Governors’ review 
of objectives 

Overview 

Our responsibilities as Governors include setting 
annual objectives for the BBC.We review management’s 
performance against these objectives periodically in the 
course of the year and publish a formal assessment in 
the Annual Report.This Report follows that pattern and 
in this section we report on performance against our 
2005/2006 objectives. 

In future, however, the Trust that will replace the 
Governors will use a new set of tools to hold the BBC 
to account (see page 6,The BBC now and in the future). 
The Trust will have to decide if it wishes to continue 
the current system of annual objectives in addition to 
the new accountability tools. 

In the meantime, we have rolled forward many of last 
year’s objectives – amended as appropriate – into 
2006/2007.These objectives can be found on page 21. 

14 BBC Annual Report and Accounts 2005/2006 

408,415


hours 

of BBC Television and Radio broadcast 
in 2005/2006 – 46.6 hours of output for
every hour of every day


Objective one


Programme strategy 

Ensure that BBC management 
develops a five-year editorial 
strategy for BBC programmes 
and services focused on 
maximising public value. 

In 2005/2006 this will include: 

 Beginning to reduce the volume of repeats on BBC One in peak time 
 Undertaking work to better understand audience concerns regarding 
derivative programming, and specifically, reducing the volume of makeover
 and lifestyle programmes on BBC One in peak time 
 Beginning to increase overall investment in original UK 
comedy and drama We are encouraged by the good start made in achieving this objective. 
In March 2005 the Director-General launched Creative Future, an ambitious 
and broad-ranging review of key programme genres.This aims to translate 
the BBC’s public commitments on quality, creativity and excellence into an 
editorial strategy covering the next five to seven years and embodying the public 
purposes of the BBC as set out in the new Charter. Emerging insights from 
this work have been presented to the Governors for discussion during the 
year. In April 2006 the first public announcements from the Creative Future 
project were made. 


Beethoven 

Thinking cross-platform: Beethoven, BBC Two’s drama-documentary complemented Radio 3’s 
Beethoven Experience which broadcast all the composer’s music over a single week 

These noted the extremely rapid pace of change in audience expectations and 
in technology and examined how they would affect key areas of output: 
journalism, drama, music, sport, comedy, entertainment, children and teens, and 
knowledge-building. Major themes from the work included: a need to think ‘crossplatform’
 – that is, across TV, radio and the internet for audiences at home and on the move; a 
need to shift investment and creative focus towards 24/7 services; a need to recognise that on-demand will 
be a key driver of how the BBC delivers content in the future and also how it 
commissions it; a need to re-invent the BBC’s approach to the internet; and finally, 
a need to develop a new relationship with audiences as partners and participants. 

Further work will be done in the coming year to translate the findings into innovative 
service strategies.We and subsequently the Trust will scrutinise these as they develop 
and ensure that, where appropriate, Public Value Tests are carried out. Innovation is, 
of course, not an end in itself. Audiences expect high quality from the BBC as well as 
innovation and we will ensure that audience views on the quality of any new output are 
fully taken into account by management. 

In the meantime, we note that BBC One continues to make progress towards 
reducing repeats in peak time.The level in 2005/2006 was 8.9% (9.7% in 2004/2005). 
In the longer term, significant further reductions are expected – cutting BBC One 
repeats in peak time to around 5%. But these reductions will not show in full on 
screen until 2008 because of the time it takes for the results of new commissioning 
to come through and for the results of the Director-General’s efficiency drive to 
produce the new investment funds needed. In the current year we do not expect to 
see a reduction of much more than 0.4% 


Extras 

Bringing fresh comedy to the BBC: Ricky Gervais and Stephen Merchant, creators of The Office, wrote, 
directed and appeared in their new comedy, Extras (to below 8.5%) and this is reflected in 
our amended objective for 2006/2007. 

Research under way by BBC Television shows that audiences have positive as 
well as negative feelings about repeats. While there is a low tolerance of peak-time repeats
on BBC One, nearly half the respondents say they appreciate an opportunity to catch up on missed 
programmes, and nearly two-thirds agree that there are some programmes they would always be happy
 to see repeated. In taking forward its work in this area the BBC needs a clear repeats policy that takes 
full account of licence fee payers’ attitudes and changes in technology – particularly 
the move towards on-demand. Management are working on this. 

