Comprehensive Spending Review
2007
317. Submitted in June, the BBC World Service's memorandum
made clear that it was at a crucial stage in negotiations on its
CSR07 bid. It told us that it was focusing on two key areas of
investment for 2008-2011. These were: building services to regions
of geopolitical insecurity; and enhancing interactive digital
services to engage with new influential audiences.[517]
It was asking for an overall increase of RPI (Retail Price Index)
plus 1.3% of its 2006/07 baseline of £246 million. The Service
argued that if it were asked to meet the 3% cashable savings per
annum set out in the Chief Secretary to the Treasury's CSR07 guidance,
it would have to find at least £19million per annum by 2010-11
and stated that it carried a particular risk of inflation as the
majority of its cost base was made up of staff and related costs.[518]
318. When we began our inquiry, the £15 million
annual funding for the daily eight hour satellite Farsi language
television service announced by the Chancellor last year had yet
to be formally allocated. As part of the CSR07 negotiations, the
Service was also continuing to ask for £6 million to extend
BBC Arabic television to a full 24/7 service. The memorandum stated
that this extra funding was very important "for the long-term
credibility" of the service.[519]
Nigel Chapman told us:
[…] I think there is a total unity of purpose
between ourselves and the FCO about that priority. It is, alongside
Farsi, the highest priority of the bid and the case for it is
very strong. I think that everybody accepts that.
[…]If you remember, the cost of the 12-hour
Arabic service, which is £19 million a year, has already
been found from the restructuring and reprioritisation of the
eastern European language services and some money that was held
back from the outcome of the spending review of 2004, so we are
already effectively funding over two thirds of the cost of Arabic
television from existing resources. That is as far as I can go.
If we are serious about this project—and we need to be,
for all sorts of very good reasons—the service needs to
be 24/7 and needs to be funded accordingly.[520]
On 25 July 2007, in his statement on new counter-terrorism
measures the Prime Minister confirmed funding for the BBC Arabic
and Farsi TV channels.[521]
319. The Service's memorandum also listed other planned
new investments for which the Service wanted an extra £10
million. These included: £4 million for BBC television in
Urdu for Pakistan through partner channels, £2 million for
African English television service with local partners, and £4
million for other media developments, including expanding broadband
video for key languages, enhancing the Global Conversation and
using digital technology to connect UK diaspora communities with
their countries of origin. On the investment for Urdu television,
Nigel Chapman argued:
[…]It would have a huge audience because of
the BBC's brand and effectiveness in Pakistan, although not just
in Pakistan, because it would, obviously, be available via satellite
and terrestrially via partner stations. So there is an appetite
for it, and in the context of what is going on in Pakistan at
the moment, there is a very strong case for that sort of development.[522]
320. The Service was also seeking up to £9million
in one-off funding to help meet rising redundancy costs.[523]
Nigel Chapman told us that this was because most of its costs
were around people and that it would therefore have to carry out
redundancies to meet the Treasury's 3% a year efficiency targets.
He argued:
The Treasury is saying in principle that it will
fund up to 50% of the restructuring costs that are brought about
by cashable savings, and the World Service should be treated in
the same way as the Foreign Office, the British Council or anybody
else in that respect. In the past, we have not asked for that,
because we have been able to absorb costs in our existing resources,
but we have got to the point now where we cannot do that. […].[524]
321. The BBC World Service received the following
financial settlement in CSR07:
Figure 3: CSR07: BBC World Service baseline and
additions
