Ancient preparations for war typically included a last-minute sacrifice to the gods, and the BBC is no different. Tony Hall, the director general, has offered up 1,000 employees in an attempt to appease the government masters who will decide the broadcaster’s fate in the coming 18 months.
Under assault from ministers and a Tory right wing not only looking to make savings but still on the warpath about what it considers the corporation’s leftwing bias during the election, Hall promised a “slimmer, leaner” BBC. Layers of bureaucracy – from 10 to seven in some areas – will be axed in order to save £50m a year. The decision comes two days after the BBC Trust indicated that it would allow BBC3 to go online only, saving another £30m a year.
The question, though, is why act now, before the first proper shot has been fired? In the next few weeks the government is expected to unveil its green paper on the renewal of the BBC’s royal charter, which runs out at the end of 2016. Meanwhile, the Treasury is said to be running a rule over BBC finances despite the independence the broadcaster is supposed to enjoy under that same charter.
Critics of the BBC are likely to argue that to cut about 5% of a combined 18,000-strong workforce before licence fee negotiations begin simply shows how overstaffed the broadcaster is in the first place.
Hall, an arch-strategist, is shrewder than that. For a start, his plans to attack so-called “paperclip jobs” so numerous they form the heart of a BBC comedy series, W1A, have been welcomed by all sides, even the unions. As a former head of news, Hall recognises that it can never be credible to offer up as the last line of defence: “Don’t come any closer or the middle manager gets it.” Making cost savings now shores up Hall’s reputation for financial control.
The director-general has made a riskier move, however, in blaming the need for savings directly on a £150m-a-year funding shortfall due to a faster-than-expected switch to online viewing. Under an anomaly of a funding mechanism that pre-dates the internet, viewers do not need a TV licence to watch catchup television on the iPlayer. The sharp rise in the number of people who have taken advantage of this loophole has shot to pieces BBC income forecasts made in 2011.
This is the first time the BBC itself has publicised the impact of this loophole, rather than newspapers such as the Rupert Murdoch-owned Sunday Times which wastes little opportunity to remind readers. So why would it raise the issue before charter renewal negotiations?
Firstly, because it wants the government to close the loophole. But it may also want to underline the irony that it was strong-armed into providing cash to speed up the country’s internet adoption in the last shotgun round of charter negotiations. In 2010, the BBC agreed to pay £300m to help roll out superfast broadband in the UK. It is arguably the case that the policy of encouraging more people to watch high-quality television on small screens rather than on the television sets was so successful that 1,000 BBC employees now face the sack as a result.
Such a fact could deter the government from a wider assault on BBC funding. A serious concern for Hall and his team is that the Treasury is said to be keen to find a way of offloading the cost of allowing the over-75s to use the BBC for free. This currently runs to £600m a year, and will rise to much more within the next 10 years because of the ageing population.
With decriminalisation of non-payment of the licence fee gaining cross-party support, the BBC faces an a further £200m-a-year reduction in income. Taken together, these changes could in a few years cost the BBC £1bn. That is more than a quarter of next year’s £3.7bn budget.
The size of the threat should not be underestimated. A television licence fee may be technically anachronistic in a digital age but it is an effective proxy for some sort of universal levy. It also helps protect against government interference, because it is individual households who pay rather than the government.
Rightwing politicians are already declaring their hands. Douglas Carswell, Ukip’s only MP, rushed on to the World at One on Thursday to declare that a huge reduction in its income would be good for the BBC as it would stop trying to do everything.
More significantly, the culture secretary, John Whittingdale, has wondered why the BBC needs to make popular TV programmes such as Strictly Come Dancing or The Voice when commercial rivals would be more than happy to do so.
It is an argument that could lead to a national broadcaster that provides only what the market cannot. Rather than the national and international beacon that it is, the BBC would be the home of the sort of worthy-but-dull programming typically found on US public service networks; without much by way of sport or entertainment.
Nor does it help that the BBC does not have a governing body able to defend it against such existential threats. In almost her first act as chairman of the BBC Trust, the government-appointed Rona Fairhead essentially declared the system of regulation unfit for purpose, and so undermined her own authority.
There can be little doubt that Hall has taken a calculated risk with his announcement about job cuts. His decision to sacrifice 1,000 unloved middle-managers is based on the belief that the BBC as a whole is under more serious financial threat. The soon-to-arrive green paper will demonstrate whether his actions have done anything to appease ministers.
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