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Departmental Overview 2019-20 the BBC Group

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Departmental Overview 2019-20 The BBC Group October 2020 This overview summarises the work of the BBC Group including what it does, how much it costs, recent and planned changes and what to look out for across its main business areas and services. We are the UK’s independent public spending watchdog If you are reading this document with a screen reader you may wish to use the bookmarks option to navigate through the parts. If you require any of the graphics in another format, we can provide this on request. Please email us at www.nao.org.uk/contact-us 2 Departmental Overview 2019-20 The BBC group Contents Overview Part One People 10 About the BBC – key facts 3 Part Two The BBC's audiences 13 The BBC's public service and commercial arms 5 Part Three New markets 18 The BBC's income 6 Part Four COVID-19 20 How the BBC spends its money 7 Part Five Issues to look out for 22 Overview of the BBC's accounts 2019-20 8 Part Six Our value-for-money work 2019-20 23 Major programmes and key developments 2019-20 9 Bookmarks New Markets Overview Part Four About the BBC – key facts COVID-19 The BBC's public service and commercial arms Part Five The BBC's income Issues to look out for How the BBC spends its money Part Six Overview of the BBC's accounts 2019-20 Our value for money work on BBC Studios in 2019-20 Major programmes and key developments 2019-20 Part One People Part Two The BBC's audiences Part Three The National Audit Office (NAO) scrutinises public spending for Parliament and If you would like to know more about the NAO’s work on the BBC, If you are interested in the NAO’s is independent of government and the civil service. We help Parliament hold please contact: work and support for Parliament government to account and we use our insights to help people who manage more widely, please contact: and govern public bodies improve public services. The Comptroller and Auditor Louise Bladen Lewis Knights [email protected] General (C&AG), Gareth Davies, is an Officer of the House of Commons and leads Director, Director, 020 7798 7665 the NAO. We audit the financial accounts of departments and other public bodies. BBC and DCMS Value for Money BBC Financial Audit We also examine and report on the value for money of how public money has been [email protected] [email protected] spent. In 2019, the NAO’s work led to a positive financial impact through reduced 020 7798 7587 020 7798 7977 costs, improved service delivery, or other benefits to citizens, of £1.1 billion. Design & Production by NAO External Relations ● DP Ref: 009035-001 © National Audit Office 2020 Contents Overview Departmental Overview 2019-20 ● BBC 3 1/7 About the BBC – key facts Public purposes The current Royal Charter, introduced in 2017, The British Broadcasting Corporation (BBC) is the UK’s main public service broadcaster sets out the BBC’s five public purposes. Ofcom the communications regulator defines public service broadcasting (PSB) as the collective output of specified television services designed to meet purposes and objectives set by Parliament. Currently, these services are: the BBC’s television Provide impartial news Support learning for channels, ITV, STV, Channel 4, S4C and Channel 5. ❶ and information to help ❷ people of all ages. people understand and PSB is the largest part of the BBC Group. Its principal funding comes from the television engage with the world licence fee, which is the group's largest source of revenue. around them. The BBC's constitutional basis is a Royal Charter, which establishes its independence, primary mission and public purposes. The BBC's mission is to act in the public interest, serving all audiences through the provision of impartial, high-quality and distinctive output and services that inform, educate and entertain. Show the most creative, Reflect, represent The BBC is a public corporation of the Department for Digital, Culture, Media & Sport. ❸ highest quality and ❹ and serve the diverse distinctive output communities of all The BBC Group also has a commercial arm and services. the United Kingdom’s nations and regions and, Alongside the BBC Public Service, the Royal Charter permits the BBC to undertake in doing so, support the commercial activities, provided that they: fit with the BBC’s mission and public creative economy across purposes; are not funded through licence fee income; and aim to make a profit. the United Kingdom. BBC Commercial Holdings has four arms: BBC Studios, BBC Studioworks, BBC Global News and BBC Children’s Productions. ❺ Reflect the United BBC Commercial Holdings manages debt facilities on behalf of all the BBC’s Kingdom, its culture