found that overhead costs were 7.6% of total
costs, well below the public sector average of 11.2% and the regulatedindustry average of 8.8%. They also found that the BBC had plans inplace to reduce these costs further by the end of the current Charter.
As the BBC moves into the next Charter period, it will need tocontinue to apply the discipline established by ‘compete or compare’
to meet the challenging savings required by the new funding settlement.
The BBC estimates that this settlement, taking into account the needto set aside funds to reinvest in new initiatives, will require it to savea further £800 million a year by 2022.
One area where the BBC has more work to do is in making theorganisation a simpler place to work. The BBC’s aspiration is to
reduce the number of layers and reporting structures across theorganisation. The Trust has encouraged this but recognises thechallenges it entails. We are supportive of the BBC’s plans to get
the structure right and ensure robust plans are in place before
implementing this major organisational change.

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Setting strategy and assessing performance

Reviewing service performance
The BBC’s reach has remained near-universal throughout this Charter period,
despite the growing choice of other media available to audiences.

Overview

Wide usage of the BBC’s programmes andservices is no doubt linked to the fact that
The Trust has been reporting annually on
they continue to be rated highly by the public
the performance of the BBC’s services since– their appreciation of BBC services and their2007. During this time there have been
general impression remains high. Our Purpose
some significant changes in the broadcasting
Remit Survey shows that over the long-term
landscape. Digital television switchover took
the public’s overall impression of the BBC has
place in 2012, listening to digital radio has
improved and that the public remains muchgrown and home internet access has increased more likely to miss the BBC if it wasn’t there
from 64% in 2007 to 86% at the start of 20161. than they would any other broadcaster.
In the past few years the rapid take up of
The Trust has had a duty to review each ofsmartphones and tablets has transformed
the BBC’s services every five years and we
how people use the internet. This has raised
have now nearly completed two reviews
challenges for some of the BBC’s linearof each service during this Charter period.
television and radio services and opportunities The reviews have been founded on strong
for the BBC to deliver its public purposes inevidence to show what the public thinks.
new ways.
This evidence has shown consistently that
Amid all of these changes, weekly reach of
the BBC remains very high at 96%. We think
it a great achievement that the BBC’s reachhas remained near-universal despite theproliferation of other choices for newsand entertainment.

audiences value the BBC’s services and rate
their quality highly.
In each review we have set actions for
the BBC which will further improve theservices for licence fee payers. This includes
ensuring that each service focuses on serving

The BBC, more than any
other broadcaster, would
be missed by the public
if it were no longer there.
any stated target audience and that they
serve younger audiences and those fromblack, Asian and minority ethnic (BAME)
backgrounds who might not find theirprogrammes relevant. We have also focusedon examining whether each BBC service issufficiently distinctive. We recommend thatthese areas should continue to be priorities
for the BBC in the next Charter period.
Through our work this year, we have seenclear evidence of growth in online consumption
and anticipate that this trend will continue.
We are clear that the BBC needs to transform
its broadcast offer to reflect these changes,

1 Source: Ofcom Communications Market Report 2015 and Ofcom
Technology Tracker, H1 2016

This year there was an increase in viewers’ perceptions of drama being ‘fresh and new’, such as BBC One’s Undercover
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Performance summary
Television – audienceappreciation

How the BBC measures up

Next steps

Source: BBC Pulse Survey—— the BBC should aim to increaseaudience appreciation scores.
These will remain important indicatorsof BBC performance

Audience appreciation of BBC television,
while remaining high, has fallen slightly forthe third year running.
82.1

2013/14

80.9

80.5

2014/15

2015/16

Fresh and new

How the BBC measures up

Next steps

Audience perceptions of whether the BBC
offers something ‘fresh and new’ haveremained strong.

Source: BBC Pulse Survey—— the BBC should increase further
the distinctiveness of its offer andreport publicly on its performancein this respect

70.5

2013/14

73.3

73.7

2014/15

2015/16

Radio – audience appreciation

How the BBC measures up

Next steps

Audience appreciation of BBC radio remains
high, and has increased slightly this year.

Source: BBC Pulse Survey—— the BBC should continue to offer highquality content to radio audiences

80.1

80.2

80.9

2013/142014/15

2015/16

Online – audience appreciation

How the BBC measures up

Next steps

Audience appreciation of BBC Online has
fallen again, affected by relaunches of theHomepage and News sites.

Source: Online Quality Survey by eDigital—— the BBC should aim for higher audienceappreciation of BBC Online

78.8

2013/14bbc.co.uk

76.0

2014/1573.2

2015/16

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Setting strategy and assessing performance

particularly to continue delivering its public
purposes to younger audiences.
Last year, the BBC took an important step inthat direction by submitting to us a proposal
to move BBC Three online. The Trust examined
the public value of the proposal and its likely
market impact and approved it in November.
We considered that the move online would
help the BBC prepare for an online future.
However, in recognition of the fact that not
everyone has reliable or unlimited access toonline content, we required that the BBC
show all BBC Three long-form programmes
on BBC One and Two as well as online.
The Trust committed that there should
be a public review of the performance of
BBC Three online within 18 months of its
decision. This review will look at reach amonga young and diverse audience, the level ofcreative risk-taking, the use of new talent,
the performance of BBC Three programmes
on BBC One and Two and the level ofaccessibility for those with auditory andsensory impairments.

Television
The last ten years have seen some significant
changes to the television market: the UK
completed its switchover to digital television,
meaning all television households now haveaccess to a much larger range of channels; theavailability and take up of internet connected
television as well as high definition (HD)television, has grown and television screen

sizes have increased, all contributing tochanges in viewing experiences. Use of on
demand services is growing and recently
there has been a rise in subscription video on
demand services – at the end of 2015 almost
a quarter of UK households subscribed toNetflix, Amazon Video or Sky’s Now TV2.
In a changing market, BBC television remains
very popular with the vast majority of adults(84%) watching for at least 15 minutes eachweek. This fell just slightly, from 85% last year,
but has been quite resilient over the past ten
years in the face of greater choice of television
channels and, more recently, other forms of
online entertainment which can be viewed
on the television.
Last year we noted that the BBC was serving
younger and black, Asian and minority ethnic(BAME) viewers less well and, in our last review
of BBC television in July 2014, we asked the BBC
to improve appeal among these audiences. The
challenge remains: for younger audiences, bothreach and time spent with BBC television has
fallen by more than average, and the average(median) age of viewer of BBC television has
risen again. However, this year BBC television’s
reach was broadly stable among BAME viewers
although it remains much lower than among
all adults at 72%. Better serving younger and
BAME adults remains a key performancechallenge for the BBC.

2 Source: BARB Establishment Survey

We have also consistently asked the Executive
to increase the distinctiveness of BBC
television and to address perceptions amonglighter viewers that it tends to play safe with
programmes and scheduling.
We have seen some improvement: thoseviewing BBC television are increasingly rating
it as ‘fresh and new’. However, there remains
a performance gap in the public’s broader
view of the BBC in this respect and qualitative
research we undertook for Charter Review
suggests that there is still a public appetite for
the BBC to take more risks in its programmingand offer more original and innovative content.
With the closure of BBC Three as a linear
channel, which had a strong track recordin creative risk-taking and innovation, we
strengthened the regulatory requirements
on BBC One and Two in this area.

BBC OneBBC One remains the most watched channel
in the UK, as 72% of people tune in each
week, down marginally from 73% last year
and from 78% at the start of the Charterin 2006/07.
BBC One programmes continue to bring verylarge audiences together: The Great British
Bake Off, Strictly Come Dancing and Sherlock allachieved audiences of more than 10 million.
BBC One viewers continue to believe thatthe quality of its programmes is high, andaudience ratings show the clear majority of
programmes are regarded as fresh and new.

There was a strong performance for new drama, such as The Night Manager
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Part One: Setting strategy and assessing performanceThis year there has been a strong performancefor some new dramas such as Undercover, The
Night Manager and Doctor Foster, and returning
series including Happy Valley and Call the
Midwife and there was an increase in viewers’
perceptions of BBC One drama being ‘freshand new’. There was also a strong performancefor some factual and comedy programmes,
such as Countryfile, DIY SOS and Peter Kay’s
Car Share.

BBC TwoThis year BBC Two was watched by 46% of
people each week, down just slightly, from
47% last year, but by a greater extent during
this Charter period from 57% in 2006/07.
Audience perceptions of BBC Two remain
high, with an average appreciation score of 82,
and 77% of programmes are rated as ‘freshand new’. Its drama, documentary and factual
output continues to be rated highly withhighlights this year including dramas such as
Line of Duty and The Last Kingdom to factualand entertainment programmes like Back inTime for the Weekend, Masterchef: The
Professionals, and comedies including
We’re Doomed! The Dad’s Army Story, andCradle to Grave.

Children’s
The BBC continues to be the only broadcasterto offer a high volume and broad range of new
UK programmes for children. This distinctive
approach continues to make its two channels
the most popular among their age groups,
despite the huge range of other programmingand online content aimed at children.
The BBC’s services are highly rated for their
quality but how older children in particular
use these services is changing – the numberof iPlayer requests for CBBC content isincreasing while those watching the CBBC
channel has continued to fall. CBBC has thehighest proportion of iPlayer viewing of any
BBC television channel while use of CBBC
online has grown to almost one million uniquebrowsers per week, from around 750,000
per week last year. The Go CBBC app, which
launched in December 2014 and provides accessto programmes, clips and games, has now
been downloaded almost 500,000 times.

This year the Trust approved an extension to
CBBC’s broadcast hours and it now runs until
9pm every night. We considered the proposal
would help to sustain CBBC viewing byoffering greater choice at a time when children
do watch television and that extended hours
BBC Three
may also help to support the transition of
Following Trust approval, BBC Three moved
younger viewers to CBBC by serving them
online in February. The new offer aims to buildwhen CBeebies closes at 7pm.
on areas where BBC Three performance is
CBeebies’ reach among its target audiencestrong such as comedy, drama, factual andremains very high, at around 46% among
current affairs.
children aged six and below. It remains bySince moving online, BBC Three has shown
far the most watched pre-school channel
some successful programmes, including dramas
and the number of iPlayer requests for its
such as Thirteen and Murdered by my Father andprogrammes has also continued to grow.
comedy series Cuckoo. Overall it is too early to
The number of unique browsers using
assess its performance and we have committed
CBeebies online has fallen just slightly to
the BBC to a full review of the change withinaround 1.2 million each week. The CBeebies
18 months of our final decision to assess how
Playtime app has now been downloaded
the service is performing.
5.9 million times, and its Storytime app has
BBC Fourbeen downloaded 1.8 million times.
BBC Four continues to be very highly ratedRadioby its viewers with an average appreciation
score of 83 and with 84% of viewers
Listening to the radio remains extremely
agreeing programmes are ‘fresh and new’,
popular – around 90% of adults tune in to
the highest for any BBC channel, and upsome radio each week. This has remained
from 82% last year.
consistently high over the course of thisCharter, despite the growing range of choice
Popular programmes this year includedof other media activities. This year the amountacquired dramas The Bridge, Trapped andof time people spent listening to the radio was
The Young Montalbano, factual series such as
stable, with listeners tuning in for more than
Empire of the Tsars: Romanov Russia with Lucy
21 hours per week on average, although thisWorsley and comedy Detectorists. And thehas fallen from almost 23 hours in 2007. This
channel’s Goes Slow programmes, inspired
has no doubt been driven by the fact thatby the concept of slow TV where events
listeners now have access to music from a
are filmed in real time, proved popular
much wider range of sources, including digital
among audiences.
music downloads, online streaming services,
as well as through sites such as YouTube.
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16-43

These changes affected younger audiences inparticular, as their time spent with the radio has
fallen by more than average. Research suggeststhat radio makes up a much smaller share ofaudio listening among younger audiences: 15 to
24 year-olds’ time spent with live radio is 49%of their total; this rises to 57% among 25 to 34
year-olds, 81% among 35 to 54 year-olds and
89% among those aged over 553.
Within this context, BBC radio continues toreach a large number of people: 65% of adults
tune in each week, broadly stable comparedwith the previous year. The BBC’s reach islower among young adults (15 to 24 year-olds)
at 55% and this has fallen just slightly, from 56%
last year.
BBC radio continues to be rated highly by its
listeners: the average audience appreciationindex (AI) score is high, at 81, and this hasgrown slightly from 80 last year. Threequarters of listeners have a positive general
impression of BBC radio stations.
Our service review of the BBC’s music
radio stations (published March 2015) foundthat they provide significant value to theiraudiences, and perceptions of quality of thestations are high. The review underlined
the critical importance of the BBC to themusic sector, and found that the high levelof support given by its stations to new, UK
and live music makes them distinctive.
In August 2015, we published a service
review of Radio 4, Radio 5 live and their sister
digital stations. We found that audiences
consider the stations to be high quality anddistinctive and that they appreciate the rangeof programming on each station. Many
stakeholders agreed with this and said thatRadio 4 and 5 live both demonstrate public
service broadcasting at its best.
We found that, while Radio 4 and 5 live haveboth aimed to improve their ability to reflect
the diversity of the UK, they will need tocontinue this as the diversity of their coreaudience grows. In the past year, the stations
have focused on developing presenter, expert
and guest diversity; providing a wider rangeof news and programmes which reflect thediversity of a changing UK; and, for 5 live,
showing some improvement in the proportionof female and BAME callers during phone-ins.
Following up the review this year, we haveseen that these efforts to make the output
more representative of a diverse UK continue
but that it will take time for this to bereflected in the profile of listeners. We view
this as a long-term challenge for the BBC asa whole during the next Charter period.
3 Source: RAJAR MIDAS Survey, Spring 2016

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25

Setting strategy and assessing performance

Many stakeholders said
that Radio 4 and 5 live
demonstrate public
service broadcastingat its best.
Radio 1 and 1Xtra
Radio 1 continues to reach a very large
proportion of its young target audience: thisyear, 37% of 15 to 29 year-olds listened each
week, although this has fallen slightly, from
38% last year, and is down further in thelonger term.
Our service review, published in March 2015,concluded that Radio 1 is clearly focused onserving a young audience and discussions wehave had with the BBC this year confirm that
this remains the case.
Our review also found that Radio 1’s daytime
speech output helps deliver the BBC’s public
purposes to a large audience within its
entertainment programmes, but that it
could do even better. This year the BBC has
informed us of a number of changes it has
made to address this challenge, including

extending its focus on key messages andcampaigns, such as its volunteering month,and through broadcasting a number ofimpactful one-off moments, such as
Newsbeat’s special on the migrant crisis anda special documentary and debate ISIS: Young,
British and Radicalised, following the Paris
attacks. We think Radio 1 has made good
progress in this area, but we will continue
to monitor progress against this action.
1Xtra continued to perform well, listened
to by 6% of its target audience of 15 to 24
year-olds each week. It continues to meet its
remit to serve young listeners with distinctive
music and speech programmes.

Radio 2 and 6 MusicRadio 2 remains the UK’s most listened toradio station with 29% of adults listening eachweek. Among its target audience of adults
aged 35 and over, reach is higher still, at 35%.
Listeners’ perceptions of the station’s quality
remain high.
Our service review in 2015 found that Radio 2
reaches considerably fewer than average
BAME listeners in its target group of over 35s,
so we asked the BBC to find ways to address
this disparity. We have noted Radio 2’s plans
for a range of editorial and other initiatives
designed to address this challenge, although
this year the station continued to have much

lower reach among BAME listeners aged 35+
at 11% compared to 37% for white listenersof this age. While we understand that somechanges may need time to take effect we
expect the BBC to move as rapidly as possible
to ensure that this key mainstream service has
broad appeal across all the UK’s ethnic groups.
6 Music’s audience grew again this year and it
is now listened to by 4% of adults each week,or more than two million people. It remains
the BBC’s highest reaching digital radio station,and the amount of time listeners spend withthe station also increased. Our music radio
review last year revealed a very strong andloyal following; this year its listeners continued
to rate the station very highly.

Asian Network
This year, BBC Asian Network’s audience hasremained broadly stable at around 595,000
people each week. We note that listener
numbers for Asian Network are not growing.
In line with its service licence remit to appeal
to British Asians, the station reached 14% of
British Asians each week, who account for thevast majority (86%) of its audience.

Radio 3
Radio 3’s performance has been strong thisyear: its weekly audience is around two million
people and it continues to be rated very highly
by its listeners for quality.

The Trust’s service review of Radio 4 found that the station sets the standard for high quality, intelligent speech radio programming
26

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Part One: Setting strategy and assessing performance

The Trust’s service review gathered evidence that social media
is growing rapidly as a way the audience access BBC News

During our service review in 2015 we looked
in some detail at its music and programming,and concluded that the station is very
distinctive and that it should maximise that
distinctiveness across the schedule. This year
the station has made some small changes
which have helped underline its distinctivenessat key times of listening, such as breakfast.
It has also run some innovative programming
seasons, such as New Year New Music, andNorthern Lights.

Radio 4 and 4 Extra
Radio 4 delivers the BBC’s public purposes
to nearly 11 million listeners, who tune in on
average for over 11 hours each week. Ourreview found that Radio 4 sets the standard
for high quality, intelligent speech radio
programming. It is highly thought of by its
audience, many of whom regard it as a‘national institution’. It creates a great dealof public value by producing news, drama,
comedy and factual programming on a rangeof topics. In our service review, we asked thestation to find ways to appeal to BAME
listeners, as successfully as it does to white
listeners. Our assessment of progress showsthat this remains a challenge for the station
and we consider it an ongoing priority.
Radio 4 Extra is highly regarded by its listeners,
and this year increased its audience to an
average two million per week. Its audiencehas grown in size despite cuts to its originatedprogrammes.

Radio 5 live and 5 live Sports Extra
Radio 5 live is listened to by 5.5 million people
each week who value its high quality live news
and sport. Listening has declined in recent
years, particularly among younger people.

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16-43

BBC Asian Network’s audience figures remained stable, reaching 14%
of British Asians each week

5 live’s breaking news and live sports coverageboth face competition from many ‘live’ online
sources of information. 5 live is responding tothese changes in audience habits by evolving
its own broadcast and online offer andchanging the way it positions itself as morethan an outlet for breaking news.
In our service review, we asked the BBC toconsider how it promotes Radio 5 live, andto give greater emphasis to its news remit sothat its reputation can strengthen in this area
alongside its reputation for high quality sports
coverage. 5 live has since undertaken a numberof initiatives to raise awareness of news on thestation including a major marketing campaign
and developing its digital offer.
We also asked 5 live to continue to find ways
to appeal to women and BAME listeners,
particularly within news programmes andto improve participation from women inphone-ins and as expert contributors. The
station has made some good progress since
our review with many editorial initiatives andchanges, and we are pleased to see a positive
outcome from this - listening among BAME
audiences has grown strongly this year.
5 live Sports Extra is valued by listeners forbringing them a greater choice of live sport.
This year it reached an audience of 1.5 million
each week, this has increased strongly sincelast year, although listening figures tend tofluctuate due to its variable schedule. Having
considered the potential impact on audiences
and on the radio market, we did not approvean expansion of 5 live Sports Extra’s remit
to allow it to offer more than overspill sports.
We think the part-time station continues tooffer value to listeners in its current form.

News and current affairs
Our Purpose Remit Survey showed that the
majority of UK adults continue to believe thatthe BBC offers high quality and independentjournalism, although perceptions of trust in
BBC News have not returned to the record
levels of 2012. Perceptions of accuracy andimpartiality were again fairly stable overall
this year.
This year claimed weekly reach of BBC Newsand current affairs programmes fell to 77% of
UK adults across television, radio and online.
BBC television news is watched by 65% of
adults each week, while 53% listen to news
programmes on UK-wide BBC radio stations,and 26% use BBC News online a week.
However, these figures do not completely
capture people who consume BBC News onsocial media. Through our service reviews thisyear, we have gathered evidence that this is
growing rapidly as a way of people finding BBC
News, particularly those who might not seekout the BBC’s own website and apps.
We continue to expect the BBC to implement
the findings from our review of network news
and current affairs, in terms of developing
greater diversity in its workforce, both on andoff-air and increasing the impact of current
affairs output. We are pleased to note a
number of important and impactful current
affairs programmes this year, among them
Panorama’s exposé of physical abuse in a
Young Offenders’ Institution.

World Service
This year, the BBC World Service reached
246 million people across the globe a week.
This is a substantial increase from 210 million

BBC Annual Report and Accounts 2015/16

27

Setting strategy and assessing performancea week in the previous year. With the continued
development of local media markets offering
more choice to audiences, this increasereflects the quality of the output and therespect and affection people around the world
have for the World Service.
Radio is still the way that most people accessthe World Service, either in English or via oneof its language services, with reach increasingby 10% to 145 million. However, among thelanguage services only, television viewing isalmost equal to radio and growing at a fasterrate. Here, partnerships with local media
organisations in each country are hugely
important to the World Service with half thetotal reach of the service delivered in this way.
Social media is also a growth area for theWorld Service, particularly in South Americaand Asia, although the BBC’s own websites
have not seen the same increase in usage.
Additional government funding will enable theWorld Service to focus on enhancing its digital
media offer as well as supporting new
language services.

OnlineThis year BBC Online was used by around
51% of UK adults a week, just up from 50%
last year. Audience appreciation (AI) scoresfor BBC Online declined slightly again thisyear to a level of 73 from 76 last year, due toreactions to relaunches of the BBC News site

for desktop computers and of its mobile
homepage. Appreciation scores have begun
to recover as people get used to the changes
but remain lower than we would like to see.

The BBC is increasingly
using social media as a
Our review of BBC Local Radio and news and platform for its content –current affairs in England asked the BBC to
improve its local web offer further. We found a powerful way to reachthat audience expectations are still not being
younger audiences.
met in this area despite improvements suchas the introduction of Local Live feeds, which
provide more dynamic and up-to-date local
news by combining short news updates withlinks to longer form content from the BBC
and other local news providers. The BBC
will need to continue to improve the speedof its local news reporting and flex the ways
in which stories are made available in order
to meet changing audience expectations.
The number of people using BBC iPlayer
has grown this year, although it remains lessuniversal than BBC One and BBC Two.
We have discussed the challenge of increasinguse of BBC Online with the BBC through theyear and agreed that it is an issue that willneed to remain a longer-term focus for theorganisation. As part of making iPlayer an
online destination for more than just catch-up,
we approved a proposal from the BBC thisyear to offer selected third party content andto premiere some BBC programmes online.
The BBC has aimed to enable users to‘click-through’ to external sites more easily

in order to allow them to find relevant content,
and we set the service a condition that it should
increase the number of click-throughs eachyear in order to increase this role. However
this year, the number of click-throughs did
not grow but remained stable at an average
17.8 million per month. We are awaiting an
explanation for this from the BBC. We remain
clear that, if the BBC continues to play animportant role as a platform for access tocontent from third parties, it should be able
to achieve growth in this area.
We have also noted this year how the BBC isincreasingly using social media as a platform
for its news and other content. These platforms
are a powerful way for the BBC to reachyounger audiences who may not choose tocome to the BBC’s own website or apps, butthey raise challenges for the BBC in maintaining
editorial control over its content and being
able to measure its use.

The BBC World Service reached almost 250 million people across the globe in the last year28

BBC Annual Report and Accounts 2015/16

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16-43

Upholding editorial standards
As in previous years, the overwhelming majority of the BBC’s content complies
with the demanding standards set by the BBC’s Editorial Guidelines.

and accuracy of the BBC’s output. These havebeen important pieces of work which have
not only maintained but also improved
standards. The Trust considers these reviews
should continue to be commissioned by theBBC’s new board to safeguard the BBC’s
impartiality and accuracy in the future.

The BBC is expected to demonstrate thehighest editorial standards at all times. The
public rightly expects the BBC to display astricter level of impartiality than otherbroadcasters, as well as the highest standardsof fairness, integrity and accuracy. The Trustsets and polices these standards and seeks
to ensure that lessons are learned when the
BBC makes mistakes.
In 2016 there were elections in Northern
Ireland, Scotland and Wales, and local
elections in England. A referendum on the
UK’s membership of the EU will be heldin June. In preparation for these significant
political events the Trust consulted on andthen approved Election Guidelines andReferendum Guidelines. It also approved
allocation criteria for Party Political
Broadcasts, Party Election Broadcasts
and Referendum Campaign Broadcasts.

Impartiality
The BBC continues to be viewed as the UK’s
most impartial broadcaster. When asked to
identify the one provider they would turn tofirst for impartial news coverage, 50% of the
public name BBC News. BBC News is also
perceived to be the most trusted and accurate
broadcaster, according to 58% of those asked.
In this Charter period the Trust has
undertaken seven reviews of the impartiality

The impartiality and accuracy of theBBC’s coverage of statistics
The Trust commissioned an independent
Panel to examine the reporting of statistics
in news and current affairs programming.
Dame Jil Matheson, the former UK National
Statistician, alongside Paul Johnson and Sir
Peter Stothard, with advice from Sir David
Spiegelhalter, received evidence fromindividuals and organisations on how wellthe BBC uses statistics. Their findings were
supported by separately commissioned
content analysis by Cardiff University andaudience research by Oxygen Brand
Consulting. The review will be publishedin summer 2016.
BBC network news coverage of thenations – impartiality review follow-up
In 2008 the Trust examined BBC networknews and current affairs coverage of the four
UK nations. The report found that the BBC’s
coverage was impartial and valued by the
majority of its audience, but identified

BBC editorial complaints
Number of complaints received by the BBC in 2015/16

Stage 3:
Appeals to the Trust’s
Editorial Standards Committee
93% answered on time

Stage 2:
Editorial complaints to the
Editorial Complaints Unit
80% answered on time

Stage 1:
Editorial andgeneral complaints
96% answered on time

bbc.co.uk

deficiencies and called for action to address
them. In 2010, the Trust published a follow-up
review, which found a marked improvement
in coverage, although still with some concerns.
In 2015 the Trust decided to commission afurther follow-up review, with content analysis
from Cardiff University. This follow-up will be
published in summer 2016.

Editorial complaints
Through our Editorial Standards Committee
we uphold the BBC’s standards by considering
editorial complaints and reports about serious
editorial breaches. Here we report on theserious breaches this year:
Human Planet – ‘Deserts: Life in the Furnace’,
BBC OneIt emerged in 2015 that this programme,
broadcast in 2011, contained misleading
footage. The programme featured atribesman shooting at a wolf that had been
circling the encampment near his enclosure.
However, the animal in question was actually asemi-domesticated wolf-dog hybrid belonging
to one of the tribesmen and the tribesman
shot to miss. This sequence misled theprogramme’s audience and was a serious
breach of the Editorial Guidelines. The
Natural History Unit began a review of the
Human Planet series to ensure there were noother potential breaches of Editorial

Appeals received by the Editorial Standards Committee
Complaints not upheld by the
Editorial Standards Committee(on appeal from the Executive)

344

Complaints upheld/partiallyupheld by the Editorial Standards
Committee

5% 3%

5.5%

355
39%

92%

209,387
19%

Complaints not considered by the
Editorial Standards Committee
because there was no reasonable
prospect of success
BBC Annual Report and Accounts 2015/16

29

Setting strategy and assessing performanceof the Editorial Guidelines. Trustees
appreciated there was a clear editorial
justification for addressing the subject andfor robustly challenging the interviewees.
Trustees considered that listeners would be
likely to have strong – and conflicting – viewson the subject. They considered that, in bothinterviews, the interviewees were not treatedwith due respect but instead faced significant
personal criticism and challenge and that,
overall, the tone of the interviews wasinappropriate. The Committee considered
this was a serious breach of the Editorial
Guidelines for Impartiality.

When asked to identify the one provider they would turn to first for impartial news coverage,
50% of the public name BBC News

Guidelines. The sequence was edited out of
the episode and BBC training has since been
updated in order to prevent further breachesof this sort.
What’s the Point of… the Met Office?,
BBC Radio 4
What’s the Point of…? takes British institutions
and queries, in a humorous and mildly
provocative tone, what purpose they serve.
The edition on 5 August 2015 considered
the Met Office and included a number ofreferences to climate change and the Met
Office’s work in this area. It indicated the
Met Office’s position on climate change wascontroversial and did not make clear thatits work – which used evidence-based
observations alongside computer modelling– was in line with prevailing scientific thought.
The Executive reported the output to the
Editorial Standards Committee as being inbreach of the Editorial Guidelines. Trustees
considered audience expectations for thisprogramme would have afforded thepresenter a good deal of leeway to assess
the Met Office’s work in a way that was
opinionated and humorous. However they
considered that the audience would not haveexpected the programme to take a stanceon climate science that differed from theprevailing scientific opinion without making
that clear to audiences.
The Committee considered this was aserious breach of the Editorial Guidelines
for impartiality and accuracy. The Executive
assured the Trust that the programme would
not be re-broadcast and would not be
available online.

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BBC Annual Report and Accounts 2015/16

Patagonia: Earth’s Secret Paradise –‘Fire and Ice’, BBC Two
This programme, broadcast on 25 September
2015, included a 30 second sequence
purportedly showing the eruption of a ‘dirty
thunderstorm’. The footage in question was
a composite shot, comprising more than one
piece of footage edited together to createa single shot. The shot used footage takenfrom different volcanic eruptions andthunderstorms, photographic images andcontemporaneous footage gathered froma number of sources. Lightning flashes had
been filmed in 2011 and superimposed on
the Calbuco volcanic eruption filmed in 2015.
This sequence misled the programme’s
audience and was a serious breach of the
Editorial Guidelines. A number of actions
were taken, including an online blog writtenby the Series Producer explaining the originsof the clip, and the clip was removed by the
BBC News website, iPlayer and BBC Store.
Breakfast Show, BBC Three Counties RadioThe episode on 3 November 2015 reported
on the case of a former worker and volunteer
preacher at a prison who was taking a case toan employment tribunal. He had cited verses
from the Bible which listed homosexuality
among a list of sins and had resigned when he
was told he would be disciplined. The show
included live interviews with a representativefrom the legal group that was representing
the former worker and, later in the samebroadcast, with the former worker himself.
The presenter expressed his views forcibly.
The Executive informed the Trust they
considered there had been a serious breachThis breach of impartiality followed a small
number of occasions when other local radio
presenters, while endeavouring to engage
with audiences, had voiced personal opinions,in breach of the Editorial Guidelines. Trustees
noted that the Executive was also concerned
about this and had produced a face to facetraining programme for presenters and theirprogramme teams that would be rolled out
across the BBC’s Local Radio services in thefirst quarter of 2016.
Don’t Make me Laugh, BBC Radio 4
The edition on 21 April 2016 of this comedy
panel show was broadcast at 6.30pm on the
Queen’s birthday. Contestants are given a
topic to discuss but must try not to make theaudience laugh. If the audience laugh the topic
is passed to another contestant. In this casethe subject was ‘the Queen must have hadsex at least four times’. Following a significant
number of complaints the BBC declared aserious breach to the Trust.
Trustees recognised that comedy can shockand that Radio 4 commissions innovative
comedy and takes risks. However, theyagreed that the humour was humiliating andcrude. This was beyond the expectations of
the programme’s audience and of generally
accepted standards. It was a breach of the
Editorial Guidelines for Harm and Offence.
The offence was compounded by the dateof the broadcast. There had been a failure ofjudgement and compliance as the complianceform had been completed incorrectly.
Trustees agreed that timely action had beentaken by the BBC in: apologising on the dayof broadcast; removing the programme from
iPlayer; moving the rest of the series to 11pm;
writing to the Executive Producer at the
production company concerned; and issuinga new version of the compliance form.

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16-43

Demonstrating value for money
This year the BBC has delivered £621 million as part of its five year, £700 million savings
programme. The outline funding settlement means the BBC will have to develop further
ambitious plans to save £800 million by 2022.
Audiences tell us that value for money is
one of their top priorities for the BBC. Our
research shows that 87% of people think it
is either important or very important, andthat audiences rate its importance as highly
as other key objectives such as providing
impartial news and current affairs, and highquality programmes and online content.
For this reason, we carried out research toestablish how audience perceptions of value
for money of the BBC compare with thefour biggest pay TV providers. Using a
representative ICM survey we found thatthe proportion of people who believe the
BBC is very good value is twice as high as the
proportion for any of the pay TV providers.

Savings now and in the future
To continue to meet these expectations ofvalue for money the BBC developed Delivering
Quality First, a programme of savings designed
to deliver a permanent £700 million reductionin the BBC’s cost base. We are now entering
the final year of this programme, and all savingsare expected to be achieved. The £700 millionof savings from Delivering Quality First, most ofwhich have already been delivered, form partof the wider £1.6 billion step change in efficiency
and value for money which the BBC will havedelivered by the end of this Charter period.

Looking forward to the first five years of thenext Charter, the BBC has agreed an outline
funding settlement with the Government.
The Trust cannot endorse the way thissettlement was reached without any input
from those who pay for the BBC and use
its services. Nevertheless, the financial
framework does give certainty to allow theBBC to plan for the long term.
Planning for the next Charter, and the savings
that the funding settlement will require, hasalready begun. The BBC will need to save£800 million a year by 2022 to fund the£400 million impact of the funding settlement,the £150 million drop in income as a result of
falling TV penetration, the £150 million cost of
new Charter proposals, as well as the estimated£100 million required to fund superinflationin areas such as sport and drama.
Savings have already begun to be identified
across all BBC divisions, but tough choices lie
ahead as these substantial savings figures aretranslated into deliverable plans.

Audiences tell us that value for money is one of their top
priorities for the BBC
bbc.co.uk

The settlement agreed
with the Government
means tough decisions
on services are inevitable.
Nick Prettejohn, BBC Trustee

Public opinion
Almost three in five respondents (57%) to theTrust’s annual Purpose Remit Survey feel that
their household gets ‘very good’ or ‘fairly
good’ value for money from the licence fee.
This is an important benchmark which has
remained relatively stable since 2008. Given
the resilience of this measure, the Trust
wanted to better understand what drives
the public’s opinions about the value formoney of the BBC, so we made it the focus
of one of the Trust’s public seminars held
last autumn.

In 2015, the BBC announced the sale and sublet of its
Media Village site in West London
BBC Annual Report and Accounts 2015/16

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Setting strategy and assessing performance

Performance summary
Savings
The BBC’s savings programme – Delivering
Quality First – is on track to deliver a£700 million permanent reduction in the
BBC’s cost base by the end of next year.

Next steps

How the BBC measures up£621m—— we will continue to monitor the savings
programme to ensure the remaining
savings are delivered while minimising
the impact on audiences

Sustainable savings this year

Reducing the pay gap

How the BBC measures up

Next steps

The pay multiple shows the ratio between
the median earnings of BBC staff and the
Director-General.

—— we will continue to monitor othercomparable organisations in order
to assess performance
10.9

10.7

10.4

2013/142014/15

2015/16

Reducing the numberof senior managers

Senior management paybill
and headcountFive years ago, the BBC committed tocontinuing to reduce the total numberof senior managers and their overall cost.

Pay (£m)

2011

We expect to be able to assess 90% of ourcost base through either direct competition
or rigorous comparison and benchmarking.

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BBC Annual Report and Accounts 2015/16

—— the strategy has been extended until
autumn 2016. The Trust will look toensure the BBC’s good work in thisarea is continued

Headcount

57.4

484
47.0

Compete or compare

Next steps

2016

356

2011

How the BBC measures up
Source: PwC efficiency report
The BBC aims toassess 90% of its cost
base

90%

Actual amount ofcost base assessed

87%

2016

Next steps—— we will continue to challenge the
BBC to maximise the proportionof expenditure which is subject tocompete or compare and publish theproportion of spend which is shown
to be efficient

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Part One: Setting strategy and assessing performance

A free, impartial andeditorially independent
BBC is vital not only to
our media market but
also to news provisionand plurality.
John Whittingdale MP,
Secretary of State for Culture, Media and SportThe first seminar focused on who governs theBBC, and the second on funding and value formoney. Across both seminars, participants
observed that the BBC’s independence isintrinsically linked to its funding and thatdamage to the licence fee model risks
reducing the BBC’s independence. Ouraudience research echoes this concern.
Other participants at the funding seminarquestioned why the BBC was not taking theopportunity of Charter Review to reform thelicence fee fundamentally for the digital age.
Responses to our public consultation weremore mixed on this point, with the majorityof respondents expressing a preference forless radical change. Most respondents felt
positively towards the licence fee (updated so
it applies to catch-up services such as iPlayer).
But most respondents felt negatively towards
a licence fee system topped up by BBC
subscription services available at additionalcost. What came across strongly in both theresearch and seminars, was the importanceof a funding system which would support the
BBC as a universal service, free to all at the
point of use. The universal remit of the BBC
is something which audiences care about
deeply and want to see retained.
It is reassuring that the Government did notseek to alter either the core tenets of thefunding system or the universal nature of
the BBC in the White Paper.

The role of the NAO
The Trust has a responsibility under theCharter to ensure that the licence fee isspent efficiently and effectively. Value formoney reviews conducted by the NAO are
an integral part of the governance framework
which the Trust uses to fulfil this responsibility.
These reviews, along with other reviewscommissioned by the Trust, help us to holdthe Executive to account and provide practical
recommendations to improve processes
and controls.

Initiative (DMI) project and Delivering Quality
First – the BBC’s savings programme.
The Trust is reassured that the Government’s
White Paper has proposed that this accessand the important work of the NAO continue
in the next Charter period as part of a wellgoverned and regulated BBC. As negotiations
with the Government proceed, it is importantthat establishing the right level of access seeks
to balance the NAO’s close relationship toparliament against the 81% of people who
believe it is important that the BBC isindependent from government and MPs.
To achieve this, existing editorial protections
will need to be maintained and additional
protections covering commercial interest andconfidentiality will need to be incorporated.

NAO reviews

This year, the NAO reviewed how the BBC
manages its most important projects. The
review is a timely moment to reflect on the
project management changes that have been
made, the impact they have had, and theopportunities there are to further improve
Under the Charter and Agreement thethe delivery of the BBC’s critical projects,
NAO have the freedom to conduct reviews
whenever they wish, on whatever subject they three years after the failure of the DigitalMedia Initiative (DMI) IT project.
wish. They also have access to all information
they need to support their work, although,The NAO reviewed the new assurance
to protect the BBC’s editorial freedom andarrangements which have been implemented
independence, they are restricted fromsince 2013. They found that introducing aquestioning the merits of editorial decisions
single point of accountability and an integrated
and creative judgements. The strength of theapprovals and assurance plan for each projectcurrent arrangement is demonstrated by(which sets out the approvals and reviews thatthe number of comprehensive and impactful
will take place) had worked well in the majority
reviews which have taken place in the lastof cases. The NAO concluded that the BBC
Charter period, including subjects like thehas strengthened its oversight by reporting
BBC’s move to Salford, the Digital Media
more quickly and more frequently on project

During this Charter period, the NAO has reviewed several major BBC
projects, such as the move of a number of key departments to Salford
bbc.co.uk

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The NAO found that the BBC World Service has delivered efficiencies
by investing in new television and digital services
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Setting strategy and assessing performance

performance. In turn, this has brought the
Executive Board’s attention to problems
more quickly than before, enabling a more
timely response.
The Trust and the NAO agree however,that there is scope for the Executive Board
to play a greater role in the management of
the portfolio. Specifically, more consistentportfolio-level information on costs, benefits,
and how projects contribute to strategic
objectives would help the Executive Board
to better manage the delivery of all
critical projects.
The NAO has also reviewed the World
Service, examining performance since 2010.
They found that the World Service has
successfully delivered much of what it sets
out to do. It has invested in new digital andtelevision services, integrated its services
more closely with the rest of the BBC and, in
doing so, delivered efficiencies while reachingan estimated 246 million people in 2015/16.
The NAO has concluded that thistransformation has delivered value formoney but has also made recommendations
to improve the Service’s approach to target
setting and performance reporting.

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BBC Annual Report and Accounts 2015/16

Other major projects
The Trust has approved a number ofother major projects this year, including
re-procurement of the Playout contract(under which digital media files are managed
and deployed at the point of broadcast) andin-sourcing of the BBC’s Media Control
Rooms (which manage the movement ofbroadcast media into, around and out of theBBC). Both projects deliver significant savingsto the BBC which will be reinvested into
content and services for audiences to enjoy.
Also this year, the BBC completed the planned
move of staff from its estate in West London.
This has enabled it to sub-let three of the fivebuildings previously occupied at Media Village.
The site will now be redeveloped, with theproceeds being reinvested in new programmes
and services.

Pay
During the year, the Trust and the Executive
Board agreed an extension of the existingsenior manager pay strategy until autumn
2016, when work on the BBC’s organisational
structure will be sufficiently advanced to beable to set meaningful new targets. This work
includes: reducing the number of layers
within the BBC; ensuring clear reportinglines; and standardising job titles, roles, andresponsibilities within the organisation. These
actions will help to further reduce the numberof senior managers required to deliver theBBC’s mission.

The BBC has reduced the senior manager
headcount by 109 individuals and the paybill
by over £10 million since 2011. Against a
backdrop of increasing competition andinflation in the broadcasting industry, these arevery significant achievements but two targets
have not yet been achieved. These are thetarget that senior managers should form no
more than 1% of the workforce and the target
to reduce the number of those earning morethan £150,000 by 20%. Progress has been
made against the 1% target in the last 12 months
but it is unlikely it will be met before a new
strategy is put in place, as it is dependent onfurther fundamental changes to the BBC’sinternal management structures.
Senior manager pay restraint is also evident at
the top of the BBC; the Director-General has
not received a pay rise since he joined the BBC
in 2013, and is paid significantly less than thechief executives of ITV, Channel 4, and Sky.
The pay multiple has fallen again this year to
10.4 times the median earnings of BBC staff.
Talent costs are another area of expenditure
where the Trust has responded to publicconcern by instigating greater transparency
and assessing whether the BBC is getting value
for money. Since our first review of talent pay
in 2008, the BBC has been more open about
how many on-screen and on-air talent are
employed and at what cost. Over the lasteight years, overall talent spend has fallen
by 12.7% and the volume of performers
and presenters engaged has fallen by 29%.

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Serving audiences across the UK
The BBC must aim to serve all audiences in Wales, Scotland, Northern Irelandand England with something of value, in order to deliver its public purposes.
Together with our advisory bodies, the Audience Councils, the Trust has assessed
how well the BBC has performed across the UK this year.
We consider it a great achievement thatnearly everyone in the UK still finds somethingthat is relevant to them from the BBC. This
year the BBC has maintained its near-universal
reach, with 96% of UK adults watching,listening to, or accessing its content each week.
However, the BBC must continue to work hard
to remain relevant when the diversity of its
audience is growing and their needs changing.
At the outset of this Charter, the Trust agreed
objectives with the BBC that more of its
network television programming would be
produced from out of London, with aproportion made in the devolved nations in linewith the population there. This shift has been amajor change and has improved the BBC’s
ability to represent people from across the UK.
Levels fell a little this year, but the BBC remains
on track to achieve the targets agreed for 2016.
This year we have also entered into
commitments to allow greater accountability
to the Scottish Parliament, Welsh Assemblyand Northern Ireland Assembly. This
report will be laid in those legislatures andwe will answer questions about the BBC’s
performance from their relevant scrutiny
committees. We are committed to greater
engagement with the respective nations,providing relevant information about theBBC’s operations so that our performancecan be scrutinised effectively. This year’s
report marks a step towards that, but the
new BBC Board will need to ensure thatnext year’s report goes further.

Wales
Trust assessment
The BBC has historically performed well in
Wales. While BBC television performs betterin Wales than any other UK nation (and better
than the UK overall), there was a slightly
larger drop in weekly reach than in otherparts of the UK, from 85% to 83% . Audienceappreciation of BBC television in Wales has
fallen slightly but remains high.
Television opts remain popular and BBC
Wales is keen to broaden the range ofcontent produced for Welsh audiences andto strengthen the on-screen portrayal of
Wales, while taking into account funding
constraints. This is a challenge given the BBC
funding constraints.
BBC radio performs better in Wales thanin the other UK nations both in terms ofaudience reach and their perceptions of
its quality. Radio 1 and Radio 2 performparticularly strongly while Radio Wales andRadio Cymru both lost some audience reachand share.

Audience Council Wales assessment
In its extensive outreach work this year,
Audience Council Wales has heard a lot about
the high regard for the BBC among audiencesin Wales and the key role which they see the
BBC playing in Wales’ national life, with bothits English and Welsh language programming.
The Council has heard concerns from theaudience about the low volume of BBC
Cymru Wales’ high quality programmes madefor Welsh audiences, especially dramas andcomedies. Audiences want the BBC to be able
to portray the Welsh nation to itself both inprogramming for Wales and that made for thewhole UK.
The Council noted some significant
improvements in BBC News offering acomparison of policy positions and legislation
across the UK’s nations, but audiences wish tosee more of this. The Council has also heard
younger people in Wales this year expressa more sceptical view of the independenceof the BBC’s news and this appears to beaffecting the perceived relevance of the
BBC to them.
Audiences in Wales continue to value the
BBC as an informer and educator in its English
and Welsh language programming and inits educational offers, such as Bitesize.

The Trust’s Audience Councils assess how well the BBC performs across the UK
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Setting strategy and assessing performance

Performance summary
Reach of BBC services

How the BBC measures up

Next steps

The BBC should make its content widely
available to all licence fee payers in waysthat are convenient to them.

Source: BBC Pulse Survey—— the BBC must continue to work hard
to remain relevant when the diversityof its audience is growing and theirneeds changing

96%
2014/15: 97%

Out of London% of network spend

How the BBC measures up

The Trust set the BBC the target of 50%
of network spend to come from out of
London by 2016.

53

Next steps

53
50

48

46

—— making content out of London is an
important way in which the BBC can
do more to represent and reflect
audiences across the UK. We expect
this target to continue

41

2011

Representing the nations
and regions
The map shows the % of people in eachnation who think the BBC is good atrepresenting their life in news and current
affairs content.

36

BBC Annual Report and Accounts 2015/16

2012

2013

2014

2016
target

2015

How the BBC measures up
Northern Ireland
50%

Scotland
50%

Wales
55%

England
54%

Next steps—— providing output that represents
the whole of the UK remains a key
challenge which we will continue
to monitor for the rest of the year

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Part One: Setting strategy and assessing performanceThe Council’s full assessment can be foundon the Trust website.

Scotland
Trust assessment
After 2014, which brought large audiences to
BBC coverage of two major events in Scotland– the Commonwealth Games in Glasgow
and the Scottish Independence Referendum– it is impressive to see that BBC television
reach in 2015/16 remained strong, with asmaller decline than across the UK overall.
BBC Scotland’s opt-out programmes on
BBC One and Two performed strongly andcontinued to play an important role inboosting Scottish representation andportrayal on BBC television.
Weekly reach for BBC radio in Scotland grewslightly during the year, although it is still below
the UK average. Some growth from Radio
Scotland contributed to this strong performance.
The station saw growth in listening across its
schedule which was changed in 2014.
The Gaelic services remained popular among
Gaelic speakers and learners. Radio nan
Gàidheal appeared to stem its decline in reachand BBC Alba was watched by 73.6% of Gaelic
speakers each week, just a small increase fromthe previous year.
In Scotland, the audiences’ general impressionof the BBC has remained lower than the UK
overall since the Referendum, and dipped
further during the UK General Election.

