Friday, March 03, 2006

Telly Tax Heading For £180


According to today's report from the Lords Committee on BBC Charter Renewal, "the BBC’s current licence bid would result in a fee which will cost about £180 in cash terms by 2014". That would take fee income to £4.3bn pa, all based on the BBC's comfortable cushion formula of RPI+2.3%. Their Lordships- and we peasants- want to see that cosy arrangement scrapped. PDQ.

Naturally, the bid is supported by reams of guff. But as shown by all the ordure slung at Dalek Birt, simple business efficiency has never been a BBC priority. Or even a vague passing interest. So when their Lordships homed in on the costs underpinning the bid, they found a preposterous lack of proper analysis:

'Michael Grade told us “what we presented in that bid was as accurate a costing as we could possibly manage.” But 'evidence suggests that it could be reduced. We have examined...the cost of the proposed move of several BBC departments from London to Greater Manchester. The BBC originally estimated this between £530 and £640 million'. Yet as soon as the Committee began probing it in detail, 'in four months the projected cost was cut by 33 per cent.

'Mark Thomas, the Director, then told us that the figure in the original bid was the “easiest calculation” based on a “lift and shift model”... Thus, 'our scrutiny of only one part of the bid has shown that the BBC’s costings were rudimentary and could be significantly reduced'.

Bad enough, but even worse, if the move to Manchester is going to increase the licence fee, why the effin' eff are they doing it in the first place?

One element of ballooning costs the Committee didn't look at was the BBC pension fund. Just like most final salary pension schemes, the BBC fund is in substantial deficit: the most recent Annual Report puts it at £o.4bn, but it has been as high as £1bn. But unlike most private sector schemes wrestling with similar deficits, the BBC has no plans to close the scheme to new members, or even to reduce the benefits. Instead we taxpayers are stumping up increased contributions, and must continue to act as guarantors- even though many of us are facing uncertainty and possible benefit reductions with our own pensions.

The telly tax remains insupportable.


PS For a quick canter through some of the high profile beneficiaries of the BBC pension fund, see here: "The fund has had to set aside more than £5m to meet the entitlements of two senior executives. Jenny Abramsky, director of radio, has a pension valued at £2.72m, which would have paid her £135,000 last year. Alan Yentob, creative director, whose expenses claims are being investigated by order of the director-general, has a pension valued at £2.57m. It would have paid him £127,000 last year. According to Mike Warburton, senior tax partner at Grant Thornton, the accountants, the devices used by the BBC to boost the pensions of its senior executives are “highly tax-efficient” and “extremely generous compared to the private sector”.

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