BBC 'failed to show value for money on big events'
The BBC has failed to show that its coverage of major sporting and music events provides the best possible value for money, a National Audit Office (NAO) report found today.
The NAO called for the Corporation to improve how it commissions coverage and evaluates success, with a more structured approach.
It said the BBC should set measurable targets for big events which can clearly demonstrate success and value - as the BBC "does not have transparency over the total budget for coverage of individual major events".
Total budgets were not brought together as several BBC divisions could be involved.
For example, BBC Sport's plan involved spending £13.7 million for TV, radio and interactive coverage of the Beijing Olympics.
But this did not include extra budgets of £2.5 million for some talent, staff and online coverage, approved separately.
The NAO called for the BBC to consider a range of costed options and to conduct annual reviews assessing the quality and management of coverage.
The study focused on coverage of six events in 2008/09 at a cost of £35 million.
They were the 2008 Beijing Olympics, the 2008 Uefa European Football Championships (Euro 2008), The Championships - Wimbledon, the Glastonbury Festival, the BBC Proms and Radio 1's Big Weekend.
The BBC spent £357 million in total during that period on the rights for and coverage of sporting and music events.
The Corporation delivered all six events on time and largely within final budgets.
But Amyas Morse, head of the NAO, said: "The BBC has not done enough to demonstrate that its coverage provides the best possible value for money.
"When the BBC decides that it wants to cover a major sporting or music event, it should carefully explore a range of options, and set down clear objectives against which it can measure its achievements after the event.
"Without that, the BBC will not convince licence fee-payers that their money has been well spent."
The BBC approved the contract for management of Radio 1's Big Weekend in April 2008, just four weeks before the event, when "significant costs had already been either incurred or committed".
It set out "high level" objectives for the Big Weekend, but they lacked measures against which performance could be assessed, according to the study.
The BBC could not find its original business case documentation for the Beijing Olympics - and did not establish coverage objectives for the other four events reviewed.
The report also highlighted discretion over the use of studios.
For Euro 2008, the BBC was allocated facilities four miles from the centre of Vienna, "and without, in the BBC's opinion, an editorially suitable camera shot of key buildings".
"The BBC therefore paid an additional £250,000 for the construction and operation of its local studio in Vienna, with a backdrop of the city skyline.
"For Beijing, the construction and operation of the BBC's own studio, which it considered editorially necessary, was approximately £160,000."
Chairman of the Public Accounts Committee Edward Leigh said: "Fresh evidence that value for money and cost-effectiveness are not always foremost in the BBC's thinking arrives in today's report...
"It does not even have a total figure of how much its coverage of an event is going to cost.
"Our confidence in the Corporation's commitment to value for money for the licence payer is certainly dented when we read in the NAO report that, for Euro 2008, the BBC spent an extra £250,000 for the construction of a local studio in Vienna, on the ground that the one allocated to them did not have a backdrop of the city's skyline.
"Such a casual approach to spending licence payers' money does not sit well with the ferocious commitment to cost-effectiveness and full accountability demanded of the public sector in the present economic climate."
He described the arrangements for Parliamentary scrutiny of the BBC as "inadequate".
The NAO said the BBC Trust had asked it not to reveal aggregate talent costs for each event, so talent and staff costs had been lumped together.
The report said: "The cost of talent (presenters and commentators) can be a significant element of coverage expenditure, particularly for the events covered by BBC Sport.
"The cost of talent was either 2% or 3% of total coverage costs for music events and between 6% and 20% for sporting events...
"For the events we reviewed, the BBC did not compare the proportions spent on the cost of talent with the added value of using these presenters... There was no inter-event comparison even though the proportions varied markedly."
The staff and talent cost per day for the Big Weekend was £138,000, compared with £90,000 for Glastonbury.
Viewers and listeners were generally found to value the BBC's coverage, with 70% giving the BBC eight out of 10 for coverage of Euro 2008.
Around 80% of the UK population watched at least three minutes of Olympic coverage in 2008.
The 2012 Olympics is being managed through a dedicated programme and the Trust is asking the executive to consider how such arrangements could be applied more widely.
BBC Trustee Jeremy Peat said: "The Trust commissioned this report as part of our programme for assessing value for money and welcomes the analysis that the NAO has produced.
"While covering high-profile sports and music events is a core part of the BBC's job - and, as this report notes, the BBC's work in this area is valued by millions of listeners and viewers - the Trust is emphatic that value for money must be delivered in this area, as is essential across the BBC...
"The Trust notes that the executive has already implemented many of the NAO's recommendations, but there is still more to do and we will review progress on a regular basis in the context of the action plan that we have asked the executive to produce."
A statement from the BBC said: "Today's review recognises that these events are enjoyed and valued by millions of viewers and listeners and there is no inference in the report whatsoever that the BBC has been 'casual' in the way that it spends licence fee money.
"Indeed, for the most part the BBC has delivered these events within budget and with appropriate staffing to provide thousands of hours of content for TV, radio and online.
"The BBC accepts and will now implement the recommendations made in the review to even better demonstrate that it delivers value for money."
Responding to Mr Leigh's comments, a Trust spokesman said: "As the body responsible for ensuring the BBC continues to deliver for licence fee-payers, the Trust regularly commissions independent reports on value for money from the NAO.
"We have a good relationship with the NAO, and have provided them with all information they have requested while carrying out this study.
"Indeed, it is in our interests to do so to make sure that the studies we commission have valid and robust conclusions.
"In order to safeguard the BBC's independence, the current arrangements for scrutiny are the responsibility of the BBC Trust, rather than Parliament.
"This is enshrined in the Charter and Agreement which was approved by Parliament, and was supported by evidence from the public gathered by the Government during the last Charter renewal process in 2006."
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