The subject is so controversial, and the potential impact on jobs so large, that Sir Michael Checkland, Director-General of the BBC, said in Birmingham this week that no decisions will be taken until September, allowing senior managers all of August to mull over the options and lobby for their interests.
But in announcing the BBC's new 24-hour radio news service and education directorate, he said: 'The rigorous review of support costs we are conducting will reduce overheads to a minimum, and release more funds to fulfil the programme objectives I have outlined.'
The report has been drawn up following a Price Waterhouse study earlier this year which identified 365 different functions that are carried out by the BBC but which are not directly related to the basic business of making television and radio programmes - everything from running transmitters to the laborious system of processing artists' contracts.
It found that a quarter of the licence fee, pounds 330m, was absorbed by administration. This was seen as far too high. It has gone on to identify, and draw a ring fence around, the special costs of about pounds 50m year associated with the governance of the BBC: everything from running the board of governors to answering letters from the public.
Until the rest of the BBC's bureaucracy is harshly pruned back, the market-oriented system of producer choice, allowing programme-makers to shop outside the corporation for services, cannot work fairly. The BBC's own programme-making services are carrying far heavier costs than outside independent facility companies and freelance technicians, with whom they are expected to compete. A small group of top BBC managers, led by the BBC's personnel director, Margaret Salmon, have spent the summer working on the masterplan, devising budget cuts, and buildings to be sold or vacated.
This has been accompanied by a matrix, in which each administrative function is given a score on a scale of 0 to 4. Essential functions such as transmission are given a 0 score. But there are other activities, engineering research, for example, which have less direct importance, which have higher scores.
The matrix paves the way for an objective system of cost/benefit analysis, allowing the board of management to work out which are the high-cost and low-benefit activities. A typical department appears to be facing budget cuts of between 20 and 30 per cent.
Senior BBC staff report that the organisation is in the grip of a seismic upheaval: rapid changes in broadcasting, with satellite television and ITV ending the cosy staus quo, accompanied by huge and unpopular changes in working conditions and organisation inside the BBC. They also fear that debate about the future direction of the BBC - and what its future programme services should carry - is being unnecessarily stifled.
Many managers appear to be in the dark about the overall plan: several controllers of BBC Radio attending this week's Radio Academy did not know about the decision to launch the new radio news channel until Sir Michael arrived to announce it. They are also serving two masters: Sir Michael Checkland is not leaving until next February. John Birt, his successor, is not a great admirer of much of the BBC's current output.
The board of management is bracing itself for the axe. The director general-designate, Mr Birt, is expected to want to reform it by appointing managers responsible for BBC-wide functions, such as resources, rather than continuing with the current system, which encourages sectional interests to flourish.
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