Recommendation 2

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% 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 6 BBC Digital • what will happen to its digital plans if it is unable to achieve its savings target.