Recommendations & Conclusions
32 items
2
Conclusion
56th Report - BBC Accounts and Trust St…
Deferred
The BBC has not adopted opportunities to digitise the licence fee, resulting in missed opportunities for cost efficiency and more customer engagement. The cost of collecting the licence fee is rising, partly because of the BBC’s reliance on postal correspondence and its increasing cost. Around 40% of households still receive …
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The BBC has not adopted opportunities to digitise the licence fee, resulting in missed opportunities for cost efficiency and more customer engagement. The cost of collecting the licence fee is rising, partly because of the BBC’s reliance on postal correspondence and its increasing cost. Around 40% of households still receive a paper licence by default, yet the BBC has not set any target to increase take-up 2 of paperless licences. Enforcement also depends heavily on letters sent to households without a licence or declaring they do not need one, which adds to costs and is a less efficient way of engaging with customers. We are concerned that delays to Capita’s IT upgrade programme, intended to improve the website and customer experience, have further limited progress towards digital engagement. Although the BBC has now moved this contract to a “payment by milestone” basis, we note that the change was made late and that this approach has not been used more widely with the BBC’s contactors. The absence of meaningful incentives in the Capita contract, and in other contractual arrangements, may have contributed to slow progress in increasing digital delivery, improving customer engagement, increasing sales and reducing licence fee evasion. recommendation To achieve cost savings and improve customer engagement, the BBC should in its response to this report: • set a timeframe for moving to digital licences to further reduce reliance on costly paper licences and letters • set out its plans to capture and use customer email addresses to enhance digital engagement and streamline customer communications • outline the lessons learned from managing the Capita licence fee contract and how it will establish clear milestones and incentives in all areas of the business to increase income and reduce evasion.
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Government response AI summary
The BBC partially agreed, explaining its existing processes for Capita contract management and rejecting the use of incentives for income or evasion reduction as inappropriate. It did not commit to setting a timeframe for digital licences or outlining plans to capture customer email addresses.
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HM Treasury
3
Conclusion
56th Report - BBC Accounts and Trust St…
Accepted
The BBC does not provide clear information about its commercial investments, or targets and actual returns from its commercial activities. The BBC has sought to offset real-terms reductions in licence fee income by increasing savings and boosting returns from its commercial arm. It has reported transparently on progress against its …
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The BBC does not provide clear information about its commercial investments, or targets and actual returns from its commercial activities. The BBC has sought to offset real-terms reductions in licence fee income by increasing savings and boosting returns from its commercial arm. It has reported transparently on progress against its savings target, making savings of £564 million to date against a target of £700 million for 2022–23 to 2027–28 in its PSB activities. However, the BBC failed to report in its 2024–25 Accounts progress against its commercial returns target of 1.5 billion over the same period, and we note that the previous reporting of commercial returns lacks clarity. We welcome the commitment to report this clearly in future, and note the stated £1 billion achieved to date. We recognise the BBC must balance reinvesting in commercial growth with providing returns to support public service broadcasting, and that this often involves using its increased debt limits to fund growth. The recent acquisition of BritBox illustrates the strategy of investing to monetise content and 3 secure longer-term returns. However, while the BBC told us it does assess expected returns and debt serviceability when making such decisions, these assessments are not visible to Parliament. recommendation In addition to its commitment to report transparently in its Annual Report and Accounts on its current commercial returns target, the BBC should report annually on its returns on investment from commercial activities and how it has optimised use of its debt limit and cash reserves.
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Government response AI summary
The BBC partially agreed, committing to publish BBC Commercial’s overall returns, including dividends, annually in its Annual Report and Accounts. It also noted existing reporting to Ofcom but did not explicitly commit to reporting on the optimisation of debt limits and cash reserves.
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HM Treasury
4
Conclusion
56th Report - BBC Accounts and Trust St…
Accepted
Progress in developing new IP remains behind target, which in turn will limit sustainable long-term revenue streams. The BBC told us that it has achieved 31% of income for 2024–25 from its most profitable streams through new intellectual property (IP), against a 40% ambition for generating revenue from new (IP). …
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Progress in developing new IP remains behind target, which in turn will limit sustainable long-term revenue streams. The BBC told us that it has achieved 31% of income for 2024–25 from its most profitable streams through new intellectual property (IP), against a 40% ambition for generating revenue from new (IP). Owning and developing IP is central to securing sustainable long-term returns; the success of Bluey, for example, illustrates the commercial value this can bring. While the BBC recognises the importance of strengthening its IP portfolio, this is a complex area with high stakes as new content carries a real risk of failure, even as it offers the potential for significant future income. To address this, the BBC told us that it is investing in talent within its commercial operations, supporting independent production companies, and acting earlier to identify promising IP opportunities. We note that these are positive steps, but progress must accelerate if the BBC is to develop intellectual property and long-term sustainable returns in a fast-changing media environment. recommendation The BBC should: a. set out in its response to this report how it will prioritise generation of new IP given its importance in delivering viewers and generating sustainable long-term returns; and b. report clearly on progress against its IP target in its Annual Report and Accounts, to support accountability.
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Government response AI summary
The BBC agreed that generating new IP is important, describing its ongoing activities in content creation, brand nurturing, and investment in third-party IP. It stated it already reports on Owned IP success but will not split out a specific IP target in its Annual Report …
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HM Treasury
5
Recommendation
56th Report - BBC Accounts and Trust St…
Accepted
The BBC’s mission to ‘serve all audiences’ is at risk as younger audiences choose other media providers, while the BBC’s digital- first strategy could risk alienating non digital audiences. As younger viewers turn to other platforms and older or less digitally connected audiences’ risk being left behind, the BBC’s ability …
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The BBC’s mission to ‘serve all audiences’ is at risk as younger audiences choose other media providers, while the BBC’s digital- first strategy could risk alienating non digital audiences. As younger viewers turn to other platforms and older or less digitally connected audiences’ risk being left behind, the BBC’s ability to serve all audiences, a core part of its public mission, is under pressure. Just 51% of younger people feel the BBC reflects them, and their overall use of BBC services, whether TV, radio or online, is significantly lower than other age groups. 4 With audiences now able to access an unprecedented range of content from a variety of providers, the BBC faces intense competition for attention. Its digital-first strategy is an important response, and there are promising signs of innovation, such as using platforms like TikTok to share news content with new demographics. However, this shift also carries a risk: those without reliable digital access could find themselves excluded from core BBC services. Ensuring access across all platforms is essential if the BBC is to remain a universal public service. recommendation The BBC should set out clearly in its response to this report how it will ensure access and engagement with all audiences, including innovation in digital access.
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Government response AI summary
The BBC agreed and stated the recommendation is implemented, detailing its existing digital-first strategy, initiatives for engaging younger and unconnected audiences, and current reach statistics across various platforms.
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HM Treasury
6
Conclusion
56th Report - BBC Accounts and Trust St…
Accepted
The BBC is a trusted institution but its relevance across the UK is under pressure. While the economic benefits of the “Across the UK” programme moving production outside of London are now clearly quantified, in response to this Committee’s past recommendations, there remain gaps in how well different audiences feel …
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The BBC is a trusted institution but its relevance across the UK is under pressure. While the economic benefits of the “Across the UK” programme moving production outside of London are now clearly quantified, in response to this Committee’s past recommendations, there remain gaps in how well different audiences feel represented. The BBC highlighted steps it has taken, including, for example, relocating the Asian Network to Birmingham and commissioning content set in Scotland and Yorkshire. However, audience data shows that some groups—across nations, regions and socio-demographic lines—remain less engaged and feel less reflected in BBC content. We are also concerned that decisions labelled as “local”, such as moving operations to Manchester or Birmingham, risk overlooking the identity and needs of smaller communities, especially in radio, where consolidation has widened geographic footprints and reduced local specificity. Reforms such as the restructuring of regional news hubs and changes to the Local Democracy Reporting Service may have unintentionally diluted the BBC’s connection with the communities it aims to serve. recommendation As part of its response to this report, and in its Annual Report and Accounts, the BBC should clearly communicate how its Across the UK programmes and other initiatives will lead to better representation of the UK’s local communities, to sustain trust and relevance in the future. 5 1 Collecting the licence fee Introduction
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Government response AI summary
The BBC agreed, explaining that its 'Across the UK' programme has already moved significant network programming and commissioning outside London to improve audience portrayal and diversity of voice, and it intends to build on these existing plans.
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HM Treasury
1
Conclusion
56th Report - BBC Accounts and Trust St…
Rejected
On the basis of reports by the Comptroller and Auditor General (C&AG), we took evidence on the British Broadcasting Corporation (BBC) Group Annual Report and Accounts 2024–25 and the Television Licence Fee Trust Statement 2024–25. We heard from Tim Davie (Director General, BBC), Leigh Tavaziva (Chief Operating Officer, BBC) and …
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On the basis of reports by the Comptroller and Auditor General (C&AG), we took evidence on the British Broadcasting Corporation (BBC) Group Annual Report and Accounts 2024–25 and the Television Licence Fee Trust Statement 2024–25. We heard from Tim Davie (Director General, BBC), Leigh Tavaziva (Chief Operating Officer, BBC) and Shirley Cameron (Director of Revenue Management, BBC).1
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Government response AI summary
The BBC explicitly disagreed with the committee's recommendation (even though the provided text is an introduction), explaining its statutory duty and current methods for licence fee collection. It committed to provide an update on the practicalities of making an e-licence the default position in its …
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HM Treasury
7
Conclusion
56th Report - BBC Accounts and Trust St…
Deferred
Potential lost income for the BBC in 2024–25 is estimated to exceed £1.1 billion. Licence fee evasion increased to 12.52%, up from 12.04% in 2023–24, representing up to £550 million in lost revenue. The BBC did not set a target for evasion during this period. In addition, 3.6 million households …
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Potential lost income for the BBC in 2024–25 is estimated to exceed £1.1 billion. Licence fee evasion increased to 12.52%, up from 12.04% in 2023–24, representing up to £550 million in lost revenue. The BBC did not set a target for evasion during this period. In addition, 3.6 million households declared that they do not need a licence, which could equate to as much as £617 million in additional income in 2024–25 if converted to paying households. These declarations have continued to rise, and increased by 0.3 million (10.5%) compared with 2023–24.8 The BBC told us that it has been addressing licence fee evasion through various measures, including visits to unlicensed households and targeted communications. The BBC explained that it changed the reaffirmation period for “no licence needed” declarations from two years to one year, which drove an extra £13 million in revenue for 2024–25. In addition, it said that it improved its website journey and trained agents to ensure that people understand the wide range of licensable activities, such as watching a live overseas channel on YouTube, to prevent inadvertent “no licence needed” declarations.9 6 BBC Group Annual Report and Accounts 2024–25, p. 58, 59, 61 7 BBC Group Annual Report and Accounts 2024–25, p. 62, 64 8 Television Licence Fee Trust Statement for the Year Ending 31 March 2025, 15 July 2025, HC 1182, p. 26, 29 9 Qq 7, 9 7
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Government response AI summary
The government responded by discussing measures related to 'Britain’s illegal meat crisis,' biosecurity at the border, and animal vaccine development, entirely unrelated to the BBC or licence fee evasion.
