Annual report expected to show Dyke's cost cutting measures on track
Greg Dyke's bid to slash costs at the BBC by£140 million a year will appear to be bearing fruit later day, when the corporation's annual report will reveal a healthy financial performance, writes Luke Satchell

Commercial arm BBC Worldwide will return a record operating cashflow of£96m,£14m up on last year, while the corporation will proclaim a reduction in licence-fee evasion figures, from 5.4 per cent to 5.2 per cent.

The news will bolster Dyke's ongoing campaign to cut costs at the corporation. He has been charged by the government to find an extra£1.1bn by 2006, and has therefore set a savings target of£140m a year.

In order to meet the government's requirement however, the corporation will need to find an extra£60m a year on top of those savings. Dyke plans to achieve this through further improvements in the collection of the licence-fee, evasion of which is believed to cost around£120m a year.

To this end the licence-fee administration, collection and enforcement contract, worth around£500m, has been put out to tender.

The publication of the annual report is also expected to reveal that Dyke received a£91,000 bonus last year, despite a drop in overall audience share from 28.3 per cent to 26.8 per cent.

The corporation is expected to justify the payment by pointing to the huge savings Dyke has made.

However the corporation's generosity to some of its outbound senior figures is expected to be met with a barrage of criticism. Director of corporate affairs Colin Browne received a£288,954 pay-off following his resignation in March last year, while head of marketing Matthew Bannister picked up a cheque for£195,550 as he departed in October.

These payments, combined with the£70,489 handed to head of policy Patricia Hodgson on her way to the Independent Television Commission, and the£24,539 given to director of news Tony Hall, will give the corporation good reason to bury the estimated£500,000 former resources chief executive Margaret Salmon received in February. Details of this payment are not expected to be posted until next year.