‘Complacent and unambitious’ BBC has ‘ducked hard choices’ and failed to shore up financial future, MPs warn

The BBC appears “complacent” about the threat it faces from declining audiences and has “ducked the hard choices” to be taken over budget cuts, MPs said in a report on the broadcaster's financial prospects.

The Public Accounts Committee (PAC) said the BBC’s plans to balance the books appeared inadequate in the face of uncertainty over the years ahead, with a plan to earn money through means other than the licence fee deemed “unambitious”.

People are spending less time watching BBC television broadcasting, with 200,000 households per year cancelling their licence fee and many looking to online platforms such as Netflix.

MPs said the BBC stood at a “critical juncture” and should work to “fully understand” why more people were watching less and choosing not to have a TV licence.

The report, published on Friday, deepened the BBC’s woes in the wake of an independent report which found the corporation had covered up the “deceitful” methods used by journalist Martin Bashir to secure a world-famous 1995 interview with Princess Diana.

Giving evidence to the PAC in March, new BBC Director-General Tim Davie accepted people would spend less time consuming BBC content in future, and said the broadcaster's response would “probably” be to produce less programming.

Mr Davie, who took over from Lord Hall in September, placed emphasis on plans to spend £700m more on regional content, an area where the BBC has an edge over competition, in the next few years as a means of securing audiences.

But MPs on Friday criticised the regional plan as seeming “unclear and disjointed”, questioning how the BBC intended to find the additional £700m before the conclusion of negotiations with the government over the future of licence fee payments.

The PAC also said it was unclear whether the number of people employed by the BBC outside of London would increase or decrease, as 600 redundancies were planned in the regions.

Meg Hillier, chair of the PAC, said: “Moving bits of this Titanic organisation around the country, reorganising the deckchairs, just won't cut it in the face of intense and rapidly changing global competition.”

MPs also said the BBC recently lost its place as the media provider that children aged six to 16 spent most time with and questioned whether the corporation's plan to re-launch BBC Three on terrestrial TV was the best way to draw back young viewers.

The committee's BBC Strategic Financial Management report asked the corporation to provide more details of plans for budget cuts in response to the fall in audience and revenue from licence fee funding, which MPs said had dropped by £310m in the previous two financial years.

The committee said the broadcaster should set out how it will achieve its £1bn savings target by March 2022. MPs said the corporation had been reluctant to take “tough choices” over cuts to content, despite aiming to produce 20 per cent less.

A BBC spokesperson told The Independent the corporation was on track to meet its savings target, adding it had reduced its “headcount” by more than 1,000 roles in one year.

Besides savings, MPs said targets for generating more money through commercial activity were "unambitious", with net returns too low to make a "significant contribution" to overall income.

Outside public contributions, the broadcaster makes money on commissions and sales of archive content through BBC Studios, but MPs said that these efforts make up less than 6 per cent of the income generated through licence fee payments.

Ms Hillier said the BBC needed to “radically re-engineer its offer”.

"We can see the BBC might be reticent to share detailed plans at this delicate moment, in the middle of licence fee negotiations, but we expected a clearer vision of how it will address the decline in its audiences and revenues, and manage the global transition from traditional TV viewing to online.”

A BBC spokesperson told The Independent the corporation did not feel the report “reflects the evidence or the facts provided to” MPs and said the corporation’s “commitment to reform was beyond question”.

“There is no complacency at the BBC. We have taken great pains to stress, including to this committee, that the jeopardy for the BBC is high,” the spokesperson said.

The BBC pointed to a January report from the National Audit Office, similarly titled The BBC’s Strategic Financial Management, which was broadly more positive. The report did, however, say the corporation needed to address a “lack of pace when implementing change”.

The BBC said it would provide MPs with more details of its future plans after the conclusion of licence fee negotiations.

Additional reporting by agencies