How is your licence fee being spent? Is it on great programmes and content or, as some parts of the media would have you believe, largely on 'excessive' talent pay, managerial salaries and expenses?
My job as Chief Financial Officer at the 主播大秀 is to deliver value for money by making sure that every pound works hard for licence fee payers, by us working more efficiently and more innovatively and ensuring that we adapt to changing economic circumstances.
We're almost halfway through our current licence fee settlement and it goes without saying that our benchmarks have changed unrecognisably as the financial climate has changed around us.
This affects our three key measures for delivering value for money (which are very different from those of a commercial organisation based on profits or growth). These are: the licence fee costs and income; how we maximise the returns from the licence fee (in other words, profits returned to the public service by 主播大秀 Worldwide); and net efficiencies.
So, which of these is keeping me awake at night?
First, the security of our income. In a time of recession young people are less likely to flee the nest and set up home on their own, and inward migration also slows. The net effect is slower household growth (currently down to 0.49% versus 0.84% last year), which has a negative impact on licence fee income. During tough times evasion also rises and is currently at 5.4% (compared to 5.1% last year). At the 主播大秀 we have managed to offset these factors by reducing the cost of licence fee collection. Have a look at the new . It's one of the ways to help more people to manage their account online or to pay by phone or direct debit. This has ensured that just as much of your licence fee goes into programmes as if the economy had continued to grow as predicted back in 2007.
Second, ability to continue to deliver growth and returns to the 主播大秀. It has invested significantly in growth over the past two to three years and, despite the downturn, we expect to see a return from that investment. Happily, we are seeing the strategy pay off with, for example, more than doubling of revenues in our new international channels year on year.
Third, can we cut costs without affecting the quality of programmes? One of the most encouraging aspects of the last year has been that we are sustaining or improving overall performance, including reach (92%) and share (42%), while delivering ever stronger listener numbers (especially on and ) and reduced cost per user hour on our digital channels. Our audiences also tell us that quality has risen over the last year.
For me, the figures are not just encouraging in themselves. The continuing success and quality of our services is particularly important in the middle of an efficiency drive which sets new challenges for production teams by looking for 4-5% efficiencies each year, which will be nearly 25% over the life of the programme.
There has been some discussion recently of the analysis by Oliver & Ohlbaum showing that content spend across the main terrestrial broadcasters has fallen this year by about 脗拢0.5billion - a warning shot to the health of our whole industry. Some of this is due to the recession and reduced advertising revenues, but the 主播大秀's spend is also down slightly, because of our investment in transforming content distribution channels as well as our obligations to fund digital switchover. But it's worth recognising that it is also the product of an efficiency drive which is focused on production processes instead of the 'back office'. So we are spending slightly less but delivering just as much as before.
The core of investment that the licence fee provides becomes even more crucial in a slower economy and, as Mark Thompson said last November, the post-switchover world does offer us the opportunity to spend a higher proportion of the licence fee on original British content.
This is just one of the considerations of our Strategic Review, the outcome of which will be announced in the spring. It will set out the 主播大秀's purpose and scope for the digital age ahead, as well as focusing on delivering the services and content that you really value.
And I did receive another form of reassurance recently. As you can imagine, unsolicited offers of financial assistance from licence fee payers are pretty unusual. However, the other day a cheque landed on my desk from an avid 主播大秀 radio listener, who, without a TV and therefore a licence, still wanted to make a fair contribution to the cost of 主播大秀 Radio. One cheque may not be an indicator for millions, but I did allow myself to think that we must be doing something right.
You can see exactly how your licence fee is being spent here: