PART 2
THE BBC EXECUTIVE’S
REVIEW AND ASSESSMENT

Overview

Delivering our strategy

Managing the businessPart 2BBC Executive
Overview

2-1 Director-General’s introduction
2-2 Understanding the BBC’s finances
2-4 Performance by service
2-8 Television
2-9 Radio
2-10 News
2-11 Future Media
2-12 Nations and Regions

GovernanceManaging our finances

Managing the business

2-38 Chief Operating Officer’s review
2-39 Increasing value
2-50 Looking forward
Governance

2-52 Executive Board
2-54 Risks and opportunities
2-56 Governance reportManaging our finances

Delivering our strategy

2-68 Chief Financial Officer’s review
2-69 Summary financial performance
2-70 Financial overview
2-79 Looking forward
2-80 Beyond broadcasting
2-82 Glossary
2-83 Contact us/More information

Subject index
Appreciation index by service
Audience approval – KPI
Board remuneration from 2011/12
Board remuneration 2010/11
Commercial companies
Content spend by service
Delivering Quality First
Digital switchover
Distinctiveness – KPI
Efficiencies
Innovation
Licence fee
Licence fee spend
News audiences
Public purposes
Quality – KPI
Radio from Nations & Regions
Reach – KPI
Reach by service
Reach (BBC News channel versus Sky)
Reach (BBC radio versus main commercial groups)
Reach (BBC network TV versus main commercial groups)
Service performance
Staff management and remuneration
Talent costs
Time spent with service
Trust expenditure
Trust – KPI
Trustee remuneration
Trust work plan 2011/12
TV programming spend by Region
VfM: Cost per User by service

Part 1

2-14 Meeting the BBC’s Purposes
2-16 The best journalism in the world
2-20 	Inspiring knowledge, culture and music
2-24 Ambitious UK drama and comedy
2-28 Outstanding children’s content
2-32 Bringing the nation together
2-36 Delivering Quality First objectives

1-6
1-20
1-19
1-19
1-7
1-9
1-6/1-25
1-7
1-24
1-17
1-8/1-13
1-8
1-6
1-12
1-6
1-10

1-10
1-37
1-18
1-37
1-6
1-35
1-42

Part 22-4 to 2-7
2-23
2-61
2-60
2-46/2-69
2-4 to 2-7
2-36
2-40
2-31
2-69/2-71
2-45
2-3
2-69/2-73
2-19
2-14
2-27
2-12
2-35
2-4 to 2-7
2-10
2-9
2-8
2-4 to 2-7
2-41
2-44
2-4 to 2-7
2-19
2-12
2-12
2-4 to 2-7

Front cover: In BBC Two’s Pompeii: Life and Death in a Roman Town, Cambridge
professor Mary Beard provided insight into the lives of the people who lived in the
shadow of Mount Vesuvius before its cataclysmic eruption.

Presented to Parliament in accordance with the BBC Royal Charter 2006 (sec. 45), available atwww.bbc.co.uk/bbctrust/about/how_we_govern/charter_and_agreement/.

Overview

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Managing the businessGovernanceManaging our finances

Director-General’s
introduction
A few evenings ago, I sat andwatched the first part of the
BBC Three documentary series
Our War with my own teenage
children. It was exhilarating,disturbing, heartbreaking. Andutterly gripping. It characterised
much of the best of what the
BBC achieved last year.
It told the story of ordinary British soldiers’ experiences of the
Afghan war in their own words and through images recordedby them with helmet cameras.
At work the following morning, I learned that Our War had
not just achieved the second highest ever score for quality for
any BBC factual programme, but that it had been watched bya large, very young and diverse audience – including people ofsimilar ages and backgrounds to the young men and women
who are fighting for this country in Afghanistan, people who
seldom, if ever, watch Panorama, Newsnight (or Sky News or
ITN for that matter) and who never read a serious newspaper.
To me, this commitment – not just to ‘preach to the choir’,
but to put serious, engaging journalism, knowledge, culture in
front of everyone, including those who may not feel a natural
appetite for it, and to make it so compelling and inspiring thatit becomes unmissable – is at the heart of what it means to bea public service broadcaster.
It was an outstanding year for science programmes – and notjust on BBC Radio 4 and BBC Four. Brian Cox introduced
broad audiences to the wonders both of the solar system anduniverse on BBC Two, while Bang Goes The Theory brought
serious science to a mass viewership on BBC One. A History of
the World in 100 Objects was a phenomenon on BBC Radio 4,
but with expressions and extensions on CBBC, BBC Local
Radio and of course on our website, the partnership with
the British Museum being just one of a growing set of links
between the BBC and other cultural institutions. Opera on
the BBC – another big initiative in 2010 – meant not just Tony
Pappano’s magnificent Opera Italia, but Stephen Fry on Wagner.
The BBC Proms had what for me was the most ambitious
and exciting season for many years while drama on television
enjoyed creative success across a very broad front: from
Stephen Moffat’s Sherlock to the unforgettable Five Daughters– an outstanding example of brave commissioning, writing andproduction being rewarded by a matching commitment fromthe audience. It was an extraordinary year for international
news with the Japanese tsunami, events in the Middle East,and the death of Osama Bin Laden. Our journalists have risen
to each challenge, sometimes sacrificing sleep and personalsafety to do so.
Audience performance and approval has been strong, withfurther growth for many digital services, but of course noteverything has gone right. In addition to occasional creative
misfires, the Miriam O’Reilly case was a reminder to the whole
BBC of our duty to reflect, on-air and in all our employment
practices, every part of the society we serve, irrespective ofage, ethnicity or anything else. In 2011 and beyond, we need todemonstrate that we have learned both the specific and themore general lessons from the case.
There were big events behind the scenes over 2010/11 as well,
above all a licence fee settlement completed in record time
last autumn. The settlement gives the BBC certainty over its
funding for many years and will help us plan the future of ourservices with real confidence. But, in common with every otherpublic cultural organisation, the settlement means the needto find savings and to make difficult choices. In 2010, we took
significant steps to prioritise spend on content and services,
reducing senior management pay and numbers and top talentfees, and making many other savings. This year we will takethat agenda to the next stage as part of a comprehensive
plan for the BBC between now and the end of our Royal
Charter in 2016.
We are hard at work on this plan right now. Inevitably, there
are many difficult questions and trade-offs to work through.
We know, however, that both our governing body, the BBC
Trust, and the British public will want to ensure that thecommitment to quality and originality which marked the bestof 2010/11 will guide all our decisions about the future. Now
more than ever, we are determined to put quality first.

Mark Thompson
Director-General
23 June 2011
Annual Report and Accounts 2010/11 2-1

Overview

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Managing the businessGovernanceManaging our finances

Understanding the BBC’s finances
The BBC creates, commissions and broadcasts more hours of original
television and radio programming than any other broadcastingorganisation – the vast majority of it produced in the UK.
Across all our activities, the BBC’s single vision is to be the most creative
organisation in the world and enrich people’s lives with programmes
and services of high quality, originality and value that inform, educate
and entertain.

BBC Group
BBC World Service

Commercial operations

Licence fee funded services

£299m

£206m

£3,513m

BBC World Service first broadcast
news and information to the world via
radio in 1932. Today, the original radio
service has been enhanced with TV
and online.
Last year over 240 million people
across the world turned to the BBC
for impartial and independent news,
analysis and information.
BBC Monitoring is funded by the
Cabinet Office. It is an open source
news and information publisher,offering around the clock news,
comment and reaction from theworld’s press, radio, TV and theinternet. Reports are translated into
English from more than 100 languages,
from Afrikaans to Yoruba.

BBC Worldwide is the BBC’s main
wholly owned commercial subsidiary,
which works to maximise income from
BBC programme rights and properties,
to offset the licence fee.
BBC Studios and Post
Production works with the BBC,other broadcasters – ITV, Channel 4,
Channel Five, and Sky – as wellas other media and independent
production companies to create
great content.
BBC World News offers 24-hour
news, information and analysis in
English across the globe. It is funded bysubscription and advertising revenues.

The BBC is established by Royal
Charter and our UK public service
broadcasting activities are funded by alicence fee paid by UK households. Last
year, we provided the following to homeaudiences:• ten UK-wide TV services• nations and regions TV services
across England, Scotland, Wales andNorthern Ireland• ten UK-wide radio networks• two national radio services eachin Scotland, Wales and Northern
Ireland• 40 local radio stations in England• Online

Looking ahead

Looking ahead

Looking ahead

As part of the Government’s Comprehensive
Spending Review it was agreed that funding for
BBC Monitoring and BBC World Service would
transfer to the licence fee from 1 April 2013
and 1 April 2014 respectively.
In January we announced cuts to some language
services and radio broadcasts, including the closureof five language services (with the approval of theForeign Secretary).

The BBC’s commercial operations are not exempt
from our public mission. Following a review of themandate, strategy and governance arrangements
for BBC commercial activity, initiated by the
BBC Trust, changes in how BBC Worldwide inparticular should operate were announced in
September 2009.
Since then, BBC Worldwide has been working torealign its activities more clearly on securing value
from the BBC’s existing intellectual property andbrands – and so best serve the interests of licencefee payers.

The new licence fee settlement means thatthe annual cost per licensed UK household
will be held at just under 40p per day – butfor that the BBC will additionally have to pay
for BBC World Service and BBC Monitoring,
establish a partnership fund for up to 20 new
local television services (as much as an initial£25million in 2013, and £5million per annumin subsequent years), and establish a newpartnership model for Welsh language TV
service S4C (contributing £76million eachyear in 2013 and 2014, with future funding
levels not yet set).
Further efficiencies will be sought on topof nearly £1billion saved since 2008.

Grant-in-aid subscription income

2-2 Annual Report and Accounts 2010/11

Combined profit before tax

Licence fee income

Overview

Delivering our strategy

Managing the businessGovernanceManaging our finances

The BBC report concluded that the BBC made an economic
contribution to the UK economy in 2009/10 of at least£8.1billion (up 5.6% from the £7.6billion value recorded in theprevious review), meaning that over £2 of economic value isgenerated by every £1 of the licence fee. We aim to continue
to deliver an economic value of at least twice the value of thelicence fee in the future, spreading the value across the UK.
We will repeat this exercise every two years and reportpublicly on our success in meeting this target. To readthe 2008/09 and 2009/10 reports visit www.bbc.co.uk/
aboutthebbc/reports/.

A new settlement
A new six-year licence fee settlement was agreed in Octoberlast year.
At the same time, we were conducting an update of an
independent report from Deloitte that assessed the economic
impact of the BBC in 2008/09. The BBC update used thesame methodology and, in March, reported that the licencefee, and how the BBC spends it, remains a cornerstone of the
UK’s creative economy.
In a tough economic climate, the licence fee has a strong
stabilising effect, and for smaller businesses and independent
producers the security of BBC funding, sometimes over many
years, can be key to survival and success.

This year the licence fee was £145.50. This is how it was spent:Monthly charge per licence fee

Licence fee rates across Europe £2010/11316.27 Switzerland*
273.48 Norway*
265.11 Denmark*227.42 Austria*
210.41 Finland
199.19 Sweden
185.36 Germany
145.50 UK
137.45 Republic of Ireland
103.95 France
94.93 Italy*
74.24 Czech Republic

£1.40
(12%)
£0.66
(5%)
£2.11
(17%)

£7.96
(66%)

Television
Radio
OnlineOther

Delivering value

Envy of the world

Everyone in the UK who watches or records TV as it is broadcast needs to becovered by a TV licence. This includes TV on computers, mobile phones, DVD/video
recorders and other devices. In parallel with the Government’s Comprehensive
Spending Review, a new six-year licence fee settlement was agreed with the Secretaryof State in October last year, in effect freezing the licence fee at the 2010 level of£145.50 until the end of the current BBC Royal Charter period – the equivalentof just under 40p per current licensed household per day.

Website www.proudofthebbc.com, related Twitter #proudofthebbc and comedian
Mitch Benn’s musical offer on YouTube – over 127,000 views and still growing – alllaunched in October when the government announced that the licence fee would
be part of its Spending Review. They each continue to garner visitors from across theglobe, and generate overwhelmingly positive comments.
Source: Broadcasting Fee Association. All licences run for a calendar year except the UK whichruns from 1 April to 31 March. Euro exchange rate used as of 1 January 2011 (£1=€1.17). Cost is
total per licence to domestic customer for TV and radio. Marked * includes VAT.

BBC spend in creative economy £m
08/09
09/10
10/11

434
440
467

Independent programmes transmitted
External programme facilities and resources
Acquired programmes transmitted

266
237
230

101
93
77

305
23 1,129299
24 1,093
289
24 1,088

Artists, contributors and copyright
BBC performing groups

Investing in the best of British
The cumulative impact and spending power of over 20 million television licences can deliver more than content alone. As well as over 17,000 in-house staff, we are able to give
work to many freelance individuals and thousands of large and small businesses across the UK – delivering sustainable benefits to digital and creative industries as well as the wider
British economy.

Annual Report and Accounts 2010/11 2-3

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Performance by service
Network television

BBC Three is dedicatedto innovative British
content and talent.
The channel aims
to provide a broad
mix of programmes
aimed primarily at
younger audiences.

BBC Four aims to be
British television’s mostintellectually and culturally
enriching channel, offering
an ambitious range ofUK and internationalarts, music, culture andfactual programmes.

The CBBC channel
offers a distinctive mixedschedule for 6-12 year
olds, with mainly UK
programmes served in a
stimulating, creative andenjoyable environment.

CBeebies aims to offera mix of high quality,
mostly UK-produced,
programmes designed
to encourage learning
through play in
a consistently safe
environment forchildren under six.

Content £mReach %

We spent a total of£1,801.3million oncontent for these
services last year

UK population who
use service each week

Time spent
watching achannel eachweek hours:mins

Appreciationindex by service%

Costs per User
Hour p

BBC One is the UK’s
most popular television
channel, with thebroadest range of
quality programmesof any UK mainstream
network. An HD
simulcast of network BBC
One, with most peaktime
programmes in HD,
launched in November.

BBC Two brings
programmes of depth
and substance toa broad audience.
It originates the greatest
amount and range offactual programmingof all BBC TV
channels, combinedwith distinctive arts,
comedy and drama.

The BBC HD channel isa high definition television
showcase for a rangeof programming fromacross the BBC’s othertelevision services.

BBC ALBA offers, toGaelic speakers andlearners, a distinctive rangeof originated programmingthat reflects and supports
Gaelic culture, identity
and heritage.

BBC One
BBC Two
BBC Three
BBC Four
CBBC†
CBeebies†
BBC HDBBC ALBA*

Aggregate of how muchpeople say they enjoyedindividual programmes,
expressed as a number
out of 100

Length of time
the average viewer
spent each week withthe channel

How much it costs
to deliver each service
to individual users

1,130.9 (1,113.1)

78.8(77.3)

07:25 (07:11)

81

(81)

6.4

(6.7)

421.0 (450.0)

55.1(55.7)

03:29 (03:31)

83

(82)

7.4

(7.7)

84.7

(87.5)

22.7(20.7)

01:45 (01:38)

83

(84)

7.0

(8.6)

50.8

(54.5)

10.6

(8.9)

01:37 (01:29)

84

(83)

9.8 (14.0)

78.3(39.9)

7.0(5.6)

02:56 (02:44)

n/a

(n/a)

8.6

(8.8)

28.5

(18.1)

8.6(8.3)

04:02 (04:01)

n/a

(n/a)

2.5

(1.8)

2.1

(1.6)

3.4

(1.6)

01:57 (01:57)

n/a

(n/a)

1.0

(1.6)

5.0

(4.3)

4.3

(4.3)

n/a

(n/a)

21.8 (20.6)

n/a

(n/a)

New metric for 2010/11.

New metric for 2010/11.

Reach definition: 15 minutes for all channels and services and on audiences aged 4+, in line with industry standards.
( ) Figures in brackets from 2009/10.
Source: BARB.
* Source: TNS SOS; Base: All aged 16+ in Scotland.
† The methodology for setting the CBBC and CBeebies content spend changed in 2010/11, following the BBC Trust’s 2009 review of children’s services.
2-4 Annual Report and Accounts 2010/11

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Network radio

BBC Radio 1 aims tooffer a high-quality
service for young
audiences combining
the best new music andemerging artists, andoffers a platform forlive music, news andadvice campaigns.

BBC 1Xtra plays thebest in contemporary
black music, with astrong emphasis ondelivering high-quality
live music and supporting
new UK artists.

BBC Radio 2 brings
listeners a broad
range of popular andspecialist music andlive performances,complemented by abroad range of speech
output including current
affairs, documentaries,
religion and the arts.

BBC Radio 3 centres onclassical music, aroundwhich it provides a broad
spectrum of jazz, worldmusic, arts programmes,
religion and drama;
there is a strong emphasis
on musical performancefrom across the UK.

BBC Radio 5 Livebroadcasts live news
and sport 24 hours aday, covering eventsas they happen andproviding context
through analysis
and discussion.

BBC Radio 5 Live Sports
Extra is a part-time
network that provides
additional sports
coverage using rights
already owned by theBBC, and so delivering
greater value to licencefee payers.

BBC 6Music aims
to entertain loversof popular music byoffering the best musicfrom the BBC soundarchive together
with current releases
outside the mainstream,
complemented by music
news and documentaries.

BBC Asian Network
offers speech and music
appealing to British
Asians, with a focus onnews and current affairs.
It broadcasts mainly inEnglish, but does offersome programmes inother languages.

Content £mReach %

We spent a total of£300.0million on content
for network radio
services last year

UK population who
use service each week

Time spent
listening to achannel eachweek hours:mins

BBC Radio 1
BBC 1Xtra
BBC Radio 2
BBC Radio 3
BBC Radio 4
BBC Radio 4 Extra
BBC Radio 5 LiveBBC 5 Live Sports Extra
BBC 6MusicBBC Asian Network

Length of time
the average listenerspent each week withthe channel

36.7(32.2)

7.4

(6.5)

1.5

46.7

(40.4)BBC Radio 4 Extra
provides speech-based
entertainment including
comedy, features,
drama and readings, plus
programmes for children.
Most output is from the
BBC archive, although it
also commissions someoriginal content.
(Was BBC Radio 7).

Appreciationindex by service%

Costs per User
Hour pAggregate of how muchpeople say they enjoyedindividual programmes,
expressed as a number
out of 100

How much it costs todeliver each service toindividual users(21.9)

08:05 (08:48)

77

(77)

0.7

(1.2)

04:46 (05:46)

80

(n/a)

3.9

(3.6)

27.2 (26.9)

11:54 (11:54)

81

(81)

0.5

(0.5)

37.3 (40.8)

4.1

(3.9)

05:50 (06:11)

82

(83)

92.8 (86.7)

20.3 (19.5)

12:06 (12:22)

80

(79)

1.4

5.3

2.0

05:56 (05:58)

80

(n/a)

1.7

(1.7)

(5.0)

22.6

BBC Radio 4 is a mixed
speech service, offering
in-depth news andcurrent affairs and awide range of otherintelligent programmes
in many genres including
drama, readings, comedy,
factual and magazine
programmes.

(1.8)

5.9

(0.6)

(6.3)
(1.3)

55.4 (55.0)

12.9 (12.3)

07:33(07:22)

76

(75)

2.1

(2.3)

2.5

(2.5)

1.3

(1.4)

02:42 (02:56)

84

(n/a)

2.6

(2.2)

7.3

(6.5)

2.3

(1.4)

08:23 (06:27)

81

(n/a)

1.4

(2.7)

8.6

(8.9)

0.9

(0.7)

05:19 (05:28)

71

(n/a)

6.7

(8.5)

New metric for 2010/11.

New metric for 2010/11.

Reach definition: 15 minutes for all channels and on audiences aged 15+, in line with industry standards.
( ) Figures in brackets from 2009/10.
Sources: RAJAR.
Annual Report and Accounts 2010/11 2-5

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Performance by service, continued/...

Future MediaBBC Online provides
innovative and distinctive
online content thatreflects and extends
the range of the BBC’s
broadcast services.

BBC Red Button delivers
interactive services
and content to digital
television viewers,
including all day,up-to-the-minute content
and information, including
news, weather, learning,
entertainment, interactive
programming andsupports major events.

Content £mReach %

We spent a totalof £140.7million oncontent for these
services last year

UK population who
use service each week

BBC Online
BBC Red Button

Time spent
with eachservice eachweek hours:mins
Length of time theaverage user spent eachweek with the service

Aggregate of how muchpeople say they enjoyedindividual programmes,
expressed as a number
out of 100

Costs per User
Reached p
How much it costs todeliver each service
to individual users

125.8 (126.7)

41.0(37.0)

n/a

80

(81)

8.5

(8.9)

14.9 (14.2)

31.0(29.0)

n/a

77

(75)

2.3

(2.2)

New metric for 2010/11.

Reach definition: 3+ minutes for both services, and on audiences aged 16+, in line with industry standards.
( ) Figures in brackets from 2009/10.
Sources: CMI (Online); Nunwood (Red Button).
2-6 Annual Report and Accounts 2010/11

Appreciationindex by service%

New metric for 2010/11.

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Journalism, and national and local radio services

The BBC News channeldelivers up-to-the-minute,accurate, impartial andindependent news andcomprehensive coverageof local, UK andinternational events.
It offers specialist analysisof the most significant
stories to put the news
in context.

BBC Parliament makes
the work of the UK’s
parliamentary andlegislative bodies and theEuropean Parliament
accessible to all, and offers
analysis and context
for the issues behindparliamentary debates.

BBC Global Newsbrings together the BBC
World Service, BBC
World News television
channel, the BBC’sinternational-facing online
news services in English,
BBC Monitoring and
BBC World Service Trust.

BBC Local Radio isa primarily speechbased service of news,
information and debate,with a strong emphasis
on interactivity.

BBC Radio Scotland isa speech-led service for
adults; BBC Radio nan
Gàidheal is a speech andmusic radio service for
Gaelic speakers. Bothservices offer a wide
range of genres andreflect the issues, events,
culture and interests ofthe people of Scotland.

Time spent
watching or
listening to achannel eachweek hours:mins

Appreciationindex by service%

BBC Radio Ulster/Foyle
is a speech-led service
that covers a wide range
of genres and reflects all
aspects of contemporary
life in Northern Ireland,
combining coverage of
local issues, interests andevents with coverage ofnational and international
developments.

BBC Radio Wales is a
speech-led service for
adults; BBC Radio Cymru
is a speech and music
radio service for Welsh
speakers. Both services
offer a wide range ofgenres and reflect theissues, events, culture
and interests of thepeople of Wales.

Content £mReach* %We spent a total of£232.5million oncontent for these
services in last year.

UK population who
use service each week

Length of time theaverage viewer or listenerspent each week withthe channel

BBC News channel
BBC Parliament
BBC English Local RadioBBC Radio Scotland
BBC Radio nan Gàidheal
BBC Radio Wales
BBC Radio Cymru
BBC Radio Ulster/Foyle

Aggregate of how muchpeople say they enjoyedindividual programmes,
expressed as a number
out of 100

Costs per User
Hour p
How much it costs todeliver each service toindividual users

47.1(47.8)

12.2

(8.7)

02:37 (02:23)

n/a

(n/a)

4.9

2.0

(2.4)

0.5

(0.3)

01:40 (01:27)

n/a

(n/a)

8.2 (14.1)

114.8 (110.2)

17.3(16.9)

80

(80)

3.2

(3.2)

23.8 (24.9)

22.2(21.2)1

79

(75)1

6.8

(7.8)

3.8

(4.2)

13.0 (13.1)

18.6(16.7)

11.8 (12.3)

5.9

(5.8)

16.2 (14.4)

36.9(35.4)

09:35 (09:38)(Combined average
across BBC Local andNations radio).

(7.6)

13.7 (16.7)
82
84

(82)2
(80)

5.7

(5.9)

12.9

(13.7)

4.8

(4.3)

36.9

New metric for 2010/11.

New metric for 2010/11.

Reach definition: 15 minutes for all channels and services, and on audiences aged 4+ (TV) and 15+ (radio).
* Three minute reach for BBC News channel and BBC Parliament – in line with industry standard for news services – would be 18.1% and 1.2% respectively,
both up again year-on-year.
1
Figure includes BBC Radio Scotland and BBC Radio nan Gàidheal.
2
Figure includes BBC Radio Wales and BBC Radio Cymru.
( ) Figures in brackets from 2009/10.
Sources: BARB (TV); RAJAR (Radio); Lèirsinn.
Annual Report and Accounts 2010/11 2-7

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Television
Our mission is to produce
innovative and original
programmes of the highest
possible quality across all genres.
Coverage that unites the UK
around key moments, placing
us at the heart of national events,
is absolutely central to our role.
George Entwistle
Director, Vision
BBC network television weekly reach versus
main commercial groups %All BBC Television
86.1 (84.9)
2011
Total other channels
2011

83.9 (79.9)

All ITV2011

75.6 (74.8)

All Channel 4
2011

66.9

(66.1)All Channel Five
44.5 (43.9)
2011
All Sky2011

40.9 (39.3)

640 hours

We originated more than 640 hoursof drama across our network services –introducing 44 brand new works.

45m

Our investment in science was
widely appreciated, with more than
45 million people sharing our special
year of programmes.

( ) Figures in brackets are 2010 comparators.

Our role in national life
BBC Television remains at the heart of national life withnearly 50 million people, almost nine out of every ten children
and adults, choosing to watch each week. Audiences place aparticularly high value on BBC Drama, with BBC One titles
Sherlock and Five Daughters exemplifying our creative ambition.
Putting Quality First
Our channels guarantee high quality plus a range ofprogramming audiences cannot find anywhere else: originalhome-grown drama in Daytime and Children’s; The One Show,
with its distinctly local flavour, live at the heart of peaktime;
distinctive new comedy, as seen in BBC Two’s Miranda,
Rev and The Trip; hard-hitting factual created for younger
audiences on BBC Three; and BBC Four, a showcase for artsand culture, from literature and ballet to Reggae Britannia.

2-8 Annual Report and Accounts 2010/11

Bringing audiences together
People turn to the BBC in times of commemoration,reflection and celebration. The Royal Wedding, an amazing
and uniquely British spectacle, was captured by BBC television
for audiences around the world. And across the UK, 75%
of viewers chose to watch the service with us. Thanks to
the generous support of the public, it was also an exceptional
year for Comic Relief. More than 35 million people joined
our programmes, raising record funds for the charity.
Increasing our value to licence fee payers
Three years into a challenging five-year savings programme,
we remain on target to achieve a 25% reduction in
expenditure by 2012/13. With the support of in-houseand independent programme makers, we are delivering
efficiencies across the full range of production costs. Our
Cost per User Hour last year was 6.6p (2010: 7.0p).

Overview

Delivering our strategy

Managing the businessGovernanceManaging our financesRadio
BBC radio has put its efforts into
making ambitious programmes of
the highest quality. Encouragingly,
by focusing on this, as well as
increasing innovation across theradio industry, we continue tothrive in a digital age.
Tim Davie
Director, Audio & MusicBBC radio weekly reach versus maincommercial groups %All BBC Radio
67.0 (66.3)
2011
All Commercial Radio2011
64.6 (61.7)
Absolute Radio2011 2.9 (3.0)
Classic FM
2011 11.2 (10.8)
TalkSPORT2011 5.6 (4.8)( ) Figures in brackets are 2010 comparators.

52.2

Talking to the UK
BBC radio strengthened its reach this year, ensuringthat it continues to deliver live radio to two thirds of the
UK population every week with distinctive, high quality
programmes across its stations. In addition, average weekly
hours listened to remains around 16.6 hours per listener.
A different approach
A year of unrivalled quality saw the conclusion of BBC Radio
4’s A History of the World in 100 Objects, which also became
an online success generating more than 11 million downloads,
BBC Radio 1 teaming up with British Forces Broadcasting
Service radio in Afghanistan’s Camp Bastion for a ten-hourtakeover, Chris Evans launching the Children’s Story Writing
Competition on BBC Radio 2, and BBC Radio 3 celebrating
The Genius of Mozart by playing every note he wrote over
12 days in January.

13,700 hours

There were over 13,700 hours in totalof news and current affairs programmes
across BBC Network Radio alone over
the year.

