Report on meeting held 15 December 2004 with BBC to discuss Mark Thompson's cuts, specifically Value for Money
Preliminaries
Unions complained that details of cuts in professional services, and the closure of Kingswood Warren R&D, had appeared in Ariel, but had not been communicated to unions at the previous meeting. A pre-announcement briefing for a limited number of union officials on Dec 6 had not featured any warning about Kingswood.
Management said that Ariel was editorially independent and could not explain why the figures had been published so authoritatively. No decisions about job cuts had yet been approved by the Executive board, and numbers could be very different once plans had been drawn up.
The BBC expressed sympathy with staff who had been shocked by the detailed news about job cuts, and described the Ariel piece as "unhelpful".
Union representatives expressed disbelief that Ariel would be allowed to publish speculative figures for job cuts without approval from above, and a heated discussion followed. The unions were angry and concerned that thousands of staff were in the dark about the impact of the changes in their area, and were being confused by conflicting messages, including the coverage in Ariel.
Paul Kirby, who led the Value for Money review, said that there had been no clear decision about the future of Kingswood Warren's Research & Development department, but confirmed that, as part of the Out of London review, the New Media R&D section would move, probably to Manchester. Management promised to clarify the exact position of KW after consulting colleagues.
In an effort to dispell confusion, management confirmed that:
- Broadcast had approval from BBC governors for privatisation as a single entity, and the process would start in the New Year. A meeting with BECTU was promised in early January.
- Resources was subject of a review to assess the impact on the company of changes like the move of Childrens and Sport to Manchester, and cuts in internal budgets. No decision had yet been made about a sale - joint ventures and partnerships were still possible. The Manchester move would not happen for 5 years, and no decisions had yet been made about the destination of extra programme spending, which would also have an impact on Resources' workload.
- WorldwideA clear statement was promised about the future of Broadcast Data Services, part of Worldwide, where members believed they were to be privatised. The statement would be made outside the meeting.
Union representatives continued to criticise the leaking and mis-reporting of Thompson's plans for the BBC, both inside and outside the Corporation, and claimed that the process of change was "out of control". The credibility of the negotiating process had been fatally undermined, they said, in the days since the changes were announced.
Value for Money Review
This was said to have been base on three objectives:
- Recyling of money inside the BBC
- A "simpler leaner" BBC
- Better value from external suppliers
The plan was to shift 10% of money around by 2007/8 - £320m in the BBC, with another £30m being recycled in BBC World Service.
According to management, VFM meant more money on content, spent more efficiently. Existing programme plans, eg creative archive, would still need to be funded, and adjustments were needed to accomodate front-loading of BBC expenditure early in the licence period that began in 1999.
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Mgmt claimed that staff cuts had been avoided where possible. Savings focused on areas like: property, prices, independents, talent, goods and services, and commercial contracts. Majority of VFM cash would come from these budget lines.
World Service
World Service was subject to separate discussions with the Foreign and Commonwealth Office, and the £30m was "illustrative", not a fixed target. Current World Service targets were in place, eg 2.5% annual efficiencies. The overall 15% target for savings in content areas did not, it was confirmed, apply to World Service.
World Service was expected to "learn" from savings in other departments, for example cuts in support services. Management were reluctant to be drawn into a detailed discussion on WS on the grounds that this would lead to "speculation" rather than facts, to which the unions replied that the months of informed rumour in the press about Thompson's BBC shake-up had been leaked by managers, and the BBC had already whipped up speculation.
There was no timetable for decisions about savings at World Service, but confirmed that proposals for any change would be tabled to the unions at national level. Union reps complained that the BBC's official position on WS contradicted some statements being made by managers at Bush House. Some WS staff would be affected by VFM if they are in professional services.
Approach taken to VFM cuts
Overall, the BBC believed it had set "robust" value for money targets that could be achieved across the Corporation, and debate would now move on from the targets themselves to implementation and timetable. This would occupy management until March 2005, as would the inter-connection of reviews eg the Manchester move and use of resources. March was the definitive sign-off date for details of the savings.
There were still options in many cases and flexibility in terms of the manner in which targets were met. No decisions had yet been taken on the VFM changes, said management
Programme-making areas were most "complicated" according to management, who admitted that things were unclear. Decisions still had to be made about where the saved cash would be spent, and some areas could actually grow. It was difficult even to speculate on the impact of the 15% saving.
Factual and Learning was an exception, and the 400 proposed job cuts were the result of management predictions that changes in content supply (more indies) and changing demand for lighter factual programmes would reduce staffing requirements. The figure was, however, "illustrative" to indicate the scale of the likely cuts - more than 20% of current staff.
Management were accused of conceding defeat on the question of the independent quota, and voluntarily imposing a 40% target, rather than the 25% currently demanded by law.
The 15% figure would be treated as an average across the BBC, and actual cuts would be less in some areas, more in others. Expenditure on staff varied by department - radio and news spends roughly 50% of its budget on in-house staff, Factual and Learning 33%, and Drama 10%. Management claimed that programme areas had plenty of opportunity for savings without wholesale job cuts.
