Tony Hall is to cut BBC senior management headcount by nearly 8% as part of efforts to save £100m a year to fund the corporation’s ambitious digital plans.
The director general told the cross-party Culture, Media and Sport Committee this morning that he faces some “difficult decisions” in finding savings to get projects off the ground, such as download-to-own portal BBC Store.
The £100m a year target, which must be found before charter renewal in 2016, was first unveiled in Hall’s strategy speech earlier this month. Today, he said work had begun with BBC managing director of operations and finance Anne Bulford and director of strategy and digital James Purnell to root out savings.
They will “immerse” themselves in the budgets of “every single division and part of the BBC” over the next three months to identify “pressure points” and “move money from one priority to another”.
Hall added: “That must be part of a discussion with the people concerned. I can’t do that by fear.”
One area already identified as ripe with savings potential is senior management headcount, with the director general announcing his intention to reduce the number of top bosses at the corporation from 450 to 415 by 2015.
However, the plans could put the executive on a collision course with the BBC Trust, which wants to get senior management down further.
If the BBC was to reach the 415 target, it would mean that senior management represent around 2% of the corporation’s total workforce. This is does not meet BBC Trust chairman Lord Patten’s 2011 target to cut the corporation’s management to 1%.
Alongside this, Hall told MPs that his mission to “simplify and slim-line” the BBC was making progress. McKinsey & Company has finished its review and Hall is preparing to reveal more details on the “bonfire of the boards”, which should halve the number of decision-making committees at the broadcaster.
“I want to go into detail on the way people are spending money and work out the sort of compromises, or things we’ve got to stop doing,” the former Royal Opera House chief executive said.
Although McKinsey has brought specific insights into how other media organisations have reduced their complexity, Hall said the BBC will get tougher with its consultancy spend. It has spent £10m this year with third party management firms and - without committing to how this will be cut in percentage terms - the DG said he wants this “reduced further”.