For some time we have been concerned about a decline in audience perceptions 
of quality of BBC Television output and we are pleased to see some evidence that 
perceptions are improving – the number of people disagreeing with the statement: 
“the BBC sets the standards for programme making in the UK” fell from 26% to 23% 
between Q4 2003 and Q4 2005. 

One factor affecting perceptions of quality is audience concern over derivative 
programming. In an effort to achieve a better understanding of the issues, the 
Governance Unit asked BBC Audience Research to re-examine existing data – 
in particular the BBC’s Pulse survey (a daily online questionnaire involving 
15,000 representative television viewers). The findings were presented to us in 
March 2006.The research made clear that audience concern reflects not just copycat 
programming but also tired and worn formats demonstrating a lack of originality 
and innovation. Management had already begun to develop a long-term strategy to 
refresh and raise the ambition of the early 


Governors’ review of objectives Total broadcasting spend 2005/2006 (£million) 


Television 2006 - 1,443  2005  
Radio 
bbc.co.uk 
BBC jam 
Interactive TV (BBCi) 
Local radio and regional television 
Programme related spend 
Overheads and Digital UK 
Restructuring 
Transmission and collection costs 
Total 


218 
72 
36 
18 
370 
338 
315 
107 
320 
3,237 
2005 
1,456 
221 
69 
8 
17 
356 
339 
282 
51 
309 
3,108 
For further explanation of these figures see Note 2b on pages 106 to 107 

evening part of the peak-time schedule 
on BBC One and we asked them to take 
these findings into account in this work – by 
concentrating their efforts on programmes 
or formats that may have reached the end 
of their creative life.This is reflected in the 
revised wording of our objective for 
2006/2007. 

In line with our 2005/2006 objective, 
the volume of makeover and lifestyle 
programming in BBC One peak time 
fell to 6.5% in 2005/2006 (from 7.7% in 
2004/2005).This reflected, in particular, 
management’s decision not to re-commission 
Changing Rooms and Groundforce. However, 
we believe that some lifestyle programming 
should remain part of the mix on BBC One 

– it holds particular appeal for audiences the 
BBC finds hard to reach, including 25 to 34 
year olds and some ethnic minority groups. 
Also in line with our objective, work is 
under way to deliver increased investment 
in comedy and drama. In comedy, BBC One 
(where six pilots have already been 
announced) and BBC Two will see the 
greatest benefits. In drama, the investment 
is beginning to show on screen, but 
the longer lead times here mean that 
substantial change will not be evident 
until 2007/2008. More than half the extra 
investment is going to BBC One, with 
some additional investment in BBC Three. 

Objective two


Driving digital 

Ensure that BBC management 
drives the market for free-to-air 
digital television, digital radio 
and new media whilst 
continuing to serve the needs of 
the analogue-only audience by: 

 Raising awareness of how 
the BBC’s digital services 
add value to the overall 
portfolio 
 Improving their availability 
 Working in partnership with 
the commercial sector to 
drive take-up 
The key role of the BBC here has been 
underlined by the Government’s decision 
to place a sixth public purpose on the BBC 
in the new Charter,that of “building digital 
Britain”, and we can report positive 
progress made during the year. 

The BBC has a number of roles to play. 
These include: continuing to encourage 
take-up through the provision and 
marketing of high quality digital content; 
raising public awareness of, and providing 
public information on, all aspects of 
switchover; and maintaining active support 
of Digital UK, the body coordinating the 
switchover to digital television in the UK. 

The UK now has the highest digital 
television penetration of any country 
in the world and the BBC’s marketing 
efforts have undoubtedly helped in this 
achievement. By the end of 2005, some 
70% of homes in the UK had at least one 
set capable of receiving digital television 
and 24% had converted all their sets. 

Of the remaining analogue-only homes, 
more than three-quarters were aware of 
Freeview. However, awareness of the BBC’s 
digital channels in these homes has shown 
a slight fall.This almost certainly reflects the 
probability that these homes, by definition, 
now contain a higher proportion of those 
hardest to convince. 

About one in three homes in the UK had 
become fully digital (that is, able to receive 
all BBC services through television and 
broadband) by the end of 2005. Reaching 
this figure is a significant milestone, but 
there is much still to do. For example, the 
growth of broadband has been impressive; 
however it appears that most of this 
growth comes from narrowband 
households upgrading, rather than new 
households gaining access to the internet. 
In other words it does not signal much of 
a lessening of the internet digital divide. 

