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The British Broadcasting Corporation

Good At Spending Other People's Money

Photo of BBC offices in Salford
BBC offices at MediaCityUK, Salford

Figures published in 2009 showed the BBC spending £20m a year on its top 100 executives. Almost £1.9m of the money it seized went into the pockets of just four of them. The top 100 took an average of £217,000 in pay and expenses.

A Freedom of Information Act disclosure in 2010 showed that six-figure salaries were being paid to 382 BBC executives. That amounted to the fees paid for permission to watch TV by 400,000 households. A third of these executives were taking more than £160,000. The corporation's top 50 executive were getting more than the Prime Minister's salary of £192,000.

Director-General Thompson was paid £664.000. The additional expenses he claimed included £647 for two nights in a Las Vegas casino hotel and 70p for car parking.

In 2017 the Corporation's 99 top executives claimed £500,000 in expenses. The direction of "regions and nations" was paid £31,000 in expenses in addition to his £250,000 salary. He ran up a total of £17,000 on air and train fares, £7,000 on hotels and £3,000 on cab fares.

The chief design officer was paid £28,000 in expenses. The head of news gathering claimed £20,000.

Another executive on a £214,000 annual salary asked to be reimbursed 50p for a Mars Bar bought on a flight to Dublin.

The Corporation's lordly director-general claimed a mere £3,000 for his expenses.

Only about one in ten of the executives the BBC thought worth a six-figure income was in the broadcaster's journalism department, although it likes to use its claim to outstanding reporting to justify it tax on TV viewers. The total bill the corporation presented to TV viewers for travel and accommodation was £45m. The total bill for senior managers' salaries came to £79m.

From 2017 the Corporation has been obliged to publish information about its most highly paid employees. In 2016 it paid 14 of its presenters more than £400,000. In all they made £28.7m.

In 2017 press reports also revealed that the Corporation had given 1763 employees pay increases of over 10% in 2016. The average increase was £8000. This was at a time when other public sector staff had had their pay held down below the rate of inflation.

Only one third were women. The BBC paid the highest paid male more than four times as much as it paid its highest paid female.

And it does not stop when senior staff have to take their leave of the BBC. According to a 2013 Public Accounts Committee report "Former director-general, Mark Thompson, claimed that it was necessary to pay his former deputy and long-term colleague Mark Byford an extra £300,000 . . . to keep Mr Byford 'fully focused' instead of 'taking calls from head hunters' ".

The cost of collecting the tax on free speech was £119m in 2008-9, according to the Corporation. That is to say that the first 847,000 licence fees collected paid not for the BBC's TV channels or radio stations, but for revenue collection. £119m of taxpayers' money wasted.

In 2013 the Corporation spent £200m on "talent", its presents and performers. Jonathan Ross was reported to have been paid nearly £6m a year from the fees the BBC collects for permission to watch TV. The BBC was paying more than £5.6m to individuals who were paid £1m or more, according to the Financial Times.

In 2017 a Freedom of Information Act disclosure forced the Corporation to reveal that it had spend more than £500,000 on taxi fares in just one year. The figures for the three years to 2017 were:

2014/15: £ 512,861
2015/16: £ 411,317
2016/17: £ 341,095

Corporation staff rode taxis as far as 45 miles.

The £3.8 billion in fees collected by the licence enforcers in 2016/17 provided about 75 per cent of the funding for the Corporation's national TV channels, many radio stations and Web sites.


It could receive a grant directly from the Exchequer, with its editorial independence guaranteed by statute. With the millions saved on collection and enforcement, the compensating adjustment to income tax would be tiny, with most households breaking even. Thousands of low-income households would be relieved of an onerous burden. The forgetful and disorganised would not be criminalised.
Broadcasting Policy Group.

In the 3 years to 2003 the out-of-control Corporation's spending on TV, radio and Internet services increased by 35 per cent, or £616m. The BBC started more new services in 2002 and 2003 than in the first 80 years of its existence. The state broadcaster increased its expenditure on programmes by 17 percent in the 2002 - 2003 financial year, bringing the total to £2.38b.