Approval scores for BBC news have remained
broadly stable compared to last year, but
down on two years ago. We encourage the
BBC to ensure that the news and current
affairs offer in Scotland is appropriate to thechanging needs of its audiences.
Audience Council Scotland assessment
The BBC’s network television programming
continued to perform well in Scotland in thewake of a strong 2014 and there was top
quality Scottish drama on BBC One which
demonstrated an audience appetite forrepresentation of contemporary Scotland.
This is also true in BBC news. BBC Scotlandoffered more content for younger audiencesin Scotland and established a significant
presence on social media.
Radio Scotland performed well as changes
to the station in recent years came together
in a schedule that was seen as consistent inquality and tone. The BBC’s own and joint
venture Gaelic services performed steadily
but remain seriously under-resourced in theCouncil’s view.
Due to the UK Government’s Charter Review
process, there was more public debate about
the BBC in Scotland than ever before, but theCouncil noted that audiences’ overall
perception of it remain weaker thanelsewhere in the UK.
Audience Council Scotland believes that there
are still important deficits in representation of

BBC Northern Ireland produces Line of Duty for the BBC
bbc.co.uk

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Scotland in BBC news and drama and that the
public discussions around changes to BBC
news provision and the potential for more
television commissioning power to be basedin Scotland could lead to improvements. The
Council believes that, above all, BBC Scotlandneeds more authority to influence outcomesfor audiences in Scotland.
The Council’s full assessment can be foundon the Trust website.

Northern Ireland
Trust assessment
The BBC has traditionally performed lessstrongly in Northern Ireland in some respects,
however, we see this changing and improving
with BBC television in particular. Appreciationof BBC television is higher in Northern Irelandthan across the rest of the UK and reach of
BBC television remains similar to the rest of
the UK. BBC Northern Ireland’s opt-out local
programming on BBC One and Two remains
popular, reaching around a third of adults
each week.
Reach of BBC radio has fallen slightly, mainly
due to the weaker performance of Radio 1
in Northern Ireland this year. Appreciation of
BBC radio remains a little lower than the UK
average. However, Radio Ulster/Foyle remains
one of the BBC’s most popular radio stations,reaching 36% of adults each week. Alongside
this, BBC Northern Ireland’s online offer isrelatively undeveloped and the BBC

BBC Scotland produced The Story of Scottish Art for BBC Two
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Setting strategy and assessing performance

ST N SOIR SH
H ER ERPS ST T REE
CI
RLOOU ESSH ESH G H ILT L
W ST
C
N CA
A W
M NE

N S
O DX
D E E EN E S CLO L S R

 ase study
C
Local radio,
news and current
affairs review

Our review of the BBC’s Local Radio,
news and current affairs in England,
concluded that the local services are avery important part of the BBC’s overall
news and radio offer to licence fee payers
and that they deliver the BBC’s public
purposes to a large number of people
who value the services and see them ashigh quality, informative and trustworthy.

T K KE O NNE ROL W U RD
K OF &FO

that BBC television’s strong performance inNorthern Ireland this year underscored theimportance of the quality and range of local
programming, alongside network programmesthat reflect the tastes and interests of viewers
in Northern Ireland.

Feedback shows that audiences want to seethemselves and their communities more fully
and authentically reflected on the BBC’s
UK-wide services, whether through events
Audience Council Northern Ireland assessment like Sports Personality of the Year, which wasstaged in Belfast, or programmes produced
Audience Council Northern Ireland believes
and set in Northern Ireland.
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BBC Annual Report and Accounts 2015/16

The BBC will therefore need to consider
how it can address a growing need for
information about local politics asregional devolution continues.

We also found that use of the BBC’s local
and regional TV and radio services ismuch lower than average among black,
Asian and minority ethnic (BAME)
audiences. So we have asked the BBC
to improve the appeal of its regional
and local content to a wider range ofaudiences, particularly BAME adults.

N
O
PT
M

L

The Northern Ireland population’s general
impression of the BBC remains lower than the
UK average. For this reason, we encourage
the BBC to find new ways in its network andlocal output to ensure it is seen as relevant tothe audience in Northern Ireland.

We stated in the review that increasing
political and fiscal devolution within
England means the BBC’s services havemore responsibility to keep audiences
informed about local matters that may
affect them, and audience expectations
are not entirely being met in this area.

A
M
H Y
A
RT B
O
H
N ER GR
ED IN GK T T
O OT LEN

CO CA INacknowledges that developing this will need
to be a focus in the coming years in order tokeep up with audience expectations of fastand comprehensive online content.

SHN
E TH A OUU CCSHSO N ES
LATE

E IRE

O
X
D
Y
R
O
DIO
O OR C SO
N EF E ELERIRO LK E E
R
H
E
R
S
T
E H
E
O
R
S F ID IDHI
H
K
T
I
S
R
F
E
S E
T
R
S
E
S
U
C
K
B EI
B S Y R IC IR
L
M ON E BERW SH REWEV S M WA GE HI
R
& D S
D
U
E H TRY RI LN
M VEN MB CO
We are very clear that the BBC services
play a different role to commercial andother local media, and we consider that
BBC Local Radio and regional current
affairs are unique within UK public
service broadcasting.

The Council notes that Radio Ulster/Foyle
continued to reach a large and appreciative
audience with a wide range of programmes
and interaction with its listeners. Audiences inNorthern Ireland would like to see BBC news
do more to reflect how society has changed
and to find new ways into public policy
matters beyond the political lens, with a wider
range of topics and voices. They want theBBC’s local news web pages to be more up todate, especially at weekends, and they feel that
network news should do more to compare
policy differences in the devolved nations.

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Part One: Setting strategy and assessing performance

As we approach a new Charter period, theCouncil believes the BBC must transform
its offer for young audiences, work to closethe divide between those with full access todigital services and those without, and findinnovative ways to build on how it listens
to its diverse audiences.
The Council’s full assessment can be foundon the Trust website.

England
Trust assessment
The BBC’s performance in England broadly
reflects that of the UK overall – the audiences’
general impression and their perceptions of
the quality of content are high. As with the
UK overall, reach of BBC television fell slightly
further this year, and audience appreciation
scores were also down slightly. Reach of BBC
radio remained stable – 66% of adults in
England listen each week, and perceptionsof quality are high.
In common with trends for the UK overall,in England there remains a wide disparity
in usage of BBC services among different
audience groups. In particular, reach and timespent with BBC television and radio remains
lower among younger and BAME audiences.
Across the BBC’s 12 English Regions there
continues to be variation in usage andperceptions of BBC services. Usage of BBC
television and radio is generally lower in
London, the Midlands and the North ofEngland; while the audiences’ general
impression of the BBC remains lower than
average in the North of England.
BBC Local Radio is listened to by 6.5 million
listeners each week, including 23% of its target
audience of adults aged 50 and over. Whileremaining high, its audience reach has declined
again this year. In response, the BBC aims to
make Local Radio, around its core offer of
local news and issues, more engaging forlisteners through presenters showing greater
warmth and personality. We are satisfied that
this does not reduce the stations’ focus onnews, nor does it imply any change to theremit of BBC Local Radio.
In England, the BBC’s regional news on
television continues to reach a very large
number of people and audience perceptions
are very positive. It is watched by 45% of
adults in England each week and the weekday
6.30pm programme is the BBC’s most watchednews programme. Its reach has fallen slightly inthe last few years, but this reflects broader
viewing trends. Our service review found that
regional current affairs in England is highly
valued and is now a unique part of UK public
service broadcasting, as there is no comparable
offer from other UK broadcasters.
Audience Council England assessment
Audience Council England finds that audiences inEngland generally have a positive perception of
the BBC and appreciate its high quality content.

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The Council finds that the BBC’s mission
to inform, educate and entertain remains
important to audiences. And, while there
are differences across the English Regions,
the BBC continues to be the broadcastermost likely to be missed by audiences, withpraise for the range and originality of muchof its television and radio content. However,
the Council think that the BBC might domore to appeal to younger audiences.
The Council found substantial audienceappreciation for the BBC’s informative andtrusted regional news and current affairs, andfor BBC Local Radio. We encourage the BBC
to sustain the unique role of BBC Local Radioeven as audience habits change and listening
to radio may be at a lower level.
The audience believes it is vital that the BBC
innovates in new services and content in the
evolving digital media market. However, thisneeds careful planning in order to ensure thatsome licence fee payers are not super-served
while others cannot access BBC services.
We welcome the BBC’s diversity initiatives
and encourage consistent action to achieve
enduring change and address the disparity
of usage among different audience groups
in England. Serving the diverse audience inEngland must remain a priority for the BBC.
The Council’s full assessment can be foundon the Trust website.

Huw Stephens broadcasts live from Cardiff Castle for BBC Radio 1
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Setting strategy and assessing performance

The BBC and the wider market
The BBC’s market impact
The Government’s Green Paper raised
two questions about the market impactof the BBC. It asked whether the evidence
suggests that the BBC has a positive or
negative wider impact on the market andalso whether the BBC was crowding out
commercial competition.
The Trust commissioned KPMG to conduct
independent analysis to help answer thesequestions. This analysis found no clear
evidence of any negative market impact and,in particular areas that KPMG focused on,
their report also found that the BBC has
had a positive impact on the market.
Clearly, market developments also impact
on the BBC’s ability to deliver the services
and content that licence fee payers expect.
In particular, increasing globalisation andconsolidation, as well as strong new entrants
such as Netflix and Amazon Video, meanthat the BBC faces more competition now
than ever before.
We recognise that any specific new area of BBC
spending or activity does have the potential toaffect adversely other interested parties, so it isvital that these proposals are carefully regulatedby the Trust and Ofcom to provide sufficient
protection and assurance to the market.

Fair trading
The Trust has a Charter duty to consider thecompetitive impact of the BBC’s activities on
the wider market. It sets the policy framework
to ensure that the BBC trades fairly andholds it to account for compliance with thisframework through regular audits andreviews, and through its role as appeal bodyfor fair trading complaints.
The fair trading policy and procedures ensurethat the BBC takes account of, and seeks tominimise, any negative impact that its activities
have on the wider market. It also ensuresproper separation between the BBC’s publicly
funded and commercially funded activities,
such that the BBC’s commercial services do
not receive any unfair advantage and do not
distort the market.

Our review process did identify some areas
where there was scope for some improvement.
We concluded that there should be somere-balancing from BBC self-assessment tomore independent oversight from a regulator,that there should be closer scrutiny of theseparation and transfer pricing arrangements
between the BBC and its commercial service
subsidiaries, and that the Trust should engage
with the market to assess the impact of BBC
ideas prior to approval more often than in thepast. The Trust has already acted to addressthese and other issues identified. In particular,
it will shortly conclude and publish the findings
from a comprehensive review of transfer
pricing conducted by EY.
We also required the BBC to obtain a morethorough account of the detailed work
performed as part of the fair trading audit
this year, with a greater focus on identifying
the appropriateness of fair trading outcomesfor individual cases, as well as whether
processes have been followed correctly.
As well as examining the overall control
environment, the auditors conducted arisk-based analysis to identify those aspectsof the BBC’s fair trading control regime that
represent the most significant fair tradingrisk and focused their more detailed audit
examination on those areas.
More than 50 individual cases were selectedfrom the BBC’s fair trading log for review.
In each of these cases the auditors examined
written records and interviewed relevant
parties to reach a view both on the operationof the control systems but also on theappropriateness of the outcome. Cases
examined, and the areas of significant risk
around which the work was focused, covered
all three of the BBC’s commercial service
subsidiaries and included examination oftransfer pricing and separation arrangements,
use of and payment for the BBC brand, andthe application of the Trust’s requirement
that, subject to fulfilling the public purposes,
the BBC should minimise any negative market
impact (the Competitive Impact Principle).

Following this work the auditors were able toissue an unmodified opinion, confirming theirview that ‘the BBC has established and has
applied a system of internal controls thatprovide reasonable assurance that it hascomplied with the requirements of the Fair
Trading Arrangements for the year underreview’. The auditor’s opinion and the
Executive Fair Trading Committee’s response
Overall, we found the fair trading arrangements to the findings are published in Part Two of
this annual report.
to be operating well. We found no evidenceof any fundamental problem in the design or
No fair trading appeals were made to theoperation of the fair trading arrangements.
Trust during 2015/16.
In February the Trust published its second
three-yearly review of the operation of theBBC’s fair trading controls. The review,which took evidence from a wide range ofcontributors, was conducted for the Trust by
Fingleton Associates Ltd. and we publishedtheir report along with our own conclusions
and actions.

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BBC Annual Report and Accounts 2015/16

The BBC Studios proposal
is one of the biggest
proposed changes to
BBC TV production inits history. Our earlyconclusions are thatthe opening up of
more programming
to competition coulddeliver real benefits
both for audiences andthe creative market.
Rona Fairhead, Chairman, BBC Trust

Competition for programme
supplyLicence fee payers expect the BBC to makethe most distinctive, high quality output
available on screen, on air and online. To meetthese expectations the BBC needs to beorganised in a way that allows it to pursue thebest ideas, whatever their source. The Trustfirmly believe that the BBC’s content supply
arrangements should therefore be open to awide range of sources, including the BBC’sown producers and independent producers,
and promote creative competition between
them. This should foster an environment
where the best programme and content ideas
are available to the BBC’s commissioners.
In 2015, the Trust undertook a major reviewof the ways that programmes and content are
made and supplied to the BBC across
television, radio and online and, at the start of2016, we published advice to the Governmenton the possible reform of these arrangementsin the next Charter period1.

Television supply
Currently the BBC’s supply arrangements for
television content require that it commission
50% of network programme hours from
BBC in-house production, 25% from qualifying
independents and the remaining 25% fromany supplier, through the Window of Creative
Competition (WoCC). In 2015/16, the BBC
sourced 54% of its programmes from
BBC production and 46% from the wider
market, spending over £443 million withexternal suppliers.

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The Trust expects the BBC to commission 25% of its eligible online spend for content and services from independent suppliers

The Trust’s review found that thesearrangements had been successful in helping
change the BBC’s commissioning culture andopening up supply to competition for thebest ideas. However, in the light of the strong
performance of external producers in winning
contestable commissions as well as wider
market developments, we also found that thecurrent system was becoming unsustainable.
In 2015/16, external producers won 83% of
the WoCC hours available and BBC in-house
17% (76% and 24% respectively in 2014/15).
We concluded that there was a strong case fora change to arrangements by at least reducing
the 50% in-house guarantee. Otherwise
we identified an increasing risk that BBC
commissioners will struggle to make the best
creative decisions on behalf of licence fee
payers as they are likely to be forced toprioritise meeting the quotas.
Within our overarching concerns to secure
the best ideas and value for money foraudiences, the Trust also expects the BBC
to draw on the capacity and skills of thewhole UK in sourcing its network television
production. Pursuant to this, the Trust has set
the BBC a target to ensure that 50% of network
television production spend will come fromoutside London by 2016 and, within this, thebbc.co.uk

BBC should source at least 17% of this spend
from Scotland, Wales and Northern Ireland.
In 2015 it commissioned 48.1% of television
network spend outside of London, with 16.6%
coming from the Nations. Our review foundthat the BBC’s strategic approach to network
supply generally had contributed to increased
plurality of the supply base as well as to thegrowth of production skills around the UK.
However, building on this performance toachieve sustainable local ecologies andproviding output that represents the wholeof the UK remain key industry challenges.
As part of the Charter Review process, in
September the Government asked for the
Trust’s views on options for reforming thecurrent system namely changes to the quotas,
directly scaling back BBC in-house production
and the BBC Executive’s own proposal toremove the in-house guarantee in mostgenres and allow BBC in-house production
to operate commercially as BBC Studios, awholly owned subsidiary of the Corporation.
Following consultation on these options,in February we published our advice to
the Government1.
1 BBC Trust, Options for changes to the supply arrangements for the
production of the BBC’s television content, radio content andonline content and services: BBC Charter Review Submission to
the Secretary of State for Culture, Media and Sport, February 2016

In our advice, we concluded that creating BBC
Studios and opening up BBC supply to morecompetition would be likely to best serve theinterests of audiences compared with thealternatives. On the available evidence, fromthe options presented, BBC Studios is forecast
to be best placed to revitalise BBC in-houseproduction and we believe such capacity isvital to ensure the continuation of the mixed
model of supply that has served audiences
across the UK well to date, as well as tosafeguard the BBC’s ability to deliver the
public purposes in the future. In the White
Paper, the Government gave its in-principle
support to BBC Studios proceeding, but the
final proposals will be subject to a full regulatory
assessment to ensure the commercial
subsidiary will be set up to trade fairly andwithout advantage from the licence fee.

Radio supply
The Trust expects BBC radio to commission
at least 10% of its eligible radio hours fromindependent suppliers and a further 10% is open
to competition across the networks as a WoCC.
Our review found that independent producers
won the majority of contestable commissions
to date and that it was the right time to consider
whether changes to both the radio WoCC andquota might better meet the needs of licence fee
payers and help support market development.
BBC Annual Report and Accounts 2015/16

41

Setting strategy and assessing performance

For Radio, the BBC has proposed significantly
increasing the amount of eligible radio hours
available to independent producers, from thecurrent 20% to 60% over the course of thenext Charter. The White Paper now statesthat the new Charter will require the BBC
to make a minimum of 60% of eligible radio
hours available to independent producers by
2022. The Trust believes that mixed supply,
allowing BBC audiences access to the mostcreative ideas, is the best approach. However,
the Trust has cautioned that this can only
work where there is sufficient capacity in themarket, otherwise it risks failing to achieve
value for money for licence fee payers.

Distribution Framework principles
The Trust Distribution Framework principles —— BBC services and content should be easy
designed to uphold the interests of audiences:to find on the platforms and devices they
are distributed through—— services should be universally accessible
and free at the point of use—— distribution arrangements should
represent value for money for licencefee payers—— distribution arrangements should
facilitate direct relationships between
the BBC and its audiences—— the BBC should have sufficient control
over its content when distributed—— the BBC should be open and transparent
through third parties
over decisions about where its services
should or should not be made available

Online supply
The Trust expects the BBC to commission
25% of its eligible online spend for content andservices from independent suppliers. While the
BBC is consistently meeting this quota our review
noted that production of online content will only
increase in importance for the BBC over the
next decade and, like television and radio, we
also judged it timely to re-consider the BBC’s
approach to the supply of ideas in this area.

Accordingly, the Framework requires the BBC
Working with partners to makethe BBC’s services widely available to keep pace with the technological progress
To be able to fulfil the public purposes, theBBC must have in place adequate arrangements
for making its services widely available toaudiences through a range of convenient andcost effective ways. In October we publisheda Distribution Framework which sets out
the principles that the BBC should follow
to maximise public value when working withpartner organisations. It aims to provide
industry with a clear and fair basis for engaging
with the BBC in this area.

Following on from the BBC’s own proposals
for reform to introduce greater competition,
the White Paper has proposed that all theBBC’s non-news online content should be fullycompeted by the end of the next Charter
period. As with the other proposals the details As confirmed by our audience research, mostwill need to be worked through to ensure the people want the BBC to continue providing
interests of licence fee payers are protected.
its services on newer platforms and devices.

by pursuing a hybrid strategy that makes bestuse of both broadcast and IP infrastructure
and also by supporting opportunities toinnovate.

The Framework further confirms the Trustview that, over the internet, licence fee payersinterests continue to be best served in mostcases by offering platform operators andothers access to the full range of BBC content
within a BBC environment via a standard
product, currently the BBC iPlayer.

The Trust expects the BBC to make available at least 20% of eligible radio hours – for programmes such as Kermode and Mayo’s Film Review
on 5 live – to independent suppliers
42

BBC Annual Report and Accounts 2015/16

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Part One: Setting strategy and assessing performance

16-43

Overseeing other activities
S4C

BBC Monitoring

The BBC Trust oversees the funding from thelicence fee received by S4C and reviews, with
the S4C Authority, the performance of thechannel each year.

BBC Monitoring tracks open source media
across the world and collates material for theGovernment, the BBC and commercial clientsto help them understand the current issues,
trends and developments in locations ofinterest to them.

There is further evidence this year of thebenefit of the BBC and S4C’s partnership:
the agreement to locate part of bothorganisations in a new building in central
Cardiff and the decision that S4C should
continue as a channel on BBC iPlayer, areboth examples which show how the twoorganisations can work together effectively
to benefit Welsh speakers.
The Trust and S4C Authority have agreed
a level of S4C funding for the year 2017/18
which follows the end of the current
Operating Agreement. We have begun to
discuss with S4C how the changes to BBC
governance in the next Charter period may
be translated through to the two organisations’strategic relationship.
In terms of S4C performance this year, we areagain pleased to see that audience perceptionsof the quality of S4C’s programmes remainhigh. We have noted in the Charter Review
process how important S4C is to people
in Wales.
The channel faces the same challenges as
most broadcasters, as it competes for its
audiences’ attention alongside a growing
number of other sources of informationand entertainment. In this context, it isencouraging to see that S4C’s reach acrossthe UK has risen and that consumptionof its programmes on demand and of its
children’s service Cyw is growing. However,reach within Wales continues to fall.

Since April 2013, BBC Monitoring has been
operating under a funding and governanceregime set out in an amendment to the
BBC Agreement, in which it is funded by
the licence fee. The regime includes regularreviews by users of the service both ingovernment and within the BBC, which
are then reported to the Trust.

Commercial services
The Trust is responsible for ensuring that theBBC’s commercial services (BBC Worldwide
Ltd., BBC Global News Ltd., and BBC
Studioworks Ltd.) fit with the public purposesof the BBC, do not damage its brand or
reputation, do not distort the market and arecommercially efficient. It sets the framework
for commercial service approvals andrequires each commercial service to assess
its compliance with these criteria and publish
its findings annually.
No commercial services have required Trust
approval during 2015/16.
In April 2015 a new framework came into
effect to bring the BBC Trust’s oversightof the BBC’s commercial services into linewith the way that the licence fee-funded
services are overseen.

The framework set four principles for thecommercial services, governing:—— strategic alignment between the licencefee-funded and commercial services—— how, where, and when commercial
business can be conducted—— how commercial performance will beassessed and how market distortion will
be prevented, and—— how the necessary financial andoperational separation between the
publicly funded and commercial BBC
activity will be maintained
When the framework was launched the Trust
also announced an independent review of thetransfer pricing arrangements in place between
the BBC and its commercial services to assess
whether the necessary controls and procedures
were being applied to ensure that fair market
rates were being paid. We will shortly
conclude and publish the findings from thereview conducted by Ernst & Young LLP (EY).
The Trust also monitors the commercial
efficiency of the BBC’s commercial services,considering whether each is performing
sufficiently to avoid any market distortion.
Each service should generate a long-term
return on investment to the BBC appropriate
to the market it is operating in. The Trust
reviews the annual performance, budget
and borrowing proposals and evidence fromthe BBC’s auditors to assess whether thisrequirement is met.

We are pleased to hear that S4C has beenworking to understand more about the
Welsh speaking population and their needs
and is adjusting its programming strategy
accordingly with a growing focus on highimpact programmes which will have appeal
on demand as well as when broadcast.
The success of S4C-BBC co-produced
drama Hinterland demonstrated the benefits
that can come with this approach.

The Trust ensures the BBC’s commercial services, such as BBC Global News Ltd.,fit with the public purposes of the BBC
bbc.co.uk

BBC Annual Report and Accounts 2015/16

43

44

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Part One: Inside the Trust

44-53

Inside the Trust

Who we are, how we operate
and how much it costs.

BBC Trustees
46
Governance48
Trust finances
51

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45

Inside the Trust

BBC Trustees
Getting the best out of the BBC for licence fee payers.
Trustees are part time and come from a variety of backgrounds,
bringing a wide range of experience to the BBC.

Rona Fairhead, Chairman

Sir Roger Carr, Vice-Chairman

Sonita Alleyne OBE

Chairs Trust Management Group andDame Janet Smith Review Committee.

Member of Value for Money Committee,
Trust Management Group and Dame Janet
Smith Review Committee.

Lead Trustee on diversity and equality.
Deputy Chair of Complaints and Appeals
Board. Member of Editorial Standards
Committee, Value for Money Committee
and Dame Janet Smith Review Committee.

Other roles
Non-executive Director, PepsiCo Inc;
Honorary Fellow and Member ofDevelopment Fund Committee, St Catharine’s
College, Cambridge; Member, Business
Ambassadors Forum, Royal Air Force
Centenary Project.

Other roles
Chairman, BAE Systems Ltd; Senior
Adviser, KKR (includes Advisory Board
role on Trainline.com); Mentor, CMi; Mentor,
Mentore; Trustee, Laundau Forte Academy
Trust; Visiting Fellow, Saïd Business School,
University of Oxford; Senior Adviser, Agilitas
Private Equity.

Other roles
Founder, Yes Programme Ltd; Non-executive
Director, Cultural Capital Fund Ltd; Member,
British Board of Film Classification; Member,
London Legacy Development Corporation;
Adviser, Creative MBA programme, Ashridge
Business School.

Richard Ayre

Mark Damazer CBEMark Florman

Chairs Editorial Standards Committee.
Lead Trustee on transparency issues andthe complaints framework.

Member of Editorial Standards Committee
and Services Committee.

Trustee for England(chairs Audience Council England),Member of Value for Money Committee.

46

BBC Annual Report and Accounts 2015/16

Other roles
Master, St. Peter’s College Oxford; Trustee,
Victoria and Albert Museum; Honorary
Fellow of Gonville and Caius College,
Cambridge.

Other roles
Chairman, Time Partners; Chairman, Spayne
Lindsay LLP; Senior Adviser, MCF Corporate
Finance; Honorary President, B Labs (UK);
Chairman of Patrons, Build Africa; Trustee,
Foundation for FutureLondon; Trustee, theSwedish Chamber of Commerce; Trustee,
the Commonwealth Education Trust Ltd;International Advisory Committee member,
Paleontological Scientific Trust.
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Part One: Inside the Trust

44-53

Bill Matthews

Aideen McGinley OBE

Nick Prettejohn

Trustee for Scotland(chairs Audience Council Scotland).
Chairs Complaints and Appeals Board.
Member of Editorials Standards Committee
and Dame Janet Smith Review Committee.
Chairman, BBC Pensions Trust.

Trustee for Northern Ireland(chairs Audience Council Northern Ireland).
Member of Services Committee and TrustManagement Group.

Chairs Value for Money Committee.
Member of Editorial Standards Committee
and Trust Management Group.
Lead Trustee on Value for Money reviews.

Other roles
Deputy Chair/Board member for Scotland,
Security Industry Authority; Chairman, HubWest Scotland; Member for Scotland, British
Transport Police Authority; Non-executive
Adviser, Criminal Injuries Compensation
Authority; Non-executive Director, National
Records of Scotland.

Other roles
Commissioner, Liverpool Mayoral Commission
on Creativity and Innovation; Trustee, Carnegie
UK Trust; Co-Chair, Carnegie Trust Roundtableon Wellbeing in Northern Ireland; Jury
Member, UK City of Culture 2017; Trustee,
Fermanagh Trust; Governor, St Michael’s
College, Enniskillen; Director, The AislingCentre; Associate, Future Search Associates;
Member, Mencap Advisory Group.

Other roles
Chairman, Scottish Widows; Non-executive
Director, Lloyds Banking Group plc; Chairman,
Britten-Pears Foundation; Chairman, RoyalNorthern College of Music; Chair of Financial
Advice Working Group.

Elan Closs Stephens CBE

Suzanna Taverne

Lord Williams of Baglan

Trustee for Wales (chairs Audience Council
Wales). Member of Services Committee andTrust Management Group.

Chairs Services Committee.
Member of Value for Money Committee.

Lead Trustee on international services.
Member of Services Committee and TrustManagement Group.

Other roles
Emeritus Professor, Aberystwyth University;
Non-executive Director and Chair of Audit
and Risk, Welsh Government; Chair of Audit
and Risk, Member of Personnel andComplaints Committees, S4C Authority;
Non-executive director, IMAX (Waterloo)
and Monitor, HLF Award on Unlocking Film
Heritage, BFI; Member, National Museums ofWales Development Board; Honorary Fellow,
Coleg Cymraeg Cenedlaethol.
bbc.co.uk

Other roles
Non-executive Director, Ford Credit Europe;
Trustee, StepChange Debt Charity.

Other roles
Distinguished Visiting Fellow, Chatham House;
Member of governing board, School of Oriental
and African Studies; Member, Swansea
University Council; Chairman, Mines Advisory
Group; Honorary Life Member, British Society
for Middle Eastern Studies.

BBC Annual Report and Accounts 2015/16

47

Inside the Trust

Governance
The BBC Trust is the governing body of the BBC. We are supported by the Trust Unit,a team of professional BBC staff who report directly to us.

The Trust sets the strategic objectives for the
BBC and issues a service licence to every BBC
service stating what we expect it to deliverand how much it can spend. We uphold theBBC’s editorial standards and protect theBBC’s independence. The Trust is separate
from the Executive which is led by the
Director-General, providing the editorial andcreative leadership of the BBC and managing
the operational delivery of its services.
The functions and duties of the Trust are
outlined in the BBC’s Royal Charter andthe BBC’s Agreement with the Secretary ofState. The Trust operates in accordance withpublished protocols, and the way we makedecisions is governed by our Standing Orders.
As Trustees we commit to acting inaccordance with our Code of Practice.
Our regular business is undertaken inmonthly meetings of the full Trust and somesub-committees. At these meetings wemake decisions relating to our duties andresponsibilities and consider proposals fromthe Executive Board.
We publish the minutes of our monthly Trust
meetings on our website. We also publish theevidence and research on which our decisions
are based, the findings of all editorial appeal
decisions, and the outcomes of value formoney and service licence reviews.

Trustees’ attendance at Trust meetings(1 April 2015 – 31 March 2016)

ChairmanRona Fairhead

19/19

Vice-Chairman
Diane Coyle*

1/1

Vice-Chairman
Sir Roger Carr**

15/18

National Trustees
Mark Florman
Bill Matthews
Aideen McGinley
Elan Closs Stephens

19/19
15/19
18/19
19/19

Trustees
Sonita Alleyne
Richard Ayre
Mark Damazer
Nick Prettejohn
Suzanna Taverne
Lord Williams

17/19
19/19
18/19
15/19
18/19
17/19

*		 Diane Coyle’s term of office ended on 30 April 2015.
** Sir Roger Carr joined as Vice-Chairman on 1 May 2015.

Assessing our own performance
In the Trust’s Standing Orders, we set
ourselves a commitment to evaluate theperformance of the Trust and its committees,
and to publish the results in the Annual
Report.

The quick assimilation of three new membersin March 2015 brought the Board back up to
full strength and we have worked cohesively
Trustee changes during the year
as a group. Over the year we have focused
The Trustees listed on pages 46 and 47 reflect increasingly on Charter Review,the membership of the Trust as at 31 Marchcommunicating our view on priorities for2016. On 1 April 2015, Mark Florman joined as tomorrow’s BBC. At the same time, we have
Trust member for England and Mark Damazer also continued working to secure the best
as a Trust member. Diane Coyle stepped
possible service and value from today’s BBC
down on 30 April 2015. Sir Roger Carr joined for licence fee payers, handling complex issues
as Vice-Chairman on 1 May 2015.
such as the BBC Three move online.

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BBC Annual Report and Accounts 2015/16

As we move towards a new Charter period,
we reflected on the Trust’s work over the lastten years; areas where we felt it was mostsuccessful included ensuring the voice of thelicence fee payer is heard and holding the
BBC to account by consistently assessing
performance. We believe that the structuralchanges proposed to the governance of the
BBC will provide an opportunity to improve
accountability further.

The Trust Unit
We are supported in our work by theTrust Unit, which provides independent andobjective advice, calling on outside experts
when necessary. The Unit is made up of BBC
staff who are independent of the Executive
and report directly to us. It includes
professional staff with expertise across a rangeof disciplines, including corporate governance,
policy development, audience research,financial and performance analysis, economics
and law. The Unit advises us on our duties,
manages the Trust’s supervisory andregulatory functions, and provides the Trustwith independent assessments of proposals
from the Executive Board. Most Unit staff are
based in London; others are based in offices
in Belfast, Birmingham, Cardiff and Glasgow.

Register of interests
Our Code of Practice requires us to maintainand publish a register of all external intereststhat might be seen to affect our ability toperform the duties of a BBC Trustee. This
register includes declarations of all positionsof employment, directorships and voluntary
positions as well as interests of close family
members, if relevant. The Trust’s registerof interests is published on our website.

bbc.co.uk

Part One: Inside the Trust

Trust committees
We do much of our work through committees,
which can make certain decisions on behalfof the Trust as a whole. The members ofeach committee and their attendance during
2015/16 are shown below. The terms ofreference for committees can be foundon our website.

Complaints and Appeals Board

Trustee

AttendanceBill Matthews

9/11

Sonita Alleyne*

11/11

Other Trustees attended thefollowing number of panel meetings
Sir Roger Carr

1

Richard Ayre

3

Mark Damazer

2

Mark Florman

1

Aideen McGinley

1

Nick Prettejohn

3

Suzanna Taverne

1

Lord Williams

1

Diane Coyle*

1

Rona Fairhead, Chairman of the Trust, is entitled to attend
any meetings of the committee and between 1 April 2015
and 31 March 2016 she attended one CAB meeting.
* Committee membership changes: Sonita Alleyne became
Deputy‑Chair on 1 May 2015. Diane Coyle’s term of office
ended on 30 April 2015.

Editorial Standards Committee
Chair: Richard Ayre
The Editorial Standards Committee (ESC)
is responsible, on behalf of the Trust, forestablishing the BBC’s editorial standards.
The ESC commissions the BBC’s Editorial
Guidelines and monitors the Executive
Board’s compliance with these guidelines.

bbc.co.uk

Chair: Suzanna Taverne
The Services Committee (SC) ensuresthat the BBC’s public services, together
with its distribution and commercial
activities, are delivered in line with thelicences and frameworks set by the Trust.
This includes oversight of Trust reviews
and regulatory matters.
Trustee

Attendance

Attendance

Suzanna Taverne

10/10
1/1

Richard Ayre

14/14

Diane Coyle*

Sonita Alleyne

14/14

Aideen McGinley

9/10

Mark Damazer*

12/12

Lord Williams

8/10

Bill Matthews

12/14

Richard Ayre*

8/9

13/14

Elan Closs Stephens*

8/9
1/1

Nick Prettejohn

Meeting attendance(1 April 2015 – 31 March 2016)

Services Committee

Meeting attendance (1 April 2015 – 31 March 2016)

Meeting attendance(1 April 2015 – 31 March 2016)

Chair: Bill Matthews
The Complaints and Appeals Board (CAB)
handles appeals and complaints to the BBC
relating to fair trading, Television Licensing,and other general matters which are noteditorial. All Trustees are members of the
CAB. The duties of the committee areconducted by panels consisting of at least
two Trustees and at least one of themembers will be the CAB Chairman
or the CAB Deputy-Chairman.

TrusteeAs the final stage of the BBC’s complaints
process, the ESC considers appeals relating tobreaches of the Editorial Guidelines as well as
related complaints handling issues. It also has
functions in relation to election and referendum
coverage, party political broadcasts, party
election broadcasts and referendum campaign
broadcasts. In addition, the committee manages
the Trust’s programme of impartiality reviews
and seminars.

44-53

Aideen McGinley

2/2Mark Damazer*

Diane Coyle*

1/1

Mark Florman

1/1

Rona Fairhead, Chairman of the Trust, is entitled to attend
any meetings of the committee and between 1 April 2015
and 31 March 2016 she attended three SC meetings.

Rona Fairhead, Chairman of the Trust, is entitled to attend
any meetings of the committee and between 1 April 2015
and 31 March 2016 she attended seven ESC meetings.
* Committee membership changes: Mark Damazer joined thecommittee on 1 May 2015. Diane Coyle’s term of office ended
on 30 April 2015.

Trust Management Group
Chair: Rona Fairhead
The Trust Management Group (TMG) approves
Trust Unit staff remuneration and severance
payments over £75,000 and oversees Trustee
expenses, conflicts of interest and hospitality,
and the Trust Code of Practice.

*Committee membership changes: Diane Coyle’s term of office
ended on 30 April 2015. Elan Closs Stephens joined the committee
in May 2015. Richard Ayre stood down in December 2015.
Mark Damazer joined the committee in January 2016.

Value for Money Committee
Chair: Nick Prettejohn
The Value for Money Committee oversees
the budget, financial approvals and value formoney processes at the Trust.
Meeting attendance (1 April 2015 – 31 March 2016)
Trustee

Attendance

Nick Prettejohn

9/9

Sonita Alleyne

9/9

Suzanna Taverne

8/9

AttendanceMark Florman

6/7

Rona Fairhead

3/3

Sir Roger Carr

4/7

Diane Coyle*

0/1

Sir Roger Carr*

1/2

Aideen McGinley

3/3

Nick Prettejohn

3/3Elan Closs Stephens

3/3

Lord Williams

2/3

Meeting attendance of TMG(1 April 2015 – 31 March 2016)
Trustee

Sonita Alleyne, Richard Ayre andBill Matthews all attended one
meeting but did not vote

Rona Fairhead, Chairman of the Trust, is entitled to attend
any meetings of the committee and between 1 April 2015
and 31 March 2016 she attended three VFM meetings.
* Committee membership changes: Diane Coyle stood downfrom the committee in March 2015 and her term of office
ended on 30 April 2015. Mark Florman joined the committee on
1 April 2015. Sir Roger Carr joined the committee on 1 May 2015.

Dame Janet Smith Review
Committee
1/1* Committee membership changes: Sir Roger Carr joined thecommittee on 1 May 2015. Diane Coyle’s term of office ended
on 30 April 2015.

This ad hoc committee of the Trust met toreview the Report of the Dame Janet Smith
Review; to consider the Executive’s responseto the Report; to prepare the Trust’s responseto the Report and to the Executive’s response;
and to make recommendations to the Trust.
Its members were Rona Fairhead (Chair), Sir
Roger Carr, Sonita Alleyne and Bill Matthews.

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Inside the Trust

Trustees’ remuneration
Fees
Trustees’ fees are determined by the
Secretary of State for Culture, Media andSport. In September 2010, Trustees took
a voluntary 8.3% pay cut (equivalent to amonth’s salary), in parallel with the thenDirector-General and other Executive Board
members. The reduced fees for Trustees willremain in effect until 31 December 2016 andare reflected in the table below. Trustees
do not receive severance pay or othercompensation for loss of office.

ExpensesTrustees are reimbursed for expenses
incurred on BBC business, which include
travel, accommodation, work-related
meals and hospitality. Trustee expenses aregoverned by the Trust’s Code of Practice,which is published on our website. Every six
months we publish a full list of all expenses
incurred by each Trustee, as well as theservices booked centrally for Trustees by theTrust Unit. Some of the expenses and support
services are classed as taxable benefits by HM
Revenue & Customs. This figure is publishedin the remuneration table; any tax arising on
expenses incurred is settled by the BBC.

Chairman’s benefits
Rona Fairhead is not eligible to receive any
benefits other than her fee but does makeuse of a BBC driver when required for
BBC business.

Trustees’ remuneration
Fees1
£000

Taxablebenefits
£000

Total
2015/16£000

Total
2014/15£000

Appointment
term startdateAppointment
term end
date

Chairman and Vice-Chairman
Rona FairheadA
Sir Roger Carr2
Diane Coyle3
Lord Patten4

110
65
6
–

6
–
–
–

116
65
6
–

55
–
87
11

9 Oct 14
1 May 15
1 Nov 06
1 May 11

8 Oct 1830 Apr 19
30 Apr 15
6 May 14National Trustees
Mark Florman
Bill Matthews5
Aideen McGinley
Elan Closs Stephens
Alison Hastings6
David Liddiment7

38
38
38
38
–
–

–
–
–
–
–
–

38
38
38
38
–
–

–
38
38
38
22
19

1 April 15
1 Jan 11
1 Nov 12
1 Nov 10
1 Nov 06
1 Nov 06

31 Mar 19
31 Dec 16
31 Oct 16
31 Oct 18
31 Oct 14
31 Oct 14

Trustees
Sonita Alleyne
Richard Ayre
Mark Damazer8
Nick Prettejohn
Suzanna Taverne
Lord Williams

33
33
30
33
33
33

–
–
–
–
–
–

33
33
30
33
33
33

33
33
–
33
33
33

1 Nov 12
1 Aug 101 April 15
1 Jan 14
1 Jan 12
1 Dec 1131 Oct 16
31 Jul 18
31 Mar 19
31 Dec 17
31 Dec 19
30 Nov 17

Total Trustees

528

6

534

473

Notes
1 Trustees took an 8.3% voluntary reduction in pay, in parallel with the then Director-General and Executive Board, in September 2010. This will remain in effect until 31 December 2016.
2 Sir Roger Carr began his appointment on 1 May 2015; accordingly his fees for 2015/16 relate only to his time in office and do not cover the full year.
3 Diane Coyle ended her appointment on 30 April 2015; accordingly her fees for 2015/16 relate only to her time in office and do not cover the full year.
4 Lord Patten’s term ended on 6 May 2014.
5 Bill Matthews is the Chairman of the Board of the BBC Pension Trust Ltd., the corporate trustee of the BBC Pension Scheme. He is separately remunerated for this role. Further details are available in the BBC
Pension Scheme Annual Report and Accounts.
6 Alison Hastings’ term ended on 31 October 2014.
7 David Liddiment’s term ended on 31 October 2014.
8 Mark Damazer requested not to be paid for his first month in office (April 2015); accordingly his fees for 2015/16 reflect this.
A Rona Fairhead is not eligible to receive any benefits other than her fee but does make use of a BBC driver when required for BBC business.

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44-53

Trust finances
We run our operations as efficiently as possible and our direct expenditurefor 2015/16 was well below that for the previous year.

In line with the rest of the BBC, we arecommitted to making savings. Specifically,
we are committed to keeping our direct
expenditure below 0.31% of total licence
fee income. This year, direct expenditure
represented less than 0.2% of total licence
fee income (2014/15 0.21%).

Director and senior
management remuneration
Jon Zeff, formerly Director, BBC Trust,
stepped down from his role on 19 April 2015
but continued in an advisory capacity for theremainder of his notice period at his previous
salary. Alex Towers, previously Deputy
Director, was appointed Director on apermanent basis on 20 April 2015.

The aggregate emoluments and base pay
for the position during 2015/16 were: Alex
Towers £178,008 (of which £148,814 was basepay) and Jon Zeff £10,469 (£9,500 base pay).
In 2014/15 Jon Zeff’s emoluments and base
pay were £154,103 and £127,742 respectively,
and Alex Towers’ emoluments and base pay
during his period as acting Director were£18,301 and £16,254 respectively. The
position holder is a member of the BBC
Pension Scheme.
Over 2015/16 the Trust Unit had six senior
managers in addition to the Director, andour website provides an analysis of theirremuneration split into £5,000 salary bands.

Trust expenditure statement

Reporting regulations
The Royal Charter requires the Annual
Report and Accounts to be externally audited.
We asked Ernst & Young LLP (EY) to confirm
that we have accurately presented the Trust’s
expenditure, including Trustees’ remuneration,
in Part One.
EY’s report and the statement of Trust
responsibilities can be found on pages 52 and53. The BBC is exempt from the requirementsof the Large and Medium-sized Companies
and Groups (Accounts and Reports)
Regulations 2008 and those of the Financial
Conduct Authority but, where relevant,
we have prepared this report as if thoserequirements apply.

Trust people
Note

2015/16£000

2014/15£000

Trustee remuneration
Staff costs
Other operating costs

1
2
3

588
4,218
2,216

521
4,002
3,183

Direct Trust expenditure

4,5

7,022

7,706

Ofcom regulatory fees

6

2,425

2,204

Ofcom Market Impact Assessment fees

7

445

332

Total Ofcom fees payable by Trust

2,870

2,536

Total Trust expenditure

9,892

10,242Average for year

2015/16

2014/15

Trustees

11.9

11.8

Trust Unit staff (EFT)1

63.0

61.8

Note
1 Trust Unit staff are those employed directly by the Trust Unit.
Of the 63.0 average equivalent full-time (EFT) Trust Unit staff for
2015/16, 13.7% EFTs were based outside London and supported
the work the Trust undertakes in Wales, Scotland, Northern
Ireland and England (2014/15: 13). 8.7% came from a BAME
background (2014/15: 10.2%); 4.8% are disabled (2014/15: 5.3%)
and 69.8% are women (2014/15: 70%).

Notes
1 The remuneration received by each Trustee is shown in the table on page 50. The figure in the table above includes social security costs.
The 2015/16 total reflects the filling of vacancies which had arisen during 2014/15.
2 Staff costs include wages and salaries, social security costs and employer’s pension contributions.
3 Operating costs include direct expenditure on activities such as research, legal advice, other specialist advisory services and the Trust’s
consultation activities and stakeholder events.
4 This represents direct external spend by the Trust. The Trust also made use of shared services, which included property provision,
finance, HR and information services that were provided by the BBC public services.
5 Of direct Trust expenditure, £826,823 (2014/15: £731,245) relates to spend on Trust activities in the four nations.
6 Ofcom allocates its costs of television and radio regulation to the BBC and the other UK broadcasting channels. The Trust pays the BBC’s
share of that allocation.
7 Ofcom Market Impact Assessment (MIA) fees cover Ofcom’s direct and indirect costs in undertaking the MIA for public value tests.

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51

Inside the Trust

Report of Ernst & Young LLP
to the BBC Trust
We have performed the procedures agreed
with you and set out below with respect tothe BBC Trust Expenditure Statement. Our
engagement was undertaken in accordancewith the International Standard on Related
Services 4400 applicable to agreed-uponprocedures engagements. The procedures
were performed for the purpose of meetingthe obligations of the Trust under the Royal
Charter dated October 2006 and are as
follows:

Our report is solely for the purpose set
forth in the first paragraph of this reportand for your information and is not to be
used or relied upon by any other parties.
This report relates only to the accounts anditems specified above and does not extend
to any financial statements of the British
Broadcasting Corporation, taken as a whole.
To the fullest extent permitted by law, we do
not assume responsibility to anyone otherthan the Trustees of the British Broadcasting
Corporation for this report.

1. Agree Trustees’ remuneration toconfirmation from the Department for
Culture, Media and Sport (DCMS).
2. Agree that the expenditure as shownin the Trust Expenditure Statement has
been accurately extracted from the books
and records of the Trust on the basis of thenotes to the Trust Expenditure Statement.
We report our findings below:
A. With respect to item 1 we found that
all Trustees’ remuneration was confirmedby the DCMS.

Richard Wilson
For and on behalf ofErnst & Young LLP
1 More London Place
London SE1 2AF
16 June 2016

B. With respect to item 2 we found thatthe expenditure as shown in the TrustExpenditure Statement has been accurately
extracted from the books and records of
the Trust on the basis of the notes to theTrust Expenditure Statement.
Because the above procedures do notconstitute either an audit or a review madein accordance with International Standards on
Auditing or International Standards on Review
Engagements (or relevant national standards
or practices), we do not express any assurance
on the BBC Trust Expenditure Statement.
Had we performed additional proceduresor had we performed an audit or review ofthe financial statements in accordance with
International Standards on Auditing (UK and
Ireland) or International Standards on Review
Engagements, we might have identified otherissues that would be of relevance to you.

52

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Part One: Inside the Trust

44-53

Statement of responsibilities Statement of disclosureof information to auditors
in respect of the Annual
The Trustees who held office at the date ofReport and Accounts
approval of this Annual Report and Accounts
The BBC’s Royal Charter requires that anannual report and statement of accounts
is prepared in two parts, Part One by theTrust and Part Two by the Executive Board.
The Executive Board’s responsibilities
are detailed in the Governance section ofPart Two of this Annual Report. In summary,the Executive Board is responsible forpreparing the financial statements andstatements of compliance with applicablecorporate governance codes andremuneration regulations, and delivering
these to the Trust within Part Two of thisAnnual Report. The Executive Board has
prepared the financial statements inaccordance with International Financial
Reporting Standards as adopted by the
EU (EU IFRS), reflecting the fact that
EU IFRS are widely used in the UK, arebeing adopted in the public sector, and that
their use would be permitted under theCompanies Act 2006. These financial
statements are audited by external auditors.

confirm that, so far as each is aware, there
is no relevant audit information of which theBBC’s auditors are unaware; and each Trustee
has taken all the steps that he or she ought tohave taken as a Trustee to make himself or
herself aware of any relevant audit informationand to establish that the BBC’s auditors areaware of that information. This statement wasapproved by the Trust on 16 June 2016.

Rona Fairhead
Chairman
16 June 2016

In preparing its associated corporate
governance disclosures, the Executive Board
has elected to comply with the UK Corporate
Governance Code, and, where applicable, theFinancial Conduct Authority Listing Rules
which apply to a company quoted on an EU
regulated market.
In order to comply with those requirements,
the Annual Report must include disclosureson the governance arrangements of theTrust as well as those of the Executive Board.
These disclosures are the responsibility of theTrust, and are included in Part One of theAnnual Report.
The Charter also requires the Trust to preparea statement of its expenditure and include it
within Part One of the Annual Report.

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BBC Annual Report and Accounts 2015/16

53

54

BBC Annual Report and Accounts 2015/16

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Part Two: Strategic report

55-162The BBC Executive’s review
and assessment
The Executive is responsible for theoperational delivery of BBC services
and the direction of BBC editorial
and creative output in line with theframework set by the Trust.

Director-General’s introduction 

56

Strategic report
Delivering our strategyOur achievements
Delivering our strategy
The BBC’s objectives for the coming year

59
60
64
71

Performance
Performance by content area
Performance by reach and genre
The BBC in each of the nations

75
76
87
90

Governance and finance report
Finance
Review of the Managing Director
Financial achievements
Financial overview
Summary financial statement
Auditor’s report

99
100
103
104
113
114

OperationsOur people
Developing new talent and skills
OutreachPartnerships
Supporting good causes
Environmental sustainability

115
116
121
124
126
128
130

Governance
Executive BoardReport of the Senior Independent Director
Governance report and Nominations Committee
Executive Remuneration report
Audit Committee report
Risks and opportunities
Fair trading report
Viability statement

131
132
134
136
138
148
153
157
160

BBC One drama War and Peace produced by BBC Wales
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55

Director-General’s introduction

The magic of broadcasting
Above the noise and debate of the last 12 months, I’m convinced that it’s the qualityof our programmes and services that people care about most. It’s our creativity andeditorial ambition on-screen and on-air that make the case for the BBC.
We’re here for one simple reason and that’s
to bring the best to everyone: to showcase
great British drama, sport and events thatbring us all together; to produce news andanalysis people can trust; to deepen our
understanding of the world; to broaden
our minds and make us laugh too. That’s mystarting point for every conversation about
this great organisation. And that’s why we
can look to the future with confidence.
When I returned to the BBC, I wanted to
do something more for our country’s great
writers, directors, actors and producers. That’s
why we’ve invested in drama as distinctive as
War and Peace, Sherlock, The Night Manager,
Happy Valley, The Dresser, Line of Duty and
Doctor Foster. They’ve given us all many hoursof unforgettable storytelling this year.
There have been moments of high politicaldrama too – our Question Time election
special; our online General Election coverage,
attracting more than 19 million uniquebrowsers globally the day after the election;plus an extraordinary year of international
news. Let’s also not forget the essential role
our local radio stations played in keeping theirlisteners and the whole country informed
about the floods. And they do so much morebesides.
This year BBC Radio has done a lot to be
proud of. I applaud the way our stations backnew artists and promote British talent theworld over. That is why Adele chose to workwith us for her comeback. And it’s why
world-leading artists like Coldplay return to
the BBC time and again. We also produce
the biggest and best classical music season
you will find anywhere in the world, withevery concert, every day on Radio 3. And
The Archers deserves special mention for
setting the agenda and bringing the issues
around domestic violence to the fore in an
extraordinary slow burn story that grippedthe country.
I’ve talked about the BBC working much
more closely with others, and this year’s
Shakespeare season has been a revelation.
We’ve collaborated like never before, we’vebeen open to new ideas and partnered withsome of our country’s most creative andplayful minds. The Royal Shakespeare
Company produced a unique celebration
on BBC Two, Sam Mendes and his teamproduced a stunning series of The Hollow
Crown, Russell T Davies brought the magic of
A Midsummer Night’s Dream to BBC One. And
we shaped an international festival online with
the British Council and cultural organisations
across the UK, including Shakespeare’s Globe,
the Shakespeare Birthplace Trust, the Royal
Opera House, the British Film Institute and
the Glasgow School of Art. For the first time,
we opened up iPlayer to some of ourcountry’s finest institutions so everybody
could join in their events.

BAFTA award-winning Strictly Come Dancing continued its annual
seaside special at Blackpool Tower
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BBC Annual Report and Accounts 2015/16

Programmes and events that bring people
together will always be at the heart of what
we do. From Radio 1’s Big Weekend, to Bake
Off, the BBC has helped to entertain families,
communities and nations throughout the lastyear. But alongside these shared moments,
audiences are also making use of technology
in new and innovative ways, particularly on
the internet.
This year we have been responding to thesechanges. BBC Three is an exemplar of this.
The channel launched online in February 2016
and I’m delighted by what the team has been
doing. The channel offers short form, longform and new forms of content, not juston the web but as part of the web, woven
into the social media conversations of its
young audience.
Alongside our creative success this year we
now also have certainty over the BBC’s future.
The debate about the renewal of the BBC’s
Charter has taken place over this year and theresult has been a Government White Paper,
published in May 2016, that backs a strong,world-class BBC. The Government has agreed
to provide the BBC with a new Charter forthe next 11 years, which will provide a stablebasis upon which we can continue to surpriseand delight audiences.
I strongly believe that the BBC’s best days areahead of us, and that’s what I’ve been fighting
for throughout the year.

CBeebies’ production of A Midsummer Night’s Dream was performed
as part of the BBC’s Shakespeare season
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Part Two: Director-General’s introduction

56-58“In the next Charter
period we want tobecome Britain’s
creative partner.
We want to continue
acting as a catalyst
for new ideas andcollaborations, bringing
together partners
from universities andmuseums, to theatresand festivals.”
Tony Hall

A more open BBC
means a leaner, moretransparent organisation.

Of course, now we have a lot more to do –we have to continue to reform the BBC.
In the coming year we will be reshaping theorganisation to make it simpler, more creativeand more open. We need to respond to the
new ways audiences find and consume ourcontent, and to make the savings necessary
to live within our means.
A more open BBC means a leaner, moretransparent organisation – with fewer
divisions and simpler structures. This is notjust to cut costs and live within the newlicence fee settlement, but also to createa place where creativity can flourish.
It will not be easy to create an open BBC.
It will mean unpicking structures and ways ofworking that have built up over generations;in many ways, an open BBC is a new BBC.

bbc.co.uk

We have made good progress on achieving
this – and have more to do.
However, our reform agenda is not just about
the organisation – it’s also about the content
we produce and how we produce it. In thenext Charter period we want to become
Britain’s creative partner. We want tocontinue acting as a catalyst for new ideas
and collaborations, bringing together partners
from universities and museums, to theatresand festivals. We can provide a lot of support:
mass audiences from day one, a trusted guide,and deep editorial and technical expertise.
And if we are to be a truly open BBC thenwe have to be able to expose ourselves toscrutiny and accept responsibility for our
failures as well as our successes. This year wesaw the publication of Dame Janet Smith’s
BBC Annual Report and Accounts 2015/16

57

Director-General’s introduction

Professor Stephen Hawking delivered this year’s BBC Reith Lectures
on black holes

Review into the cultures and practices of the
BBC in the years that Stuart Hall and Jimmy
Savile worked here. The events covered by
the Review represent some of the worst
betrayals of trust in the BBC’s history. I havealready said that the BBC failed the survivorsof abuse when it should have protected them.
And I want to express again our gratitude tothose who came forward to tell their stories
to the Review.
We must also do all we can to ensure that welearn the lessons of Dame Janet’s Review. We
have already committed to take forward theactions it recommends and are publishing,alongside this Annual Report, a progress
report, setting out where we are now andwhat we plan to do in the coming months toensure those lessons are learned and acted
upon. We will take action, and we will bestronger for it.

BAFTA award-winning BBC One comedy Car Share

To him, we all owe a huge debt of gratitude.
But I also want to say thank you to everyone
who has contributed to a successful year,
working for us and with us. It’s been a great
team effort – on-screen, on-air, backstage
and across a range of crucial supporting roles.
Their contribution makes the BBC what it is.

Tony Hall
Director-General

The debate about the
renewal of the BBC’s
Charter has taken placeover this year and theresult has been a
Government White
Paper, that backs astrong, world-class BBC.

16 June 2016

It’s also been a year where we have lost someicons of the broadcasting world, not least Sir
Terry Wogan, who has left an extraordinary
legacy which continues to inspire us all.
And we’ve had a chance to celebrate someone
who stands for everything that is great about
the BBC – Sir David Attenborough. In his
90th birthday year, he is still as curious, as
pioneering and engaging as ever – perhaps
more so. He’s travelled around the globe andbrought the wonder of the world to millions
on the BBC.

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Part Two: Strategic report – Delivering our strategy

59-74

Delivering our strategy

Our achievements for the year
and how we’ve delivered ourstrategy in 2015/16.

CBBC presenters (L-R) Lauren Layfield, Hacker, Katie Thistleton,
Dodge and Karim Zeroualbbc.co.uk

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59Strategic report – Delivering our strategy

Creative highlights
We brought stand-out content, big moments and the benefit
of new technologies to audiences.

500 WORDS
123,436 children were
inspired to enter Radio 2’s
500 WORDS short story
competition for children
aged 13 and under.

The Night Manager
The Night Manager was enjoyed by an average of 8.4 million acrossthe series and achieved the highest distinctiveness score of any
BBC drama series of the year.

CBeebies18.3 million individual stories
have been downloaded to
the CBeebies Storytime
app so far.

Ten Pieces
Ten Pieces is a groundbreaking campaign to introduce children toclassical music. We extended the initiative to secondary schools,
building on the success of Ten Pieces Primary – which has alreadyengaged more than half of UK primary schools.

60

The Proms season

BBC World Service

In addition to BBC Radio, 29 Proms were broadcast across BBC
television, representing the biggest commitment to classical musicon mixed-genre channels anywhere in the world.

The World Service audience has seen significant growth in the past
year and reaches a record 246m people a week globally. A key partof this growth has come from the new language TV services
launched, collectively reaching almost 20 million people every week.

BBC Annual Report and Accounts 2015/16

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59-74

The Great British Bake Off

iPlayer Radio app

The final of The Great British Bake Off reached more than 15 million
people, making it the most watched programme in 2015.

There were over one million downloads of radio programmes
via the BBC iPlayer Radio app in less than a month after its launch,with Radio 4 drama proving the most popular.

Sport
Over 50 million people –87% of the UK population– watched sport on BBC
television during 2015; higher
than any other broadcaster.

News
We’re now giving audiences even more news, analysis andexplanation of the day’s biggest local, national and international
stories, by extending the BBC’s News at Ten by an extra
15 minutes from Monday to Friday.

Music
A clip from the world-exclusive
Adele at the BBC has become
the most watched clip on the
BBC YouTube Channel, withover 48 million views.

Sherlock
Sherlock: The Abominable Bride was the most watched
programme across all channels over the Christmas period,
with 11.6 million viewers.

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61Strategic report – Delivering our strategy

Weather
1 July 2015 saw a newsummer record of 7.3 million
UK unique browsers coming
to BBC Weather, as the UKbasked in sun on the hottest
July day ever recorded.

Stick Man
Stick Man was watched by more children aged 4 to 15 thanany other programme on any channel over the festive period.

General Election
Mobile was the preferred screen to access BBC News Online
during the election. Over 76.1m unique browsers globally used BBC
News Online and in the UK, the BBC’s coverage across all platforms
reached 89% of all adults and 84% of 18 to 34s in results week.

Strictly Come Dancing
The final of 2015’s Strictly Come Dancing was watched by 12.3 million
viewers and across the series was watched by more than 50% of
all television viewers.

School Report
This year marked 10 years of
BBC School Report in whichmore than 400,000 school
reporters from years one tonine have already taken part.

World at One
Radio 4’s World at One celebrated 50 years on air. The firstbroadcast was on the Home Service in October 1965 andwas presented by William Hardcastle.

62

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Part Two: Strategic report – Delivering our strategy

59-74

Corporate achievements
We continued the journey of changing the BBC to make sure
we are more efficient, representative, fair and innovative.

Overhead costs
In 2015/16, 94% of the BBC’s controllable spend was focusedon content and delivery, with just 6% spent on running theorganisation. This focus on reducing our costs ensures we areinvesting as much money as possible directly into content forlicence fee payers.

6%
DigitalThe BBC Academy launched the BBC Make it Digital traineeshipfor up to 5,000 young unemployed people, in partnership with
the Department for Work and Pensions and Skills Funding Agency.

Sound Women
BBC Radio launched amentoring scheme with Sound
Women, offering 20 womenthe chance to be mentored byexperienced radio production
staff, in order to build theirexperience with the ultimate
aim of increasing the numberof women in senior roles in
the radio industry.

micro:bit
In the BBC’s most ambitious education initiative for 30 years, every
11 or 12 year-old child across the country (year 7 or equivalent)
has been given a micro:bit – a pocket-sized, codeable computer
unveiled by the BBC and partners, that allows children to getcreative with technology.

Digital and writing talentChildren in NeedChildren in Need raised £37.1 million; the highest ever on the night
total. The final overall total will be announced this summer.

bbc.co.uk

BBC Birmingham took centre stage as a hub for digital and writing
talent, building on its role as the centre for skills and talent for thewhole of the BBC.

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63Strategic report – Delivering our strategy

Delivering our strategy
Our mission is to inform, educate and entertain, to bring the best to everyone.
We have a very simple purpose: to make great programmes and to offer outstanding,
distinctive services – to enhance the lives of everyone in the UK, to fire theimagination and the curiosity of our audiences.
The BBC improves the lives of everyone in
the UK in more ways than ever before andmore frequently than ever before. Across thenext decade we want to maintain that role atthe heart of British life, to remain Britain’s
greatest cultural institution.
The unique way the BBC is funded places
particular obligations on us.
Because the BBC’s funding is independent,
that gives us creative freedom. That meansa BBC that must be more prepared thanever to take risks; more open than ever topartnerships and collaborations; open to
working with the best ideas and talent
wherever they come from. In other words,
the licence fee gives us the freedom and theobligation to be distinctive and original.
Because the BBC is funded by the licence fee,
our mission is universal. Universality does notmean doing everything for everyone. It meansreaching everyone with good things, thingsof real value, of public value to them, but of
personal value to them as well: whoever theyare; however wealthy they are; whatever age
group they are in; whatever background theycome from; and whatever part of the UK.
As we inform, educate and entertain the
public, the BBC must meet these three aims:
quality, universality and distinctiveness.
While distinctiveness is important, it must bebalanced against the public’s desire for a BBCof the highest quality and a universal BBC thatmeets their needs. We do not want or needto reach all audiences as an end in itself, wewant and need to reach all audiences with highquality and relevant public service content that
informs, educates and entertains. That is how
we fulfil our mission. For 2015/16, we set four
strategic objectives, to focus the organisation
on delivering our strategy, these were:—— to make distinctive, world-class content—— to transform our offer for younger
audiences—— to develop a more personal BBC

This year, we have reached new milestones,
celebrating the 25th anniversary of BBC Films,
transferring BBC Three online in a global-first
In this report we outline what the organisation
move from linear, and reaching more people
has done to deliver these objectives
around the globe than ever before bythroughout the year.
expanding the BBC World Service. This year,
BBC Introducing alone has discovered 27
Making distinctive,
artists that have gone on to sign for major
world‑class content
record labels, and the Ten Pieces initiative,
In the last year, we have brought our
introducing children to classical music, hasaudiences more outstanding content acrossbeen extended to secondary schools.
all of our platforms, from world-class dramas
such as Dickensian, Doctor Foster, And Then
We pride ourselves on distinctive services andThere Were None, War and Peace, The Nightoutstanding programmes such as Strictly ComeManager and Capital, to the return of theDancing and The Great British Bake Off that have
Clangers on CBeebies and the women’s
become global phenomena, loved by audiences
football World Cup in Canada. We tackled
at home and abroad, and we are focused onsensitive, challenging and controversial topics
modernising and developing our services forin a range of programmes, with domestic
the digital age. We have just completed aabuse in Radio 4’s The Archers, honour killing
creative review of BBC Online. Our ambitionin BBC Three’s Murdered by my Father andis to provide a distinctive public service that
hard-hitting Panorama investigations on
informs, educates and entertains. We will do
BBC One. BBC News covered major global—— to demonstrate value for money inevery area of our work

This year’s BBC Radio 6 Music Festival took place in music venues
across Bristol
64

BBC Annual Report and Accounts 2015/16

events, providing insight into the Paris climateagreement and the European migrant crisis,
uncovering corruption in sport and bringing
the latest verified updates as terrorists attacks
unfolded in Tunisia, Paris and Brussels. We
celebrated national moments with Stargazing’s
awe-inspiring coverage of the launch into
space of British astronaut Tim Peake and thebuild-up and results of the General Election,
which reached 89% of all adults, with 19 million
people watching BBC Television coverage on
results night.

BBC Two’s BAFTA award-winning Britain’s Forgotten Slave Owners
presented by David Olusoga
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59-74

BBC One family drama The A Word challenged perceptions of living with autism

this online by focusing our energy andcreativity on six flagship areas:
1. Trusted, impartial and accurate news –BBC News.
2. The best in live sports coverage and sports
news – BBC Sport.
3. Where UK children come to learn and playin safety – iPlay and BBC Bitesize.
4. High-quality entertainment that enriches
our lives – BBC iPlayer and BBC iPlayer
Radio.
5. The best of arts and culture, history andscience – the Ideas Service.
6. Historic moments, national events –BBC Live.
As part of the review and our overall savings
plans, we will also be making changes tocurrent sites, including closing the iWonder
service. We will focus on distinctive long-form
journalism online under a current affairsbanner and close the online News Magazine,
the separate Newsbeat site and app, and theTravel site. We will also stop running local
news index web pages, offering instead anopen stream on our rolling guide to BBC
and local news provider stories, Local Live.
We want to open the BBC to become aresource for others, the engine room for
the UK’s creative industries, so that theinvestment in the licence fee is not just an
investment in the BBC. KPMG’s report inbbc.co.uk

summer 2015 shows that the BBC plays
a valuable role in supporting the creative
economy with £2.2 billion of licence fee
income invested into UK creative industries.
We announced plans in the autumn to work
closely with creative partners to serve
audiences in new and exciting ways.

Build partnerships
There is real value in working in partnershipwith others. Combining our expertise andresources with those of partners outside the
BBC allows us to support the wider creative
industry and to deliver greater value toeveryone. The BBC’s community archive,
which is made possible as a result of ourpartnership with national museums andgalleries in Northern Ireland, is one example
of a strategic partnership with wide-reaching
benefits. We seek to run partnerships that
support and showcase the best of our content
and that bring the best ideas and innovation to
the screen and airwaves. Our long-standing
partnership with MG ALBA brings the best
Gaelic content to the widest possible audience.
2016 commemorates 400 years since thedeath of William Shakespeare and the BBC
is celebrating his works, with content for all
audiences across our platforms, as part ofthe BBC Shakespeare Festival. We worked
with the Royal Shakespeare Company on
Shakespeare Live!, a televised celebration tomark the 400th anniversary of the bard’s
death, in April 2016. We have announced plans

for a new partnership with local libraries and,
together with the British Library, launched a
website – Shakespeare on Tour – to build adigital picture of the way Shakespeare’s works
shaped the country.
Get Creative is a year-long celebrationof British arts, culture and creativity, inpartnership with cultural movement What
Next? as well as a huge range of arts, culturaland voluntary organisations across the UK.
The idea is to boost creativity in the UK, as
well as celebrating the millions of people
already doing something artistic and creative
every day.
In Get Creative, we’re working closelywith a huge number of external organisations
including Culture at King’s, Voluntary Arts,
64 Million Artists, Fun Palaces, Cultural
Learning Alliance, and Arts Council England,
as well as Culture 24, the Royal Shakespeare
Company, the BFI, the Roundhouse, Sadler’s
Wells, the Young Vic, National Theatre Wales,
Arts Council Wales and many more. It’s thefirst time amateur and professional arts
organisations have come together ona national project of this scale.
At Easter, we began the rollout of the
micro:bit, a pocket-sized, codeable, computerwith motion detection, a built-in compass andBluetooth technology, to every child in year
7 or equivalent across the UK. Working with
29 partners, the micro:bit is the BBC’s mostambitious education initiative in 30 years.
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65Strategic report – Delivering our strategy

Make it Digital traineeships, produced withpartners including Job Centres and the Skills
Funding Agency, gave opportunities to over
1,000 unemployed young people in 2015/16
and will continue next year.
In news, we have announced the creation ofa new partnership with local news providers,to strengthen and enhance local journalism,
and the crucial role it plays in holding local
authorities to account, while maintaining thehealthy competition between different news
sources which is so important in a democracy.

content that keeps pace with young people’s
lives in the future. So in February this year,
after 18 months of consultation withstakeholders including young people, andfollowing a Public Value Test by the BBC Trust,
BBC Three became the first television channel
in the world to switch online, and embraced
the shift in how BBC Three’s 16 to 34 year-old
audience consumes media today.

The content on BBC Three is made for young
people and covers issues relevant to young
people’s lives. It is available on-demand via
connected televisions, games consoles, set top
Transforming our offer
boxes, native apps, streaming devices andfor younger audiencesbrowsers through BBC Three on iPlayer, andWhen BBC Three launched in 2003, Facebook,
The Daily Drop is a mobile first stream of
BBC iPlayer, Buzzfeed, Apple’s iPhone, Spotify
stories and content from the BBC and acrossand many other products that havethe web that keeps young people informed
revolutionised media did not exist. Youngthroughout the day.
people today are as familiar with accessing
content on a phone as they are on a television, We’re also changing how we deliver content
to our youngest audiences. BBC Children’sand expect to be able to access content on acontinues to be at the forefront of creating
range of devices at a time of their choosing.
Over the past year BBC Three has continued public service content suited to how young
audiences wish to consume it. A key step has
its journey to ensure that the service meets
been in the creating of a safe on-demand
the needs of young people today, andinnovates with new ways to create and deliver space with the launch of iPlayer Kids. Other

Distinctiveness is not a term that often
comes up in daily conversation, but it is one
that we use with some regularity. That’s
because it’s a fundamental characteristicof the BBC and our services, and something
we are focused on in everything we do.
Most media companies aim to be different,
and some other Public Service Broadcasters
have a formal requirement to be distinctive,
but no other broadcaster has the samecommitment to being distinctive in somany areas.

Distinctiveness andthe BBC audience
Helen Boaden
Director
Radio and BBC England

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On radio, two-thirds of the music on Radio 1
is new, 1,100 hours of music a year on
Radio 2 is from specialist genres like jazz, folk
and country, and the remaining stations fromRadio 4 to Nan Gàidheal are utterly unique.
On television, the BBC is the UK’s only
significant provider of natural history shows.
And for children, CBeebies and CBBC
provide more than 85% of all first-run UK
originated television programming.

digital-first developments include CBBC’s
online drama Dixi, and the ongoingdevelopment of the CBeebies Storytime andPlaytime apps.
An astonishing 18.3 million individual stories
have been downloaded to the CBeebies
Storytime app so far, and in the BBC’s mostambitious education initiative for 30 years,
our engagement with schools has seen BBC
School Report celebrate its 10th year, withmore than 400,000 school reporters fromyears 1 to 9 already taking part. Ten Pieces,the groundbreaking campaign to introduce
children to classical music, has been extended
to secondary schools, building on the successof Ten Pieces primary – which has alreadyengaged more than half of UK primaryschools, and an incredible 123,436 children
were inspired to enter Radio 2’s 500 WORDS
short story competition for children aged 13
and under.
Radio 1’s #1millionhours campaign
encouraged young listeners to volunteer forgood causes with four national charities, while
Radio 1Xtra partnered with Arts Council
England and the Roundhouse in its spoken

These three examples show what
distinctiveness is – and what it isn’t. CBeebies
and CBBC are unlike other channels, but they
are also immensely popular, with CBeebies
reaching 46% of its target audience. Radio 2
is eclectic and surprising, but also the biggest
UK-wide radio station in the country.
Distinctive doesn’t mean niche, market
failure broadcasting. Channels like BBC ALBA
and BBC Four are obviously different fromanything else on television but it’s arguablethat our most distinctive service is BBC One.
Thirty years ago, a fifth of BBC One’s peaktime schedule consisted of foreign series
like Dallas, The Rockford Files and Kojak.
Today, it is zero.
From Happy Valley on BBC One to
Slow TV on BBC Four, the BBC’s services
and programmes have never been more
distinctive. In the next Charter period we will
make sure that, like the Corporation itself,they continue to be something unique andprecious, for everyone.

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word season, and Radio 1’s YouTube channel
reached three million subscribers.
Of course, young audiences still consume andenjoy a wide range of content from across the
BBC but our focus on transforming our offer
for younger audiences continues to be a key
objective for the coming year.

Developing a more personal BBC
The BBC has been at the forefront of digital
innovation for the past 20 years, combining
our editorial and digital expertise to helpchange how, when and where we read stories,
listen to programmes or catch up on ourfavourite shows. Now we aim to put
audiences in the driving seat with thefunctionality to personalise our services.
We are creating personal experiences,utilising our unique blend of creative andtechnological expertise, and an unmatchedbreadth of content.
Over the past six months, we have beensteadily introducing a range of features to key
areas of the BBC. From the My News sectionin the BBC News app to My Programmes in
BBC iPlayer, recommendations on the
homepage to notifications from BBC Sport,

Connecting the UK
through eventsCharlotte Moore
Controller
TV Channels and iPlayer

bbc.co.uk

6.4 million
users have signedin to
the BBC – withover 2 million
signed-in users on
BBC sites in any
given month

1.6 billion BBC
programmes
have been
recommended
to viewers andlisteners

1.4 billion
personalised
alerts havebeen sent tofans via the BBCSport app

Signed-in users
consumed 32%
more BBC
content thanthose who
weren’t, Oct-Dec
2015

How you are benefiting from myBBC
and tailored newsletters across the BBC,
we are making it even easier and moreconvenient for audiences to find, read, watch
and listen to the content they care about.

We are starting to see that the combination of
the new features we have launched are really
improving the experience of users. 6.4 million
have signed in to the BBC – with over 2 million

Every Christmas, the BBC brings the wholefamily and the whole nation together. This
year, eight out of the top ten programmes
over Christmas were from the BBC, witha cast of characters including a Victorian
detective, a 1950s midwife, and an
animated stick.

The BBC has always played this role. Families
who would have huddled around the wirelessin the 1940s, or gathered in front of theCoronation in the 1950s, can now watch on
myriad devices and at the place and time thatthey choose.

The BBC can unite the nation in joy andcelebration, but will also stand with it in grief.
The Corporation is the go-to broadcaster for
events like Remembrance Day, and the guidewhere audiences turn to understand horrific
events like last year’s Paris attacks.
Year in, year out, the BBC both covers andcreates the events that matter most to thepeople of the United Kingdom.
Viewers come to the BBC for the Olympics
and elections, but also for baking, businessand ballroom dancing, transformed by
the BBC into moments that everyone
can experience and enjoy. Shows like
The Great British Bake Off, The Apprenticeand Strictly Come Dancing don’t just entertainand educate, they create a national
conversation and strengthen the threads
that hold society together.

Technology changes, and audiences havemore choice and control than ever, but the
BBC remains the broadcaster that brings
us together.
The rise of technology and timeshifting
doesn’t mean that broadcasting can nolonger unite us. Initial audience figures for theBBC’s Christmas schedule were lower than inprevious years, but as results for timeshiftedviewing were added in, programmes like Callthe Midwife, Mrs Brown’s Boys and Sherlock
gained over three million viewers, becomingsome of the most timeshifted programmes
on record, and equalling the performance ofChristmases past.

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signed-in users on BBC sites in any given
month. Since this time last year, 1.6 billion BBC
programmes have been recommended; 1.4
billion personalised alerts have been sent via
the BBC Sport app; in the last few months, 1.7
million users have personalised the My News
section on the BBC News app and website –selecting over 12 million topics to track; andthere has been an increase of 400% in thenumber signing up to our pan-BBC
newsletters, which are increasingly more
relevant to users’ tastes and preferences.
We also want more of our audience to be
involved in shaping the future direction of
the BBC and with the changing governancearrangements under the next Charter, wehave reviewed how people interact with the
BBC itself. We are developing Our BBC
where the public feels more connected andhas more tangible ownership of the BBC.
We want to initiate a two-way conversation
with our audiences, making it easier to feedback their comments, ideas, praise andcriticism, and to receive a response. We arelooking into how we can be more open with
our data, making more available and easily
digestible. We want to share as much as
possible while being mindful that we operate
in a commercial and journalistic environment,
in which sensitive information cannot bemade available.

Demonstrating value for money
in every area of our work
All of this was made possible by a major
programme of reform. Over the past 20
years, the BBC has transformed its efficiency
and productivity, delivering more services
for less, and is now as efficient as comparable
organisations. Our efficiency record issignificantly ahead of the public sector evenwhen the cost of making the changes istaken into account. 94% of controllable
spend is now spent on content, distribution
and related support.

The task of BBC News is to make senseof the world. In 2015, it was needed morethan ever. It was a year that shocked andsurprised. One crisis fed into another.

The World Service andinternational expansion
James Harding
Director
News and Current Affairs

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People rallied to the cause of free speechwhen the Charlie Hebdo journalists weremurdered. Just as Europe seemed to havesettled the Euro crisis in Greece, it was
rocked by the largest wave of migration
since World War II. China’s growth engine
sputtered; oil prices tanked; India had a new
spring in its step; Fifa imploded. Robots andartificial intelligence started moving,
noticeably, beyond our imaginations and into
our lives. The US buried the hatchet with
Iran and Cuba. Russia entrenched in Ukraine,weighed-in in Syria. In Nigeria and Myanmar,
the elections surprised those sceptics who
had doubted that a peaceful transfer of
power, so long in coming, would ever arrive.
And in the UK, the voters confounded thepollsters: David Cameron’s Conservative
Party won an overall majority.

Efficiency is a process and not a destination.
We continue to pursue and deliver efficiency
savings in order to manage inflation in our
existing cost base and fund normal levels
of investment in capital expenditure.
PricewaterhouseCoopers’ (PwC) BBC
Efficiency Review, published in September
2015, advised that productive efficiency saving
will require major restructuring and significant
changes to working practices. Since thepublication of that document, the BBC has
been working to identify and implement new
efficiency savings. In November 2015, weannounced £150 million of savings to address
the shortfall in funding, largely caused by falls
in the percentage of households owning a
television. We are delivering these savingsby creating a simpler, leaner BBC withfewer divisions and senior managers incontent areas, cutting 1,000 posts by 2017,
which includes restructuring back office andsupport services and merging technology
and digital divisions.

In a noisy world, where so much information
is partial and shrill, people came to the BBC to
be reliably informed. In 2015, the Government
committed a further £290 million to invest
in the BBC World Service. It will enable the
BBC to provide independent, impartial,
intelligent news reporting to millions more
people in North Korea and Russia, India andAfrica. It is an endorsement of what the BBC
does. And it will enable the BBC, more thanever, to make sense of the world for people
around the world.

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£35 million will be saved from the BBC’s
television sports rights budget. Meeting thissavings target is tough, particularly given thehigh levels of inflation in the market. We havealready made some tough choices leading to
the loss of some existing rights and events,
which have contributed to the savings, forinstance around the Open Golf and ending
our contract for the Formula 1 racing
coverage three years early. This move is areflection of the current financial constraints
but does not represent a diminishingcommitment to sports coverage. We haverecently secured a series of important rights– including Wimbledon, Premier League
highlights, the FA Cup, live coverage of Euro2016 and 2020 football championships, theOlympics shared with Discovery, and Six
Nations rugby shared with ITV.
We remain committed to maximising theamount we spend on content. There is radical
change taking place at the BBC. By the endof the next Charter, all our output will either

Showcasing
UK creativity
Tim Davie
CEO
BBC Worldwide and Director, Global

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be open to competition in the market orcompared against the best. We will use
competition where possible, and comparison
where not. The key driver of Compete orCompare is to secure the best value forlicence fee payers – ensuring we deliver thebest output for the lowest cost. Subject tofinal approval from the BBC Trust or its
successor, we will launch BBC Studios
alongside the removal of the in-houseguarantees that have protected television
non-news production.

In radio, we are looking into ways to increase
the opportunities for independent producers
to create content, opening up competition
in all areas where there are creative or
economic benefits. These proposals, which
are also subject to approval, would lead tocompetition for around 60% of eligible
network radio hours. Putting around 60%of eligible hours up for competition would
offer indies more opportunities to makeprogrammes across the BBC network
radio portfolio.

Programme making is the very heart of the
BBC and we want to ensure that the very
best content is available to our audiences.
In launching BBC Studios we ensure that the
BBC gets the best quality and value for money
for licence fee payers. BBC Studios waslaunched as a division of the BBC on 29 April
2016 and is proposed to become a separate
subsidiary in April 2017. Greater competition
will give commissioners more freedom andcreative choice.

Online, 100% of the BBC’s non-news online
content will be open to full competition by theend of the Charter period.

Against a backdrop of industry consolidation,
new players in the market and drama budget
inflation, I believe BBC Worldwide has animportant role to play in discovering,
nurturing and showcasing the best of
UK creativity.

In a UK landscape where 50% of indies
are owned by a larger group, according to
Broadcast’s Indie Survey 2016, I’m pleased
that BBC Worldwide is able to offer indies
a UK-owned distributor of scale. Moreover,the continuing appetite for English-language
premium drama – the revenues of the UK’s
top five drama indies rose by a third last year
according to Broadcast – means multiple
partners are increasingly needed to meetthe rising cost of production. As an active
creative partner, we have built codevelopment and distribution partnerships
with producers and bring international
co-finance to the table.

This year we had the 40th anniversary of
BBC Worldwide Showcase, the world’s
biggest television export fair by a single
distributor and a unique platform for British
content. Held in Liverpool for the fifth year,
we welcomed over 700 buyers from all over
the world, who watched and bought thelatest titles from the BBC and independent
producers. The delegates reflect changes I’ve
seen in the wider market – we now haveincreasing numbers of buyers from global
and regional digital platforms alongside thetraditional television broadcasters.

Through the rest of 2016, we will be working
on our longer-term savings plan to meet thefinancial challenge of the first half of the newCharter. We have estimated that we will needto find a total of around £800 million ofrecurring savings by 2021/22.

Great content is at the heart of everything
BBC Worldwide does and I’m proud to beable to fly the flag globally for the unmissable,
world-class content made by the BBC andthe best of the UK’s creative industries.

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Charter Review and
the BBC’s responseto the White Paper
James Purnell
Director
Strategy and External Affairs

The BBC’s current Royal Charter runs to theend of December 2016. The Department for
Culture, Media and Sport (DCMS) has
responsibility for renewing the Charter andthe BBC has negotiated with Ministers andofficials to shape the future of the BBC. The
process officially began when the
Government published and consulted on a
Green Paper in July 2015. Over the summer
this consultation received an unprecedented
response from the public, with around
190,000 submissions, demonstrating the
support and engagement that the public feels
towards the BBC. Throughout the autumn of2015, BBC executives participated in BBC
Trust seminars across the UK, listening andresponding to questions from membersof the public and putting forward theBBC’s vision.
The Government’s White Paper in May 2016
was a significant milestone on the way torenewing the BBC’s Royal Charter.
Fundamentally, it affirms the importance of
the BBC to the public and to the creative
industries. It delivered three important
proposals that should ensure a secure andindependent future. Firstly, it proposed an
11 year Charter period to remove thecoincidence of General Elections and BBC
Charter negotiations. Secondly, it has
cemented the licence fee as the way the BBC

will be funded for the next 11 years. Thirdly,
it ensured that the scale and scope of the
BBC is maintained. In total, these measures
should provide long-term stability and astrong foundation for the BBC.
It is now of vital importance that we are able
to ensure that the positive intentions of theWhite Paper are clearly transferred to the
new Royal Charter and Agreement. The
BBC looks forward to continuing to workwith Government to ensure this happens.
We will also continue discussions in theremaining areas where we are in
disagreement.
Whilst doing this we will, of course, continue
preparations to ensure that the BBC is set
up properly to address future challenges,
including changing audience behaviours andshifts in the competitive landscape. In
September 2015, we set out an ambitious
reform programme for the BBC called
British, Bold, Creative – aiming to make theBBC more open, more creative, more
distinctive and more personalised than everbefore. We have already started work on
delivering this behind the scenes and are
confident that, with a new Charter in place,it will result in a BBC that can look forwardwith confidence to the future.

The series finale of new drama Doctor Foster reached more than 10 million viewers
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Our plans for next year
For the next year the BBC has set itself four strategic objectives – all within our overall mission
to provide distinctive, world-class content and services. We will be focusing on: creating an
open BBC, and working with partners; delivering a more personal, more digital BBC; making
the BBC simpler and even more creative; and transforming what we do for younger audiences.
Create an open BBC,working with partners
In 2016/17 our aims are to:—— build on existing relationships—— develop new partnership projects—— explore new ways of working andcurating content—— expand third-party content on BBC
platforms such as iPlayer
The new Charter and Agreement will besupported by a new partnership framework
to articulate and simplify the BBC’s approach,so partnership and collaboration can proceed
as a priority, while keeping within the BBC
regulatory framework.

We will pave the way towards the Ideas
Service with pathway projects, for example
New Age of Wonder, which will launch in 2017with partners from across the science sector.
BBC Arts will deliver an Arts Council England/
BBC partnership around live arts, building on
Live from Television Centre.
Arts Online will pioneer new ways of working
and run a pathfinder project for third-party
content on iPlayer through its many
partnerships for the Shakespeare Festival.
Get Reading will work with key partners tocelebrate great authors and get the nation
reading and sharing the books they love.
Working with Hull City of Culture 2017, we
will explore further uses of digital technology
to increase public access to culture, ideas
and the arts.

The Space will continue to create more open
commissioning and production models forcontent in partnership with the arts sector.
Elsewhere, World War One on the BBC willcontinue with partners to bring fresh insights
for audiences to the battles of Jutland andthe Somme.
On television, A Black History of Britain will
explore the relationship between the British
Isles and the people of Africa, working withheritage organisations to inspire community
activities and research.
Radio 4 and the British Museum are planninga new collaboration focusing on faith andsociety, through objects from deep history
to the present day.
Radio 1 will continue its #1millionhours
volunteering campaign in partnership with
UK charity partners.

Sunderland acapella group Dodici Voce performed as part of Hadrian’s Wall of Sound for BBC Music Day
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Produced by BBC Scotland, the Mrs Brown’s Boys Christmas Special
was watched by 6.5 million viewers on the day itself

BBC Music will work with a range of partners
from over 250 organisations across the UK todeliver another Ten Pieces to UK primary andsecondary schools, and to deliver the annual
BBC Music Day. Both initiatives will besupported by the BBC’s performing groups.
Radio 3 will be building on existing music
partnerships and seek new partners including
venues and ensembles up and down the
country to reach new audiences.
In news, the creation of a new partnershipwith local news providers, will strengthen andenhance local journalism, and the crucial role itplays in holding local authorities to account.
More coverage and content from councils will
be more widely distributed ensuring greater
accountability and transparency in an evermore devolved Britain.
These plans are not just a milestone in therelationship between the BBC and the local
press. They will enhance local journalism,
ensure greater accountability of people inpublic life and enable BBC audiences andnewspaper readers to get better coverage ofwhat is really happening in their communities.

BBC Three’s The World’s Worst Place To Be Disabled? was part of acollection of programmes capturing the lives of young disabled people

Around the UK
Make it Digital has delivered up to one million
BBC micro:bits to Year 7 or equivalent acrossthe UK and will work in partnership withlibraries to build digital skills.
Local radio stations will develop collaborations
with the libraries sector. The Arts Task Forcewill report on working with local organisations
around the UK.
English Regions also aims to develop more
effective partnerships with other local
news organisations.
With Scottish writing and performing talent,
BBC Scotland will offer representative drama
and celebrate the nation’s rich and diverse
cultural and musical heritage. It will also workwith devolved institutions, local press andjournalism colleges to deliver relevant news
and collaborate with educational experts andstudents to support the learning offer andcontinue to work in partnership with MG
ALBA to deliver BBC ALBA.

make it easier for everyone to develop newservices that all work in a similar way and canbe easily joined up. R&D will also work with
JANET (the high speed research network) toprovide institutions and cultural organisations
with the bandwidth (100mb+) they need towork with us to take advantage of these new
IP production technologies.

Deliver a more personal,
more digital BBC
Building on the success of this year we willcontinue to enhance existing ways in which
our audience experience becomes much
more personalised – tailored around theirindividual interests and passions.

myBBC
We will continue to improve our online
offering to help more of our audiences
find content we know they value, and to
make it available to watch, listen to orread in ways that are more convenientto their lives.

By improving and simplifying our BBC ID
system, we’ll be giving the audience easy
The Data Research Partnership will be an
ambitious new partnership between R&D and access to control what content they see andOur partnership initiatives include theseveral academic institutions. The partnership what we recommend to them. We will putthem more in control of the things we learn
establishment of a shared data journalism unit, will explore new ways to capture and analyse
about their BBC online activities and how weenhancing a vital new area of digital journalism. vast amounts of data – and then use this data
We will create a video news bank, enabling
to improve our services. For example, through use it to improve their experience. We will
BBC local video and audio news content to be creating more personal experiences; through introduce features that help us to learn more
about a user’s signed in activity. By watching,accessed by news media websites, enhancing
reducing the cost of operating our services;listening, reading and adding content they
their online offers and making BBC news
or through creating completely new
like to their own profile, we will learn about
output more accessible to audiences online.
media experiences.
what each person loves. This lets us offer
We will establish a local public sector
R&D will partner in other ways too. For
personalise emails, deliver online notifications
reporting service to cover local authorities
example, working with the Advanced Media
when content becomes available from an
and public services. The BBC will fund 150
Workflow Association to develop common
ever-increasing range of areas and tojournalists from 2017, who will be employedstandards for new IP production technology
recommend other relevant programmingby local newspapers and other qualifyingthat enables producers to capture, edit andat the end of playback in iPlayer and otherproviders of local news.
distribute content over the internet. This will
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We’re also helping content makers to increaseaudience interaction, through commenting,votes, contact us, more ways to get involved– which will help to inform our futurecontent-making discussions.

Race to Rio
London 2012 delivered a step change in how
audiences consume live sport on the BBC. We
called it the first ‘digital Olympics’ with 39
million UK unique browsers to BBC Sport
Online over the course of the games – arecord at the time. We are going to offer allthat and more for Rio 2016. Audiences will beable to personalise their Rio 2016 experienceby adding an Olympics stream of content totheir personal My Sport page along with
content streams from their favourite Olympic
disciplines. BBC Sport app users will also beable to activate personalised alerts by adding
medal alerts for their country and also
Olympics news alerts to ensure that they
don’t miss breaking news stories and key
highlights direct from Rio.

Our BBCAs well as learning about individual
preferences, new technology will be key toenabling a deeper relationship with ouraudiences as citizens as well as consumers.
We will bring BBC decision-making closer toaudiences encouraging them to share theirinsights with us and each other, inviting themto collaborate on building new content, andinforming them about how the BBC is run andour resources managed.

Make the BBC simpler andeven more creative
We are in the middle of a process to makethe BBC simpler and leaner – to not only
modernise the way the BBC works, but also
improve how it works.

regulated organisations – better than mostof government and above a typical
media company.

The cost and size of senior management has
been reduced. When we began our current
reforms there were as many as 10 layers
between the Director-General and staff. All
We announced proposals in July 2015 that
BBC divisions have reviewed their structures
will save £50 million from changes that cut
in order to reduce this – leading to
duplication, complexity and cost. The
management layers already falling to eight,
proposals will:
and we are on track to achieve a target to—— simplify and standardise a unified
further reduce layers. In March we exceeded‘one BBC’ approach in professional
a 2012 pledge to cut the senior manager
and support areas – marketing andpay bill by £9 million and we are now oncommunications, finance, HR, IT support
track to save a further £10 million. As
and legal – saving around £25 million
examples of these changes, a single controller—— reduce the number of divisions, saving
across BBC television channels and iPlayer
around £15 million
was announced in January, and in April,—— reduce the number of management layers Technology, Engineering and Digital became
from the top to the bottom, saving around a single division.
£10 million
Further tough choices lie ahead with changes
to programmes and services inevitable.
This will establish a BBC with fewer divisions,However, working towards a simpler andfewer management layers and less costly
leaner BBC will continue to ensure that webusiness support. The work is now wellminimise the impact of such cuts to services.
underway with progress in every area.
The professional services changes are now
Transform what we do for
expected to achieve £30 million in staff
younger audiences
cost savings.
The BBC’s unwavering commitment toOverheads have now fallen to 6% of total
costs, against a public sector average of 11.2%
and the regulated industry average of 8.8%.
Accountants PwC independently verified
both our historic BBC savings and ouroverhead bill. They found that not only had
we delivered over £1.6 billion in annual savingsin the last five years, but that our overhead
percentage put us amongst the most efficient

As students prepared for their exams, BBC Learning launcheda free Bitesize revision app
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universality and belief in providing a rich mix
of content for all age groups means that weneed to regularly evolve our youth offer toensure that it is still appealing to audiences.
Young audiences are at the vanguard of
behavioural change; they adopt newtechnologies before other age groups, and use
these technologies in groundbreaking ways.
Despite this, they continue to love broadcast

Life and Death Row: Love Triangle is BBC Three’s first serialised
documentary for digital audiences
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content, consuming radio and televisioncontent in huge numbers. The BBC then,needs to offer a range of content experiences
across all platforms, to this sophisticated groupof consumers. This means providing specialist
services that directly target young audiences,such as the new BBC Three and Radio 1/1Xtra;
but also ensuring that our broad popular
services, such as BBC One, continue to offer
content that appeals to young audiences.

with a varied on-demand offering via Radio 1
on iPlayer. In line with Radio 1’s ambition to
be a force for good in the lives of young
people in the UK, our volunteering campaign,#1millionhours, will continue throughout
2016. This will encourage listeners to donate
a million hours of their time to help others via
a series of key charity partners. We will also
increase the impact of Radio 1’s documentary
output offering complementary visualcontent and using social media to effectively
promote programmes.

inspire primary school children throughexciting, innovative and accessible massparticipation experiments.

Our core services, such as BBC One, will
deliver distinctive mainstream content that
holds great appeal to young audiences. For
example, EastEnders remains a favourite withyoung audiences, with just over 1.5 million 16
to 34 year-olds viewing each episode in 2016
so far on average. The return of factual
entertainment programmes such as The GreatThe newly launched BBC Three will build on
British Bake Off and Strictly Come Dancing will
its success and continue to innovate with new
likely delight and inform a significant young
content, new talent and new platforms. Future BBC Learning will continue to support andaudience, following on from attracting 3.1
educate young learners. The next year will
highlights include the return of BAFTA
million and 1.1 million young viewers on
see the transformation of Bitesize, the BBC’s
nominated People Just Do Nothing, Class – theaverage, respectively, every week in 2015.
young adult Doctor Who spin-off, documentary curriculum-linked education resource that
supports children and young people with their Drama is also important to this audienceseasons on race, disability and religion, andstudies outside the classroom. BBC Bitesize is group, so the return of Sherlock, Doctor Who
Unsolved, which will use multiple formats toand Our Girl will bring young audiences to theused by nine out of ten 15 and 16 year-olds
tell the story of the real-life disappearance
channel throughout the year. The forthcoming
during the summer term. Thanks to theof a teenager 20 years ago. Native apps
summer of sport, with both Euro 2016 anddevelopment of myBBC, users will in future
for mobile will launch in 2016.
the Rio Olympics, will draw in young audiences
sign
in
to
Bitesizeandenter
information
aboutRadio 1 and 1Xtra will continue to engage with
their education, enabling personalised content, – based on past tournaments, we can expect
young audiences through a strategy of Listen,around one quarter of the audience to be
progression and reward. BBC Learning will
Watch and Share. Our distinctive on-air
aged 16 to 34.
also
undertakeabold,
ambitious,
curriculumprogrammes will be complemented by online
linkedsciencecampaign.
The
campaign
will
activity on appropriate platforms, together

BBC Radio 1’s Big Weekend is Europe’s largest free ticketed festival
74

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Performance

How we performed against ourobjectives by content area, genre,
channel or network.

BBC One’s BAFTA-winning drama series Happy Valley
bbc.co.uk

BBC Annual Report and Accounts 2015/16

75Strategic report – Performance

Television
The BBC had some notable successes on television this year, despite continuing
declines in audience reach and time spent across the industry as a whole.

BBC One’s power to unite us through things
we share was clearly evident again this year.
The final of The Great British Bake Off reachedmore than 15 million people, making it themost watched programme in 2015. In drama,
the second series of Happy Valley attracted
larger audiences than the award-winning firstseries, and new commission Doctor Foster
captivated audiences – reaching more than
10 million people with the final episode. The
BBC also continued its tradition of bringing
audiences comedies with the best of British
talent, with a successful launch of Peter Kay’s
Car Share (which premiered on BBC iPlayer
before being broadcast on BBC One), andthe return of Still Open All Hours withSir David Jason.

and the Giant Dinosaur on BBC One (which
achieved an audience of 8.1 million) and Fakeor Fortune demonstrated arts formats candeliver large audiences, becoming the BBC’s
top performing arts series since 2004.

The BBC, like all major public service
portfolios, experienced declines in
television viewing in recent years,
particularly amongst the young. Audienceshare (all individuals) declined slightly
year-on-year from 32.9% to 32.3%, as a resultof small losses across the channels.

Innovation, experimentation and support of
new talent on BBC Three continued in thelead up to February’s online launch. New
offerings like The Fear, Murder In Successvilleand Asian Provocateur, with rising star Romesh
Ranganathan, demonstrated the channel’scommitment to launching bold new formats
with exciting new talent.

Our factual programming bucked theprevailing market trends, growing reachoverall, particularly amongst black andminority ethnic viewers. New launches on
BBC One and BBC Two drove this strong
performance such as Hugh’s War on Waste,
Back in Time for the Weekend and The Real
Marigold Hotel. Natural History demonstrated
its enduring audience appeal with Attenborough

BBC Three and Four also played distinct
roles in delivering factual content to ouraudience. BBC Three’s factual seasons
covering disability, race and gender included
a documentary fronted by Professor Greenon male suicide, which is now being shownby teachers in schools. BBC Four’s Go Slowseason struck a distinct chord with audiences
looking for something different and distinctive– in fact the Handmade: Wood documentary
achieved the BBC’s highest ever ‘Fresh & New’score for an origination.

BBC Annual Report and Accounts 2015/16

15m
15 million people, making it themost watched programme in 2015
If you want to read more about the BBC’s spending in each of the
Nations, please see page 93 in the BBC’s Full Financial Statements.

Our children’s channels boldly went where
no others had before – CBBC sent a Blue
Peter badge into space with Tim Peake, anddocumented a Syrian child’s life inside a
refugee camp in Boy on the Bicycle; while
CBeebies brought its audience standout
events like the Tortoise and the Hare ballet,
and pioneering dramas such as Topsy & Tim.

BBC Four’s Handmade: Wood achieved the BBC’s highest ever‘Fresh & New’ score for an origination
76

The final of The Great British Bake Off
reached more than

The Real Marigold Hotel raised some big questions about
the way we live the later part of our lives
bbc.co.uk

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Television performance by service
Content (£m)
We spent a totalof £1,648.3 million
on these services
last year

Reach (%)
UK population
who use theservice eachweek

Network television

Time spent
watching achannel eachweek (h:m)
Length of time theaverage viewer
spent each weekwith the channel

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

Cost peruser hour (p)How much it
costs to deliver
each service toindividual users

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.

£1,052.5m 71.8%
2014/15: £1,110.0m

2014/15: 73.3%

07:34

80.0

6.3p

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
and arts programming.

£399.0m

46.1%

2014/15: £404.8m

2014/15: 47.3%

03:06

81.9

9.0p

£52.9m*17.1%**

01:44

82.4

6.7p

£44.2m

12.8%

01:43

83.4

6.5p

£70.6m

4.6%†

02:31

n/a

19.8p

£29.1m

7.9%‡

04:21

n/a

2.7p

BBC Three is constantly
innovating to provoke
thought and to entertain
audiences from 16-year-olds
to 30-somethings withoriginal comedy, drama andfactual programming thatcelebrates new British talent.
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.
The CBBC channel offers
a distinctive mixed schedule for6- to 12-year-olds, with mainly
UK programmes served ina stimulating, creative andenjoyable environment.
CBeebies provides a mixof high-quality, mostly
UK-produced, programmes
designed to encourage learning
through play in a consistently
safe environment for children
under six.

2014/15: £82.0m

2014/15: £46.0m

2014/15: £72.2m

2014/15: £27.7m

2014/15: 18.4%

2014/15: 13.6%

2014/15: 4.9%

2014/15: 8.2%

2014/15: 07:39

2014/15: 03:08

2014/15: 01:49

2014/15: 01:42

2014/15: 02:34

2014/15: 04:04

2014/15: 80.4

2014/15: 82.2

2014/15: 82.8

2014/15: 84.0

2014/15: n/a

2014/15: n/a

2014/15: 6.5p

2014/15: 9.0p

2014/15: 8.1p

2014/15: 6.6p

2014/15: 18.8p

2014/15: 2.7p

Reach definition: 15+ minutes consecutive for all channels and services and audiences aged 4+ (TV).
Sources: BARB (TV reach and time spent – all channels include their simulcast HD channel where applicable); Appreciation Index: Pulse panel of 20,000 UK adults 16+ by GfK.
n/a Data does not currently exist for this measure.
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 above figures. iPlayer viewing is growing, especially for young-skewed services
such as CBBC where iPlayer accounts for over one-fifth of viewing in 2015/16.
*	BBC Three as a linear service closed in March 2016, being replaced with an online service from February 2016. Spend on BBC Three Online formed part of the BBC Online & Red button service from thatpoint onwards.
**	BBC Three: among its target group of 16- to 34-year-olds reach was 22.0% and time spent was 02:09. Owing to the channel moving online, BBC Three BARB data to14/02/2016; BBC Three Appreciation Index
data to 15/02/2016.
†	CBBC: among its target audience of 6- to 12-year-olds reach was 21.3% and time spent per viewer was 02:57 (based on 15+ min reach). Based on 3+ minute reach, reach was 25.8% of 6- to 12-year-olds andtime spent per viewer was 02:27.
‡	CBeebies: among its target audience of 0- to 6-year-olds (measured as children aged 4-6 and housewives with children aged 0-3) reach was 40.3% and time spent was 05:01 (based on 15+ min reach).
Based on 3+ minute reach, reach was 46.2% of 0- to 6-year-olds and time spent per viewer was 04:23.
Arrows denote whether there has been a change of +/-1.1-2.4% or +/-2.5% from the previous year’s AI.

bbc.co.uk

BBC Annual Report and Accounts 2015/16

77Strategic report – PerformanceRadio
In the face of increasing digital competition and changing audience habits, radio
across the BBC maintained reach and hours by focusing on high-quality, distinctive
programming, creative partnerships and digital innovation.
Radio 1’s #1millionhours campaign
encouraged young listeners to volunteer
for good causes with four national charities,
while Radio 1Xtra partnered with Arts
Council England and the Roundhouse in its
spoken word season. Radio 1’s YouTube
channel reached three million subscribers.

Professor Stephen Hawking’s Reith Lecturesand Glenda Jackson in Zola’s Blood, Sex andMoney featured on Radio 4, where Andrew
Marr also explored British identity throughpoetry and national borders were debated in
The Global Philosopher. Radio 4 extra’s audiencepeaked at 2.2 million.

Radio 2 broadcast the 500 Words final from
St James’s Palace after record entries andcommemorated the 75th anniversary of theBattle of Britain. A series from Shilpa Shetty
celebrated India, alongside a live music
simulcast with the Asian Network, while
Radio 6 Music is the biggest digital‑only station.

Radio 5 live broadcast a heart transplant inreal time, came live from 20 marginal seats
during the election campaign, and went
behind the scenes at RAF Akrotiri, the Britishbase for operations in Syria.

Radio 3 brought listeners remarkable music
and culture through seasons like Northern
Lights and Why Music? with the Wellcome
Collection, broadcasting a record-breaking
composition by Max Richter called Sleep. The
BBC Proms celebrated its 120th anniversary
with a focus on the piano and new regular
Sunday Matinees aimed at families.

We launched a BBC Music app and anumber of DAB pop-up stations, including
a temporary jazz service in partnership with
Jazz FM. We offered a download function for
BBC iPlayer Radio and our short-form audio
collections received record audiences online.

BBC Annual Report and Accounts 2015/16

3m
If you want to read more about the BBC’s spending in each of the
Nations please see page 93 in the BBC’s Full Financial Statements

We outlined a proposal to open up BBC
Radio to more competition fromindependent producers and continued todeliver savings, whilst remaining focused on
the quality of our output and the unique role
BBC Radio plays in people’s daily lives.

Asian Network presenter Bobby Friction and Radio 2 presenter Jo Whiley
teamed up for a celebration of Indian music simulcast across both stations
78

Radio 1’s YouTube channel reachedthree million subscribers

Radio 5 live presenters Tony Livesey and Anna Foster present the
5 live Drive programme
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Radio performance by service
Content (£m)
We spent a totalof £277.3 million
on these services
last year

Reach (%)
UK population
who use theservice eachweekTime spent
listening to aservice eachweek (h:m)
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

Cost peruser hour (p)How much it
costs to deliver
each service toindividual users£36.2m

19.3%*

06:11

78.9

1.1p

£4.6m

1.9%‡

04:56

82.4

1.7p

£44.6m

28.5%†

11:53

82.2

0.5p

£37.7m

3.8%

06:21

82.0

5.5p

£88.6m

20.0%

11:30

80.6

1.4p

£3.1m

3.7%

05:48

77.4

0.5p

£45.5m

10.3%

06:35

78.8

2.4p

£2.5m

2.7%

03:19

85.4

1.0p

Network radio
BBC Radio 1 broadcasts a
distinctive mix of new musicand entertainment for
15- to 29-year-olds as wellas providing tailored news,
documentaries and advice
campaigns for young adults.
BBC 1Xtra plays the best incontemporary black music,
with a strong emphasis ondelivering high-quality live
music and supporting
new artists.
BBC Radio 2 broadcasts a
unique mix of music and speechprogrammes covering a diversemix of live pop and rock,comedy, documentaries andreligious output, as well as
bringing social action campaigns
to over 14 million listeners.
BBC Radio 3 centres onclassical music, around which
it provides a broad spectrumof jazz, world music, arts
programmes, religion anddrama. There is a strongemphasis on musicalperformance across the UK.
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.
Originally launched in 2002
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.
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 throughwide-ranging analysis anddiscussion.
BBC Radio 5 live sports extra
brings a greater choice of live
action to sports fans byextending live coverage ofvarious sporting events.

2014/15: £40.5m

2014/15: £6.2m

2014/15: £46.2m

2014/15: £38.4m

2014/15: £87.8m

2014/15: £3.9m

2014/15: £49.1m

2014/15: £2.5m
bbc.co.uk

2014/15: 19.4%

2014/15: 1.9%

2014/15: 28.4%

2014/15: 3.7%

2014/15: 20.1%

2014/15: 3.3%

2014/15: 10.9%

2014/15: 1.9%

2014/15: 06:37

2014/15: 05:11

2014/15: 11:49

2014/15: 05:49

2014/15: 11:30

2014/15: 05:47

2014/15: 06:35

2014/15: 03:31

2014/15: 77.3

2014/15: 79.2

2014/15: 81.4

2014/15: 82.1

2014/15: 80.4

2014/15: 77.1

2014/15: 78.3

2014/15: 83.0

2014/15: 1.1p

2014/15: 2.3p

2014/15: 0.5p

2014/15: 6.4p

2014/15: 1.4p

2014/15: 0.7p

2014/15: 2.5p

2014/15: 1.3p

BBC Annual Report and Accounts 2015/16

79Strategic report – PerformanceRadio performance by service
Content (£m)
We spent a totalof £277.3 million
on these services
last year

Reach (%)
UK population
who use theservice eachweekTime spent
listening to aservice eachweek (h:m)
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

Cost peruser hour (p)How much it
costs to deliver
each service toindividual users

£7.9m

4.0%

09:09

82.4

0.7p

£6.6m

1.1%§

05:52

80.1

3.5p

Network radio
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.
BBC Asian Network offers
speech and music appealing
to British Asians, with a focus
on news and current affairs.
It broadcasts mainly in English,
but does offer some
programmes in other languages.

2014/15: £8.0m

2014/15: £6.2m

2014/15: 3.8%

2014/15: 1.1%

2014/15: 08:38

2014/15: 06:29

2014/15: 82.5

2014/15: 74.4

2014/15: 0.9p

2014/15: 3.1p

Reach definition: 15+ minutes for all stations and audiences aged 15+.
Sources: RAJAR (Radio reach and time spent). Appreciation Index: Pulse panel of 20,000 UK adults 16+ by GfK.
n/a Data does not currently exist for this measure.
Excludes programme ‘Coming up on 5 live sports extra’.
* Radio 1: among its target group of 15-29 year-olds reach was 37.1% and time spent was 06:16.
† Radio 2: among its target group of 35+ year-olds reach was 34.9% and time spent was 12:53.
‡ 1Xtra: among 15-24 year-olds reach was 6.3% and time spent was 04:08.
§	A sian Network: among its target group of British Asians under 35 reach was 13.8% and time spent was 05:44.
Arrows denote whether there has been a change of +/- 1.1-2.4% or =+/-2.5% from the previous year’s A1.

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News
BBC News brings the world to the UK and the UK to the world.

Our reach is unparalleled. Last year 320
million people worldwide watched andlistened on television, radio, online and mobile.
In the UK 77% of adults consumed BBC News
weekly. The range of coverage spanned theterror attacks in Paris, Brussels, Tunisia, Beirut
and the Sinai desert, in-depth investigation
into an economically stalling China, the politicalparalysis in Brazil, the resurgence of India, a
new government in Nigeria, and ourcommitment to reporting the continuing war
in Syria and understanding the renewal of
diplomatic relations with both Iran and Cuba.
Above all, 2015 was the year that the issues ofglobal economic inequality and the fear of
violence spilled across Europe in the form of
millions of migrants arriving by boat or on
foot. When something important happened,
the BBC was there.
We are the most trusted, accurate andimpartial source of news in the UK. 2015
was the year of the UK General Election andthere were three stand-out moments for ouraudience: David Cameron’s BBC interview inwhich he told the country he wouldn’t standfor a third term; the BBC Question Time in
Leeds when the politicians and the public
really locked horns for the first time; and themoment when David Dimbleby announced
the outcome of the exit poll, the poll that
defied all others. It was also the year that
local and regional coverage played a vital role
during the series of storms and floods thatswept the UK.

We are at the front line of online and mobile
news. 2015 saw audiences in the UK andaround the world accessing news more andmore on their mobiles. BBC Breaking News
Twitter followers increased to over 21 million.
Video posts helped BBC News become thebiggest news provider on Facebook withmore than 28 million ‘likes’.
We are reaching record numbers of people
across the world. Last year 320 million
people worldwide, or one in every 16 adults,
used the BBC’s international news services,
now available in 30 languages including English.
This is a 13% increase since last year and puts
us well on track to meet the DirectorGeneral’s target of a 500 million overall global
audience by our centenary in 2022. We’ve
introduced new TV news bulletins in languages
other than English, which have hugely boosted
our growth. All platforms – radio, televisionand online – have larger audiences than lastyear. We are shortly to begin the biggest
expansion of the World Service since the1940s, thanks to additional funding from the
UK Government. This will help us reach evenmore people, especially those in countries
where media freedom is under threat.

Last year 77% of UK adults weekly watched and listened to BBC Newson television, radio, online and mobile
bbc.co.uk

320m
people worldwide watched andlistened to BBC News on television,
radio, online and mobile
If you want to read more about the BBC’s spending in each of the
Nations, please see page 93 in the BBC’s Full Financial Statements.

This World, Outbreak: The Truth About Ebola won the BAFTA award
for Current Affairs for its investigation into the epidemic
BBC Annual Report and Accounts 2015/16

81Strategic report – Performance
News performance by service

The BBC News Channel
is a 24‑hour impartial andindependent news service
offering breaking news, analysis
and insight. It provides fastand comprehensive coverageof local, UK and international
events as they unfold.

PARLIAMENT

BBC Parliament is the UK’s
only channel dedicated topolitics. It shows debates
and committees from
Westminster, Holyrood,
Stormont, Cardiff Bay andStrasbourg as well as politicalprogrammes from acrossthe UK.

Content (£m)
We spent a totalof £48.5 million
on content forthese services
last year

Reach (%)
UK population
who use theservice eachweekTime spent
watching or
listening to aservice each week(h:m) Length oftime the average
viewer or listenerspent each weekwith the service

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

Cost peruser hour (p)How much it
costs to deliver
each service toindividual users£46.6m

10.3%

02:41

n/a

5.5p

£1.9m

0.6%

02:12

n/a

7.0p

2014/15: £46.2m

2014/15: £1.7m

2014/15: 10.2%

2014/15: 0.5%

2014/15: 02:34

2014/15: 01:46

2014/15: n/a

2014/15: n/a

2014/15: 5.8p

2014/15: 6.3p

Reach definition: 15+ minutes for all channels and services and on audiences aged 4+ (TV) and 15+ (radio).
Source: reach and time spent BARB (TV).
n/a Data does not currently exist for this measure.
Three-minute reach for BBC News Channel and BBC Parliament – in line with industry standards – would be 14.8% and 1.3% respectively (16.5% and 1.5% among 16+ population).

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News performance by service
Global performance
The BBC World Service Group is the global
division of BBC News and includes the World
Service, World News, bbc.com and Media
Action. BBC World Service is an international

multimedia broadcaster, delivering a wide
range of language and regional services onradio, TV, online and via mobile. BBC WorldNews and bbc.com, the BBC’s commercially
funded international 24-hour news andinformation platforms, are operated by BBC
Global News Ltd, a member of the BBC’scommercial group of companies.

2015/16

2014/15

Year on yearchange (%)

World Service Group (Total Global News audience)

320.3

282.6

13.3

BBC World Service

246.3

209.8

17.4

World Service Television

90.6

74.2

22.1

World Service Radio

144.6

131.6

9.9

World Service Online

41.6

24.0

73.4

BBC World News channel

83.5

84.8

-1.5

bbc.com and social media

39.2

33.3

17.7

World Service English

65.8

52.1

26.3

Arabic

36.7

36.3

1.2

Azeri

0.13

0.08

55.5

Bengali

6.2

7.7

-20.4

Brasil

7.4

3.9

88.3

Burmese

6.0

6.9

13.3

Chinese

0.82

0.47

73.1

French

14.8

12.7

16.8

Great Lakes

3.2

3.2

0.8

Hausa

23.3

18.1

28.7

Hindi

6.3

10.8

-41.9*

Audience by service (m)BBC World Service reach across all platforms by language service

bbc.co.uk

BBC Annual Report and Accounts 2015/16

83Strategic report – Performance
News performance by service

2015/16

2014/15

Year on yearchange (%)

Indonesian

4.7

4.1

13.0

Kyrgyz3.0

0.1

2,808.7

Mundo

6.9

3.9

78.2

Nepali

5.3

4.6

14.1

Pashto

6.6

6.5

1.7

Persian

17.9

17.7

1.5

Russian

4.4

5.6

-20.4

Sinhala

0.89

0.89

0.0

Somali

3.6

3.5

3.3

Swahili

17.2

16.6

3.6

Tamil

9.6

1.4

591.3

Thai

1.2

0.16

666.9

Turkish

1.7

0.84

107.4

Ukrainian

2.9

3.0

-3.4

Urdu

11.9

11.5

3.2

Uzbek

0.59

0.58

1.0

Vietnamese

1.5

0.42

260.1

Audience by service (m)BBC World Service reach across all platforms by language service continued* Existing WS Hindi TV reach was removed from GAM 2016 due to a change in format; the new format has not yet been measured.
Please note that the total World Service audience reach is less than the sum of the individual World Service language services. This is because we de-duplicate audiences and report unique user figures.
For example, people using multiple platforms to access our content, or multiple services or languages, are counted only once. This has the net effect of lowering – and thereby making more accurate –the total World Service reach figure.
Source: BBC Global Audience Measure (GAM). The GAM is a snapshot of the BBC’s global news weekly audience using the latest data available as of May 2016, covering 238 countries and territories.
Data is compiled from a combination of market surveys, syndicated audience ratings data and web analytics. UK domestic news is excluded from the calculation. The 2015/16 numbers have included
social media (Facebook and YouTube) for the first time, in addition to television, radio and online.

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DigitalThis year more people came to BBC Online. We have started to deliver more
personalised experiences and world class innovation, whilst delivering more toaudiences around the world.
2015/16 saw BBC Online’s reach increase
from 51.4%, up from 50.2% in 2014/15.
During the General Election over 76.1 million
unique browsers globally used BBC News
Online. It has also been rated the most trusted
online news source in the UK. BBC Online isconsistently in the top five highest reachingsites in the UK. It is the only British service torank in that top five - all the others are basedin the US1. BBC Online continues to be mobile
first: it is the biggest screen in terms of traffic
for BBC Online.
In 2015/16 we continued to personalise BBC
Online, with over six million people signingin to use our personalised features over thelast year. Highlights include rapid sport andnews notifications; alerts to most loved
personalised iPlayer content; and tailored
recommendations.
We created a body of distinctive content
and launched a series of innovative
experiences: an interactive episode ofCasualty was one of over 100 pilots launchedthis year on our testing platform BBC Taster.
These pilots are successfully informing
commissioning strategies.

BBC Online also became more open andcollaborative. We partnered with theindustry on Make it Digital, a major initiative
which aims to inspire today’s generation ofschoolchildren to learn coding skills.
Additionally, we jointly launched BBC Storewith BBC Worldwide, which enablesaudiences to enjoy a comprehensive collectionof programmes from our archive.
We have continued to transform our offer
for youth audiences with BBC Three movingfrom a linear broadcast channel to an online
first destination – the first broadcaster in theworld to do this. BBC Three online shows longand short form content tailored to platforms
such as YouTube, Facebook and Twitter,ensuring that the new BBC Three isn’t justin the digital world, but that it is of thedigital world.

During the General Election

76.1m
more than 76.1 million uniquebrowsers globally used
BBC News Online
If you want to read more about the BBC’s spending in each of the
Nations, please see page 93 in the BBC’s Full Financial Statements.
1	Source: comScore, MMX Multi-Platform, July 2014 – March 2016,
top five based on Unique Visitors, Top 100 Properties

Our focus next year will be to open up theBBC’s digital capabilities to the UK creative
sector; working on turning the Ideas Service
into practice as outlined in our Charter
proposals; and to bring the BBC’s best content
to our online audiences. Internally, the BBC isbringing together all of its public service andcommercial technology functions to help
ensure the organisation will continue to build
on its rich tradition of innovation as it enters
into its next Charter period.

The reinvented BBC Three offers television shows to stream and download through our new
home The Best Of and publishes daily content through its mobile-first platform The Daily Drop
bbc.co.uk

BBC Annual Report and Accounts 2015/16

85Strategic report – Performance
Digital performance by service

BBC Online comprises theBBC’s portfolio of online
products on desktop, TV,
mobile and tablet, including
news, sport and weather;
our children’s services CBBC
and CBeebies; and Knowledge
and Learning – as well as
IP-delivered TV and radio
services, with both live andon-demand programmes
available on BBC iPlayer. BBC
Red Button and Red Button+deliver interactive services andcontent to digital televisionviewers, including up-to-theminute content andinformation across news, sport,
weather, entertainment,interactive programming andmajor events.

Content (£m)
We spent a totalof £153.3 million
on content forthese services
last year

Reach (%)
UK population
who use theservice eachweekTime spent
with each service
each week (h:m)
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 peruser reached
per week (p)How much it
costs to deliver
each service toindividual users£153.3m

63.1%*

n/a

n/a

9.4p

2014/15: £124.6m

2014/15: 63.6%

2014/15: n/a

2014/15: n/a

2014/15: 7.6p

Reach definition: 3+ mins for both services, and on adults aged 16+.
Sources: Reach: Cross-Media Insight Survey by GfK for the BBC, 16+.
n/a Data does not currently exist for this measure.
The prior year balance has been updated following an adjustment to the data that has allowed a more accurate analysis.
*	Note that the service reach listed in the performance table relates to BBC Online and Red Button reach, this consequently includes additional audiences reached by the BBC’s Red Button services who may not
use BBC Online.
N.B. The 2014/15 cost per user reached figure is different from that in the 2014/15 Annual Report owing to an error in the calculation in 2014/15.

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Part Two: Strategic report – Performance

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Performance by reach
Television
Weekly reach
BBC network television versus
main commercial groups

All BBC
Television

Total otherchannels

80.3%

88.5%*

2014/15: 82.0%

2014/15: 89.4%

All

All

All

All

television

television

television

television

68.4%

60.7%†

42.4%

40.5%

2014/15: 70.5%

2014/15: 61.9%

2014/15: 42.6%

2014/15: 41.6%

Source: BARB, Based on 4+. Reach condition = 15+ mins consecutive.
* Reach of all TV channels apart from the BBC TV portfolio.
† Excludes S4C.
Sky portfolio – includes Flextech from week 1 2011 and excludes Flextech in 2010.
ITV and Channel 4 portfolio figures do not match 2012/13 figures in the Annual Report owing to TechEdge reach methodology change that was implemented at the end of 2013.
All data run prior to TechEdge reach methodology change in May 2016 except for ‘Total Other (excluding BBC portfolio)’ which was run after this change. For comparability, the figures for earlier financial years
were rerun for this category so do not match the figures in the 2014/15 Annual Report.

Weekly television reach
100

90

Total other(exc BBC portfolio)

80

BBC portfolio
ITV portfolio
Channel 4 portfolio
excluding S4C

70

Channel 5 portfolio

60

Sky portfolio
50

40

30

FY2011/12

FY2012/13

FY2013/14

FY2014/15

FY2015/16

Source: BARB / TRP Research.
Based on inds 4+.
Reach condition = 15+ mins cons.
Sky portfolio – includes Flextech from week 1 2011 and excludes Flextech in 2010.
ITV and Channel 4 portfolio figures do not match 2012/13 figures in the Annual Report due to TechEdge reach methodology change that was implemented at the end of 2013.

Radio
All BBC radio

All commercial
radio

All BBC
network radio

All nationalcommercial
radio

All BBC local
radio

All local
commercial
radio

65.2%

64.7%

59.7%

33.9%

16.2%

50.8%

Weekly reach
BBC Radio compared tocommercial stations

2014/15: 65.3%

2014/15: 63.8%

2014/15: 59.6%

2014/15: 31.8%

2014/15: 16.6%

2014/15: 50.6%

Source: RAJAR, 15+, 15-minute reach.

bbc.co.uk

BBC Annual Report and Accounts 2015/16

87Strategic report – Performance

Performance by genre*
Network hoursof output by genreRadio3,385 hrs

819 hrs

30 hrs

6 hrs

11,543 hrs

Current
Affairs

184 hrs

343 hrs

123 hrs

113 hrs

1,645 hrs

Factual2,264 hrs

3,382 hrs

1,007 hrs

1,311 hrs

3,476 hrs

Music
and Arts

51 hrs282 hrs

30 hrs1,425 hrs

42,236 hrs

Religion

92 hrs

50 hrsn/a

24 hrs573 hrs

576 hrs

278 hrs

169 hrs

106 hrs

4,632 hrs

359 hrs

788 hrs

197 hrs

101 hrsn/a

575 hrs

317 hrs

91 hrs27 hrs7,385 hrs

177 hrs

294 hrs

1,088 hrs

28 hrsn/a hrs**

Schools/
Formal Education

n/a

95 hrsn/an/a

104 hrsSport

604 hrs

1,034 hrs

44 hrs2 hrs

5,483 hrs

News and Weather

2014/15: 3,256 hrs

2014/15: 197 hrs

2014/15: 2,102 hrs

2014/15: 44 hrs

2014/15: 86 hrs

Drama

2014/15: 643 hrs

Film

2014/15: 356 hrs

Entertainment

2014/15: 579 hrs

Comedy2014/15: 161 hrs

2014/15: n/a

2014/15: 819 hrs

2014/15: 409 hrs

2014/15: 443 hrs

2014/15: 3,356 hrs

2014/15: 286 hrs

2014/15: 50 hrs

2014/15: 242 hrs

2014/15: 783 hrs

2014/15: 314 hrs

2014/15: 252 hrs

2014/15: 309 hrs

2014/15: 1,087 hrs

2014/15: 34 hrs

2014/15: 166 hrs

2014/15: 971 hrs

2014/15: 48 hrs

2014/15: n/a

2014/15: 282 hrs

2014/15: 190 hrs

2014/15: 197 hrs

2014/15: 1,208 hrs

2014/15: 1 hr

2014/15: 167 hrs

2014/15: 6 hrs

2014/15: 111 hrs

2014/15: 1,196 hrs

2014/15: 1,434 hrs

2014/15: 21 hrs

2014/15: 177 hrs

2014/15: 129 hrs

2014/15: 28 hrs

2014/15: 49 hrs

2014/15: 1 hr

2014/15: n/a

2014/15: 11,391 hrs

2014/15: 1,668 hrs

2014/15: 3,318 hrs

2014/15: 42,024 hrs

2014/15: 592 hrs

2014/15: 4,280 hrs

2014/15: n/a

2014/15: 7,490 hrs

2014/15: n/a

2014/15: 112 hrs

2014/15: 5,166 hrs* BBC Three became an online-only channel on 16 February 2016. Therefore hours of output on network linear TV are only shown until 15/02/2016 and do not include online programming.
The comparison with 2014/15 is not like-for-like.
** The radio comedy hours are disclosed within the Entertainment genre.

Network hoursof output by genreChildren’s

2 hrs

2014/15: 1 hr

8 hrs

2014/15: 21 hrs

n/a

2014/15: n/a

4,090 hrs

2014/15: 4,076 hrs

4,393 hrs

2014/15: 4,355 hrs

Education (formal) includes education for children, Open University and BBC Learning Zone.
CBBC and CBeebies programming moved from BBC One and BBC Two, to transmit only on its digital channels from December 2012.

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Network supply
Almost half of network television production is in the nations and regions, withmore than 48.1% from outside London and more than 16% from Scotland, Walesand Northern Ireland.

7.7%

Network TV programming spend byregion as a percentage of eligible spend
2015

2014

London

51.9%

46.7%

Scotland
Wales
Northern Ireland

7.7%
7.1%
1.8%

9.2%
6.5%
2.5%

Total nations

16.6%

18.1%

Midlands
North of EnglandSouth of EnglandMulti-region*

1.8%
17.4%
9.3%
3.0%

1.7%
23.1%
7.6%
2.8%

Total regions

31.6%

35.2%

Total nations and regions

48.1%

53.3%

Grand total

100%

100%

12,133 hrs

1.8%
226,367 hrs

8,616 hrs

BBC Local Radio** andnations radio hours of output
2015

2014

LondonEngland (ex London)
Scotland
Wales
Northern Ireland

8,014
226,367
12,133
13,8428,616

8,260
225,084
12,494
13,784
8,722

Total

268,972

268,344

7.1%

31.6%

Network television spend based on Ofcom definitions
by calendar 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 includes BBC original programmes and excludes
any repeat programmes.

51.9%

13,842 hrs

8,014 hrs

bbc.co.uk

BBC Annual Report and Accounts 2015/16

89Strategic report – Performance

The BBC in Wales
In a year marked by the Rugby World Cup, the 150th anniversary of the Welsh settlers’
voyage to Patagonia, and a General Election, the BBC performed strongly in Wales withan average 19 hours of BBC content consumed per adult each week.
on New Year’s Day provided the UK’s
favourite holiday viewing, with 11.6 million
viewers across the UK welcoming the returnof Benedict Cumberbatch and Martin
Freeman over the Christmas period.

The audience performanceof both BBC Television
and Radio continued to be
Across drama, factual and music, network
the highest of all four UK television production spend in Wales
represented 7.1% of total BBC investment,
nations, driven by thewith Crimewatch, Bargain Hunt, Casualty,
BBC Cardiff Singer of the World and Coast at
strong performancethe heart of the provision.
of BBC One Wales,
BBC Radio Wales and Radio Cymru provided
extensive coverage of the 2015 Rugby WorldRadio 1 and Radio 2.
Local television programming producedfor BBC One Wales and BBC Two Wales
attracted 870,000 viewers each week (31% of
adults), while the audience share for local
output remained ahead of comparable
measures for BBC network output in Wales.
The success of home-grown content wasmarked; and a rich and diverse crop of factual
programming included the award-winning Life
After April, a revealing portrait of the lives andpassions of a new generation in Young, Welsh
and Pretty Skint, and a frank account of one
region’s struggle to preserve its identity in
Welsh Heartland. At the lighter end of life,
Rhod Gilbert’s Work Experience and Max’s World
Cup Warm-Up were a hit with both Welsh and
UK audiences.
The year also saw significant growth in BBC
iPlayer usage in Wales, blurring the traditionalboundaries between live channels andon-demand services. For example, there wereover one million requests to view Young, Welsh
and Pretty Skint, which debuted on BBC Three.
Television drama production in Wales continued
to excel. Peter Capaldi’s second series ofDoctor Who drew six million viewers in the UK,
while BBC Wales’ production of War andPeace – adapted by Andrew Davies –attracted more than seven million viewers
in January. The second series of Hinterland(an S4C/BBC co-production) cemented its
position as BBC Wales’ most successful
locally-commissioned drama series in recent
history, while the return of BBC One’s Sherlock

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Cup, Wales’ qualification for Euro 2016 andthe General Election, though overall audience
reach was down year-on-year. In parallel,
usage of social media services and mobile
continued to grow strongly – and both
stations saw listening via podcasts andinteractive content rise.

The BBC spends£177.7m
on network and local content
from Wales
If you want to read more about the BBC’s spending in Wales, pleasesee page 94 in the BBC’s Full Financial Statements.

The 150th anniversary of the Welsh settlers
reaching Patagonia was marked with a rangeof programming, including a landmark
documentary with Huw Edwards, producedin Welsh and English. To mark the historicoccasion, the BBC National Orchestra ofWales (BBC NOW) became the first
professional symphony orchestra to visit theregion, delivering a range of music workshops
at local schools and community centres. The
tour culminated with two gala concerts ina specially converted warehouse in Chubut,
the province’s capital, attracting thousandsof local residents of all ages to their firstorchestral concert.
BBC programming for S4C continued toplay a vital role at the heart of the channel’sschedule, with the popular drama Pobol y Cwm
returning to its regular five-nights-a-weekpattern in the autumn. The introduction of
S4C to BBC iPlayer also performed well, withover 100,000 requests to view content eachweek on average. Alongside this success, BBC
Cymru Fyw – the Welsh language online andmobile service – provided a vibrant andinnovative service to users, attracting almost
45,000 unique browsers each week.

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Part Two: Strategic report – Performance

75-98

Performance by service
Content (£m)
We spent a totalof £29.3 million
on content forthese dedicatedservices last year

Reach (%)
Wales’ population
who use theservice eachweekTime spent
watching or
listening to aservice each week(h:m) Length oftime the average
viewer or listenerspent each weekwith the service

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

Cost peruser hour (p)How much it
costs to deliver
each service toindividual users£15.1m

14.8%

08:15

82.5

9.0p

£14.2m

4.3%

10:47

77.0

22.3p

Dedicated services
BBC Radio Wales is a
speech-led service for adults,
which offers a wide range ofgenres and reflects the issues,
events, culture and interestsof the people of Wales.
BBC Radio Cymru is a speech
and music radio service for
Welsh speakers, which offers
a wide range of genres andreflects the issues, events,
culture and interests of thepeople of Wales.

2014/15: £15.5m

2014/15: £14.1m

2014/15: 16.2%

2014/15: 4.6%

2014/15: 09:22

2014/15: 10:49

2014/15: 83.0

2014/15: 78.1

2014/15: 7.6p

2014/15: 21.1p

Reach definition: 15+ minutes and audiences aged 15+. Sources: RAJAR (Radio reach and time spent). Appreciation Index: From Pulse panel of 20,000 UK adults 16+ by GfK. BBC Radio Wales, BBC Radio Cymru:
data based on their Total Survey Area (TSA). Arrows denote whether there has been a change of +/-1.1-2.4% or +/-2.5% from the previous year’s AI.
BBC Radio Cymru reaches 18.9% of the 15+ Welsh-speaking population in Wales a week, who use the service for 12:07 a week on average. Welsh-speaking listeners give it an average Appreciation Index score of
76.5. The prior year balance has been updated following an adjustment to the data that has allowed a more accurate analysis.

Reaching our audiences

Performance by platform

Audience reach
Percentage of adults in Wales who use
BBC TV, radio or online each week.
in 2015

Weekly reach of BBC Television

97%

83%

2014: 97%

2014/15: 85%

Total time spent
Length of time these audiences spend with
the BBC each week in 2015.

Weekly reach of dedicated news services
on television

19.5hrs48%
2014/15: 49%

General impression
General impression of the BBC.

Weekly reach of BBC Radio

7/10

72%

2014/15: 7/10

2014/15: 76%

bbc.co.uk

BBC Annual Report and Accounts 2015/16

91Strategic report – Performance

The BBC in Scotland
With award-winning investigations and drama, to cutting edge documentaries andevents coverage, BBC Scotland reflected Scotland in all its rich diversity across 2015/16.

The third series of crime
thriller, Shetland, drew anaverage network audienceof 5.8 million.

A rich and varied crop of documentaries
included thought-provoking insights intolife in modern Scotland, with subjects such
as Transplant Tales, Teenage Millionaire andTranssexual Stories. The deeply moving
story of those still touched by a tragedy
that shook the world 20 years ago was told
in Dunblane: Our Story.

What Do Artists Do All Day?, the BBC Goes Pop
season on BBC Four and the four-part Story of
Scottish Art put the spotlight on art and artists
from Scotland and beyond. And rural life wasvery much to the fore, with The Mart, Bothy
Life, Lady Lairds, The Mountain and the much
Illegal puppy farming, fracking and the Glasgow acclaimed 12-part This Farming Life, for
BBC Two.
bin lorry tragedy were just some of thesubjects covered by our Investigations team,Mrs Brown’s Boys was, once again, at the heart
whose work on serious allegations of dopingof the BBC’s festive television schedule andin world athletics had global repercussions.
the new comedy spoof Scot Squad drew an
Catch Me If You Can subsequently scooped the average Scotland audience share of 20%
Sport Story of the Year Award at the 2015
across its six-part run.
British Journalism Awards.
BBC One Saturday night lottery show
In drama, a third series of Ann Cleeves’favourites Who Dares Wins, In It To Win It
acclaimed crime thriller, Shetland, drew anand Win Your Wish List were all shot at BBC
average network audience of 5.8 million
Scotland’s headquarters in Glasgow and ouracross its six parts. Other highlights included
outside broadcast crews brought extensive
Iain Banks’ Stonemouth and Murder on
festival coverage from across the country,
BBC Two in March. The introduction of fresh from The Proms and Celtic Connections, tofaces and compelling storylines helped Riverthe World Pipe Band Championships andCity continue to be the most appreciatedT in the Park.
‘soap’ in Scotland and, working alongside theChildren’s output continued to delight andChildren’s Hospice Association, our drama
surprise, with Katie Morag and other wellteam delivered one of the year’s mostestablished favourites joined by innovative
poignant pieces of television in telling the story
new formats such as Lifebabble.
of the death of a baby.
BBC Scotland’s General Election coverage
was both comprehensive and authoritative
and, for the first time, our results programme
broadcast live from all 32 count locations
across Scotland.

The BBC spends£176.4m
on network and local content
from Scotland
If you want to read more about the BBC’s spending in Scotland,
please see page 99 in the BBC’s Full Financial Statements.

BBC ALBA retained its loyal audience,reaching 660,000 viewers each week, and themuch-acclaimed drama, Bannan, returned toour screens during the year.
Changes to the Radio Scotland schedules
brought extended Kaye Adams and Newsdrive
programmes, with Good Morning Scotland now
on-air seven days a week. The addition of the
new topical comedy quiz Breaking the News,the weekly magazine Out for the Weekend
and Quay Sessions, showcasing the best ofhome-grown and international music talent,helped the station go from strength tostrength in 2015.
Social media is becoming increasingly
important as a means to connect with ouraudiences. The average weekly reach on the
BBC Scotland Facebook page increased from
260,000 (October 2014 – March 2015) to
1.68 million in 2015/16. One sketch, from
Scot Squad, reached 16.1million unique users.

Performance by service
Content (£m)
We spent a totalof £32.3 million
on these services
last year

Reach (%)
Scotland adult
population who
use the service
each week

Time spent
watching achannel eachweek (h:m)
Length of time theaverage viewer
spent each weekwith the channel

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

Cost peruser hour (p)How much it
costs to deliver
each service toindividual users

£5.5m

15.0%

01:59

n/a

7.8p

Dedicated services
BBC ALBA offers, to Gaelic
speakers and learners, adistinctive range of originatedprogramming that reflects
and supports Gaelic culture,
identity and heritage.
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BBC Annual Report and Accounts 2015/16

2014/15: £6.0m

2014/15: 16.2%

2014/15: 01:56

2014/15: n/a

2014/15: 8.3p
bbc.co.uk

Part Two: Strategic report – Performance

Performance by service

Content (£m)
We spent a totalof £32.3 million
on content forthese dedicatedservices last year

Reach (%)
Scotland
population who
use the service
each week

Time spent
watching or
listening to aservice each week(h:m) Length oftime the average
viewer or listenerspent each weekwith the service

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

Cost peruser hour (p)How much it
costs to deliver
each service toindividual users£22.9m

21.0%

06:55

76.0

6.6p

£3.9m

69.0%*

08:27

n/a

16.3p

Dedicated services
BBC Radio Scotland is a
speech-led service for adults.
Mixed-genre programmingreflects the diversity of
Scottish culture and covers
national and international
issues and events relevant tolisteners across the country.
BBC Radio nan Gàidheal‡
offers a comprehensive speech
and music radio service for
Gaelic speakers. Mixed-genre
programming reflects thediversity of Scottish culture
and, from a Gaelic perspective
and through the medium of the
Gaelic language, covers
national and international
issues and events relevant tolisteners across the country.

75-98

2014/15: £21.7m

2014/15: £3.7m

2014/15: 20.0%

2014/15: 63.3%

2014/15: 07:09

2014/15: 07:40

2014/15: 75.6

2014/15: n/a

2014/15: 6.5p

2014/15: 18.9p

RAJAR reach definition: 15+ minutes and audiences aged 15+. Sources: RAJAR (radio reach and time spent). Appreciation index: From Pulse panel of 20,000 UK adults 16+ by GfK. BBC Radio Scotland: data basedon its Total Service Area (TSA).
* TRP Panel: Gaelic-speaking 16+ population in Scotland. Arrows denote whether there has been a change of +/-1.1-2.4% or +/-2.5% from the previous year’s AI.

Reaching our audiences

Performance by platform

Audience reach
Percentage of adults in Scotland who use
BBC TV, radio or online each week
in 2015.

Weekly reach of BBC Television

95%

83%

2014: 95%

2014/15: 83%

Total time spent
Length of time these audiences spend with
the BBC each week in 2015.

Weekly reach of dedicated news services
on television

18.4hrs51%
2014/15: 51%

General impression
General impression of the BBC.

Weekly reach of BBC Radio

6/10

59%

2014/15: 6/10

2014/15: 57%

bbc.co.uk

BBC Annual Report and Accounts 2015/16

93Strategic report – Performance

The BBC in Northern Ireland
We had a remarkable year of BBC programmes
and events in Northern Ireland during 2015/16.

