Source · Select Committees · Public Accounts Committee
Recommendation 18
18
Accepted in Part
BBC's investment decisions lack transparent reporting on assessments and returns, limiting parliamentary scrutiny.
Recommendation
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
Government Response 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.
Government Response
Accepted in Part
HM Government
Accepted in Part
3.1 The BBC partially agrees with the Committee’s recommendation. Target implementation date: 2026 aligned with Ofcom and BBC Annual Report and Accounts publication. 3.2 The BBC is committed to report whatever is required under accounting regulations. While the BBC already also provides a substantial amount of information on its commercial activities in its Annual Report and Accounts, it will ensure that BBC Commercial’s overall returns including dividends to the BBC Group are published annually in its Annual Report and Accounts. 3.3 The BBC Group already reports annually to Ofcom who monitor its commercial activities. Annual reporting to Ofcom includes detailed financial performance of BBC Studios and BBC Studioworks, its two core commercial businesses, including revenue, direct and common costs, and therefore both Gross Profit and percentage profit margin (Earnings Before Interest, Taxes, Depreciation, and Amortisation). The BBC Group’s reporting obligations to Ofcom are detailed in the BBC’s Annual Report and Accounts, along with its other general duties in relation to commercial activities.