42

BBC Radio 3 commissioned 42 newmusical works this year including Simon
Holt’s A Table of Noises, debuted at theProms by BBC Young Musician winner
Colin Currie.
Memorable programmes and services
BBC radio won 54 Sony Radio Academy Awards in 2010,
including the UK Station of the Year for BBC Radio 5 Live.
Elsewhere, attendance at BBC Proms performances werehigher than ever and BBC Radio 1’s Big Weekend in Bangor
entertained 40,000 people. Radioplayer, our online listening
partnership with UK commercial radio, launched in March.
Cascading value
Radio remains incredible value for money and cost per
listener hour across the portfolio of radio channels is 1.6p
(2009: 1.6p). We are working hard to ensure the efficiency
of in-house productions and have increased competition fromindependent productions in the WoCC. In addition, we aim todeliver value through our external partnerships – for example,
BBC Radio 1’s Big Weekend in Bangor generated an estimated£3million for the local economy.

Annual Report and Accounts 2010/11 2-9

Overview

Delivering our strategy

Managing the businessGovernanceManaging our financesNews
Our aim is to combine distinctive
eyewitness reporting withspecialist analysis – explaining
not just what is happening in asometimes chaotic world but
why. In this way, we aim to justify
the public’s continuing trust in our
impartiality and independence.
Helen Boaden
Director, News

49

There were 49 new documentaries
on BBC Radio 1 across the last year.

100 hours

BBC News channel offered over
100 hours of sports news.
Meeting audience needs
On average, more than 80% of UK adults consumed BBC
news each week last year across television, radio and online.
Breakfast, BBC Parliament, BBC News channel, and News
Online all had record audiences, with News Online averaging
11.7 million weekly users across the year, up year-on-year from
10.2 million. In local radio, there was an impressive growth inweekly listeners in England – up 722,000 on the year – after
renewed focus on editorial ambition and resources. Audience
trust levels for BBC news are at their highest for three years(Source PBTS).
Quality assured
Our core values are accuracy, impartiality and independence,
driven by our commitment to eyewitness reporting andspecialist analysis at home and abroad. BBC journalism
is founded on the quality of our specialist editors andcorrespondents working for a range of daily and weekly
services and programmes on all platforms. We invest ininvestigations of significance and current affairs on televisionand radio not found elsewhere in the marketplace.

2-10 Annual Report and Accounts 2010/11

Memorable stories
Big events drew big and sometimes record audiences –the General Election, the Chilean miners’ rescue, Japan’searthquake and Middle East unrest. We examinedgovernment spending plans across all BBC News, including
the nations and regions, under one heading – ‘The Spending
Review: Making It Clear’. Over 21 million people saw our
television news on the day of the review. Panorama was
widely recognised for its independence in investigating FIFA
corruption before the World Cup vote.
Working together
We are meeting our existing five-year continuous savings
programme while hitting our audience performance targets
and continuing to deliver high quality, comprehensive news
coverage. To help to do this, we are sharing the best of
BBC journalism and reporting teams across more outlets:
in Libya the BBC News channel presenter also presented
for BBC One bulletins. In Japan, BBC News channel and
BBC World simulcast output. The combined CPUH for
BBC News channel and BBC Parliament was 5.0p (2010: 7.8p).
Continuous news weekly reach (000s)
2009/102010/11

BBC News channel

7,896

10,367

Sky News

5,279

6,250

Source: BARB. Base: 4+. Three-minute reach.
In response to the Lambert Review of BBC News 24 in 2002 the BBC offered toconsider the relationship between BBC News and BBC World News, including atriennial benchmarking exercise by independent consultants to confirm that marginal
cost pricing remained in line with market practice and the BBC’s Fair Trading guidelines.
The latest benchmarking exercise was completed in May 2010 and confirmed this tobe the case.

Overview

Delivering our strategy

Managing the businessGovernanceManaging our finances

Future Media
Every week, millions of people
experience the BBC’s digital services.
We exist to combine technologicalinnovation with high-quality editorial
to make these services engaging,easy to find and accessible for all.
Ralph Rivera
Director, Future Media

500,000

11.7m

12.5m

100m

The Archers is one of the BBC’s most
The News website generated 11.7 million
popular on-demand programmes, with over users on the day after the General Election,
500,000 podcast downloads every month. passing the previous record of 9.4 million
for President Obama’s 2008 win.
On average last year 12.5 million people
used BBC Red Button services eachweek – for news, sport such as darts andsnooker, and multi-screen video streams
from events like T in the Park.

BBC iPlayer averaged well over 100 million
requests for programmes each month andover 1.6 billion programmes were played
through the year.

Digital content for all
BBC Online was used by an average of 20 million people in the
UK each week last year. Our new three year plan will give them
all a clearer editorial offer so that they can quickly and easily findwhat they want. Individual products – like news or children’scontent – will have clearly defined remits and will ensure that
BBC Online offers something for everyone. BBC Red Button
provides important interactivity for many of the nine million
individuals in the UK who are not yet online.

Future media now
Innovations in BBC iPlayer, in particular the 2010 re-launch andthe applications for smartphones and tablets, have provenpopular with audiences, with weekly programme requests
increasing by 41% year-on-year. BBC News relaunched in 2010
with more integrated use of video and images, and increased
external linking to other websites. Seamless and simple
experiences, and doing fewer things better, will frame ouractivity for the coming year.

Content not found anywhere else
Each online product category will have a content strategy built
on the editorial priorities from Putting Quality First, making
them distinct from what is available from commercial media
providers. BBC Red Button continues to play an importantrole in repurposing that content for TV, and gives viewers
up-to-the-minute information as well as different ways towatch sports and events.

Increasing value
Digital services are no longer optional extras to television
or radio, but are themselves important elements in the 21st
century media landscape, and used by our audiences toimprove their experience of BBC content. BBC Online and
BBC Red Button continue to deliver value for money forlicence fee payers, accounting for just 4% of licence fee spend
last year, and having a Cost per User Reached of 8.6p and 2.3p
respectively (2010: 8.9p, 2.2p).
Annual Report and Accounts 2010/11 2-11

Overview

Delivering our strategy

Managing the businessGovernanceManaging our finances

Nations and Regions
England Local Radio is where we share experiences like the General Election,
the winter freeze and join community celebrations like Royal Wedding street parties(shown). It is also an important showcase for local talent. Last year more people
watched regional weekday evening news programmes on BBC One than in any ofthe previous five years, and Local Radio audiences were up by 720,000 to 7.4 million(Q4). Online user numbers were also up to 6.7 million (from 5.1 million in Q1 2010).
For more about the BBC across England visit www.bbc.co.uk/england.
Scotland Network television programming hours were up 150% to 611 hours from
243 hours in 2008/09. This has brought new investment and opportunities for our
in-house production teams and the wider creative sector. Weekday national bulletin
Reporting Scotland peaked at 710,000 average nightly viewers in December(highest since 2002), while overall reach to BBC Scotland TV bulletins was up
to 54% (2010: 51%). For more from the BBC in Scotland see www.bbc.co.uk/
scotland or www.bbc.co.uk/alba. Picture shows comedy Limmy’s Show.
Wales Audiences enjoy the quality and diversity of our offer. Picture shows landmark
history series Snowdonia 1890 (our most successful series of the year). English
language programmes attracted an average of one million viewers each week, andwe saw an impressive 14% increase in viewers to our Welsh language content for
S4C (up to 190,000). BBC Radio Wales drew in an nearly 60,000 more listeners
each week versus 2010, while BBC Radio Cymru improved year-on-year althoughstill slightly down on 2008/09 levels. For more about the BBC in Wales
visit www.bbc.co.uk/wales or www.bbc.co.uk/cymru.
Northern Ireland Programmes and services in Northern Ireland enjoyed popular
appeal, and much critical success, with highlights including Fergal Keane’s series on
The Story of Ireland (shown). Reach on BBC One was up to 78% (2010: 73%), andwas steady on BBC Two at c.49%. Schedule changes at BBC Radio Foyle helped
Radio Ulster/Foyle to a joint 1% year-on-year increase in reach. Weekly uniqueusers to BBC Northern Ireland’s website broke the one million mark – up from0.66 million in 2010. To find out why, go to www.bbc.co.uk/northernireland.
BBC Radio: hours from the Nations and Regions

TV programming spend by region as a % of eligible spend

2009/102010/11

London

8,760

8,760

England

243,075

238,461

Scotland

14,694

15,917

Wales

15,67015,790

Northern Ireland

9,355
291,554

Total

2009

2010

London

62.3%

62.2%

Scotland

6.1%

7.4%

Wales

4.4%

5.0%

9,285

Northern Ireland

1.2%

0.8%

288,213

Total Nations

11.7%

13.2%

Midlands

3.8%

3.9%

North of England

8.2%

7.7%

South of England

14.0%

13.0%

Total English Regions

26.0%

24.6%

Total Nations and Regions

37.7%

37.8%

Grand Total

100.0%

100.0%The vast majority of our radio hours are live – which enables us to keep our listeners
updated on key developments and issues of the day.

Based on Ofcom definitions by calendar year.
2-12 Annual Report and Accounts 2010/11

DELIVERING OURSTRATEGY
Little Charley Bear is a brand new pre-school series for 2011,
which launched on CBeebies in January. Little Charley Bearinspires creativity, discovery and imagination, using CGI animation
to aid learning. To find out more or to join in the fun visit
www.littlecharleybear.com.

Overview

Delivering our strategy

Managing the businessGovernanceManaging our finances

Meeting the BBC’s Purposes
The BBC’s public service mission is to inform, educate and entertain audienceswith programmes and services of high quality, originality and value. Putting
Quality First is our 21st century strategy for delivering our mission in
the digital age through:• the best journalism in the world• inspiring knowledge, culture and music• ambitious UK drama and comedy• outstanding children’s content• bringing the nation together
By offering the best content across our portfolio of services we giveaudiences what they tell us they want to listen to, watch and surf. The
following pages give a flavour of our last year and highlight how we havemet our promises to audiences to inform, educate and entertain themwith a distinct range of programmes that they will not find anywhere else.
CitizenshipInform: we have a worldwide reputation for impartial
reportage and analysis of the world we live in. Our UK-wide,
international, national and local channels and services covera broad range of stories, issues and information tailored fora diverse range of users.
As well as covering May’s General Election (pictured) andlocal elections, and the lead up to and outcome of the new
Government’s Comprehensive Public Spending Review(and the subsequent reaction), other major domestic stories
that we reported and analysed included the Report of the
Bloody Sunday Inquiry, the Papal visit, and the Labour Party
leadership contest.

Learning
Educate: we promote and support formal and informal
education for all age groups – from pre-school children tosilver-surfer adults, across television, radio and the web.
Our targeted children’s services – CBeebies and CBBC –engage and entertain their demanding audiences, supportingthem as they learn new skills to cope with the world aroundthem. The picture shows Tikkabilla’s Paul Ewing reading astory for our youngest viewers with the help (and occasional
hindrance) of Tamba the puppet.

2-14 Annual Report and Accounts 2010/11

Overview

Delivering our strategy

Managing the businessGovernanceManaging our finances

Creativity
Entertain: we offer unique and innovative content thatentertains and engages audiences, including live music andthe biggest range of radio, television and bespoke online
drama from any broadcaster in the world.
A season of programmes across BBC One, BBC Two and
BBC Four marked the 70th anniversary of The Battle ofBritain. Pictured here, First Light told the extraordinary
story of 18 year old Spitfire pilot Geoffrey Wellum througha mixture of drama and his own personal recollection.

Community
We reflect the UK’s diversity at national, regional andlocal levels with services in English, Scottish Gaelic and
Welsh, and programmes in many other languages. The
BBC’s distinctive offer across our portfolio means wehave something for everyone.
And while tastes may change, and senses of humour mayvary from region to region, quality content will be valued
by audiences wherever in the UK they are. Stephen Nolan(shown in his studio) meets the different expectations of
the listeners to the shows he presents locally on BBC Radio
Ulster and UK-wide on BBC Radio 5 Live.

GlobalWe offer the best of UK content to the world, as well as
bringing the best of the world to the UK.
Our global news services provide independent andinternationally respected news and analysis, covering the
key stories of the day. We continue to cover the ongoing
conflicts in Iraq and Afghanistan, as well as new andemerging stories like the recent Pakistan floods, the election
and floods in Haiti, the oil leak in the Gulf of Mexico, theChilean miners, democracy protests across the Middle East
(picture shows women protesters in Cairo’s Tahrir Square),and the Japanese earthquake and tsunami.

DigitalThe BBC is the most used online content provider in the
UK and over 15 million adults now listen to our radio
services via digital platforms each week.
We have been at the forefront of helping the UK upgrade
to digital television, and will continue to develop partnerships
with industry leaders that can benefit audiences
everywhere, from digital radio to broadband. In September
we broadcast a set by The Charlatans from London to
Tokyo in Super Hi-Vision. We plan to use this technology,
developed with Japanese broadcaster NHK, for a series ofBBC big screens during the 2012 London Olympics.

Annual Report and Accounts 2010/11 2-15

Overview

Delivering our strategy

Managing the businessGovernanceManaging our finances

Meeting the BBC’s Purposes with…

The best journalism in the world
Informing civic and democratic life at home and abroad –through independent, impartial and accurate news, current affairs
and information.
We aim to reach 80% of the UK population each week with ourjournalism output. For 2010/11 the weekly average was 82%.

1

1 In June, crowds gathered in the square outside
Londonderry’s Guildhall to hear the Prime Ministerannounce the findings of the Saville Inquiry live on
BBC Parliament.
2 A record 7.4 million viewers watched the BBC News
channel on the day of Gordon Brown’s resignationand the announcement of the UK’s first peacetime
coalition government since the 1930s.
3 As well as the aftermath of the January 2010
earthquake, we continued to cover the election andfloods in Haiti (picture shows local woman helping
out at emergency hospital).
2-16 Annual Report and Accounts 2010/11© european pressphoto agency bv

2

3

Overview

Delivering our strategy

Managing the businessGovernanceManaging our finances

BBC network hours of output by genre 2010/11 (2009/10 comparator figures)News and weather
BBC One
BBC Two
BBC Three
BBC FourRadio(2,407)(11,833)

2,421

932

32

6

BBC One

BBC Two

BBC Three

BBC Four

Radio

(235)

(282)

(160)

(165)

(2,172)

(902)

(32)

(6)

11,542Current affairs

224

296

253

Anytime news
The BBC News channel is the UK’s most watched news
channel, with more viewers than its primary competitor Sky
News, reaching 10.4 million viewers each week. The channel
is committed to appeal to a broad ranging audience.
BBC News channel and BBC News online both offer up to
the minute updates and expert analysis throughout the day,but viewers and listeners just wanting a quick update on the
big stories and key headlines from our television and radio
services can visit www.bbc.co.uk/news/video_and_audio/.
A year of politics
The big national story of the year for the UK was theGeneral Election, which saw not only the election of a new
Parliament in Westminster, but also a large turnover in its
membership and many voices calling for change to revitalise
Parliament’s work and increase its openness and relevance.
On BBC Parliament we discussed many of the emerging issues
during the Live State Opening at the end of May, and havecontinued to do so since on, for example, the Friday editionof The Record.
During the General Election process and its aftermath,
BBC Parliament continued to strike a balance between
ongoing coverage of the devolved institutions and unfolding
Westminster events. It offered live coverage of news
conferences and speeches from the political parties, anddebates and analysis from across the BBC’s portfolio.
In the absence of committee and Westminster Hall debates,
the channel expanded its Briefings slot over the summer
months. Highlights included the CBI’s Richard Lambert on‘After the Crisis’ at Chatham House in May, Speaker John
Bercow’s speech on Parliamentary reform to the Hansard
Society in June, and European Commission President Barroso’s
State of the Union address in September.
For more live and recorded parliamentary coverage see
http://news.bbc.co.uk/democracylive/hi/.

150

2,164

The national perspective
BBC One is our primary channel for reaching mainstream
audiences with both daily news and current affairs. Moreviewers get their national and international news from our
6pm network news bulletins than from the other terrestrial
channels. And our regional and Nations news at 6.30pm
also outperforms the equivalent offer from the commercial
providers.
Panorama continues to bring quality in-depth investigative
journalism to peaktime audiences each week. A Kids in Carespecial report spent six months following children in the care ofsocial services to find out if the state can be a real parent. It was
narrated by Samantha Morton, who herself grew up in care.
And in a worldwide scoop in November, the controversial FIFA’s
Dirty Secrets investigated corruption allegations against some ofthe officials who were due to vote on England’s 2018 World
Cup bid. FIFA has not yet addressed the allegations and thestory continues to make headlines around the world.
Current affairs is also an important part of the BBC Two offer– with highlights this year including Secret Iraq, Secret War on
Terror and, closer to home The British at Work.
We are working on imaginative ways to bring topical issues
to a mainstream BBC One audience by producing bold
documentaries such as July’s My Child’s Big Fat Birthday
Party as well as building on the format Famous, Rich And…
Connecting with new audiences
We will continue to introduce BBC Three’s young adultviewers to a broad range of current affairs content,
covering subjects as diverse as autism and child trafficking.
Some pieces will be UK-based, while others will have aninternational dimension. Blood, Sweat and Luxuries exploredthe production of goods like coffee, mobile phones andleather, and brought the impact of first world consumerism
on the developing world home to our audience. It showedthat BBC Three viewers do have an appetite for challenging
documentaries when they see the relevance to them.
In response to the BBC Trust’s service review, we revamped
BBC 1Xtra’s news coverage in August 2009, adding two new
Annual Report and Accounts 2010/11 2-17

Overview

Delivering our strategy

Managing the businessGovernanceThe best journalism in the world, continued/...

News, commentary and analysis across our television,
radio and online services, including:
1 Democracy Live website.
2 Matt Holland presents the East version of Late Kick
Off, England’s regional Football League show.
3 Harvard professor Michael Sandel brought a seriesof lectures to BBC Four on Justice, part of a season
on the state of justice in Britain and the world today.
4 We reported extensively from location as theworld witnessed unprecedented calls for change
from across the Middle East, starting in Cairo’s
Tahrir Square.
5 Over 2,100 hours of radio news and current affairs
last year included BBC Radio 4’s PM, with Eddie Mair.
6 Daily news on BBC One includes tailored regionaland national main evening bulletins. Picture shows
Catriona Shearer from Reporting Scotland.
7 Camera operator Joe Phua (from our Singapore
bureau) in Japan after the earthquake and tsunami.

1

3

2

4

5

2-18 Annual Report and Accounts 2010/11

6

7

Managing our finances

Overview

Delivering our strategy

Managing the business

Average audiences to news programmes(million)
Breakfast news
BBC One 1.5 (1.2)
GMTV/Daybreak 0.7 (0.9)
Lunchtime news
BBC One
2.6 (2.7)ITV1
1.0 (1.0)
Early evening network news
4.4 (4.2)
BBC OneITV1
3.3 (3.2)
CH4 0.8 (0.7)
CH5 0.7 (0.7)
Early evening regional news
BBC One5.5 (5.2)
ITV1
3.2 (3.1)
Late night news (10pm)
BBC One
4.4 (4.5)ITV1
2.3 (2.4)

KPI

GovernanceManaging our finances

Restore trust in output% Agreeing
Scoring 8 or more out of 10 for‘I trust the BBC’
09/10
30.8
36.8
10/11
Average score out of 10 for‘I trust the BBC’
09/10
6.0
6.4
10/11

Source: Pan BBC Tracking Study/Brand and Reputation Tracker. Base: All aged 15+.

Source: BARB Base: All aged 16+, weekdays.
( ) Figures in brackets are 2009/10 comparators.

15-minute bulletins, similar in style to BBC Radio 1’s Newsbeat,each weekday. These were supplemented during 2010 with anumber of one-offs that addressed areas of specific interest
to the audience such as literacy and consumer technology.
In April, we offered special 30-minute Newsbeat Leader
Interviews with each of the three main party leaders in frontof live first time voter audiences.
We are proud that CBBC covers issues that no otherchildren’s channel would touch – like smoking, the General
Election and children’s care services. We work hard to ensurethat such subjects are relevant to our viewers and that we
present them in such a way that they actively choose to watch.
This is particularly important for our core citizenship strands,
Newsround and Blue Peter, and we will continue to work toensure that both shows reach as many children as possible.
The Newsround website is regularly updated across every day– see http://news.bbc.co.uk/cbbcnews – and the mobile site isat www.bbc.co.uk/mobile/cbbc, for the latest news, sport andPress Pack reports.
Listening to our audiences
BBC Radio 4 remains at the forefront of our radio news andcurrent affairs offer, and Today, the lunchtime’s The World at
One and drivetime’s PM all help set the daily agenda. Recent
addition to the BBC Radio 4 stable – current affairs strand
The Report – responded to the big stories and mixed analysis
and insight with topical investigations.
At a Nations and at a local level, comprehensive radio
coverage of the General Election – during which thedevolved institutions continued to sit – offered room forour correspondents to assess the implications of a change ofgovernment for each area. BBC Radio Wales embarked on
a General Election Tour, with Good Morning Wales, Good
Evening Wales and The Radio Wales Phone-In gauging theviews of people and politicians in six marginal seats across thecountry. BBC Radio Scotland also ran dedicated programming
and a series of debates from across Scotland. And BBC Radio
Ulster/Foyle made effective use of outside broadcasts and its
network of area-based correspondents to profile and explore
issues affecting communities across the region.

Ongoing local debates around both the build-up to, and theaftermath of, the coalition government’s spending review
added further context to matters of local concern.
World news
Our global news coverage provides independent andinternationally respected news and analysis. We continue tocover the ongoing conflicts in Iraq and Afghanistan, as well as
new and emerging stories. The early part of the year saw us
cover the Pakistan floods, the floods and election in Haiti, theoil leak in the Gulf of Mexico, the rescue of the Chilean miners,
and the EU response to France expelling Romanian gypsies.
In January, anti-government protests in Egypt saw the startof calls for increased personal and political freedoms acrossthe Middle East and North Africa. Our correspondents
and journalists across our services made sense of what was
happening for their viewers, listeners and readers at homein the UK and on the ground in the countries themselves(and elsewhere) on BBC Arabic, on BBC World Service radio,
and online, giving historic context as well as contemporary
analysis as the events unfolded. A particular highlight was
Jeremy Bowen’s interview with Libya’s Colonel Gaddafi.
The earthquake in Japan, as well as the subsequent tsunami
and the drama that unfolded around the Fukushima Daiichi
nuclear reactors – as well as the global economic implicationsof these events – continued to be covered long after theoriginal events on that day in March had passed. Updates were
kept together on a central website, www.bbc.co.uk/news/
world-asia-pacific-12711226.
As a result of the government’s spending review, BBC World
Service will be funded by the licence fee from April 2014.
You can find out more about BBC World Service atwww.bbc.co.uk/worldservice, where you can also findthe most recent full annual report of BBC World Service’s
performance for 2010/11.
To find out some of our programme priorities and plans
for the year ahead, visit www.bbc.co.uk/aboutthebbc.
Annual Report and Accounts 2010/11 2-19

Overview

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Managing the businessGovernanceManaging our finances

Meeting the BBC’s Purposes with…

Inspiring knowledge, culture and music
Enriching people’s lives – bringing knowledge, music and culture to
receptive minds, eyes and ears.
With our core mission to inform, educate and entertain, we are always
looking for ways to open up accessible and engaging ways into music,
the arts, science, history and other specialist fields for our audiences.

1

1 Spitfire Women introduced us to some of the 168
female pilots of World War Two Air Transport
Auxiliary, a thousand strong organisation thatdelivered aircraft to the frontline RAF.
2 Agony and Ecstasy followed English National Balletin its 60th anniversary year – picture shows dancers
Daria Klimentov and Vadim Muntagirov.
3 When God Spoke English – The Making of the KingJames Bible told how one of the greatest works ofEnglish prose came to be written.
2-20 Annual Report and Accounts 2010/11

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Managing the businessGovernanceManaging our finances

BBC network hours of output by genre 2010/11 (2009/10 comparator figures)
FactualBBC One
BBC Two
BBC Three
BBC FourRadio(2,153)(2,436)2,302 1,786(1,785)

1,403

1,081

(1,541)

(915)

2,359

Music and arts

BBC One

BBC Two

BBC Three

BBC Four

Radio

(97)

(317)

(79)

(1,267)(41,591)

102

353

70

1,425

41,709Religion

BBC One

BBC Two

BBC Four

Radio

(97)

(37)

(40)

(1,173)98

50

Inspiring live music from across the UK
We broadcast our first outside concert – a relay of Mozart’s
The Magic Flute from Covent Garden – in 1923. It is a heritagethat we are privileged to continue.
The 2010 BBC Proms season saw more people attending
than ever before. There were more than 313,000 attendances
at 89 concerts in the Royal Albert Hall and Cadogan Hall in
London (over 15,000 more than last year, with one in eightbuying tickets for the first time). On average, 4,000 people
attended each of the 76 Proms in the Royal Albert Hall, with42 concerts selling out completely. There were also more
‘Prommers’ buying £5 standing tickets on the day – over
86,000 sold in total from July to September.
The season kicked off with an ambitious opening weekend
featuring Mahler’s Symphony No. 8 from the BBC SymphonyOrchestra and combined choirs under the baton of JiřiBělohlavek, Wagner’s The Mastersingers of Nuremberg
with Bryn Terfel, and Verdi’s Simon Boccanegra with Placido
Domingo. This – and all other Proms – were broadcast liveon BBC Radio 3 and available for a further seven days on
BBC iPlayer. The Friday and Saturday concerts also simulcast
on television. And we hosted Last Night concerts in London,
County Down, Salford, Swansea and Dundee.
Specialist music
Our jazz coverage has included Desmond Carrington’s Friday
night show and live sessions from our Maida Vale studios hosted
by Jamie Cullum, both on BBC Radio 2. BBC Radio 3 output
has included Jazz on 3 (with Jez Nelson), Jazz Library and Jazz
Line-Up, a feature in the schedule for 11 years. Our local radio
services also serve up a mixed diet to their listeners – on BBC
Radio Stoke John Hellings plays a huge range of music fromthe earliest recorded Jazz, through Big Band and Bebop, tothe latest releases. John’s show is followed not just by listeners
in the Midlands but also all over the world on the web.

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1,181

On television, Reggae Britannia celebrated the impact of
reggae on British society as well as its enduring musical legacy– including many of the urban music styles typically found on
BBC 1Xtra: hip hop, grime, bassline, garage, dubstep, drum
and bass, UK funky, dancehall and R&B. On Sunday’s 100%
Homegrown host DJ Target champions the sound of UK blackmusic and gives a platform to new talent. Over the years theshow has supported a host of UK artists at the beginning of
their careers including Lethal B, Dizzee Rascal, Skinnyman
and Estelle.
Exploring the Arts
We are committed to keeping Arts coverage at the heartof our programme offer. From BBC One, Modern Masters,presented by Alastair Sooke, aimed to make sense of western
art in the last century when the historically normal rulesof painting ceased to apply and artists were less interested
in making straightforward pictures of the world aroundthem. Focusing on the work of four key artists – Warhol,
Matisse, Picasso and Dali – Modern Masters gave a sense ofwhat happened to art in the 20th century. The series was
supported online with a virtual exhibition and we created aseries of walking guides to accompany the series – available atwww.bbc.co.uk/bbcone/modernmasters/artwalks/ and alsoavailable on mobile phones – so that viewers inspired by what
they saw could experience some of the very best in modern
art, sculpture and architecture for free in nine cities acrossthe UK.
Other Arts output that had an impact on audiences included
Opera Italia, a tour de force from the Royal Opera’s musicaldirector Antonio Pappano; Stephen Fry on Wagner was avery personal assessment of the man and his music, filmed in
Bayreuth and Nuremberg, and a glorious attempt to salvage
the music Fry loves from its dark association with the Nazis;
and Agony and Ecstasy, an exclusive behind-the-scenes series
following English National Ballet in its 60th anniversary year.

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Inspiring knowledge, culture and music, continued/...

Distinctive factual output can be found across ourchannels – and this year on television alone our eclectic
offer included:
1 E-Numbers – An Edible Adventure was part ofa range of output across TV, radio and online for
our World of Wonder season.
2 Mountain Gorillas: we invest time and resource into
genres not widely available from UK commercial
channels, like natural history.
3 The Judas Tree starring Carlos Acosta – along withConcerto and Elite Syncopations – celebrated the
genius of choreographer Kenneth MacMillan.
4 Digging for Britain, archaeology in action from
BBC Two.
5 Dr Kevin Fong looked at pioneering cardiac
treatment in Horizon: How to Mend a Broken Heart.
6 We explored how The Normans transformed thehistory of Europe, in a four-part series filmed in HD.

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Maintain value among high

KPI approvers and improve value
among low approvers% High approvers
Scoring 8 or more out of 10
Overall approval of the BBC
09/10
10/11
% Low approvers
Scoring 4 or less out of 10
Overall approval of the BBC
12.4
09/10
10/11 10.2

38.0
41.8

Source: Pan BBC Tracking Study/Brand and Reputation Tracker. Base: All aged 15+.

Choirmaster Gareth Malone literally picked up the baton
for two major challenges this year. In Gareth Malone Goes to
Glyndebourne he agreed to find and train a youth chorus of 50
teenagers to sing on the main stage at Glyndebourne, and hewent back to school in Gareth Malone’s Extraordinary School
For Boys, both on BBC Two.
BBC Radio Scotland offered its 900,000 listeners more than
200 hours of arts coverage over the year, including a daily arts
show at lunchtime.
Our shared history
BBC Radio 4’s History of the World in 100 Objects continued
to surprise audiences to the end. Our local online support andcontent as well as links with over 500 museums helped people
up and down the country to get involved in this fascinating
subject. By the end of March, over 20.6 million podcasts fromthe series had been downloaded.
In ancient history Cambridge professor Mary Beard provided
insight into the lives of the people who lived in the shadow ofMount Vesuvius before its cataclysmic eruption in Pompeii: Lifeand Death in a Roman Town.
Also on television, Victorian Pharmacy examined the worldof the pharmacy at the beginning of Queen Victoria’s reignin 1837, when traditional remedies such as leeches, oil ofearthworm and potions laced with cannabis and opium
were the order of the day for those that could afford them.
In August, Robert Bartlett examined the legacy of The
Normans in Britain. And September saw the launch oflandmark series Michael Wood’s Story of England, tracking
the evolution of an English community at Kibworth in
Leicestershire over 15 centuries – we also made 15
complementary regional programmes that highlight otherplaces of local interest for viewers to explore themselves.

On a more contemporary level, The Trouble with Northern
Ireland tackled the sensitive issue of identity in Northern
Ireland with a light-hearted look at how much Northern
Ireland has changed over the last 40 years. For audiences inNorthern Ireland only, Fergal Keane’s landmark series The
Story of Ireland traced the events and influences that shaped
modern Ireland. The series was subsequently given a
network showing.
Science
As part of our World of Wonder year of science (launched
in January 2010 to coincide with the Royal Society’s 350th
anniversary), BBC Four profiled three British Nobel Prizewinners – astronomer Dame Jocelyn Bell Burnell, biologist
Sir Tim Hunt and chemist James Lovelock – in the series
Beautiful Minds.
On BBC Two, medical journalist Michael Mosley’s The Story of
Science was an informative and ambitious exploration of how
science has changed the way we see ourselves, and the way
we see our world.
And Saving Species was a 40-part BBC Radio 4 series looking
at man’s impact on nature and the environment and thechallenges of wildlife conservation, covering topics as diverse as
the BP oil spill off the Mississippi Delta and efforts to save thelong-billed vulture in India. Podcasts from the best of the BBC’s
natural history radio output are available at www.bbc.co.uk/
podcasts/series/nathistory.

To find out some of our programme priorities and plans
for the year ahead, visit www.bbc.co.uk/aboutthebbc.
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Ambitious UK drama and comedy
Stimulating and entertaining audiences – with stories about their lives
and the world around them.
Excellence, originality and variety are the watchwords for BBC comedy
and drama.

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1 Crime drama Sherlock was a fast-paced
contemporary telling of the Arthur Conan
Doyle classic, with 21st century twists.
2 Five Daughters was scheduled on five consecutive
evenings, and rewarded viewers with a powerful
drama based on a harrowing true story.
3 Come Fly With Me was set in a busy airport andfeatured a host of characters played by Matt Lucasand David Walliams.

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BBC network hours of output by genre 2010/11 (2009/10 comparator figures)Entertainment
BBC One
BBC Two
BBC Three
BBC Four

Radio

(612)

(7,405)

585

597

1,179

143

BBC One

BBC Two

BBC Three

BBC Four

Radio

(980)

(472)

(506)

(413)

(4,784)

(499)

(989)

(293)

7,622

Drama

808

283

346

304

4,577

Film

BBC One

BBC Two

BBC Three

BBC Four

(534)

(609)

(236)

(168)

486

660

224

Although overall drama hours are down year-on-year by atotal of 630 hours across all channels, the reality behind thesenumbers is a drop in originated drama of only eight hours
across our portfolio. The primary reason for the drop in hours
is fewer acquired drama series, which is in line with our statedPutting Quality First strategy.
New stories
On BBC One, Five Daughters told a true story overconsecutive nights in April last year. It involved viewers withthe unfolding stories of five women and their brutal murders.
Four-part thriller The Silence centred around a deaf
protagonist, but covered familiar themes of alienation andpowerlessness in a strikingly different way. It featured deaf
actress Genevieve Barr in her first major television role.
Both series were highly appreciated by viewers.
Luther was a dark psychological crime drama about a police
detective struggling with his own demons, a damaged
individual who might be as dangerous as the murderers hehunts. Actor Idris Elba brought this complex character to lifeon our screens, and will return for a second series.
In May, The Secret Diaries of Miss Anne Lister from BBC Two
saw Maxine Peake play the title role of a 19th Century Halifax
woman regarded as Britain’s first out lesbian. Based on Lister’s
private journals – only recently decoded – it was a costume
drama about a woman who lived ahead of her time.
New ways with old stories
A dramatisation of Christopher Isherwood’s semiautobiographical novel Goodbye to Berlin was told in
Christopher and his Kind, starring Matt Smith. It explored thepolitical and social context that gave rise to what is perhaps
Isherwood’s most iconic work.
It can be risky taking something familiar and daring to change it– but Mark Gatiss and co-creator Steven Moffatt’s approach to
Sherlock saw Arthur Conan Doyle’s characters brought up-todate and resulted in one of the highlights of the year, winning
both critical acclaim and drawing in over eight million viewers.

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And on BBC Four, The Road to Coronation Street was a
one-off drama that lovingly explored the birth of one of
the nation’s favourite programmes for the last 40 years.
An all-star cast included Jane Horrocks, Jessie Wallace andChristian McKay. The programme was part of the Planet
North season, celebrating the culture, history, life andarchitecture of northern England.
A second series of E20, the EastEnders companion drama
premiered online, was commissioned. The series is a great
platform for young, aspiring writers and actors to mastertheir craft as they establish characters and develop storylines.
The writing team are all aged between 17-22.
Drama on-demand
Drama from the BBC embraces everything that is uniquely
British and is the home of the best story-telling. Our
homegrown approach encourages UK talent to tell our
nations’ stories to itself and to the world. We broadcast new
and original drama across our portfolio of services, including
around 4,500 hours of drama on our UK-wide radio networks
each year, and over 1,700 hours of television drama, much of itavailable after broadcast on BBC iPlayer.
Listeners who prefer their content ‘live’ in the schedules havefound recent afternoon highlights included HMS Surprise, athree-part dramatisation of Patrick O’Brian’s novel set in 1804
in England, India and on the high seas, and a welcome returnfor Two Pipe Problems by Michael Chaplin, featuring William
and Sandy, residents of The Old Beeches retirement homefor elderly thespians and former co-stars of a 1960s TV series.

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Story-telling – whether in straight drama or comedy –has to engage the audience with the characters, eventhe puppet ones. Highlights from the BBC’s schedules
have included:
1 Four-part thriller The Silence, introducing new talent
Genevieve Barr.
2 Mongrels from BBC Three, our first urban,
multispecies, adult puppet comedy from new writer
Jon Brown.
3 Rev followed the daily trials and moral conflictsof an inner city minister, played by Tom Hollander.
4 BBC Three’s most successful sitcom launch ever,Him & Her, with Russell Tovey and Sarah Solemani.
5 Other new comedy this year included comedy panel
game Ask Rhod Gilbert from BBC Northern Ireland.
6 Our original daytime drama offer included
The Indian Doctor, starring Sanjeev Bhaskar in
the title role.
7 White Chameleon, an autobiographical piece by
playwright Christopher Hampton (right, with actor
Alex Jennings), just part of over 600 hours of dramafrom BBC Radio 4 this year.

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3

4

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Increase distinctiveness and quality

KPI % Agreeing

Scoring 8 or more out of 10 for
High Quality
09/10
36.0
42.3
10/11
Average score out of 10 for
High Quality
6.4
09/10
6.8
10/11
Source: Pan BBC Tracking Study/Brand and Reputation Tracker. Base: All aged 15+.

Uniquely British humour
BBC Radio 4 was responsible for around 260 hours oforiginal comedy last year, from some of the country’s best
new writers and performers, and its topical comedy podcast
is one of the UK’s most popular, with over 1.2 million
downloads worldwide every month.
Cockney comedian Micky Flanagan’s first radio series told hisjourney from ‘working-class Herbert to middle-class intellectual’as he left the mean streets of London’s East End and headed
to the leafy lanes of Dulwich. Mixing documentary segments,
interviews with people he knew, and some of his acclaimed
stand-up comedy, each episode focused on a different decade.
Not only can we expect to hear Micky back on BBC Radio 4
in a second series, but as a direct result of series one he has also
now signed a television development deal.
In July, BBC Radio 4 brought listeners a series of five comedy
pilots in the Happy Tuesdays slot, in which some of the most
exciting comedy talent around were given the chance to try
out new ideas and formats. Justin Moorhouse, for example,
wrote his first audience sitcom, with Jim Poyser; Dan Renton
Skinner took his Angelos Epithemiou character from Vic
Reeves and Bob Mortimer’s surreal panel show Shooting Stars
and gave him a spoof chat show; and Pauline Pepys’ Dowry saw
Olivia Colman playing Pauline, Samuel Pepys’ sister and David
Mitchell playing Samuel.
August saw An Audience with Ed Reardon recorded live
during the Edinburgh festival – just part of our wider output
from festivals and events across the country.
BBC Radio 2’s comedy season got started with Hot Gossip,
a comedy panel show hosted by Claudia Winkleman, andincluded programmes dedicated to the talents of some of the
UK’s greatest comedians: Leslie Phillips presented Carry On
Forever; Sean Lock remembered the unique talent that was
Tommy Cooper in Tommy Cooper – Just Like This!; 30 years

after his death, Alexander Armstrong brought the story ofPeter Sellers in Being Here – The Peter Sellers Story; and All
Round Bob Monkhouse was presented by his old friend Barry
Cryer. The season ended with Dave Allen: Goodnight and May
Your God Go With You, in which one Irish comic, Ed Byrne,
examined the life and career of another.
Embracing risks
Comedy is a risky genre – requiring time and investment
to create and then maintain. But it is still important thatbroadcasters and commissioners experiment with newwriters, comics and actors.
New television series this year included Rev – with Tom
Hollander as an inner city vicar, emerging comedian Simon
Brodkin’s character-driven series Lee Nelson’s Well Good
Show, adult puppet comedy Mongrels from new writer Jon
Brown, and BBC Three’s most successful comedy launch everwith Stefan Golaszewski’s anti-romantic comedy Him & Her.
BBC Three pushed convention further than before by
opening up its range of pilots to audiences online for comment.
Although full series of Pulse, Stanley Park and Dappers
were not commissioned, they demonstrate the channel’s
continued support of original UK drama and commitment
to try new things. But The Fades, a supernatural horror fromaward-winning writer Jack Thorne, will be back later this year.

To find out some of our programme priorities and plans
for the year ahead, visit www.bbc.co.uk/aboutthebbc.
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Outstanding children’s content
Delighting and surprising young audiences – helping children explore
their world in a safe public space.
We are committed to providing the best quality UK-produced content
for children that encourages learning, supports understanding of theworld around them, but also entertains this demanding audience.

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1 CBBC’s Deadly 60 brought natural history tochildren in an adventure covering six continents.
2 BBC orchestras give masterclasses andperformances to a range of audiences acrossthe year.
3 Growing Up In A War Zone: A Newsround Special
showed how Afghan children’s lives are affectedby war.

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BBC network hours of output by genre 2010/11 (2009/10 comparator figures)Children’s
BBC One
BBC Two
CBBC
CBeebies

Radio

(482)

(1,414)

459

1,736

4,398 4,514(4,344)(4,538)

BBC Two

BBC Four

CBBC

CBeebies

Radio

(289)

(4)

(–)

(156)

(128)

(1,660)1,460

Schools/formal education

198

6

–

Learning with the BBC
Knowledge and skills are fundamental to the BBC’s offer.
Our aim is to open learning opportunities to all audiences,
but it is of greatest importance to our younger viewers,
listeners and users.
We want to inspire a life full of learning, and engaging younger
audiences wherever and whenever they watch or listen to
our programmes or use our websites. On our mainstream
content for example we will tackle subjects like bullying andpeer pressure through EastEnders spin-off E20, in chunks
designed to be shown to teens and others in their classrooms.
And our specialist children’s content – including over
2,100 hours across BBC One and BBC Two – will remain
springboards for learning.
Online, our support for formal education includes Key Stage
1 maths and literacy games, as well as English, maths andscience activities for Key Stage 2 learners on our website
www.bbc.co.uk/schools/bitesizeprimary. GCSE Bitesize
remains the cornerstone of our learning portfolio for older
school students, with practical help and advice across a rangeof GCSE subjects from Art & Design to Welsh as a Second
Language. For more information see www.bbc.co.uk/schools/
gcsebitesize.
Children live in a world that they want to engage with and findout more about. We help them to do this with programmes
like Newsround, the daily news magazine that keeps them
up-to-date on the latest stories and events happening at home
and abroad, and My Life, CBBC’s acclaimed single-subject
documentary strand which follows extraordinary children
with unique stories to tell.

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Encouraging the youngest imaginations
For pre-schoolers, programmes like Alphablocks – 26
episodes aimed at 4-6 year olds who are learning to read –encourage the use of the imagination. Alphablocks is a seriesof adventures that invite parent and child to have fun together
with words. Based on best-practice phonics teaching, it canhelp young children develop engagement and confidence withreading and making words. Every episode is different: there
are songs, stories and games, and the website – like all theBBC’s children’s sites – features games and activities in a safe
and secure environment. New from February, The Lingo Show
introduces different languages (including Polish, Somali andUrdu) to a pre-school audience. It is aimed at mother tongue
speakers of English as well as their friends who may speak adifferent language at home. To see all our websites for under12s visit www.bbc.co.uk/children.
Show Me Show Me actively encourages these youngest
viewers to imagine they are with their presenter friends ina playground high in the sky. This year the show featured
Uki, whose adventures helped viewers learn about nature,friendship and sharing first experiences of the world.

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Our distinctive range of children’s programming ispresented in a safe and ad-free environment, andour online offer is safely moderated. Recent viewer
favourites include:
1 Science-based gameshow Richard Hammond’s
Blast Lab.
2 Original drama this year included a new versionof Richmal Crompton’s Just William stories.
3 CBeebies’ Show Me Show Me – Pui and Chris
explore the magic of the every day.
4 Big City Park is full of adventure, and filmed
outdoor’s in Belfast’s Ormeau Park.
5 Popular comedy drama with a heart inTracey Beaker Returns.
6 Animated reggae-singing crime fighting Rastamousealways ‘Makes A Bad Ting Good!’ with the help offriends Scratchy and Zoomer.
7 Mish (pictured) and his chums Moosh and Mogo
from Same Smile travel the country showing 2-4
year olds that while we all have different lives, we all
have the same smile!

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KPI

GovernanceManaging our finances

Increase distinctiveness% Agreeing strongly
BBC television is original and different
37.3
09/10
35.9
10/11

Source: Pulse: All aged 16+.

Audio for children
Older children – and even family groups – will also findopportunities to grow their imagination with the BBC
children’s output. Over the summer, BBC Radio 7 (now called
BBC Radio 4 Extra) broadcast a selection of classic children’s
novels including Black Beauty, 101 Dalmatians, The Wind in
the Willows, and The Adventures of Tintin. And BBC Radio 4
offered a two-part adaptation of Mary Norton’s children’sclassic The Borrowers about the tiny Clock family that live
under the floorboards of a large house.
CBeebies offers a weekly ‘Best Bits’ podcast for downloadat www.bbc.co.uk/podcasts/series/cbeebies, for anytime
anywhere listening – a real boon for today’s busy children.
Engagement through games and activities
Children are not passive viewers. They want to get involved.
And the BBC can help them do this.
Our range of public events this year included CBBC’s Deadly
Days Out, which attracted thousands of children and families
to locations across the country, including Cwmbran andNorwich. The days were linked to the Live ‘n’ Deadly series
and featured wildlife presenter Steve Backshall (and someof his friends!) and a host of fun family activities.
New series included Mighty-Mites, a high-energy programmethat inspires children to get up and have a go at a range of new,and sometimes very exciting activities – from circus skills toindoor skiing, and swimming to pottery painting.

Informing and entertaining
Sometimes audiences want to watch or listen or log-on
just to be entertained. And our audiences have not been
disappointed this year.
We launched ZingZillas in April, a live action music series set
on a tropical island paradise that follows the adventures of thebest children’s band in the history of music – the ZingZillas!
With musical influences spanning the globe – from rock tosoul, jazz to samba, big band to orchestra – ZingZillas gets its
young viewers jumping, swaying and trilling to music from theworld over. Guests such as Dame Cleo Laine and Jamiroquai
help with the fun.
CBBC’s Muddle Earth – our first ever in-house long-form
animation series – is a comedy fantasy adventure series set
in a mad world inhabited by all manner of strange creatures.
Aimed at 6-9 year olds, it features the voice of Sir David Jasonand music performed by the BBC Philharmonic Orchestra.
And Horrible Histories – a real favourite with the older
children – continues to offer laugh out loud sketches,
cartoons and quizzes. It has been available on BBC HD
since June last year.
As well as being fun, each of these programmes offers real
educational content and rewards our younger viewers
engagement with improved skills and knowledge.

To find out some of our programme priorities and plans
for the year ahead, visit www.bbc.co.uk/aboutthebbc.
Annual Report and Accounts 2010/11 2-31

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Meeting the BBC’s Purposes by…

Bringing the nation together
Being there for the whole UK – in moments of crisis, commemorationand celebration through landmark events, sport and entertainment.
Since its earliest days, the BBC has been privileged to be a national
gathering point. It is a heritage that we are proud to continue.

1

1 Proms in the Park saw five Last Night concertsfrom County Down, Salford, Swansea, Dundee
and London’s Hyde Park.
2 Although mainly broadcast in English, BBC Asian
Network also offers news, current affairs andmusic programmes to speakers of a range ofSouth Asian languages, including in Mirpuri,presented by Zarina Khan.
3 Wimbledon tennis was available on BBC Radio 5
Live with Richard Bacon, complementing our
television, BBC Red Button and online coverage.
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BBC network hours of output by genre 2010/11 (2009/10 comparator figures)Sport
BBC One
BBC Two
BBC Three
BBC Four

Radio

(597)

(4,071)697

965(1,023)101(75)News events
There have been a number of momentous events marked
this year in our programming – events that unite large sectionsof the country in a shared experience: from May’s General
Election – when 73% of adults watched or listened to ourcoverage (including results) – to September’s Papal visit which
was of particular interest to a large community of faith andwas seen by nearly one in six of the UK population.
The UK is renowned worldwide for its pomp and ceremony.
Viewers can find live coverage of some of our big national
events – from the State Opening of Parliament to Troopingof the Colour and the Edinburgh Tattoo – on our BBC Red
Button service.
For those interested in the big events as they unfold, www.
bbc.co.uk/news gives up-to-the-minute information on what
is going on in the world. And for users interested in what ishappening at Brussels, Westminster or the UK’s devolved
parliament and assemblies, they can search, find and watch
the politics that impact on us all at http://news.bbc.co.uk/
democracylive/hi.
Bringing the nation together
Live music has been a core part of our offer since the British
Broadcasting Company’s earliest days.
BBC radio is the home of UK live music – from live acoustic
sets on BBC Radio 2 to round-the-clock coverage from
Glastonbury on BBC 6Music as part of our 150 hours of musicfrom the festival, headlined by Gorillaz and featuring acts asdiverse as Kylie Minogue, Muse, Stevie Wonder and the Yeovil
Town Brass Band.
As well as Glastonbury, our festival coverage last year included
Reading and Leeds (available across a range of channels,
including BBC Red Button) as well as the less well-known
Rockness (from the banks of Loch Ness) and Wakestock,
Europe’s largest wakeboard music festival from the LlŷnPeninsula in North Wales.

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BBC Radio 1’s Big Weekend also came from Wales thisyear. 40,000 people went to Bangor for the largest freeticketed music festival in the UK, where they were treatedto performances from stars including Rihanna, Cheryl
Cole, Florence and the Machine, Dizzee Rascal, Alicia Keysand Faithless.
Our coverage is not limited to the popular and chart acts
preferred by the commercial stations, and BBC Radio 3 camelive from Womad in Wiltshire in July, the 10th year it has done
so. This year the BBC Radio 3 Stage’s closing act was Kanda
Bongo Man, king of Congolese soukas music. And BBC 1Xtra
Live – UK’s biggest free urban music event – saw over 10,000
tickets issued to fans for sets by N-Dubz, Tinie Tempah andTinchy Stryder among others.
The BBC is committed to bringing the very best live music to
our audience and supporting both established and emerging
UK artists, as well as the best from around the world. To
experience recent live performances visit www.bbc.co.uk/
radio, where you will also find links to the best in recorded
music from pipes on BBC Radio nan Gàidheal’s Cruanlath
to country, roots and Americana on BBC Radio 2’s Bob
Harris Country, and podcasts of gems like BBC Radio 3’s Late
Junction Sessions. Whatever your musical passion, you will findsomething on the BBC.
Nothing unites people more than a good wedding – andApril’s Royal Wedding did not disappoint.
Despite the many choices available to audiences, the BBC’sedge over other broadcasters on these great occasions is
actually growing. For the ceremony in Westminster Abbey
itself, BBC One had an average audience of 18.7 million. An
additional 0.5 million joined us on BBC News channel, giving
BBC television a 69% audience share – more than three times
that of ITV and over 25 times that of Sky. Over the whole day,just under 35 million UK viewers experienced some of ourcoverage, including news and highlights.
BBC iPlayer live streaming requests for the ceremony topped
530,000 on the Friday, making it the second most requested
BBC iPlayer programme ever on a single day.
Annual Report and Accounts 2010/11 2-33

Overview

Delivering our strategy

Managing the businessGovernance

Bringing the nation together, continued/...

Our coverage of live news, sport events and musicfrom the UK and across the globe bring communities
of interest together for a shared experience:
1 The visit of Pope Benedict XVI to the UK – watchedby around one in six of the population.
2 BBC Radio 5 Live’s Septemberfest from Newcastle
had something for all the family, including an exclusive
set by children’s favourite the ZingZillas.
3 Sports commentary across television, radio
and online from experts like John Inverdale
and Denise Lewis.
4 The FIFA World Cup from South Africa
united football fans across the UK, whoever
they were supporting.
5 Paulo Nutini performed live for BBC Radio 2 fromhis home town of Paisley.
6 The BBC was destination of choice for six outof ten of the UK population (c.35 million) for theRoyal Wedding.

1

2

3

2-34 Annual Report and Accounts 2010/11

4

5

Managing our finances

Overview

Delivering our strategy

Managing the business

6

KPI

GovernanceManaging our finances

Maintain reach
Weekly pan-BBC reach %
09/10
10/11

96.9
96.7

Source: CMI. Base: All aged 16+

Talking to audiences
Each year, our UK-wide radio networks go up and down the
country meeting with their listeners and broadcasting from
where they are. In August, when BBC London 94.9 joined
one million revellers at the Notting Hill Carnival, Chris Evansbroadcast his BBC Radio 2 Breakfast show from a field in
Cornwall. In September BBC Radio 5 Live was in Newcastle
for its Septemberfest, which culminated in coverage of theGreat North Run.
There are five BBC orchestras which, with the BBC Singers,
can be seen live in a range of concerts across the country,
many of them free. For more information or to check out
the concert diary see www.bbc.co.uk/orchestras.
Uniting communities of interest
We broadcast our first radio sports commentary in 1927:
it has been a vital part of our schedules since, with 44% ofviewers watching or listening to our sports commentary
and analysis each week.
2010 has been an incredible year for sport from the BBC, andonce more we have been broadcaster of choice for the big
events from Wimbledon to the FIFA World Cup, where we
had nearly 80% reach across all platforms, a peak television
audience of 17.8 million (for England v Germany), and a record
weekly reach of 11.5 million online users at www.bbc.co.uk/
sport. Over half of the available audience watched the final
on BBC One.
Over four million viewers watched our television coverage of‘Super Saturday’ at August’s European Athletics in Barcelona
as Britain’s Mo Farah, Dai Greene and Jessica Ennis each won
Gold, helping Team GB to a record haul of 19 medals fromthe meet. Winter 2010 saw record weekly audience figuresof in excess of seven million for BBC Radio 5 Live.

Adding value by extending choice
Television BBC Red Button offers viewers a multi-screen
experience, and extends audience choice. So far this year
we have used it for a range of national and minority sporting
events including the FIFA World Cup, Wimbledon tennis(where seven million viewers picked which matches to follow
from a selection of up to six at a time), Formula 1, WorldChampionship Snooker, Open Golf, rowing, skiing andequestrian events such as the Burleigh Horse Trials.
Our sports news continues to cover major and breaking
stories online and other platforms like twitter.com, wherefans can follow the likes of Dan Roan (@danroan) or
Cornelius Lysaght (@CorneliusRacing).
We constantly seek to engage audiences with our sports
output, anytime they choose and anywhere they are. BBCNews channel for example, with over 100 hours of sports
news each year, is streamed on the iPhone. And podcasts,
from BBC Radio 5 Live’s 606 Football Phone-in to BBC Radio
Scotland’s Off the Ball, are being increasingly used to offer
innovative delivery solutions to our progressively more
on-demand audiences. To discover what podcasts wecurrently have see www.bbc.co.uk/podcasts.

To find out some of our programme priorities and plans
for the year ahead, visit www.bbc.co.uk/aboutthebbc.
Annual Report and Accounts 2010/11 2-35

Overview

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Managing the businessGovernanceManaging our finances

Delivering Quality First objectives
In December, in its conclusions on Putting Quality First, the BBC Trust
identified four primary objectives for the BBC between now and 2016.
These objectives require a challenging programme of organisationaland cultural change – and this summer’s Delivering Quality Firstis an initial look at how we might best do this. For more information
on Delivering Quality First see www.bbc.co.uk/aboutthebbc/
therealstory/delivering_quality_first.shtml.

Objective 1: Increase the distinctivenessand quality of output

Objective 2: Improve value for money
for licence fee payers

We will do this by increasingly focusing on our five
editorial priorities across our portfolio of services.
In addition, we have listened to what audiences tell us
they want – both directly and via BBC Trust consultations– and are working to implement specific changes coming
out of the recent reviews of BBC One, BBC Two, BBC
Four, BBC Radio 1, BBC Radio 2, BBC Radio 3, BBC Radio4, BBC 6Music, BBC Radio 7 (now BBC Radio 4 Extra)
and BBC Red Button. We will also spend less on a more
focused and higher quality website.
We will do fewer things better in ways which increase
quality, impact and value and help the BBC as a whole
maintain or increase its reach to audiences.

We will continue to reduce the share of our expenditure
allocated to running costs in order to direct a greater
share of the licence fee into making great content that
our licence fee payers value.
As a public service broadcaster, we have a duty to makeevery pound of the licence fee work harder. Doing more
for less is challenging, but not new. In fact since the 1990s wehave made significant efficiencies to bring our running costs
down from 24% of the licence fee to around 12% today.
Our new target will bring these to under 10% from 2013/14.
Equally importantly, we will continue to strive to makethe 90% of the licence fee that we will spend on content
and distribution work hard too, so that we can deliver
quality programmes and services to audiences andlicence fee payers.

Objective 3: Serve all audiences

Objective 4: Set new standards ofopenness and transparency

We will meet our audiences’ expectations by progressing
key digital projects.
A successful launch of YouView remains a priority for
2011/12. YouView is just one example of the opportunities
made available by the development of Internet Protocol
TV (IPTV). And we are currently exploring how IPTV canfurther enrich and add value to the television experiencefor viewers by using our strengths in linear broadcasting
as well as the online space to bring the best of the BBC’sinteractive output to the television screen.
We will work with government and other stakeholders
to deliver a roadmap for digital terrestrial television, radio
and broadband.