BBC Radio Ulster’s 40thbirthday was marked
by a series of outside
broadcasts and special
initiatives, including a
Gala Concert from the
Ulster Hall.
We also engaged record numbers of people
in BBC events as part of Tall Ships Belfast
and our annual Proms in the Park. And wewere delighted to bring the spectacle of
BBC Sports Personality of the Year to Belfast
for the first time. It was a proud moment for
local BBC staff, audiences and sport, andprompted some of the best feedback we’ve
ever received.
Our news and current affairs output covered
the Westminster election, providing in-depth
and sustained coverage across radio, televisionand online. We also explained and analysed
developments at Stormont and gave BBC
audiences an important forum for debate.
Spotlight continued its award-winning run ofinvestigations; Nolan Live included a unique andambitious collaboration with RTÉ looking atviews and attitudes on both sides of theborder; and BBC Newsline benefited fromnew investment to upgrade our studiofacilities in Broadcasting House – adevelopment which enhanced the lookand impact of our output.

We built upon our success in creating
high-quality network television drama, withcommissions for returning series of The Falland Line of Duty, and a new period drama set
in the west of Northern Ireland. All of thiswork has important benefits for our creative
industries and the diversity of the BBC’s
network schedules. It is complemented
by a developing range and volume of otherlocally-produced output for UK-wide
audiences, including radio documentaries,
dramas and readings, current affairs
investigations, including Panorama, andthe established, and much valued, placethat the Ulster Orchestra has within
BBC Radio 3’s schedules.

The BBC spends£73.4mon network and local content from
Northern Ireland
If you want to read more about the BBC’s spending in Northern
Ireland, please see page 104 in the BBC’s Full Financial Statements.

Local musical talent and diversity wereshowcased to great effect as part of BBC
Music Day. And we celebrated Van Morrison’s
70th birthday with a concert broadcast from
Cyprus Avenue and a week of special
programming on BBC Radio Ulster. Sir James
Galway also made a welcome return to ourairwaves and was profiled in a lyrical
documentary, Being James Galway. Emerging
musical talent also found its place on the
BBC stage through our new School Choirof the Year competition.
Technical innovation underpins all of BBC
Northern Ireland’s editorial ambitions. Our
local teams have been doing some groundbreaking work in making the BBC’s archives
more accessible as part of the BBC Rewind
project – achievements that we want toconsolidate and grow over the next period.
Addressing the technical and otherrequirements on which our broadcasting
future depends has also been a priority, andwork continues on the BBC’s property needsin Northern Ireland.
Our linguistic and cultural heritage wasreflected in different ways across our local
services. Mary McAleese wrote and presented
a compelling documentary Columbanus: The
Man Who Saved Europe, which was alsobroadcast in Irish. And Ulster-Scots themes
were explored in series including Imagining
Ulster. Much of this programming is only madepossible by the support that we receive fromNI Screen – a partnership that is also helping
to give strategic direction and impetus to thesector’s development more generally.

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Performance by service
Content (£m)
We spent a totalof £17.7 million
on content forthese dedicatedservices last year

Reach (%)
Northern
Ireland’s
population who
use the service
each week

Time spent
watching or
listening to aservice each week(h:m) Length oftime the average
viewer or listenerspent each weekwith the service

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

Cost peruser hour (p)How much it
costs to deliver
each service toindividual users£17.7m

36.2%

10:47

74.2

5.7p

Dedicated services
BBC Radio Ulster is a
speech-led service, providing
a mix of programmes thatreflect news, events andcommunity 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 ofnews and other programming
which complements, andcontributes to, BBC Radio
Ulster’s region-wide service.

2014/15: £17.3m

2014/15: 35.6%

2014/15: 10:02

2014/15: 77.9

2014/15: 6.3p

Reach definition: 15+ minutes and audiences aged 15+.
Sources: RAJAR (Radio reach and time spent). Appreciation index: from Pulse panel of 20,000 adults 16+ by GfK.
BBC Radio Ulster/Foyle: data based on its Total Survey Area (TSA).
Arrows denote whether there has been a change of +/-1.1-2.4% or +/-2.5% from the previous year’s AI.

Reaching our audiences

Performance by platform

Audience reach
Percentage of adults in Northern Ireland
who use BBC TV, radio or online
each week in 2015.

Weekly reach of BBC Television

96%

80%

2014: 95%

2014/15: 82%

Total time spent
Length of time these audiences spend with
the BBC each week in 2015.

Weekly reach of dedicated news services
on television

17.0hrs53%
2014/15: 55%

General impression
General impression of the BBC.

Weekly reach of BBC Radio

6/10

60%

2014/15: 7/10

2014/15: 61%

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95Strategic report – Performance

The BBC in England
It has been another strong year for the BBC across England, attributable to a powerful
mixture of appealing content, big news stories, unique live events and continued
investment in our sites across the country.
visit the city during the Snooker WorldChampionships. In Salford, 5 live and BBCSport hosted a marathon five-a-side footballmatch, which saw hundreds of amateur
players take to a specially constructed pitch in
the MediaCity piazza alongside Alan Shearer
and Robbie Savage to raise over £370,000
for Sport Relief.

From Poldark to
Happy Valley, the English
countryside provided
a magnificent setting
for some of our most
CBBC Live & Digital took the BBC’s Make
powerful dramas, proving it Digital project to 25,000 visitors in Hull,while in Leeds, CBeebies filmed its thirda hit with audiences across collaboration with Northern Ballet –a performance of Elves and the Shoemaker.
the country and helping
CBBC’s commitment to the North Eastremains strong with two of the network’s
to drive international
most popular drama series, continuing to filmsales and the BBC’sin the Newcastle area. These series, taken
together with all the department’s otherglobal reputation for
production activities, give rise to an out ofhigh‑quality drama.
London spend by BBC Children’s of 83%.

4.3m
The early evening BBC One
regional programmes collectively
remain the most watched news
service in England, with an average
audience of 4.3 million adults

The BBC’s relationship with Birmingham wasfurther renewed with the completion of the
The urban environment of Greater
process to move an additional 300 jobs to the
Manchester was the backdrop for Peterbase, with the BBC Academy at the heart of a
Kay’s popular comedy Car Share. The sitcom
new centre for skills, training and recruitment.
premiered on iPlayer and, with 2.8 million
Approximately 250 more roles were also
requests, became one of the most requested moved to Salford, enabling us to continue toprogrammes ever, before going on to become build our presence outside the South East anda BBC One favourite. Another notable success reduce the cost of the London estate.
was Boy Meets Girl; set in Newcastle and the
BBC Local Radio once again demonstrated
product of a specific search for scripts withpositive portrayals of transgender characters, its vital role in a crisis during successive floods
this was the first BBC comedy to prominently in the North of England. Stations in York,
Cumbria, Lancashire, Manchester and Leeds
feature transgender issues. In March 2016
all stayed on the air and provided online
The A Word, focusing on a young boy with
updates around the clock to keep the publicautism growing up in the Lake District, took
in touch with the rapidly unfolding events.
to our screens, demonstrating our ongoing
Many staff left their families to work during
desire to widen the diversity of stories andthe Christmas break, even though theirrepresentation in peak time slots.
own homes were being flooded.
A range of live events across the country
On television, the early evening BBC One
helped us to get even closer to audiences
regional programmes collectively remain thein England; The 6 Music Festival andmost watched TV news programming inaccompanying fringe event were held in
Bristol to the delight of the region’s music fans, England, with an average audience of 4.3
million adults. In January the late bulletins atwhile Birmingham played host to the second
BBC Music Awards. BBC Sport’s Cue Sheffield 22.30 were permanently extended by threeminutes, allowing more live updates fromsaw a number of network programmes
different communities around England.
such as The One Show and Woman’s Hour

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Part Two: Strategic report – Performance

75-98

Performance by service
Content (£m)
We spent a totalof £119.8 million
on content forthese dedicatedservices last year

Reach (%)
England’s
population who
use the service
each week

Time spent
watching or
listening to aservice each week(h:m) Length oftime the average
viewer or listenerspent each weekwith the service

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

Cost peruser hour (p)How much it
costs to deliver
each service toindividual users£119.8m

15.0%

08:51

82.4

3.9p

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

2014/15: £115.6m

2014/15: 15.5%

2014/15: 08:44

2014/15: 81.2

2014/15: 3.8p

Reach definition: 15+ minutes and audiences aged 15+.
Sources: RAJAR (Radio reach and time spent). Appreciation Index: from Pulse panel of 20,000 adults 16+ by GfK.
BBC Local Radio in England: data based on its Total Survey Area (TSA).
Arrows denote whether there has been a change of +/-1.1-2.4% or +/-2.5% from the previous year’s AI.

Reaching our audiences

Performance by platform

Audience reach
Percentage of adults in England who use
BBC TV, radio or online each week
in 2015.

Weekly reach of BBC Television

96%

80%

2014: 96%

2014/15: 82%

Total time spent
Length of time these audiences spend with
the BBC each week in 2015.

Weekly reach of dedicated news services
on television

18.4hrs45%
2014/15: 45%

General impression
General impression of the BBC.

Weekly reach of BBC Radio

7/10

65%

2014/15: 7/10

2014/15: 65%

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BBC Annual Report and Accounts 2015/16

97Strategic report – Performance

Local Radio
BBC Local Radio is the BBC’s regional radio service for England and the Channel Islands,
consisting of 40 stations. Launched with BBC Radio Leicester in 1967, it has expanded toserve the whole country, providing a local news-based service, complemented by music.

LOCAL RADIO
BBC Newcastle

BBC Radio Cumbria

NORTH EAST
& CUMBRIA
BBC Tees

YORKSHIRE

BBC Radio YorkBBC Radio Leeds

BBC Radio Humberside

BBC Radio Lancashire

EAST YORKSHIRE& LINCOLNSHIREBBC Radio Manchester
BBC Radio Merseyside

BBC Radio Sheffield

NORTH
WEST

BBC Radio Lincolnshire

EAST MIDLANDSBBC Radio Stoke

BBC Radio Nottingham

BBC Radio Derby

BBC Radio Norfolk

BBC Radio Shropshire
BBC Radio Leicester

WEST MIDLANDS
BBC WM 95.6

EAST

BBC Radio Northampton

BBC Coventry & Warwickshire

BBC Radio Cambridgeshire

BBC Hereford & Worcester

BBC Radio Suffolk

BBC Three Counties RadioBBC Radio Gloucestershire

BBC Essex

BBC Radio Oxford

LONDONBBC Radio Wiltshire
BBC Radio Bristol

WEST

BBC Radio London
BBC Radio Berkshire

SOUTH

BBC Surrey

BBC Radio Kent

SOUTH
EAST

BBC Somerset
BBC Radio Solent

SOUTH WEST

BBC Sussex

BBC Radio Devon
BBC Radio Cornwall
Isles of Scilly

Channel Islands

BBC Radio Guernsey

BBC Radio Jersey

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Part Two: Governance and finance report – Finance
Finance99-114

Finance

The BBC must account for how
it responsibly uses the licence fee
and other income.

BBC One’s Attenborough at 90 celebrated Sir David’s extraordinary
career in natural history
bbc.co.uk

BBC Annual Report and Accounts 2015/16

99Governance and finance report – Finance

Review of the Managing Director,
BBC Finance and Operations“As we reach the endof the current Charter,
the BBC is undergoinga substantial period ofchange and uncertainty
alongside delivery of the
final year of the DQF
programme. We haveplans in place to ensure
the financial stabilityof the BBC.”
Anne Bulford

Continued drive on
efficiencies as we enter
the final year of DQF
This year we have continued to build on
our impressive track record of delivering
efficiencies.

—— procurement is helping us make savings
from contract negotiations. The pastseven major procurements delivereda total of £649 million in savings overthe life of the contracts

In 2015, the National Audit Office (NAO)
and PricewaterhouseCoopers (PwC)
independently verified the BBC’s progress
2015/16 was the penultimate year of theBBC’s ‘Delivering Quality First’ (DQF) savings against its efficiency targets. The NAO
programme, which has delivered £621 million examined the progress of the DQF
programme, while PwC confirmed that thesustainable savings by 31 March 2016. The
BBC will hit £1.6 billion of recurring costprogramme remains on track to deliver anannual total of £700 million in annual recurring efficiencies in 2016/17, more than 40% of theBBC’s addressable costs. This has beensavings by 31 March 2017. The focus of thepossible in part due to the introduction ofefficiencies has been on people, property
a new efficiency strategy known as Compete
and procurement:or Compare. This ensures that all costs are—— people: pay restraint and headcounteither challenged in the market or rated
reductions has delivered over £150 million
against it, helping establish a culture ofa year in reduced costs and a reduction ofcontinuous efficiency within the BBC. The key
more than 2,000 employees over the past
driver of Compete or Compare is to securenine years. Senior manager pay bill has also
the best value for licence fee payers at every
fallen by more than £31 million since 2009,
opportunity. PwC found that 87% of thethe equivalent of 40%
current cost base controlled by the BBC has—— property has significantly reduced since
now been tested, up from around 80% in
2010, saving the BBC £75 million a year
2014. In 2016/17, we expect 90% of theseby 2016/17
controllable costs to be tested underCompete or Compare.

100 BBC Annual Report and Accounts 2015/16

In July 2015, PwC also reviewed the calculationof the BBC overheads and compared ouroverhead ratio against industry benchmarks.
In 2015/16, 94% of the BBC’s controllable
spend was focused on content and delivery,
with just 6% spent on running theorganisation. This places us in the top 25% ofregulated organisations, against a public sector
average of 11% and a regulated industry
average of 9%. This focus on reducing ourrunning costs ensures we are investing as
much money as possible into content forlicence fee payers.
When we began the DQF programme in 2011,
the BBC set out the savings needed based on
future licence fee income forecasts. During
2015, the BBC announced that forecast licence
fee income in 2016/17 would be £150 million
lower than the previous DQF forecast. This
represents approximately one million fewer
homes paying the licence fee. As more people
rely on BBC iPlayer, mobiles and online
catch-up, the percentage of households owning
televisions is falling faster than previously
predicted, and a loophole means thathouseholds watching only on-demand
television are not subject to the licence fee.
We welcome the Government’s commitment

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Part Two: Governance and finance report – Finance

to close the iPlayer loophole by bringing
BBC on-demand programme services into
the legislation.
In the meantime, the BBC must find savings
to make up this £150 million shortfall that willarise by the end of the current licence fee
period. The Director-General has set out
a package of proposals to save £50 million
by making the BBC simpler and leaner. These
will reduce the number of divisions, reduce
the number of layers from the top to thebottom of the organisation and simplify andstandardise procedures across the BBC. This
work is now well under way. The remaining£100 million in savings will come from a mix ofcontent savings and other pan-BBC initiatives.
The BBC’s sports rights budget will contribute£35 million of the savings, which has alreadybeen achieved from changes, including Open
Golf coverage and the move of Formula 1
to Channel 4.
The 2015 licence fee settlement effectively
requires the BBC to absorb inflation in thecost base equivalent to £400 million a year by
2021/22 and self fund any investment in newservices. In addition, we face superinflationof costs of around £100 million a year by

2021/22 in areas such as sports and drama.
The BBC cannot stand still and this investment
in new services for audiences will require an
additional £150 million by 2021/22. This meansa total saving target of £800 million a year isrequired by 2021/22, representing over 20% of
expected 2016/17 spend, or an average annual
savings target of around 4% a year over the
next five years.

99-114lighting. We are very grateful to our suppliers– they are an important part of our service
delivery and we would not be able to meet
our saving targets without their help.
During the year, the BBC brought its
recruitment services back in-house to unify its
HR function, bringing its 10-year contract with
Capita to an end. This is expected to deliver
a 20% saving. Capita continues to work with
us in other areas, including our successful
partnership for licence fee collection.

This means that tough decisions will have to
be made and we cannot rule out an impact
on services and scope in the long term.

Valued partnerships
In a typical year, the BBC spends £1.4 billion
on goods and services using 12,000 suppliers(excluding freelancers and independent
programme commissions). We are committed
to working with our suppliers to find ways toreduce cost whilst preserving quality andtimeliness. About half of the annual spend ison 11 major service contracts like technology(Atos); facilities management (Interserve); andtransmission (Arqiva). The other half covers
purchasing of regular goods and services
associated with running the business, ranging
from costumes and travel to cameras and

The reprocurement of the BBC’s Business
Process Outsourcing (BPO) services forfinance, accounting, payroll and associatedtechnology completed recently with thecontract being awarded to IBM. The newpartnership with IBM will deliver significant
savings to the BBC through a simplified andinnovative approach. IBM will replace Sopra
Steria from 1 November 2016.
We would like to thank both Capita andSopra Steria for their valuable support overthe past decade.
From April 2017, the BBC will move to a new
IT service model, which will be delivered bya number of suppliers. As part of this, BT has

Use of the licence fee*
2015^

2016
Content,
distribution andTotal
its support£m£mContent,
distribution andits support£m

Generalsupport£m

Television

2,059.4141.8

2,201.2

Radio

608.2

33.9

642.1

BBC Online

224.8

13.2

2,892.4

Orchestras and performing groups
S4C**

Generalsupport
£m

Total
£m

2,186.0

180.4

2,366.4

611.0

41.4

652.4

238.0

187.8

13.1

200.9

188.9

3,081.3

2,984.8234.9

3,219.7

26.2

2.1

28.3

29.7

2.8

32.5

32.3

2.4

34.7

28.5

2.5

31.0

Development spend***

81.2

6.4

87.6

75.6

7.1

82.7

BBC World Service operating licence

246.2

15.0

261.2

236.2

17.2

253.4

3,278.3

214.8

3,493.1

3,354.8264.5

3,619.3

94%

6%

100%

93%

7%

100%

Spend by service licence

Total service spend% spend^ The BBC has reviewed its analysis of PSB Group expenditure support costs during the year and consequently restated this view to make the prior year classification consistent with the current year.
* The licence fee after collection costs is also used to fund the BBC’s obligations to broadband rollout and S4C as well as its pension deficit payments.
** £34.7 million spent with S4C is the cost of content provided to S4C over and above the £75 million new obligation.
*** Development costs fund 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, their related
support and overhead costs. It is distinct from research costs which is focused on longer-term research of new technology and standards that benefit the BBC and the rest of the industry.

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BBC Annual Report and Accounts 2015/16 101Governance and finance report – Finance

We will hold conversations with theGovernment over the coming months todiscuss the recommendations in the White
Paper, specifically around the independenceof the new Board and the exact role of the
Looking forward
NAO. It is vital that the final Charter and
The current Charter expires on 31 December Agreement delivers a strong independent
system of governance that attracts wide
2016, with the new Charter in place fromsupport and ensures value for licence fee
1 January 2017. With that in mind, wepayers over the coming 11 years.
welcome the recent publication of theGovernment’s White Paper and the clarity it
The current strong financial position of theprovides on the future of the BBC. The key
BBC, along with the successful delivery ofthings to note from the White Paper, fromcurrent saving plans, leaves us in a gooda financial and governance perspective, are:position to meet our future obligations andbeen appointed as its broadcast network
provider. This contract will also deliverconsiderable savings and is expected to pave
the way for future digital innovation.

—— the next Charter will be an 11-year
period, taking us up to 31 December 2027

continue delivering world-class content toour audiences.

—— the licence fee has been secured for theCharter period and will increase in linewith inflation for the first five years of the
new Charter, which is the first increase innearly a decade—— subject to regulatory approvals, we can
now press ahead with plans to create
BBC Studios as a commercial subsidiary– allowing us, for the first time, to makeprogrammes for others, removing thein-house guarantees that have protected
television production to dateAnne Bulford
Managing Director,
BBC Finance and Operations
16 June 2016—— for the first time, we’ll have a strong
unitary board with an external
regulator: Ofcom

BBC Radio 3’s new regular jazz slot Jazz Now
102 BBC Annual Report and Accounts 2015/16

Popular crime drama Silent Witness returned for a 19th series
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Part Two: Governance and finance report – Finance

99-114

Financial achievements

Rationalising the BBC estate

Ongoing savings

There has been a particular focus on rationalising and modernising
the BBC estate. We have exited both Television Centre and parts ofWhite City and continue to move more of our business outside ofLondon. During the year we successfully completed the sale of fouracres of freehold land in London W12 alongside the sublease of six
BBC Media Village buildings, recording a profit on sale of £96 million
and annual recurring savings of £33 million. 55% of our employees
are now based outside of the M25, an increase of 1% on last year.

The Delivering Quality First savings programme delivered£621 million sustainable savings by 31 March 2016. The programme
remains on track to deliver an annual total of £700 million in
annual recurrent savings by 31 March 2017.

Prioritising spend on content
In 2015/16, 94% of our core controllable spend is now spent on content,
distribution and related support with only 6% spent on running theorganisation. This focus on reducing our costs ensures we are investing
as much money as possible directly into content for licence fee payers.

Senior manager remuneration

Talent spend

We have continued to reduce the number of senior managers
and their cost. The senior manager paybill is now £47.0 million ascompared to £78.5 million on 1 August 2009. The total numberof senior managers is 356, 45 fewer than last year and 279 fewer
than 2009.

Total talent spend of £200 million in 2015/16 represents 12%(2014/15: 12.2%) of internal spend on content and has reducedby £8.4 million (4%) on the prior year. We remain 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).

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BBC Annual Report and Accounts 2015/16 103Governance and finance report – Finance

Financial overview
How we use the licence fee

Results for the year

Licence fee collection

Our results for this year once again show that
The way in which the BBC is funded places
we have successfully managed the financial
significant responsibilities on it as anchallenges facing us, giving a sound base toorganisation:
meet our future commitments and deliver our—— to provide value for money by focusing
strategic ambitions. A reduction in operating
expenditure on the programmes andcosts through our efficiency programmes,
services the public most wants fromalong with a significant gain on the Westthe BBC
London Media Village property transaction,—— to ensure that the output is then delivered have resulted in a group surplus of £59 million
for the year (2015: deficit of £125 million).
as cost efficiently as possible—— to ensure effective and efficient collectionof the licence fee

The table below provides a summary of theincome statement.

—— to maximise funding from other sources,
most significantly BBC Worldwide, theBBC’s commercial trading operation, in amanner consistent with the terms of its
Charter and other obligations

IncomeTotal licence fee income increased by
0.2% or £8 million from £3,735 million to£3,743 million due to improved collectionplans and modest household growth.

Effective financial management is a key partof the BBC’s unique relationship with its
audiences. This includes spending the licence
fee efficiently and collecting a television licencefee from everyone who is required tobuy one.
This is the third year of the new licence fee
contract and total cost savings of £220 million
are expected to be delivered over the eight
years of the contract, releasing more funding
to be spent on our programmes and services.
This is a huge achievement that has only beenpossible due to the strong relationship with
Capita, our outsourced provider for collectionof licence fee monies.

Summary consolidated income statement
For year ended 31 March 2016
Income statement classification

What is it?

2016
£m

2015
£m

Licence fee income

The total of licence fees collected

3,743

3,735

Other income and revenue

Commercial (mainly BBC Worldwide) income

Total income
Operating costs

The cost of producing all content and of running
the BBC

Restructuring costs

Sums provided to fund future efficiency
initiatives

What has happened this year?

0.2% increase reflects limited net growth in
the number of households acquiring a licence

1,084

1,070

4,827

4,805

(4,776)(4,903)

Decrease due to major sporting events in2014/15 such as the Commonwealth Gamesand FIFA World Cup

(21)

(11)

Costs to deliver DQF savings andreorganisation costs within BBC Worldwide(4,797)(4,914)

Share of results of associates
and joint ventures

Our share of the profit of the businesses where
we control 50% or less40

33

Increase in 2015/16 reflects a full year share of
the new BBC AMERICA associate following
partial sale during 2014/15

Gain on sale of operations

Profit on disposal of operations–

116

2014/15 reflects the gain on the partial sale of
BBC AMERICA

Gain on disposal of fixed assets

Profit on disposal of fixed assets

968Gain recorded on the sale of freehold land
from the West London Media Village site

Net financing costs

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

(107)

(143)

Lower accounting charge for the BBC pension
plan liabilities

Taxation charge

The net tax liability of the BBC on its taxable
profits–(30)

Tax charge arises on commercial activities. An
overprovision in previous years has been used
to reduce this year’s tax charge

59

(125)

Total operating costs

Group surplus/(deficit) for
the year

104 BBC Annual Report and Accounts 2015/16

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Part Two: Governance and finance report – Finance

Licence fee statement
As in previous years, the BBC prepares alicence fee revenue statement audited by the
NAO. This account sets out the amounts wecollected in the year and paid over to HM
Government. Alongside their audit work, theNAO examines our collection arrangements
and reports on them to Parliament. More on
the licence fee revenue statement can befound on our website: bbc.co.uk/aboutthebbc

This contribution is increasingly important for
the funding of programmes commissioned by
the public service BBC.

In an increasingly complex world of multiple
content producers and platforms, BBC
Worldwide plays a vital role in supporting andshowcasing the best of British creativity, fromboth the BBC and the wider UK creative
industries. 2015/16 was another strong year
for BBC Worldwide. It delivered headline
sales of £1,029 million (2014/15: £1,002 million),
Commercial trading
a 3% increase from prior year and 7% in
The licence fee is supplemented by income
terms of underlying growth. It achieved thisfrom the commercial exploitation of licenceby growing its position as an active creative
fee funded content and infrastructure through partner and driving forward its growth
three commercial subsidiaries – BBCstrategy. The key drivers of the revenue
Worldwide, BBC Global News and BBC
increase were healthy sales to third parties
Studioworks (previously BBC Studios andsuch as Netflix, which operates Subscription
Post Production).
Video On Demand (SVOD) services, andUKTV. Headline profit of £134 million was
BBC Worldwide£5 million lower than prior year (2014/15:
BBC Worldwide exists to support the£139 million) due to the full year impact of
BBC public service mission and to maximise
income to the Group on its behalf. It returned£222 million to the BBC in 2015/16, well above£200 million for a second year running(2014/15: £227 million). Last year’s record
returns were boosted by the BBC AMERICAUK PSB Grouppart sale proceeds, as were this year’s returns
BBC
Worldwide
to a lesser extent. After adjusting for disposal
Global News
proceeds from both years, this year’s return
BBC Studioworks (Previously S&PP)
showed a 18% year-on-year improvement.

99-114the part-disposal of BBC AMERICA in
October 2014, significant investment in new
channel brands and the rising cost of content.
Removing the BBC AMERICA effect, headline
profit growth was 4%.
BBC Worldwide has delivered progresson each of the three pillars of its strategy:
premium content; global brands; andgradual transformation to digital products
and services.

Premium content
World-class content remains at the heart ofwhat the company does. In 2015/16, it invested£162 million in content (2014/15: £181 million),
which was a reduction from the previous year
due to the part-disposal of BBC AMERICA
during 2014. Investment in BBC commissioned
content remained fairly stable at £93 million(2014/15: £94 million), supporting on-screen
programmes across the BBC’s channels.
BBC Worldwide also continued to build
relationships with the independent sector,
Headline sales
2015/16£m

Headline profit

2014/15£m

2015/16£m

2014/15
£m

181

192

n/a

n/a

1,029

1,002

134

139

101

93

0

(5)

22

29

2

(1)

Global brand Dancing with the Stars retained its position as a Top 10 most watched entertainment programme in the USA
bbc.co.uk

BBC Annual Report and Accounts 2015/16 105Governance and finance report – Finance© Silverback films/Jason Roberts

New CBeebies 3D animation Go Jetters rated well in the UK
and internationally

returning £116 million during the year
(2014/15: £113 million) by working with over
250 UK independent producers. 2015/16 alsosaw BBC Worldwide take equity stakes in
Amazing Productions, Mighty Productions,
Red Planet Pictures (Entertainment) andGreenbird Media. These deeper indie
relationships, along with a close strategic
partnership with BBC Studios, are expected
to support the development of UK-owned
intellectual property and secure BBC
Worldwide’s future pipeline ofworld‑class content.

Global brands
Key global brands continued to perform wellduring 2015/16. BBC Worldwide continued
to build its channel genre brands this year,
resulting in 12 of BBC Worldwide’s
33 international channel feeds carrying its
new channel brands by 31 March 2016. New
channel brands were launched during the year
in Poland, the Nordics, South Africa and Latin
America and most of the other thematic BBC
channels are expected to re-brand during
2016/17. BBC Earth and BBC First are now
available in at least 40 countries with BBC Britavailable in 61 countries.
Dancing with the Stars retained its position
as a Top 10 most watched entertainment
programme in the USA and Sherlock: The
Abominable Bride was sold to 216 territories
and also screened in cinemas in over 20
countries. In natural history, BBC Earth Films
and Shanghai Media Group signed the firstdeal under the landmark Sino-UK Film
Co-Production Treaty to co-produce a new
documentary feature film for cinematic
release in 2017.
106 BBC Annual Report and Accounts 2015/16

Almost three-quarters of Silverback Films’ The Hunt wascommercially funded via BBC Worldwide, including co-production
deals with BBC AMERICA, CCTV-9 and NDRDigital products and services
Progress on BBC Worldwide’s ‘direct toconsumer’ offering included the launch of BBC
Store in November 2015. With over 7,000
hours of contemporary and classic content at
the time of launch, BBC Store allows viewers
in the UK to buy and keep programmes theywant to enjoy beyond the 30-day licencefee-funded BBC iPlayer window. Work
continued on plans for Over The Top (OTT)
services in selected markets outside the UK,with BBC Player announced just after
year-end and expected to launch in Singapore
later this year. The new authenticatedmulti-genre SVOD service will be available toStarhub customers in Singapore and offer
audiences a wealth of BBC titles.
Highlights from BBC Worldwide’s fourbusiness regions in the year included: growthin content sales; the best year to date for
BBC AMERICA viewership and a significant
Doctor Who SVOD deal signed with Amazon
in North America; a strong first full year for
BBC First and an exceptional year for CBeebies
in Australia and New Zealand; and strong
format licensing sales and the launch or relaunchof 11 new channel feeds in global markets.
In a challenging operating environment, BBC
Worldwide continues to transform the way itworks in order to build a world-class company
that attracts and retains the best talent, while
being run in an efficient way. To that end,
an active programme of efficiencies wasdeveloped during 2015/16 to reduce
operating costs and reduce the workforce
by 11%. Nonetheless, a focus on company
culture, training and engagement meant

BBC Worldwide’s staff engagement score
was 70% this year, well above the global
market norm of 55%.
This commitment to running a world-classmedia company, investing in content, anddelivering on its strategy puts BBC Worldwide
in a good place to meet its target of returning£1.2 billion to the BBC over the first five yearsof the new Charter, as well as continuing tosupport the UK’s creative industries during
this time.

BBC Global NewsBBC Global News operates the BBC’s twocommercially-funded international news
services: BBC World News, the 24-hourglobal news TV channel, and the digitalplatform BBC.com (including the BBC.com
website, a News app and a Sport app). BBC
Global News’ mission is to be the best andmost trusted international news provider
in the world, while growing the BBC’sinternational news audiences and operating
as a commercially efficient business.

No.1
The BBC continues to be the world’s
most shared news source on Twitter
bbc.co.uk

Part Two: Governance and finance report – Finance

No.1
BBC Global News’ mission is
to be the best and most trusted
international news provider
In 2015/16, BBC World News’ global footprint
expanded significantly, up 11% from previous
year. The channel’s distribution increased
to a record 441 million households (up from
398 million in 2014/15).
Trends in the World News channel viewing
figures varied by region. In Europe, viewingof news channels increased in 2015, bucking
the trend of recent years, with World News
gaining audience reach for the first time since2008 and continuing to close the gap on CNN.
In Asia, viewing of news channels continued to
grow but at a slower pace than the previous
year, with World News narrowing the gap
on CNN. In the US, World News maintained
consistent viewing figures in 2015/16,
outranking Bloomberg TV by the endof the year.
Audience growth for BBC.com was on target
in 2015/16, helped by strong performance inthe US. BBC.com attracted, on average, over89 million monthly unique browsers, up 4%
from 2014/15. Total page views across all
platforms (website, apps and IPTV) averaged
1.1 billion per month, down 7% from theprevious year due to the ongoing shift inbrowsing habits from desktop to mobile.

Digital innovation throughout the year
delivered several enhancements to theBBC.com proposition. The BBC.com website
saw numerous improvements to the video
viewing experience and a major re-designof the News app more than doubled thenumber of videos viewed on it. In October
2015, a new Japanese-language edition of
BBC.com was launched to serve strong
demand in this major market.
Beyond BBC.com, off-platform consumptionof BBC content is playing an increasingly
important role in the Global News content
distribution strategy. In 2015/16, Global News
continued its successful partnerships with
MSN, Yahoo!, AOL, Google, LinkedIn,
Flipboard, Facebook and Apple, andentered into new agreements with Spotify
and Smartnews.
On social media, BBC News has nearly
30 million Facebook fans globally and the
BBC continues to be the world’s most sharednews source on Twitter.

398

2014/15
bbc.co.uk

441

2015/16+11%

BBC Studioworks(Previously BBC Studios
and Post Production)
BBC Studioworks is a wholly-owned
commercial subsidiary of the BBC serving
both the BBC and external clients. Until May
2016, the company traded as BBC Studios andPost Production. Following the year end, thecompany undertook a full rebranding exercise,
which included changing its name to BBC
Studioworks Limited.
The company has historically been divided
into two operating divisions; Studios and Post
Production Services (S&PP) and Digital Media
Services (DMS). At year end, the Digital Media
Services division was closed as part of a
refocusing exercise, allowing the company toconcentrate on its core strengths in deliveringstudios, post production and related services.
These remaining core areas have returned anunderlying operating profit over each of thelast two years.

In 2015/16, Global News maintained its
position as the most trusted international
news provider. It was recognised for the
excellence of its journalism with a number ofawards, including a Peabody for coverage of
the European Migrant Crisis, and an award
from ENBA India for the best news coverageby an international news channel in India, forthe second year running. The redesigned BBC
News app also won the People’s Voice Webby
Award for the best mobile site or app in theNews category.

In the year ended 31 March 2016, thecompany returned an underlying operating
profit of £1.3 million, representing profit
growth of 33% since 2014/15 on the same
basis. Underlying operating profits exclude
DMS and are stated before the deduction of
non-trading items such as contributions to the
BBC pension deficit.

Global News achieved break-even in 2015/16,
one year ahead of its five-year plan target,
returning an operating profit of £0.2 million(2014/15: loss of £4.6 million). Year-on-yearsales growth was coupled with a significant
cost reduction exercise.

—— many elements of the BBC’s General
Election broadcasting in May 2015.
Elections broadcasting represents one of
the most technically demanding studio
productions to host due to the mix ofvirtual and augmented reality technologies
employed as well as managing a complex
connectivity arrangement

Video continued on its trajectory of rapid
growth, averaging 53 million video views permonth (up 44% from 2014/15).

World News distribution – full and part-timehouseholds (million)

99-114

During the year, S&PP delivered an impressive
range of creative projects for numerous
broadcasters, media companies and content
owners – including:—— a range of studios and post production
technical services to the BBC’s multiaward-winning continuing drama,
EastEnders

Video views – all platform(monthly average, million)

53
37

2014/15+44%

2015/16
BBC Annual Report and Accounts 2015/16 107Governance and finance report – Finance—— post production services for a numberof broadcasters including ITV’s gameshow, Keep it in the Family, and theBBC’s consistent ratings winner,
Strictly Come Dancing—— other successful studio productions
including Sky’s A League of their Own,
Channel 5’s Lip Sync Battle UK, BBC’s
The Voice UK live shows, BBC’s Strictly
Come Dancing as well as comedy panel
quiz shows such as E4’s Virtually Famousand ITV’s Celebrity Juice

During 2015/16, the company has been
overseeing the refurbishment of its studios
on the Television Centre site in West London.
The structural work has been completed
and the technical fit-out is now under way
in anticipation of three Television Centre
studios reopening in 2017.

Results for the year
UK Public Service Broadcasting (UK PSB) Group expenditure2016 Service

Content£m

Distribution£mContent anddistribution
support£m

BBC One1,052.5

35.8

154.1

88.0

1,330.4

BBC Two

399.0

20.2

60.2

34.1

513.5

BBC Three

52.9

7.7

13.5

4.4

78.5

BBC Four

44.2

4.1

7.7

3.8

59.8

CBBC

70.6

7.7

12.4

6.1

96.8
42.3

Generalsupport
£m

Total
£m

CBeebies

29.1

4.1

6.6

2.5

BBC ALBA

5.5

0.9

0.9

0.5

7.8

BBC News channel*

46.6

7.0

6.5

2.2

62.3

BBC Parliament
Television

1.9

6.3

1.4

0.2

9.8

1,702.3

93.8

263.3

141.8

2,201.2

BBC Radio 1

36.2

6.0

5.2

1.3

48.7

BBC Radio 2

44.6

6.0

4.8

2.1

57.5

BBC Radio 3

37.7

6.0

6.3

3.1

53.1

BBC Radio 4

88.6

6.4

13.2

6.6

114.8

BBC Radio 5 Live

45.5

4.4

7.0

3.6

60.5
5.6

BBC Radio 5 Live Sports Extra

2.5

1.6

1.3

0.2

BBC 1Xtra

4.6

1.7

3.0

0.3

9.6

BBC 6Music

7.9

1.7

2.4

0.6

12.6

BBC 4 Extra

3.1

1.7

1.4

0.2

6.4

BBC Asian Network

6.6

2.1

1.8

0.5

11.0

BBC Local Radio

119.8

14.8

15.0

9.3

158.9

BBC Radio Scotland

22.9

2.9

4.3

1.9

32.0

BBC Radio nan Gàidheal

3.9

1.3

0.7

0.3

6.2

BBC Radio Wales

15.1

1.6

3.0

1.2

20.9

BBC Radio Cymru

14.2

1.5

2.9

1.2

19.8

BBC Radio Ulster/BBC Radio Foyle

17.7

1.8

3.5

1.5

24.5

Radio

470.9

61.5

75.8

33.9

642.1

BBC Online and Red Button**
Spend regulated by service licence

153.3

37.9

33.6

13.2

238.0

2,326.5

193.2

372.7

188.9

3,081.3

Orchestras and performing groups

23.2

–

3.0

2.1

28.3

S4C (service spend)

28.0

–

4.3

2.4

34.7

Development spend******

72.0

–

9.2

6.4

87.6

BBC World Service operating licence***

224.3

–

21.9

15.0

261.2

Other service spend

347.5

–

38.4

25.9

411.8

Total service spend

2,674.0

193.2

411.1

214.8

3,493.1

108 BBC Annual Report and Accounts 2015/16

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Part Two: Governance and finance report – FinanceContent£m

2016 Service

Distribution£mContent anddistribution
support£m

99-114Generalsupport
£m

Total
£m

Licence fee collection costs

114.6

S4C (direct funding)

75.3

Monitoring

5.8

PSB Group pension deficit reduction payment

95.8

Costs incurred to generate intra-group income

64.5

Costs incurred to generate third-party income

71.3

Restructuring costs

15.1

Total PSB Group content expenditure

3,935.5

Local TV****

3.5

Broadband rollout****150.0

Total PSB Group expenditure

4,089.0

Lease reclassification*****(78.3)PSB Group expenditure

4,010.7*

Included within BBC News channel are production costs of £24.7 million, Newsgathering costs of £21.3 million and other costs of £0.6 million (2015: production costs of £23.5 million, Newsgathering costsof £22.1 million and other costs of £0.6 million).
BBC Online and Red Button spend is monitored by annexe (relating to editorial areas of the service). Non-annexe spend covers costs relating to central editorial activities such as the BBC Homepage,technologies which operate across the service and overheads. The spend for each annexe was: News, Travel & Weather £50.9 million (2015: £43.5 million), Sport, £16.7 million (2015: £17.2 million),Children’s £9.4 million (2015: £9.0 million), BBC Three £10.4 million (2015: nil), Knowledge & Learning £18.6 million (2015: £15.5 million), TV & iPlayer £16.3 million (2015: £13.7 million) and Radio & Music£13.5 million (2015: £14.1 million), giving a total annexe spend of £135.8 million (2015: £113.0 million). Non-annexe spend was £17.5 million (2015: £11.6 million).
***
The BBC World Service operating licence includes distribution spend of £36.6 million. Total Grant-in-aid funding equivalent spend on BBC World Service was £240.2 million.
**** Under the terms of the latest licence fee agreement, the BBC has committed to contribute funding toward broadband rollout across the UK and funding for the development of Local 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.
******Development costs fund 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, their related
support and overhead costs. It is distinct from research costs which is focused on longer-term research of new technology and standards that benefit the whole industry.
**

PSB support costs include the following

2016
£m

Content anddistribution
support£m

Generalsupport^
£m

2015
£m

43.3

111.6

69.5

92.1

161.6

14.0

31.5

45.5

16.5

26.6

43.1

–

9.5

9.5

–

6.6

6.6

10.7

49.1

59.8

19.7

65.4

85.1

Content anddistribution
support£m

Generalsupport£m

Property

68.3

HR and training
Policy and strategy
Finance and operations
Marketing, audiences and communication

86.8

–

86.8

79.6

–

79.6

Total central costs

179.8

133.4

313.2

185.3

190.7

376.0

Technology

106.6

59.8

166.4

115.6

55.2

170.8

Libraries, learning support and community events

28.5

–

28.5

33.0

–

33.0

Production and digital support

25.0

–

25.0

28.3

–

28.3

Research department

17.9

–

17.9

17.0

–

17.0

Contribution to JVs and spend in other PSB entities

28.3

–

28.3

26.1

–

26.1
10.2

–

9.9

9.9

–

10.2

Other

BBC Trust Unit (excluding restructuring)

25.0

11.7

36.7

11.2

8.4

19.6

Total support costs

411.1

214.8

625.9

416.5

264.5

681.0

^ The BBC has reviewed its analysis of PSB Group expenditure support costs during the year and consequently restated this view to make the prior year classification consistent with the current year.

bbc.co.uk

BBC Annual Report and Accounts 2015/16 109Governance and finance report – Finance

BBC World Service

Delivering efficiencies

In 2014/15, BBC World Service became
licence fee funded again and, as a result, an
operating licence was established for theservice. The operating licence sets out theremit and scope of BBC World Service, its
annual budget and its main commitments.
The Trust regularly reviews the performanceof the service against its licence, in the same
way as it does for the other BBC services.

2015/16 was the penultimate year of theBBC’s DQF programme that delivered
another £157 million of annual savings,
bringing the total of savings to £641 million(of which £621 million are sustainable savings).
The BBC’s annual savings achievement isreviewed by our auditors, Ernst & Young LLP.
The BBC remains on track to achieve the fullsavings target of £700 million per annum by
31 March 2017.

The current operating licence sets out a target
for total cash spend of at least £245 million
per annum. This year, the total BBC World
Service spend of £240 million was £5 million
lower than the target owing to a reduction
in discretionary and business development
spend and a drive for efficiencies in areas suchas network News. This is a 1% reduction in
spend from prior year. Total expenditure
including depreciation, support costs andother charges was £260 million.
During this year, it was announced that the
BBC World Service will receive new grantfunding from the Government from 2016/17
to 2019/20 to meet the cost of additional
services. Details are still being finalised but the
expectation is to receive a grant of £34 million
in 2016/17 and £85 million a year from2017/18. This new funding is the single biggest
increase in the World Service budget evercommitted by any Government. The funding
will be spent on digital, television and radio
services around the world to build the global
reach of the World Service and increase
access to news and information.

During 2014, the Compete or Compare
framework was introduced by the DirectorGeneral, announcing that the BBC would
formalise market testing and benchmarking
activity through applying a rigorouscomparison across all areas of expenditure.
The aim is to extend competition whereverit can bring greater choice, value for moneyor innovation. The BBC has now establisheda strong culture of market testing andbenchmarking activities and an independent
study undertaken by PwC during the year
concluded that 87% of BBC controllable spend
satisfied the Compete or Compare criteria.
The BBC expects to cover nearly 90% of its
cost base by the end of this Charter period,
either through direct competition or rigorouscomparison and benchmarking.

The PwC study concluded that the BBC wasamongst the most efficient organisations in the
public sector and regulated industries in termsof managing overheads. In 2015/16, 94% of theBBC’s controllable spend was focused oncontent and delivery, with just 6% spent on
running the organisation. This is well below
both the public sector average of 11%, and theregulated industry average of 9%.
During the year, the Director-Generalannounced proposals for modernisation at theBBC, introducing the idea of creating an open
BBC for the internet age. This investment is
expected to cost £150 million a year by
2021/22. Delivering this, at the same time asfinancing a £550 million funding gap, will bea significant challenge.
The BBC is committed to protecting
programmes and services and making the BBC
simpler, leaner and more effective. The totalrequired savings of £800 million per annum
will be partially funded by reprioritisation,changes to services, as well as commercial
income and policy changes. New saving
measures will also be introduced such as
streamlining back office functions, cutting
management and management layers andreducing historic levels of BBC bureaucracy.
1,000 posts are targeted to close by 2017.

BBC Arabic filmmaker Safa Al Ahmad on the front line with anti-Houthi militias in Taiz – Under Seige
110 BBC Annual Report and Accounts 2015/16

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Part Two: Governance and finance report – Finance

Focusing spend
The BBC concentrates its expenditure on the
production of programmes and other content
and its delivery to audiences and users, andthe essential infrastructure to support this.
Year-on-year spend can vary significantly
because of the cycle of major sports events.
Total content spend reduced by 2% to £2,674
million (2014/15: £2,728 million) this year,

99-114

which was largely due to additional investment reinvented as an online-only service.
in our coverage of the Commonwealth
BBC Three Online offers news and sport inGames and FIFA World Cup in 2014/15.
collaboration with other parts of the BBC. It
No service licences spent above or below the also collaborates with other BBC services toprovide an editorial perspective on major
regulated baseline threshold during 2015/16.
sporting events and festivals, and with Radio 1
Following a detailed and rigorous public value to develop new talent, cross-commission andassessment, BBC Three closed as a linear
produce short-form content.
television channel in February 2016 and was

Summary consolidated balance sheet
For year ended 31 March 2016
2016
£m

2015
£m

Mainly the BBC’s property, plant, equipment
and investments

1,807

1,750

Increase in the interest in associates in respectof BBC AMERICA along with increased
long-term receivables in BBCW

Current assets

Programme and other stocks and amounts
to be received in the next 12 months

2,025

2,096

Reduction in cash due to planned pension
deficit payment is partially offset by increased
other receivables

Current liabilities

Amounts to be paid in the next 12 months(1,158)(1,186)

Decrease in accruals and deferred income at
the year end

Non-current liabilities(excluding pension liabilities)

Amounts to be paid after the next 12 months(1,112)(1,126)

Broadly consistent with prior year

1,562

1,534

(1,011)

(948)

551

586

551

586

Balance sheet classification

What is it?

Non-current assets

Net assets(excluding pension liabilities)
Net pension liabilities

The net deficit of the BBC’s pension scheme

Net assets

What has happened this year?