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HM Treasury
8
Conclusion
56th Report - BBC Accounts and Trust St…
Deferred
The BBC increased enforcement of the licence fee system by carrying out nearly 2 million visits to unlicensed households in 2024–25, about 50% more than in 2023–24, driven by a rise in visiting officers (from 172 to 229) and visits per officer (from 7,660 to 8,670). However, this increase did …
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The BBC increased enforcement of the licence fee system by carrying out nearly 2 million visits to unlicensed households in 2024–25, about 50% more than in 2023–24, driven by a rise in visiting officers (from 172 to 229) and visits per officer (from 7,660 to 8,670). However, this increase did not lead to a proportional rise in households interviewed under caution or purchasing a licence. In addition, the number of people taken to courts for licence fee evasion has fallen by 17.3% year-on-year from December 2023 to December 2024, continuing a long-term decline since 2017.10 The BBC noted that it has become harder to get people to answer their doors compared to five years ago, which limits the enforcement effectiveness. It also said that it has moved towards a more marketing-led approach, including targeted communications and improving customer understanding of licensable activities to ensure that people stay licensed.11 In response to our question about how their enforcement is incentivised the BBC explained that it prioritised customer service over aggressive enforcement, ensuring that customers are treated fairly and that enforcement activities are proportionate.12
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Government response AI summary
The government responded by outlining strategies and actions related to animal vaccine availability and development, entirely unrelated to BBC licence fee enforcement.
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HM Treasury
9
Conclusion
56th Report - BBC Accounts and Trust St…
Deferred
We queried why digital audience engagement through the accounts necessary to use iPlayer cannot support more digital licence fee enforcement activities. The BBC told us that its household-address based licensing system does not match individual based BBC account data, so it cannot directly tie digital use to a licence holder.13 …
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We queried why digital audience engagement through the accounts necessary to use iPlayer cannot support more digital licence fee enforcement activities. The BBC told us that its household-address based licensing system does not match individual based BBC account data, so it cannot directly tie digital use to a licence holder.13 It explained that it chooses not to gate iPlayer or BBC News in the way a commercial provider would in order to preserve universality.14 It added that it currently operates in a hybrid broadcast-and-digital system, which shapes how usage and payment can be linked.15
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Government response AI summary
The government responded by outlining work related to a Sanitary and Phytosanitary (SPS) agreement with the EU and strengthening resilience to animal disease, entirely unrelated to BBC iPlayer or licence fee enforcement.
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HM Treasury
10
Conclusion
56th Report - BBC Accounts and Trust St…
Accepted
The BBC did not set an evasion target for 2024–25, and we asked whether there were any internal targets that had not been publicly disclosed.16 The BBC told us that it had clear internal revenue targets and a target for licences in force, which the executive team and the BBC …
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The BBC did not set an evasion target for 2024–25, and we asked whether there were any internal targets that had not been publicly disclosed.16 The BBC told us that it had clear internal revenue targets and a target for licences in force, which the executive team and the BBC Board monitored monthly. It explained that although it had metrics for “no licence needed”, it did not have a target for declarations as these are driven by customer behaviour.17 The BBC also stated that prosecution volumes were not a metric of success and that Capita the BBC’s main 10 Television Licence Fee Trust Statement for the Year Ending 31 March 2025, 15 July 2025, HC 1182, p. 27 11 Qq 19, 20 12 Qq 29-31 13 Q 14 14 Q 16 15 Qq 15, 35 16 Q 10; Television Licence Fee Trust Statement for the Year Ending 31 March 2025, 15 July 2025, HC 1182, p. 10 17 Qq 10, 11 8 contractor for TV licencing was not incentivised on revenue, prosecutions, or sales, with the focus instead on customer-service monitored through service-level agreements (SLAs).18 Opportunities for digitising the licence fee
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Government response AI summary
TVL focuses on Licences in Force and implicit in that is minimising evasion. The BBC carries out trend modelling to forecast changes in licensable consumption and trends in evasion. The BBC’s activities on collection and enforcement focus on availability of service and fair and proportionate …
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HM Treasury
11
Conclusion
56th Report - BBC Accounts and Trust St…
Acknowledged
In 2024–25, the BBC spent £166 million on collection of the licence fee, (equivalent to 4.3% of licence fee income), up from £143 million (4.0%) in 2023–24. It issued 60.2% of licences electronically, and around 40% paper licences.19 The BBC told us that postal costs were a significant component of …
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In 2024–25, the BBC spent £166 million on collection of the licence fee, (equivalent to 4.3% of licence fee income), up from £143 million (4.0%) in 2023–24. It issued 60.2% of licences electronically, and around 40% paper licences.19 The BBC told us that postal costs were a significant component of collection expense and that minimising reliance on mail and moving more contact online was a key part of reducing the cost of collection. It also highlighted rising postal prices of 14.4% in the year, which added further pressure. In parallel, the BBC said the cost of collection included investment in a new over-75s (pension credit) system, that automatically checks entitlement with DWP and issues licences, improving customer experience by reducing processing from up to two weeks to around two minutes, and as a consequence the BBC expected to save money.20
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Government response AI summary
The BBC will consider the regulatory aspects and practicalities of making an e-licence the default position and will give an update on this in the Licence Fee Trust Statement for 2025/26.