For the BBC there is a growing issue of 
how best to focus its marketing effort. On 
the one hand there is the pressing need to 
encourage people to take their first steps 
into the digital world; on the other there 
is the need to encourage those who have 
already made the move to go further and 
become fully digital.There is some concern 
that the latter group may become irritated 
by messages designed for the former. 

We are encouraged to note from survey 
evidence that the BBC digital channels are 
seen as “good use of the licence fee” by 
an increasing proportion of audiences. 
BBC News 24 in particular is seen as “good 
use of the licence fee” by nearly 70% of 
the audience (although this has decreased 
slightly this year). Awareness of digital radio 
is growing and sales of DAB sets are 
growing rapidly – more rapidly than the 
increase in reach of BBC digital stations. 
This perhaps reflects the fact that sets are 
bought primarily for improved reception, 

16 BBC Annual Report and Accounts 2005/2006 

BBC News 24 

Driving digital: Simon McCoy and Kate Silverton 
presenting BBC News 24, one of the BBC’s portfolio 
of extra channels available to digital viewers 

and listening behaviour does not 
automatically change with the purchase 
of a set.We have therefore asked for 
marketing effort to include some focus 
on the content of the BBC’s DAB services 
and their unique value to licence fee 
payers as well as on access to the services. 
bbc.co.uk has maintained high levels of 
awareness and we are pleased to see 
an increase in awareness of BBCi 24/7 – 
48.2% (42.4% 2004/2005) – reflecting the 
marketing effort put into promoting its 
core news and children’s output. 

Technical and financial constraints are 
restricting opportunities for improving 
the availability of digital services. Coverage 
of digital terrestrial cannot be increased 
beyond the current 73% until digital 
switchover. Significant further increases 
in the BBC’s DAB network depend on 
the licence fee settlement.Where digital 
television is concerned, the BBC is 
continuing its efforts – with commercial 
public service broadcasters – to launch 
a free-to-air satellite service.This would 
extend the BBC’s digital channels to areas 
not currently reached by Freeview. 

In the meantime we are encouraged by the 
BBC’s efforts to drive take-up by building 
partnerships with manufacturers, retailers 
and broadcasters across television, radio, 
mobile and broadband ISPs. In addition, 
the BBC has been active in the Freeview 
consortium to ensure that Freeview’s 
technology and content are in good shape 
for switchover.The BBC has also been 
closely involved in the set up, launch and 
communications strategy of Digital UK 
(formerly ‘SwitchCo’). 


Urban Classic 

Building bridges: MC Purple with the BBC Concert 
Orchestra – a collaboration between 1Xtra, one 
of the BBC’s digital stations, and Radio 3, making 
connections between very different audiences 

Objective three 

Value for money 

Ensure that BBC management 
implements the findings of the 
value-for-money review by: 

 Making savings of £105million 
in 2005/2006 towards the 
target of annual savings of 
£355million by 2008 
 Developing a detailed, three-
year plan to transform the 
BBC’s processes and make it 
more efficient and effective in 
providing services that meet 
the needs of licence fee payers 
Good progress has been made towards 
this objective. In March 2005 the Director-
General announced a three-year efficiency 
programme which aims to deliver 
£355million of ongoing gross annual cash 
savings by 2007/2008.The BBC exceeded 
its savings target for 2005/2006, comprising 
£99million of ongoing cash savings and a 
further £7million of one-off programme 
genre mix changes. It remains on track to 
deliver its three-year target of annual savings. 

The majority of the cash savings were 
achieved through post closures across 
both content and professional service 
divisions which reduced headcount by 
917 and 215 respectively.The second 
year of the programme is expected to see 
more savings derived from transformational 
changes to ways of working. 

One-off implementation costs in the original 
plan were forecast to be £197million over 
the three-year programme. During the 
year this forecast rose by £44million to 
£241million, the increase resulting mainly 

5.4p 

cost per hour of viewing/listening to 
the BBC, based on average consumption 

from increased pension augmentation costs 
of post closures. Although actual spend on 
implementation costs in 2005/2006 was 
lower than forecast, at £34million, this is a 
result of timing differences in post closures 
and the overall one-off implementation costs 
are expected to remain at £241million. 

The savings reported above go beyond 
the cumulative seven year self-help targets 
of £3.3billion by 2006/2007 agreed with 
the DCMS for the current Charter period. 