Increase reflecting changes in financial
assumptions

Represented by:
BBC reserves

The net resources available to the BBC
for future use

Balance sheet
The high-level property strategy through to2020 (the 2020 Vision) agreed by the BBC
Executive Board in 1998 included a financial
target that the cost of its property estate
would be no greater in real terms by 2010
than it was in 1998. The 2020 Vision was
designed to allow the BBC to continue tomodernise older buildings to meet its digital
innovation aims as well as improving its spaces
and facilities, fostering the BBC’s creative
ambitions at the same time as reducing costs,
striking the right balance between efficiency
and creativity.
Exiting the Media Centre and Garden Housebuildings within the West London Media
Village was a significant part of the property
rationalisation required to deliver thisstrategy as well as delivering a significant
element of the DQF savings. As a result£74 million was re-categorised within
non-current assets, from Land and Buildings
to Investment Properties.

bbc.co.uk

The BBC’s cash balance at the end of the yearis £335 million which is a £71 million reduction
from prior year (2014/15: £406 million)
including a £100 million planned pension
deficit payment. The reduction in cash has
been partly offset within current assets bya £67 million receivable in respect of theWest London Media Village sale.

scheme deficit which is reviewed at triennial
actuarial valuations.

The most recent actuarial valuation wascompleted in 2013 and showed a funding
shortfall of £2,054 million. The next formal
actuarial valuation of the Scheme is underway
and will present a valuation as at 1 April 2016.
The valuation will be agreed with the pension
scheme Trustees later this year in advance ofPension costs
the statutory deadline of 30 June 2017. We
At 31 March 2016, the accounting pension
deficit (as defined by IAS 19) had increased by intend on finalising the valuation by 1 April
7% to £1,011 million compared to £948 million 2017, in line with the next scheduled pension
deficit payment. The current repayment plan,a year ago. The increase during the current
year was due to a net loss from changes in the agreed between the BBC and the pension
valuation assumptions of £93 million, an annual scheme Trustees in 2013, continues to befollowed. It is considered to represent a
operating charge of £160 million and net
sensible and affordable plan to address thefinance costs of £30 million, offset by
deficit, without compromising programmes
contributions paid of £220 million.
or pension scheme members. The BBC will
This accounting valuation is only a ‘snapshot’continue to work with the pension scheme’sat a particular date in time, and is therefore
Trustees to ensure the Scheme delivers thesensitive to short-term market fluctuations.
best value to both members and licence
It also has no immediate impact on the cash
fee payers.
cost of paying down the current pension

BBC Annual Report and Accounts 2015/16 111Governance and finance report – Finance

Summary consolidated cash flow statement
For year ended 31 March 2016
2016
£m

2015
£m

Surplus of the BBC’s income over its
operating costs

182

147

Increase reflecting the Income and Expendituresurplus this year

Net cash used in investing
activities

Cash invested in property, plant and equipment

(174)

(205)

Reduced spend on programme rights this year

Net cash used in financing
activities

Proceeds and repayments from borrowings andnet interest paid on the BBC’s borrowings

(80)

(66)

Repayment of loans

(72)

(124)

406

526

Cash flow classification

What is it?

Net cash inflow from operating
activities

Net decrease in cash andcash equivalents
Cash and cash equivalents atthe beginning of the year

The BBC’s cash balance at the beginning of theyear

Effect of foreign exchange ratechanges on cash and cash
equivalents

The impact of foreign exchange rates
on the BBC’s cash

1

4

Cash and cash equivalents at
the end of the year

The BBC’s cash at the end of the year

335

406

Cash

Tax

The BBC’s cash balance at the end of theyear of £335 million will be used to fund new
obligations, strategic initiatives and the pension
deficit repayment plan. The cash position is
forecast to fall into an overdraft position in
2017/18, whilst remaining within our DCMS
borrowing limits. The BBC will need tosuccessfully deliver efficiency saving schemesin order for the cash flow to return to along‑term positive position and fund future
investment plans.

The BBC is a committed and prudent tax
payer in all the countries in which it operates.
Its commercial operations undertake
appropriate and legitimate tax planningmeasures in accordance with the spirit andintention of all laws and regulations.

What has happened this year?

Positive movements in exchange rates
impacting the sterling value of our cash

BBC One’s 20 part drama Dickensian set within the fictional realms of Charles Dickens’ critically acclaimed novels
112 BBC Annual Report and Accounts 2015/16

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Part Two: Governance and finance report – Finance

99-114

Summary financial statement
The summary financial information comprises
the BBC’s summary income statement on
page 104, summary balance sheet on page 111
and summary cash flow statement on page112. These include the key headline data fromthe full annual financial statements which areavailable online in the download centre at:bbc.co.uk/annualreport

In considering the consistency of the summary
financial information with the full annual
financial statements, the Executive Board has
elected to:—— use headings and sub-totals in thesummary income statement, summarybalance sheet and summary cash flow
statement that include, as a minimum,
the headings and sub-totals shownin bold type in the corresponding
primary statements in the full annual
financial statements

The summary financial information presented
within Part Two of the BBC’s Annual Report
does not constitute the full financial
statements of the BBC for the financial years
ended 31 March 2016 and 2015 but represents —— include a brief description of theextracts from them. These extracts do notrespective headings
provide as full an understanding of the——ensure that the amounts reported in thefinancial performance and position, or financialsummary financial information agree withand investing activities, of the BBC as the fullthe corresponding amounts reported inannual financial statements.
the full annual financial statements
The independent auditor of the BBC, Ernst
and Young LLP, has issued an unqualified audit —— include the comparative amount for theimmediately preceding financial year for
opinion on the full financial statements for the
all amounts reported in the summary
year ended 31 March 2016 and 2015.
financial information
Statement of the Executive Board’s—— include an explanation of ‘what has
responsibilities in respect of Part Two
happened in the year’ reflecting the mainof the BBC’s Annual Report and summarytransactions and events reported in thefinancial information
full annual financial statements as they
The Executive Board has accepted
affect the respective heading
responsibility for preparing Part Two of the——
include any other information necessary
BBC’s Annual Report and the summary
toensure that the summary financial
financial information included therein. The
informationis consistent with the fullsummary financial information is intended byannual financial statements for thethe Board to be consistent with the full annual
financial year in question
financial statements of the Corporation.
The summary financial information, theStrategic report and Governance and financereport (including Executive remuneration
report) was approved by the Executive Boardand signed on its behalf on 16 June 2016 by:Tony Hall
Director-General

Anne Bulford
Managing Director,
BBC Finance and Operations
bbc.co.uk

BBC Annual Report and Accounts 2015/16 113Governance and finance report – Finance

Auditor’s report
Independent auditor’s
statement to the Trusteesof the British Broadcasting
Corporation (BBC) only
We have examined the summary financial
information for the year ended 31 March
2016, which comprises the Consolidated
income statement on page 104, theConsolidated balance sheet on page 111
and the Consolidated cash flow statementon page 112 of Part Two of the BBC’s
Annual Report.
This report is made solely to the Trusteesof the British Broadcasting Corporation(the ‘Corporation’), as a body, in accordancewith the terms of our engagement letter.
To the fullest extent permitted by law, we
do not accept or assume responsibility toanyone other than the Trustees as a body,for our work, for this report, or the opinion
we have formed.

114 BBC Annual Report and Accounts 2015/16

Respective responsibilities of the
Executive Board and the auditor
The Executive Board is responsible forpreparing the summarised financial
information so that it is consistent withthe full annual financial statements of
the Corporation.

OpinionIn our opinion the summary financial
information is consistent with the full financial
statements and Directors’ Remuneration
Report of the Corporation for the year ended
31 March 2016.

Our responsibility is to report to you
our opinion on the consistency of thesummary financial information, with thefull annual financial statements and theRemuneration Report.
We also read the other information
contained in Part Two of the BBC’s Annual
Report and consider the implications for ourreport if we become aware of any apparent
misstatements or material inconsistencies
with the summary financial information.
We conducted our work in accordancewith Bulletin 2008/3 issued by the Auditing
Practices Board. Our report on the
Corporation’s full annual financial statements
describes the basis of our opinion on thosefinancial statements and on the Directors’
Remuneration Report.

Richard Wilson(Senior statutory auditor)
for and on behalf ofErnst & Young LLP,
Statutory Auditor
London16 June 2016bbc.co.uk

Part Two: Governance and finance report – Operations115-130

Operations

Management of the BBC’s
relationships with staff,
organisations and partners.

Idris Elba filming BBC One crime drama series Lutherwww.bbc.co.uk

BBC Annual Report and Accounts 2015/16 115Governance and finance report – Operations

Our people
Continuing our work towards a more efficient BBC.

roles had closed in the public service, withThis year we have continued to deliver
BBC Worldwide ending the year with 176
outstanding programmes and services to our
fewer employees than 12 months
audiences whilst achieving substantial
previously, a reduction of some 9%. Since
organisational change and preparing for more
the end of the financial year further roles
with the launch of two new divisions – Studios,have closed and hundreds more are inand Design and Engineering, which occurred
progress. As a result further reduction willin April 2016. Throughout the year we havebe reflected in future years’ publishedreviewed many parts of the organisation andaverage headcount figures
taken opportunities to simplify structures toreduce costs and enable more efficient andFollowing procurement processes we also
effective working practices.
decided to make savings by bringing in-housesome activities such as transactional HR
Our workforce
administration and creative services roles
Over the course of a year the scale and profile which were previously contracted out. Someof the BBC’s overall workforce is affected by
175 roles were established or transferred
the mix between in-house and independent
from insourcing and significant financial
programme and content supply; changes tosavings to the BBC will result.
our insourcing/outsourcing service model; thelaunch of new audience facing initiatives as well Other notable headcount moves during theyear included:
as headcount reductions arising from savings
programmes. In 2015/16, our average annual—— the creation of 39 more apprentices,headcount was 18,920 equivalent full timetrainee and graduate trainee roles in thestaff, compared to 18,974 last year.
BBC Academy and in digital teams
Table 1: Total average public service—— further development of myBBC andbroadcasting headcount (equivalent full time)
iPlayer, which created 110 more roles withspecific digital skills
Year
Total
2011/12

19,054

2012/13

18,683

2013/14

18,647

2014/15

18,974

2015/16

18,920We are committed to controlling the level of
our workforce and ensuring value for money
across the BBC. During the year we closed
437 posts as a result of our savings
programmes, including:—— 278 posts as part of our DQF programme(Delivering Quality First), which originally
started in October 2012. This
programme continues and ongoing savings
have been made, at the same time as wehave continued to invest in the digital skills
that are required to build the BBC of the
future—— during the year the Director-Generalannounced a programme of simplification
to deliver £50 million savings in addition to
DQF. This is expected to result in some
1,000 post closures, including some roles
in BBC Worldwide. We remain on trackto achieve our goal of 1,000 post closures
by April 2017. By the year end 105 of these116 BBC Annual Report and Accounts 2015/16

Table 2: UK PSB staff by nation(equivalent full time) %31 Mar2016

31 Mar2015

31 Mar2014

31 Mar2013

England(excl London)

36

34

33

32

London

45

46

47

48

Scotland

7

7

8

7

Wales

8

8

8

8

Northern
Ireland

4

4

4

4

Our new creative vision for BBC Birmingham
was unveiled in 2013 and in 2015 wecompleted the relocation of BBC Academy,HR, internal communications and diversity
teams to the Mailbox. This transformation of
the BBC in Birmingham was the single largest
move of staff in this current year and we are
now operating that base at near capacity.

Senior managers
Throughout the year we continued to reduce
the number of senior managers, in line withour commitments in the 2009 and 2011
reward strategies.

—— investment in information security andother technical skills, accounting for 56
new roles

Table 3: UK PSB senior manager headcountby salary band*
2015/16

2014/15

In addition, following the increased
Government funding for the BBC World
Service as part of the 2015 licence fee
settlement, we have also begun to recruit
additional roles into our News division.

Under £70,000

07£70,000-£99,999

123

137

£100,000-£129,999

91

107

£130,000-£159,999

80

76£160,000-£189,999

31

40£190,000-£219,999

17

16£220,000-£249,999

8

11£250,000-£279,999

02£280,000-£309,999

5

2£310,000-£339,999

1

2£340,000-£369,999

00£370,000-£399,999

0

1

356

401

At year end there were also reductions in staff
in key production areas, partially as a result of
timing of activity.
Together these changes led to a net reductionof over 200 roles in our year end EFTnumbers compared to 31 March 2015,
although due to the timing of the changes thisis not fully reflected in the average numberspresented in Table 1, above.
The BBC remains committed to locating atleast 50% of employees outside of London
and 55% of our employees are now basedoutside of the M25, an increase of 1% on lastyear. The total number of staff employed by
the BBC in each of the devolved nations isdisclosed in the Full Financial Statements.

Band

Total*** As at 31 March each year** Total excludes Executive Board members

The senior manager paybill is now £47.0 million
compared to £78.5 million in 2009, and thetotal number of senior managers is 356 (or 361
when Executive Board members are included).
This compares to 640 in 2009 and represents a
reduction of 279. Over the last year senior
manager numbers have decreased by 45.
bbc.co.uk

Part Two: Governance and finance report – Operations115-130

Severance

Severance Payments 2014/15 and 2015/16: all staff (including senior management)*
1 April 201531 March 2016

1 April 201431 March 2015

Payment Band

Spend
£000s

Volumes

Spend
£000s

Volumes

Under £10k

286

45

69

11
141

£10k<£50k

5,675

189

4,183

£50k<£75k

5,104

81

3,571

58

£75k<£100k

5,036

58

3,259

39

Driving efficiencies across the BBC has aninevitable impact on jobs. We continue tobe fully committed to managing job losses
through redeployment and retraining
wherever possible and throughout the year
have streamlined our processes to more
effectively assess employee suitability andskills match to job vacancies.

£100k<£150k

9,809

75

6,952

54

Our current severance policy is:

0

0

0

0

25,909448

18,034303—— one month’s pay for each year of service
up to a maximum of 12 months’ pay. For
those employees who joined before
January 2013 the maximum is higher at
24 months’ pay

Over £150k
Total* Excluding on-air talent

Payments in lieu of notice 2014/15 and 2015/16: all staff (including senior management)
1 April 201531 March 2016

1 April 201431 March 2015

Spend
£000s

Volumes

Spend
£000s

Volumes

Under £5k

0

0

2

1

£5k<£10k

0

0

0

0

Payment Band—— a cap on redundancy payments of £150,000£10k<£20k

0

0

0

0

£20k<£30k

0

0

0

0

—— the maximum length of notice period is
six months
We are currently awaiting further clarificationon the Government’s proposed cap on
redundancy which received Royal Assent on
4 May 2016.

£30k<£50k

0

0

0

0

Where redundancy severance is paid:

Over £50k

0

0

0

0

—— notice will be served and worked in full

Total

0

0

2

1

—— 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

Severance Payments 2014/15 and 2015/16: senior management staff only*
1 April 201531 March 2016

1 April 201431 March 2015

Payment Band

Spend
£000s

Volumes

Spend
£000s

Under £10k

0

0

0

0

£10k<£50k

58

2

50

1

£50k<£75k

124

2

154

3

£75k<£100k

756

9

161

2

£100k<£150k

3,885

27

1,311

9

0

0

0

0

4,823

40

1,676

15

Over £150k
Total* Excluding on-air talent

Volumes—— in exceptional cases, for example when
there is a need to protect theconfidentiality of sensitive information,individuals may be placed on gardening
leave during their noticeAll severance payments over £75,000 are
signed off by the Senior Manager
Remuneration Committee.
There were no instances where employees
received payment in lieu of notice in addition
to a severance payment.
There have been no instances, outside of policy,of people returning to the BBC following
receipt of a redundancy/severance payment.

bbc.co.uk

BBC Annual Report and Accounts 2015/16 117Governance and finance report – Operations

Talent2014/15

2015/2016
Volumes

Spend
£000s

Volumes

Variance£000s

98,522

46,946

100,00946,809

(1,487)45,608695

50,957774(5,349)

Spend
£000s

Under £50k
£50k-£100k£100k-£150k

18,338152

15,914134

2,424£150k-£250k

11,90764

14,59177(2,684)£250k-£500k

13,42538

11,41434

2,011£500k-£750k

2,847£750k-£1m

0£1m-£5m

3,794

Organisations**
Total

2,928
7*

836

(81)
9*

5,139

(836)
(1,345)

5,580

1,853

6,621

2,495

(1,041)200,02149,755

208,40950,332(8,388)* The number of individuals in the £500,000+ categories has been aggregated in order to protect the personal
information of those individuals, in line with data protection best practice.
** Organisations are groups of individuals contracted as one – for example external orchestra – so it is not possible
to list numbers of individuals against this spend.
The format of the BBC’s reporting of on-air and on-screen talent spend may change in future.

On-screen talent
We want the BBC to be the place where thebest artists want to work to deliver great
programmes. Across radio, television and our
digital services, our audiences expect us tooffer the best range of most-loved, creative,
engaging, authoritative and diverse talent in
British broadcasting.
We remain 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). This approach has beenendorsed by independent consultants Oliver& Ohlbaum as an appropriate response tochanging market conditions.
In 2015, total talent spend of £200 million
represents 12% of the BBC’s internal spend

on content. This internal spend on content
includes the BBC World Service.

Staff remuneration,
engaging and getting
the best from our people
It remains our policy to provide remunerationthat attracts, motivates and retains the key
talent required to lead and to deliver
outstanding public service broadcasting, whilst
recognising the BBC’s status as a publicly
funded corporation which must deliver value
to the licence fee payer.
In August 2015, we processed the final stage
increase of a two-year pay deal for all staff
in grades 2-11. This two year pay deal wasoffered and accepted in 2014 and comprised

90% of BBC employees agreed with the statement“I am proud to work for the BBC”
118 BBC Annual Report and Accounts 2015/16

three stages. The first was in August 2014 andthe following two stages were in January 2015
and August 2015.
In autumn 2015, we ran our BBC-wide annual
staff survey. 54% of staff participated and ouroverall employee engagement score increased
to 67% (from 66% in 2014). This compares
favourably against the Ipsos MORI UK normof 55%.
Of particular note were 93% of employees
agreeing with the statement “I am proud towork for the BBC”. Many areas showed
improving scores such as those statements
linked to team communications, line managers
addressing performance and questions
relating to respect at work. Action plans arein place across the organisation to address
the areas that the survey results identified
as requiring improvements.
We continue to work closely with our unions
and are committed to building positive andconstructive relationships with all our people
and their representatives. During 2015/16,
there were two days where the BBC was
impacted by small scale strike action involving
25 members of staff.

Supporting our staff
Following the Respect at Work Review
by Dinah Rose QC in 2013, we have madeconsiderable progress on two-way
communications with our employees, tohelp us understand how they are feeling andwhere problems may lie. Recommendations
that included a review of the Bullying andHarassment policy, an online training module
for all employees, an enhanced mediation
service and a confidential internal advice
line, have all been implemented.

The BBC’s Global Women in News network supports female staff
across the whole of news, wherever they are based
bbc.co.uk

Part Two: Governance and finance report – OperationsDiversity and inclusion

Diversity: percentage of total staff
March
2016

March
2015

2017
Target

13.4%

13.1%

14.2%

Employee groupBAME – all staff
BAME – wider leadership*

9.2%

9.2%

10%

Disabled – all staff

3.6%

3.8%

5.3%

Disabled – wider leadership*

2.8%

3.0%

5%

Women – all staff

48.7%

48.4%

Women – wider leadership*

41.4%

41.3%

* Wider leadership includes grades 10, 11 and senior managers

In February 2016, Dame Janet Smith published
her report into the cultures and practices of
the BBC during the years that Jimmy Savile andStuart Hall worked here. The report set out
in detail the horrific events that took place
during that time, which was a truly dark
chapter for the BBC. We owe a great debt
of gratitude to those survivors who cameforward to tell their stories as part of
the Review.
In her report, Dame Janet made a numberof recommendations, all of which we haveaccepted and on all of which work is currently
underway. This includes a thorough review ofour policies and processes relating to bullying
and harassment, child protection andwhistle-blowing, to ensure they reflect bestpractice. We will also be looking in detail atthe culture of the BBC, to ensure employees
feel comfortable speaking out.
We are committed to doing all we can toensure nothing like the events described by
Dame Janet can ever happen again. A fullprogress report on our work is being
published alongside the Annual Report andwe will provide our final response to her
recommendations in the autumn. The
progress report is published on the BBC’s
corporate website.

Human rights
The BBC takes human rights seriously;
at home in the UK, and across the globe.
Every member of staff has the right to returnhome in the same state of health, in which
they left for work, and to form and join tradeunions. Some staff are required to work inhigh-risk environments, such as those in
hostile surroundings, covert filming or
covering events such as terrorist incidents.
Our High Risk Team advises and oversees
training and provision of equipment for staff
to ensure they are appropriately prepared toundertake their role. Our Terms of Traderequire any suppliers we work with, and any
sub-contractors they use, to adhere to thecodes of practice published by the Equality
and Human Rights Commission and theEquality Commission Northern Ireland.

BBC Radio Bristol Breakfast Show presenter Emma Britton
bbc.co.uk

115-130

In order to be a truly creative organisation, theBBC needs to embrace the UK in its entirety.
Our audiences, our people and our suppliers
expect it and the more diverse our content
and workforce are, the better we can reflect
our audiences in our content. Diversity islooked at across the entire supply chain –from commissioning and production throughto the sourcing of talent and on-air portrayal.
In 2014, the BBC Director-Generalannounced measures to broaden the rangeof voices and backgrounds across the BBC,and since then we have made good progressagainst a series of measures and 2017 targets
for staff and onscreen:
At 13.4%, the proportion of black, Asian andethnic minority (BAME) employees has neverbeen higher and we are on track to meet our2017 goal of 14.2%, but we recognise that
there is more to be done in some areas.
Almost half of our employees are women, andat leadership grades, 41.4%. Half of BBC Local
Radio breakfast shows now have a female
presenter, meeting the ambition set by the
Director-General and half of our news
correspondents are now women.
An aim for 1% of the BBC’s workforce to beapprentices by the end of the current licencefee period has been met based on the
October 2015 apprenticeship figures. 45% of
the 2015 Television Production apprentices
are black, Asian and ethnic minority with
64% coming from families where neither
parent attended university. Across our2015 Digital Journalism apprentices 50% areblack, Asian and ethnic minority with 60%
coming from families where neither parent
attended university.

The Creative Access traineeship aims to provide opportunities
to under-represented groups
BBC Annual Report and Accounts 2015/16 119Governance and finance report – Operations

The Local Apprentices were hired on every BBC Local and Nations Radio station

Development opportunities for underrepresented groups at all levels continue tobe progressed through initiatives including the
Senior Leadership Development Programme
and Creative Access Graduate Trainees.
Across the organisation, we also support
numerous staff networks, including Pride forlesbian, gay, bisexual and transgender (LGBT)
staff, the BBC Black and Asian Forum, Ability
for disabled employees and Global Womenin News.

To help us make sure we are heading in theright direction the Independent Diversity
Action Panel continues to advise, support andchallenge us. Members include Baroness Tanni
Grey-Thompson, Sir Lenny Henry, Heather
Rabbatts CBE, George Mpanga , Daniel
Oudkerk, Tanya Motie, Jason Roberts MBE,
Nihal Arthanayake and Baroness Floella
Benjamin OBE. They have supported us in thedevelopment of a new diversity and inclusion
strategy which will take us through to 2020.

External collaborations are with partners
including the Shaw Trust, the Stephen
Lawrence Charitable Trust and the Mama
Youth Project. We also work extensively withthe wider industry and are an active memberof the Creative Diversity Network, playing
a key role in pan-industry initiatives such as
DIAMOND, a diversity monitoring tool.

More about the BBC’s diversity policy
and new strategy can be found at:bbc.co.uk/diversity.

Two onscreen 2017 targets are in place. A 5%target for onscreen disability, and a 15% target
for onscreen BAME. When the onscreen
monitoring tool (DIAMOND) is launchedlater this year, we will be able to measure ourprogress against these.

120 BBC Annual Report and Accounts 2015/16

bbc.co.uk

Part Two: Governance and finance report – Operations115-130Developing new talent and skills
Get in, gets skills, get on
The BBC Academy delivers apprenticeships,
graduate entry schemes, and professional
development for BBC staff, people embarking
on media careers, freelancers and the wider
UK industry. This is done through online andface-to-face training, work experience andapprenticeships, and professional skills
development for BBC staff and the wider
industry, and is a requirement of theBBC’s Charter.
In 2015, BBC Academy moved to its new
home at BBC Birmingham, where it’s now
established as our skills and talent centre
for the whole of the UK.

New talent, skills andapprenticeships
In 2013, the Director-General set a target for
1% of the BBC’s workforce to be apprentices
by the end of the licence fee period. We
met this target in November 2014, and we’recontinuing to expand the opportunities
available to people wanting the skills toenter the media industry.
In October 2015, the BBC hired 187 nongraduate apprentices and 146 graduate-leveltrainees across our Production, Journalism,
Engineering, Digital, Business and Legal
departments. We are especially proud of our
Local Apprenticeship which saw us hire anapprentice on every BBC Local and Nations

Radio station, providing opportunities intowns and cities right across the UK.
We are committed to offering opportunities
at the BBC to everyone. We offer degreelevel apprentice opportunities in Business
Management and Broadcast Engineering,
providing alternatives for those who choose
not to go to university.
This year, the BBC Make it Digitaltraineeship has given opportunities to 1,200+
unemployed young people across the UK,
made possible through a partnership including
Job Centres across the UK, the Skills Funding
Agency, Scottish and Welsh Government andthe Northern Ireland Assembly.

Innovative and flexible training
The Academy continues to adapt its training
to meet the needs of a fast-changing BBC.
Our journalism training team has developed
online training, Reporting on the EU
Referendum, to inform EU-related coverageahead of the Referendum in June. The course
is mandatory for staff and freelancers working
in the News division and for some others
involved in factual output. Face-to-facebriefings, also covering the UK national andlocal elections in May, have been delivered
to more than 1,300 staff across the UK.

teams in Birmingham, has provided a new
resource for those working on BBC investigations.
There have already been some notable on-air
successes including the unveiling of a would-be
so-called Islamic State recruiter by anundercover reporter in Leeds.
A major training initiative for BBC Local Radio
is part of our drive to offer training using
innovative techniques. It’s reached all 39
stations and 250 staff, using live streamed
events as well as face-to-face sessions.
The Academy is closely involved in the plans to
expand the World Service, ‘World 2020’. This
will involve the recruitment of additional staff
to support new or expanded services, all ofwhom will need a significant amount oftraining. Training is expected to start in
September 2016.
Around 100 BBC staff are participating in the
Academy’s MSc programme in Software
Engineering and Internet Architecture. Thishas been running since 2011 in collaboration
with the universities of Bournemouth,
Bradford and Lancaster.

In partnership with the BBC Weather Centre
we provided a three day presentation training
opportunity to eight men and women withdisabilities. Two of those trained wereA new Birmingham-based Investigative Hub, set subsequently offered longer training
attachments with English Regions, with a view
up in collaboration with BBC English Regions
to one day making a network appearance.

The BBC is committed to offering a range of training and development opportunities that are open to everyone
bbc.co.uk

BBC Annual Report and Accounts 2015/16 121Governance and finance report – Operations

The Academy continues to adapt its training to meet the needsof a fast-changing BBC

The Academy’s Expert Voices initiative, which
had great success in bringing new diverse
contributors to BBC output, was nominatedagain at the European Diversity Awards,
having won the EDA prize the previous year.

The Academy offers a range of production and technology courses

Bringing new skills to the BBC
and the industry

Following a successful pilot, Digital Seasons
were rolled out in London, Bristol and Salford
offering staff practical workshops andmasterclasses to develop skills in contentThe range and scope of our technology
making, new platforms and understanding
training has been boosted by the acquisitionof licences from third-party providers, offering online audiences.
access to more than 5,000 online courses and The Academy’s ‘Fusion’ project helps build
modules and 15,000 professional training
a workforce equipped with technical andbooks and videos. This is part of our drive
editorial skills, sharing innovations and successto deliver more training to more people atstories to enhance creativity and savelower cost.
resources. More than 65 events weredelivered across divisions on subjects ranging
The Academy took significant steps into its
from immersive virtual reality, ultra highdigital future with the release of the Digitaldefinition, filming with drones and the future
Storytelling Massive Open Online Courseof mobile and social media. The project(MOOC) in partnership with the University
reached more than 4000 delegates.
of Birmingham. 28,000 people signed up to
study this introduction to the principles andpractice of making great video for the web.
A truly global project it reached learners
across the world and was repeated in March,
May and July 2016.

As part of our commitment to train andsupport the wider broadcast industry wecontinue to support the National Film &Television School to deliver a series ofco‑branded craft and production
courses focussed around drama andentertainment production.
The BBC continues to be the largest
contributor to Creative Skillset’s Television
Skills Fund, which allows the Academy to train
the industry with a number of initiatives
addressing current and future skills gaps
across the UK.

122 BBC Annual Report and Accounts 2015/16

The Academy is an active participant in theEuropean Broadcasting Union’s training
Academy, and with the National Council for
the Training of Journalists and Broadcasting
Journalism Training Council.
After the publication of the Academy’s English
Regions Skills review, a number of externalfacing training initiatives were announced,
working in partnership with Creative Skillset
and other UK Broadcasters. These include
Digital Cities skills events and training
workshops in Bristol, Birmingham, the North
and Nations; a UK-wide 12-month Series
Producer Scheme designed to help grow thenext generation of senior creative content
makers and a new Production Management
training initiative to help support this key
area in production.
The Academy is working in partnership with
the Birmingham-based digital arts project
The Space to build digital skills and knowledge
in the arts sector and will be developing
a series of large-scale training events andsmaller focused workshops aimed at arts
organisations across the UK over the next
two years.

bbc.co.uk

Part Two: Governance and finance report – Operations115-130

Apprentices
A look at some of the new talent trained by
BBC Apprenticeship schemes over the last 12 months.

Digital Journalist

Production Apprentice

Local Apprentice

Rachel Coburn

Shaquille Robinson

Talisha Johnson

I was working in a betting shop in Glasgow
when I applied for the digital journalist
apprenticeship. I started with BBC Scotland
Online and one of my first jobs was to source
the family of a boy stabbed in school and givethe details to the television Newsdesk. Within
three months of joining I produced a TV
package for Reporting Scotland with a pieceto camera.

Being a BBC apprentice has literally changed
my life and put me on a path that I neverthought I’d ever be on.

My apprentice journey has taken me fromworking as an assistant on my local radio
station to presenting television for CBBC.
My 15-month apprenticeship consisted ofon the job training, work experience, a formal
qualification and the chance to network.
It was a fantastic combination that surpassed
anything I could have been offered if I hadgone to university.

Broadcast Engineering
Apprentice

BBC Scotland Apprentice

BBC Wales Apprentice

Ross Whyatt

Lois Roberts

I was always in that small minority of kids
saying that I never wanted to go university
but I never knew exactly how I’d get myfoot in the door of the industry that I’m
now a part of.

I was 18 years old when I began thisapprenticeship with BBC Scotland in Glasgow.
Before joining the BBC Technology
Apprenticeship Scheme I was working for Apple When I was younger, I worked as an extra on
in one of their stores as a Family Room Specialist. various television programmes and wasconstantly creating my own short films and radio
Once I visited the BBC at their London open
podcasts. Throughout school and college, I knew
day I was attracted by how they were goingthat I wanted to jump straight into the media
to combine the use of employment, higher
industry and discovered that an apprenticeshipeducation and in-house training to give young
would be the best way of doing that.
people the opportunity to become engineers.
It was everything I was looking for, and more.

Tobi Ajala

bbc.co.uk

Towards the end of my A-levels, I decided
that I needed a break from exams so going toUniversity straight after sixth form was not an
option for me. Instead of writing my personalstatement like the rest of my friends, I waslooking for apprenticeships. I came across the
BBC Multiplatform Sport apprentice and I
immediately thought that this was perfect forme as I have an interest in both sport and media.

BBC Annual Report and Accounts 2015/16 123Governance and finance report – Operations

OutreachOn-screen and on-air the BBC offers creative, diverse and hugely varied content.
Our Outreach activity supports this content by engaging the groups the BBC serves
least well, through face-to-face work, community support and staff volunteering.

Our aim is to enhance
our broadcasting throughprojects that touch thelives of our audiences
as well as making BBC
programmes that are
relevant and accessible to
all now and in the future.

In 2015, BBC Outreach built on the Community
Doorway programme established in 2014. It’s
through this initiative that charities andcommunity groups get to work with BBC
volunteers on one-off projects. This year webrought together BBC programmes and over
1,000 staff to work with nearly 100 local
partner organisations on projects ranging fromfirst time voters in Birmingham and Bristol, todrama story-lining in Hertsmere; from healthand well-being in Glasgow, to online safety with
BBC Learning; each project giving our audience
the opportunity to meet the BBC, to shape ourcontent and discover careers within the media.

Social inclusion
This year, in partnership with the Royal
Television Society, The Joseph Rowntree
Foundation and the National Council for
Voluntary Organisations, BBC Outreach ran
a conference, ‘Who Benefits: Television &Poverty’. We looked at recent and upcoming
programmes connected to poverty as well as
new audience research. For the programme
makers present, it was a chance to find newstories and different ways of making
programmes. For charities and the people
they support, it was an opportunity to hear
about the way television programmes arecommissioned, and how programme choices
are made.

Working with andfor communities
This year BBC programmes worked with manydifferent communities – locally and nationally.

The project was enjoyed by an audience ofover 30 million people across both regionaland network TV, radio and digital platforms.
Hadrian’s Wall of Sound included over 650
performers from 45 different musical groups.
The event was produced in partnership witha large number of external agencies andorganisations, including English Heritage, theNorthumberland National Parks Authority
and The Arts Council.
Launched on The One Show and acrossweather, news and nations and regions in
November 2015, BBC Weather Watchers is
a new online crowd-sourcing weather clubfor people who want to join in the nation’s
favourite conversation, and help tell the storyof our famously unpredictable weather.
Weather Watchers sign in through BBC ID
and create digital report cards, ‘now casts’.
Their reports can be geolocated to their exact
location, allowing other Weather Watchers
and broadcasters across the BBC access toa unique, dynamic map of the UK’s current
weather conditions.
As of March 2016, we had nearly 100,000
Weather Watchers, who have posted aroundhalf-a-million weather reports from throughout
the country; from Shetland to the Channel
Islands. Hundreds of Weather Watchers haveseen their photos and observations used to tell
the weather story on BBC Weather, BBC
News, on Local Radio and Regional TV, online
and on social media.

In December 2015, Radio 1 and 1Xtra
launched #1millionhours, one of the stations’Hadrian’s Wall of Sound was a truly uniquemost ambitious social action campaigns toproject that celebrated both the beauty of thedate, working with charities Oxfam,
surrounding countryside and the passion ofBarnardo’s, Age UK and Cancer Research UK.
musicians living in the very north of England,
Listeners are asked to volunteer their timethrough a 13-hour relay of live music to markwith these charities or others of their own
the first BBC Music Day. Hadrian’s Wall runs for choosing. Opportunities include helping out
73 miles, from Bowness in Solway on the west
in AgeUK shops, day centres or at events,
coast of Cumbria, to Wallsend, on the banks
being a stock room or retail assistant forfor the River Tyne in North Tyneside, much
Barnardo’s and being an Oxfam steward atof it through very remote countryside.
a summer festival.

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By the end of March, and after only one major
push on-air, just short of 300,000 hours havebeen pledged. Ben Cooper, Controller ofRadio 1 and 1Xtra said, “I want BBC Radio 1
and 1Xtra to be a force for good in the UK
and magnify all the positive work that young
people do for others, so we’re very proud
to be working alongside some of the mostexperienced organisations in the country toreach one million hours of volunteering.”

Encouraging young talent
A key part of the BBC’s outreach work is its
commitment to new skills and talentdevelopment for children and young people.

School Report
This year marked ten years of the BBC’s
flagship schools journalism project School
Report. On 10 March, students from morethan 1,000 schools across the UK turned theirclassrooms into newsrooms to join the BBC
in a unique interactive news broadcast, when
11 to 16 year-olds report on all the news andsport that’s important to them in 2016. There
was coverage throughout the day on local,
regional and national BBC news programmes
and services, plus 12 hours of continuous live
coverage entirely dedicated to School
Reporters on: bbc.co.uk/schoolreport.
Journalist Huw Edwards said: “I look forward
to this day every year. I’ve seen first-hand how
much can be learnt from work-shops inschools when we give students real journalistic
deadlines and standards to adhere to. I’m
involved because I want to give young people
the chance to make the news themselves, andI want to share the principles of goodjournalism with them.”bbc.co.uk

This year, School Report stories included: BBCRadio 5 live – a school of over 1,000 pupils andteachers live without social media for a weekfeaturing 5 live presenters; BBC Radio 4 –young people’s take on the EU referendum;
News at Six – a school taking part in ascientific study into sleep deprivation, andfrom BBC World Service – seven special radio
reports from young people around the world.

Bristol’s Talent Ticket Roadshow
Over 1,500 Bristol secondary school pupils
took part in the BBC’s Talent Ticket
Roadshow in March 2016. Choosing fromworkshops in foley, film production, animation,
set design, open electronics and prosthetic
makeup, the 14 to 15 year-olds got hands-on
experience using industry equipment. Over
40 BBC volunteers were involved in taking
the project out to some of the mostdisadvantaged and ethnically diverse schools
in the city.

115-130

As of March 2016, we had nearly

100,000
Weather Watchers, who haveposted around half-a-million
weather reports from throughout
the country

The project is part of a partnership between
the BBC, 12 Bristol secondary schools and the
University of the West of England. It aims toencourage young people to discover theircreativity, develop their confidence anddiscover careers within the creative industries.
The programme also offers work experiencein Year 10 and a three-day film-making camp
for students in Year 12.

BBC Annual Report and Accounts 2015/16 125Governance and finance report – Operations

Partnerships
This year, innovative partnerships, new andongoing, have thrived across the BBC as wehave focussed on working towards our vision
to deliver an open BBC, as Britain’s creative
partner, which we set out in autumn 2015’s
British Bold Creative document.

On television, Face of Britain was a partnershipwith the National Portrait Gallery, where
Simon Schama explored the history of British
portraiture and the galleries’ curators put
together five collections following the themesof the programme.

Make it Digital

Arts

Music

Early in 2016, we announced plans for the
BBC Shakespeare Festival, partnering with
the Royal Shakespeare Company (RSC)on several projects, including an exclusive
live event on BBC Two. Internationally,
Shakespeare Lives, co-curated with the British
Council, is bringing Shakespeare to global
digital audiences from the Royal Opera
House, Shakespeare’s Globe, the British
Film Institute (BFI), RSC, Hay Festival andmany others.

BBC Radio 3 has multiple partnerships withthe wider cultural world, this year theseincluded Wellcome Collection, Cut n’ Splice
Festival, EFG London Jazz Festival, WOMADFestival, Celtic Connections, BASCA, The
Arts and Humanities Research Council and
PRS For Music Foundation.

The Make it Digital traineeships, producedwith partners including Job Centres and Skills
Funding Agency, gave opportunities to over1000 unemployed young people in this year,
and will support thousands more next year.

Continuing to build digital skills andknowledge, in partnership with the BBC
Academy, The Space has become adevelopment and commissioning organisation
for arts bodies to produce content they
otherwise couldn’t. It has a new independent
board with senior figures from BFI, UK Cityof Culture, NESTA and Royal Welsh Collegeof Music.
Our ongoing partnership with Arts Council
England focused on two projects this year.
Words First with the Roundhouse showcased
young spoken word poets on Radio 1 and1Xtra. Live from Television Centre commissioned
Battersea Arts Centre to host an evening of
independent theatre companies on BBC Fourand iPlayer.

In classical music, Ten Pieces has reachedalmost half of all UK school children. The
collaboration between BBC Learning and BBC
Music has fostered partnership with the
ABRSM, Arts Council England, Arts Council
Wales, Arts Council Northern Ireland,
Creative Scotland, Music Mark, Youth Music,
ABO, ISM and Into Film.

Science
The BBC partnered with major space
agencies, NASA, ESA, RosCosmos and UKSA,
as well as public institutions such as the
Science Museum, to capture highlights ofBritish astronaut Tim Peake’s space mission.
Back on earth, Radio 4’s 25-part series
Natural Histories was produced in partnershipwith the Natural History Museum.

Radio 1Xtra’s DJ Target at Words First which showcased
young spoken word poets
126 BBC Annual Report and Accounts 2015/16

As part of our Make it Digital initiative, theBBC and 31 partners have given a BBC
micro:bit, a pocket-sized codeable computer,to every child in year 7 or equivalent acrossthe UK.

Libraries
The BBC agreed a new Memorandum ofUnderstanding (MOU) with the Society ofChief Librarians for England, Wales and inparallel with Northern Ireland. They arechampioning Make it Digital projects including
BBC Weather Watchers, an online weather
reporting tool developed in partnership with
the Royal Meteorological Society, which is now
a core part of the daily weather forecasts
across BBC output.
We have also announced LovetoRead tocelebrate reading for pleasure through a wide
range of programming in the summer andautumn of 2016. To deliver this campaign, we
are working with Society of Chief Librarians,
Scottish Libraries and Information Council,
and reading charities including, Scottish Book
Trust, Book Trust, Reading Agency andNational Literacy Trust.

Stargazing Live: Brit in Space followed the action as astronaut
Tim Peake docked with the International Space Stationbbc.co.uk

Part Two: Governance and finance report – Operations

City Partnerships

Nations

We have renewed our support for thecreative industries in Bristol by signing a new
MOU with the Bristol City partnership andalso signed an MOU to support the Hull City
Partnership for the 2017 City of Culture
celebrations.

In Wales, our strategic partnership with S4C
has produced more innovative programming,
including bi-lingual drama Hinterland/Y Gwyll.

BBC Research and Development
We are expanding the scale and scopeof our Research and Development (R&D)
partnerships activity. Over the last year,
we’ve collaborated with 20 universities and
30 commercial organisations, supporting
long-term strategic research, medium-term
industry impact projects, and short-term
tactical collaborations for skills development,such as hosting PhD student internships.
Notably, this year we won funding from theEuropean Commission for four projects,
working with Fraunhoferk, BT and Cisco andsmall businesses that are expert in nichefields. The outcomes will have international
economic impact including new services formedia monitoring, audio, UHD content andmulti-screen experiences.

115-130

BBC Wales founded Creative Cardiff with
Cardiff University, Wales Millennium Centre
and Cardiff Council to support Wales’
creative economy.
BBC Wales and Arts Council of Wales
continued to promote new Welsh music
through their joint Horizons project, andmarked a new three year partnership witha Get Creative weekend.
Across the year, BBC Scotland maintained
and refreshed a number of strategic creative
collaborations and partnerships, including
those with Creative Scotland, the RoyalConservatoire of Scotland, STV and withMG ALBA, with whom we partner in theoperation of the Gaelic language television
service, BBC ALBA.

The partnership with NI Screen brought
benefits across BBC output and the creative
industries in Northern Ireland. Strategic links
and co-operation were also to the fore in
In addition to promoting 60 pilot ideas on BBC developing programme materials about
Taster, in 2015 BBC R&D’s Connected Studiothe events and legacies of 1916 in
has worked with 288 people from small
Northern Ireland.
creative companies using an IP-agnostic andopen process. 170 submissions were made for
the Future of Content pilot programme alone,with a number slated for further development.

BBC Radio 4’s Save the Rhino appeal worked to conserve populationsof endangered rhinos in Africa and Asia
bbc.co.uk

BBC Media Action works to improve dialogue and debate between
the public and those in power in Nepal
BBC Annual Report and Accounts 2015/16 127Governance and finance report – Operations

Charities
We have been broadcasting and supporting
charity appeals since 1923 and our appeals
have become a vital part of our remit – andvalue – as a public service broadcaster. Overthe past decade, our appeals and telethons
have raised over £1 billion; benefiting
individuals, communities and organisations
across the UK and around the world.
Alongside support for our corporate charities– BBC Children in Need and BBC Media
Action – and our partnership with Comic
Relief, we also make appeals for a broad rangeof charities, helping to raise vital funds andawareness. During 2015/16, £95 million has
been raised and the information below setsout some of the main charitable achievementsthat we have made over the last year.
BBC Children in Need
Highlighting the realities of life fordisadvantaged children and young people
across the UK, the live Children in Need
programme in November raised a recordbreaking £37.1 million on the night, with thefinal total to be announced this summer.

The BBC rallied the public’s support with
programming across multiple channels. The
One Show’s Rickshaw Challenge returned, with
six young people pedalling from Land’s End to
the East End. Elsewhere, Radio 2 gave listeners
fun ways to get involved, Countryfile viewers
went on rambles, and Tom Jones and Rob
Brydon hosted One Big Night, encouraging
viewers to donate. Across the UK, BBC
presenters also undertook fantastic
fundraising activities, from rowing canoes
down canals to mad marathons.
But these activities were just the tip of theiceberg. Central to all our activities are thestories of the young people supported byChildren in Need, showing how every penny
donated makes a difference. We fund around
2,400 projects and, in the last year, we helped
change the lives of 480,000 children andyoung people across the UK. These fantastic
achievements are only made possible by theincredible generosity of the British public.
BBC Media Action
The BBC’s international development
charity uses media and communication totransform lives, working with partners

to reach more than 200 million people inmore than 30 countries.
Original television, radio and online dramas
and discussion programmes help improvehealth, share innovation and inform people
about their rights. Mentoring media
professionals helps to raise journalism
standards, and Lifeline programmes– broadcast before and after disasters –help save lives.
Within hours of the devastating earthquake
in Nepal in April 2015, BBC Media Action was
sharing information with survivors via BBC
Nepali and local radio stations. The Lifeline
radio programme Milijuli Nepal (Together
Nepal) offered people reassurance, as
well as advice on staying safe, protecting
children and looking after their health inunsanitary conditions.
In Afghanistan, Nepal, Tanzania and South
Sudan, BBC Media Action’s teams contributed
debates and discussion to the BBC’s 100
Women season. In Tanzania the four debates– each attended by 100 women from all walksof life – were captured by the country’s first
all-female production crew.

BBC Children in Need’s Life
President, Sir Terry Wogan,passed away in January thisyear. Sir Terry hosted every
Appeal Show from 1980
to 2015 and as the face –and heart – of the charity,
he helped raise well over£800 million to change
the lives of disadvantaged
children and young people
across the UK.
We shall all miss him
enormously, but his legacy
lives on in the young lives
he has helped improve.
We know that the BBC,colleagues, supporters, andthe public will all work hard
to continue to build on that
legacy for years to come.
Sir Terry Wogan presents
Weekend Wogan
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In 2015/16, BBC Media Action’s 90 projects
were supported by a range of funders
including the UK’s Department forInternational Development, the Foreign andCommonwealth Office, the Bill and Melinda
Gates Foundation, UNICEF and USAID.
Total income for 2015/16 was £44 million.
The charity published a number of reports in2015/6 – including research on humanitarian
programming and an analysis of media inpolitically unstable environments. To readthese or for more information about
BBC Media Action please visit:bbc.co.uk/mediaaction

ran a Raising the Roof appeal with Sue Ryder,
who were building a new hospice. Radio
Derby’s breakfast presenter Colin Bloomfieldlaunched the station’s Melanoma Appeal
shortly before his death aged 33, from skincancer. Working with the charity Skcin and
Derby Telegraph the appeal raised £174,746.
This paid for two sun shades and two sunmeters in local parks, skin cancer checks for
hundreds of people and education about sun
safety for more than 50,000 schoolchildren.