Not content with spending taxpayers' money on 8 TV channels and 57 radio stations, it spends many millions on Web sites. Tens of millions are spent on channels with small audiences. BBC4 has had only 4,000 viewers for some programmes. The Corporation also publishes 17 magazines.

The state broadcaster lost £100m on the acquisition by BBC Worldwide of Lonely Planet, a travel publisher. According to an internal report in 2013 the BBC "seemed to get carried away with deal momentum" and failed to perform "enough downside analysis" of the finances of the company it was buying. But John Smith, who oversaw the purchase, was rewarded with £610,000 when he left the "BEEB". Another £100m was lost on a "digital media initiative" that was badly managed and finally abandoned in 2013.

According to TV production company executive Peter Bazalgette, writing in the Financial Times, an American cable channel worked out that each member of its programme commissioning team covered three times as many hours as their BBC equivalents.

In 2010 the National Audit Office revealed that the Corporation was getting poor value for money from its live broadcasts of sporting and musical events. The Audit Office accused the state broadcaster of being insufficiently rigorous in calculating budgets. The BBC spent £246m to buy the right to broadcast such events in 2008-9 and another £111m on the staff and facilities for the events. £250,000 was paid for a purpose-built studio in Vienna for a football championship so that the city skyline should form the backdrop. For the Beijing Olympics it spent £160,000 to build its own studio. Spending on the Wimbledon tennis tournament in 2008 was £700,000 over a budget of £2.5m. Licence fee payers were charged £1.74 million for broadcasts of the Glastonbury music festival.

The axe man has arrived at the BBC – bearing a scalpel

"The axe man has arrived at the BBC – bearing a scalpel." That is how the Financial Times reported the BBC's attempt in 2014 to cut its spending. The Corporation had announced that it would save £50m by shutting down Channel 3. More cuts were expected, possibly by reducing the layers of staff, by closing 20 or more of the company's 40 local radio stations, or by cutting back it wide-ranging Internet activities.

The BBC has a track record of committing public money without fully analysing the costs and benefits, according to the House of Commons public accounts committee.

"Too often there has been a culture where ends have overridden means", the spending watchdog concludes in a report published today.

A number of projects are singled out for criticism, including redevelopment of Broadcasting House, which saw project management failings cost the corporation more than £100m, and the £576,000 bill for using a studio in Vienna for coverage of the Euro 2008 football tournament in order to provide the "necessary backdrop".

The committee also admonishes the BBC Trust for failing to provide information except under a guarantee that it would not be made public. "The Trust seems to think it is acceptable to negotiate the terms on which it will do business with parliament. This is unacceptable and discourtesy" the committee says.

Financial Times report, April 2010

Although funded by taxpayers the BBC it is not accountable to Parliament. The Public Accounts Committee is not allowed to inspect its financial records. Before 2010 The National Audit Office (NAO) was allowed to look at its spending only if the BBC Trust invited it to. The NAO was then able to choose what to look into but still reported what it found to the BBC itself. In 2013, following revelations about excessive severance payments to senior staff, the government announced that the NAO would have greater power to investigate the BBC as and when it wished.

When agreeing to this Chris Patten, the "lord" who chaired the BBC Trust, showed his failure to understand the difference between the responsibilities of private businesses and state entities by dismissing £3.8 of excess severance payments made by the BBC as "about what other TV networks would pay for televising the first half of a Premiership football match".

State Media Giant Facts (2013)

BBC annual income £5.5bn
TV tax revenue £3.7bn
Staff costs £1.284bn
Total operating costs £4.9bn
Radio channels - 44

Public service broadcasting expenditure £3.8bn
Annual cost of Web sites £177.6m
TV channels - 11

Number of premises with licence to view TV 25.611,000 *
Cost of collecting licence fees £111m

* It is not known how many of these licences are for business premises. There are aproximately 26.4 households in the UK. The figures mean that at least 617,000 households do not have permission to watch TV.

Part 5. Bad at broadcasting.

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