2-36 Annual Report and Accounts 2010/11

These objectives will be a key part of how we reportfrom now on. They will be monitored by a range ofdifferent measures, including audience research, financial
analysis, external audit, and an assessment by the BBC
Trust. In the coming year licence fee payers will see us
introduce more information online at regular intervals thatwill keep them up-to-date on service performance, as well
as a six-month update on progress against these objectives
and any major new proposals we are developing.
This will all be available at www.bbc.co.uk/aboutthebbc/.
The Director-General expects to present formal proposals
on Delivering Quality First to the BBC Trust in the summerof 2011, to be followed by a period of public consultation
and with final conclusions before the end of 2011.

MANAGING THE
BUSINESSBBC One’s dark psychological crime drama Luther starred Idris
Elba as a murder detective struggling with his own demons, andwhose brilliant mind cannot always save him from the potentially
dangerous violence of his own passions.

Overview

Delivering our strategy

Managing the businessGovernanceManaging our finances

Chief Operating Officer’s review
The new Operations Group will
drive change and support the BBC
in delivering simpler, more efficientand more cost-effective ways ofworking – vital if we are to meet
the target we set ourselves in
Putting Quality First of reducing
overheads to less than 10p inevery licence fee pound by 2015.
Operations GroupIn October, a new, expanded Operations Group brought
together the existing Operations division with BBC People(HR and recruitment services) and the externally facing
Communications and Marketing and Audiences departments,
bringing in functions as varied as audience telephone helplines
and the teams who produce programme trails. In February,Technology and Editorial Policy joined the group. The
expanded group is responsible for driving change throughprogrammes such as Delivering Quality First as well as serving
and supporting the whole organisation with a world-classinfrastructure.
Delivering Quality FirstIn addition to meeting existing efficiency targets – £434million
over this financial year – the Operations Group is working withthe rest of the BBC to deliver the stretching extra efficiencies
required from the new fixed licence fee settlement as well as
integrating the BBC World Service and BBC Monitoring with
our UK services and building our new relationship with S4C.
Operations itself is making savings of 25%.
Partnerships and projects
Operations is now responsible for a large majority of theBBC’s major contracts and projects, including the migration
into London’s new Broadcasting House which will bring ournews and radio services together next year. This allows us to
substantially reduce our property footprint in central London
as well as bring the BBC World Service physically closer to ourdomestic services. In Salford’s MediaCityUK, we completed
the fit-out under budget and the first teams began moving
into their new home in May.
We are making good progress on digital switchover withover one in four of the UK population now switched. Overthe past year we completed the STV North region (withroughly 610,000 households switched), the West and theChannel Islands, with good progress being made in Anglia
and Central regions.

Freeview HD launched in April last year to complement ourhigh definition services already available on satellite and cable,
and is growing quickly. Almost one million receivers have beensold and more than one in seven of all new televisions now
include Freeview HD as standard. We achieved our coveragetarget of 50% of UK households in time for the FIFA World
Cup in July. Autumn saw the launch of BBC One HD, bringing
the excitement of HD to BBC One – the most watchedchannel in the UK – in time for Christmas.
Despite all this change, which has been as unsettling for somestaff as it has been exciting for others, in many respects recent
months have been ‘business as usual’ for the BBC: we havecontinued to make truly distinctive programmes like Human
Planet and ZingZillas.
New ways of working
The digital age means that the broadcast and informationindustries have to evolve and move faster than ever before.
We have to make sure that we’re set up to address new andemerging challenges in the most efficient, effective way. We
are, for example, at the final testing stages of a revolutionary
project that will enable programme makers to view andedit video footage, including thousands of hours of archive
material, on their PCs. This will allow them to work both morecollaboratively and more efficiently, making savings that can be
fed back into other high quality content.
For me, this means keeping it simple: we need a BBC thatis simple to work for, simple to work or partner with,and perhaps most importantly, simple for its audiences toaccess and use. And we need to stay open, transparent andaccountable so that audiences understand the value they getfor their licence fees. Achieving that will be the test of the
Operations Group’s success.

Caroline Thomson
Chief Operating Officer
23 June 20112-38 Annual Report and Accounts 2010/11

Overview

Delivering our strategy

Managing the businessGovernanceManaging our finances

Meeting the BBC’s Purposes by…

Increasing value
Our new strategy, Putting Quality First, was approved by the BBC
Trust in December. Putting Quality First was designed to help the BBC
respond flexibly to the business challenges we face every day in the faceof advances in technology and a rapidly changing media landscape, as
well as adapt to the way we behave in – and therefore the impact wehave on – the wider marketplace.
To read Putting Quality First go to www.bbc.co.uk/aboutthebbc/future/
strategy_review.shtml, where we will also post updates as we deliverchange at the BBC.
Delivering value for audiences
Changes in audience behaviour continue to challenge us all.
While the number of radio listeners is at an all-time high, thehours they listen are going down. This is particularly true ofLocal Radio (both BBC and commercial).
At the same time, the average amount of television viewing
has increased. And while time-shifted viewing has more thantripled in three years – BBC iPlayer is the most popular catchup service online with over 130 million requests per month in
the UK – the vast majority of viewing (c.94%) is still to live TV.
Difficult economic and trading conditions have continued thisyear. In August, Ofcom’s seventh annual Communications
Market Report recorded the decline in commercial TV andradio revenues for 2009 – the fifth year in a row that it has
decreased (see www.ofcom.org.uk/cmr). The ongoing threat
to advertising revenues continues to highlight the opportunities
and support that the BBC is able to offer to the wider media
industry through its careful investment of the licence fee,although this may be impacted going forward by the newlicence fee settlement.
The Government’s Comprehensive Spending Review saw
the licence fee frozen for six years until December 2016.
This means new challenges, which in turn mean more
tough choices. We have to work even harder than before
to minimise costs across the board – people, processes,
procurement, property and technology – in order tomaximise investment in programmes and services overthe long-term.
As we look inwards to how we manage our investment on
our in-house content, we must also look outward to see if weare driving as much value as we can. Inevitably some sectionsof our audiences will be disappointed, and harder deals willneed to be struck with our partners and suppliers.

Sports rights
Sports fans expect to experience the best UK, European andworld events as they happen, with supplementary news andanalysis on television, radio and online. The major sporting
events have the ability to deliver shared national momentswith massive cross platform audiences. But with manybroadcasters seeking to buy the rights to the most popularsporting events, we must carefully consider the balance ofour rights portfolio before bidding for new or additional ones,
considering factors such as anticipated audience size and value
for money.
Our sports rights portfolio is in a strong position, with key
properties like the 2014 FIFA World Cup, 2012 Olympics
and Wimbledon in place, plus a wide range of rights recently
secured including:• Golf: Open Golf until 2016, and US Masters Golf until 2014
• Rugby Union: Live Wales, Ireland and Scotland autumn
internationals, plus highlights for England games• Cricket: Ashes cricket for Test Match Special on the radio
The BBC Trust commissioned independent consultants, MTM
London, to undertake a Value for Money (VfM) study into
the BBC’s procurement of sports rights. The report by MTM
London concluded that the BBC’s processes for sports rights
management are well suited to market conditions and enable
the BBC to make sensible decisions about which rights toacquire and manage the negotiating process so as to securevalue for money.

Annual Report and Accounts 2010/11 2-39

Overview

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Managing the businessGovernanceManaging our finances

Increasing value, continued/...

Map showing progress of Switchover
as at end of March 2011
Already Switched• Border• West Country• Granada• Wales• STV North• West• Channel Islands

Shetland Islands

STV North

STV
CentralBorderUTV

Yorkshire

Switching in 2011
• STV Central switches between 2010 and 2011
• Central, Yorkshire and Anglia switch in 2011
• Meridian switches between 2011 and 2012
Switching in 2012
• London switches in 2012
• Tyne Tees and UTV switch in 2012
By the end of March, the Switchover Help Scheme had contacted about 5.4 million
people and completed 588,000 installations. By the time switchover is complete,
we expect to have helped around 1.5 million eligible people.

Tyne
Tees

GranadaCentralAngliaWales
LondonWest

Meridian

West
Country

Channel Islands

Value for money studies
As well as the MTM study into sports rights, this year has
seen the BBC Trust commission two more VfM studies.
In February, the National Audit Office reported on ourmanagement of the Digital Media Initiative programme,
designed to allow BBC staff to develop, create, share andmanage video and audio content and programming on
their desktop, and so to improve production efficiency
across the BBC.
And in March, the NAO also reported on our managementof the costs of producing continuing drama, specifically BBC
One network’s Casualty, Doctors, EastEnders, Holby City, BBC
Scotland’s River City and, for S4C, Pobol y Cwm.
In all three instances, we have accepted, and are currently
acting on, the full findings of the reports. To read thereports in full go to www.bbc.co.uk/bbctrust/our_work/
vfm/index.shtml.
Digital switchover
Digital UK Limited – owned and funded by the BBC and other
UK PSBs and digital multiplex licensees – works closely with
the DCMS and Ofcom to prepare for the switchover fromanalogue to digital TV.
It is responsible for coordinating and planning the technicalrollout of a digital terrestrial network (DTT) to a timetable
set by government spanning the years 2008-2012. It is budgetedto ‘cost’ up to £200million, ring-fenced in the licence fee.
Twelve switchovers took place in the year to 31 March,covering 2.5 million homes. After switching England’s Westregion, the main focus this year was on STV North and theChannel Islands, areas with low or no DTT coverage before
switchover. The arrival of Freeview has greatly improved
viewer choice.
Digital UK works with industry stakeholders and otherinterested groups, and helps make sure that viewers knowwhat is happening and when, and what they need to do.
Digital switchover is scheduled to be completed by the endof 2012. Through our wholly-owned subsidiary, DSHS Limited,
the BBC also offers practical help to millions of older and2-40 Annual Report and Accounts 2010/11

disabled viewers to keep on watching the programmes andservices they love – not just from the BBC – and ensure thatno-one is left behind.
For more information on the Switchover Help Scheme, please
visit www.helpscheme.co.uk or for advice call Freephone
0800 40 85 900.
Programme acquisitions
In Putting Quality First we committed to cutting annual spend
on foreign acquisitions by £20million, targeting savings towards
even more UK-originated programming.
We will still aim to bring some of the best foreign dramas andmovies to UK viewers, in line with our Global purpose to bring
the best of the world to the UK. The best foreign language
films – including The Diving Bell and the Butterfly and
The Counterfeiters – and other drama like Danish police series
The Killing were still available on BBC Four over the year.
But, as with sport rights, we will not buy at any cost. We aredelighted that we were able to introduce UK viewers to thestylish world of Mad Men but elected not to enter a bidding
war over series five. Sky offered significantly more than wewere willing to pay and so the show has now moved. UK fanswill still be able to watch the new series, but will have to pay
a monthly subscription to Sky’s new premium channel.

Acquired programmes – like police drama The Killing from Danish broadcaster DR,
shown here – can provide excellent value, as well as introduce UK audiences to thebest global content.

Overview

Delivering our strategy

Managing the businessTotal average PSB headcount (equivalent full-time)GovernanceManaging our finances

Senior manager headcount by salary band

Year end 2006

18,860Band

Year end 2007

17,914

Under £70,000

4041Year end 2008

17,677£70,000-£99,999

261

230

Year end 2009

17,078£100,000-£129,999

157

128

Year end 2010

17,238£130,000-£159,999

82

77

Year end 201117,242£160,000-£189,999

33

28

Some post closures identified as part of our current restructuring had not yet taken
effect as at 31 March 2011. In addition, there is some dual running of posts as wecomplete the transition of to the new Salford site. In our Future Media and Technology
divisions, a number of agency staff were replaced over the year by people employed
directly by the BBC and who consequently now feature in the overall headcount.

£190,000-£219,999

23

20

UK PSB staff by Nation (equivalent full-time) %2009/10£220,000-£249,999

97£250,000-£279,999

4

4£280,000-£309,999

2

2£310,000-£339,999

2009/102010/112010/11

Total*

3

3

614

540

England (excluding London)

24

25

London59

55

Scotland7

8

We publish details of senior managers’ salaries in bands of £5,000, as well as thesalaries, expense claims and gifts and hospitality register of the 110 most senior
managers, identified according to salary, responsibility and reference atwww.bbc.co.uk/aboutthebbc/running/bbcstructure/az.shtml.

Wales

7

8

* Total excludes Executive Board members.

Northern Ireland

3

4

100%

100%

Total

Adding value by stretching resources
Our aim is to continually increase our efficiency andeffectiveness while maintaining and improving services andquality for audiences. Putting Quality First has given fresh
impetus to our ongoing efficiency programme, as we examine
the level and spread of our spend on people (both in-housepeople and through external contractors).
Staff
Staff management and remuneration
We are privileged to benefit from a workforce withexceptionally high levels of skills as well as pride in both thework they do and in the BBC as an organisation. For many,
we offer the opportunity to work on a range of output andactivity unavailable elsewhere, offering creative challenges that
benefit us all, not least audiences.
However, this has been a particular challenging year for us todemonstrate our appreciation of our staff and acknowledge
the value that they deliver. We suspended the staff andmanagement bonus schemes and embarked on an extensive– and at times heated – consultation with employees andunions over radical reforms to the BBC pension arrangements.
Moreover, the 2010 pay settlement reflected the economic
climate and the need to deliver an affordable deal that offers
value to licence fee payers. The deal saw a below inflation risefor those on less than £37,726, with a pay freeze for thoseon higher salaries for the second year in a row. Althoughdisappointing for many, it was a responsible reaction to theacute pressure on pay and pensions across the public andprivate sectors. We still saw two days of strike action overpension reforms and pay, although agreement was finallyreached and our proposals in both areas have now been
implemented.
Our target on senior management pay is to reduce that paybill
by 25% by the end of December 2011. Since August 2009 it
has been reduced by £14.4million (18.3%), with the balance£5.4million on course for delivery by target date. On average,
new senior managers are paid 8.7% less than the previous
post holder.

Year-on-year the equivalent full-time (EFT) staff level has
remained broadly stable although the pay and service profileof the organisation has changed following a decrease in thenumber of senior managers and a higher proportion of
redundancies from amongst longer serving and more highly
paid members of the workforce.
Our new purpose-built, state-of-the-art broadcast
facilities in Salford and London Broadcasting House provide
the opportunity for ambitious change over the next coupleof years. Multiplatform working, creative collaboration andknowledge share will drive efficiency and greater benefit
for audiences.
Around 2,300 jobs are in the process of moving to Salford’s
MediaCityUK. An estimated 1,500 people from London will
join staff moving from our old site in Manchester, with anadditional 500 local creative talents occupying space alongside
the BBC as the move opens up new opportunities in the area.
People interested in joining us in Salford can upload their CV
at www.bbc.co.uk/jobs/north.
Over 5,000 staff are also due to move into the new
Broadcasting House complex in London from early 2012. This
will allow us to substantially reduce our property footprint incentral London as we bring the BBC World Service physicallycloser to our domestic news and radio services.
We recognise that the migration of key departments from
London to Salford coupled with uncertainty among staff
over the implementation of Delivering Quality First is
unsettling for many employees. There will be fewer jobs
in the new BBC. So the coming year will see us work withstaff and unions to manage those changes fairly, transparently
and with compassion, providing outplacement services andredeployment wherever possible and working to maintainstaff motivation and engagement.

Annual Report and Accounts 2010/11 2-41

Overview

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Managing the businessGovernanceManaging our finances

Increasing value, continued/...

Diversity table, % of total staff
Target2012% point
Actual change year2010/11
on-yearBlack and Minority Ethnic

12.5

12.2

+0.1

Senior manager,
Black and Minority Ethnic

7.0

6.0

+0.3

Disabled staff

5.5

4.1

-0.1

Senior manager, disabled staff

4.5

3.0

-0.4

We aim to meet all our diversity targets by the 2012 deadline date.

The College of Production launched this year. Free to UK users, it helps equippeople with skills they need for a lifetime of employability in the constantly shifting
media landscape.

Diversity
A fundamental commitment to serve our audiences drives
the BBC’s equality and diversity agenda: we aim to reflect thevariety of the world we live in through our workforce, who
directly and indirectly make rich, meaningful content which
delivers quality and value back to all UK audiences.
We continually review our policies and processes to ensurethat they are barrier free for all potential employees andspecific workforce targets focus our efforts on diversifying
the workforce to reflect modern Britain. But we also lookbeyond these targets across the breadth of our workforce.
We have worked with staff across all BBC divisions so they
can understand and implement the core requirements ofthe Equality Act 2010, and developed a new online diversity
training module for new managers.
Women made up half (49.2%) of the BBC’s total workforce
last year, and over one third (36.0%) at senior managementlevels. Both are stable year-on-year. The number of staff who
identify themselves as disabled has stayed reasonably constantat 4.1% (2010: 4.2%) and is 3.0 % among senior managers.
Black and minority ethnic (BME) staff are 12.2% with a slightincrease at senior management levels, now at 6.0%.
We changed our ethnicity monitoring categories to reflect thenational Census 2011, and have introduced sexual orientation
and religion or belief monitoring to help us better understandthe composition of our workforce.
During the year, the BBC took over the chair of the Cultural
Diversity Network (CDN) and launched a programme oftraining and development to underpin the CDN mentoring
scheme. In December, a week of programming across all
platforms marked International Day of Disabled People
and included Access All Areas, with well-known disabledpresenters and journalists looking at technology, employment
and social attitudes.

2-42 Annual Report and Accounts 2010/11

Looking to the year ahead, one of the key areas of focus will
be around understanding issues relating to age and ageism
within the industry. We are actively working with programme
making areas in the BBC and with the wider industry todevelop a more sophisticated approach to reflecting peopleof different ages in our on-air talent.
For more information on our approach to equality anddiversity see www.bbc.co.uk/diversity.
BBC Academy
This year our training focus has been on building a UK talentbase that has transferable skills and is able to make the most of
the creative opportunities offered by a fully digital world. In thecurrent economic climate, it is more important than ever thatthe BBC shares easy-to-access training direct with the industry.
A highlight of the year was the launch of the College of
Production website, joining the existing College of Journalism
site – both offered free to everyone in the UK. And wemade available a suite of 20 easily-digested online modules
on subjects surrounding editorial standards like accuracy,
impartiality and privacy. More will follow.
Across the UK, we established key partnerships with otherindustry bodies: we joined forces with Arts Council England
to help arts organisations create compelling and high quality
content using web and broadcast technologies; we played a
key role in devising and supporting the Belfast Media Festival
2010; and for the first time, the BBC Academy had a strong
presence at leading industry events, including delivering
free training at the Edinburgh TV Festival and the Sheffield
Documentary Festival.
Across the media industry, and as part of our Bristol Anchor
Partnership, we delivered training which supports creative
innovation across the South West of England. And in
partnership with PACT, the trade association representing
and promoting the commercial interests of independent
producers, we delivered multiplatform workshops tohundreds of freelances across the UK.

Overview

Delivering our strategy

Managing the businessGovernanceManaging our finances

The BBC has promoted an industry-wide safety passport which
ensures that staff are fully trained in all safety aspects of their job. For more detailsof this and other training modules open to the industry and general public see
www.bbctraining.com.

We know that this training is valued by the industry. Broadcast
magazine reported that 93% of freelancers think that training
is an important part of what helps them to be successful (April2011) and 83% of industry stakeholders believe that the BBC
makes a significant contribution to training the broadcasting
industry (source: BBC Academy survey of external
stakeholders, March 2011).
We will continue to develop our industry partnerships;
extending the benefits of BBC training to the wider freelancepool on which everyone in the industry depends. But,
in-house, a major focus of our efforts for 2011 will be on
supporting the moves to Salford and back to the newly
refurbished Broadcasting House. We will also help the BBC
implement changes around Delivering Quality First.
SafetyOur safety team is involved across the range of BBC output,
with significant highlights this year including: covering news
events in North Africa and the Middle East; filming landmark
series Africa, under extreme climate and terrain challenges,
coupled with the rapidly changing political environment; theCommonwealth Games in Delhi; The Cricket World Cup;
Glastonbury; the Proms and Proms in the Park; Top Gear’s
Middle-East special; and ensuring the safety of thousands ofvisitors to events including Doctor Who Live and the Doctor
Who Experience.

Our approach to safety focuses on prevention, but we also support people after
unexpected or unplanned events, including BBC Arabic reporter Assad Sawey,
beaten during the democracy protests in Cairo’s Ramses Square and seen hereon the left being interviewed by News colleague Lyse Doucet.

There were no fatalities in 2010/11. We reported 38 accidents
to the Health & Safety Executive, equivalent to an incidence
rate of 175 per 100,000 staff. Most accidents are very minor.
Our work with industry leaders, other employers and theHSE this year included one day safety conferences covering
Noise in the Performing Groups, Events Safety and Worker
Involvement. We have been working with the HSE andothers to produce new guidance for musicians to help
protect their hearing.
We are continuing to focus on simplifying safety, especially on
ensuring that planning for safety is proportionate and focuseson serious risk. We have published a series of pocket guides
for staff which take much of the repetition out of planningfor routine and familiar tasks, and delivered awareness training
on them.
To read BBC health and safety policies visit
www.bbc.co.uk/safety.
Creating new value and synergies
The UK’s creative economy
The BBC believes that the future of public service broadcastingin the UK depends on a vibrant UK creative community.
Without locally-based on-air and off-air talent, the existing range,
quality and plurality of UK public service broadcasting content
and services would be impossible to sustain.

The Road to Coronation Street from external supplier ITV Studios, part of BBC
Four’s Planet North season, recalled the difficult birth of a show that is still oneof the television industry’s greatest successes and which celebrated its 50th
anniversary in December.
Annual Report and Accounts 2010/11 2-43

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Increasing value, continued/...

2010/11 Talent spend
2010/11 Number of£000s individuals

Variance£000s

Pay band2009/10£000s

Number ofindividuals

To £50,000

103,877

57,859102,433

50,029(1,444)£50,000-£99,999

41,766618

38,259562(3,507)£100,000-£149,999

15,434129

16,990142

1,556£150,000-£249,999

17,88194

14,95880(2,923)£250,000-£499,999

8,457

26

10,78133£500,000-£749,999

6,170£750,000-£999,999

2,756£1,000,000-£4,999,999

16,964

Organisations*

8,211

2,943

7,098

2,505

(1,113)

221,516

61,690212,565

53,370(8,951)

Total

}

4,084
21

3,315
14,647}2,324(2,086)19559(2,317)* Organisations are groups of individuals contracted as one – eg external orchestras – so it is not possible to list numbers of individuals against this period.
The number of individuals in the £500,000+ categories have been aggregated in order to protect the personal information of those individuals, in line withdata protection best practice.

Editorial guidelines
Over the years generations of programme makers havelearned many lessons about how to make our content.
Lessons that still apply today. And we pull these together into
our Editorial Guidelines, available at www.bbc.co.uk/guidelines/
editorialguidelines, and which is both a written assuranceof our commitment to our audiences as well as a valuable
support to in-house and external programme makers.
In addition to the easy-to-navigate guidelines, the site gives
advice on how to interpret them and links through to brandnew bite-size training modules from the BBC Academy, sousers inside and outside the BBC can learn (at no charge)
how to apply them. Link via www.bbc.co.uk/academy/collegeofproduction.
IndiesSince it was introduced, the BBC has consistently met – andusually exceeded – the television hours quota establishedunder the 1990 Broadcasting Act intended for independent
production companies.
Over the years, and bolstered by the 25% quota, theindependent television sector has grown in size andin confidence, and is today responsible for providing
some of the UK’s most valued programmes like Gareth
Malone’s Extraordinary School for Boys and Sherlock.
The BBC has introduced its own additional Window ofCreative Competition (WoCC), increasing yet further the
television hours commissioned from independents acrossentertainment, comedy, drama, factual and children’s output.
Performance against the television WoCC can be found in
the Performance Against Public Commitments documentin the download section at www.bbc.co.uk/annualreport.
The radio supply market is less established. At present,
the BBC voluntarily sets its own quota of 10% of eligible
radio programming by broadcast hours from external radio
producers. We have exceeded this quota by more than
2% for all but one of the last ten years. In August the BBC
Trust asked the Executive to introduce a WoCC for the
2-44 Annual Report and Accounts 2010/11

radio programme market, potentially opening up theavailable programming hours to independent producers
by a further 10%.
Talent spend
A BBC Trust review of talent costs in 2008 confirmed the
BBC did not pay more than the market price for top TV
talent. At the time, the BBC committed to reductions in its
spend through a review of how we manage and reward on-air
talent – those artists, presenters and performers who help
drive audiences’ assessment of BBC quality and distinctiveness– and see how we might improve our processes while still
investing in the best talent available.
This year, we have continued to reduce both our top talentand overall spend (down a further £9million for talent spend
overall, including £2.9million for those individuals earning over
£100,000) as we focus on the practical implementation of
our strategy: to reduce rates paid, develop new talent, andwork existing talent harder, as appropriate. A resurgent
commercial market has, however, seen the departure ofseveral high profile individuals to other broadcasters making
further reductions challenging.
Last year, for the first time, we published our total spend on
talent. This year we are publishing the data at a more granularlevel, as proposed by the House of Commons’ Culture, Mediaand Sport Select Committee, demonstrating to licence fee
payers our commitment to transparency and value for money.
Partnerships
We believe that there is real value in working in partnershipwith others. By combining our expertise and resources withthose of external partners and independent production
companies we are able to support the wider creative
industries as they develop their skills and experience, andextend their own offer and so together we deliver greater
value to all audiences.

Overview

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Managing the business

1

2

1 The Ginger Tree was one of the earliest examples of HD television content.
Audiences could not experience the HD, but the programme still won two
BAFTAs and was nominated for a further three.
2 YouView opens up BBC iPlayer away from the PC to the family television.

YouView‘Project Canvas’ was proposed as a way to deliver an internet
connected upgrade to the UK’s free-to-air digital TV platform
Freeview, and create a subscription-free content alternative
for audiences in a market dominated by pay-TV.
In June, after an extensive public consultation process, wewere given approval to participate in an enabling joint-venture
and YouView TV Ltd was subsequently established in
September. Consumer trials are scheduled for later in 2011
and, together with fellow shareholders ITV, BT, Channel Five,
Channel 4, TalkTalk and Arqiva, we are planning to launch inearly 2012.
Consumers will be able to buy a set-top box that will integrate
on-demand content – from sources like BBC iPlayer – with live
and recorded programmes.
Central to YouView’s business model is openness. Common
technical standards will allow a range of technology companies
to make boxes while an open environment for content will give
third parties like Local TV a route to the living room screen.
Freeview HD – DVB-T2
When Freeview’s partners wanted to introduce a HighDefinition service for their audiences, they needed to finda way to transmit the much larger HD signals within theexisting spectrum capacity. To make the most efficient useof spectrum available, BBC Research & Development (R&D)
collaborated with other European broadcasting experts
representing 40 companies and – in less than 18 months– developed a new transmission system, DVB-T2.
DVB-T2 enabled Freeview HD to launch in time for the FIFA
World Cup. By the end of March, 1.85 million Freeview HD
boxes and Freeview HD TVs had been sold.
Freeview HD carries the BBC HD Channel, ITV 1 HD and
4 HD. This line-up was boosted in autumn 2010 with thearrival of BBC One HD which simulcasts a network versionof the BBC One schedule for the first time.

GovernanceManaging our finances

Investment in innovation since 2006
£m
11.2
06/07
07/08
12.5
08/09
17.2
09/10
20.7
10/11
18.3

The yearly totals represent the BBC’s
expenditure on infrastructure anddistribution technology, as well as onother research and development
activity which had, at the time, not yet
led a product or service. It also covers
investment in audience facing technology,
content and production – a few
examples of which are outlined on
the next couple of pages.

