BBC set to unveil deep cuts

LONDON Thu Oct 6, 2011 12:07am BST

A man talks on a mobile phone inside the BBC headquarters in London November 21, 2008. REUTERS/Andrew Winning

A man talks on a mobile phone inside the BBC headquarters in London November 21, 2008.

Credit: Reuters/Andrew Winning

Related Topics

Quotes

   

LONDON (Reuters) - The BBC is set to announce proposals for deep cuts to its programming and staff numbers Thursday as the publicly funded broadcaster prepares to implement savings imposed by the cash-strapped government.

The world's biggest broadcaster has to slash 20 percent of its annual 3.5 billion pound budget under a deal struck with the government a year ago as the country's deepest public spending cuts in decades were being planned.

With eight national TV channels, 50 radio stations and an extensive website, the BBC's size and resources have attracted envy and criticism from rivals, led by BSkyB, especially as advertising-funded rivals are hit hard by the recession.

Last year, the BBC agreed to freeze the annual licence fee of 145.50 pounds payable by every TV-owning household. It is also taking on extra costs from the government including funding BBC World Service radio, which is broadcast overseas.

The agreement between the Director General of the BBC and the government was hammered out in haste, stripping out the months of negotiation normally involved, as the coalition government scrambled to cut its spending after taking power.

"The BBC were in no position to argue, given the rhetoric about the state of the economy and the need for everyone to pull their horns in," says Steven Barnett, professor of communications at London's Westminster University.

The BBC towers over the nation's media landscape with a rich offering of drama, comedy and children's programming, a huge newsgathering operation and some of the most popular websites.

In a lecture two years ago, News Corp executive and BSkyB Chairman James Murdoch lashed out at the BBC, accusing it of making a land grab for power and calling for a radical overhaul of television regulation.

The pendulum has since swung back in favour of looser regulation more favourable to commercial rivals and lower public spending, especially since the recession and the installation of a centre-right coalition government in 2010.

Alex DeGroote, media analyst at London brokerage Panmure Gordon, said the slimming down of the BBC would help level the playing field in Britain, where commercial media companies were up against a far stronger public rival than their peers abroad.

"There's always been a BBC discount for commercial media in this country. It got particularly high in 2002-05. That's when you had a massive expansion of the BBC's inventory -- more digital radio, BBC3 and BBC4, lots of Internet sites," he said.

"Arguably, you had a sponsor government as well. Tony Blair's New Labour was in favour of expansion of the public sector. But slowly the roles have reversed."

(Editing by Louise Ireland)

FILED UNDER: