Recommendations & Conclusions
9 items
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
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.
Read full response →
HM Treasury