BBC Trust

BBC Trust Chairman Sir Michael Lyons today underlined progress towards creating "a changing BBC for changing times" as the corporation's Annual Report and Accounts for 2008/09 were published.

And he stressed that amidst the on-going policy debate about the BBC's role and position in the media industry, it was important to acknowledge that the BBC had produced some great content and programmes during the past year and that this is a top priority for licence fee payers.

He also stressed that the BBC must continue to build on positive developments over the past year, in particular by meeting growing audience demands for more fresh and new programmes and ensuring that the organisation is as lean as it can be – particularly during the current economic climate.

Sir Michael also announced today that, as part of a review of executive pay, agreement has been reached that Executive Board bonus payments will be suspended until further notice and not re-introduced without the Trust's approval. And he published a Trust update on efforts to drive down talent costs in the BBC, which confirms good progress, but that efforts should be stepped up further.

During the year, the BBC's overall weekly reach to the UK held steady at 93 per cent, with digital channels BBC Three, BBC Four and the BBC News Channel all seeing increases, although BBC One, BBC Two and CBBC all experienced slight drops. The number of people watching TV remained high, despite the rising popularity of online content and on demand media. This year 85 per cent of people said they would miss the BBC if it wasn't there – up from 70 per cent two years ago.

BBC audience research showed a small positive overall trend in distinctiveness and quality. This was primarily down to programmes and content. Highlights of the year included the excellent coverage of the Olympics and the financial crisis, Being Human, Five Minutes of Heaven and Tiger - Spy In The Jungle. The proportion of those who agreed with the statement that the BBC is high quality remained stable at 66 per cent, while those who strongly agreed with this statement rose from 32 per cent to 34 per cent. Those who agreed strongly that BBC television is “original and different” rose from 32 per cent to 36 per cent.

The BBC continued to make excellent progress with non-broadcast services, with the number of iPlayer users doubling to 2.8 million a week and BBC Online use up one-third to 22.2 million per week.

During the year the BBC played an active role in the debate about the future of public broadcasting, leading up to the publication of the Government's Digital Britain report in June 2009. While the BBC Trust opposes the proposals for top slicing the licence fee contained in the document, it recognises that the report seeks to address some real problems and identifies some real opportunities. The Trust is clear that the BBC can play an important part in delivering the report's aims, including helping to secure and maintain a plurality of public service broadcasting in the UK.

As part of this debate the Trust challenged the BBC to come up with plans to work more closely with broadcasters and other organisations in the future to help secure and maintain a plurality of public service broadcasting in the UK. The Director-General and his team responded enthusiastically and creatively, devising an ambitious partnerships programme which will enable the BBC's knowhow and resources to be shared with others. As part of this, the BBC has also unveiled ambitious plans to share the iPlayer with other broadcasters and to bring it and other materials directly to TV screens.

The Trust continued to carry out its responsibilities in relation to the competitive impact of the BBC during the year. This factor played a part in Trust decisions to reject the BBC's local video proposals, to uphold parts of appeals against the use of sponsorship in the BBC Sports Personality of the Year and to review the scope and scale of BBC Worldwide's activities.

During the year, the BBC rose to the challenge set by the Trust to deliver cumulative net efficiencies amounting to three per cent over five years. In 2008/09 - the first year of the programme - the BBC delivered £237 million in efficiencies (£192 million net of costs), putting it on course to meet the overall target of £1.9 billion. The review of executive pay, which is already underway, will take into account the current economic climate and the BBC's own financial challenges.

The BBC did make a truly notable mistake during the year - the Russell Brand Show broadcasts in October 2008. Following the broadcasts, the Trust acted swiftly and decisively in response to strong public reaction, ensuring those responsible were held to account. BBC management showed leadership in responding constructively to the incident and ensuring necessary corrections were quickly put in place and lessons were learned. The Trust also demanded a much wider examination of the public's views on taste and standards which will inform new editorial guidelines next year.