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HM Treasury
12
Conclusion
56th Report - BBC Accounts and Trust St…
Deferred
We asked the BBC why a large minority of households still received a paper licence and what the BBC was doing to accelerate the shift online. The BBC explained that physical licences were issued by default unless customers opted into an e-licence, that the BBC tried to promote, and that …
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We asked the BBC why a large minority of households still received a paper licence and what the BBC was doing to accelerate the shift online. The BBC explained that physical licences were issued by default unless customers opted into an e-licence, that the BBC tried to promote, and that many households did not provide email addresses and were not obliged to do so.21 We asked the BBC to explain its “very analogue” reliance on the letters and enforcement visits and why digital viewing information was not used more directly. The BBC pointed to gradual progress in digital engagement with its customers, noting that the share of customers with an e-licence rose by 3 percentage points to 60% in the last year.22 However, the BBC also told us there was no specific target to increase electronic issuance but accepted the “fair challenge” to go further.23
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Government response AI summary
The BBC will consider the regulatory aspects and practicalities of making an e-licence the default position and will give an update on this in the Licence Fee Trust Statement for 2025/26.
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HM Treasury
13
Conclusion
56th Report - BBC Accounts and Trust St…
Accepted in Part
Capita, the BBC’s main contractor for TV licensing, has experienced significant delays in upgrading its IT systems, designed to improve the website and customer journey to support digital engagement.24 The BBC told us that delivery had been challenging and delayed by just under two years, with 10 of 13 milestones …
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Capita, the BBC’s main contractor for TV licensing, has experienced significant delays in upgrading its IT systems, designed to improve the website and customer journey to support digital engagement.24 The BBC told us that delivery had been challenging and delayed by just under two years, with 10 of 13 milestones completed at the time of our evidence session 18 Qq 21, 29-30 19 Q 24; Television Licence Fee Trust Statement for the Year Ending 31 March 2025, 15 July 2025, HC 1182, p. 31 20 Qq 26, 27 21 Qq 22-24 22 Q 13 23 Q 25 24 Television Licence Fee Trust Statement for the Year Ending 31 March 2025, 15 July 2025, HC 1182, p. 31 9 in September. The BBC attributed these delays to the complexity of legacy systems and supply chain, and the need to avoid risks to licence-fee collection during the transition.25
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Government response AI summary
The Committee reported on delays in Capita upgrading its IT systems for TV licensing. Lessons learned from the Capita contract are shared across TVL and the wider BBC through a joined up strategic approach to procurement and contract management.
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HM Treasury
14
Conclusion
56th Report - BBC Accounts and Trust St…
Accepted in Part
To address these challenges, the BBC escalated issues directly with Capita’s CEO and co-located supply-chain technologists to improve coordination. The BBC told us it switched to payment by milestone part- way through the programme, after delays had already occurred, and acknowledged that it should have adopted this approach from the …
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To address these challenges, the BBC escalated issues directly with Capita’s CEO and co-located supply-chain technologists to improve coordination. The BBC told us it switched to payment by milestone part- way through the programme, after delays had already occurred, and acknowledged that it should have adopted this approach from the outset. When we asked about wider adoption of milestone-based payments, the BBC agreed that it had learned a lesson but had not applied this learning to other contracts. The BBC told us that Capita was not incentivised to increase sales and reduce evasion. It said that it tied Capita’s performance to customer-service SLAs and closely tracked customer satisfaction.26 25 Q 27 26 Qq 27-29 10 2 Growing commercial returns Investment and returns in commercial activities
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Government response AI summary
Lessons learned from the Capita contract are shared across TVL and the wider BBC through a joined up strategic approach to procurement and contract management, but the BBC does not believe that incentives on income or evasion reduction would be appropriate.
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HM Treasury
15
Conclusion
56th Report - BBC Accounts and Trust St…
The BBC faced sustained financial pressures due to real-terms reductions in licence fee income, which rose only modestly to £3.8 billion in 2024–25, compared to £3.7 billion in 2023–24. The rise was due to an increase in the cost of a licence following two years of frozen pricing, despite rising …
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The BBC faced sustained financial pressures due to real-terms reductions in licence fee income, which rose only modestly to £3.8 billion in 2024–25, compared to £3.7 billion in 2023–24. The rise was due to an increase in the cost of a licence following two years of frozen pricing, despite rising costs and inflationary pressures. As part of wider transformation activities to deliver greater value for licence fee payers and enable reinvestment, the BBC set a target of £700 million in annual recurring public service broadcasting (PSB) savings by March 2028 and had achieved £564 million by the end of 2024–25. These savings were accompanied by difficult decisions, including headcount reductions and service changes, aimed at maximising value for licence fee payers while continuing to invest in digital transformation and high-impact content.27 The BBC told us that these measures were essential to maintain its PSB remit in a highly competitive global media market.28
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HM Treasury
16
Recommendation
56th Report - BBC Accounts and Trust St…
Accepted in Part
Alongside PSB savings, the BBC sought to increase returns from its commercial arm. BBC Commercial achieved record sales of £2.2 billion in 2024–25, up from £1.9 billion the previous year, and the NAO concluded that BBC Studios had succeeded in delivering increasing returns by adapting to a changing market.29 The …
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Alongside PSB savings, the BBC sought to increase returns from its commercial arm. BBC Commercial achieved record sales of £2.2 billion in 2024–25, up from £1.9 billion the previous year, and the NAO concluded that BBC Studios had succeeded in delivering increasing returns by adapting to a changing market.29 The BBC has committed to delivering £1.5 billion in commercial returns over five years by 2027–28.30 The BBC explained how these returns are generated, primarily through dividends and investment in programming from BBC Studios, and emphasised that creating and exploiting new IP was a key lever in its overall commercial performance.31 However, while the BBC publicly reported progress against its public service savings target, it did not report in its 2024–25 Annual Report 27 BBC Group Annual Report and Accounts 2024–25, p. 9, 12, 58 28 Qq 36, 37 29 BBC Group Annual Report and Accounts 2024–25, p. 9, 12, 58 30 BBC, BBC Group Annual Report and Accounts 2024–25, p. 81 31 Qq 38, 43-44 11 and Accounts on progress towards its commercial returns target of £1.5 billion for 2022–23 to 2027–28, despite telling us it had achieved £1 billion to date.32 The BBC acknowledged this omission during our evidence session and committed to providing clearer reporting on this target in future years. We note that the previous reporting of commercial returns lacked clarity, making it difficult for Parliament to assess performance against strategic objectives.33
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Government response AI summary
The BBC will ensure that BBC Commercial’s overall returns including dividends to the BBC Group are published annually in its Annual Report and Accounts, aligned with the 2026 publication date; they already report to Ofcom.
