Report on meeting held 9 December 2004 with BBC to discuss cuts resulting from four reviews
Negotiators opened the meeting by describing Mark Thompsons' announcement of job cuts as the "most disastrous day in the BBC's history". The unions did, however, welcome the BBC's willingness to consult properly, as indicated by the Director-General himself.
The unions complained that a new relocation policy had been published without union consultation - management say they had no intention to "negate" their commitment to full consultation, but had wanted to show staff that support would be available for those affected by the move to Manchester
Some information had appeared on various divisional websites, and unions expressed concern that this had not been centrally distributed.
Both sides agreed that talks about the Thompson cuts would initially be conducted at national level, but could be devolved if mutually agreed. Unions called on BBC to field senior decision makers at meetings.
Some local discussions would be needed on the 15% efficiency savings, which will be implemented at local level, however departmental managers are not supposed to be jumping the gun. The unions warned that piecemeal local cuts would be resisted.
The BBC said it has not yet imposed a formal recruitment freeze in response to the cuts announcement, but divisions were expected to implement headcount control, which would result in each vacancy being reviewed, and a determination made as to whether they should be filled, or left vacant.
Management confirmed that preferential pension discounting for redundant staff would be honoured, as would the current redundancy arrangements, both the period of notice and the calculation of severance pay.
Manchester
Peter Salmon said the move was intended to shift the industry, to provide a counterweight to the BBC's London presence, and was part of an investment policy across the UK, including new programme commissioners in Nations and Regions. Current timetable is for moves to take place by 2010. Salmon said the departments moving planned to move were strategically important, have a long-term future, and will work well together.
No personal decisions were likely to be demanded for about 18 months, and staff will be involved in planning the move, though workshops and other activities. Management confirmed that staff who don't want to move from London will be offered resettlement if possible, or redundancy. In addition to the Manchester move, there would be other, smaller, moves to the rest of the UK from London.
Unions observed that the move depended on "satisfactory" licence fee settlement, and government approval. BBC Governors had signed off all the out of London plans, subject to licence fee. Although speculative figures around £500m had been aired, the BBC was not in a position yet to estimate how much the move would eventually cost.
Management were asked what would happen to TV Centre and the W1 project once Childrens and Sport, heavy users of TV studios and post-production, moved to Manchester? Management said the question of TV Centre's future usage was under review, with no clear idea of the outcome. Similarly, there was no clear picture of precise occupancy of BBC space over the next few years, but management hope to consolidate London staff into the big sites at White City, and in the new BH.
Although the current proposals for Manchester were relatively vague, but management expected that clarity would emerge within the next few months.
Content supply
Management explained that this review had been aimed at ensuring that the BBC could exploit the best programme ideas. BBC had feared a 50% independent quota being imposed by the government, but believed that in-house production was crucial to the BBC's role as a strong creative force.
Critics of the BBC had argued that the Corporation had not always commissioned the best ideas. Thompson's plan guaranteed 50% of production as an in-house activity, and the 60% planned capacity - down from 70% - was sufficient to represent a critical mass. Target date for the new arrangements was 2007.
Management were unwilling to predict if, or how many, jobs would be cut as a result of the reduction in capacity, pointing out that there might be new work to do, for example in replacing repeats with new productions.
Job cuts in Factual and Learning, where 400 posts are threatened, were partly driven by the higher proportion of permanent jobs in the division, compared to areas like Drama. BBC policy on use of fixed-term contracts had not been changed by th4e Thompson announcements.The figure of 400 was described as a "best estimate".
The definition of "independent production" would not depart from the statutory formula for TV, but management had still to clarify whether news programming would now be included in the voluntary 10% quota in radio.
Management were asked directly why no vigorous defence of in-house production had been publicly pursued by senior BBC figures, and the unions expressed fears that the BBC was moving towards a Channel 4, publisher/broadcaster model.
The BBC was accused of self-imposing a 40% independent quota by reducing capacity to 60%, and the unions cast doubts on the likelihood of in-house producers winning more work than their capacity would allow.
Management were reminded that independent productions companies sometimes fell short of BBC practice in issues like working conditions for their staff, and job security.
Commercial Review
Four key areas had been examinied by this review team:
- Scope of activities - what should the BBC be involved in, given accusations of "creep" into commercial areas that had little to do with programmes?
- Ownership - which model would yield greatest benefit for licence fee payers?
- Fair Trading - was criticism of the BBC "crowding out" genuine commercial enterprises justified?
- Governance - were the BBC's commercial subsidiaries being run transparently?
The review, said management, had included consulation with the entire "market", and there was apparently no oppositioin to the BBC exploiting its assets.
Central to the review process had been the question of exactly how the assets should be exploited, and whether it was necessary and appropriate for them to be wholly-owned by the BBC. The Corporation, it was said, must be able to explain why it retained ownership of particular assets.
The possibility of obtaining services from outside suppliers, rather than wholly-owned subsidiaries, had been considered during the review.
Worldwide
A subsidiary responsible for exploitation of BBC assets, and promotion of BBC's position globally. 2,000+ staff.
