Recommendation 21

Staff pay is another high-profile area where the BBC has recently attempted reform. In 2018–19, the BBC introduced new terms and conditions for staff. The BBC calculated these changes would result in a net saving of £4.9 million in its pay bill over the seven years from 2017 to 2023, less than 0.1% of the total staff pay bill over that period.39 We challenged the BBC on whether these pay reforms were unambitious, especially at a time when costs need to be reduced in order to meet emerging challenges. The BBC argued that the purpose of these reforms was not to save money, but to align allowances, bring people up to a minimum standard and put in place a transparent way of managing pay. The BBC highlighted separate pay reforms it had made, including a pay freeze for all senior managers and no annual pay review for staff last year, and halving the number of senior managers over the last 10 years to 1.5% of its total staff base, compared to the market norm of 2.3%. The BBC considered that it had done a good job in dealing with competitive cost pressure for staff in certain areas, such as digital, at the same time as trying to keep its pay levels at a reasonable level and in line with inflation.40 The BBC’s commercial operations