commercial activities and lends funds from these facilities to subsidiaries at a and values to the world. commercial rate. It is through this company that the commercial subsidiaries make dividend payments to the BBC. Contents Overview Departmental Overview 2019-20 ● BBC 4 2/7 About the BBC – key facts continued Key facts BBC’s global reach: 10 UK 56 radio stations: iPlayer programme TV services: requests 2019: 10 pan-UK 4.8 billion 468 million people a week 6 national 91% of UK 40 local adults use BBC (across England television, radio and the Channel or online each Islands) week on average There is also the World Service Contents Overview Departmental Overview 2019-20 ● BBC 5 3/7 The BBC's public service and commercial arms The BBC Group comprises more than 100 separate entities. However, most activity is concentrated in the BBC Public Service broadcaster and BBC Studios, BBC Global News and BBC Studioworks. BBC Studios Total operating costs 2019-20: £1.3 billion Funds, creates, distributes and commercialises content for the BBC and other companies, both BBC Public Service broadcaster in the UK and internationally. Total operating costs 2019-20: £4 billion 103 subsidiary companies. Split into five divisions: 1 News and Current Affairs; 2 Nations and Regions; 3 Content; BBC Global News 4 Radio and Education; and Total operating costs 2019-20: 5 Corporate Services. £114 million Operates the TV channel BBC World News and bbc.com. Funded by advertising, sponsorship and income from pay TV operators. Six subsidiary companies. BBC Studioworks Total operating costs 2019-20: £36 million Provides studio and post-production services to major TV broadcasters and production companies. Public Service Part of BBC Commercial Holdings Contents Overview Departmental Overview 2019-20 ● BBC 6 4/7 The BBC's income More than 70% of the BBC’s income comes from the licence Nearly 30% of the BBC’s income comes from commercial fee. Total licence fee income has fallen for the past two years. sources. Income at the BBC’s largest commercial subsidiary, BBC Studios, increased by 17% this year. The key factors driving the reduction from 2018-19 are: Key commercial revenue streams: £215 million reduction in the grant that the • £3,520 million • Content and format sales – £456 million BBC receives from the Department for Work (increase of 8% from last year). & Pensions for free licences for the over-75s. licence fee £1,423 million The BBC agreed a number of significant After 2019-20 no further grant payments income content deals in the year, including commercial and will be made and the BBC is implementing a major deal with Discovery for BBC changes to over-75s’ licencing arrangements. other income landmark natural history content and • £45 million reduction in the number of paid-for a supply agreement with Britbox, which TV licences in force, declining by 1.4% from launched in the UK in November 2019. 21.6 million to 21.3 million. Production income – £195 million (same £170 million • This has been partially offset by 2.7% annual as last year). inflationary increase in the cost of a TV licence. from last year BBC Studios’ production activities won 77 £224 million The cost of a TV licence is tied to changes in the new commissions during 2019-20, 49 within from last year annual Consumer Price Index (CPI) rate. the BBC and 28 from third parties. • Advertising income – £237 million Changes in licence fee revenue over the past two years (increase of 158% from last year) and subscription fees – £255 million £ million 4,500 (increase of 36% from last year). 4,000 3,830 The BBC acquired the full shareholding 77 3,690 90 3,520 of UKTV in June 2019, which it had 3,500 -187 -30 -215 -45 3,000 previously held as a joint venture 2,500 with Discovery. The BBC now receives 2,000 100% of income generated by UKTV 1,500 through advertising income and 1,000 subscription services. 500 0 Total Reduction Reduction Inflationary Total Reduction Reduction Inflationary Total 2017-18 in Over-75s in Licences increase 2018-19 in Over-75s in Licences increase 2019-20 grant in Force grant in Force Source: National Audit Office analysis of the BBC’s Annual Report and Accounts, 2019-20 and 2018-19 Contents Overview Departmental Overview 2019-20 ● BBC 7 5/7 How the BBC spends its money The BBC Public Service spent Arts and music Radio BBC World Service £4 billion in 2019-20. £41m £494m operating licence BBC Online Sport production £58m £223m £238m £2,777 million (70%) was spent directly Children’s £83m BBC World Service on content grant £92m Entertainment This is a reduction of £85 million, or 3%, from and comedy last year. This is because of the cost of major Other service Development sporting events last year.
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