In September BBC R&D’s work on DVB-T2 won the IBC
2010 Innovation Award for Content Delivery.
Super Hi-Vision
We continue to develop partnerships across the media sector
that can benefit audiences everywhere – often behind thescenes and over many years.
A BBC R&D team worked with Japanese broadcaster NHK
on the first High Definition film The Ginger Tree in 1989,
although at that point of course the audience could not actually
see any of the benefits of HD!
In the intervening years we have continued to collaborate
with NHK to refine HD and aid the development of other
innovations such as experimental new broadcasting system
Super Hi-Vision – 16 times sharper than current HighDefinition. Most recently we have shared the benefits of theBBC’s considerable expertise in distribution and compression
technologies to help NHK ascertain exactly what will bepossible in terms of transmitting SHV pictures long distance.
Although live transmission of SHV was tested in 2008 thecontent used for this experiment was small, simple andrelatively easy to distribute. We needed to find out if it
was possible to send SHV footage across long distances bysubjecting the system to true broadcast conditions. Using
subjects that might normally be seen by audiences on
conventional TV, in September we broadcast a set by The
Charlatans, as well as an exhibition Taekwondo bout by the
Scottish national team, from London to Tokyo across theinternet and relayed using a series of international research
networks. We are interested in its potential as a means toprovide high quality pictures on public displays for the 2012
London Olympics and to form part of the BBC’s archive
footage of the Games.
For more information about BBC R&D visit
www.bbc.co.uk/rd.

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Increasing value, continued/...

1

1 The new generation of the sci-fi drama Torchwood is a co-production between
STARZ, BBC Cymru Wales and BBC Worldwide. BBC Worldwide Productions
has produced the latest series, Torchwood: Miracle Day, shot in Los Angeles andCardiff, featuring locations throughout the world. The investment from STARZ
and BBC Worldwide has provided greater production values for fans, the BBC
and international sales clients.
2 The Open Offer Process has been a useful addition to the BBC trading framework
and will continue on an ongoing basis. The largest individual deal it generated thisyear was with FremantleMedia Enterprises on a new children’s title Strange Hill
High (shown).
3 Strictly Come Dancing is still performing strongly across the world as theinternational TV format Dancing with the Stars. In 2011 it was broadcast in three
new territories: Vietnam, Armenia and Indonesia.

Piero sports graphics system
The Piero sports graphics system (Piero), which debutedon Match of the Day in September 2004, transformed
sports broadcasting. It lays graphics over TV pictures, affording
presenters and pundits another way to view and analyse andexplain crucial game incidents or referee decisions.
Piero was initially created by BBC R&D, and has since beendeveloped by Red Bee Media. Content has been sold to
33 companies in 25 countries, featuring global sports events
such as RBS Six Nations Rugby and the FIFA World Cup inSouth Africa, where over 85% of all analysis effects usedin the global feed came from the Piero system.
The ‘Queen’s Award for Enterprise: Innovation 2011’ wasjointly awarded to both BBC R&D and Red Bee Media for
their collaborative work in developing Piero in April 2011.
For more information about Piero visit www.bbc.co.uk/rd/
projects/virtual/piero/index.shtml or www.redbeemedia.com/
piero.
Many of our collaborations extend beyond the type of formal
partnerships outlined here, and we share our resources andexpertise more widely with a wide range of organisations.
For example, we distribute some of our online video news
content in an agreement with The Daily Telegraph, The
Guardian, The Independent, Daily Mail and over 30 othernewspaper websites. For more about our partnershipstrategy and who we are currently collaborating with see
www.bbc.co.uk/aboutthebbc/future/partnerships.shtml.

Supplying the BBC
We aim to choose all our suppliers carefully, to ensure thatthey have a specific expertise and can deliver value for money.
We have worked with many of our suppliers for many years,
and some are essential to broadcast continuity – such as
Arqiva, Siemens and SES Astra who provide and maintain our
distribution networks. Equally, each year other companies andindividuals work with us for the first time, including on-screen
and on-air talent, independent production companies, andthrough outsourced support services providers.
All our supply arrangements are managed through specialised
procurement teams, to ensure we comply with the relevant
regulations, and use industry-standard terms of trade.
Information on all our procurement needs – including new
tenders – can be found on www.bbc.co.uk/supplying.
BBC commercial companies
Across all that we do, our vision is to be the most creative
organisation in the world and enrich people’s lives with
content that informs, educates and entertains. Through ourcommercial operations – from licensing agreements with UK
and non-UK companies to making digital technologies work
better for studio-based programme makers and to being a
direct provider of independent, impartial and trusted
news – we work to build and enhance the UK’s global andnational reputation as a creator and provider of the best
content available.
Exploiting intellectual property rights fairly
The BBC Commercial Agency creates value for licence fee
payers by generating optimal commercial returns on BBC
programmes and intellectual property.
Historically, all investment was conducted on a First Option
agreement giving BBC Worldwide 30 days negotiating exclusivity
to secure commercial rights at a market-rate price acceptable
to the BBC. In return, BBC Worldwide pays a Minimum
Guarantee. Deals are struck in 70-80% of cases, with remaining
rights made available for sale to the wider market.

21

2-46 Annual Report and Accounts 2010/11

Overview

Delivering our strategy

Managing the business3

GovernanceManaging our financesWorldwide
Headline sales £m
09/10
10/11

1,074
1,158

Headline profit £m
09/10 145
10/11 160
Overseas sales £m
09/10
10/11

Following the BBC Trust’s Commercial Review, we introduced
an Open Offer Process to test pricing and increasetransparency. We auctioned a representative selection ofrights directly to the open market (including BBC Worldwide
on equal terms). In 2010/11, the first year of operation, 24 titles
were offered this way.
This generated almost £5million from six different distributors,
including BBC Worldwide, who were successful on just under
70% of completed bids. Comparable prices achieved throughOpen Offer bids are broadly in line with those achieved in thenormal trading arrangements. Both results support our viewthat arms-length negotiation between the BBC Commercial
Agency and BBC Worldwide provides genuine commercial,market-rate pricing.
In total, by licensing rights to a range of commercial
partners this year the BBC Commercial Agency raised
a record £111.4million, including £77.4million of up-front
programme investment.
BBC Worldwide
The majority of the BBC’s commercial income comes from
BBC Worldwide and its network of sales and production
offices around the world. BBC Worldwide invests in rights
to create media content, which it then exploits internationallyacross a wide range of products and services. A leading
exporter in its sectors, BBC Worldwide provides a global
showcase for British talent and content that helps the BBC toachieve its fifth public purpose – Bringing the UK to the world
and the world to the UK.
BBC Worldwide’s headline sales of £1,157.7million (2010:£1,074.2million) and headline profits of £160.2million (2010:£145.2million) in 2010/11 both exceeded the previous best
performance (up 7.8% and 10.3% respectively) and wereachieved despite ongoing economic difficulties in some market
segments. The company’s continuing resilience during thedown turn is due to several factors: the diversity of its productportfolio and the strength of its brands, the geographic spreadof its markets, and prior investment in new business areas thatis now starting to bear fruit.

587
643

Returns made to the BBC in the year increased by £14.4million
to £181.9million (2010: £167.5million). This figure includes direct
investments into programming budgets (£78.5million) and cash
dividends (£76.4million). Headline operating margin increasedslightly to 13.8% (2010: 13.5%), driven primarily by thecontinuing success of established high-margin businesses (salesof TV programmes and formats, and DVD publishing) and themove towards profitability of some new businesses.
A particular focus for BBC Worldwide in recent years has
been developing new businesses to ensure growth in thedigital age. There has been good progress in this respect,with BBC.com (the international version of www.bbc.co.uk)
growing its advertising base, especially in the US, and moving
rapidly since its launch in 2007 towards breakeven. A versionof the site editorially tailored for US visitors was launched inJuly 2010 and one for business users in Asia in March 2011.
The company has also launched mobile games and other Appsin response to the rising popularity of smartphone and tablet
devices. For example, there have been 80,000 downloads of
the BBC Listener App – which brings the best of BBC radio
content to audiences in North America – since its launch in
May 2010.
The company is also aiming to generate more of its sales
from outside the UK, and overseas revenues increased by
9.6% year-on-year. The current proportion of revenues
generated outside the UK is 55.5%.
Given the ongoing strong performance in the UK (revenues
have grown by 5.6%) reaching its target of two thirds revenues
from overseas by 2012 may take slightly longer than forecast.
BBC Worldwide’s portfolio of 31 international BBC-branded
TV channels, first launched in 2007, has helped bring a wider
range of UK programmes to audiences in over 100 countries.
BBC America, its cable channel in the US, has had its bestyear ever with average primetime ratings for the 25-54 age
group up 36.8% year-on-year. There were new launches inIndia (BBC Entertainment), and New Zealand and Italy (BBCKnowledge), among others.
Annual Report and Accounts 2010/11 2-47

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1

BBC Worldwide is on track to meet its 2012 target of 10%
of revenues generated from digital businesses (2010/11: 8.1%).
Major brands such as Top Gear, Doctor Who and BBC Earth(an umbrella brand used to market the BBC’s natural history
catalogue) continue to grow quickly. They generated sales of£308.1million, up 12.6% on last year. BBC Worldwide is always
working to find new ways for people to enjoy their favourite
shows: new developments include an acclaimed Doctor Who
Live arena show, electronic games linked to Top Gear andthree natural history films being developed for cinema release,including one based on Walking with Dinosaurs in 3D.
BBC Worldwide’s international production business also
had a good year. The US version of Strictly Come Dancing,made for the ABC network, is as popular as ever – season
12, which aired in April and May 2011, was the most-watched
series in the franchise’s history. Other highlights included a
US version of Top Gear for HISTORY™ channel, and Indianand French versions of The Week the Women Went. The
Los Angeles based production team has developed a strong
slate of formats as well as making a new series of the sci-fi
drama series Torchwood for BBC Cymru Wales and US
channel STARZ.
As the company continues to implement its strategy, itspriorities will be: growing digital and international revenues,
expanding its TV channels and production businesses, anddeveloping more direct-to-consumer businesses through its
major brands and a programme of customer engagement.
It will also be working hard to increase its business specificallyin the US, the world’s largest media market.

2-48 Annual Report and Accounts 2010/11

BBC Studios and Post Production
Our commercial facilities arm BBC Studios and Post
Production (BBC S&PP) worked with over 250 media
companies and other clients across the 12 month period,
making hundreds of shows for a variety of broadcasters,
including Zeppotron’s 10’O’Clock Live for Channel 4, Thumbs
Up Productions’ Britain’s Next Top Model for Living TV andCPL Production’s A League of Their Own for Sky 1.
Despite tough market conditions the company performed
well, beating budget and achieving an operating profit before
restructuring of £6.1million. This is the highest operating profit
margin achieved since incorporation and only three out of thelast 13 years have been higher in absolute terms (2002/03,
2004/05 and 2006/07 – when turnover was two and half times
higher). Restructuring costs resulted in a £1.6million loss before
interest and taxation (2010: £9.7million loss).
Highlights from the year include:• supporting over 22 hours of complex live coverage ofMay’s General Election from Studio One at Television
Centre, with six BBC News production teams and four sets
on multiple levels, plus hosting and delivering Channel 4’s and
RTE’s election coverage and two other productions on thesame night• launching the UK’s first 3D capable (and 108050P HD) TV
studio at Television Centre, and making a stereoscopic 3D
Strictly Come Dancing trail for BBC Children in Need
• winning a multi-million pound contract for the Channel 4
blockbuster entertainment show Deal or No Deal,
produced by Endemol UK• taking EastEnders tapeless and HD

Overview

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Managing the business2

GovernanceManaging our finances

3

1 Upgrading the set – and even working that into the storylines – saw the Queen
Vic burn as BBC S&PP takes EastEnders HD, part of a major technology refreshand introducing new HD and tapeless workflows.
2 Working across the industry, BBC S&PP helps deliver some of the best loved
programmes from other broadcasters, including Channel 4’s Deal or No Deal.
3 Emmy, Peabody and duPont Award-winning BBC World News America is theBBC’s first ever newscast tailored for American viewers.

• expanding digital restoration and archive services, andlaunching the new digital Media Hub facility – consolidating
and building on existing technologies to connect withcustomers, suppliers and distributors around the world• remastering the landmark arts series Civilisation for BBC
HD and restoring ITV’s cult action adventure series The
Persuaders for BluRay release for Network DVD
BBC S&PP also completed its turnaround with the closureof its Sport and Children’s business as a result of this work
moving to Salford. Looking ahead, the company will focus
on growing its three remaining businesses:• new Business and Entertainment: delivering studios and postproduction facilities from London’s Television Centre andBristol’s Paintworks• Drama Services: supporting the BBC’s EastEnders operation
and running the recently renovated Studio D facility for set
standing shows, both at Elstree• Digital Media Services: preserving, re-mastering andmanaging content, editing TV promos and creating
high-end effects
For more about BBC S&PP see:www.bbcstudiosandpostproduction.com.
BBC World News
BBC World News is our subscription and advertising-fundedinternational 24-hour news and information channel.
It is available across the globe and attracts 69 million viewers
each week. As well as being available in nearly 300 million
households and nearly 1.8 million hotel rooms, the channel
can also be found on some cruise ships, airlines, mobile phone
networks and a number of major online platforms includingwww.bbc.com/news.
Operating in a highly competitive marketplace, BBC WorldNews reported a net profit for the year of £9.4million(2010: £3.6million profit). For more information on thechannel visit www.bbcworldnews.com.

Fair Trading by the BBC
The BBC has a detailed operational Fair Trading framework
which applies to all our activities and is outlined in our Fair
Trading Guidelines, found at www.bbc.co.uk/info/policies/
fairtrading.
These arrangements are subject to annual audit byindependent auditors and have been accredited with theISO9001:2008 quality standard.
The BBC Agreement requires all our commercial services tomeet the following criteria:• fit with public purposes• show commercial efficiency• not jeopardise the BBC’s good reputation nor the valueof the BBC brand• comply with the BBC’s Fair Trading Guidelines, and avoid
distorting the market
Having received reports from relevant senior management,
the BBC Executive is satisfied that all commercial services met
the criteria for the period 1 April 2010 to 31 March 2011.
The BBC has a published Fair Trading complaints and appeals
process, which can be found at www.bbc.co.uk/aboutthebbc/
policies/fairtrading_complaints/fair_trading.shtml.
Details of Fair Trading complaints dealt with during the year
and those that went to appeal to the BBC Trust can be foundin our Fair Trading Bulletin at www.bbc.co.uk/aboutthebbc/
policies/fairtrading_complaints and on the BBC Trust’s appeals
page www.bbc.co.uk/bbctrust/about/complaints_appeals/
fair_trading/.

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Managing the businessGovernanceManaging our finances

Looking forward
Our environment targets – by 31 March 2013
Target2012/13

Performance
2010/11

Reduction in energy
consumed per person

-20%

-1%

Reduction in water
consumed per person

-25%

-3%

Reduction in waste
to landfill per person

-25%

-78%

% of waste recycled

75%

55%

Reduction in CO2 emissions
from transport

-20%

-2%

Area

2010/11 was the third year of a major
programme focused on improving ourenvironmental impact. Over the period
we have constantly taken opportunities
to devise environmentally friendly
solutions across a range of work issues.
In February we received the Carbon
Trust Standard, granted to organisations
proven to have taken practical steps
to manage and reduce CO2 emissions.
Further notes on this environmental
data can be found in our corporate
responsibility report, available atwww.bbc.co.uk/outreach/reports/.

£111.4m 2,300
BBC Commercial Agency
raised record £111.4million
licensing rights in 2010/11.

The number of jobs moving Reduction on senior
to MediaCityUK.
manager paybill from
August 2009 until end
March 2011.

Delivering value
Our previous investments and plans will now start to pay-off.
For example, upfront investment in Salford’s MediaCityUK will
deliver a completely tapeless, digital production environment
which will return any short-term investment through reduced
operational costs. This is allowing us to revolutionise the way
we work and do more with less.
Since the start of the Digital Switchover Help Scheme, it has
spent significantly less than the amount originally allocated bygovernment. Over the last three years the take-up of digital
television has increased significantly and take-up of the Help
Scheme has been lower than originally estimated. In addition,a very effective procurement exercise also reduced the
projected cost of the Scheme by £100million, so that by theend of the Scheme in 2012 we expect the under spend to
be around £300million.
Adding value
We will continue to develop our industry partnerships;
extending the benefits of BBC training to the wider freelancepool on which everyone in the industry depends. But,
in-house, a major focus of our efforts for 2011 will be on
supporting the moves to MediaCityUK in Salford and backto the newly re-furbished Broadcasting House in London.
We will also help the BBC implement changes around
Delivering Quality First.

2-50 Annual Report and Accounts 2010/11£14.4mCreating value
For the rest of 2011, much of our focus will be on deliveringmajor milestones for some existing partnership projects,
continuing to develop partnerships in three key areas(training, Digital Public Space and City/Regional partnerships),and planning for how the BBC will meet the newpartnerships commitments agreed as part of the recent
licence fee settlement.
Environmental sustainability
This year we reviewed our own approach towards theenvironment and our sustainability practices and as a result,
we have evolved a new strategy to help us become a moresustainable organisation. In addition to our ongoing efforts tomeet existing targets aimed at reducing our environmental
footprint, we have introduced a renewed focus on our corebusiness: making programmes.
We aim to set the standard in sustainable productions, andhave created a detailed ‘how to’ guide for staff, plus a rangeof other initiatives and events to engage them in the issues.
We have developed a carbon calculator ‘Albert’ which will
enable us to gather data and identify where we need to do
better. We will share our learnings, and Albert itself, with thewider broadcasting industry. For more see www.bbc.co.uk/
outreach/environment.

GOVERNANCE
Middle East Editor Jeremy Bowen, with Rob Magee andproducer Cara Swift (not shown), covered developments in Libya
from a base in Tripoli, working across radio, television and online
to bring the latest news and analysis of the events and people
making headlines there, and within the wider context of change
across the Middle East and North Africa.

Overview

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Managing the businessGovernanceManaging our finances

Executive Board
The Executive Board, chaired by the Director-General, and its
sub-committees, are responsible for the delivery of BBC services
and day-to-day operations across the organisation.

Mark Thompson

Caroline Thomson

Zarin Patel

Helen Boaden

Tim Davie

George Entwistle

Ralph Rivera

Marcus Agius

Director-General since June
2004. Chair of the Executive
Board and the BBC Direction
Group, made up of all theBBC’s divisional directors.

Director of Audio & Music
since September 2008. Board
member since April 2005.

Chief Operating Officer.
Board member since May 2000.
Trustee of the BBC Pension
Scheme. Non-executive
director of Digital UK.

Interim Director, BBC Visionfrom January 2011, confirmedin post and appointed to fullExecutive Board in April 2011.
Prior to this he was Controllerof Knowledge Commissioning
since January 2008.

Chief Financial Officer since
January 2005. Trustee of the
BBC Pension Scheme andnon-executive director of
BBC Worldwide Limited.

Joined the BBC from Major
League Gaming in October2010 as Director, Digital Media.
Board member – as Director,
BBC Future Media – since
March 2011.

The following executive directors ceased to be members of the Executive Board during 2010/11: Mark
Byford (Deputy Director-General), Lucy Adams (Director, BBC People), Sharon Baylay (Director,
Marketing, Communications & Audiences), Jana Bennett OBE (Director, Vision), Erik Huggers (Director,
Future Media & Technology), and Peter Salmon (Director, BBC North). The terms of office for nonexecutive directors David Robbie and Dr Samir Shah OBE also concluded during the year.
2-52 Annual Report and Accounts 2010/11

Director of News since 2004.
Board member since April 2011as Director, BBC News Group.

First appointed non-executive
director and Senior
Independent Director in
December 2006. Chairs
the BBC Executive Board’s
Remuneration Committee.
Group Chairman of Barclays
PLC, Chairman of British
Bankers Association, Chairmanof the Trustees of the Royal
Botanic Gardens, Kew and
Chairman of the Foundation
and Friends of the Royal
Botanic Gardens, Kew.

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For more information on
the members of the BBC’s
Executive Board, please visit
www.bbc.co.uk/aboutthebbc/
running/executive.

Simon Burke

Appointed non-executive
director in January 2011. Chairs
the BBC Executive Board’s
Audit Committee. Chairmanof Mitchells & Butlers, Chairmanof Hobbycraft, and Chairmanof Eagle Eye Solutions.

Val Gooding

First appointed non-executive
director in January 2008.
Chairman of Premier Farnell
plc. Also non-executive directorof J Sainsbury plc, Standard
Chartered Bank plc, the Lawn
Tennis Association and theHome Office. Trustee of
the British Museum andthe Rose Theatre.

The Executive Board delegates some of its
responsibilities to four sub-committees:
Executive Audit Committee
Chair: Simon Burke
The Executive Audit Committee (EAC) was establishedunder Charter article 35(3). The EAC oversees the BBC’s
corporate governance, particularly its financial reporting,internal control and risk management. The committee ismade up of three non-executive directors. The DirectorGeneral, Chief Finance Officer, Head of Business Assurance
and external audit representatives also attend. The
committee meets four times a year.
Executive Remuneration Committee
Chair: Marcus AgiusThe Executive Remuneration Committee (ERC) wasestablished under Charter article 35(3) and in accordancewith the requirements set out in article 33 of the Charter.
The ERC decides the remuneration of executive membersof the Board. It is made up of at least three non-executive
directors, and the Director of BBC People and Director of
Reward also attend. The ERC meets three times a year, andat other times as required.

Dr Mike Lynch OBEFirst appointed non-executive
director in January 2007.
Re-appointed for the second
time this year. Technology
entrepreneur, founderand CEO of Autonomy
Corporation plc. Other
directorships include the
British Library and Blinkx plc.

Robert Webb QC

First appointed non-executive
director in January 2007. Reappointed for the second time
this year. Appointed QC in 1988.
Chairman of BBC Worldwide
and BBC Commercial Holdings
Board. Chairman of Autonomy
Corporation plc and Sciemus Ltd.
Non-executive director of the
London Stock Exchange, Hakluyt &Co Ltd, Argent Group plc and theEmerging Health Threats Forum.
Honorary Fellow of UNICEF.

Fair Trading Committee
Chair: Val Gooding
The Fair Trading Committee helps ensures that the BBC
complies with its fair trading obligations. It is made up of
three non-executive directors and two executive directors.
The Head of Fair Trading and General Counsel also attend.
The committee meets four times a year.
Nominations Committee
Membership of the Nominations Committee depends
on whether non-executive or executive appointments
are being made. The Chair of the committee is taken bya non-executive director for other non-executive director
appointments and the Director-General for executive
appointments. The Chair of the ERC is not permitted tochair this committee. The Nominations Committee wasestablished under article 35(4) of the Charter and operates
in accordance with the requirements set out in articles 30
and 31 of the Charter. This committee oversees the processof proposing, appointing and dismissing members of the
Executive Board, except the Board Chairman (the DirectorGeneral), who is appointed by the BBC Trust.

Annual Report and Accounts 2010/11 2-53

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Risks and opportunities
The Executive Board is responsible for identifying risks and taking
mitigating action. The risks and related opportunities identified below
are those thought to have the most significant impact on our audiences,
strategy and operations. They are not expressed in any ranking ororder of priority.
Content and Audiences: Challenges are mitigated by our editorial strategy and our commitment to Delivering Quality First.
Our mission is to inform, educate and entertain audiences and manage any threats to this objective. We must continue to seize
appropriate opportunities and serve all audiences, against a backdrop of profound changes in the media sector, and a focus on
distinctiveness and value-for-money:
Risk

ActionFuture outlook• Failure to deliver on Charter
requirements and strategy• Effective editorial and businessstrategies• Ongoing monitoring of audience andindustry developments• In-house review of existing production
processes and audience priorities• Continuing need to cover complex events,
worldwide• Ongoing focus on Charter, Mission
and Purposes• Clear strategic choices, whilst maintaining
editorial quality• Failure to uphold the highest values
and standards, and to maintain accuracy
and impartiality in all content, could leadto loss of audience trust, damaging
our brand• Continue to attract and retain people
with the right mix of skills and expertise• Strong editorial controls and effective
compliance processes• Ongoing training of production teams• Serious consideration of complaints• Highest standards of editorial integrity andimpartiality will remain paramount• Any editorial lapses will be dealt with quickly
and proportionately• Strategy to combat perceived regional bias

• Failing to keep pace with
developments in technology could
limit access to content• Technology strategies that reflect
developments and maintain principleof free at the point of use• Collaboration with media industry
on technical innovations (eg launchof Radioplayer)• Accelerating pace of change will present
challenges but also new opportunities in
how we engage with our audiences• Recognition of need to be flexible to keep
pace with audience expectations (eg useof social media)• Reviewing options to fund the digitisationof the archive, in order to open it up to
licence fee payers

Operational and Services: Challenges are mitigated by our business strategy, policies and procedures
Resilience of our operations, and of the operations of our suppliers and partners, is essential to delivering the services thatlicence fee payers expect in both normal times and times of crisis. Organisational transformation will change our overall risk
profile. Innovation is essential to anticipate modern audience needs:
Risk

ActionFuture outlook• Technical failure, infrastructureinterdependencies, industrial actionor the actions of third parties including
suppliers, could lead to interruptionof broadcast services• Detailed broadcast continuity plans
regularly reviewed and tested• Exit strategies and contingency plans
for key suppliers• Major investment to refresh the coretechnology network• Prioritising technology investment in newsites and recognised need for new training• Technological development will continue
to offer opportunities alongside risks• Resilience enhanced by platform options
offered by internet and broadcast
technology development (eg YouView)• Without careful allocation andmanagement of resources, we will not
successfully complete the wide scope of
concurrent projects, compromising ourability to match audience future needs(eg Olympics, Queen’s Diamond Jubilee,
Digital Switchover)• Lessons learnt from external reviewsof major projects• Consistent review of individual andportfolio project risks• Enhancing scrutiny of milestone attainment
and inter-project impacts on the overall
project portfolio• Continuously review the timeline of major
activities impacting business areas, tohighlight points of strain• To build on existing expertise in dealing withchange, change management and projectdelivery capability• Capacity planning for projects to besupported by staff resource monitoring
tool, with targeted actions for scarce andspecialist skills

2-54 Annual Report and Accounts 2010/11

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Financial and Commercial: Challenges are mitigated by our financial strategy and our commercial policy and guidelines
The prolonged UK and global economic situation impacts us and all our stakeholders and could lead to a decline in income,despite reduced uncertainty due to agreement on the licence fee level to 2016:
Risk

ActionFuture outlook• Economic slowdown could lead todecreased licence fee income
and reduced financial flexibility,
in turn increasing pressure on borrowing
arrangements; spending power erodedby inflation• Contingencies built into financial plans• Efficiencies gained by cooperation withpartners and ongoing strategic initiatives• Pension affordability addressed• Possibility of a recession in the UK remains
and low inflation predictions may prove
inaccurate• High levels of uncertainty remain regarding
the global economy, impacting the value of
assets and investments• Extending beyond appropriate
boundaries could impact commercial
interests of other operators against the
public interest• Compliance with existing guidelines on
unfair competition• Vigilance over boundaries and plurality• Upheaval in media sector may continue• Developments in technology will posenew challenges• Transparent public service role

Corporate Responsibility: Challenges are mitigated by the strength of our business processes
Whilst driving our strategy to deliver quality, originality and value to our audiences – requiring creative risks and innovative
approaches – we must maintain appropriate practices:
Risk

ActionFuture outlook• Inadequate controls could endanger
the health and safety of individuals,
the natural environment and our
reputation• Strong safety risk assessment
procedures applied diligently• Environmental impacts undercontinuous review• Attention to changing exposures andindustry best practice on global stage• Take opportunities to devise
environmentally friendly solutions• Failure to comply with legal andregulatory requirements may
result in penalties• Liaison and active engagement withregulatory bodies and stakeholder groups• Specific controls enhanced (eg tocomply with Bribery Act and Data
Protection Act)

• Political focus on media industry regulation
likely to continue and penalties may become
more severe• Continuing to study and plan for impactsof new legislation• Failure to meet digital public policy
responsibilities could limit enjoyment
by all• Digital Switchover highly successful
to date• Focus on new responsibilities fordelivering broadband• Engaging with vulnerable groups• Broadcasting and internet; launchof Radioplayer• Pace of innovation may overtake andmitigate some risks and present newopportunities• Emerging government initiatives may impact
the resources at our disposal• Developments in technology andchanges to legislation are conspiring
to increase potential threats frominformation security breaches• Active consideration of threats, withongoing mitigation measures including
encryption roll-out• Data Protection procedures and training
reviewed and revitalised• Effective practices and procedures willremain key and are under regular review• Continued deployment of the best available
technology to safeguard data

Annual Report and Accounts 2010/11 2-55

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Governance report
BBC corporate governance framework
The BBC’s corporate governance framework is defined in
the Royal Charter (the Charter). You can see the Charter on
the BBC Trust’s website at www.bbc.co.uk/bbctrust/about/
how_we_govern/charter_and_agreement/.
The Charter requires the Executive Board to have regard togenerally accepted principles of good corporate governance.
And while the BBC is not a listed company, it has nonetheless
opted to adopt best practice and follow the provisions of the
Financial Services Authority’s Listing Rules and the Financial
Reporting Council’s 2008 Combined Code on Corporate
Governance (the Combined Code) in order to be consistent
with companies quoted on an EU regulated market.
In May 2010, the Financial Reporting Council issued the UK
Corporate Governance Code (2010) which is effective forfinancial years beginning on or after 29 June 2010. The BBC
will report on its compliance with this new edition of theCode in its Annual Report and Accounts for 2011/12.