The value-for-money targets are ambitious 
and require strong change management.We 
engaged PA Consulting to provide us with 
assurance that management’s three-year 
plans were sufficiently detailed and robust to 
drive the transformational change needed to 
achieve the targets. Management have acted 
on recommendations from PA Consulting: 
they have taken full and appropriate 
ownership for the change programme and 
introduced a monitoring framework; and 
strengthened their central change team who 
engage with leaders at all business levels. 
Detailed divisional change plans include 
roadmaps, key milestones and measures 
with regular reporting of progress against 
these to both management and Governors. 

Progress towards developing a full 
business architecture – establishing the 
principles underlying the execution of 
agreed BBC strategy – has been slower 
than initially expected. However, significant 
progress has now been made and it is 
expected the full framework will be 
completed in the autumn incorporating 
the Creative Future recommendations 
and the licence fee settlement. 

BBC Annual Report and Accounts 2005/2006 17 

Governors’ review 
of objectives 

Objective four


Impartiality and independence 

Ensure that the BBC meets 
the highest standards 
of accuracy, fairness and 
impartiality expected 
by audiences in all its 
programmes. 

In particular, strengthen 
editorial processes to 
deliver high-quality, trusted 
journalism by implementing 
the recommendations of the 
Neil Report and acting on 
the Governors’ independent 
reviews of impartiality. 

In overall terms we are satisfied with 
performance against this objective. During 
the year under review BBC news coverage 
met high standards of accuracy, impartiality 
and independence, and substantial 
progress was made in implementing the 
recommendations of the Neil Report and 
the Governors’ impartiality reviews. 

The Neil Report was the result of a 
management review led by Ronald Neil – 
a former Director of BBC News and 
Current Affairs – to consider the editorial 
lessons of the Hutton Inquiry into the 
death of Dr David Kelly.The report was 
published in 2004 and we endorsed its 
recommendations, which included changes 
to journalistic practice, the handling of 
editorial complaints, and the way BBC 
journalists are trained. In particular it 
recommended the establishment of a 
BBC College of Journalism and progress 
has been made here (see page 64). 
The other recommendations had already 
been implemented. 

1.7 

million


contacts from members of the public 
to BBC Information in 2005/2006 

In terms of impartiality, the first major 
challenge of the year came in May with the 
General Election. In the event, the number 
of complaints about impartiality, unfairness 
and balance was low.The most high-profile 
complaint came from the Conservative 
Party and related to The Heckler on 
BBC Three, a study of political heckling 
produced by BBC News.The programme 
makers had sent three hecklers to a 
public meeting addressed by the then 
Conservative leader Michael Howard. 
The hecklers had been fitted with radio 
microphones to record their interventions 
and these were spotted by the meeting 
organisers who seized the equipment. 
The Conservative complaint alleged 
bias and breach of BBC guidelines. 
Management rebutted both charges, 
the complaint was not referred to the 
Governors, and the programme was 
broadcast without further complaint. 

The suicide bombings in London on 7 July 
sparked an intense public debate on the 
BBC use of the word ‘terrorist’.The BBC’s 
published Editorial Guidelines do not ban 
use of the word but take the position 
that:“The word ‘terrorist’can be a barrier 
rather than an aid to understanding.We 
should try to avoid the term, without 
attribution.We should let other people 
characterise while we report the facts 
as we know them.” A number of 
commentators took issue with this, 
suggesting that the BBC was, in effect, 
condoning terrorism by being hesitant 
about using the word. In the light of this 
public debate, management reviewed 
the published guideline.They decided 
not to make any change to the guideline 
but to publish a guidance note for BBC 
programme makers providing additional 
context on the value of precision and 
consistency of language.We endorsed 
this approach, and it was published to 
supplement the advice in the Editorial 

Newswatch 
Being open and accountable: the Newswatch 
website gives audiences who may be unhappy with 
BBC News a way to be heard 
Guidelines (the text of the guidance note is 
available on the advice page of the Editorial 
Guidelines section of bbc.co.uk). 

In the summer, a further editorial challenge 
was created by Live8, the global music event 
staged to focus attention on issues of Third 
World debt in the week of the G8 summit. 
The BBC had to find a way to serve its 
audiences – who rightly expected to see 
and hear this event – but also to uphold its 
commitment to impartiality by not allowing 
the BBC to be perceived to offer a free ride 
for a political campaign.The impartiality 
issues were aired in editorial policy forums 
within the BBC in the run up to Live8, and 
raised with us in a report from the Director-
General.The outcome was that, in addition 
to the event itself, a range of material was 
broadcast that set it in context and enabled 
viewers and listeners to make up their own 
minds about the issues involved. 

During the course of the year we 
commissioned a study of the impartiality 
of BBC News’ coverage of the Israeli-
Palestinian conflict (see box), and asked 
management to update us on the progress 
of implementing the findings of our earlier 
impartiality study on coverage of the EU 
(see page 65). 

In terms of audience perceptions, results from 
a regular tracking survey conducted by MORI 
show that around three-quarters of the 
UK public (76%) say they trust BBC news 
programmes the most to give a fair, informed 
and balanced view on important events 
and issues compared to any other news 
programmes.When asked to consider all of 
the services that the main broadcasters offer, 
and not just news, over half of those surveyed 
believe that the words ‘Fair’,‘Accurate’and 
‘Trustworthy’ are most applicable to the BBC. 
In a separate survey, around three-quarters 
of opinion formers (73%) believe the BBC 
is impartial and independent. 

18 BBC Annual Report and Accounts 2005/2006 

Programme spend by genre 2005/2006 (£million) 
2006 2005 
Factual and learning 394 351 
News and current affairs 485 458 
Entertainment 253 267 
Sport 372 438 
Children’s 140 134 
Drama 427 398 
Music and arts 241 245 
Speech – Local Radio 182 175 
Total 2,494 2,466 
Education for children is included in Children’s; Film is included in Drama; Religion is included in Factual and learning 

Governors’ roadshow 

Listening to licence fee payers: BBC Chairman 
Michael Grade and fellow Governors taking 
questions at a public meeting in Cardiff. Public 
accountability activity is an important part of the 
Governors’ role 

The proportion of Conservative supporters 
who believe the BBC is biased against the 
Conservative Party has fallen from 26% in 
Q2 2005 to 21% in Q1 2006. 

As highlighted by the BBC Chairman in his 
Goodman Media Lecture in May 2005, the 
BBC faces new challenges on impartiality 
as a result of technological and social 
change.We, in collaboration with BBC 
management, are leading a project to deliver 
a set of principles underlying impartiality 
in the 21st century.The project will seek 
to identify how to deliver impartiality in 
ways that are relevant and convincing 
to the BBC’s many different audiences. 
The focus will be on UK audiences and 
domestic output and will consider the 
implications for all genres of programming. 

See pages 89 to 90 for further information 
about editorial compliance. 

BBC News coverage of the 
Israeli-Palestinian conflict 

In October 2005 we commissioned 
an independent panel chaired by 
Sir Quentin Thomas, President of the 
British Board of Film Classification, to 
“assess the impartiality of BBC News 
and Current Affairs coverage of 
the Israeli-Palestinian conflict with 
particular regard to accuracy, 
fairness, context, balance and bias, 
actual or perceived. 
The panel presented their report 
to us in April 2006 and we published 
it in full shortly afterwards. Its main 
finding was that there was no 
deliberate or systematic bias. 
The panel went on to say, however, 
that the audience feel they do 
not understand the conflict and, 
perhaps for that reason, do not 
see it as important or interesting. 
The panel’s view was that 
impartiality required a full and 
fair account and in that regard 
they found the BBC coverage to 
be inconsistent, not always providing 
a complete picture and in that sense 
misleading.The panel made a number 
of recommendations, including that 
the BBC should provide licence 
fee payers with greater context 
to assist their understanding of 
the complexities of the conflict. 
We passed the report to 
management and asked them to 
respond to us by June 2006, with 
the response set in the context 
of the Neil Report.The panel report 
is available on the BBC Governors’ 
website: www.bbcgovernors.co.uk. 
Management’s response will also be 
published there, together with our 
own conclusions. 
Objective five


Accountability to audiences 

Deliver greater transparency 
and accountability to licence 
fee payers in 2005/2006 by, 
in particular: 

 Management ensuring 
that the changes to the 
complaints handling process 
are being implemented across 
the organisation 
 Governors developing 
Service Licences as the 
key tool for exercising 
effective stewardship of 
the public’s money 
We are encouraged by progress on this 
objective and look forward to further 
moves to increase transparency and 
accountability when the Trust is established. 

