BBC Trust

After careful consideration, the Trust has approved the BBC budget for 2009/10, satisfied that it provides for high quality services and demonstrates value for money for licence fee payers. The Trust is mindful that the BBC faces new pressures because of the recession but also has a vital role to play in supporting other parts of the industry through a range of partnership initiatives and by commissioning independent productions. In the current economic climate, it is more important than ever that the BBC does not push up costs for other broadcasters.

This budget is designed to deliver both planned efficiency savings, totalling £1.9 billion over five years to 2012/13, plus additional savings as part of a further efficiency exercise, triggered by the economic downturn. This will include a freeze in senior management pay this year with no more than modest pay increases for other staff. No bonuses will be paid to BBC public service staff.

As part of the overall efficiency drive, the Trust welcomes BBC management's commitment to reduce significantly the total amount it spends on top talent in coming years. BBC management is actively managing this process, with some new contracts already agreed for substantially less than the BBC has paid in the past.

Last year the Trust examined the issue of talent pay in depth and concluded that, although the BBC has to compete in the market for talent, it is not leading the market and must ensure it does not in the future. The Trust made a number of recommendations following its review of the BBC's role in the talent market and will report back on BBC management progress in implementing these recommendations as part of its annual report this summer.

In approving the budget, the Trust was keen to ensure that, while achieving challenging savings, BBC management could still deliver the Creative Future strategic framework which the Trust approved in October 2007.

Last December BBC management proposed an additional £52.7 million in BBC Online over the next three years to make available more of the BBC's content in ways to suit audiences. This was part of an overall strategic direction to move more resources online from traditional linear television and radio. Following the Trust's review of bbc.co.uk and consideration of the necessary management controls, the Trust has been able to agree an increase in BBC Online's budget of £30.7 million over three years, subject to certain conditions set by the Chairman to the Director-General which we are publishing today.

This is significantly less than BBC management originally asked for. The Trust considers that investment at this reduced level is appropriate. It believes that ongoing robust evaluation of the BBC's impact on online markets will be necessary to ensure that public value is created by the investment.

Delivering Creative Future also included a commitment to a wide range of distinctive, quality programmes on television, radio and online. As part of 2009/10 budget, the BBC is able, through efficiencies, to make some targeted investment in core public service broadcasting in the arts and children's content.

BBC management will provide further detail of this investment in due course.

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