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HM Treasury
17
Conclusion
56th Report - BBC Accounts and Trust St…
Accepted in Part
The BBC explained that its commercial strategy involved balancing reinvestment for growth with delivering returns to support PSB.34 It told us that it is using its increased borrowing capacity, within an overall debt limit of £3 billion, to fund acquisitions and expansion.35 At 31 March 2025, BBC Group net debt …
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The BBC explained that its commercial strategy involved balancing reinvestment for growth with delivering returns to support PSB.34 It told us that it is using its increased borrowing capacity, within an overall debt limit of £3 billion, to fund acquisitions and expansion.35 At 31 March 2025, BBC Group net debt stood at £1.6 billion, within this limit.36 The BBC told us that borrowing was sometimes necessary to compete internationally.37 However, it confirmed that any decisions to borrow money were carefully checked to make sure the BBC will be able to pay back what it owed, and that the expected benefits were worth the cost.38
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Government response AI summary
The Committee reported on the BBC's commercial strategy, including reinvestment for growth and using borrowing capacity to fund acquisitions. The BBC will ensure that BBC Commercial’s overall returns including dividends to the BBC Group are published annually in its Annual Report and Accounts.
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HM Treasury
18
Recommendation
56th Report - BBC Accounts and Trust St…
Accepted in Part
The acquisition of BritBox International in March 2024 illustrated the BBC’s strategy of investing to monetise content and secure longer-term returns.39 The BBC told us that this acquisition, alongside other initiatives, was intended to strengthen its ability to distribute content to audiences around the world and increase income in the …
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The acquisition of BritBox International in March 2024 illustrated the BBC’s strategy of investing to monetise content and secure longer-term returns.39 The BBC told us that this acquisition, alongside other initiatives, was intended to strengthen its ability to distribute content to audiences around the world and increase income in the future to help fund its PSB activities.40 While the BBC assured us that it undertook rigorous financial modelling and risk assessments before committing to such investments, it accepted that it did not currently report these assessments in a way that allows Parliament to understand how decisions were made or how performance was tracked.41 As these assessments are not visible to Parliament, there is a limited external scrutiny and accountability over the BBC’s use of debt and cash reserves. We were concerned that without transparent reporting on returns from individual investments and the optimisation of borrowing, it was difficult to judge whether the BBC was delivering value for money from its commercial activities.42 32 Q 38; BBC, BBC Group Annual Report and Accounts 2024–25, p. 62, 81 33 Qq 40, 41 34 Q 41 35 Qq 52-53; BBC, BBC Group Annual Report and Accounts 2024–25, p. 58 36 BBC Group Annual Report and Accounts 2024–25, p. 58 37 Qq 51, 53 38 Q 55 39 BBC Group Annual Report and Accounts 2024–25, p. 77, 81, 126 40 Q 53 41 Qq 40, 51 42 Qq 54-55 12 Developing Intellectual Property
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Government response AI summary
The BBC will publish BBC Commercial’s overall returns including dividends to the BBC Group annually in its Annual Report and Accounts, aligned with the 2026 publication date; they already report to Ofcom.
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HM Treasury
19
Conclusion
56th Report - BBC Accounts and Trust St…
Accepted in Part
The BBC’s commercial activities provide a way to offset declining licence fee income, with BBC Commercial through BBC Studios, reporting turnover growth that it attributes to its ability to generate and monetise intellectual property.43 The BBC told us that commercial revenue had doubled since the start of the Charter period …
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The BBC’s commercial activities provide a way to offset declining licence fee income, with BBC Commercial through BBC Studios, reporting turnover growth that it attributes to its ability to generate and monetise intellectual property.43 The BBC told us that commercial revenue had doubled since the start of the Charter period to around £2.2 billion, underlining why the BBC viewed IP as central to sustaining longterm returns. The BBC said that owning IP materially improved margins compared with producing for others, and therefore increasing the proportion of BBCowned programming was important for durable revenue streams.44
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Government response AI summary
The BBC will ensure that BBC Commercial’s overall returns including dividends to the BBC Group are published annually in its Annual Report and Accounts, while reporting what is required under accounting regulations.