The Executive Board has complied with the requirementsof the Charter which has also secured substantial compliancewith the Combined Code. There are, however, a few areasof the Combined Code that are either not appropriate to
the circumstances of the BBC or where compliance with
the Charter overrides compliance with the Combined
Code. Partial non-compliance with a further provision of the
Combined Code has arisen during the year. From 1 January
2011 to 25 May 2011, the Executive Audit Committee
comprised only two non-executive directors, Simon Burkeand Dr Mike Lynch whereas the Combined Code requires
an audit committee to comprise at least three non-executive
directors. The Executive Board believes that these areas do
not compromise the quality of the governance arrangements
in place nor the execution of the Executive Board’s
responsibilities.

Areas of the Combined Code not relevantto the BBC reas where compliance with the Charter overrides
A
the Combined Code

Make up of remuneration (Combined Code principle B.1):
The BBC sets levels for executive remuneration that should be
sufficient to attract, retain and motivate directors of the quality
required to run the organisation successfully, in line with thisprinciple. However, this principle also requires aligning executive
remuneration to the notion of enhancing shareholder value
by making performance-related elements of remuneration asignificant proportion of total remuneration. By virtue of the BBC’s
licence fee funding and its public purposes, the amount of variable(or performance-related) remuneration that may be earned
should be limited. Variable pay in the form of bonuses for BBC
executive directors have been suspended indefinitely.

Division of responsibilities between Chairman andChief Executive (Combined Code principle A.2):
As permitted by the Charter, the Chairman of the
Executive Board is the Director-General, the chief executive
officer of the BBC. This does not comply with the Combined
Code which requires a clear division of responsibilities at thehead of the company between the running of the board and theexecutive responsible for the running of the company’s business.
No one individual should have unfettered powers of decision.
Whilst the Director-General acts as both Chairman and Chief
Executive, the strategic oversight by the BBC Trust ensures thatno single individual has unfettered powers.

Interaction
with shareholders (Combined Code principles
D.1 and D.2): The BBC is not a profit-oriented company withshareholders and so provisions relating to interaction withshareholders clearly do not apply. In some circumstances,
however, it is possible to consider, by analogy, the way in which
the BBC Trust engages with licence fee payers. This is set out in
the Trust’s review and assessment in Part One of the Annual
Report and Accounts.


Boardbalance and independence (Combined Code principleA.3): The Executive Board currently comprises 12 directors, ofwhom seven are executive directors and five are non-executive
directors – providing a balance of executive and non-executive
directors so that no individual or small group of individuals candominate decision taking. This complies with the Charter which
specifies that non-executive directors must not be less than
one-third and not equal to or more than one half of the membersof the Executive Board. However, this does not comply with
the Combined Code which requires that at least half the board,
excluding the chairman, should be independent non-executive
directors. All non-executive directors are considered independent
for the purposes of the Combined Code.

2-56 Annual Report and Accounts 2010/11

Cost of compliance
In order to ensure that we complied with all relevant
legislation, to which the BBC is subject in 2010/11, we
incurred compliance costs estimated at £17.3million(2010: £17.6million), which includes the BBC’s annual£3.3million subscription to Ofcom.

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Executive Board
The Executive Board usually meets monthly (except forAugust); summary minutes of meetings are available onlineat www.bbc.co.uk/info/running/executive/minutes.shtml.
In practice, the Executive Board delegates some of its
responsibility to other managerial groups and, in accordancewith the requirements and provisions of the Charter, thefollowing Committees continued to operate last year:• Audit Committee• Fair Trading Committee• Nominations Committee• Remuneration Committee
Any delegation from the Executive Board is stated in therelevant standing orders for each group and a framework
for reporting and review is established. See www.bbc.co.uk/
aboutthebbc/running/executive/subcom.shtml.

The most recent evaluation of the effectiveness of the
Executive Board, its Committees and its interaction with theTrust took place during 2009. This was conducted by external
consultants and included interviews with Executive Board
members (both executive and non-executive), an assessmentof the governance protocols, and the administrative support
to the Executive Board. The report concluded that although
direct comparisons or benchmarking with corporate boards
was difficult given the unusual governance structure of theBBC, the Board had been assessed as working well according
to the most important criteria.

Report of the Senior Independent Director
In last year’s Annual Report I reflected on how the BBC’s responseto the economic downturn was having an impact across all of theBBC’s areas of activities. This year, the pressures on the Corporation
continued, with the Government’s Spending Review having serious
ramifications for the BBC. The six year licence fee settlement will
see a relatively flat income level, the value of which will be reducing
in real terms, and from 2013 the licence fee will also have to fund
BBC Monitoring, BBC World Service and the majority of Welsh
language broadcaster S4C.
The new financial reality is requiring a radical response fromthe Board.
During the year, we have implemented big changes at Board level,with total membership reduced from 16 to 12. Post closures saw
us lose Mark Byford and Sharon Baylay; Erik Huggers took up arole in the commercial sector; and the terms for non-executive
directors David Robbie and Samir Shah concluded at the end of
December. In addition, a further three executive directors also
stepped down from the Board, but I am delighted to say will remain
with the BBC: Peter Salmon, Lucy Adams and Jana Bennett.
We thank them all for their generous advice and wisdom over theyears and for their commitment to the BBC on behalf of licence fee
payers. We wish them all well for the future, especially Mark Byford
who is leaving after 32 years with the Corporation.
These changes also brought us new members Ralph Rivera, Helen
Boaden and George Entwistle, and non-executive director Simon
Burke who will chair the Executive Audit Committee. The rangeof skills, expertise and experience around the Board table continues
to be strong, and the benefits of a smaller and therefore more
responsive Board are already being seen in action.
The licence fee settlement is increasing the pressure for efficiencies
from all parts of the business. As the BBC has already beendelivering year-on-year efficiencies since 2008, this is difficult. But
we are witnessing examples of BBC staff across the Corporation
finding ways creatively to reduce spend and to drive added benefit
from the licence fee while maintaining quality. As a Board, and in
our Committee work, we will continue to ensure that this remains
the case.

Although I believe that there will be benefits for the BBC and its
audiences in the longer term, the negative side of an efficiency
drive includes the human costs for departing staff. With more staff
choosing to leave as their posts are relocated to Salford, I am – incommon with the other non-executive directors – impressed by
the manner in which the BBC is showing itself managing such a levelof upheaval.
Of course, large numbers are also electing to embrace the move toSalford, and the fresh creative and personal challenges it offers. The
BBC has, throughout all this change, not only achieved record levelsof audience/licence fee payer appreciation but also delivered a raftof distinctive programmes not found anywhere else. Sherlock andHuman Planet – fiction and fact but telling equally dramatic stories– were particular personal highlights from the year.
May saw Lord Patten take the chair at the BBC Trust. I lookforward to working with the new Chairman in the coming
months and years, supporting the BBC as it provides more great,
original content valued by the British public, paid for by them, andrepresenting the best of UK creativity.
Marcus Agius
Senior Independent Director
23 June 2011

Annual Report and Accounts 2010/11 2-57

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Governance report, continued/…

Induction, performance and development
All new directors receive an induction programme and a wide
range of information about the BBC on joining. The content of
the induction programme will vary depending on whether theappointment is to an executive or non-executive position andwhether the new director was an external candidate or not.
The information always includes details of Board procedures
and directors’ responsibilities.
All directors have access to external independent advice
if they wish.
The Director-General also has a separate meeting with the
non-executive directors every year.
In accordance with the Charter, the BBC Trust conducts
an ongoing assessment of BBC services, including some fullservice reviews each year (with public consultation). The Trust
also annually reviews the performance of all BBC services withthe service controllers and output directors. The BBC Trust’s
review and assessment for 2010/11 can be found in Part One.
The performance review processes for the Executive Board’s
Committees continues to evolve and each reviews their own
performance and effectiveness. No significant issues wereidentified for 2010/11.
All the executive directors have their own personal anddivisional objectives, and their performance against themis reviewed by the Director-General each year, and by the
Remuneration Committee.

2-58 Annual Report and Accounts 2010/11

Nominations Committee
The Nominations Committee oversees the process ofproposing, appointing and – if necessary – dismissing membersof the Board. The only exception is the Director-General,
who is appointed by the BBC Trust. Membership of theNominations Committee is dependent on whether it isdealing with executive or non-executive appointments.
Board appointments
The Nominations Committee oversaw a number of
appointments during the year. Two executive appointments
were made: Ralph Rivera, Director, Future Media (effective
1 March 2011) and Helen Boaden, Director, BBC NewsGroup (effective after the year end, from 1 April 2011).
The terms of office for non-executive directors David Robbie
and Samir Shah OBE were ended on 31 December 2010.
Two other non-executive directors, Dr Mike Lynch OBE andRobert Webb QC, were due to step down on 31 December
2010: the Nominations Committee recommended to theBoard and to the BBC Trust that both be re-appointed for afurther term. One new non-executive director appointment
was recommended to the Board and the Trust: Simon Burke
was appointed for a two year period with effect from
1 January 2011.
Departing directors
Changes implemented this year to the Executive Board
saw the departure of a number of executive and nonexecutive directors.
Following the closure of the role of Director of Marketing,Communications and Audiences, Sharon Baylay stepped
down from the Executive Board in November. She iscurrently on maternity leave.
In February, after over two years on the Executive Boardand nearly four years with the BBC, Director, Future
Media & Technology Erik Huggers left the BBC for thecommercial sector.
Mark Byford stepped down as the BBC’s Deputy DirectorGeneral and Head of BBC Journalism, after 32 years of service
and 13 years on the BBC Executive Board, and subsequently
left the BBC in June.
The terms of office for non-executive directors David Robbie
and Dr Samir Shah concluded at the end of December.
We are grateful for the contribution each has made,individually and collectively, to the BBC and on behalf of licencefee payers, and wish them well for the future.
In addition, a further three executive directors also left theBoard, but remain with the BBC: Peter Salmon (Director,
BBC North) is running our new base in MediaCityUK,
Salford; Lucy Adams took up a new role with additional areasof responsibility as Director, Business Operations; and Jana
Bennett moved from Director, BBC Vision to our commercial
subsidiary BBC Worldwide.

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Executive Board and Committee attendance

Executive Board

Fair Trading
Committee

Audit Committee

Ordinary Extra-ordinary
Number of meetings
for the period

1112

Director, BBC
PeopleLucy Adams

1010

Director, MC&A
Sharon Baylay

7/7

6/10

Director, Vision
Jana Bennett

8/9

5/10

Deputy DirectorGeneral
Mark Byford

1010

Director, Audio& Music
Tim Davie

10

10

Director, Vision
George Entwistle

3/3

2/2

Director, Future
Media & Technology
Erik Huggers

9/10

9/11

Chief Financial
Officer
Zarin Patel

11

12

Director, Future
Media
Ralph Rivera

1/1

2/2

Director, BBC North
Peter Salmon

10

11

Director-General
Mark Thompson

11

11

Chief Operating
Officer
Caroline Thomson

1111MemberAttendee
4Nominations Committee

Remuneration Committee

MemberMember3

Attendee3

Attendee
9

2

9

2/2

4

3

3

3

9

3

Non-executive directors:
Marcus Agius

10

10

Simon Burke

3/3

2/2

Val Gooding

9

10

Dr Mike Lynch

8

9

4

David Robbie

8/8

6/10

3/3

Dr Samir Shah

8/8

8/10

2/3

Robert Webb

10

8

3

3

8

1/1
2

7
3

3
8

Annual Report and Accounts 2010/11 2-59

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Governance report, continued/…

Report of the Chairman of the Executive
Remuneration Committee
While recognising the importance of attracting and retaining
excellent people to deliver the BBC’s purposes for the benefitof licence fee payers, the focus of the ERC this year has been on
implementing the recommendations of 2009’s BBC Executive
Remuneration Review:• Executive pay frozen for four years and bonuses removed
indefinitely• senior management pay frozen and bonuses removed for
two years• reduce the number of senior managers by 20% over a twoyear period (and paybill by 25%)
• ensure Executive remuneration is significantly below theequivalent in the market by providing salaries which arediscounted by between 50-80% against comparative rolesin the commercial sector
At the BBC Trust’s request we brought forward the target date forachieving these measures from August 2013 to December 2011.
We are making steady progress towards our target measures.
As at 31 March 2011, the number of senior managers has
reduced by 86 posts (13.4%) and the related paybill is down by£14.4million (18.3%). Plans are in place fully to meet the target
by the new deadline.
Our most talented people continue to be in demand within
and outside of the sector, and this has been demonstrated by
the recent exits of some of our most talented senior executives
who have left the BBC to secure similar positions on significantly
increased packages.
Despite these pressures, we have continued to focus on finding
opportunities to reduce our senior management paybill throughrecruiting senior managers who are paid less than the previous
incumbent. Senior managers joining the BBC and staff promoted
into senior roles during the year are, on average, paid 8.7% less thanthe previous post holder. Of the 15 most senior roles replaced,
we have achieved an average salary reduction of 19%.
In particular the Committee has been mindful of the need toensure that Executive Board salaries make a substantial andproportionate contribution to the reductions. To this end we have:• reduced the size of the Board• reduced the salaries of new Board members• with individual agreement, removed pension supplements witheffect from April 2011
As a result, we will have reduced the executive director paybill
for 2011/12 by £2.1million (43%). In addition, Board members(including non-executive directors) agreed to forgo one month’ssalary, reducing executive earnings last year by a further £289,000.
The ERC undertook its regular assurance exercise to benchmark
BBC Executive pay against the market, and this revealed that
Executive Board pay is discounted on average by 58% against thecommercial sector.
The reality of meeting stretching targets within a short timeframe
coupled with the necessity of competing head-on with highly
commercial competitors to attract and retain the very best talent
will be an ongoing challenge for the BBC. But we recognise thatpay growth across the UK is below the rate of inflation and manylicence fee payers are experiencing a reduction in their personal
income. It is essential therefore that the BBC continues todemonstrate pay restraint at all levels.

Executive Board remuneration report
This report sets out the BBC’s remuneration policy anddetails the remuneration received by the members of the
Executive Board. It has been prepared on the basis that therequirements of the Large and Medium-sized Companies andGroups (Accounts and Reports) Regulations 2008 and thoseof the Financial Services Authority apply to the BBC whereverthese disclosure provisions are relevant. The sections on
pensions and remuneration received by the Executive Board
members are audited by KPMG LLP.
Remuneration Committees: constitution and operation
The Remuneration and Appointments Committee (RAC)of the BBC Trust is responsible for setting the remuneration
strategy for the Executive Board and is responsible for all
aspects of the remuneration of the Director-General andthe non-executive directors.
The Executive Remuneration Committee (ERC) is
responsible for implementing the agreed strategy for all
executive members of the Executive Board, with the
exception of the Director-General. Its members are nonexecutive directors: Marcus Agius (Chairman), Robert Webb
QC and Val Gooding CBE.

Meetings of the ERC are also attended, on invitation, by the
Director-General and the Director, Business Operations, whoadvise on matters relating to other members of the Executive
Board and the overall performance of the BBC. Whenmatters concerning the remuneration of the Director-Generaland Director, Business Operations are considered, they are
not present. The ERC has access to internal expertise throughthe BBC’s Reward Director who also attends the meetings.
Complying with the Combined Code, the ERC takes
specialist advice from external professional advisers on somematters, and particularly those relating to market practice.
During the year, independent advice was received fromPricewaterhouseCoopers.
Remuneration of non-executive directors
Non-executive directors’ fees are determined by the Trust.
Remuneration of executive directors
The strategy set by the Trust is intended to provide
remuneration that attracts, motivates and retains the besttalent to lead the BBC, while recognising the expectationsof licence fee payers. The BBC is funded by the licence fee
and must deliver value to the licence fee payer.

2-60 Annual Report and Accounts 2010/11

Marcus Agius
Chairman of the Executive Remuneration
Committee
23 June 2011

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Remuneration received
The remuneration of the Executive Board members and the Trustees during the year is shown below:
Other
remuneration8£000

Compensation
Total
for loss remuneration
Sub totalof office2010/112010/11
£000
£000

Total
remuneration9
2009/10£000

Fee/base
pay7£000

Taxablebenefits£000

Tim Davie

335

15

72

422

–

422

452

Zarin Patel

322

13

68

403

–

403

434

25

1

–

26

–

26

–

613

3

163

779

–

779

838

Executive directors serving as at 31 March 2011

Appointed to BBC Board
1 March 2011

Ralph Rivera
Mark Thompson
Caroline Thomson
Total executive directors

307

15

63

385

–

385

419

1,602

47

366

2,015

–

2,015

2,143

47

–

–

47

–

47

51

Non-executive directors serving as at 31 March 20116
Marcus Agius

10

–

–

10

–

10

–

37

–

–

37

–

37

37

33

–

–

33

–

33

36

Robert Webb

123

–

–

123

–

123

83

Total non-executive directors

250

–

–

250

–

250

207

367

–

367

328

Simon Burke

Joined 1 January 2011

Val Gooding
Mike Lynch
1

Executive directors leaving during 2010/11
Lucy Adams

Stepped down
31 March 2011

293

15

59

Sharon Baylay2

Stepped down
30 November 2010

207

10

37

254

392

646

345

Jana Bennett3

Left 6 February 2011

353

13

74

440

–

440

517

Mark Byford4

Stepped down
31 March 2011

435

12

–

447

949

1,396

488

Erik Huggers5

Left 25 February 2011

345

13

56

414

–

414

407

Peter Salmon

Stepped down
31 March 2011

344

17

75

436

–

436

193

Executive directors leaving during 2009/10
John Smith

Stepped down
30 September 2009

Total former executive directors

–

–

–

–

–

–

348

1,977

80

301

2,358

1,341

3,699

2,626

31

–

–

31

–

31

41

Non-executive directors leaving during 2010/116
David Robbie

Left 31 December 2010

Samir Shah

Left 31 December 2010

Total former non-executive directors
Total Executive Board
Total Trustees
Total
Note 1
Note 2
Note 3Note 4Note 5Note 6Note 7Note 8Note 9

27

–

–

27

–

27

36

58

–

–

58

–

58

77

3,887

127

667

4,681

1,341

6,022

5,053

588

–

588

662

5,269

1,341

6,610

5,715

In October 2009, Robert Webb was appointed as non-executive Chairman of both BBC Commercial Holdings Limited and BBC Worldwide Limited. In recognition of these
additional responsibilities he received fees of £90,000 during the 2010/11 financial year.
Sharon Baylay stepped down from the Board on 30 November 2010 and is currently on Maternity Leave. It was announced in November 2010 that she would leave the BBC in June
2011. On leaving the BBC she will receive the BBC’s standard redundancy terms and her compensation for loss of office will be £392,000.
Jana Bennett left the role on 6 February 2011 and took up a position in BBC Worldwide.
It was announced in November 2010 that Mark Byford would step down from the Executive Board on 31 March 2011 and leave the BBC in June 2011. On leaving the BBC he will
receive the BBC’s standard redundancy terms and his compensation for loss of office will be £949,000.
Erik Huggers left the BBC on 25 February 2011 and his base pay includes a payment for unpaid leave of £46,000.
Non-executive directors are appointed initially for a period of two years, except the Senior Independent Director, who is appointed for an initial three-year period.
The BBC introduced a salary sacrifice arrangement on 1 June 2008 for members who joined the Pension Scheme before 1 November 2006, and all directors in the table above
participated in the arrangement. The terms and conditions of employment were changed for those employees opting for the salary sacrifice arrangement and as a result employee
pension contributions made via the salary sacrifice arrangement have been treated as employer contributions, 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. The total salary sacrifice by executive directors was£94,000 (2010: £77,000).
Other remuneration relates to pension arrangements; providing cash supplements for directors subject to the maximum annual limit. These cash supplements have been withdrawn
with effect from 1 April 2011.
Lucy Adams, Sharon Baylay and Peter Salmon joined the Board during 2009. John Smith stepped down from the Board in 2009. Total Remuneration 2009/10 therefore reflects partyear tenure.

Annual Report and Accounts 2010/11 2-61

Overview

Delivering our strategy

Managing the businessGovernanceManaging our finances

Governance report, continued/…

Annual executive directors’ salary and benefits
Executive
Executive
director pay at director pay at
1
31 March 2010
1 May 20112
Lucy Adams

394–

Sharon Baylay

376–

Jana Bennett

517–

Helen Boaden–

354Mark Byford

488–

Tim Davie

452

380

–

285

Erik Huggers

407–

Zarin Patel

434

365

Ralph Rivera–

308Peter Salmon

467–

Caroline Thomson

419

350

George Entwistle

Mark Thompson
Total

838

671

4,792

2,713

We have reduced the size of the
Executive Board, reduced the payof new Board members and – withindividual agreement – removed pension
supplements with effect from 1 April
2011. As a result, ongoing significant
financial savings will be realised in 2011/12
as shown in this table.
In addition executive directors haveagreed to forego an additional one
month’s base salary in the financial year
ending 31 March 2012. (This excludes
new members Ralph Rivera, Helen
Boaden and George Entwistle, whose
appointments are effective during theyear, respectively on 1 March 2011,
1 April 2011 and 1 May 2011).

The executive directors’ annual salary and benefits as at 31 March 2010 represents annual salary, taxable benefits and other
remuneration of executive directors serving at that date.
2
The Executive Board paybill as at 1 May 2011 represents the annual salary, projected taxable benefits and other remunerationof executive directors serving at that date. From 1 April 2011 the BBC, with individual agreement, has removed pension
supplements for individual directors.
1

Each year the ERC reviews independently provided market
pay data to support it in its decision-making on remuneration,and ensure that levels of pay are consistent with the agreed
strategy. Data obtained for 2010 showed that total directcompensation (base salary plus variable pay) ranged between
31% and 60% of the level paid by our competitors in thecommercial sector. This differential reflects the substantial
additional amounts of variable pay (including share based
awards) that are provided in the commercial sector.
Each component of the total remuneration packageof executive directors is broken down as follows:
Base payThree factors determine the level of base pay set for an
executive director:• would the rate be recognised as fair by the market(competitor companies) for the job?
• does the personal performance of the executive justify thelevel of base pay?
• is the level affordable to the BBC and not deemed excessive?
Base pay is aligned at around the market median for total
remuneration, discounted by a factor of 50-80% to ensurethat the BBC does not lead the market on executive pay inthe media sector.

2-62 Annual Report and Accounts 2010/11

Variable pay
Performance bonuses to a maximum of 10% of base pay
have historically been paid to executive directors for achieving
efficiency targets and other identified objectives. However,in 2009 the annual bonus scheme for executive directors was
suspended indefinitely. No discretionary bonuses were paidin 2010/11.
Benefits
In addition to pensions, the other main contractual benefits
are a car and fuel allowance, private health insurance, and life
assurance. The Director-General and Deputy Director-General(post closed on 31 March 2011) were entitled last year toa chauffeur-driven car under earlier arrangements. The
Director-General has no entitlement to a personal car
allowance or fuel allowance.
PensionMembers of the Executive Board are eligible to participate in
the BBC Pension Scheme, which provides for pension benefits
on a defined benefit basis.
For an employee joining the Pension Scheme before
1 November 2006, the accrual rate is 1/60th of the final
pensionable salary (base pay, including London weighting) for
each year of service. For this group of employees, the normal
pensionable age is 60.
For an employee who joined the pension scheme on/after
the 1 November 2006 the accrual rate is 1.67% of theirpensionable pay for each year of service, adjusted in line with
inflation. For this group the normal pensionable age is 65.
The majority of the executive directors have a normal
pensionable age of 60.

Overview

Delivering our strategy

Managing the businessGovernanceManaging our finances

Defined benefit schemes
Details of defined benefit entitlements are shown below:
Transfervalue ofaccruedpension at
31 March
2011£000

Transfervalue ofaccruedpension at
31 March
2010£000

Director’s
contributions(excluding
contributions
paid via thesalary sacrificearrangement)£000

Increase/(decrease)in transfer
value lessdirector’s
contributions£000

Age as at
31 March
2010

Increasein accrued
pensionover year
£000

Total
accruedpension at
31 March
2011£000

Lucy Adams1

46

2

4

29

11

0

18

Sharon Baylay2

42

2

4

26

10

0

16

3

Jana Bennett

55

2

18

313

247

0

66

Mark Byford4

52

8

223

3,553

3,682

0

(129)

Executive directors

Tim Davie

43

2

12

127

92

0

35

Erik Huggers5

38

2

6

33

19

0

14

Zarin Patel

50

2

26

349

284

0

65

Peter Salmon6

54

2

9

154

107

0

47

Mark Thompson

53

2

14

221

167

0

54

Caroline Thomson

56

2

75

1,436

1,460

0

(24)

Lucy Adams stepped down as a director on 31 March 2011.
Sharon Baylay stepped down as a director on 30 November 2010 but was still an active member of the scheme at 31 March 2011, therefore her accrued pension as at 31 March 2011 has been valued.
3
Jana Bennett left as a director on 6 February 2011 but was still an active member of the scheme at 31 March 2011, therefore her accrued pension as at 31 March 2011 has been valued.
4Mark Byford stepped down as a director on 31 March 2011.
5
Erik Huggers both left as a director and left the Scheme on 25 February 2011. His accrued pension on leaving the Scheme has been valued as at 31 March 2011.
6
Peter Salmon stepped down as a director on 31 March 2011.
1
2

For those who joined the Pension Scheme after 31 May
1989 earnings are subject to a maximum annual limit(£123,600 per annum for 2010/11). No maximum annual
limit is applied to those who joined on or before 31 May 1989.
The Pension Scheme provides for early retirement on medical
grounds and life assurance of four times pensionable pay up toa prescribed limit.
Executive directors who joined the Pension Scheme
on/after 1 June 1989, and whose pensionable pay exceeds
the maximum annual limit, received a cash supplement in2010/11, paid on pensionable salary above the maximum
annual limit (see table showing defined benefit schemes).
This cash supplement has been withdrawn with effect from
1 April 2011.
Members of the Executive Board who joined the BBC after
the 1 December 2010 are eligible to join the BBC LifePlan
scheme, a defined contribution arrangement. The BBC
pays matching contributions between 4-5%, with an additional
1% contribution between 6-7%, above which an additional 2%
is provided up to a maximum employer contribution of 10%.
Employment contracts
Employment contracts of executive directors have amaximum notice period of 12 months, but are subject
to earlier termination for cause. There is no contractual
entitlement to any additional remuneration in the eventof early termination other than in the case of termination
for reason of redundancy.

Outside interests
With the prior agreement of the Director-General andthe Nominations Committee, executive members of the
Executive Board may hold one remunerated external
directorship with up to 15 days per year permitted to fulfil
these duties. Remuneration which arises from directorships
may be retained by the individual. Executive directors may also
hold non-remunerated posts outside the BBC.
During the year no executive director held any other
remunerated external directorship. To obtain the Executive
Board’s register of interests visit www.bbc.co.uk/aboutthebbc/
running/executive/eb.
It is recognised that non-executive directors are likely to haveother directorships and the restrictions applying to executive
directors do not apply to them.
The BBC’s commercial businesses
The BBC has three commercial subsidiaries:• BBC Worldwide• BBC Studios and Post Production• BBC World NewsThe remuneration policy for the subsidiaries includes thecontractual provision of annual bonus and long-term incentive
plans (LTIP) open to all permanent staff, including directors.
The full costs of base pay, annual bonus and the LTIP are
self-funded by the commercial revenues of each subsidiarycompany and are not subsidised by the licence fee.