In areas of continuous production, in which roughly 50% of BBC staff were involved - soaps, radio, journalism - three types of saving had been identified:
- Digital savings N&R, Jupiter, Pacific Quay, new BH
- Staffing levels, which had been set historically and led to similar programmes having different staff complements
- Pooling of staff eg in news
In commissioned programmes - Drama, Factual, and Entertainment where 20% of budgets are spent on in-house staff, savings were expected from:
- A new approach to setting budgets for genres/types of programmes, instead of fixed tariffs
- Tougher supply management - large amounts of finished programming and services are bought in
- Better utilisation of BBC staff - pooling, less time in activities like post-production
Digital technology
Unions had been in discussion about multi-skilled pilot schemes in the regions, and had concerns that the current agreement was not being honoured by management. The new techniques had caused a range of problems, and often the resulting output was not up to BBC standards. Management accepted that the subject was "sensitive".
Unions asked how management intended to maintain quality if staffing and budgets are being reduced with the introduction of digital technology. The BBC accepted there would be "trade offs", but were committed to extracting benefits from the major investment already made in new broadcasting technology, particularly in the Nations & Regions.
Staffing
Unions did not accept that there was widespread over-staffing in the BBC, as the management's analysis had implied. In fact staff in most areas had been under sustained pressure to produce more output in less time. Management questioned whether dedicated teams for specific programmes were always necessary.
The BBC emphasised that in programme areas money saved by cuts would be re-invested in production, however the unions predicted that the 15% saving target would inevitably lead to job cuts, not least because of the separate 14% reduction in in-house capacity to allow more independent productions to be commissioned. Management claimed, though, that the impact of changes in programme commissioning would be greater on resource staff than production departments. Unions were sceptical.
Professional Services
None of the money save in these areas would be re-invested in the divisions where it came from (unlike the programme department savings). The impact of VFM in professional services would therefore be negative. The estimate of 2,500 job cuts was an "indication".
Management said that there were 4,500 management and professional posts in professional services including finance and HR, and there were 1500 support posts in admininstration and secretarial roles. Savings were planned to be 25% of the current budget. Outsourcing of HR was being explored, and there were existing plans for outsourcing in finance and IT which would go ahead.
Relationships with existing suppliers were being reviewed, and all activities would be moved towards best-practice benchmarks. Other public sector employers - civil service, NHS - spend less on support than the BBC, claimed management. Examples of inefficiency given by management were the formal recruitment process for internal job moves in production, which led to one in four staff formally changing post every year, but often staying on the same grade.
In response, the unions warned that a departure from the BBC's exacting selection process for jobs would encourage the favouritism and nepotism that was rife in some parts of the industry.
Unions claimed that staff and public had been allowed to adopt the perception that the professional services cute were about the BBC getting rid of superfluous back-room staff. However professional services covered critical activities like occupational health and health & safety, as well as other services that were valuable to the BBC and its staff.
Management were challenged to justify their claim that outsourcing and cuts in professional services were just options, and not firm plans, since staff in some areas like occupational health had been told exactly how many job cuts would occur. The BBC said that although "models" were being discussed with staff, no final decisions had been made, nor was it clear whether there would be providers willing to offer outsourced services if required to by the BBC.
Union representatives offered written evidence that presentations in People division had been made using identical graphical templates, indicating that there was a centrally-directed plan for massive job cuts and redundancies across professional services. The management should come clean and show the unions the full plan.
Support for staff in professional services was expressed by the union side at the meeting, and the benchmarking process used to compare the BBC's specialists with outside companies was questioned. Without comparing other organisation's record on in-house training, health & safety, and personnel support for staff, a straight comparison of numbers in the professional services was invalid, and the inference that the BBC had too many staff in areas like HR was false.
Management admitted it was "unfortunate" that BBC People had been singled out by the press in the aftermath of Thompson's cuts announcement, and predicted that most cuts in professional services could, in fact, fall in Finance.
After a discussion about the exact numbers of staff in professional services - just over 3,000 are formally in the services divisions, but the BBC claims another 3,500 are embedded into programme and other divisions - management agreed to provide detailed figures outside the meeting.
Regions
Unions pointed out that budgets and staffing levels in the regions were already under pressure, and thre had been no sign yet of the BBC's promised increase in spending in the regions. It would not be appropriate, for example, simply to set a staffing level for local radio stations, and apply it everywhere.
Management confirmed that local radio stations would not suffer the full effect of the 15% saving target, and their predicament was understood by Thompson. Debate about local radio cuts had been confined to staff numbers, and not salaries.
Property
Under the property heading, BBC admitted that its contract with LST was being re-negotiated, and the unions questioned why they had been told, at the time of the LST deal being struck, that it could not be changed during its 30-year life. According to management the re-negotiation was "mutual".
Unions asked about the future of the BBC's property portfolio, especially the impact of the move to Manchester. BBC plans to focus within London on the new Broadcasting House, Television Centre, and the White City complex.
External suppliers
New relationships, and prices, would be brokered with the BBC's main suppliers of independent programming, and suppliers of other programme-making services should expect pressure on prices.
Timetable for change
Management revealed that although the BBC's Governors were not due to approve the detailed plans for change until March 2005, the Executive Board would begin appraising the divisional proposals for 15% cuts, and redundancies and outsourcing in Professional Services, in January 2005.
The unions criticised the timetable for allowing no time for consultation before senior executives started making decisions. In practice, said the unions, divisional managers would have to finalise their proposals either during the Christmas holiday period, or immediately after, and staff, unions, and middle-managers for that matter, would have no influence over them.
A combination of a rushed timetable, and profound lack of detail about the changes, had already turned the talks over Thompson's cuts into the "most shambolic" in the BBC's recent history, according to union officials.
Management regretted that there was a lack of clarity, and could not account for discrepancies between reports about the changes on various divisional websites within the BBC. Managers also acknowledged that most staff urgently wanted to know if they were affected, and how.
