BBC Annual Report and Accounts ReportAnnual and BBC 2005/2006 British Broadcasting Corporation Broadcasting House London W1A 1AA bbc.co.uk Annual Repor t and © BBC 2006 Accounts 2005/2006 Purpose, vision and values The BBC’s purpose is to enrich people’s lives with programmes and services that inform, educate and entertain The BBC’s vision is to be the most creative organisation in the world Values I Trust is the foundation of the BBC: we are independent, impartial and honest I Audiences are at the heart of everything we do I We take pride in delivering quality and value for money I Creativity is the lifeblood of our organisation I We respect each other and celebrate our diversity so that everyone can give their best I We are one BBC: great things happen when we work together Contents 2 Chairman’s statement 4 Director-General’s report 6 The BBC now and in the future 10 Board of Governors 12 Executive Board 14 Governors’ review of objectives 22 The BBC at a glance Governors’ review of services 24 Television 32 Radio 40 New Media 46 News 50 BBC World Service & Global News 54 Nations & Regions 58 Governors’ review of commercial activities 60 Being accountable and responsible 68 Performance against Statements of Programme Policy commitments 2005/2006 76 Compliance 92 Financial review 95 Financial statements 140 Broadcasting facts and figures 151 Getting in touch with the BBC 152 Other information BBC Annual Report and Accounts 2005/2006 1 Chairman’s statement This is the last annual report from the The main function of the Trust will be to BBC Board of Governors, which is to ensure that licence fee payers’ expectations be replaced under the new draft Royal of the BBC are fulfilled in terms of the Charter by the BBC Trust. I would like to quality and value for money of its services, pay tribute to the work of all Governors and that the BBC remains focused on over the last 80 years.The fact that the fulfilling its six public purposes as set out independence of the BBC endures is in the new draft Charter. In representing due in no small part to their robust the interests of licence fee payers, the Trust stewardship – sometimes in the face will recognise that these interests go of fierce onslaught from political and beyond their direct interest in the BBC. commercial vested interests. Licence fee payers do not exist solely on a media diet provided by the BBC.They value The pressing need for modernisation the choice of services provided by others, of the BBC’s governance arrangements and the Trust will ensure that the BBC was recognised by my predecessor as operates in a way that fully recognises this. Chairman, Gavyn Davies, and the Board has been able to build on the work he I have no doubt that the BBC Executive and his fellow Governors began.This work will sometimes be disappointed by the will be completed by the Trust using the outcome of a Public Value Test – just as new tools at its disposal under the new private sector interests will sometimes Charter: Purpose Remits, Service Licences be disappointed. Our job as BBC Trustees and Public Value Tests (for the details will be to ensure that the widest interests of these, see The BBC now and in the of licence fee payers take precedence over future, page 9). either of those interests. At the heart of the new arrangements The White Paper published earlier this year is an explicit recognition that the Trust exists after two years of public debate, research to represent the interests of licence fee and evidence-gathering represents a vote payers, not the narrow interests of the of public confidence in the BBC.The new BBC as an institution. Although the new ten-year Charter and the maintenance structures will not be in place until the new of licence fee funding offer the BBC an Charter takes effect, in January 2007, the enviable degree of stability in a fast-changing present Board of Governors fully supports media landscape.The missing piece in the the changes and is already operating within jigsaw is the licence fee settlement. the spirit of the new Charter. For the first time, the BBC has been As a result, the relationship between the completely open with the public about Board and the Executive – those charged the licence fee bid. Its size was based on with the day-to-day running of the BBC – a fully costed business plan at the time has begun to change.There is now real of publication, reflecting the Government’s separation between the two bodies, enabling plan for the BBC set out in last year’s Green the Board to exercise independent oversight Paper. In the subsequent discussions with of the work of the Executive.This will the Government, the BBC has made clear intensify in the future as the Trust uses that its overriding concern is to be able to its new powers to ensure rigorous, meet the needs and expectations of licence independent and fully transparent scrutiny fee payers at the lowest possible cost. of the work of the Executive. Achieving the highest possible settlement 2 BBC Annual Report and Accounts 2005/2006 should not be regarded as a badge of programme, which is designed to release a brilliant comic actor, he was also an honour for those representing the licence money to invest in more and better exceptionally talented writer. He was a fee payers on the Board of the BBC. output. It has also been delivered in the modest man, and even as an established context of the exhaustive – and sometimes star he would sometimes submit scripts Much of our work as Governors this exhausting – process of Charter Review. to the BBC under an assumed name – he year has been focused on financial and said he wanted to make sure they were organisational change in preparation for This is not to say that the picture is accepted because of their quality, not the new Charter. As a result I am confident completely positive. One issue repeatedly because of who had written them. that the BBC is in good shape structurally raised with us in our consultations with Ronnie Barker’s contribution to the BBC to begin the next stage of its development. audiences around the UK this year is the proved beyond doubt that quality and The BBC will end the current Charter problem of limited digital coverage.Those popularity are not mutually exclusive. having met its commitment to achieve licence fee payers affected have expressed Maintaining support from licence fee payers a broadly zero debt position.The self-help justified disquiet that while they contribute over the ten years to come will depend target of £3.3billion imposed by the to the cost of the BBC’s digital output they on the BBC remembering that this is what Government for the period of the current are unable to receive the services.We have distinguishes BBC output. Charter is on track and will be exceeded. encouraged management to speed up their And the Director-General’s additional plans – working with commercial partners value-for-money savings target for – to develop a satellite equivalent of 2005/2006 has been exceeded, making Freeview that would solve these problems. more secure his overall target of achieving £355million of ongoing gross annual savings I’m proud to be the last Chairman of by 2007/2008. Governors and to have been appointed as the first Chairman of the new Trust. Michael Grade In this report we give an objective At the heart of my vision for the BBC Chairman assessment of management performance is the recognition that the survival of a 14 June 2006 during the year under review.Where more licence-fee funded BBC depends not on needs to be done we say so. But the economic theory or political dogma but general picture is encouraging.The overall on the ability of the BBC to retain the reach of the BBC’s television and radio support of the overwhelming majority services is broadly stable at 92.7%, and of the people of the UK through the the reach of the BBC’s online services content and services it offers. continues to grow rapidly. In an increasingly competitive context, where audiences are These can take many forms as the BBC presented with much increased choice, this delivers its historic public service remit is a real achievement. And the achievement to inform, to educate and to entertain. is greater because it reflects no lessening of But they must all share the aspiration overall quality – indeed quite the contrary. to set new standards of quality, whatever The BBC can take justified pride in the the genre or distribution mechanism. growing high quality of its overall output this year – a judgement reflected in the Earlier this year I took part in the memorial many awards it has won. service for Ronnie Barker, whose long career with the BBC exemplifies what I This performance has been delivered mean.The list of his BBC hits is astonishing: against a background of understandable The Navy Lark,The Frost Report,The Two staff concern over the job reductions and Ronnies, Porridge, Open All Hours – these changes in working practices flowing from are among the greatest achievements of the Director-General’s value for money BBC comedy. Ronnie Barker was not just BBC Annual Report and Accounts 2005/2006 3 Director-General’s report The BBC is living between two worlds: the radio or television studio.