Annual Report and Accounts 2010/11 2-63

Overview

Delivering our strategy

Managing the businessGovernanceManaging our finances

Governance report, continued/…

Report of the Chairman of the Executive
Audit Committee

The BBC is currently in the midst of one of the most interesting
and challenging times in its history, and I am very pleased to takethe Chair of the Executive Audit Committee at this time. I haveinherited an audit and risk function which has been well managedbut I hope to bring a fresh perspective to the issues brought
before the Committee, whilst maintaining the existing strengthof governance within the BBC which is essential to making thebest use of the licence fee.
Over the course of the year, the Committee has continued toconsider papers from management covering a diverse range ofissues including the security of the BBC’s information, the levels offraud and theft in the organisation and the post implementation
reviews of major projects.
Additionally we regularly consider the findings of the Internal Audit
Department, and track management’s progress in addressing these.
We maintain a close contact with the external auditors, consideringwith them their audit approach in advance and discussing any
issues they wish to bring to our attention. We also ensure risks are
considered in the full context of the BBC’s values and objectives,
aided by regular reports on the pan-BBC risk profile and also on
specific significant issues, a key focus being to ensure that mitigations
are proportionate.

Accountability and internal control
The Executive Board is responsible for the operational
management of the BBC (excluding the Trust Unit), which
includes safeguarding its assets and achieving value for moneyby ensuring there is a process in place for managing significant
risks to the BBC as well as maintaining an effective system
of internal control.
Risk identification, management and ownershipManaging risk within the BBC is integral to the delivery of our
MANAGING
RISK AT THE BBC
business objectives and public purposes. We believe that thisWe recognise that key to the delivery of the BBC’s objectives
is the successful completion of numerous inter-related projects
and change programmes, and we intend to continue to focus onachievement of delivery milestones and holding management toaccount. During the year the Committee has reviewed healthchecks on all critical projects.
An important value of our work is in providing an independentview, challenging assumptions and perspectives and bringing
innovative approaches to the BBC, by which we help the
management team foresee potential pitfalls and inefficiencies.
We will continue to keep audience priorities and value formoney at front of mind in our assessment of the control
environment’s adequacy.
Simon Burke
Chairman of the Audit Committee
23 June 2011

is most effectively achieved through the engagement of theentire Executive Board, which is responsible for identifying
risks and opportunities that might impact on the BBC’saudiences, strategy and operations.
Our ongoing process for identifying, evaluating, managing,monitoring and reporting significant risks to the BBC, whichaccords with the Turnbull guidance (Internal Control: Revised
Guidance for Directors on the Combined Code), has beenin place for the year ended 31 March 2011 and up to the dateof approval of this BBC Annual Report and Accounts.

The Executive Board oversees an embedded process that gives visibility to prioritised risks.
ReportDivisions represented
and risks set in context

BBC Divisions

Risk Management Team
Risk database
Common criteria used toevaluate risks consistently

Evaluate

2-64 Annual Report and Accounts 2010/11

Executive
Audit Committee
Papers are presented byindividuals directly responsible

Specialist Functions

Identify

ManageExecutive Board

View risks in light ofstrategy and objectives

Overview

Delivering our strategy

Managing the business

Key elements of the process include:• the director of each business group is responsible for
identifying and managing the risks facing their business,and maintaining a register of key business risks, together
with mitigations• specialist functions oversee the management of certain
major areas of risk, such as production safety, fraud andinformation security, ensuring appropriate frameworks
are in place and effective ownership at a senior level• a dedicated central risk management team works withstakeholders to ensure the continuous development of
the process and appropriate ownership of all risks• the Board receives regular reports and updates on the
BBC’s risk exposure and mitigation strategies
Internal control
The Executive Board is responsible for establishing, maintaining
and reviewing the effectiveness of the BBC’s system of internal
control and for ensuring necessary actions are taken to remedy
any significant failings or weaknesses identified. Our systemof control is designed to manage (rather than eliminate) therisk of failure to achieve business objectives and to provide
reasonable assurance that assets are safeguarded, transactions
are appropriately authorised and material errors or irregularities
are either prevented or detected on a timely basis.
Key elements of our system of internal control include:• comprehensive monthly, quarterly and annual reporting
processes, both within business groups and up to theBoard (including financial monitoring and reporting basedon an annual budget, monthly reporting of actual results,
regular re-forecasting and analysis of variances andkey drivers, as well as performance reviews tracking
achievements against strategy)• regular treasury and cash reporting, analysing funding
requirements and liquidity• formal authorisation limits and processes covering all
financial transactions• processes to ensure compliance with all applicable laws
and regulations, including Ofcom requirements• formal policies and procedures concerning all material
business processes, to ensure risks are managed and thattimely, relevant and reliable information is available acrossthe business• processes to ensure that our staff are professional andcompetent, such as recruitment policies, performanceappraisals and training programmes
The Executive Board confirms that it has considered theeffectiveness of the system of internal controls outlined here
and in operation throughout the last financial year, and up to
the date of approval of the Annual Report and Accounts.

GovernanceManaging our financesInternal audit
Internal Audit, Risk Management and Investigation Services
combine to form our Business Assurance function, which isled by the Director of Risk and Assurance. Internal Audit’s
authority and independence is assured by the Director of
Risk and Assurance’s independent and direct access to the
Director-General and to the Executive Audit Committee(EAC). Internal Audit regularly tests our control systems andcore business processes to ensure they are fit for purpose
and consistently applied. The work plan, which is based on acontinuing assessment of key risks, is agreed annually with the
EAC and covers financial, operational and compliance controls,
including the exercise of the BBC’s right of audit over external
suppliers such as independent production companies andservice providers. Any significant control failings or weaknesses
identified are reported to appropriate levels of management;
the status of corrective actions is reported back to the EAC.
Executive Audit Committee
The current members of the Executive Audit Committee(EAC) are non-executive directors Simon Burke (Chairman,
appointed 1 January 2011), Dr Mike Lynch and Val Gooding(appointed 25 May 2011). Until 31 December 2010, members
included non-executive directors David Robbie (Chairman)
and Dr Samir Shah, whose terms of office concluded atthat date. The Board is satisfied that both Simon Burke, andDavid Robbie before him, have significant, recent and relevant
financial experience.
The EAC augments the range of skills and experienceof its members with advice as necessary from internaland external professionals, on relevant matters including
developments in financial reporting and company law.
Meetings are also attended by the Director-General, theChief Financial Officer, the Director of Risk and Assurance,and representatives from Internal Audit, Risk Management
and external auditors KPMG LLP.
During the year, the EAC reviewed its Terms of Reference
and approved their continued application, deeming
them appropriate to ensure the Committee’s continued
effectiveness.
The EAC met four times during the financial year. It meets atleast annually with the external auditors without any memberof management present. The Chairman of the EAC meetswith the Director of Risk and Assurance, alone or with theexternal auditors, but without management, and also meets
privately with the external audit lead partner.
Minutes of EAC meetings are available to the Executive Boardand to the BBC Trust. Recommendations of the Committee
on any area within its remit where action or improvement
is needed are reported back to the Board. The Committee
Chairman formally reports to the Board at least once a year.

Annual Report and Accounts 2010/11 2-65

Overview

Delivering our strategy

Managing the businessGovernanceManaging our finances

Governance report, continued/…

During 2010/11 the EAC has:• reviewed the effectiveness of the system of internal
controls, including controls over financial reporting• sought assurance from management that control
issues highlighted by internal and external auditors
are being addressed• considered reports from management on processes
for managing significant risks• reviewed the BBC’s group financial statements, including
accounting policies, compliance with legal and regulatory
requirements, and the findings of the external auditors• overseen the BBC’s relationship with the external auditors,
including their engagement, the scope of and approachto their work, their fees, their performance and their
independence, including the approval and compliancewith the policy on non-audit work
• approved the work plan of Internal Audit• reviewed the fraud detection processes and whistle-blowing
arrangements• considered post investment reviews for major investments• monitored the implementation actions required as a resultof reviews carried out by the National Audit Office
Independence of external auditors
We comply with the Combined Code guidance on
maintaining an appropriate relationship with external auditors.
We re-appointed KPMG LLP as external auditors during
2008 for a period of three years from 2008/09, after a formal
tender process. In accordance with the contract terms, theEAC has since approved a two year extension to this period.
The EAC is satisfied that KPMG has adequate safeguards
in place to avoid the possibility of its audit objectivity andindependence being compromised, including appropriate
rotation of its team, as well as an appropriate quality
assurance programme.
The EAC has set a clear policy which defines the threshold
above which proposed non-audit work to be carried out by
KPMG must be approved in advance by the Committee, andalso defines when it must be submitted to competitive tender.
This is to safeguard and support the external auditors’ ability
to remain impartial and objective. In all cases, KPMG is notconsidered for work which might compromise its ability togive independent opinion on the BBC’s financial statements.
Recruitment from KPMG into any senior management
position in the BBC requires the prior approval of the EAC.
BBC jam
BBC jam launched in January 2006, providing free-to-viewinteractive online learning resources in support of UK curricula
requirements for 5-16 year olds. The original budget for theservice was £150million. After rigorous consultation involving
the BBC Governors, the Department for Culture, Mediaand Sport and the European Commission, the service had
extensive conditions and operating boundaries set on its
activities. Notwithstanding, the service attracted criticism
from commercial educational providers and, following further
discussions with the UK Government and the European
2-66 Annual Report and Accounts 2010/11

Commission, the BBC Trust decided to suspend BBC jam in
March 2007. In January 2008, the BBC Trust decided that the
public interest was best served by BBC jam closing when its
Service Licence expired on 30 September 2008. It is estimatedthat, of the £150million available budget, £96million was spenton the service before it was closed.
Subsequent use of BBC jam assets in indigenous language
content for Scotland, Wales and Northern Ireland wasapproved by the BBC Trust in May 2008 and again in February
2011. This content was judged to offer high public value withlimited scope for creating adverse market impact. In addition,a bespoke learning resource that assisted deaf children withliteracy was returned to creators, Shoreditch Consortium.
The value of these re-used assets totalled £13million, witha recovery cost of £2million. No further opportunities todispose of assets and limit the costs of decommissioning
BBC jam have subsequently been identified. The Trust has
stipulated that no further work on re-using BBC jam assets
should now take place. The final net cost of the BBC jam
service was therefore £85million after taking into accountthe value of the recovered assets and the cost of recoveringand re-using them.
Whistle-blowing
We have a ‘whistle-blowing’ (protected disclosure) policy,
to facilitate the confidential communication via a number ofroutes of any incident in which there is a suspicion that theBBC’s codes have been breached. We recognise that there
could be sensitivities regarding actual or suspected incidents
and so we provide a ‘whistle-blowing’ hotline administeredby an independent external company to ensure anonymity.
Each incident or suspicion reported is independently
investigated in a confidential manner, a response iscommunicated and action is taken as appropriate. The
EAC is responsible for ensuring that there are appropriatearrangements in place for the proportionate investigationof matters reported and for appropriate follow-up action.

The fit-outs for both MediaCityUK at Salford (shown here) and London’sBroadcasting House are delivering on time and under budget.

MANAGING OURFINANCES
Grammy winning singer-songwriter Adele gave a stunningexclusive performance for Live Lounge Special on BBC Radio 1
in January, just part of our distinctive ongoing commitment
to live music last year.

Overview

Delivering our strategy

Managing the businessGovernanceManaging our finances

Chief Financial Officer’s review
The last year has seen the
BBC face a number of financial
challenges. But we end the year
in a financially resilient position –able to absorb these challenges,
and also unlock significant futuresavings as we transform our ways
of working as we continue toprovide audiences with excellent
content across all our platforms.
Financial resilience
It is the management of these challenges and our preparations
for the future which have driven the result for the year.
The full year group surplus of £483million reflects some
exceptional credits which are not part of our regular
operations: we benefit from a £250million actuarial gain
which is a direct result of significant pension reform to reduce
our ongoing pension costs, as well as a profit of £96million
from the disposal of Animal Planet as we concentrate ourcommercial activities on BBC branded channels and platforms.
Excluding these two significant items, the underlying groupsurplus for the year was £137million, or 2.7% of our income.
A small surplus like this is appropriate as it reflects a broad
matching of income and expenditure, whilst providing someheadroom for unforeseen events or costs.
Although at the year-end we are showing an overall cash
balance of £513million, this needs to be seen in the context
of our short-term commitments. £266million of this cash isring-fenced for repayment to DCMS as it is the surplus on the
Digital Switchover Help Scheme and Digital UK. Further sumsof £74million and £120million respectively, have been set aside
to fund the completion of the move to Salford and ourpension deficit recovery payments for the next two years.
Finally, £69million of this cash is destined for investment in thedevelopment of our commercial operations. After allowancefor these amounts, the BBC has an underlying net overdraftof £16million at the year-end which is a reasonable level.
The first step of providing value to licence fee payers is toensure the maximisation of our income. In difficult economic
times we have protected the level of licence fee income andat the same time grown our non-licence fee incomes to show
an overall increase in our income of over £200million. The
commercial operations should not be overlooked withsignificant contributions being made by BBC Worldwide,
which goes from strength-to-strength as a business, but BBC
World News and BBC Studios & Post Production (BBC S&PP)
also contributed.

2-68 Annual Report and Accounts 2010/11

We have also agreed with the government the levels of thelicence fee through to the end of the Charter period andalthough this agreement comes with significant additional
financial obligations, it gives us the financial security to plan
our operations and prioritise our expenditure to best serve
the needs of our audiences.
Delivering efficiency
We are in the position to do this is because of the operationaland financial efficiencies we have delivered in recent years,
augmented by the prioritisation of our expenditure in linewith the editorial priorities set out in Putting Quality First.
We are now projecting that the efficiencies to be generated
from our Continuous Improvement Programme will exceed£2billion, with all the money being recycled into either
the enhancement of our content or investment in our
infrastructure, especially our operational sites. In addition
we continue to identify further opportunities to reduce thecosts of senior managers and of our talent and remain on
track to hit all our targets in these areas.
Financial challenges
In the course of this year we have not only confirmed thesize of our pension deficit but also agreed a plan with thepension trustees to recover the deficit over a mutually agreed
timescale and which does not unduly compromise the funding
available for our services.
The management of high inflation (the RPI increase was
5.3% over the year) has put significant pressure on the BBC’s
finances, and will continue to do so with the licence fee frozen
for the next five years. However, recent experience hastaught us how to manage such pressures and puts the BBC
in a strong position to enable their management withoutcompromising our spending and investment ambitions.

Zarin Patel
Chief Financial Officer
23 June 2011

Overview

Delivering our strategy

Managing the businessGovernanceManaging our finances

Summary financial performance
Licence fee payers rightly expect their investment in the BBC to offer
distinctive, high-quality programmes, and at the same time deliver
real and sustainable value for them and their families. The onus is on
the BBC to efficiently manage how we spend licence fee income, as
well as striving to continuously cut duplication and waste across all ouroperations, and increase revenues from our commercial activities.

Licence fee spend• 80p in every £1 of licence fee is spent on programmes
or the infrastructure to support the BBC’s activities.

Breakdown of licence fee spend 2010/11• 6p in every £1 is spent getting our services to audienceson analogue, DTT, satellite and the internet.

Content spend
Property and technology
Support and marketing functions
Service distribution
Licence fee collection
Digital Switchover Help Scheme
Restructuring
Total• The cost of collecting the licence fee is lower than lastyear at 3.4p per £1 collected (down from 3.5p last year).

Efficiency savings• £1billion of sustainable savings achieved since the startof the Continuous Improvement Programme without
deterioration in quality of our content.
• Of the remaining £1.1billion, £870million will be deliveredby initiatives already in place (assured savings).
• We remain on track to achieve our 3% annual
savings target.
• Total savings are anticipated to be £1.9billion after
implementation costs.
Commercial performance• BBC Worldwide record gross sales of £1.158billion –8% up on last year.
• BBC World News sales benefit from recovery inadvertising markets and show a 16% increase on last year.
• BBC S&PP operations show profits before
restructuring costs.
• BBC Worldwide returned £182million to Public Services
Broadcasting in the year.

£m

%

2,549
308
303
202
124
80
30
3,596

71
9
8
6
3
2
1
100

Ongoing gross efficiency savings £mProjected

2,000
1,500

501

1,000

434

500
0

328
237

237

08/09

09/10

585

2.1bn

1.5bn

999

565
10/11

New savings

11/12

12/13

Total

Ongoing annual savings

Year-on-year change in income% change – equates to – Change £m
16.3%£10.3m7.8%-1.1%£-0.7mBBC World NewsBBC Studios and Post Production£83.5mBBC Worldwide

Annual Report and Accounts 2010/11 2-69

Overview

Delivering our strategy

Managing the businessGovernanceManaging our finances

Financial overview
In common with many other organisations, the BBC has continued
to face some significant financial challenges as the UK economy has
continued to suffer from the effects of its deepest recession since the1930s. Collecting the licence fee has been a challenge in this difficult
environment, and as I set out last year, the value of the pension
scheme has led to the need for us to address a significant deficit.

The actions that we have taken during the last two years have
met the short-term pressures of needing to fund the pensions
deficit and lower than planned income from the licence fee
whilst sustaining and improving the breadth, depth and reachof the services that our viewers, listeners and readers value.
This has, I believe, created a strong platform from which we
can begin to meet the future challenge of maintaining thequality of our output within our future funding pressures.
We set out our strategic view for the BBC in the publicationin March 2010 of Putting Quality First. This strategy ambitiously
reshapes the BBC and its output to serve audiences in a
future that will be much more dynamic than traditional linear
programming. It would have been an easy response to theprevailing financial conditions to have scaled back our ambition
for more creative and innovative programming, or to haveretrenched our range of TV and radio channels or to havescaled back our transformational investment programme in
an infrastructure that will enable the delivery of great quality
output for the next 25 years.
We have, though, maintained the direction of travel on which
we had embarked whilst beginning the implementation of ourplans to tackle the key issue of the recovery of the pension
scheme deficit. Our financial statements and the balance sheet
in particular, demonstrate the underlying health of the BBC
and the success, so far, of our investment strategy.

2-70 Annual Report and Accounts 2010/11

The multimedia newsroom at Television Centre brings different journalistic sources
together so that all BBC news outlets and services on all platforms can meet thechallenges of an on-demand digital world.

Overview

Delivering our strategy

Managing the businessGovernanceManaging our finances

Efficiency savings by category
Category% of total savings

PeopleRe-focusing to get the right mix of people to continue to deliver distinctive output that audiences value. We are committed
to a real-term reduction in talent spend.
Production and process improvement
Using innovative technology to improve how we do things and minimise costs across our operations, from schedulingto shooting.
Procurement and contracts
Releasing funds for programmes and content with savings from bulk buying, outsourcing and re-negotiating contracts.
Property and technology
Transforming the way we work, for example using tapeless, digital production to make multiplatform content more efficiently
than ever before.
Focusing on content quality
Putting Quality First builds on our existing efficiency programme, with an editorial focus on original output of the highest quality
and maximum audience impact.

13%
29%
23%
7%
28%

The following examples give a sense of how and where we
made some of our ongoing efficiency savings this year:
Saving today, planning for tomorrow
During 2010/11 BBC network radio made some immediate
practical changes to how it is structured, removing duplicationand improving impact across the division – for the benefit of ouraudiences. For instance, it now has a single Live Events unit, aone-stop-shop where specialist expertise and resources are easilyfound and shared.
The same colleagues also carried out a number of studies to
identify opportunities for new and future efficiency savings –including an external review benchmarking BBC music radio
operations against the commercial sector, and a study comparing
programme prices across BBC radio networks. Both provided
real insight into current BBC practices and will help to deliver
sustainable improvements.

Deriving ongoing benefits
While long-term contracts deliver many benefits, dramatic changes
in the economic environment can necessitate some renegotiations.
The economic downturn over the last few years coupled withthe licence fee freeze has given us leverage to renegotiate some
supplier contracts and deliver improved value to licence fee payers.
For example, with operations from catering to construction,
car parking to cleaning, BBC Workplace manages some of ourbiggest contracts. During 2010/11, it negotiated a change to thecontracted inflation provisions (from RPI-based to CPI-based)and embedded guaranteed reductions in charges into two service
provider contracts. The result was additional savings of £1.3million
over the year, worth around £7.0million until the end of thecurrent licence fee period.

News headlines
Last year we realised our first full year of savings from theintroduction of a new playout system for dedicated politics channel
BBC Parliament from its Millbank HQ in Westminster. The new
system enabled the automation of a number of key tasks, aswell as facilitating integration with the operations supporting the
Democracy Live website. Combined, these different ways ofworking delivered significant savings on what had previously been
a separate third party contract for BBC Parliament channel playout.

Creative solutions
Different television programme genres have distinct ways ofworking, and there is not always a single solution to a problem
that can be applied across the board.
Because of large studio and overhead costs, growing volume
and long-term or bulk deals allow better cost management forentertainment series, and effectively reduce the average costof programmes.
Volume commissioning has also been used to lower average
programme costs in drama (due to low marginal cost of additional
episodes) and has delivered savings on shows such as The
Armstrong and Miller Show (pictured).
Shooting drama episodes together in blocks has reduced
preparation time, and therefore costs, which have been further
reduced by re-working crew structures and levels.
Commissioning of returning factual strands has generated some of
the largest efficiencies. For example, The Antiques Roadshow is now
a 60 minute programme (was 50 minutes in 2007/08), allowing
additional content that would previously have been cut, driving
audience value at little extra input and having no negative impact
on programme quality.
The Armstrong and Miller Show.
Annual Report and Accounts 2010/11 2-71

Overview

Delivering our strategy

Managing the businessGovernanceManaging our finances

Financial overview, continued/…

Summary consolidated income statement
For the year ended 31 March 2011

2011
£m

2010
£m

Licence fee income
Other income

3,513
1,480

3,447
1,343

Total income
Operating costs (excluding restructuring costs
and exceptional pension income)

4,993

4,790

(4,789)(4,541)

Exceptional pension income
Restructuring costs

250
(63)

334
(62)

Total operating costs(4,602)(4,269)

Share of results of associates and joint ventures
Gain on sale of operations and disposal of fixed assets
Tax, interest and financing costs

27
96
(31)

37
41
(122)

Group surplus for year

483

477

Income and expenditure statement
The management of our recent financial challenges and the
preparations put in place for the future are heavily reflectedin the group result of a £483million surplus. An actuarial gainof £250million was made as a direct result of significant
pension reform to reduce our ongoing pension costs; and a
profit of £96million was made from the disposal of Animal
Planet as we moved to concentrate our commercial activities
on BBC branded channels and platforms. After excludingthese two items, the underlying group surplus for the year was£137million (2.7% of our income), in line with our broad aim tomatch our income and costs over each licence fee period.
The licence fee is our single biggest source of income andthrough efficient and effective collection we have increased
this by £66million this year. This income is augmented by thecommercial exploitation of licence fee funded content throughour commercial subsidiaries – primarily BBC Worldwide, but
this year has also seen greater contributions from BBC WorldNews and from BBC S&PP.
Despite the difficult wider trading environment, total
commercial revenues have increased 13% year-on-year, with
a 68% increase in profit before interest and tax – boosted
by the disposal of Animal Planet for £96million as the BBC
continues to focus on BBC branded channels and platforms.
BBC Worldwide has delivered record gross sales of£1,158million, up 8%. The continued diversity of its portfolioof businesses has allowed it to beat the trend in many markets
and generate strong margins with operating profit before
specific items up by 10%.
As a result of its activities in 2010/11, BBC Worldwide
contributed £182million to the BBC from, in the main,
dividends and investment in programming – an increase of 9%
on last year. Looking forward, BBC Worldwide will continue
to invest in great programming, international expansion, thegrowth of its channels businesses and new digital opportunities
to fuel the UK creative economy.

2-72 Annual Report and Accounts 2010/11

Effective and efficient collection of thelicence fee has maintained income despite
household growth continuing to be lower
than historic levels
Other income – primarily from thecommercial group – is up by 10% with strong
growth in BBC Worldwide sales
Operating costs reflect higher sales in
BBC Worldwide. Costs also reflect a big yearin sport and coverage of the General Election
and world events
The exceptional pension income reflects
the change in scheme benefits announced
during 2010/11, partly offset by the cost of early
retirement and redundancy
Gains this year relate to the disposal by
BBC Worldwide of Animal Planet

During the year, BBC Worldwide wrote down the carrying
value of its Lonely Planet investment by £34million. This is asa result of the continued strengthening of the Australian dollar– at a 27-year high against sterling – as well as the challenging
market conditions facing the business.
BBC World News maintained the BBC’s international
reputation for high quality journalism and delivered an
operating profit for the first time this year with sales increasing
and reduced costs – advertising sales in particular recoveredfrom the prior year recession and sales improved, althoughin part from the continued weakness of sterling.
Despite tough market conditions BBC S&PP performed
well, achieving an operating profit before restructuring of£6million. This is the highest operating profit margin achievedsince incorporation. BBC S&PP also completed the closureof its Sport and Children’s business as this activity transfers
to Salford.
The Trust, on behalf of licence fee payer, scrutinises how wespend this revenue whilst also ensuring that our high profilerole in the sector does not damage the industry. One of
the tools that the Trust uses to monitor our performanceis Service Licences – we agree a Baseline Budget for eachone of our 28 major services and report against that baseline
within a 10% tolerance either higher or lower.
The full outturn of our content spend by service shows thatthrough our efficiency programme, we are delivering output
for broadly the same cost as last year, and this includes funding
the cost of covering the General Election and the FIFA World
Cup in South Africa. We have been able to do this bymanaging our cost base tightly, for example with staff costs,
where we have held pay increases to below the rate of
inflation again.
We have seen a very marginal increase in headcount in thelicence fee funded services (from 17,238 to 17,242 full-time
equivalent people) and a reduction in the staff paybill of 4%
this year, reflecting the continued focus on reducing ourpermanent staffing levels.

Overview

Delivering our strategy

Managing the businessGovernanceManaging our finances

Total operating expenditure on UK public services
2011 Service
BBC One
BBC Two
BBC Three
BBC Four
CBBC*
CBeebies*
BBC HDBBC ALBA
BBC News channel
BBC Parliament
BBC Red Button

Content£m

Infrastructure/
support£m

Distribution
£m

2011
Total
£m

2010
Total
£m

1,130.9
421.0
84.7
50.8
78.3
28.5
2.1
5.0
47.1
2.0
14.9

50.8
21.0
3.9
2.9
3.2
3.3
8.2
1.5
6.2
4.7
19.5

221.2
86.3
21.5
13.4
17.8
7.9
1.5
1.1
7.8
1.3
5.1

1,402.9
528.3
110.1
67.1
99.3
39.7
11.8
7.6
61.1
8.0
39.5

1,373.6
575.6
118.6
74.0
57.1
28.7
10.9
6.1
64.0
10.3
39.3

1,865.3

125.2

384.9

4.8
1.2
4.9
4.9
9.9
1.1
6.2
1.1
1.2
1.4
10.1
3.3
1.4
1.2
1.6
1.8
56.1

6.6
2.4
7.6
8.5
17.1
1.8
11.3
1.3
2.3
2.6
22.6
5.3
0.9
2.8
2.7
3.6
99.4

2,358.2
43.8
10.1
53.2
54.7
112.7
7.8
72.7
4.9
10.0
12.9
141.5
33.1
6.3
16.7
15.9
18.9

Radio

36.7
7.4
46.7
37.3
92.8
5.3
55.4
2.5
7.3
8.6
114.8
23.8
3.8
13.0
11.8
16.2
483.4

2,375.4
48.1
11.0
59.2
50.7
119.8
8.2
72.9
4.9
10.8
12.6
147.5
32.4
6.1
17.0
16.1
21.6

BBC Online

125.8

21.1

2,474.5

202.4

Television
BBC Radio 1
BBC 1Xtra
BBC Radio 2
BBC Radio 3
BBC Radio 4
BBC Radio 4 Extra
BBC Radio 5 LiveBBC Radio 5 Live Sports Extra
BBC 6MusicBBC Asian Network
BBC Local RadioBBC Radio Scotland
BBC Radio nan Gàidheal
BBC Radio Wales
BBC Radio Cymru
BBC Radio Ulster/BBC Radio Foyle

Spend regulated by service licence
*

638.9

615.2

47.3

194.2

199.3

531.6

3,208.5

3,172.7

The methodology for setting the CBBC and CBeebies content spend changed in 2010/11, following the BBC Trust’s 2009 review of children’s services. All children’s spend
is now allocated to either CBBC or CBeebies, including that portion which was previously allocated to BBC One and BBC Two.