In April the BBC broadcast a Disasters
Emergency Committee appeal for the victimsof the Nepal earthquake, which helped
towards a final DEC appeal total of
Broadcast Appeals
During the year, the BBC broadcast 49 appeals £87,240,000.
Any charity that meets the relevant criteria
on Radio 4 and 11 BBC One Lifeline appeals.
can apply for an appeal on the BBC and
These raised over £800,000 and are a vital
more information on this can be found at:means by which smaller charities can reachbbc.co.uk/charityappeals/
a wide audience. For example, the charity
Save the Rhino was still receiving chequesSport Relief
two months after their appeal and have raised In 2016, the BBC helped Sport Relief toover £20,000 in total. Cathy Dean, Director
capture the imagination of the public with aof the organisation, called their appeal on
season of programmes dedicated to inspiring
Radio 4: “The appeal that just keeps giving!”
the public to walk, run, swim and cycle
The ability to reach a wider audience is a key
themselves proud. The campaign included
factor in the importance of our appeals.
iconic moments, from Jo Brand’s ‘Hell of a
Breast Cancer Now said of their BBC Lifeline Walk’ across the country, to Greg James’ fiveAppeal: “It reached millions of people wetriathlons in five days and Eddie Izzard’s
would not have been able to otherwise
staggering attempt to run 27 marathonsreach – for secondary breast cancer thisin 27 days across South Africa, whichawareness is vital.”
BBC Three covered exclusively.
There is a separate selection process forbroadcast appeals on BBC television and radioin Northern Ireland, which last year broadcast
13 appeals as well as a special Christmas-time
appeal. The BBC Radio 4 Christmas appeal
with St Martin-in-the-Fields, in its 89th year,
raised £2,500,050. Two BBC Local Radiostations ran appeals. Radio Cambridgeshire

the UK took part at flagship venues in London,
Glasgow, Belfast, Sheffield and Norwich –alongside many more local events – with thetotal raised reaching over £65 million by theend of April 2016.
Thanks to the enormous generosity of the
British public, Sport Relief has raised morethan £328 million since its first campaign in
2002, funding projects that help transformthe lives of people in the world’s poorest
communities and here in the UK. This
wouldn’t have been possible without theenduring support of the BBC.
BBC Performing Arts Fund
The BBC Performing Arts Fund, one of theBBC’s three corporate charities, closed in May
2016 after 13 years. Since its inception as The
Fame Academy Bursary, the charity awarded
over £5 million in funding to individuals andgroups involved in the performing arts, with
beneficiaries including artist Adele, composerMark Simpson and Radio 2 Folk Awards
Musician of the Year, Sam Sweeney. Hundredsof choirs, bands, orchestras, dance andtheatre groups from across the UK also
received funding to train and develop andthousands of people benefitted from theFund’s work.

A dedicated night of television on Friday
18 March included unforgettable sportand entertainment, interspersed with films
highlighting work funded by Sport Relief.
A record £55 million was raised on the night.
This was followed, on Sunday 20 March, by theSport Relief Games, in which people acrossIdris Elba and Lenny Henry film a comedy sketch of
Luther for Sport Relief 2016bbc.co.uk

115-130

Jo Brand meets Age UK, Barnsley Allsorts Group in Wombwell
as part of Brand’s Hell of a Walk for Sport Relief 2016
BBC Annual Report and Accounts 2015/16 129Governance and finance report – Operations

Environmental sustainability
Environmental issues have long been reflected and documented in the programmes wemake and it is important to us that consideration for the environment is also embeddedin the way we operate and run the BBC.
We have continued to reduce the CO2
emissions and energy consumption associatedwith use of our buildings, significantly
exceeding our target.
We have also significantly beaten or 2016/17
targets for other environmental measures.
This includes an 86% reduction in waste tolandfill per person and nearly halving ourwater use per person.
Last year, we reported on our sustainableproduction scheme, albert+, for the firsttime. This year, 55 productions including
BBC Breakfast, Blue Peter and The One Show
have all achieved certification and displayed

the albert+ mark in their end credits –almost double what we reported last year.
We have found that typically, productions
going through the albert+ process reduce
their carbon emissions by about 15% and save
£6,000, bringing both environmental andfinancial savings.
While good progress is being made, theunpredictable nature of the global events webring to our audience means that sustained
reductions in emissions from travel continue
to be challenging. Our Carbon Literacy course
was developed as a partnership between
BBC Sustainability, BBC Academy and several
external partners mainly based at MediaCity

UK, Salford, including ITV. Around 350 people
have taken the course so far, across almost
all the BBC’s major production bases. The
partners have also shared the course with the
BAFTA Albert Consortium, a group of UK
broadcasters and independent production
companies working together to promote anddevelop sustainable working practices within
the industry. This means the course has now
reached hundreds more people outside
the BBC.
We are proud of what we have achieved so far
but are aware that there is a long way to go inthis critical area of the BBC’s work. You can readmore at: bbc.co.uk/responsibility/environment

BBC Environmental target performance summary
BBC environment targets

2015/16
TargetPerformance
2016/17 against baseline

Absolute reduction in energy consumption

-20%

-38%

Absolute reduction in CO2 emissions from buildings

-20%

-33%

Reduction in water use (per person)

-25%

-48%

Reduction in waste (tonnes) to landfill (per person)
Amount of waste recycled

-25%
70%

-86%
64%

Reduction in transport CO2 emissions (per BBC user)

-20%

0%

Greenhouse Gas emissions
Greenhouse Gas emissions (tonnes CO2 emissions, scopes 1 & 2):
Carbon intensity (tonnes CO2 emissions/Total Group Income £m):

100,552
20.8

Notes on table
Greenhouse Gas data is for UK-based and representative World Service bureaux; detailed information and explanatory
notes can be found online at: bbc.co.uk/responsibility/environment.

Sustainable production

Target2016/17

Performance
2015/16In-house Children’s and TV to use albert to carbon
footprint production

100%
on track83%
on track

BBC average carbon footprint for TV production
per production hour
BBC productions to complete albert+ sustainableproduction certification process

N/A
25
productions

10.7 tonnes
CO2
55
productions

Notes
albert is a carbon calculator which helps production teams across the broadcasting industry calculate the carbon
emissions associated with TV production.
albert+ is a certification scheme which helps productions take steps to reduce environmental impacts. Successful
productions are awarded a one, two or three star rating and may display a badge on programme credits. Productions
which have completed the process have progressed to the audit stage.
For more information see: bbc.co.uk/responsibility/environment

130 BBC Annual Report and Accounts 2015/16

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131-160

Governance

Governance is the way we guarantee
independence, deliver our mission
and account for our actions.

Tom Hiddleston filming The Night Manager
www.bbc.co.uk

BBC Annual Report and Accounts 2015/16 131Governance and finance report – Governance

Executive Board
The Executive Board, chaired by the
Director‑General, and consisting of executive
and non-executive directors, is responsible forthe delivery of BBC services and day-to-day
operations across the organisation.

Executive directors

Tony Hall, Lord Hall of Birkenhead CBE
Director-General and Chairman,
BBC Executive Board

Helen Boaden

Anne Bulford OBE

Tim Davie

Director, Radio and BBC EnglandManaging Director, Finance and Operations

CEO, BBC Worldwide and Director, Global

James Harding

Mark Linsey

James Purnell

Director, News and Current Affairs

Director, BBC Studios

Director, Strategy and External Affairs

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131-160

Non-executive directors
This is the membership of the
Executive Board as at April 2016.
Throughout the reporting year
membership has changed. Pleaserefer to pages 135 and 139 forfurther details.
Charlotte Moore attended the Executive
Board in her capacity as Acting Director,
Television.

Dame Fiona Reynolds DBE

Simon Burke

Senior Independent Director; Chairman of
the Remuneration Committee, Fair Trading
Committee, and Nominations Committee fornon-executive appointments; member of the
Audit Committee

Chairman of the Audit Committee

Further information about Executive
Board members is available online: bbc.
co.uk/aboutthebbc/insidethebbc/
managementstructure/seniormanagement
The Executive Board delegatessome of its responsibilities tofour sub-committees:
Audit Committee
The Audit Committee oversees financial
reporting, internal control and risk
management. The committee is madeup of three non-executive directors.
The Director-General, Managing Director,
Finance & Operations, BBC Group GeneralCounsel, Director of Risk and Assurance,and external audit representatives may
also attend.

Alice Perkins CB

Sir Howard Stringer

Member of the Remuneration and Fair
Trading Committees

Member of the Fair Trading Committee

Fair Trading Committee
The Fair Trading Committee ensuresthat the BBC complies with its fairtrading obligations. It is made up of three
non-executive directors. The Managing
Director, Finance & Operations, BBCGroup General Counsel, Director of
Risk and Assurance, and external audit
representatives may also attend.
Nominations Committee
The Nominations Committee oversees
the process of proposing, appointing anddismissing members of the Board, except
the Chairman, who is appointed by the
BBC Trust. Membership of the committee
depends on whether non-executive or
executive appointments are being made.

Dharmash Mistry
Member of the Audit and Remuneration
Committees

bbc.co.uk

Remuneration Committee
The Remuneration Committee oversees
the BBC’s Senior Management Reward
Strategy and decides the individual
remuneration arrangements for BBC
executive directors and the BBC
Worldwide Executive Team. It is madeup of three non-executive directors.
The Director-General, Managing Director,
Finance and Operations and Directorof HR may also attend.

BBC Annual Report and Accounts 2015/16 133Governance and finance report – Governance

Report of the Senior
Independent Director“Alongside the Charter
Review process we hadan exceptionally creativeand productive year.”
Dame Fiona Reynolds

2015/16 is the last financial year of this Charter
period. By 1 January 2017 a new Charter will
be in place and our roles will certainly havechanged. This is a chance, then, to reflect ona vitally important year for the BBC and
its future.
Alongside the Charter Review process we
had an exceptionally creative and productive
year. Highlights of our output included War
and Peace, The Great British Bake Off, Doctor
Foster and Countryfile, which reached its
largest audiences and highest ratings ever.
We also reached new audiences in new
ways: 50,000 people attended Radio 1’s
Big Weekend in Norwich, the World Service
reached its highest ever global weekly
audience, 246 million, and one third of the
UK’s population tuned into BBC’s coverageof the Glastonbury Festival.

134 BBC Annual Report and Accounts 2015/16

For the Executive Board, our overwhelming
focus was to ensure the BBC is ready for its
new Charter. We prepared our vision for the
future, which we published as British, Bold andCreative in September 2015. This set out how
we see the BBC shifting from a broadcasterto an open platform, where creative
partnerships thrive; and also how we will
make the substantial savings that are required
under the budget settlement we agreed with
the UK Government in July 2015. As nonexecutive directors we contributed directly
to Sir David Clementi’s review of governance,emphasising the vital importance of the BBC’s
independence, our public service mission, andthe ability to move quickly and decisively torespond to new challenges and opportunities
including those posed by the fast-changing
digital world.

bbc.co.uk

Part Two: Governance and finance report – GovernanceThus we also spent much time this year
making sure that the BBC is equipped to facethese challenges. We had robust debateson BBC Three’s digital future; the new
relationships we seek with our audiences,
represented by myBBC; and securing the rightframework for BBC Studios so that it willcontinue to reflect public service values as itenhances the volume and quality of homegrown production. We continued our focus
on simplicity, cutting overhead costs andsupporting our staff to give their best.
And of course we received the report andconclusions reached by Dame Janet Smith,whose review of the Savile years, which I
commissioned three and a half years ago,examined in detail one of the darkest
chapters in the BBC’s history.

131-160

professionalism and respect. This work will
be helped by our plans to create a simpler,open, and less hierarchical BBC.
This is my last report from the Executive
Board in its current form. I’d like to thankall our colleagues: the BBC Trust; all themembers of the Executive Board, past andpresent, executive and non-executive; andall of the BBC’s staff here and throughout theworld, led by Tony Hall. The last few years
have not been easy but we all remain
passionately committed to excellence,inspired by our mission and its possibilities,
and excited by the future of the BBC
under a new Charter.

Dame Fiona Reynolds
Senior Independent Director

We would like formally to express our
sympathy to the victims, our gratitude for
their courage in coming forward to give
evidence, and our determination that the BBC
should never again be in a position where
crimes like those committed by Jimmy Savile
and Stuart Hall can take place. We have begun
the detailed work of reviewing the BBC’s
culture and processes in response to Dame
Janet’s recommendations to ensure thateveryone who comes into contact with theBBC, for whatever purpose, is treated with

16 June 2016

Executive Board and Committee attendance
Executive
Board
Number of meetings for the period

Audit Committee
MemberAttendee12

Fair Trading Committee
MemberAttendee

54Nominations
Committee
MemberRemuneration Committee
MemberAttendee2

6

Executives
Tony Hall

11

Helen Boaden

11

Anne Bulford

12

Danny Cohen*

4/7

Tim Davie

11James Harding

10

James Purnell

11Peter Salmon**

5/5

4
5

4

2

5

2

5

Non-executives
Simon Burke

11

Nicholas Hytner***

5/8

Dharmash Mistry

12

Alice Perkins

11

Fiona Reynolds

12

Howard Stringer

10

5
5

6
4

5

5

4

2

1

2

6

This table does not include business conducted offline and update meetings where no formal business was considered.
* Danny Cohen left the BBC on 20 November 2015. He ceased being a member of the Executive Board on 12 November2015. ** Peter Salmon joined the Board on 13 October 2015. He ceased to be a memberon 1 March 2016. *** Nick Hytner left the BBC on 31 December 2015.

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BBC Annual Report and Accounts 2015/16 135Governance and finance report – Governance

Governance report
Good governance is about leadership, accountability and openness.

BBC Corporate Governance
Framework
The BBC’s corporate governance framework
is defined in its Royal Charter and theaccompanying Framework Agreement. You
can find the Charter and Agreement on the
BBC Trust’s website at: bbc.co.uk/bbctrust/governance/regulatory_framework/charter_
agreement/
The BBC’s Charter requires the Executive
Board to have regard to generally accepted
principles of good corporate governance.
Although the BBC is not a listed company, it
has opted to adopt best practice and follow
the provisions of the Financial Conduct
Authority’s Listing Rules and the Financial
Reporting Council’s 2014 UK Corporate
Governance Code, where appropriate, inorder to deliver the same governancestandards as companies quoted on an EU
regulated stock market.
The Executive Board has complied with therequirements of the Charter and has also
substantially complied with the UK Corporate
Governance Code. There are a number ofcomponents of the UK Corporate
Governance Code that are either not
appropriate to the circumstances of the BBCor where compliance with the BBC’s Charteror Agreement overrides compliance with the
UK Corporate Governance Code. There arealso two areas where the BBC did not fullycomply with the specific requirements of theCode; all of these are set out below.
Areas of the UK Corporate Governance
Code not relevant to the BBC:
Make up of remuneration (UK Corporate
Governance Code principle D.1.1): The BBC
sets levels for executive remuneration thatshould be sufficient to attract, retain andmotivate directors of the quality required to
run the organisation successfully, in line withthis principle. However, this principle also
requires aligning executive remuneration to
the notion of enhancing shareholder value bymaking performance-related elements ofremuneration a significant proportion of total
remuneration. By virtue of the BBC’s licence

136 BBC Annual Report and Accounts 2015/16

fee funding and its status as a public
corporation, the Executive Board has
determined that the amount of variable (orperformance-related) 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 have been stopped. Tim Davie
receives an element of performance-related
pay in his role as Chief Executive Officer of
BBC Worldwide, the BBC’s wholly-owned
commercial subsidiary.

Make up of Board (UK Corporate
Governance Code principle B.1.2): The BBC
Charter requires non-executive directors to
be not less than one-third and not equal to or
more than one-half. The number of nonexecutive directors is less than half of theBoards Members, however it is not less than
one-third.

Areas of non-compliance with the
UK Corporate Governance Code:
External evaluation of the Board (UKCorporate Governance Code principle
B.6.2): In 2013 the BBC Trust and Executive
Interaction with shareholders (UKBoard undertook an extensive review ofCorporate Governance Code principles
its governance procedures and the results
B.7.1, B.7.2, D.2.4 and section E):
were published. The Executive Board also
The BBC is not a profit-oriented company
with shareholders and so provisions relating to undertook an internal evaluation of its
interaction with shareholders do not apply. In operations during 2014/15. However, thesome circumstances, however, it is possible to last external evaluation of the Board wasconsider, by analogy, the way in which the BBC completed in 2009, therefore not within
the last three years as required by the UK
Trust engages with licence fee payers. This isset out in the Trust’s review and assessment in Corporate Governance Code. Given thePart One of this Annual Report and Accounts. activities undertaken in 2014/15 the Executive
Board believes that non-compliance in thisAreas where compliance with the BBC’s
area has not compromised the quality of theCharter overrides the UK Corporate
governance arrangements in place during
Governance Code:2015/16 or the execution of the Executive
Division of responsibilities between
Board’s responsibilities.
Chairman and Chief Executive (UKCorporate Governance Code principle
Cost of complianceA.2.1 and A.3.1): As permitted by the BBC’s
In 2015/16, the BBC incurred costs estimatedCharter, the Chairman of the Executive Board at £14.2 million (2014/15: £11.7 million) tois the Director-General, the chief executive
ensure that we complied with all relevant
officer of the BBC. This does not comply with legislation. This includes the BBC’s annual
the UK Corporate Governance Code which£2.6 million regulatory fee to Ofcom. During
requires a clear division of responsibilities at
the year a number of enquiries continued,
the head of the company between the running the costs incurred during 2015/16 on theseof the Board and the executive responsible for enquiries were £0.9 million (2014/15:
the running of the business. No one individual £1.2 million).
should have unfettered powers of decision.
The BBC Executive Board
Whilst the Director-General acts as both
The Executive Board, its sub-committees
Chairman and Chief Executive of the BBC
Executive Board, the strategic oversight of the and other groups to which it delegates
Corporation by the BBC Trust ensures that no responsibility are responsible for the deliveryof BBC services and day-to-day operations
single individual has unfettered powers.
across the organisation. The BBC Trust is
Evaluation of the Chairman (UK Corporate responsible for setting the overall strategic
Governance Code principle B6.3): The
direction of the BBC and for exercising
Director-General of the BBC, being thegeneral oversight of the work of the
Chairman of the Board, has his performance
Executive Board.
evaluated by the Chairman of the BBC Trustas opposed to the Senior Independent
Director, as required in the UK Corporate
Governance Code.

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Nominations
Committee
The Executive Board delegates some of its
responsibility to other managerial groups and,in accordance with the requirements andprovisions of the Charter, the following
Committees of the Board continued tooperate last year:—— Audit Committee—— Fair Trading Committee—— Nominations Committee—— Remuneration Committee
Any delegation from the Executive Board
is stated in the relevant standing orders
for each Committee and a framework
for reporting and review is established.
See: bbc.co.uk/aboutthebbc/insidethebbc/
managementstructure/seniormanagement/
subcom.html

Board appointments
The Nominations Committee oversees theprocess of proposing members of the Board.
Appointments are made by the Executive
Board, with non-executive appointments
requiring the approval of the BBC Trust.
The only exception is the Chairman, who isappointed by the BBC Trust. Membershipof the Nominations Committee is dependenton whether it is dealing with executive or
non-executive appointments.

Peter Salmon, Director BBC Studios, wasappointed to the Executive Board, effective
13 October 2015; he stood down from theBoard on 1 March 2016 and left the BBC
shortly afterwards.
Following approval from the BBC Trust, theNominations Committee appointed Nicholas
Serota as a new non-executive director; thiswill be effective from 1 August 2016. External
search consultants Egon Zehnder were used
for this appointment, the BBC has noconnection with the company.

The Executive Board meets monthly (except
for August), although additional Board
meetings are convened during the year as andwhen required. Summary minutes of themonthly meetings are available online at:bbc.co.uk/aboutthebbc/insidethebbc/
managementstructure/seniormanagement/

Induction, performanceand development
All new directors receive an induction
programme including Board procedures anddirectors’ responsibilities. All directors haveaccess to external independent advice asnecessary through the Company Secretary.
The BBC Trust formally assesses theperformance of the BBC’s services against
the terms of the licences it issues for each
BBC service. The BBC Trust’s review andassessment for 2015/16 can be found inPart One of this Annual Report.
All the executive directors have their own
personal and divisional objectives, and theirperformance against them is reviewed bytheir line manager.

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BBC Annual Report and Accounts 2015/16 137Governance and finance report – Governance

Executive
Remuneration Committee
We also need to ensure
we have simpler and more
efficient organisational
structures to help our
staff to deliver.
Dame Fiona Reynolds

Annual Statement of the
Chair of the Executive
Remuneration Committee
The BBC is living through a time of enormouschange. Some of the pressure to change isexternally driven: the broadcasting
environment is becoming increasinglycompetitive, and we need to be ever betterat embracing the digital challenge, engaging
with our audiences and attracting the best
employees with the right skills for the future.
Some is internally driven as we strive for evergreater creativity, efficiency and simplification.
In line with these themes the Executive
Remuneration Committee’s role is to develop
strategy and practices around remunerationthat support and drive appropriate change,
and that help us attract and retain the seniorstaff with the skills and qualities we need.
At the same time we must be open andtransparent to all our audiences.
Our goal to simplify the BBC has alreadyresulted in the reduction in the number ofmanagement layers and reduced duplicationin central BBC roles. As a result of this we are
well on track to reduce our headcount by thetargeted 1,000 posts, saving £50 million perannum. We have also created BBC Studios togive a boost to production, and combined ourtechnology functions under one leader with
the new Design and Engineering division
leading the way in all our digital output.

We are acutely aware that we also need to
pay enough to attract and retain talent andinspiring leaders, and we are concerned that
it is becoming increasingly difficult for the
BBC to compete in today’s fast-expanding
media market. As Tony Hall describes in his
foreword to this report, the challenge for the
next Charter period is to create an open anddistinctive BBC for the internet age. To deliver
this we need to attract, retain and motivate
talented people who are able to lead the BBC
with vision and cutting edge creative, technicaland professional skills. We will also continue
the process of creating a simpler and more
efficient organisational structure to help
our staff deliver.
We will spend the rest of 2016 preparing forthe new Charter, and this will include further
organisational and cultural change. We haveagreed with the Trust that we will publish a
new senior reward strategy once this work is
substantially complete. In the meantime our
focus is on continuing to deliver the current
pay and reward strategy, and motivating oursenior staff to deliver the ambitious goals the
BBC set out in our Charter vision.

Dame Fiona Reynolds
Chairman
16 June 2016

We have significantly over-achieved thetargets set by the BBC Trust to reduce ourmanagement numbers. The cost of senior
management pay has been reduced by 40%
since we set the goals in 2009, with a closing
paybill in March 2016 of £47.0 million ascompared to £78.5 million on 1 August 2009.
In 2009 senior manager roles numbered
640. Today the figure stands at 361, a 43%
reduction. 52 of these roles were lost in thelast year.

138 BBC Annual Report and Accounts 2015/16

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This report sets out the BBC’s remuneration policy and details the annual remuneration
received by the staff members of the Executive Board (the executive directors) for the
2015/16 financial year. It has been prepared on the basis that the requirements of theLarge and Medium-sized 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 the Executive Board
members, labelled as audited, have been audited by EY, the BBC’s statutory auditors.
Overview
The significant achievements in our Senior
Management Pay strategy can be seen in
our 2015/16 performance with a Senior
Management pay bill reduction of 9.7% andheadcount reductions of 12% in year. These
reductions have been achieved throughcombining roles so that our best people
stretch their expertise across new andbroader responsibilities. We also continue tomeasure ratios between board salaries andmedian employee earnings and these haveshown further improvement this year.
Cost management is underpinned bydiscounting salaries wherever possible andnot paying Senior Management bonuses.
This is challenging in an increasinglycompetitive market for strong talent andleadership in media.

The remuneration policy
for executive directors
1. Remuneration Committees:
constitution and operation
The BBC Trust is responsible for setting the
remuneration strategy for the Executive
Board and for all aspects of the remunerationof the Director-General and the nonexecutive directors.
The Executive Remuneration Committee(ERC) is responsible for implementing theagreed strategy for all executive membersof the Executive Board, with the exceptionof the Director-General. Its members are
non-executive directors: Dame Fiona
Reynolds (Chairman), Alice Perkins andDharmash Mistry.

Complying with the UK Corporate
Governance Code 2012, the ERC takes
Our Executive Board has seen some changes
specialist advice from external professional
both in structure and incumbents. The post of advisers on some matters, particularly those
Director, BBC Studios was added to the Board relating to market practice. During the year,with Peter Salmon initially filling the role. Mark independent advice is received from Willis
Linsey has now taken over this role, and joined Towers Watson on matters related to market
the Board in April 2016. Other changes
comparability of executive remuneration.
include Danny Cohen, Director of Television,leaving the Board and Nick Hytner leaving his The Executive Remuneration Committee
established the Senior Manager Remunerationrole as non-executive director in December
Committee (SMRC) in September 2012, giving
2015, having made a significant contribution
it responsibility for aligning the operational
to the BBC. Sir Nicholas Serota who joinsneeds of the BBC within the strategic
the Board as non-executive director fromframework set by the Trust and implemented
August 2016 brings a wealth of experienceby the ERC.
in the arts world.

bbc.co.uk

2. Executive Board membershipand structure
As at 31 March 2016 the Executive Board
comprised six executive directors employedin the public service; the CEO BBCWorldwide, employed by BBC Worldwide;and six non-executive directors. Details of
the Executive Board membership and full
remuneration are provided in this report.

3. Executive director pay
components
The ERC is committed to setting appropriate
levels of pay for executive directors that
attract, motivate and retain the best people tolead the BBC and provide value for the licencefee payer. The BBC’s executive pay strategy
should be fair, transparent and broadly
consistent with the approach to pay for all
employees at the BBC. Progress continues tobe made towards these goals, including thephased diminution of historic differences inapproaches to pay and benefits between
senior and other staff.
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, the Committee considers eachcomponent of the total remuneration package
broken down as set out in the table overleaf.

BBC Annual Report and Accounts 2015/16 139Governance and finance report – Governance

Executive Director pay components
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 and annualised
long-term incentive).

Three factors are used to determine
the level of base pay set for an
executive director or senior
manager:

There is no prescribedmaximum salary or
maximum increase.

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

—— would the rate be consistent withthe discounted market rate forthe job?
—— does the personal performanceof the executive justify the levelof base pay?
—— is the level affordable to the BBC
and not deemed excessive?

Executive directors employed in the
BBC’s commercial businesses arecontractually entitled to a performance
related annual bonus funded by thecommercial business and not thelicence fee. It is reward for theachievement of short-term strategic
goals and profit growth.

Executive directors in public service
are no longer entitled to receive a
performance bonus.

No executive director in the
public service has received abonus since 2008.

Payment of contractual bonus in the
BBC’s commercial businesses issubject to the achievement of an
overall headline profit for theirbusiness.

The maximum bonus payable
to an executive director
employed in a BBC commercial
business is 70% of salary wheretarget bonus is 50% of salary.

Pensions are offered in accordancewith the all employee pension
arrangements.

Directors can elect to join thedefined contribution scheme LifePlan.

Current policy provides adefined contribution schemewith no salary cap and amaximum employer
contribution of 10% of salary.

Variable pay

Benefits

In addition to pensions, the other main
contractual benefit is life assurance.

The BBC’s defined benefit scheme isclosed for new joiners.

Existing members of a defined
benefit pension scheme arecapped at the maximum salary
for their pension scheme orare subject to a cap in
pensionable salary growth.
Executive directors areprovided with death in service
life assurance cover of twotimes their basic salary.
Employees who are membersof either the BBC Pension
Scheme or LifePlan (the BBC’s
defined contribution plan) areprovided with death in service
life assurance cover of fourtimes their basic salary.

140 BBC Annual Report and Accounts 2015/16

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Part Two: Governance and finance report – Governance

131-160

Component

Purpose and link to strategy

Operation

Maximum opportunity

Benefits

In April 2012, the BBC removed
the car allowance benefit for all
new executive directors and senior
managers to ensure that future
policy aligns with arrangements
for all BBC employees.

Executive directors who werealready in receipt of a car allowance
have retained it.

The maximum car allowance
benefit received by any
executive director is £12,900
per annum. This is a historical
benefit.

Executive directors who received
a car allowance payment in 2015/16
were: Helen Boaden, Danny Cohen
and Peter Salmon. The car allowanceis frozen on promotion to the
Executive Board.
The Director-General is entitled to a
car and driver but has no entitlement
to a personal car allowance or fuelallowance.
During 2015/16 all other executive
directors have had shared access toa car and driver, which is also used by
the Chairman of the BBC Trust forbusiness purposes.

The maximum level of coveroffered is family cover.

In April 2011, the BBC removed
private health care benefit for all
new executive directors and senior
managers to ensure that future
policy aligns with arrangements for
all BBC employees.

Executive directors who werealready entitled to funded private
medical insurance have retained it.

Employment
contracts andseverance

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

There is no contractual entitlement
to any additional remuneration in theevent of early termination other thanin the case of termination for reasonof redundancy.

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

Other
remuneration

There is no entitlement to any other
remuneration.

Consideration is given to thereputational risks to the BBC and thelevel of payment is agreed by the
Executive Remuneration Committee
on a case-by-case basis.

There is no prescribedmaximum.

Benefits

bbc.co.uk

This is a historical benefit.

Executive directors who elected totake up funded private medical
insurance in 2015/16 were: Helen
Boaden, Tim Davie, Peter Salmon
and Danny Cohen.

BBC Annual Report and Accounts 2015/16 141Governance and finance report – GovernancePensionExecutive directors who joined the BBC
before 1 December 2010 are eligible toparticipate 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 theBBC’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 contributionof 10%. There is no maximum pensionablesalary for contributions to LifePlan.

earnings to NEST. Individuals can choose to
opt out of this.

Executive directors who decide not to join
LifePlan or are not already an existing
member of the Scheme are, subject tomeeting the relevant criteria, automaticallyenrolled into the National Employment
Savings Trust (NEST). The BBC andemployees currently pay 1% of qualifying

Features of the BBC’s pension arrangementsthat our Executive directors participate inalongside other BBC employees are provided
in the table below.

Executive directors’ pension arrangements
may be reviewed and amended in response tochanges in legislation or similar developments.

Details of the BBC Pension Scheme areavailable at: bbc.co.uk/mypension/‘Old’ benefits
defined benefit‘New’ benefits
defined benefit

CAB 2006
defined benefit

CAB 2011
defined benefit

LifePlandefined contribution

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

30 September 1996

31 October 2006

30 November 2010

1 January 2012

Open to all eligible
employees

Open to all eligible
employees

Accrual60ths accrual

60ths accrual

1.67% accrualadjusted in line with
inflation

1.67% accrualadjusted in linewith CPI

BBC will contribute
1% of qualifying
earnings

SalaryFinal pensionable

Final pensionable

Career averagerevalued earnings

Career averagerevalued earnings

BBC will contributea maximum of 10%
of salary if employee
contributes 8% withlower sliding scale

SchemeDate closed

60

60

65

65

N/A

N/A

Earnings cap

Normal pensionable age

Date of joining
before 1 June 1989
uncapped, capped
otherwise£149,400

Capped at£149,400

Capped at£149,400

Capped at£144,000

Uncapped

Minimum earnings£5,824 p.a.
Maximum earnings£42,384 p.a.

Pensionable salary
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 employee
contribution is 4%

1% of qualifying
earnings

Employee contribution(% of pensionable salary)

142 BBC Annual Report and Accounts 2015/16

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Part Two: Governance and finance report – Governance

4. How does the executive pay
policy in the public service differ
from that for all other BBC
employees?

5. The Executive Pay Strategy and
Policy for 2015/16 – progressing
towards greater consistency andtransparency

Bonuses have not been paid to executive
directors in the public service since 2008 and
the BBC is moving away from the previous
two-tier benefit structure by phasing out
private medical insurance and car allowances.
No new executive director or senior
manager has received these benefits sinceAugust 2011 and April 2012 respectively.
These changes have simplified and equalised
pay arrangements across our employee
population. A full range of benefits can
now be purchased by all staff at all levelsof the organisation under our flexible
benefits arrangements.

Throughout 2015/16, the ERC worked to
manage and reduce both senior managers’ paybill and numbers by ensuring compliance with
the BBC Executive and Senior Management
Pay Strategy. This was agreed with the Trustin July 2011 with targets to be delivered by theend of 2015. Since January 2012 the BBC has
reduced by 123 senior managers against atarget of c.70 and by £10.37 million against
a target of c. £9 million.

Executive directors and senior managers are
not entitled to the annual pay review agreed
with the National Joint Council of Trade
Unions and are not automatically entitled toany form of annual increment or progression
payment. A cost of living increase of 2.5% wasapplied to the senior management population,
excluding the Executive Board, Executive
Team and those earning more than£150,000, in August 2015. This was in linewith what was awarded to other eligible
BBC staff and recognised the impact that
previous pay freezes have had on pay.
Senior salaries are discounted against the
remuneration of equivalent roles incommercial organisations and remuneration
for senior employees is increasingly aligned to
public sector organisations with commercial
sector activities.
The ERC uses the BBC pay multiples, ratios of
the Director-General and executive directors’
median earnings to the BBC median earnings,
as a cap to ensure that the BBC continues
to reduce the level of remuneration for
executive directors relative to all membersof staff.

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131-160

The 2011 pay strategy was also focused on
reducing the number of larger senior manager
roles i.e. those on a salary of £150,000 or
more, by 20% from 90 to 72. Adjusting the2011 target salary measure of £150,000 for
inflation and benefits harmonisation gives alevel of £170,000, and at this level we haveachieved the target with 61 senior managers
paid above this level.

Delivering the strategy in 2016/17
The ERC will continue to consider all potential
executive director appointments andseverance cases to ensure alignment with BBC
policy and strategy. Monitoring of seniorIn the last year we have reduced our executive management pay and numbers will continue.
A new remuneration strategy will be
and senior manager pay bill by 9.7% ordeveloped when the current restructuring£4.5 million and senior manager heads haveprogramme is complete.
mirrored this with a reduction of 12% or
52 heads since March 2015.
The BBC continues the practice of discounting
BBC executive directors’ pay against thecommercial sector and has maintained thefreeze in pay of executive directors. The
agreed discount remains at between 50% and
80% below commercial sector comparisons.
In order to ensure that levels of pay are
consistent with the agreed strategy thecommittee obtains and reviews externalmarket pay data via an independent advisor.
This information was reported to the Trustand provided assurance of our continued
delivery against the policy. On average wecurrently discount against comparable
commercial sector executive roles by 68% for
our executive directors in the public service.
This discount reflects the substantial additionalamounts of variable pay (including bonus andlong-term incentives) provided in thecommercial sector that are not available toexecutive directors working for the public
service BBC.

6. Consideration of BBC Trust views
The ERC consults the Trust on all mattersrelating to the executive director pay strategy
to ensure alignment with licence fee payers’
expectations. The ERC provides updates to
the Trust outlining progress against our
strategy and seeks feedback from the Trust.
The ERC provides an annual assurance report(covering executive director pay, benefits andterms and conditions) to the Trust forconsideration and feedback. It was noted
there had been no ‘in role’ salary increases
for executive directors and that the discountfactor against remuneration of commercial
sector competitors was within the range
agreed by the Trust.

BBC Annual Report and Accounts 2015/16 143Governance and finance report – Governance

Executive Board annual remuneration report
Annual remuneration of the Executive Board – detail of remuneration received (audited)
Table 1 provides full details of the remuneration received by all Executive Board members and the total remuneration for Trustees for 2015/16
compared to previous year.
Table 1: Remuneration received
2015/16Fee/base pay£000(Note 2)

Taxablebenefits£000(Note 3)

Performancerelated
remuneration£000(Note 4)Compensation
for lossof office£000

Pensionrelated single
figure£000(Note 5)Total
remuneration£000

Tony Hall

450

15

–

–

–

465

Helen Boaden

340

15

–

–

40

395

Anne Bulford

395

–

–

–

–

395

Tim Davie (Note 1)

400

2

224

–

38

664

James Harding

340

–

–

–

34

374

James Purnell

295

–

–

–

30

325

2,220

32

224

–

142

2,618

Peter Salmon

146

6

–

–

10

162

Danny Cohen

172

4

–

–

27

203

Total former executive directors serving on the Executive Board
in 2015/16

318

10

–

–

37

365

2,538

42

224

–

179

2,983

Simon Burke

37

–

–

–

–

37

Dharmash Mistry

33

–

–

–

–

33

Alice Perkins

33

–

–

–

–

33

Dame Fiona Reynolds

47

–

–

–

–

47

Howard Stringer

33

–

–

–

–

33

Total non-executive directors as at 31 March 2016

183

–

–

–

–

183

Nicholas Hytner

25

–

–

–

–

25

Total former non-executive directors serving on the Executive Board
in 2015/16

25

–

–

–

–

25

–

–

–

–

–

–

Executive directors
Executive directors as at 31 March 2016

Total Executive directors as at 31 March 2016
Former executive directors serving on the Executive Board
in 2015/16				

Total executive directors
Non-executive directors
Non-executive directors as at 31 March 2016

Former non-executive directors serving on the Executive Board
in 2015/16

Former non-executive directors on the Executive Board prior
to 2015/16
Total former non-executive directors on the Executive Board prior
to 2015/16
Total non-executive directors
Total Executive Board
Total Trustees
Total

144 BBC Annual Report and Accounts 2015/16

208

–

–

–

–

208

2,746

42

224

–

179

3,191

528

6

–

–

–

534

3,274

48

224

–

179

3,725

bbc.co.uk

Part Two: Governance and finance report – Governance

131-160

2014/15
Fee/base
pay£000

Taxablebenefits£000

Performancerelated
remuneration£000

Compensation
for loss Pension-relatedof officesingle figure
£000
£000

450

16

–

–

–

466

Appointed 2 April 2013

340

15

–

–

65

420

Current appointment from 15 April 2013

395

–

–

–

–

395

Appointed 21 June 2013

400

2

201

–

37

640

Current appointment from 1 April 2014

340

–

–

–

14

354

Appointed 12 August 2013

295

–

–

–

30

325

Appointed 19 March 2013

2,220

33

201

–

146

2,600

Total
remuneration
£000

–

–

–

–

–

–

Appointed on 13 October 2015 and stood down on 1 March 2016

320

10

–

–

42

372

Appointed on 7 May 2013 and stood down on 12 November 2015

320

10

–

–

42

372

2,540

43

201

–

188

2,972

37

–

–

–

–

37

Appointed 1 January 2011, current term expires 31 December 2016

19

–

–

–

–

19

Appointed 1 September 2014, term expires 31 August 2017

33

–

–

–

–

33

Appointed 1 April 2014, term expires 31 March 2017

47

–

–

–

–

47

Appointed 1 January 2012, current term expires 31 December 2016

33

–

–

–

–

33

Appointed 1 January 2014, term expires 31 December 2016

169

–

–

–

–

169

33

–

–

–

–

33

33

33

202

–

–

–

–

202

2,742

43

201

–

188

3,174

471

–

–

–

–

471

3,213

43

201

–

188

3,645

bbc.co.uk

Appointed 1 April 2014 and stood down on 31 December 2015

BBC Annual Report and Accounts 2015/16 145Governance and finance report – GovernanceNotes to Table 1:
Executive Board remuneration
Note 1: Tim Davie
Tim Davie’s role as the CEO of BBC
Worldwide is funded entirely by the BBC’scommercial operations and is not paid for or
subsidised by the licence fee.
Note 2: Fee Base Pay – Pensions
Employee pension contributions are ordinarily
made via a salary sacrifice arrangement as an
employer contribution, with a corresponding
reduction in salary. Base salaries for executive
directors have not been adjusted to reflectthat business. The performance-related
remuneration for Tim Davie related toamounts earned in the year ending
31 March 2016.

the impact of salary sacrifice to enablelike-for-like comparison with prior years
before salary sacrifice was introduced.
Note 3: Taxable Benefits
Taxable Benefits are : car allowance, private
medical insurance and taxable expenses.

The ERC has ceased payment of bonuses toall executive directors in the public service.
Note 5: Pension related single figure
This is generally calculated at 20 times theincrease in the accrued pension over the year
net of inflation, less the directors’ defined
benefit contributions, plus the employer’s
defined contributions.

Note 4: Performance-related remuneration
Tim Davie as CEO of Worldwide iscontractually entitled to a bonus, it is funded
entirely by the BBC’s commercial operations
and is not paid for or subsidised by the licencefee. Payment of the bonus is subject to theachievement of an overall headline profit for

Table 2: Defined benefit entitlements (audited)
Details of defined benefit entitlements are shown below.
Accruedpension
31 March 2016(or retirement/leaving theBoard if earlier)£000

Accruedpension
31 March 2015
(or joining theBoard if after)£000

Director
defined benefit
contributions(via salarysacrifice)2015/16£000

Pension-related
single figure£000

Age as at
31 March 2016

SectionHelen Boaden

60

Old Benefits

84

80

13

40

Danny Cohen

42

CAB 2006

20

18

4

27

Peter Salmon

59

New Benefits

23

22

5

10

Tim Davie

48

CAB 2011

10

8

9

38

Executive directors

1 Tim Davie became an active member of the CAB 2011 section as at 1 January 2012 and retains a deferred pension in the new benefits section for service up to that date.
The accrued pension shown relates to CAB 2011 only
2 Directors’ defined-benefit contributions are made via a 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.
To avoid double-counting, the salary sacrifice contribution is treated as a contribution from the director for the purpose of calculating the pension-related single figure
3 The pension-related single figure has been calculated on a pro rata basis to reflect the period each director has served as a member of the Board
4 Tony Hall and Anne Bulford are not currently contributing to a BBC pension arrangement and do not receive any payments-in-lieu of pension-related benefits in respect of theircurrent period of employment
5 James Harding and James Purnell are active members of LifePlan. In 2015/16 the employer contributions to this scheme were £34,000 and £29,500 respectively
6 The accrued pension shown for Peter Salmon includes the period of his current employment before he was appointed a director.

Comparative pay across the BBC: how does
executive director pay compare to that ofother BBC employees?
In 2011 the BBC voluntarily agreed to report
the top to median earnings multiple asproposed in the Hutton report ‘Fair Pay in
the Public Sector’. Since 2011 the BBC haspublished these figures on an annual basis.

The table below provides a summary of the
Director-General to BBC staff medianearnings and executive directors’ to medianearnings figures since 2011. The DirectorGeneral multiple has reduced again from 10.7
to 10.4. (audited)

2016

2015

2014

2013

2012

2011

Director-General earnings

10.4

10.7

10.9

11.0

16.5

16.8

Executive directors’ median earnings

8.2

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 Board annual salaries.
These figures exclude the CEO, BBC Worldwide whose role is funded entirely by the BBC’s commercial operations.

The table provides a summary of the changes
to the Director-General’s cash earnings for2015/2016 versus the change in pan BBC
median earnings over the same period. This
demonstrates a positive increase in medianearnings across the BBC while there has
been no change in the earnings of the
Director-General.

146 BBC Annual Report and Accounts 2015/16

2015/16

Change from2014/15

Director-General earnings

450

0.0%

Pan-BBC median earnings

43

2.3%

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Part Two: Governance and finance report – Governance

2014/15

2015/16

Executive director cash earnings*

131-160

Salary andallowance costs£mPercentage of
paybill

Salary andallowance costs£mPercentage of
paybill

1.83

0.2%

2.16

0.2%

Senior manager cash earnings

45.2

5.5%

51.53

5.9%

All other BBC staff cash earnings

773.8294.3%

815.09

93.8%

Total

820.85868.78* As the data is representative of public service broadcasting, Tim Davie, CEO BBC Worldwide has been excluded.

Severance
No severance was paid to executive directors
during the year ended 31 March 2016.

The BBC’s commercial businesses
The BBC has staff employed with threecommercial subsidiaries:

Changes to Director-General remuneration
In the past three years, there have been nochanges to the Director-General’sRemuneration.

—— BBC Worldwide

Outside interests
With the prior agreement of the DirectorGeneral, executive members of the Executive
Board may hold remunerated external
directorships. The prime purpose of theexternal directorship should be to support
personal and career development andthereby give back to the BBC. Remuneration
which arises from external directorships may
be retained by the individual. 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.

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.

During the year one executive director held
another remunerated external directorship.
Anne Bulford is a non-executive member ofthe Executive Committee of the Army Board.
The fee for this role is donated in full anddirectly by the Army to the Army Benevolent
Fund. To see the Executive Board’s register ofinterests visit: bbc.co.uk/corporate2/
insidethebbc/managementstructure/seniormanagement

bbc.co.uk—— BBC Studios and Post Production—— BBC Global News Ltd

Remuneration within the commercial
subsidiaries is not governed by the BBC’s
remuneration policy but is subject to theBBC’s governance and approval.
Variable remuneration in 2015/16
for BBC Worldwide
The earnings of the CEO, BBC Worldwide forthe year are outlined below:—— the minimum – a base salary of £400,000,
pension related single figure of £38,000
and taxable benefits of £2,000—— target: the minimum payment plus a bonusof 50% of base salary (£200,000)—— maximum: the minimum payment plus abonus of 70% of base salary (£280,000)

BBC Annual Report and Accounts 2015/16 147Governance and finance report – Governance

Audit Committee report“During all of ouractivities we endeavour
to pay attention toaudience priorities
and value for money.”
Simon Burke

Report of the Chairmanof the Executive Audit
Committee
Overview
Throughout my tenure as Executive Audit
Committee Chair, I have sought to maintainthe focus of the Committee on ensuring that
Licence Fee payers’ money is properly controlled
and accounted for, that management decisions
are based on robust and accurate information,that our reporting to the external world is fairand complete, and that the Corporation canunderstand the key risks that need to beconsidered in a wide range of decisions.
This year, important challenges for us haveincluded:—— monitoring the risk landscape as Charterdiscussions progressed—— ensuring that a good control framework ismaintained in the context of widespreadand major change in the BBC—— achieving the right level of assurance over
several complex proposals or initiatives—— following up the recommendations of someof the high profile reviews carried out at
the BBC over the past two to three years
We met five times in the year, covering
strategic issues, regular topics and itemsof particular focus, as well as the approvalof financial statements and the review ofthe effectiveness of the external auditor.
148 BBC Annual Report and Accounts 2015/16

We enjoy strong support from the mostsenior executives in the BBC and this has
been reflected in the calibre of executive
attendance and the high quality of debate.
The agenda and papers for the committee
have been well considered and insightful,drawing from the knowledge of both BBC
and external experts.

