[Swprograms] Fw: [CMA] Jowell probes BBC licence fee claims

["Paul David" <paul@xxxxxxxxxxxxxxxxxxxxxxx>]

From: "Michelle McGuire" <michelle@xxxxxxxxxxxxxxx>
To: <cma-l@xxxxxxxxxxxxxxx>
Sent: Thursday, October 13, 2005 11:09 AM
Subject: [CMA] Jowell probes BBC licence fee claims


Jowell probes BBC licence fee claims
Geoff White
13 October 2005 07:50

The government has hired a major firm of accountants to probe the
financial thinking behind the BBC's bid for an inflation-busting
licence fee rise.

The corporation this week publicly set out its arguments for a rise
of 2.3% above the rate of inflation - which could mean the licence
fee rising to more than £200 by the time of the next Charter review
in 2016.

It has now emerged that the Department for Culture, Media and Sport
(DCMS) hired PKF accountants to look through the BBC's figures and
that the firm will now scrutinise its licence fee bid in the run-up
to a settlement.

The use of PKF - hired by the DCMS in July - will come as depressing
news for the corporation. The firm was last used in 2000 when former
culture secretary Chris Smith ended up cutting its request for £700m
in extra funding to £200m, and requiring it to find £1bn of self-help
money.

The media secretary Tessa Jowell has asked PKF to look into the
corporation's costings and value for money plans, as well as looking
at commercial services such as BBC Worldwide, and provide a financial
analysis to the department. The firm will report back to the DCMS
over the next few months, in time to feed into its decision on the
licence fee settlement, expected to be announced next spring.

News of PFK's involvement came after BBC chairman Michael Grade and
director general Mark Thompson held a press conference to unveil
their case for the 2.3% settlement.

They argued the extra money is needed for the BBC to take a leading
role in building digital Britain, and also to make more hours of
original programmes to cut down on repeats. In total the BBC is
asking for an extra £5.5bn, of which 30% would be paid for from the
licence fee increase, with the rest coming from cost-cutting measures
- notably the 3,780 job cuts.

The figures have been questioned by the Satellite and Cable
Broadcasting Group (SCBG) which researched the costs of digital
infrastructure for its submission to the House of Lords select
committee on the BBC in June. The group predicted that the licence
fee would have to rise to £200 in order to cover the cost of digital
switchover alone.

Source: broadcastnow.co.uk


-- 
Michelle McGuire
Editor, Airflash Magazine
Development Officer

Community Media Association
http://www.commedia.org.uk

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