Summary:

BBC Online is meeting its obligation to commission 25 percent of eligible production work from external suppliers – but must make wide-rangi…

BBC Online is meeting its obligation to commission 25 percent of eligible production work from external suppliers – but must make wide-ranging changes to the process, a review by its regulating BBC Trust has concluded (release, review)

The BBC has met the quota requirement every year since it was recommended by the 2004 Graf report. Last year, it commissioned external interactive producers for work totalling £20 million.

But a Deloitte review in to the quota commissioned by the trust slates the system for lack of transparency, management, direction and value for money.

Consequently, the trust – whilst it is not raising the quota – has ordered BBC Online to “discuss with industry what form strategic goals for a quota system might take”, and to simplify the current process.

This BBC Trust review has been many months in the making – the BBC executive had already known the outcome and recommendations before Friday’s publication and has partly responded – it has already agreed to give the trust, after speaking with industry, a review within three months. The trust says the whole issue requires “urgent attention”.

Deloitte’s review (highlights):-

“The BBC is complying with the requirements set out in the BBC Agreement. However, the Online independent supply quota does not appear to be working well in practice. Whilst steps have recently been taken to remedy the issues surrounding it, both the BBC and the independent sector recognise there is a lack of: communication around how the commissioning for online takes place, clarity around how the quota is calculated and tracked; and, consistency and efficiency in commissioning practices. Most significantly, interviews demonstrate a strong belief in the independent sector that BBC online commissioners select suppliers to pitch for commissions based on the commissioners’ personal knowledge, rather than any rounded evaluation of who is equipped to deliver quality and value for money.

“There is a high degree of external scepticism as to whether reported performance is real or the result of an accounting allocation.

“Overall BBC Online expenditure is expected to go down rather than up

There are issues with the management of the current arrangements that impact the value for money and quality BBC Online achieves for licence fee payers

“BBC Online has failed to provide sufficient transparency to the sector in terms of: strategic direction, emerging opportunities, decision making processes, and reporting of performance relative to the quota.

“An average commission size in FY 2009/10 of less than £5,000 and only 17 commissions over £100,000

“The revenues of the top 100 interactive agencies totalled c. £790m in 2009. In 2009/10 the BBC spent c. £20m externally as part of the BBC Online quota. Although the BBC will spend more on digital content (for example on those areas excluded from the eligible base), in absolute terms the impact that the BBC makes on the online content sector is limited.

“In this context, BBC Online’s c. £20m of ‘eligible’ annual spend lacks the scale to have as significant an impact on the shape of market as the BBC does in TV broadcasting.”

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