Role

Topics for the Committee’s attention this year
have included all the key risk areas as well assome specific presentations, including:—— monitoring and reviewing the integrityof the financial statements of the BBC
and the significant reporting judgments
contained within them—— BBC Worldwide’s risk management
and control environment—— Information Security—— Crisis Management—— TV Licence fee collection
We evaluate our performance annually anddid not note any significant issues at the last
review. During all of our activities we
endeavour to pay attention to audience
priorities and value for money. I am satisfied
that the Committee has discharged its
responsibilities effectively during the year.

Simon Burke
Chairman of the Executive
Audit Committee
16 June 2016

The main purpose of the Executive Audit
Committee (EAC) is to review and maintainoversight of the BBC’s corporate governanceparticularly with respect to financial reporting,internal control and risk management. In
order to gain this assurance, the EAC has
responsibility for:—— reviewing the effectiveness of the BBC’s
system of internal control—— reviewing the process for theidentification, management and reportingof key BBC strategic and operational risks—— reviewing the assurance processes inplace to test and monitor the operationof controls designed to manage key risks—— monitoring and reviewing the effectivenessand resourcing of the internal audit function—— reviewing the performance of theexternal auditor, including auditor
independence and objectivity, scope ofwork, the provision of non-audit services,
fees, appointment and re-tendering of theexternal audit contract—— reviewing the BBC’s systems for thedetection and prevention of fraud, bribery
and money laundering
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Part Two: Governance and finance report – Governance

—— reviewing arrangements by which staffof the company may, in confidence, raise
concerns about possible improprieties inmatters of financial reporting, illegality orother matters
The EAC’s standing orders set out in moredetail our responsibilities. These are reviewed
regularly and were last updated in September
2015. They can be read on our website:
downloads.bbc.co.uk/aboutthebbc/
insidethebbc/managementstructure/seniormanagement/subcommittee/pdf/
executive_audit_committee_standing_orders_2013.pdf

Membership
The EAC comprises three non-executive
directors, of whom one must have recent andrelevant financial experience. The members
who served during the past year are:Simon Burke (Chair)
Fiona Reynolds
Dharmash Mistry
We consider that Simon Burke, our
Committee chairman, has significant, recent
and relevant financial experience. In addition,
all of the members of the committee areindividuals who hold or have held senior

positions in similar sized organisations andhave the experience and skills to properly fulfil
their responsibilities. When appropriate, we
augment the skills and experiences of ourmembers with advice from internal andexternal professionals – for example on
matters such as developments in financial
reporting.

131-160

the integrity of the financial statements before
the Annual Report is approved by the
Board as a whole.
We spent our time on the following areas:

Integrity of financial reporting
We reviewed the integrity of the financial
statements of the BBC:—— we identified through discussion with both
Our meetings are also attended by the
management and the external auditor the
Director-General, the Managing Director
key risks of misstatement within the BBC’s
Finance and Operations, the BBC’s Legalfinancial statements, including those areas
Counsel, the Director of Risk and Assurance
where significant financial judgements
and senior representatives from internal audit,
were required and which have influenced
risk management, finance and the external
the financial statements
auditors. We also meet privately, without any
member of management present, with both—— we discussed these risks with the auditor
Internal Audit and the external auditors on
at the time we reviewed and agreed thea regular basis.
external auditors’ audit plan and also at
the conclusion of the audit of the financial
Meetings
statements
We held five meetings during 2015/16, at key
times in the reporting and audit calendar.
Minutes from our meetings are made available
to the Executive Board and to the BBC Trust.
Additionally the Chairman of our committee
reports back to the Board after each meetingon any issues where action or improvement isrequired. We also produce a formal report to
the Board each year and provide our views on—— we reviewed, discussed and challenged
detailed papers received frommanagement on those areas requiring
significant financial judgement, taking
account of the views of the auditor
We set out below how we satisfied ourselvesthat the key areas of judgement have been
appropriately addressed.

Area of judgement

Our response

Pension scheme – assumptions impacting the pension deficit
The financial statements include a significant deficit on the balance
sheet of £1,010.7 million for the BBC’s defined benefit pension
scheme.

We took advice from independent actuaries on theappropriateness of the assumptions used, including how thesecompare with those used by other organisations. We focusedin particular on the assumptions used regarding discount rates,
inflation rates and mortality/life expectancy and obtained anunderstanding of how changes in these assumptions would affectthe financial statements. We also considered any movements inthese from prior years. We considered the external auditors viewson the assumptions used.

Judgements are required regarding the underlying assumptions
used by the actuaries in calculating the pension deficit. Changes
in these assumptions can result in large swings in the final
numbers disclosed.

We are satisfied that the assumptions used in the financial
statements are reasonable, appropriate to the BBC and supported
by independent actuarial specialists.
Property – accounting treatment of BBC buildings
The BBC holds a significant property portfolio, which continues
to be rationalised in order to reduce costs. The estate includes
freehold properties as well as properties held under finance andoperating leases. Buildings which have been sublet or are available
for sublet are classified as investment properties. Judgements are
required regarding the future intentions for vacant buildings andthe related timescales. This impacts the accounting treatment andcarrying value of the properties on the balance sheet.

bbc.co.uk

We reviewed detailed reports from management which explained
the treatment for the most significant buildings, including the
projected timescales for future activity and rationale for treatment.
We also considered the auditors’ views on the accounting
treatment for these buildings. We are satisfied that the treatmentof these properties within the financial statements is consistent
with management intention and is in line with accepted
accounting standards.

BBC Annual Report and Accounts 2015/16 149Governance and finance report – GovernanceArea of judgement

Our response

Projects – capitalisation/impairment of capital projects
The BBC undertakes multiple capital projects at any one time.
If a material capital project cannot be completed on time, orwill not derive future benefit to the BBC, this could trigger an
impairment charge.

We reviewed reports from management which explained thestatus of major capital projects and the approach taken to assess
whether any impairment charge was required. We also considered
the auditors’ views.

Decisions on whether it is appropriate to capitalise project costs
are made in line with current accounting standards.

We are satisfied with the treatment of project costs, and theunderlying systems that record and monitor these, and gain
assurance from the work of external and internal audit in this area.

Revenue recognition
There is an inherent financial risk around revenue recognition
relating to timing of recognition of income. The nature of the risk
varies between the licence fee income in the public services andthe commercial income. In both cases the underlying risk is aroundyear end cut-off.

We consider that the BBC’s existing financial control systems should
ensure that income is properly treated in the financial statements.
We are confident that management understand the risks in this areaand have suitable controls in place.

Provisions and accruals
The financial statements include of £26.7 million as part of theBBC’s programme of restructuring and £37.2 million in respect ofproperty dilapidations. Judgements in these areas are largely
related to the timing of recognition of these provisions and theamounts to be recognised.

We reviewed and discussed the level of provisions withmanagement. This included consideration of new provisions andany release and utilisation of existing provisions. Management
confirmed to us that they have applied a consistent approach to therecognition and release of provisions across the BBC Group. We
also considered the views of the external auditors in respect of theprovisions and associated disclosures in the accounts. We
concluded that we were satisfied with the level of provisions
carried at 31 March 2016 and the disclosure in respect of those
provisions within the financial statements.

Other less significant provisions totalling £43.1 million require
judgements regarding the assumptions used in quantifying theBBC’s exposure to claims from various parties, and the likelihoodof success of those claims.
Service licences – cost cut off and allocation between service
licences
Service licences are used by the BBC Trust to regulate the licencefee-funded services. They include an agreed and authorised budget
with a 10% tolerance threshold. Service budgets include costs
taken from a number of different divisions and consequently
judgements are required in the allocation of direct costs andoverheads across the various services.

150 BBC Annual Report and Accounts 2015/16

We have discussed the external auditors’ findings and opinions andalso rely upon internal audit’s work in this area. We are satisfied thatthe systems are working as intended and are suitably scrutinised.

We reviewed the out-turn against the service licence budgets.
Management confirmed to us that the basis of cost allocation was
the same as in previous years.
We also considered the views of the external auditors who
performed testing on the cost allocation, which included cut off
testing around the year-end along with testing assumptions used inspend allocations across the divisions. We are satisfied that thecosts have been appropriately classified during the year and in
a consistent way to prior years.

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Part Two: Governance and finance report – Governance

Management confirmed to us that they were
not aware of any material misstatements or
immaterial misstatements made intentionallyto achieve a particular presentation. The
auditors reported to us the misstatementsthat they had found in the course of theirwork and we are satisfied that no material
amounts remain unadjusted. We confirm that
we are satisfied that the external auditors
have fulfilled their responsibilities withdiligence and professional scepticism.
After reviewing the presentations and reports
from management and consulting with theexternal auditors where necessary, we aresatisfied that the financial statements
appropriately address the critical judgements
and key estimates (both in respect to theamounts reported and the disclosures).
We are also satisfied that the significant
assumptions used for determining thevalue of assets and liabilities have been
appropriately scrutinised, challenged andare sufficiently robust.
We reviewed the Group financial statements
and how these are positioned within thewider Annual Report. To assist this review weconsidered reports from management andfrom the internal and external auditors toassist our consideration of:—— the quality and acceptability of accounting
policies, including their compliance withaccounting 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 information necessary
to assess the BBC’s performanceand strategy

bbc.co.uk

Effectiveness of internal controls
and risk management framework
Internal controls assurance
We reviewed the effectiveness of the system
of internal controls, taking account of thefindings from internal and external audit
reports and other assurance activity. We
considered a number of specific areas during
the year:—— we reviewed the trends and themes fromInternal Audit activity and questioned
representatives of Internal Audit on theoutcomes of their work. A summary of
every internal audit, including key findings
and rating (where appropriate) isreviewed by the Committee—— actions arising from independent
assurance activity, including internal andexternal audit, NAO and BBC Trust
reviews are monitored by the Committee
for completion. This is an area we follow
up at every meeting to ensure that agreed
actions in respect of any weaknesses
found are being properly addressed—— for areas which are considered highprofile or have received a lot of attention
such as freelance tax arrangements andthe management of major projects, weensure there is suitable follow up andscrutiny over the completion of any
improvement plans or agreed actions—— we reviewed the assurance plans andfindings for major project and change
activity in the BBC, this includes assurance
provided by the BBC project management
office, internal audit and external specialists—— we also reviewed the levels of fraud andtheft reported and detected andarrangements in place to prevent,minimise and detect fraud and bribery.
We are pleased to note that there havebeen no significant frauds detected in thepast year

131-160—— the findings and progress of actions fromthe audits of BBC commercial subsidiaries
are considered. The CFO of BBC
Worldwide attended to provide an
update on the BBC Worldwide control
environment and management of risk—— in addition, we receive an Annual Reportfrom the Director of Risk and Assurance
providing an overview of the strength of
the BBC’s control environment. This
report did not identify any significant
weaknesses in control and the mitigationof risk
Risk management
We considered the processes for managing
significant risks within the BBC. This work is
influenced by the assessment of the BBC’s
principal risks set out on page 153. There isa regular committee agenda item wherechanges to the risk profile are reviewed andthe effectiveness of the risk management
process is assessed.
During the year, we also reviewed andapproved an action plan from management
in response to the Trust review of theeffectiveness of risk management in the BBC
and will monitor completion of those actions.
We continue to have a focus on ensuring thatassurance resource and activity is aligned tothe principal risks facing the BBC and theoutputs of this support the committee inassessing how well risks are being managed.
During the year the Committee examined therequirements of the revised UK Corporate
Governance Code in relation to theassessment and reporting of longer-term
viability, risk management and internal control.
The committee looked at key elements of theBBC’s risk management process, including thereporting and categorisation of risk across thegroup and examined what might constitute asignificant failing or weakness in the system ofinternal control.

BBC Annual Report and Accounts 2015/16 151Governance and finance report – Governance

Effectiveness of Internal Audit
We oversee the work of Internal Audit.
This is a regular item at each of our meetings
at which the Head of Internal Audit also
attends. During the year we have:—— approved the plan of work for the coming
year, ensuring that it is risk based andstrikes a balance between providing
assurance over core business processes
and areas of significant strategic risk—— considered the findings from audit activity,
focusing on audits with unsatisfactory
outcomes and management’s plans toaddress these—— considered the resource requirements forInternal Audit and its capability
During the year, the committee reviewed andapproved a plan to restructure the internal
audit function from a largely in-house
resourced team to one primarily resourced
from an approved external provider. Thistransition is underway and the committee
will continue to monitor its implementationand effectiveness.
The EAC Chairman also meets with the
Director of Risk and Assurance before
each Audit Committee meeting without
management present, to provide theopportunity for open discussions.

152 BBC Annual Report and Accounts 2015/16

Independence and effectivenessof our external auditors
Appointment of our external auditors
The EAC periodically considers thereappointment of the external auditor andthe rotation of the Group Audit Partner inorder to ensure that the external audit
remains effective and independent.
In 2014 the BBC appointed Ernst & Young LLP(EY) as the BBC’s external auditors after aformal tender process. Their appointment
is for a period of three years from 2014/15
with the option to extend this for a further
two years. This is the second year of
EY’s appointment.
Relationship with external auditors
We oversaw the relationship with EY,
including the scope and approach to theirwork, their fees, their performance andindependence (including the approval andcompliance with policy on non-audit work).
Specific areas of focus this year have included:—— audit risk identification and alignmentof this with management risk assessment

Non-audit services
As one of our safeguards over the
independence of the external auditors, theCommittee has developed, and oversees, theBBC’s policy on the commissioning of theauditors 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 carriedout by the external auditors must be
approved in advance by the EAC. It also
defines when work must be submitted forcompetitive tender.
EY is not considered for work which might
compromise its ability to give independent
opinion on the BBC’s financial statements.
Recruitment from EY into any senior
management position in the BBC requires theprior approval of the EAC.
The external auditors have confirmed their
independence and compliance with the policyon auditor independence to the Committee.

—— our challenge to the auditors on how they
addressed these audit risks—— our private discussions with the auditors
without management present
The Committee has conducted a review ofthe performance of the external auditors andthe effectiveness of the external audit process
for the year ended 31 March 2016. Based on
this review, the Committee was satisfied withthe performance of the auditors and theeffectiveness of the audit process.

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Part Two: Governance and finance report – Governance

131-160

Risks and opportunities
Risks and opportunities affect the ability of
the BBC to fulfil its Charter obligations andpublic purposes. Our approach to risk needs
to reflect the unique nature of the BBC.
To deliver our objectives we must continue
to take creative risks. We must also takeseriously our regulatory and statutory
responsibilities. Just as taking risk is core
to fulfilling our purposes, rigorous risk
assessment and mitigation is the foundationof delivering what we do.

Key to risk movement:
Anticipated movement
in risk over next
12 months

During the next financial year we expect
renewal of our Charter to be completed.
The BBC acknowledges the challenges of
evolving audience needs and the opportunities
this offers for the Corporation for the next
11 years. Throughout the Corporation, carefulconsideration of risks and opportunities
contributes to the quality of our programmes,
the excellence of the service we provide, andso our ability to serve our audiences. Our
principal strategic and operational risks andopportunities are set out below.

Risk increasing
No risk movement
Risk decreasing

Public purposes
1 Sustaining citizenship and civil society
2 Promoting education and learning
3 Stimulating creativity and cultural

excellence
4 Representing the UK, its nations,regions and communities
5 Bringing the UK to the world and theworld to the UK
6 In promoting its other Purposes, help todeliver to the public the benefit ofemerging communications, technologies
and services.

Strategic risks and opportunities
Principal risks andopportunities
1. Meeting audience needs
1 2 3 4 5 6 		The media landscape is changing significantly, as are
the habits and tastes of our audiences. We face therisk that we fail to evolve our offer and drive
innovation, to meet the needs of our audience,
particularly the young and underserved groups.
2. Securing programme supply
2 3 4 5Retaining a diverse range of suppliers is important
for the BBC. This ensures the BBC can continue todeliver the best range of British content for the UK
audience at affordable prices. The changing media
market could put this at risk.

bbc.co.uk

Risk
Keymovement mitigations—— regular re-evaluation of our audience strategy, informed by aconstant monitoring of audience performance and market andcompetitor trends—— the launch of BBC Studios is designed to secure the long-term
supply of the best quality content for UK audiences—— ongoing dialogue with the independent production communityand stakeholders to inform our supply strategy

BBC Annual Report and Accounts 2015/16 153

Governance and finance report – GovernancePrincipal risks andopportunities
3. Attracting and retaining talent
3

The ability to attract, develop and retain the best
creative talent across all disciplines and crafts
impacts on the quality of our output and ourcontribution to creative and digital economies.
4. Charter review
1 2 3 4 5 6

Risk
Key
movement mitigations—— regular re-evaluation of employment, staff engagement
and on‑air talent strategies—— nurturing entry level talent via outreach activity—— ongoing dialogue with Government to finalise Royal Charterand Agreement and to resolve outstanding issues

The Government published its White Paper on
12th May, setting out its policy position in relation
to the BBC. The White Paper provides the BBC
with long-term stability and a strong foundation tocontinue to inform, educate and entertain the
British public.
5. Change at the BBC
6

The BBC is in the midst of a significant period of
operational, organisational and cultural change. The
consequent strain on the organisation could affectour ability to respond quickly to new challenges, or
impact on our delivery of creative and strategic
priorities.
6. Maintaining the BBC’s reputation
4 5—— continuing work on reducing complexity and cost throughorganisational simplicity, ensuring key activity and timings are aligned—— corporate Project Management Office overseeing delivery ofmajor projects, providing delivery confidence assessment—— continuing leadership team emphasis on building an open culture
where everyone feels confident to raise issues—— monitoring perceptions of the BBC’s reputation amongst all
audiences on a continuous basis, responding as needed

The BBC brand could be damaged as a result ofperceived management failures, or through an
inability to respond swiftly, reasonably andproportionately to significant events.
7. Maintaining the BBC’s market position
4 5

The BBC is operating in a fiercely competitive andglobal market. This creates a number of linked risks:—— Funding constraints may affect our ability tocompete for talent and resources affecting ourability to remain relevant to our audiences—— Our production business could fail to securecommissions leading to a reduction in IP owned
and reduced secondary revenue streams for
the BBC—— Our commercial subsidiaries could fail to
respond to market challenges

154 BBC Annual Report and Accounts 2015/16

—— the BBC Studios proposal is designed to support a long term
pipeline of fully owned content for the BBC—— ongoing assessment of our resource allocation informed byaudience insight and performance—— proven delivery by commercial subsidiary of sustainable financial
returns, successfully promoting the BBC globally, showcasing UK
creativity and innovation, and achieving strong business, editorial
and creative relationships

bbc.co.uk

Part Two: Governance and finance report – Governance

131-160

Operational risks and opportunities
Principal risks and opportunities

Risk
Key
movement mitigations

1. Business continuity
Technical failure, infrastructure interdependencies,
the actions of third parties (e.g. disruption to or
denial of services by cyber-attack, supplier action
or failure) could lead to interruption of broadcast
services, with consequent impact on audiencesleading to reputation damage.

—— strong business continuity policies and practices aligned to theinternational standard—— monitoring of cyber-attacks, ensuring fast response—— active involvement in UK and global industry security forums—— regular in-depth risk reviews of potential system vulnerabilities
and process weaknesses

2. Editorial compliance
Failure to uphold our editorial values and standards
in all our content could affect our ability to maintainhigh levels of audience trust, damage our brand orlead to legal exposure.

—— long-established and effective editorial compliance processes
supported by appropriate training—— strong referral procedures and monitoring of high-risk
programmes—— widely distributed Editorial Standards and Guidance

3. Child protection
Failure to protect children on BBC premises orwhen participating in BBC activities would have aconsequent impact on the individuals, and could
lead to reputational damage and legal challenge
for the BBC.

—— positive outcome from independent audit of BBC policies andprocesses published in July 2015. To be followed up in responseto recommendations from Dame Janet Smith report—— safe recruitment practices followed; DBS/PVG check requirement
linked with mandatory Child Protection and Working withChildren training—— formal, accredited or recognised training for chaperones continues
in partnership with PACT and other industry partners—— process for escalation and resolution of potential issues

4. Data security
Compromises to BBC data and services, throughhacking, other internal or external attack, or error
could lead to disruption to services or disclosureof confidential data, including sensitive editorial
material or sensitive personal data, withconsequent reputational damage and possible
financial penalties.

—— data protection policies and practices—— investment in technical capability including range of monitoringand defence walls against hacking, malware and other attacks—— global staff awareness and education campaigns carrying key
security messages

5. Health, safety and security
Failure to meet corporate responsibility for thehealth, safety, well-being and security of staff,
freelancers, contributors and audiences could
result in impact on the individuals and their families,
legal and financial exposure, reputational damage
and loss of trust.

—— robust health and safety training in the UK and overseas; specialist
equipment and bespoke high risk processes and procedures for
activities in designated hostile environments—— proactive response to changing threats, with tailored advice andguidance from specialist safety teams—— close liaison with UK security authorities over UK security
threat level—— standardising approach to international bureaux physical safety
and security—— working with media safety and security forums and otherbroadcasters to raise standards in the industry as a whole

6. Liquidity and savings
As we transition to the new licence fee settlement,
including new commitments, a failure to achieve
new and very stretching savings targets could
impact services and damage our reputation andour relationship with audiences and stakeholders.

—— strong governance and frameworks around implementation of
our change programmes to enable the delivery of our strategic
vision within available funding

7. Regulatory compliance
Failure to comply with the broad range of legal andother regulatory requirements, or to keep pacewith changes, may result in legal or regulatory
challenge, a threat to services or financial penalties.

—— regular monitoring of compliance requirements—— training and communication plans regularly refreshed to ensure
good awareness of need for compliance with newly introduced
legislation—— continuing to review and plan for impacts of new legislation,
including working with the industry to monitor and develop bestpractice solutions for achieving effective compliancebbc.co.uk

BBC Annual Report and Accounts 2015/16 155Governance and finance report – Governance

The BBC’s accountability
and internal control processes
The Executive Board is responsible forthe operational management of the BBC(excluding the BBC Trust). This includes
safeguarding its assets and achieving value formoney by ensuring there is a process in place
for managing significant risk issues to the BBC.
The Executive Board is responsible forestablishing, maintaining and reviewing theeffectiveness of the BBC’s system of internal
control and for ensuring that necessary
actions are taken to remedy any significant
failings or weaknesses identified. Such systems
can only provide reasonable and not absoluteassurance against material misstatement orloss. Our system of control is designed to
manage (rather than eliminate) the risk offailure to achieve business objectives
and to provide reasonable assurance that
assets are safeguarded, transactions areappropriately authorised and material
errors or irregularities are either
prevented or detected on a timely basis.
Key elements of our system of internal
control include:
Risk identification and management: theExecutive Board coordinates and monitors
risk management activity within the BBC.
Our process for identifying, evaluating andmanaging significant risks to the BBC, whichaccords with the Turnbull guidance (Internal
Control: Guidance to Directors), has been inplace for the year ended 31 March 2016 andup to the date of approval of this BBC Annual
Report and Accounts. Risk management
mechanisms are concentrated within divisions
and business units, with supporting processes
in place to manage project risks and crosscutting issues such editorial standards andsafety. Additionally the Executive Board
receives regular briefings and holds discussions
on risk exposure, appetite and mitigation,
focusing on the key strategic andoperational risks.

156 BBC Annual Report and Accounts 2015/16

Strategy and financial reporting: theExecutive Board approve a business planthat aims to deliver the Trust-approved BBC
strategy. Comprehensive monthly, quarterly
and annual reporting processes, both within
business groups and up to the Executive
Board, include financial monitoring against
plan, regular reforecasting, analysis ofvariances and performance reviews
tracking achievements against businessplan and strategy.
Policies: formal policies and procedures arein place for all material control activities toensure compliance with all applicable laws andregulations, that costs are well managed, andrisks are mitigated.

Independent assurance: the Internal Audit
function maintains an independent reporting
line into the Chair of the Audit Committee
and conducts a programme of audits, aligned
to principal risks facing the BBC. The findingsof the audits are reported to Senior
Management and the Audit Committee withremediating actions tracked for completion.
Whistle-blowing: a protected disclosure
policy is in place. We provide a ‘whistleblowing’ hotline administered by anindependent external company to ensure
anonymity. In addition, the Senior
Independent Director is named on the policy
as a contact for the raising of the most serious
level of concerns.

Cash management: the BBC undertakes
regular treasury and cash reporting andforecasting, which analyse funding
requirements and liquidity.
Authorisation procedures: clearly statedformal delegated authorities, authorisation
limits and control processes cover all financialtransactions and commitments.
Major project governance: the ProjectSponsor is responsible for ensuring thatassurance is sufficient for the projectthroughout its life cycle, with independent
review and challenge provided by the BBC
Programme Management Office and Internal
Audit. Monthly status reports on major
projects are provided to the Executive Board.
Staff capability: processes are in place toensure that our staff are professional andcompetent. These include recruitment
policies, mandatory training requirements,
performance appraisals and development
programmes.

bbc.co.uk

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131-160

Fair trading report
Membership and remit of
the Executive Fair Trading
Committee

Guidelines, found at: bbc.co.uk/aboutthebbc/
insidethebbc/howwework/
policiesandguidelines/fairtrading.html

The key function of the Executive Fair Trading
Committee (EFTC) is to oversee the BBC
Executive’s compliance with our Fair Trading
obligations. The EFTC comprises three
non-executive directors: Dame Fiona
Reynolds (Chair), Alice Perkins and Sir
Howard Stringer. The EFTC meetings are also
attended by the Managing Director, Finance &Operations, Group General Counsel,
Assistant General Counsel, Head of Fair
Trading & Competition Law and the Directorof Risk and Assurance. The attendance record
for each director is available on page 135.

The BBC Agreement requires the BBC
Executive to ensure that all our commercial
services meet the following criteria.
Commercial services must:

Responsibilities of the EFTC include:—— keeping under review the BBC’s Fair
Trading Guidelines—— dealing with Fair Trading complaints
against the BBC through the appointmentof a Fair Trading Complaints Panel which
is chaired by and includes a majority of
non-executive directors—— reviewing ongoing compliance with theBBC’s Four Commercial Criteria

These arrangements are subject to annual
audit by independent auditors and separately
have been accredited with the ISO 9001:2008
quality standard. The Auditor’s report is set
out on page 159.

—— fit with public purposes—— show commercial efficiency—— not jeopardise the good reputation of
the BBC or the value of the BBC brand—— comply with the BBC’s Fair Trading
Guidelines, and in particular avoid
distorting the market
Having received reports from relevant senior
management, the Executive Fair Trading
Committee is satisfied that all commercial
services have met the above criteria for theperiod 1 April 2015 to 31 March 2016.

—— commissioning the annual Fair Trading
audit by independent auditors

The BBC has a published Fair Trading
complaints and appeals process, which can befound at: bbc.co.uk/bbctrust/governance/complaints_framework/fair_trading.html

The BBC has a detailed operational Fair
Trading framework which applies to all our
activities and is outlined in our Fair Trading

The BBC received two Fair Trading complaints
during the year. Details of these complaints,
and of previous Fair Trading complaints and

Sir David Attenborough celebrating his 90th birthday,
pictured with former BBC Nature documentary film makers
bbc.co.uk

those that went to appeal to the BBC Trustcan be found in our Fair Trading Bulletin at:
bbc.co.uk/aboutthebbc/insidethebbc/
howwework/policiesandguidelines/fairtrading/complaints_bulletins.html and the BBC Trust’s
Complaints and Appeals Board page:bbc.co.uk/bbctrust/our_work/complaints_
and_appeals/cab.html

Countryfile achieved record ratings in 2016 so far with a consolidated
average audience of 7.0 million (33% share)
BBC Annual Report and Accounts 2015/16 157

Governance and finance report – Governance

Report of the Chairman of
the Executive Fair Trading
Committee
As a public service broadcaster, funded by
the licence fee, the BBC has a responsibility
to ensure that we trade fairly and pay regard
to the impact of our activities on the wider
market. To achieve this we have a wellestablished Fair Trading regime which is
subject to both internal and external scrutiny.
The Fair Trading and Competition Law
team works closely with staff throughout the
BBC to ensure that new internal processes,
projects and initiatives comply with Fair
Trading requirements. The team also manages
a targeted training programme for staff likely
to encounter Fair Trading issues. The Fair
Trading Committee oversees these processes
and monitors compliance with them.
This work is particularly important at a time
when the BBC is undergoing structuralchanges to streamline the way we deliver
services to licence fee payers, and is in theprocess of Charter Review. This year, the Fair
Trading team has provided advice on a wide
range of issues, with the year dominated byengagement with the requirements understate aid and the Fair Trading Guidelines forthe proposed creation of our new commercial
production arm, BBC Studios. The team also
considered and advised on a number of fairtrading issues for key BBC projects such as
myBBC and BBC Store.

The BBC Trust published this year its new
Strategic Framework for Commercial Services
and undertook a review of transfer pricing
between the BBC and its Commercial
Services. The Fair Trading and Competition
Law team liaised with the Trust’s external
consultants to assist this review andwill engage with the Trust on any
recommendations that it makes in thelight of its findings.
The work of the Fair Trading regime isalso audited externally, and once again has
demonstrated its effective operation with an
unqualified audit opinion. The Committee willcontinue to ensure that the BBC’s regulatory
requirements are adhered to through ourapproach to compliance that is robust,
efficient and proportionate. Fair Trading will
also be kept high on the Executive Board’s
agenda. All stakeholders, including licence fee
payers and those who might be affected by
the BBC’s activities, can be confident that the
BBC remains committed to, and compliant
with, our Fair Trading obligations.

Dame Fiona Reynolds
Chairman of the Executive Fair
Trading Committee
16 June 2016

Another important component of our regimeis the Fair Trading Complaints process andthis year saw two complaints, both of whichhave been handled in line with our
published procedures.

Have I Got News For You won the BAFTA for best Comedy and
Comedy Entertainment programme
158 BBC Annual Report and Accounts 2015/16

Line of Duty returned for a third series, produced by
BBC Northern Ireland
bbc.co.uk

Part Two: Governance and finance report – GovernanceIndependent Fair Trading
Auditor’s Report to the
BBC for the year ended
31 March 2016

Our opinion has been prepared for andonly for the BBC in accordance with our
instructions which were agreed with the EFTC
on behalf of the BBC. We do not, in giving thisopinion, accept or assume responsibility forany other purpose or to any person otherWe have audited, in our role as the BBC’s
than the Trust or the Executive to whom thisfair trading auditors, the system of internal
controls established within the BBC to provide report is shown or in to whose hands it may
come, and no other person shall be entitled
the BBC with reasonable assurance that the
BBC Executive (‘the Executive’) has complied to rely on our opinion, save where expressly
agreed by our prior consent in writing.
with the requirement of the BBC Trust’s Fair
Trading Policies & Framework and the Fair
Our approach
Trading Guidelines for the year ended 31
We have performed a reasonable assurance
March 2016 (‘the Fair Trading Arrangements’). engagement as defined in ISAE 3000.
Our instructions for this engagement,
including the scope of work to be undertaken,
were agreed with the BBC’s Executive Fair
Trading Committee (the ‘EFTC’). These
instructions include agreement that our audit
should be conducted in accordance with
International Standard on Assurance
Engagements (‘ISAE’) 3000, agreement on thelimit of our liability in respect of this work andagreement that our duty of 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 Trust, BBC Executive andfair trading auditors
The Trust is responsible for ensuring that the
Executive trades fairly. It is also responsible forpreparing the section within the BBC’s Annual
Report entitled ‘Fair Trading’ which includes astatement on fair trading.
The Executive is charged by the Trust withestablishing and operating a system of internal
controls designed to ensure compliance with
the BBC’s Fair Trading Arrangements for theyear ended 31 March 2016, including
identifying and assessing risks that could
threaten fair trading and designing andimplementing responses to such risks.
As the BBC’s fair trading auditors, it is our
responsibility to form an independent view,
based on our audit work, as to the extent towhich the BBC has established, and applied,a system of internal controls which provide
reasonable assurance that it has compliedwith the requirements of its Fair Trading
Arrangements for the year ended 31 March2016. We have reviewed specific decisions
reached by the BBC on fair trading issues only
in so far as this is necessary to form an opinion
on the application of the system of internal
controls. We have also reviewed whether the
Trust’s statement on fair trading reflects our
findings of the BBC’s compliance with its system
of internal controls and we report if it does not.
bbc.co.uk

The objective of a reasonable assurance
engagement is to perform such procedures as
to obtain information and explanations which
we consider necessary in order to provide us
with sufficient appropriate evidence toexpress a conclusion on the BBC’s compliancewith its Fair Trading Arrangements for theyear ended 31 March 2016.
Our work consisted of enquiry and testing toenable us to form a view as to whether anappropriate system of internal controls was inplace. We conducted a risk-based analysis to
identify those aspects of the BBC’s fair trading
control regime that represents the mostsignificant fair trading risk, and focused our
detailed testing on those areas. Individual
cases were selected from the BBC’s fairtrading log for review. In each case we
examined written records and interviewed
relevant parties to provide us with reasonableassurance that the system of internal control
had been applied, and the appropriateness ofthe outcome. Cases examined, and the areasof significant risk around which the work was
focused, covered all three of the BBC’scommercial service subsidiaries and included
examination of transfer pricing and separation
arrangements, use of and payment for the
BBC brand, and the application of the Trust’s
requirement that, subject to fulfilling the public
purposes, the BBC should minimise any
negative market impact.

131-160

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 togive the Executive reasonable assurance as
to the adequacy of the system of internal
controls which was in place and being applied
to deliver compliance with the requirementsof its Fair Trading Arrangements for the year
ended 31 March 2016. Further, because fairtrading issues require judgements which
ultimately might be tested in a court of law,competition authority or elsewhere, there isalways a risk of challenge even where thesystem of internal controls has been followed
and decisions have been taken with thegreatest care.

OpinionBased on the results of our procedures, in
our opinion the BBC has established and has
applied a system of internal controls thatprovide reasonable assurance that it hascomplied with the requirements of the Fair
Trading Arrangements for the year ended
31 March 2016.

Deloitte LLP
Chartered Accountants
London16 June 2016

BBC Annual Report and Accounts 2015/16 159

Governance and finance report – GovernanceViability statement
In accordance with provision C2.2 of the 2014
revision of the UK Corporate Governance
Code, the Executive Board has assessed theprospect of the Corporation over a longer
period than the twelve months required bythe ‘Going Concern’ provision. The Executive
Board considers annually and on a rolling-basis
a three year plan for the business. The latest
three year plan was approved in February
2016 and covers the period to 31 March 2019.
A three year horizon is consideredappropriate as this is in line with the BBC’s
budgeting process, and it is noted that thelatest three year plan goes beyond the
31 March 2017 date when the BBC Group’s
current £200 million borrowing facility
matures; this is maintained to allow theBBC to manage fluctuations in the Group’s
cash flows and liquidity.
The three year plan considers cash flows
as well as the financial covenants which thecredit facility requires compliance with. Key
assumptions underpinning the three year plan,and the associated cash flow forecast, are that
the Charter will be renewed in line with therecently issued White Paper and borrowing
facilities will remain unchanged.

160 BBC Annual Report and Accounts 2015/16

The Executive Board has conducted a robust
assessment of the principal risks facing the
Corporation, as described in pages 153-155,
including those that would threaten its businessmodel, future performance, solvency or
liquidity. Sensitivity analysis is applied to the
cash flow to model the potential effects
should principal risks actually occur, individuallyor in unison. Three stress points were identified
when a combination of severe but plausible
risks were modelled, with one breaching theborrowing limits without considering any
benefit of mitigating actions. By implementing
identified measures to mitigate these risks
cash flows remain within borrowing limits.
Taking account of the Group’s current
position, principal risks and the aforementioned
sensitivity analysis, the Executive Board has areasonable expectation that the Corporation
will be able to continue in operation and meetits liabilities as they fall due over the three year
period of the assessment.

bbc.co.uk

Glossary
We have used some terms in this report to explain how we run ourbusiness, but which might be unfamiliar to our readers. The following
list gives definitions for some of the more frequently used terms.
Acquired programmes
Acquired programmes are bought in a finishedstate from another supplier.
Appreciation Index or AI
Appreciation Index or AI is the aggregate of
how much people say they enjoyed individual
programmes, expressed as a number out
of 100.
Audience Councils
The BBC Audience Councils are advisory bodiesof the BBC Trust, the governing body of theBBC. There are four Audience Councils –for England, Northern Ireland, Scotland
and Wales.
BARB
BARB (Broadcasters Audience Research
Board) is the independent organisation
responsible for providing the official
measurement of UK television audiences.
Cost per user hour
Cost per user hour or cost per listener hourcombines service spend and consumption to
help inform an assessment of value for money.
Creative economy
The UK’s creative economy includes theorganisations and people who work in thedesign and media industries, including
independent production companies, actors
and writers.
Delivering Quality First (DQF)
DQF is the BBC’s current efficiency
programme, launched in 2011 following thelicence fee agreement with Government in2010, which froze the level of the licence fee
until 2017.

bbc.co.uk

HDTV
HDTV – or high-definition television –is available via either a set-top box or an
integrated digital television, and gives viewers
better quality, high-resolution pictures.
ImpactImpact shows how memorable or acclaimed
a programme or service is, and can bemeasured by the number of awards won
by a service, or comments (positive andnegative) generated in the press.
Overall impression
Favourability towards the BBC which is
calculated by asking the following question:“Thinking about the BBC generally, what isyour overall impression on a scale from 1 to 10,
where 1 means extremely unfavourable and
10 means extremely favourable”.
Peak time
Peak-time hours for the BBC’s TV services
are 6pm-10.30pm. Radio consumption is very
different, and peak time for radio is usually
defined as the breakfast and drive-time slots.
PSB
The UK’s Public Service Broadcasters (PSBs)
are the BBC, ITV, Channel 4, Channel 5
and S4C.
Purpose Remit Survey
The BBC Purpose Remit Survey (PRS) is aquantitative tracking survey which aims tohelp the BBC Trust to understand the public’s
views of the BBC’s performance against its
public purposes.

Reach
Reach on television is the number orpercentage of an audience group who watch
a programme or channel (15 consecutive
minutes each week is the usual BBC measure,versus three minutes on commercial TV); andon radio is the number or percentage of
people aged 15+ who listen to at least fiveminutes of radio in a 15-minute period during
an average week.
Share
The share of total viewing or listening to aparticular programme or service over a settime, expressed as a percentage of total hoursof viewing/listening.
Unique users/browsers
Unique users or unique browsers is a measure
for website traffic. It is not a traditional surveyof ‘people’, but is measured automatically using
either server logs or by a tag embedded
within the web pages.
WoCC
The Window of Creative Competition(WoCC) opens up 25% of eligible TV hours
and 10% of eligible radio hours to freecompetition between BBC in-houseproduction and external producers. WoCCs
are on top of pre-existing Ofcom andvoluntary minimums.
If you want more information or to know
more about how the BBC is run, please visit
bbc.co.uk/aboutthebbc

RAJAR
RAJAR (Radio Joint Audience Research) is
the official body in charge of measuring radio
audiences in the UK. It is jointly owned by the
BBC and the RadioCentre on behalf of thecommercial sector.

BBC Annual Report and Accounts 2015/16 161Governance and finance report – GovernanceIndex
Subject index

Overview

Part One

Audit Committee report

Part Two

148

BBC Worldwide

43

105

Bullying and harassment cases

118

Charities

127

Charter Review

11-15

70

Commercial strategy

43

105

Complaints

29

Content spend by service

77, 79-80, 82, 86

Creative economy

04

Delivering Quality First

04

Editorial standards
Efficiency savings

08, 21, 31-34

04

31-34

Environmental sustainability
22-28, 35-39

Executive directors
43

Human rights
29

Licence fee – income and expenditure

31-34

myBBC
National Audit Office
Nations and regions
02

21

72
100

18-19, 35-39

89

18-19
11-15, 18-19, 27
22-28

116
50-51

Risks and opportunities

153
22-28

Severance pay

Strategic objectives – distinctive, world-class content
Strategic objectives – transform the offer for younger audiences
Strategic objectives – develop a more personal BBC
Strategic objectives – value for money

77, 79-80, 82, 86
116-7

Spend by service
Staff – headcount, location and diversity

77, 79-80, 82, 86
144-5

Remuneration – BBC senior managers

Service performance

104, 108

31-34

Remuneration – BBC Executive Board
Remuneration – BBC Trust

106
119

Impartiality – public perception of news providers

Reach by service

119
132-3

Global News

Public trust in the BBC

110
129

Equality and diversity

Public purposes

100

29-30

101
51

116

20, 22-28
20, 2521,19
21, 31-34

BBC Studios

41

BBC Studios and Post Production

41

107

Talent costs

34

117-8

Time spent with each service

69

22-28

77, 79-80, 82, 86

Trading fairly

40

157

Trust expenditure

51

Trustees

46

Viability statement

162 BBC Annual Report and Accounts 2015/16

160

bbc.co.uk

Contacts

Contact us
If you have a comment, appreciation or complaint about BBC programmes
and service, contact: bbc.co.uk/feedback or write to:
BBC Audience services, PO Box 1922, Darlington DL3 0UR
Comment line telephone: 03700 100 222
Other queries telephone: 03700 100 123
Textphone: 03700 100 212
BBC Trust
1st floor, 180 Great Portland Street, London W1W 5QZ

More information
If you wish to find out more about the BBC’s
full-year performance to March 2016 –including full financial statements and eachservice’s performance against its quotas andtargets, as well as other public commitments,
please visit: bbc.co.uk/annualreport. The
Annual Report is also published in Welsh.
An accessible PDF is available online.

Email: trust.enquiries@bbc.co.uk
Website: bbc.co.uk/bbctrust
BBC information line: 03700 103 100
Textphone: 03700 100 212

Copyright credits
Page 01
Asian Network stage at London Mela 2015 – BBC/
Tricia Yourkevich
Page 02
BBC News General Election 2015 studio – BBC/Jeff
Overs; School children on Broadcasting House tour
– BBC Shows & Tours; Ten Pieces Prom 2015 – BBC/
Guy Levy; The Big Sing/BBC Music Day – BBC/Matt
Squire; Girls with DAB radio – BBC Media Action;
Coding with a BBC micro:bit – BBCPage 03
Great British Bake-Off – BBC/Love Productions/Mark Bourdillon; BBC Broadcasting House – BBC/Phil Coomes; BBC News Gallery Studio E – BBC/Jeff
Overs; Adele with Graham Norton – BBC/Guy Levy

Page 39
Huw Stephens – BBC/Betina Skovbro

Page 106
The Hunt – Silverback Films/Jason Roberts

Pages 42-43
Kermode & Mayo – BBC/Rumeana Jahangir
BBC World News – BBCPage 112
Dickensian – Red Planet Productions/Todd Antony

Pages 46-47
Trustee portraits – BBC/Mike Abrahams
Page 56
Strictly Come Dancing – BBC/Guy Levy;
Page 58
Professor Stephen Hawking – BBC/Richard Ansett;
Car Share – BBC/Matt Squire

Page 09
Rona Fairhead – Getty Images/Ben Pruchnie

Page 60-61
The Night Manager – BBC/The Ink Factory/Mitch
Jenkins; 500 WORDS – BBC/Guy Levy; Ten Pieces –BBC/Chris Christodoulou; The Proms Season –Sarah Robertson; World Service – BBC/Henry
Iddon; Great British Bake-Off – BBC/Love
Productions/Mark Bourdillon; Sport – BBC/Steve
Wyatt; Music – BBC/Guy Levy; Sherlock – BBC/
Hartswood Films

Pages 12-14
BBC Trust Charter Review seminars – BBC Trust/Sion Brynach

Pages 62-63
Stick Man – BBC/Magic Light Productions; Strictly
Come Dancing – BBC/Guy Levy;

Page 17
Nicola Sturgeon – BBC/Jeff Overs
Doctor Foster – BBC/Phil Fisk

Page 64-65
BBC Radio 6 – BBC/Andrew Hayes-Watkins; Britain’s
Forgotten Slave Owners – BBC/Ben Crichton; The A
Word – BBC/Fifty Fathoms/Joe Hughes

Page 05
Sherlock – BBC and Hartswood Films/RobertViglasky; Strictly Come Dancing – BBC/Guy Levy

Page 22
Undercover – BBC/Sally Mais
Page 24
The Night Manager – BBC and The Ink Factory/Des
WilliePages 66-70, 132-134 and 148
Executive Board – BBC/Andrew Hayes-Watkins;
Page 71
BBC Music Day – BBC/Mark Waugh

Page 26-27
Radio 4 live listening event – BBC/Pete Dadds
BBC Breakfast Twitter – BBCPage 72
Mrs Brown’s Boys – BBC/Alan Peebles; World’s
Worst Place to be Disabled? – BBC/markthree media

Page 28
BBC Hausa – BBC/Henry Iddon

Page 76
The Real Marigold Hotel – BBC/Two Four/Vinod
SinghPages 30-31
Newsroom – BBC/Jeff Overs
Audience tour – BBC Shows & Tours
BBC Media Village – BBCPage 81
This World – BBC/Quicksilver Media/Mongoose
Pictures/Dan Edge

Page 33
BBC North – BBCWorld Service gallery – BBC/Jeff Overs

Page 102
Jazz Now – BBC/Jude Edington; Silent Witness –BBC/Todd Antony

Page 35
Audience Council England – BBC/David Oates

Page 103
And Then There Were None – Mammoth Screen/
Robert Viglasky

Page 37
Line of Duty – BBC and World Productions/Steffan
Hill/Mike Gascon
The Story of Scottish Art – BBC Scotland

Page 105
Dancing with the Stars – 2015 American
Broadcasting Companies, Inc. All rights reserved

Page 126-127
Stargazing Live – BBC/S.Corvaja- ESA; Save the
Rhino – Flick Taylor; Nepal – BBC Media Action
Pages 128-129
Weekend Wogan – BBC/Andy Sheppard; Sport
Relief – Gary Moyes; Age UK – BBC/ Ian Tuttle
Pages 157
Countryfile – BBC/Oliver Edwards
Pages 158
Have I Got News For You – BBC/Hat Trick/Richard
Kendall; Line of Duty – BBC/World Productions/
Steffan Hill
Divider images
Front cover
The Great British Bake Off – BBC/Love Productions/Mark Bourdillon
Inside front cover
Attenborough and the Giant Dinosaur – BBC/
William HicklinPart One cover
BBC 6 Music Festival 2016 – BBC/Guy Levy
Page 11Microphones – BBC/Jeff Overs
Page 16-17
Broadcasting House – BBC/Jeff Overs
Page 44-45
New Broadcasting House – BBC/Jeff Overs
Page 54-55
War and Peace – BBC/Laurie Sparham
Page 59
CBBC studio – BBC/Joseph Scanlon
Page 75
Happy Valley – BBC/Red Productions/Ben Blackall
Page 99
Attenborough at 90 – BBC/Sarah Dunn
Page 115
Luther – BBC/Steffan Hill
Page 131
The Night Manager – BBC/The Ink Factory/Des Willie

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