Changes to the complaints handling system 
were made in February 2005 and are now 
well established across the BBC.The aim 
of the system is to ensure that the BBC 
handles editorial complaints effectively, 
including responding to complainants 
within ten working days. Initially, complaints 
are handled either by the programme 
concerned, or by BBC Information. 
Complainants unhappy with the response 
have recourse to the independent Editorial 
Complaints Unit, and, if still unsatisfied, to 
the Governors’ Programme Complaints 
Committee, the final court of appeal. 

In 2005/2006, 91% of all complaints to the 
BBC received a response within ten working 
days – an improvement from 88% at the start 
of the year. For the full report of editorial 
complaints in 2005/2006, see page 62. 

BBC Annual Report and Accounts 2005/2006 19 

Governors’ review 
of objectives 

This system, however, is for editorial 
complaints only and does not cover such 
things as TV licensing or complaints against 
off-air events.The new draft Agreement, 
published alongside the new Charter, 
requires the Trust to develop and consult 
on a complaints framework that includes a 
clear definition of the different categories 
of complaints.This will be developed during 
2006 and consulted on once the Trust is 
in place. 

We have sought to increase our public 
accountability activity this year.We held our 
first ever AGM, in London, and since then we 
have held public meetings in Glasgow, Cardiff 
and Belfast. During the year we launched 
our own website: www.bbcgovernors.co.uk. 
Public consultations have also been a key 
development this year with a number being 
launched since summer 2005. Details of 
these – and of the issues raised by licence 
fee payers at our public meetings – can be 
found on the Governors’ website. 

One area where we wanted to know 
more about licence fee payers’ opinions 
was their response to the BBC’s own 
licence fee bid (a licence fee rising to 
£150, in 2005 pounds, in 2013/2014). 
We also wanted to understand licence 
fee payers’ reaction to the Government’s 
plan to fund targeted help via the licence 
fee.We commissioned Professor Patrick 
Barwise to carry out an independent 
investigation of these two areas. His report, 
published in April 2006, concluded that: 

 There is no ‘tipping point’ above which 
willingness to pay would drop dramatically 
 The more consumers know about the 
BBC’s proposed new services, the more 
positive their attitude 
 When asked to think about it, and if really 
forced to choose between paying the 
licence fee and losing the BBC’s services, 
most licence fee payers would, if they had 
Audience approval of the BBC 

2005/2006 6.6 
2004/2005 6.5 
2003/2004 6.7 
2002/2003 6.8 
2001/2002 6.8 
2000/2001 6.5 

Source: Pan-BBC Tracking Study age 15+
Note: Figures are a mean score out of ten


to, pay substantially more than the current 

£10 per month for existing BBC services 

 If the licence fee increased to £150 a 
year (in 2005 pounds) in 2013/2014 the 
proportion of people willing to pay for 
existing services would fall from about 
75–80% today to about 65–70% in 
2013/2014.This rises to 70–75% if the 
proposed new services are added 
 When asked about a licence fee 
supplement to pay for help for the 
vulnerable during digital switchover, 53% 
support and 47% oppose. However, if the 
Government proceeds with this proposal 
it would not be the straw that broke the 
licence fee’s back 
Service Licences are one of the 
key accountability tools currently in 
development.The licences will detail the 
budget and remit of each BBC service, 
how they contribute to the delivery 
of the BBC’s public purposes, and how 
performance should be measured. 
Our work on these included a public 
consultation on the framework in the latter 
part of 2005.The responses to this (which 
can be found on the Governors’ website) 
are being taken account of in the drafting 
of the Service Licences themselves. 
Service Licences are part of the new 
governance arrangements that will come 
into force with the arrival of the Trust 
and the new Charter. 

We have done a good deal of work to 
develop our accountability in preparation 
for handing over to the Trust. Accountability 
to licence fee payers is an imperative 
across the BBC and will be a particular 
focus for the Trust. Since his appointment, 
the BBC Chairman has regularly made 
himself available for questioning by licence 
fee payers on BBC radio phone-ins and we 
are developing other new ways to reach 
out to the audiences with accountability 
activity. Progress will be monitored over 

Combined monthly reach of 
BBC Television, BBC Radio 
and bbc.co.uk (%) 
2004/2005 
2003/2004 
2002/2003 
2005/2006 
95.6 
96.6 
96.2 
94.3 

Source: Pan-BBC Tracking Study age 15+, 
claimed usage 

the current year as part of the Governors’ 
Accountability to Audiences Objective 
for 2006/2007. 