It is the ‘more for less’ strategy that is creating downward
pressure on service licence baselines. One service licence
finished the year below its 10% tolerance – BBC 1Xtra, where
savings were delivered from leveraging greater synergies fromits sister station, BBC Radio 1 and several others were close to
the 10% mark as efficiencies and savings are delivered. We arecareful, though, to ensure that these savings are not at the costof quality and we carefully monitor the audience response to
our output to ensure that we still deliver value.

The increasing costs of BBC Radio 1 and BBC Radio 2 reflect
their success in attracting larger audiences which increases
their allocation of music copyright costs with corresponding
reductions across other services.
Management is committed to reducing the budget of BBC
Online by 25% and has now agreed plans with the Trust to
deliver this saving over the next three years.

Annual Report and Accounts 2010/11 2-73

Overview

Delivering our strategy

Managing the businessGovernanceManaging our finances

Financial overview, continued/…

The team from In Your Corner travels round and about Northern Ireland picking up
on the stories that affect the ordinary person on the street.

Our orchestras (like the BBC National Orchestra of Wales, shown) and singers are
based across the UK, and work among local communities and groups as well as taketheir rightful place on the global stage. For more see www.bbc.co.uk/orchestras/.

Total BBC expenditure
Content£m

Distribution£m

Infrastructure/
support£m

Other items
£m

2011
Total
£m

2010
Total
£m

2,474.5

202.4

531.6

–

3,208.5

3,172.7

–
20.2
26.9
27.6
–

–
–
–
–
–

–
3.9
5.3
5.3
–

123.6
–
–
–
64.6

123.6
24.1
32.2
32.9
64.6

126.5
24.1
36.6
37.1
41.5

74.7

-

14.5

188.2

277.4

265.8

–

–

–

29.6

29.6

36.9

Total UK public services expenditure
Digital switchover (Digital UK Limited)
Digital switchover (DSHS Limited)

2,549.2
–
–

202.4
–
–

546.1
–
–

217.8
25.0
55.3

3,515.5
25.0
55.3

3,475.4
29.2
55.6

Total UK Public Service BroadcastingGroup expenditure

2,549.2

202.4

546.1*

298.1

3,595.8

3,560.2

2011
Spend regulated by service licence
Other UK PSB spend
Licence fee collection costs
Orchestras and performing groups
S4C
Development spend
Costs incurred to generate third party income
Total other UK PSB spend
Restructuring costs* Infrastructure and support costs include spend on learning support and community events, marketing, press and publicity, the BBC Trust Unit (£14.0million (2010:£13.9million)) and other overheads excluding restructuring.

2-74 Annual Report and Accounts 2010/11

Overview

Delivering our strategy

Managing the businessGovernanceManaging our finances

Summary balance sheet
for the year ended 31 March 2011

2011
£m

2010
£m

Non current assets
Current assets
Current liabilities
Non current liabilities (excluding pensions)

1,947
2,082
(1,344)(1,357)

1,533
2,242
(1,498)(1,084)

Net assets (excluding pension)

1,328

1,193

Net pension liability(927)(1,647)

Net assets/(liabilities)

401

(454)

Represented by
BBC reserves
Non-controlling interests

394
7

(470)
16

401

(454)

The balance sheet – plant, property and equipment
A quick glance at the change in our balance sheet from lastyear to this shows the increase in value of our non current
assets, particularly our plant, property and equipment, ie theassets on which we rely to make and distribute programmes.
The key reason behind the increase is the delivery to the
BBC of our major development of the renewed Broadcasting
House in London, delivered ahead of time and on budget.
This building, along with Pacific Quay in Glasgow, MediaCityUK
in Salford and the new Roath Lock Drama Village in Cardiff
Bay (the latter two will both come into service next year) arecornerstones of our strategy to transform the way we work,and to move the BBC out of London. The depreciation of
Broadcasting House will only commence once the building
becomes functional in 2011/12.
It will be sad to leave Television Centre (as announced for2015) but it is a building that needs significant investment andwhich is becoming increasingly less suited to the way that
programmes are made now. Our new buildings represent
substantial investments to enhance creative collaborations
and cross-platform working. This investment is also serving toredistribute our infrastructure across the UK to ensure that by
2016, 50% of network TV spend will be outside of London.
Although our permanent asset base has increased by£414million this year, we will reap future cost savings from
more efficient use of space, people and time as well as
broadening our dialogue with audiences across the UK, finding
and fostering new talent and opening up opportunities for
production beyond the M25. These benefits are why it wasright that we continued with these projects despite the added
risks and pressures from the economic environment.

Completed refurbishment of Broadcasting
House has increased non current assets andreduced current asset as the pre-paid value
is capitalised. Recognition of the finance leaseliability increases liabilities
The valuation of the pensions scheme’s net
liabilities reflect changes to scheme benefits,
the deficit reduction payments and changes inmarket valuation of assets

Pension liability
Last year’s valuation of our pension scheme showed a deficitof £1,647million, a situation that clearly needed addressing.
Due to a combination of stronger performance from thescheme’s investments, pension reform and an initial deficit
recovery payment made to the scheme in 2010/11, thescheme has made significant progress in recovering the
deficit. At 31 March 2011, the deficit has reduced by£720million (44%) to £927million.
There are three main constituent parts to this improvement:
Pension curtailment
During the year we announced plans to reform thepension benefits of active scheme members and to reducethe cost of benefits building up in the future. The gain is
calculated at £250million based on the expected actionsof scheme participants.
Actuarial gain on defined benefit pension schemes
A net gain of £304million arose in the year as a consequenceof a rise in the equity markets, and changes in the key
demographic assumptions.
Additional payments
We have agreed a Deficit Reduction Plan with the Scheme
Trustees, which after making an initial payment of £110million
in 2010/11, allows for annual payments of between £60millionand £100million over the ten years to 2021/22 at levels which
are regarded as affordable and do not unduly jeopardise thedelivery of programme content and other investments.

Annual Report and Accounts 2010/11 2-75

Overview

Delivering our strategy

Managing the businessGovernanceManaging our finances

Financial overview, continued/…

Summary consolidated cashflow statement
for the year ended 31 March 2011

2011
£m

2010
£m

Net cash inflow from operating activities
Net cash outflow
from investing activities
Summary
consolidated
cashflow statement
for
the
year
ended
31
March
2011 activities
Net cash outflow fromfinancing

475
(149)
(110)

441
(147)
(144)

Net increase in cash and cash equivalents

2011
216
£m

2010
150
£m

Cash and cash equivalents at the beginning of the year
Effect Movementsof foreign exchange
rate changes
in cash£m on cash and cash equivalents
Cash classified
as held for sale and restricted funds
800

264
(1)
34

124
(2)
(8)

475 at the149
Cash and cash equivalents
end of the year

513

264

Cash and cash equivalents at the beginning of the year
Net cash inflow from operating activities
Effect of foreign exchange rate changes on cash and cash equivalents
Net cash outflow from investing activities
Cash classified as held for sale and restricted funds
Net cash outflow from financing activities
Cash and cash equivalents at the end of the year
Net increase in cash and cash equivalents

600

110
266

Movements
in cash £m
400
800
200
600

264

475

247
110

0
Cash at
400 thestart

Cash fromoperatingof the year* activities

200

149

Cash frominvestingactivities

264

266

Cash from
DigitalRemainingfinancing Switchover
cash atactivities underspend
the endat endof the yearof year247* Includes Digital Switchover underspend at start of the year of £132million.

0

Cash atCash fromthe start
operatingof the year* activities

Cash frominvestingactivities

Cash from
DigitalRemainingfinancing Switchover
cash atactivities underspend
the endat endof the yearof year* Includes Digital Switchover underspend at start of the year of £132million.

2-76 Annual Report and Accounts 2010/11

264
475
(1)
(149)
34
(110)
513
216

124
441
(2)
(147)
(8)
(144)
264
150

The group’s operating surplus excluding
depreciation, but including changes inworking capital
Addition and disposal of assets less interest
earnedInterest
paid
and financeleasesentered intoThe
group’soperatingsurplusexcludingdepreciation, but including changes inworking capital
2011 figure represents:
Addition
disposalof assets less interest£266m –anddigitalunderspend
earned£69m – commercial companies£178m – Home and World Services
Interest paid and finance leases entered into
2011 figure represents:£266m – digital underspend£69m – commercial companies£178m – Home and World Services

Cash
We always seek to match the cash collected from the licencefee payer with the programmes and services we deliver. This
year, however, we have a significant amount of cash retained
for three very good reasons:
Digital Switchover£266million of the year-end cash is money that we collected
to fund the transition to digital transmission. This reflects
significantly lower rates of take up of the offer of digital
switchover support than were initially assumed and also
contract procurement efficiencies. £32million of the cash
saved so far has already been paid back to DCMS and we
expect to repay substantially more over the course of thenext year.
Investment in our infrastructure
As I set out above, we are investing in our productive
infrastructure across the UK. These are large scale projects
that spread across a number of years and the cash demands
vary from year to year. Hence we have cash set aside now
to finance the completion of these projects. We also face thechallenge of moving 1,600 posts from London to Salford which
commenced in May 2011 and will complete in December at abudgeted cost of £74million.
Recovery of the pension scheme deficit
As set out above, we have agreed a deficit reduction plan withthe scheme trustees and have made financial provision for thepayments of £120million due to 2013.
As these pressures crystallise, and are compounded by thefinancial challenges of the flat licence fee settlement from thisyear onward plus the wider inflation environment, the BBC’s
cash balance will reduce rapidly.

Overview

Delivering our strategy

Managing the business

1

2

Optimising our income – collecting the licence feewith sensitivity
I am very aware of the BBC’s unique position of trust withthe licence fee payer, and this places on us some important
responsibilities: to use the money well and to spend it on thethings that matter, to use the money efficiently and finally, tomake sure that everyone who should pay does pay. There isan inherent unfairness in evasion which penalises those who
do pay.
Within these principles, we have continued to improve ourcollection services – offering different ways to pay; enhancing
the web based self-serve options; more targeted marketing
and reminder contacts and earlier follow up action on licencesthat are not renewed.
During this year, the fall in the rate of growth in licence fee
income seen last year has stopped as household growth
has started to show signs of recovery. Also, despite therecessionary pressures in the economy, we have held the rateof evasion stable. Income is higher than last year, attributable
to the increase in the cost of a TV Licence. This is the last time
the fee will be increased for the next five years under thesettlement agreed with the government.

GovernanceManaging our finances

It has been a significant year for science programming on BBC television – which
saw some creative thinking in meeting existing efficiency targets as well as delivering
sustainable changes in work practices.
1 Bang Goes the Theory presenter Liz Bonnin was on OB duties in Hawaii for
Stargazing Live, speaking to an assortment of experts over the three programmes.
The production team from her ‘day job’ took this as an opportunity to work up
two relevant stories for Bang…, completing film inserts that otherwise they could
not have afforded. The Bang… and Stargazing teams shared all location staff, andboth teams benefited from improved usage of valuable presenter time, as well assavings in location and travel costs.
2 Horizon improved the efficiency of its staffing mix so that the two Series Producers
covered most of the development producer role, used more desktop FCP editing
to reduce post-production costs, and – in common with increasing numbers ofother factual teams like The One Show – increased the amount of self shooting,
reducing the number of staff needed to make a shoot. The use of different
combinations of initiatives enabled significant saving to be made without impacting
on programme quality.
3 The One Show.

Even within a difficult collection environment, the cost ofcollection is lower than last year and the cost per £1 collected
is lower at 3.4p. There is evidence that people preferelectronic options as a method of payment as self-servetransactions on our website have increased to 54% andaround 68% of all licences are paid for now by direct debit.
We have continued to focus on enforcement activity and havebeen quicker to follow up where licences are not renewed
or direct debit payments missed. But alongside this, we havebeen able to offer flexible ways for people to pay through the
cash schemes and whilst this activity is expensive compared
to renewals via direct debit, it is still cost effective in protecting
our income. Furthermore, I believe that this approachis reasonable and fair, a view supported by the fact thatrecorded complaints are down by 20% this year at less than
1% of licences in force.
This year, in collaboration with Harris, the world regarded
polling agency, we have started maintaining a Reputation Index
to track the attitude of the British public towards the activity
for the collection of the TV licence. Over the course of theyear this index has increased from 100 to 102.
For the first time this year, the BBC is publishing a Trust
Statement which specifically discloses all licence fee income
collected and paid over to HM Treasury. The statement isaudited by the National Audit Office.

3

Annual Report and Accounts 2010/11 2-77

Overview

Delivering our strategy

Managing the businessGovernanceManaging our finances

Financial overview, continued/…

1

2

Making the licence fee work harder – the efficiency story
Looking at what we do and how we do it has become part of
the way that the BBC does business since the Value for Money
programme was launched in 2005. We are now three years
into a five year programme of Continuous Improvementthat aims to generate over £2billion of savings withoutcompromising quality. This is money that has been recycled
to develop our content and our infrastructure.
This year, savings of £434million have been generated and theactions taken to date, if continued, will deliver over £2billionof savings by the end of 2012/13. There are plans in place todeliver the remaining efficiencies by March 2013 and whilst theachievement of this is not without risk, I am confident that wewill continue to deliver on this programme.
Beyond continuous improvement, we have looked further
at how much we spend on senior staff pay. We have set
ourselves some challenging targets to reduce senior manager
paybill by 25% and senior manager headcount by 20% – bothtargets to be achieved by December 2011. We are on course
to deliver these targets. Talent costs have also been targetedfollowing a 3% reduction in talent spend last year, a further£9million has been saved this year.

The Continuous Improvement savings plan, reductions insenior manager pay and what we spend on talent were
initiatives already in place at the beginning of this year and are
all important contributors to being able to commit as muchof the licence fee to content as possible. When the valuationof the pension deficit was confirmed, it was clear that pension
reform would not be adequate in itself to close the gap andconsequently that additional contributions to the scheme
would be needed. To afford those additional contributions, afurther set of challenges were put in place to generate savings.

1 Picture shows Hilary Kay, one of the The Antiques Roadshow experts, who
understands the importance of knowing the value of assets. Format sold by
BBC Worldwide.
2 Picture shows Sir Kenneth Clark’s landmark 1969 arts series Civilisation,remastered this year by BBC S&PP in HD for broadcast and retail sale.
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Looking forward
The licence fee settlement means that we are able to planahead, including investing in programmes and genres like
Lost Land of the Tiger that have long production lead times
and need major up-front commitment of resources or
may be unattractive to commercial producers.

20%

Reduction in annual cost baseafter impact of licence fee
settlement and Government
Spending Review.

£501m

£9m

Projected pan-BBC
Year-on-year reduction in
efficiency savings for 2011/12, spend on talent, artists andon top of £999million
contributors – just over 4%.
already achieved.

Future challenges
Reflecting on our financial performance in 2010/11 and thestrength of our balance sheet, we are in a good position toshape our own destiny. We have faced considerable financial
risks to our plans in the past year and have managed theserisks to date, whilst continuing to meet our primary purposeof serving the licence fee payer. To continue to do so, weneed to show the same belief in our strategy and to continue
to focus on delivering the priorities of the business – the five
editorial priorities set out in Putting Quality First.
Next year carries its own challenges and for the first time, wehave published a summary of our budget which sets them out
and how we intend to meet them. Uppermost in these are
the moves to Salford and Broadcasting House which will be
logistically demanding but I am pleased to confirm the financial
risk is included in our plans.
We are also preparing for the major broadcasting events tocome in 2012 (Olympics, Diamond Jubilee) and our further
investment in digital production initiatives. These costs arealso budgeted.
There are challenges arising from the funding limits set for the
BBC World Service in the Government’s Comprehensive
Spending Review last year, which reduced Grant-in-Aid fundingby 16% over three years. A number of savings initiatives
to meet these challenges were announced in January 2011.
These included the closure of five language services (Albanian,
Serbian, Macedonian, Portuguese for Africa and English for
the Caribbean), the cessation of radio broadcasting in otherservices (for example Russian and Turkish) in orderto focus on online and new media content, savings in
distribution and support costs, and changes to the English
schedule. More than 400 posts will close as a result of thesechanges and cost of these post closures has been provided
for in this year’s accounts.
Most significantly, in a separate announcement in October,the government also set out the medium term future forthe licence fee which will stay at its current value for theremainder of the Charter period and, in future years will
also be used to fund the BBC World Service and S4C. We
estimate that the loss of any increase in the licence fee andthe use of income to fund services previously funded bygovernment will equate to around 20% of our ongoing licencefee funding. We believe we cannot accommodate that sizeof a reduction in spending power by efficiency savings alone.
We are now engaged in a major exercise reaching across thewhole of the BBC’s operations to determine what the shapeof the organisation should be – what services should we be
providing; what should we be doing less of or even stopping.
We exist to inform, to educate and to entertain the UK public,so we will also be seeking, through the Trust, viewer andlistener feedback on these ideas.
As described above, 2011/12 will see significant changes tothe BBC’s operations, and combined with the efficiencies wehave delivered and financial strategies we have pursued, theBBC is in a strong, resilient position as it sets out to Deliver
Quality First.
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Beyond broadcasting
The BBC has staff and services based across the UK, providing local andnational programmes and attending or running events, from small local
Melas to BBC Radio 1’s Big Weekend and the BBC Proms. Wherever
we are, we aim to behave sustainably and ethically within thosecommunities where we operate.
To find out more about the activities outlined on this page – and links
to much more – visit www.bbc.co.uk/outreach.

BBC Outreach
Reaching underserved audiences remains the focus of ourOutreach activities. As well as supporting learning by making
our resources widely available online, for example, we organisecommunity activities across the UK. Last year these activities
included citizenship projects such as School Report and Schools
Question Time. We also promoted education and learning
through, for example, BBC Bitesize and BBC Headroom andstimulated creativity with BBC Writersroom.
Bang Goes the Theory LIVE has been a great success.
We took the flagship BBC One science show out tomeet audiences across the UK. Each individual event wasorganised with the support of external partners and offereda presenter-led stage show as well as a range of interactive
displays. By the end of March, over a quarter of a million
people had visited Bang LIVE. More are planned for later
this year. See www.bbc.co.uk/tv/features/bang/aps/. To findout about other Outreach activities or to sign up for regular
updates visit www.bbc.co.uk/outreach.

Pudsey and Sir Terry Wogan play it ‘Strictly’ for laughs.

2-80 Annual Report and Accounts 2010/11

Charitable donations
Once again we broadcast appeals for a wide variety of local,
national and international causes, helping raise awareness andfunds. High profile appeals this year included November’sannual BBC Children in Need appeal which raised £39million
and Comic Relief in March, which raised a record £74million
on the night. Overall, we broadcast appeals for total of 63
charitable causes through our weekly BBC Radio 4 Appeal
and the monthly Lifeline appeal on BBC One, plus DEC appeal
for Pakistan. For more on our charity appeals – including how
to apply for an Appeal – visit www.bbc.co.uk/charityappeals/.
An independent Appeals Advisory Committee informs the
BBC on its policy and practice.
And to find out more about our corporate charities, visit theindividual websites:• BBC Children in Need: www.bbc.co.uk/pudsey/• BBC Performing Arts Fund: www.bbc.co.uk/
performingartsfund/• BBC Wildlife Fund: www.bbc.co.uk/wild/• BBC World Service Trust:www.bbc.co.uk/worldservice/trust/
Last year we provided charities with services with a cash
equivalent value of £420,000 (2010: £384,000)
In addition to broadcast appeals, BBC commercial businesses
donated £26,700 to charities during the year (2010: £6,700).
Corporate responsibility
The BBC sets out to be an industry leader in managing its
business responsibly. This year we have again maintained our
Platinum ranking in Business in the Community’s Corporate
Responsibility Index with a score of 98%. We share ourknowledge and learn from others through active involvementin the CSR Media Forum, the Corporate ResponsibilityGroup, Associate Parliamentary Corporate ResponsibilityGroup, Business in the Community and the London
Benchmarking Group.

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Managing the business

Summary financial statement
The summary financial statement contains the BBC’s
Summary Income Statement on page 2-72, Summary Balance
Sheet on page 2-75 and Summary Cash Flow Statement on
page 2-76. These include the key headline data from the full
financial statements which are available online in the download
centre at www.bbc.co.uk/annualreport.
The summary financial statement does not contain sufficient
information to allow a full understanding of the results andstate of affairs of the BBC Group as are provided by the fullannual financial statements. The independent auditors of theBBC, KPMG LLP, have issued an unqualified audit opinion on
the full financial statements.

Independent auditor’s statement to the Trustees of the
British Broadcasting Corporation (BBC)We have examined the summary financial statement which
comprises the Summary Consolidated Income Statement on
page 2-72, the Summary Consolidated Balance Sheet on page
2-75, the Summary Consolidated Cash Flow Statement on
page 2-76 and Executive Board Remuneration Report on
pages 2-60 to 2-63.
The BBC’s Trustees have engaged us to examine the summary
financial statement which has been prepared as if the BBC
were a quoted company and entitled to prepare such astatement under Section 426 of the Companies Act 2006.
This statement is made solely to the BBC’s Trustees as a bodyon terms we have agreed. Our work has been undertaken sothat we might state to the BBC’s Trustees those matters weare required to state to them in such a statement and for noother purpose. To the fullest extent permitted by law, we do
not accept or assume responsibility to anyone other than the
BBC and the BBC’s Trustees as a body, for our work, for thisstatement or for the opinions we have formed.
Respective responsibilities of directors, Trustees
and auditors
The Trustees and Executive Board are responsible forpreparing the BBC’s Executive’s review and assessment as
if Section 428 of the Companies Act applied to the BBC
and it were a quoted company.
Our responsibility, in accordance with the terms of ourengagement is to report to you our opinion on theconsistency of the summary financial statement within the
BBC’s Executive’s review and assessment with the full annual
financial statements and the Executive Board Remuneration
Report, and its compliance with the relevant requirementsof section 428 of the Companies Act 2006 and the regulations
made thereunder as if they applied to the BBC and it were aquoted company.

GovernanceManaging our finances

The summary financial statement, including the Governancereport and Executive Remuneration Report, was approvedby the Executive Board on 23 June 2011 and signed on its
behalf by:

Mark Thompson
Director-General

Zarin Patel
Chief Financial Officer

We also read the other information contained in the
BBC Executive’s review and assessment and consider
the implications for our report if we become aware of
any apparent misstatements of material inconsistencies
with the summary financial statement.
Basis of opinion
We conducted our work in accordance with Bulletin 2008/3:
The auditor’s statement on the summary financial statement
issued by the Auditing Practices Board. Our report on the
BBC’s full annual financial statements describes the basis of ouraudit opinion on those financial statements and the Executive
Board Remuneration Report.
OpinionIn our opinion the summary financial statement is consistent
with the full annual financial statements and the Executive
Board Remuneration Report of the BBC for the year ended
31 March 2011 and complies with the applicable requirementsof section 428 of the Companies Act 2006 and the regulations
made thereunder as if they applied to the BBC and it were aquoted company.

Scott Cormack
For and on behalf of KPMG LLP, Statutory Auditor
Chartered Accountants
15 Canada Square
London E14 5GL
23 June 2011

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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 ones.
Acquired Programmes Acquired Programmes are bought in a finished state from another supplier, for example police drama The Killing waslicensed from Danish broadcaster DR and shown on BBC Four. Last year we licensed programmes from over 20 countries.
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.

Creative economy

The UK’s creative economy includes the organisations and people who work in design and media industries, including indies,actors and writers. A recent report updating an independent review from Deloitte originally published in March 2010 showedthat the BBC contributed at least £8.1billion to the UK creative economy in 2009/10 (up year-on-year by 5.1%), generating over
£2 worth of economic value for every pound of the licence fee.

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 (CPUH) or Cost per Listener Hour combines service spend and consumption to help inform anassessment of value for money. BBC Radio 2 has the lowest CPUH of all BBC radio services (around 0.5p) due to its popularity.

Digital switchover

The process of digital switchover involves turning off the UK’s analogue television broadcasting system by 2012. For more
information see www.helpscheme.co.uk.

FreesatFreesat is a free-to-air satellite TV service provided by the BBC and ITV, where users pay for the equipment but do
not pay a monthly subscription. Visit www.freesat.co.uk/. Freesat from Sky is also available for a one-off payment:www.freesatfromsky.co.uk.

Freeview

Freeview is the main UK digital terrestrial television service transmitted through an aerial and using a set-top box. No
subscription is required. Freeview is the most widely used digital television platform. It has been available in HD since April 2010.
See www.freeview.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 be measured by the number of awards won
by a service, or comments (positive and negative) generated in the press.

IPTV

IPTV (Internet Protocol TV) usually delivers on-demand content down a phone line to a television. YouView is an example ofthe opportunities made available by the development of IPTV.

On-demand

On-demand services let the viewer or listener experience a programme at a time that suits them, for example via BBC iPlayer,
itvplayer, 4oD or Sky Player.

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 Five and S4C.

Rajar

Rajar (Radio Joint Audience Research) is the official body in charge of measuring radio audiences in the UK. It is jointly ownedby the BBC and the RadioCentre on behalf of the commercial sector.

Reach

Reach on television is the number or percentage 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); and on radio is the number orpercentage of people aged 15+ who listen to at least five minutes of radio in a 15-minute period during an average week.

Share

The share of total viewing or listening to a particular programme or service over a set time, expressed as a percentage of total
hours of viewing/listening. For example, BBC One has a 21% share of viewing in all homes each week, and BBC Radio Ulster/
Foyle had nearly 23% share of listening in its transmission area for the year.

Unique users

Unique users or unique browsers is a measure for website traffic. It is not a traditional survey of ‘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-house production and external producers. WoCCs are on top of pre-existing Ofcom andvoluntary minimums.

If you want information or to know more about how the BBC is run, please visit www.bbc.co.uk/aboutthebbc.
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Contact us
More information
Contacting the BBC
If you wish to find out more about the BBC’s full year
performance to March 2011 – including full financial statements
and each service’s performance against its Statement of
Programme Policy, as well as other public commitments,
please visit www.bbc.co.uk/annualreport.
The Annual Report is also available in Welsh and inaudio version.
If you want information or to know more about how the BBC
is run please visit www.bbc.co.uk/aboutthebbc. Here you will
also find a blog where senior staff and experts regularly givean insider’s view of what is happening at the BBC.
For tickets to shows, tours and events please visit
www.bbc.co.uk/showsandtours.
If you have a comment, appreciation or complaint about BBC
programmes and services please visit
www.bbc.co.uk/feedback.
Or write to BBC Audience Services,
PO Box 1922, Darlington DL3 0UR
Comment line tel: 03700 100 222*
Other queries tel: 03700 100 123*
Textphone: 03700 100 212*
Lines are open 24 hours a day, seven days a week.
Calls may be monitored or recorded for training purposes.

Credits and copyright
Photographs used are © BBC or used under the termsof the PACT agreement, except for: page 2-15 and 2-18,
pictures of Tahrir Square, Cairo from Hugh Sykes; page 2-16
picture of Big Screen © european pressphoto agency b.v.;
page 2-49 picture of Deal or No Deal © Endemol UK/
Channel 4; page 2-51 picture of Jeremy Bowen and
Rob Magee from Cara Swift. Permission from the
copyright holders must be sought before any photographs
are reproduced.
The text of this document may be reproduced free ofcharge in any format or medium providing that it is doneso accurately and not in a misleading context. It must be
accredited to the BBC.
Designluminous.co.uk

BBC TrustIf you have any comments or questions about the workof the BBC Trust you can contact it direct by post, email,or telephone.
BBC Trust Unit
1st Floor
180 Great Portland Street
London W1W 5QZ
Email: trust.enquiries@bbc.co.uk
Telephone: BBC Information line 03700 103 100†*
Textphone: 03700 100 212*
Lines open Monday to Friday between 9.30am and 5.30pm.
BBC Audience Councils
The Audience Councils in England, Scotland, Wales andNorthern Ireland, help the BBC Trust to understand theneeds and concerns of audiences throughout the UK.
To contact the Audience Councils:
Audience Council England
Email: audiencecouncil.england@bbc.co.uk
Audience Council Scotland
Email: acs@bbc.co.uk
Audience Council Wales
Email: acw@bbc.co.uk
Audience Council Northern Ireland
Email: audiencecouncil.ni@bbc.co.uk† Calls maybe recorded for training purposes.
* 0 370 numbers are ‘UK wide’ and cost no more than calls to 01 or 02 geographic numbers.

Annual Report and Accounts 2010/11 2-83

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