The review had concluded that continued ownership would guarantee maximum return of value to licence payers. It is the UK's biggest exporter of TV programmes. A joint venture/partnership strategy was already in place, and would be extended to learning, books, and other areas, which would be sold off either entirely, or in part.
Some parts of WW provide important services to BBC not linked to exploitation of content, and these would not necessarily be kept inside BBC, Broadcast Data Services being an example.
Magazines published by BBC Worldwide had been the subject of public debate, and a number would be disposed of on the grounds that they are not programme-related. On-air trails for magazines will cease.
Fair trading process will come under purview of Governors, and more independent non-executive directors will be appointed to Worldwide's board.
Profitablity had been poor, and the BBC was obliged to improve this. Management blamed poor performance of some business units, together with the up-front costs of starting up new magazines for Worldwide's low earnings, and emphasised that much of the actual cash returned to the BBC by Worldwide was for rights payments which the BBC could earn from elsewhere.
Unions explored whether changes in Worldwide would be TUPE tranfers, as with Origin Publishing early this year. Management confirmed that magazines covering history, music, and wildlife would continue to be published, but the BBC would drop some that were not programme-related, like "Cross Stitching Crazy". The BBC was reminded that in the Origin outsourcing staff had lost the right to belong to BBC pension fund. BBC was accused of running scared from criticism, for example abandoning on-air promotion of Radio Times.
Broadcast
Reponsible for playout of BBC TV channels, on-air presentation, and marketing through trails. Also offers playout for commercial channels, specifically in partnership with Flextech. 900+ staff.
Management described Broadcast as a new business in growing market which was being hampered by BBC brand. Despite offering playout prices to the BBC that were competitive with the outside market, the review had concluded that it would be in the best interests of the business itself to sell it off.. Several issues need to be resolved before sale, which would delay putting Broadcast on the market until the New Year.
Resources
Operates TV studios, post-production, and outside broadcast facilities in London, as well as a costume and wig store. 1200+ staff.
Resources would be affected by the other reviews commissioned by Mark Thompson, particularly the move to Manchester which would rob the London-based company of its two largest customers. Overall the BBC accounts for most of Resources' business,and cuts in budgets would also impact on the company.
According to the Commercial Review team, there was no reason to continue owning BBC Resources, and once its relationship with a slimmed-down and non-London BBC had been clarified, the company would be put on the market for sale, probably in mid-2005.
General discussion on privatisation
Unions complained that there were contradictory messages from management about the exact intention to sell, or transfer to joint ventures, Broadcast and Resources. Members in both companies had been given unequivocal promises in previous years that incorporation was not a prelude to privatisation. The promises were clearly worthless.
Management said that the BBC intended to "take both companies to market", albeit at different times, and although proposals for joint ventures would be entertained, the starting point would be to put Broadcast, and then Resources, up for sale.
Unions accused the BBC of sacrificing core areas which were earning profits, and said there would be no long-term benefit to the Corporation. Management confirmed that benchmarking analysis had shown both companies to be charging competitive prices to the BBC, and the unions asked what advantage would flow to the BBC from selling them, especially since they were both in profit.
Management claimed that the value of assets in both companies would be "better realised" by selling than keeping them in the BBC. The unions asked why, apparently, it made sense for the BBC to own and operate TV production and distribution facilities in Nations and Regions, but not in London, where they were likely to be sold. Management responded by saying that the review had not covered any facilities outside London.
All three unions threatened that strong resistance would be mounted including industrial action to prevent any sale, and demanded that staff in both companies should receive guarantees about terms and conditions at least as good at those given to BBC Technology.
Management had different motives for proposing the sale of Broadcast and Resources. They claimed that Broadcast was being held back in its efforts to win outside business, and would fare better as an independent company. Unions suggested that the real problem was not the BBC brand, but the costs of occupying LST premises, and all the overheads implied by being part of the BBC itself.
According to management, the transfer of Broadcast's contract with the BBC, which runs until 2012, could be done without using the formal European Union procurement procedure, suggesting that a sale could be stitched up behind closed doors.
In the case of Resources, management said there was a vibrant market in London supplying TV facilities, and claimed that programme-makers consulted during the commercial review would be content to use other providers. Management accepted that the company would be seriously damaged by the move of its main customers, Sport and Childrens, to Manchester, but suggested that a joint venture between Resources and another entity might help fill empty studios and editing suites in London by bringing non-BBC work in.
The BBC hinted that the sale of Resources might be accompanied by a long-term minimum volume contract, which would guarantee the new owner a fixed level of work from BBC producers. Union representatives argued that the time for a volume contract was four or five years ago when in-house producers were deserting Resources facilities, and offering one just before a sale would be seen as a cynical move to "fatten the calf" before sending it to market.
The unions repeated that all staff affected by the Manchester move should be entitled to equal treatment, whether that meant redundancy pay or relocation allowances, and Resources members should be included.
The BBC refused to confirm or deny that talks were already underway with prospective purchasers or joint venture partners interested in either Broadcast or Resources. No estimates were offered of the prices that might be realised if the companies were sold.
