A report from the Public Accounts Committee of the UK House of Commons says the BBC is bullish about moving to a fully digital future but must take care that no one is left behind, suggesting the Corporation currently lacks a plan for delivering its services in the digital future it envisages. To achieve its goals, the Committee says the BBC must work with government and other stakeholders, including on the rollout of broadband across the United Kingdom.

The broadcaster must also overcome the challenges it faces to recruit and retain the skilled staff it needs to develop its offer so that it is secure and competitive in a global online world. It currently has a 23 per cent turnover rate among staff in its digital section.

The report says the BBC is being held back by regulatory and funding uncertainties, making it less competitive in a rapidly changing global marketplace.

As a result of licence fee changes and inflation, the BBC now estimates it will have a nearly £400 million (€452m) a year funding gap by 2027-28. The PAC is not convinced that the BBC currently knows the detail of the resources needed to achieve its digital plans or whether the £500 million it intends to invest annually by 2025 will be sufficient to also allow it to plan for an Internet only future. It will need to move more quickly on this and in parallel develop its data security policies to ensure they are fit for purpose as the BBC collects more user data.

“The BBC has a careful and difficult balance to strike here – it has committed to an Internet only future by the 2030s but knows it is essential that there are ways for people, especially children and others who cannot or do not easily access the Internet, to access its services. Licence fee payers must be able to keep our options open,” commented Dame Meg Hillier MP Chair of the Committee. “The BBC is being held back in a yesteryear of TV and radio by uncertainty over funding and regulation, and by the DCMS Department’s constant delays and down-scaling of national fast broadband rollout plans. The BBC fulfils an essential public service function – it must have the planning, resources and wider infrastructure support to do so.”

PAC report conclusions and recommendations

7. The BBC has not yet started planning for a future where radio and television are only accessed through the internet, including how it will work with government and other stakeholders. In December 2022, the BBC’s Director-General set out where the BBC would need to be by the 2030s and announced it would move to an internet-only future with greater urgency. Although, it appears to have rowed back from some of the details of its announcement, or at least from what was reported, the BBC is bullish about moving to a fully digital future. We have kept a close eye on progress as the Department for Digital, Culture, Media and Sport’s has worked with industry to roll out broadband across the UK. We understand the challenges associated with this as well as the varying speeds nationwide and therefore the possibility of leaving audiences behind in an internet-only future. The BBC confirmed its commitment to universality and to ensuring audiences are not digitally excluded. It closed BBC Three as a linear channel in 2016 and moved it online, but then reopened it six years later; an example of where it moved too soon, and audiences did not follow. The BBC therefore recognises the need to plan for an Internet future and to get the timing right. It knows it needs to work with government and other stakeholders to ensure nobody is excluded due to a lack of confidence in adopting the necessary technologies, access to them, or because of affordability.
8. Recommendation 1: The BBC should develop a detailed plan including scenarios for how it could switch to an internet-only future, working with government, audience representatives and wider stakeholders, to ensure no-one is left behind.
9. The BBC has a high-level plan in place for its £500 million of annual savings and reinvestment into digital, but it is unclear whether this will cover its new ambition to transition to an internet-only future in the 2030s. Following its January 2022 licence fee settlement with government, the BBC estimated that it would have a funding gap of £285 million a year by 2027-28. It says that has now increased to nearly £400 million due to inflation, in addition to its funding being cut by 30 per cent in real terms over the past 10 years. The BBC has an overarching target for its digital services to be within at least the top three for UK market share. As part of its digital first plan, announced in May 2022, it committed to an additional £50 million for digital product development from 2025. However, the BBC has not fully determined the details of its £500 million digital investment plan and reports that it is refining the detail required through its current budgeting process. Its plan is heavily dependent on it being able to achieve further savings for reinvestment, but it did not say what it will do if these saving targets become unachievable.

Recommendation 2: The BBC should write to the Committee, within two months and once its budget is finalised for the financial year, with reassurance that it has developed the necessary detail in support of its digital investment plan. It should set out:

• if its £500 million annual investment by 2025 is sufficient to achieve its plans;
• how it will achieve all the required savings; and
• what will happen to its digital plans if it is unable to achieve its savings target.

7. The BBC faces a significant challenge in a very competitive market to recruit and retain staff with the right digital skills. The BBC had a 23 per cent staff turnover rate in its digital product group as of June 2022. Shortages of digital skills are an economy-wide challenge that is not unique to the BBC, and we have regularly heard of similar challenges across government itself, for example with our recent inquiry into the defence digital strategy. The BBC reports that these challenges became more complex during 2022 because of the consequences of the COVID-19 pandemic leading to wage increases as well as more staff working remotely, with people in a local area becoming part of a wider, sometimes international, recruitment market. However, the BBC says that attrition rates are now reducing and its ability to recruit and retain staff is improving. The BBC does not pay digital staff as much as many of its rivals. It acknowledges that it has increased the ranges for some of its digital jobs by more than the standard pay rise that it gave to most of its employees last year. While salaries are important, the BBC also seeks to make the most of its inherent attractiveness as an employer giving the opportunity to work on a very wide range of products compared to others and also supporting a public service purpose.

Recommendation 3: The BBC should develop a plan for how it will maintain its recent progress in recruiting and retaining specialist digital staff including succession planning specific to the key digital skills that it needs for the future.

9. The BBC’s approach to how it will develop personalised services for audiences is not yet well developed. The BBC wants to personalise its products and services such that audiences can access content that is of interest to them, while also fulfilling its public service obligations. The BBC sees this as a new and interesting challenge and says that, unlike its commercial rivals, it aims to strike a careful balance through human curation of content as well as the use of algorithms. It recognises that its public service obligations should be at the heart of its personalisation strategy. The BBC has spoken about personalisation ambitions over the past nine years and worked to personalise individual products such as the iPlayer. But there is as yet no comprehensive personalisation strategy in place to show what this would look like in practice.

Recommendation 4: The BBC should move more quickly on the development of a personalisation strategy that serves its public sector purposes while fulfilling its ambitions for a more tailored experience for its audiences. It should write to the Committee on its progress by December 2023.

10. The BBC has developed its approach to data security since 2019 but is not yet doing enough to manage the risks arising from increased access to users’ personal data. The BBC needs to collect and hold some audience data to help it to compete in the digital space, and crucial to this is sign-in, where audiences register for and use a BBC account to access its digital services. The BBC has a sign-in strategy, with a target for 72 per cent of digital product views to come from signed-in users by 2023. It also has an overall goal of 23.5 million signed-in users by 2023. The BBC tries not to collect or hold more data about audiences than is necessary and reassured us that it has no plans to commercialise the data that it collects. That makes it distinct from other digital providers. The BBC appointed a data protection officer in 2019 and also set up a central data protection team. However, the increased use of personal data exposes the BBC to more potential risks and it has not shown clearly that its active management of those risks is yet sufficiently embedded. The BBC has assured us that there have been no significant data breaches in the current financial year.

Recommendation 5: The BBC should review its data collection and storage policies and work out the minimum amount of data that is needed to achieve its goals, what will be sufficient for its personalisation strategy, and how it will keep that data safe.

Other posts by Colin Mann:

1. Analysis: SVoDs drive $220bn content spend
2. A TikToking clock heading towards regeneration – or not?
3. European pay-radio: Getting ready

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Tags: BBC, Public Accounts Committee