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HM Treasury
20
Conclusion
56th Report - BBC Accounts and Trust St…
Accepted in Part
On the specific balance between existing franchises and newly created IP, the BBC told us that in 2024–25, three of the top ten most profitable titles were IP generated from BBC Studios. The BBC explained that it tracked the proportion of programming delivered that it owned, and that this metric …
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On the specific balance between existing franchises and newly created IP, the BBC told us that in 2024–25, three of the top ten most profitable titles were IP generated from BBC Studios. The BBC explained that it tracked the proportion of programming delivered that it owned, and that this metric was the focus of its ambition to grow the IP base over the coming years. It emphasised that the overall share of BBCowned productions and IP, stood at 31%, with an ambition to move this towards 40% over time.45
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Government response AI summary
The Committee reported on the balance between existing franchises and newly created IP, including the BBC's plan to increase BBC-owned productions and IP. The BBC will ensure that BBC Commercial’s overall returns including dividends to the BBC Group are published annually in its Annual Report …
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HM Treasury
21
Conclusion
56th Report - BBC Accounts and Trust St…
Accepted in Part
The BBC pointed to specific examples to illustrate the commercial value that successful IP could generate, highlighting its global rights to ‘Bluey’ as having created “enormous value,” alongside other diversified commercial assets such as BritBox International.46 The BBC also stressed that the strength of its brand underpinned the monetisation of …
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The BBC pointed to specific examples to illustrate the commercial value that successful IP could generate, highlighting its global rights to ‘Bluey’ as having created “enormous value,” alongside other diversified commercial assets such as BritBox International.46 The BBC also stressed that the strength of its brand underpinned the monetisation of IP across its activities, reinforcing the strategic emphasis it placed on owning and developing titles that could travel internationally. In this context, the BBC maintained that building a stronger IP portfolio was integral to securing sustainable longterm returns from content after its first broadcast or release in the UK.47
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Government response AI summary
The Committee highlighted the commercial value that successful IP could generate for the BBC, including global rights to ‘Bluey’. The BBC will ensure that BBC Commercial’s overall returns including dividends to the BBC Group are published annually in its Annual Report and Accounts.
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HM Treasury
22
Conclusion
56th Report - BBC Accounts and Trust St…
Accepted in Part
At the same time, the BBC was clear that creating new IP was inherently uncertain and high-stakes: it told us that success was unpredictable, describing commissioning as a “spread-betting game” in which some developments would fail even when strategic bets were well-judged. It also said it therefore needed to “get …
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At the same time, the BBC was clear that creating new IP was inherently uncertain and high-stakes: it told us that success was unpredictable, describing commissioning as a “spread-betting game” in which some developments would fail even when strategic bets were well-judged. It also said it therefore needed to “get there early,” working proactively to identify promising UK writers and partners at an early stage to improve the odds of success in a competitive market.48 The BBC 43 BBC Group Annual Report and Accounts 2024–25, p. 76 and Q 44 44 Qq 41, 44 45 Qq 43-44 46 Qq 41, 44 47 Qq 41-42 48 Q 46 13 also noted “chill winds” across the wider production sector, which added to execution risk even as the BBC seeks to expand its pipeline of BBC owned titles.49
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Government response AI summary
The BBC will ensure that BBC Commercial’s overall returns including dividends to the BBC Group are published annually in its Annual Report and Accounts, while reporting what is required under accounting regulations.
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HM Treasury
23
Conclusion
56th Report - BBC Accounts and Trust St…
Accepted
We asked the BBC, given it was not meeting its ambitions for new IP, what steps it would take to increase this. The BBC told us it had appointed a new CEO for BBC Studios production, was bringing in new talent, investing earlier with creatives to secure and grow UK …
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We asked the BBC, given it was not meeting its ambitions for new IP, what steps it would take to increase this. The BBC told us it had appointed a new CEO for BBC Studios production, was bringing in new talent, investing earlier with creatives to secure and grow UK IP, and continuing to support independent producers while increasing the proportion of programming it owns. The BBC said BBC Studios’ commercial model allowed it to take “a bit more risk” than purely advertisingfunded broadcasters, and that the BBC was actively buying UK IP and building it in partnership to retain more value in the UK.50 The BBC also explained that there was an ongoing capitalallocation tradeoff between extracting dividends to support public service content and reinvesting in BBC Studios to build enterprise value and future returns, which it said was being actively managed by the commercial and main boards, but again, this is not visible to us.51 49 Q 41 50 Qq 46, 47 51 Q 41 14 3 Sustaining a universal BBC Serving all audiences in a digital age
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Government response AI summary
BBC Studios makes and distributes content, nurturing well-known brands and formats. BBC Studios is committed to developing long-term Intellectual Property (IP), which remains central to its strategy for growing the Global Content Studio. Alongside BBC Studios-created IP, it also invests in and exploits third-party IP.
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HM Treasury
24
Conclusion
56th Report - BBC Accounts and Trust St…
Accepted
The BBC faces a significant challenge in maintaining relevance among younger audiences. In 2024–25, only 67% of those aged 16–34 used BBC services weekly, compared with 96% of those aged 55 and over, and below the BBC’s own target of 70%.52 Furthermore, only 51% of 16–34-year-olds felt the BBC reflected …
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The BBC faces a significant challenge in maintaining relevance among younger audiences. In 2024–25, only 67% of those aged 16–34 used BBC services weekly, compared with 96% of those aged 55 and over, and below the BBC’s own target of 70%.52 Furthermore, only 51% of 16–34-year-olds felt the BBC reflected people like them, a figure described as “a really significant challenge” by the BBC, who acknowledged the need to improve reach and relevance without compromising editorial standards.53 The BBC’s own research shows that while overall usage remains high, the downward trend among younger cohorts highlights the risk to the BBC’s mission to serve all audiences.54
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Government response AI summary
The BBC is committed to delivering outstanding value to all audiences as a universal public service, and to serving younger digital-first audiences and making services available to unconnected audiences; they cite usage stats and initiatives.