20 BBC Annual Report and Accounts 2005/2006 

Governors’ 
objectives for 
2006/2007 

The existing BBC Charter requires us 
to set and report on annual objectives. 
The objectives for 2006/2007 focus on 
major pan-BBC priorities. 

Under the new Charter the BBC Trust 
will have a new set of tools for holding the 
BBC to account based on Purpose Remits, 
Service Licences and Statements of 
Programme Policy. 

The Trust will take a view on whether or 
not there is a continuing role for annual 
corporate objectives for the BBC. In the 
meantime we have decided that the 
2006/2007 objectives should cover the 
same strategic priorities as those for 
2005/2006, updated to reflect progress 
made during the year as well as new 
initiatives for the coming transitional 
year – to be approved where necessary 
by the Governors or the Trust. 

1 Programme strategy 

Ensure that BBC management continue 
to develop and begin to implement 
the five-year editorial strategy for BBC 
programmes and services by translating 
the findings of Creative Future into service 
strategies and pan-BBC proposals. 

In Television, continue progress towards 
the detailed objectives set in 2005/2006: 

 Reducing the volume of repeats in 
BBC One peak to below 8.5% in 
2006/2007 (towards a target of 5% 
in 2008/2009)1 
 Continue to increase overall investment 
in original UK comedy and drama 
 Refresh BBC One’s early evening output, 
paying particular attention to the lifecycle 
of programmes or formats 
1 Definition of repeats to include digital transfers from 

BBC Three and BBC Four, but not digital premieres 

(eg Spooks) 

2 Driving digital 

Ensure that BBC management prepare for 
digital switchover and drive the market 
for free-to-air digital television, digital 
radio and new media whilst continuing 
to serve the needs of the analogue-only 
audience by: 

 Raising awareness of how the BBC’s 
digital services add value to the 
overall portfolio 
 Improving their availability 
 Working in partnership with the 
commercial sector to drive take-up 
3 Value for money 

Ensure that BBC management deliver 
value-for-money savings whilst retaining 
quality output. In 2006/2007, this will be 
measured against the following goals: 

 Headcount: Achieving headcount 
reduction targets of 2,055 in 2006/2007, 
towards the target of 3,763 for the three 
years to 2007/2008 
 Savings: Making gross cumulative cash 
savings of £211million in 2006/2007, 
which includes new gross cash savings of 
£112million, towards a target of annual 
gross cash savings of £355million by 
2007/2008 (after three years) 
 Implementation costs: Incurring 
implementation costs of no more than 
£148million in 2006/2007 from the total 
of £241million one-off implementation 
costs included within the three-year plan 
 Business model: Developing a coherent 
business architecture which underpins 
the BBC’s transformation 
 Financial planning: Implementing a financial 
plan that ensures the most effective 
allocation of BBC funds to meet the 
needs of the licence fee payer, begins to 
set targets for continuous improvement 
and has the flexibility to deal with new 
audience priorities and cost pressures. 
In particular: 
 Worldwide to improve return to the 
BBC by providing double digit growth in 
underlying profit (ie excluding exceptional 
items) plus ongoing sales growth and to 
achieve competitive performance levels, 
delivering a return on sales of at least 
10% and EBITDA (earnings before 
interest, tax, depreciation and 
amortisation) margin of at least 22% 
 Net licence fee sales to increase by 
1.04%, with evasion falling from 4.7% 
in 2005/2006 to 4.6% 
4 Impartiality 

Ensure that the BBC meets the highest 
standards of accuracy, fairness and 
impartiality expected by audiences. In 
particular, respond to the Governors’ 
independent reviews of impartiality 
to ensure strong editorial processes 
and training that deliver high quality, 
trusted journalism. 

5 Accountability 

Focus on improving the BBC’s 
accountability to audiences. In particular: 

The BBC Governance Unit to: 

 Develop and conduct a major public 
survey looking at attitudes towards 
the BBC, for consideration by the 
BBC Trust 
 In readiness for the Trust, work with the 
Broadcasting Councils and English 
National Forum to develop an action 
plan to engage more widely with 
audiences, build the profile of the 
Councils, and contribute advice across 
the range of the BBC’s public purposes 
BBC Management to: 

 Develop new service strategies in 
response to the Creative Future project 
ensuring that all audiences are well 
served and in particular to provide 
adequate focus on improving perceptions 
among those audiences less favourable 
towards the BBC 
BBC Annual Report and Accounts 2005/2006 21