As part of its work to ensure that the BBC delivers for audiences, the Trust published its service licence review for children's services during the year. They were found to be performing very well, but some areas for improvement were identified.

The BBC has made progress in serving and representing all audiences during 2008/09, and the Trust has set new targets on making programmes outside London, and has supported new investment in Salford and elsewhere. The Trust has also pushed for changes in editorial style to better reflect the reality of decision making in the UK's devolved administrations. Early evidence shows this is making a difference.

Sir Michael Lyons said:

"While the policy and political debate around the BBC has intensified over the past year, it is important to step back and acknowledge that the BBC produced some great content and services during 2008/09.

"And this is what the public care about more than anything else – it's the main thing they pay their licence fee for.

"My job entails seeing the BBC through the eyes of licence fee payers and helping to ensure their expectations are met.

"There has been evidence of our approach starting to pay dividends during the year with, at the Trust's behest, the BBC making progress in areas including serving and representing all audiences, delivering value for money and supporting the wider industry. And I pay tribute to the enthusiasm of the Director-General and his team in responding to the many challenges set by the Trust.

"There is more to do, for example in meeting growing audience demands for more fresh and new ideas for programmes and content, ensuring systems are working to avoid failures like the Russell Brand Show broadcasts last October, ensuring efficiency wherever possible and making sure the BBC is as transparent as it can be about how it operates.

"This is all work in progress, but we are making good strides towards delivering a changing BBC for changing times."

Director-General Mark Thompson said:

"Two years ago I set out an ambitious strategy to reshape the BBC for the 21st century. We recognised that, for the BBC to remain relevant, it needed to be smaller, but deliver a bigger impact with high quality, distinctive programmes and services; and it needed to get ready for - and help support others in responding to - the challenges of digital media.

"This year we have seen evidence of this strategy starting to deliver. We've achieved our efficiency targets while not undermining the high quality of our programmes and services. We've also started to make some significant headway in forming partnerships with the rest of the industry.

"What comes through clearly this year is that the most important people - our audiences - believe the programmes they enjoy are increasing in quality and distinctiveness.

"In the year ahead we will continue to drive down our costs, become more transparent about how we operate and above all else, focus on providing the best television, radio and online services for the public who own and pay for the BBC with their licence fee."

The update on talent costs, 13 months after the publication of a Trust report into talent pay, consists of a short report from BBC management setting out steps taken over the past year to drive down costs and a Trust commentary in response.

The Trust's response states that the BBC Executive has made good progress on the Trust's recommendations, controlling talent costs and supporting up-and-coming talent. But it concludes that the Executive should step up its efforts to reduce overall talent spend within the current licence fee period, and to bring forward plans to increase transparency in this area in its Annual Report.

Ends

Notes to editors

The BBC's accounting year is 01 April 2008 to 31 March 2009.

In line with Charter requirements, the Annual Report is in two parts, with the Trust's commentary on the BBC's performance published separately from the detailed analysis and financial accounts prepared by the BBC Executive Board. In addition, full financial statements and corporate governance statements are being published online at http://www.bbc.co.uk/annualreport/

In addition to the Annual Report and Accounts the BBC Trust is today also publishing the following documents:

Four Nations Audience Council Reviews:

• Wales
• Northern Ireland
• Scotland
• England

Purpose Remits Research Reports:

• UK
• England
• Wales
• Northern Ireland
• Scotland
• BBC Trust World Service Research Report - Arabic TV
• Trust Response to the BBC's Follow-up Review of Talent Costs
• Trust's Observations on the BBC's Equal Opportunities Arrangements Report
• Trust's Observations on the BBC's Training and Development Report
• BBC Annual Report and Accounts Licence Fee Payers' Leaflet: 'Getting the best out of the BBC'

The BBC World Service has published its Annual Review today.

BBC Worldwide has published its Annual Review today.