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HM Treasury
25
Conclusion
56th Report - BBC Accounts and Trust St…
Acknowledged
The BBC told us that it operated in an environment of “phenomenal competition” from global streaming platforms and social media, which had transformed audience behaviour.55 The BBC noted that younger audiences were increasingly fragmented in their media habits, with almost infinite choice, making it harder for the BBC to sustain …
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The BBC told us that it operated in an environment of “phenomenal competition” from global streaming platforms and social media, which had transformed audience behaviour.55 The BBC noted that younger audiences were increasingly fragmented in their media habits, with almost infinite choice, making it harder for the BBC to sustain engagement.56 It said that to stay relevant and ensure BBC content was surfaced and trusted by younger viewers, it had built the biggest news service on Instagram, was present on TikTok, and collaborated closely with YouTube.57 It also emphasised that the BBC was developing action plans for younger audiences, but cautioned that “what doesn’t work is a massive lurch to youth and trying very hard to be the coolest one on the block,” instead stressing the importance of authenticity and trusted presenters. The BBC also noted that while Radio 1 and educational services like Bitesize continued to attract young people, the BBC needed to focus on creating big hits and titles that appeal to this demographic, such as popular dramas, to sustain engagement.58 52 BBC Group Annual Report and Accounts 2024–25, p. 223 53 Q 66 54 Q 57; BBC Group Annual Report and Accounts 2024–25, p. 10 55 Q 57 56 Q 68 57 Qq 66, 69 58 Q 66 15
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Government response AI summary
The BBC is committed to delivering outstanding value to all audiences as a universal public service, and to serving younger digital-first audiences and making services available to unconnected audiences.
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HM Treasury
26
Recommendation
56th Report - BBC Accounts and Trust St…
Acknowledged
The inability to maintain “universal, easy-to-access distribution” is one of the BBC’s principal risks.59 When we asked about how the BBC is preparing for the transition to online, the BBC told us that any move towards it must ensure “no one is left behind,” emphasising that the BBC had no …
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The inability to maintain “universal, easy-to-access distribution” is one of the BBC’s principal risks.59 When we asked about how the BBC is preparing for the transition to online, the BBC told us that any move towards it must ensure “no one is left behind,” emphasising that the BBC had no desire to have people who cannot access its services.60 We asked the BBC about the timescale of the transition to online services, and the BBC said that any switchover depended on universal broadband (around 20 Mbps) to enable streaming and that, once the number of unconnected households was small, it could pursue targeted solutions to ensure those households are connected.61
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Government response AI summary
The BBC is committed to delivering outstanding value to all audiences as a universal public service, and to serving younger digital-first audiences and making services available to unconnected audiences. The BBC’s digital-first strategy aims to serve all audiences, while keeping in line with its commitment …
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HM Treasury
27
Recommendation
56th Report - BBC Accounts and Trust St…
Acknowledged
The BBC cautioned that without universal provision of affordable broadband, a switchover would be “a self-inflicted wound” and reiterated the BBC’s commitment to maintaining significant broadcast services during the transition.62 It noted that, during the analogue switch off, it introduced solutions such as Freesat to address gaps in terrestrial coverage, …
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The BBC cautioned that without universal provision of affordable broadband, a switchover would be “a self-inflicted wound” and reiterated the BBC’s commitment to maintaining significant broadcast services during the transition.62 It noted that, during the analogue switch off, it introduced solutions such as Freesat to address gaps in terrestrial coverage, ensuring that households who could not receive Digital Terrestrial Television (DTT) were not left behind.63 It stated that any digital transition must be sequenced alongside improvements in broadband availability and affordability to protect access and engagement for audiences who rely on traditional broadcast services, including Digital Audio Broadcasting (DAB) and DTT.64 Staying relevant across the UK
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Government response AI summary
The BBC is committed to delivering outstanding value to all audiences as a universal public service, and to serving younger digital-first audiences and making services available to unconnected audiences. The BBC’s digital-first strategy aims to serve all audiences, while keeping in line with its commitment …
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HM Treasury
28
Conclusion
56th Report - BBC Accounts and Trust St…
Acknowledged
We heard that the BBC is widely trusted, with the Chair highlighting the World Service as a clear illustration of the BBC’s global reach and reputation.65 At the same time, the BBC is also focused on strengthening its connection with audiences at home; it described its Across the UK programme …
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We heard that the BBC is widely trusted, with the Chair highlighting the World Service as a clear illustration of the BBC’s global reach and reputation.65 At the same time, the BBC is also focused on strengthening its connection with audiences at home; it described its Across the UK programme as an initiative to move jobs, investment, and creative output beyond London to better serve and represent audiences across all regions and nations of the UK.66 In its Annual Report and Accounts, the BBC framed the programme under “Delivering across the UK” and “Our audiences,” positioning Across the UK as a corporate priority for audience engagement across the nations and regions.67 The BBC 59 BBC Group Annual Report and Accounts 2024–25, p. 113 60 Q 75 61 Q 76 62 Qq 76, 78, 79 63 Q 76 64 Q 79 65 Q 86 66 Qq 72, 73 67 BBC Group Annual Report and Accounts 2024–25, p. 46, 52 16 described the purpose of Across the UK as to “level out our appeal and usage through the UK” ensuring its services remain relevant to audiences in all regions and nations.68
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Government response AI summary
The BBC agrees to communicate how its Across the UK programmes and other initiatives will lead to better representation of the UK’s local communities as part of its Annual Report and Accounts.
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HM Treasury
29
Recommendation
56th Report - BBC Accounts and Trust St…
Accepted
On Across the UK, we drew attention to a prior Public Accounts Committee finding in 2024 that the BBC had “begun implementing its programme without a clear plan and could not readily explain the expected impact and benefits for licence fee payers,” and invited the BBC to set out its …
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On Across the UK, we drew attention to a prior Public Accounts Committee finding in 2024 that the BBC had “begun implementing its programme without a clear plan and could not readily explain the expected impact and benefits for licence fee payers,” and invited the BBC to set out its plan and benefits.69 The BBC told us the plan was to move £700 million of spend out of London, with a forecast of £830 million by 2027–28, and £412 million already moved, and more than 400 FTEs relocated. It also reported that 61% of network TV spend was now outside London, and network audio spend was at 46% (on track for 50% by 2027–28), alongside delivery of 100 scripted titles, including 20 in the nations.70 On outcomes, the BBC said it was tracking two benefit streams: audience perception, and regional economic impact. It cited an uptick in audience engagement in the north of England as output had shifted, and highlighted an expected £282 million GVA over a decade in the West Midlands, supported by formal partnership agreements with local authorities and clustering in Digbeth.71
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Government response AI summary
BBC will share information on an annual basis as part of the BBC Annual Report and Accounts which identifies the level of investment in its content from the Nations and Regions of the UK as well as audience data; target date 2026.
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HM Treasury
30
Conclusion
56th Report - BBC Accounts and Trust St…
Acknowledged
We asked the BBC how the Across the UK programme and other initiatives would lead to better representation and connection for communities, beyond relocating staff and spend. The BBC told us it would measure change through audience perception within regions and regional economic impacts, citing as examples partnership agreements and …
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We asked the BBC how the Across the UK programme and other initiatives would lead to better representation and connection for communities, beyond relocating staff and spend. The BBC told us it would measure change through audience perception within regions and regional economic impacts, citing as examples partnership agreements and job clustering.72 We reiterated our earlier criticism that the programme began “without a clear plan” for impacts and benefits and underscored the need to articulate outcomes for licence fee payers.73 The BBC also told us it is pushing “more power outside London,” with about 40 of its 90 commissioners now based outside London. However, it accepted that more was needed at senior levels specifically, that more of the most senior commissioners should be located outside London.74
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Government response AI summary
The BBC agrees to communicate how its Across the UK programmes and other initiatives will lead to better representation of the UK’s local communities as part of its Annual Report and Accounts.
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HM Treasury
31
Conclusion
56th Report - BBC Accounts and Trust St…
Acknowledged
The BBC highlighted its ongoing audience research and engagement, aiming to avoid institutions feeling “distant” from the people.75 The BBC also told us about persistent differences in engagement and the extent to which people across geographies and socio-economic backgrounds feel represented in 68 Q 73 69 Q 72; Committee of …
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The BBC highlighted its ongoing audience research and engagement, aiming to avoid institutions feeling “distant” from the people.75 The BBC also told us about persistent differences in engagement and the extent to which people across geographies and socio-economic backgrounds feel represented in 68 Q 73 69 Q 72; Committee of Public Accounts, Twenty-sixth Report of Session 2023–24, The BBC’s implementation of Across the UK, HC 426, 17 April 2024 70 Q 72 71 Q 73 72 Q 73 73 Q 72 74 Q 59 75 Q 59 17 BBC content. We pressed the BBC to set out the pathway from structural change to demonstrable audience outcomes. As examples of “reflections”, the BBC referenced productions from Scotland and dramas set in the north of England, alongside the Asian Network’s move to Birmingham–steps intended to mirror diverse audiences more closely.76
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Government response AI summary
The BBC agrees to communicate how its Across the UK programmes and other initiatives will lead to better representation of the UK’s local communities as part of its Annual Report and Accounts.
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HM Treasury
32
Conclusion
56th Report - BBC Accounts and Trust St…
Acknowledged
We asked whether choices labelled “local” are genuinely relevant to smaller communities, particularly in radio and local news. We underlined that local radio remains a “lifeline” for older audiences, and emphasised that, for example, “in Sheffield, local means Sheffield” rather than pooled content from larger hubs.77 The BBC agreed it …
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We asked whether choices labelled “local” are genuinely relevant to smaller communities, particularly in radio and local news. We underlined that local radio remains a “lifeline” for older audiences, and emphasised that, for example, “in Sheffield, local means Sheffield” rather than pooled content from larger hubs.77 The BBC agreed it must avoid “lumping anyone together in one geographic unit,” stressed sensitivity to distinct local identities, and acknowledged the importance of considering the appropriate size and scope of regional hubs, adding that pushing provision into more localised delivery would require more investment whereas hubs can support training and peer learning for junior journalists.78 On the Local Democracy Reporting Service, the BBC said the scheme was demand-led, widely distributed and strong. However, it acknowledged there was scope to review who uses the current system, the depth of provision and geographic spread as part of charter considerations, to ensure reporters remained “truly local” rather than stretched over larger footprints.79 76 Qq 58, 59, 72-74 77 Qq 60, 61 78 Qq 61, 64 79 Qq 60, 62, 63 18
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Government response AI summary
BBC will share information on an annual basis as part of the BBC Annual Report and Accounts which identifies the level of investment in its content from the Nations and Regions of the UK as well as audience data; target date 2026.
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HM Treasury