The BBC spends over £500 million each year on goods and services ranging from broadcast specific products to more generic items. It has a centralised procurement function and manages spending along category, enabling it to control its spending more effectively than in the past. The BBC was aiming to deliver £75 million savings from procurement in the three years to April 2008, and is on course to achieve those. But savings have varied widely between categories and it has achieved least from those where it has spent most, Production Resources and Technology and Broadcast Equipment. In recent years the BBC has used fewer suppliers and has established central contracts for a greater proportion of its goods and services, but in 2006-07 it still used over 17,000 suppliers. That year the BBC spent more than £200 million through local deals and made nearly 38,000 individual purchases from suppliers with which it had no central contract. During 2006-07 the BBC introduced an upgraded electronic purchasing system, but 2,000 of the 4,500 licences it had paid for to give staff access to the system were not being used. The average cost of processing a purchase using the system is £6, although the cost is more than six times greater when buyers do not use a central contract. The BBC uses technology across all of its procurement activities, including letting tenders through eAuctions. The BBC has made estimated annual savings of £3 million (14 per cent) from the 19 eAuctions it ran between April 2005 and March 2007, but since then had let only five more contracts in this way.

Incorporating HC 359-i and 494-i of session 2009-10, this report draws on the work of the Committee and the National Audit Office since 2003 in examining the BBC's approach to financial matters.

The BBC did a good job in completing the move to Salford on time, within budget and without disruption services. However, the scale of some of the allowances paid to staff to relocate to Salford is difficult to justify. There were 11 cases where the cost of relocating staff exceeded £100,000 per person, with one costing £150,000. The BBC also failed to make a proper record of the exceptions it made to its allowance policy. The longer term success of the move to Salford depends on the BBC achieving the wider benefits it promised. These include reducing the gap between Northern and Southern audiences in the BBC's market share and stimulating economic and other regional benefits, including creating up to 15,000 jobs. The BBC should set clearly defined expectations for its relationships with its commercial partners and make clear that they must pay their fair share of tax. The BBC's decision to enter into a 10-year contract with the Peel Group for studio space at Salford seems to take little account the fast pace of change in the broadcasting industry. The BBC could end up having to pay for studio services it no longer needs and become overly dependent on them. There is also dismay at the abandonment of the BBC's Digital Media Initiative at a cost to the licence fee payer of £100 million. There have been conflicting reports from the BBC and the BBC Trust on what the project did or did not deliver

review of the BBCs royal Charter : 1st report of session 2005-06, Vol. 2: Evidence

The BBC's White City 2 property development in West London comprises three new buildings, which were built next to an existing BBC building known as White City 1. White City 2 was financed by Land Securities Trillium under a 30 year partnership deal with the BBC, which also covered property services at 48 other BBC locations. The cost of construction for White City 2 was £210 million, along with £60.9 million for furniture and technical fit-out of the buildings. The development was completed on time, but the Committee of Public Accounts found several aspects of the project constituting risks to value for money. The cost of the development also exceeded the amount originally approved by the BBC Governors, along with significant variations to the scheme as the project progressed. The Committee set out a number of conclusions and recommendations: that the whole life costs of projects should be assessed and made available to the BBC Governors; the BBC should better integrate design and construction, so reducing the risk of design changes after contracts have begun; the license fee money should not be used to subsidise the BBC's commercial subsidiaries, and that rent charged for the sublet of buildings should meet the BBC's costs; that the BBC should not hold on to property which it does not need or which it cannot use cost-effectively; the BBC in future should follow public sector good practice, in particular in estimating whole life costs of projects, monitoring returns to the private sector, obtaining refinancing benefits, and integrating design and construction.

Tax lost through the hidden economy could be over £2 billion and involve some 2 million people. HM Revenue & Customs (HMRC) spent 41 million in 2006-07 on encouraging people and businesses into the formal economy, detecting and imposing sanctions on those operating in the hidden economy, achieving a return/cost ration of 4.5:1. HMRC detects some 30,000 hidden economy cases a year, a detection rate of only around 1.5 per cent, but the amount of tax recovered has increased by 13 per cent in real terms since 2003-04. Areas of risk include: self-employed builders and decorators who often receive cash payments; individuals who trade on the internet; and buy-to-let landlords. To increase detections HMRC is making more use of data matching techniques, and the Tax Evasion hotline received over 120,000 calls in 2006-07, but progress in investigating cases has been slow with only 2000 completed against a target of 5,500. HMRC can impose penalties of up to 100 per cent of tax owed, but usually imposes a lower penalty or waives them. Prosecutions are not given much publicity, limiting their wider deterrent effect. Advertising campaigns to encourage people to declare tax owed have led to 8,300 registrations bringing in extra tax of £38 million over three years. Offshore Disclosure arrangements have been even more successful following landmark rulings requiring financial institutions to release details of around 400,000 offshore accounts. Some 45,000 people came forward bringing in around £400 million at a cost of £6 million, a return of £67 for every £1 spent.

March, September, and December issues include index digests, and June issue includes cumulative tables and index digest.

In the three years to December 2012, the BBC gave 150 senior managers severance payments totalling £25 million. The BBC paid more salary in lieu of notice than it was obliged to in 22 of the 150 severance payments for senior managers in the three years to December 2012, at a cost of £1.4 million. It is unacceptable for the BBC, or any other public body, to give departing senior managers huge severance payments that far exceed their contractual entitlements. Some of the justifications put forward by the BBC were extraordinary. The Committee welcomes the changes that the BBC's Director General, Lord Hall, has made to cap severance pay. Recommendations include: the BBC should remind its staff that they are all individually responsible for protecting public money and challenging wasteful practices; to protect licence fee payers' interests and its own reputation, the BBC should establish internal procedures that provide clear central oversight and effective scrutiny of severance payments; the BBC Executive and the BBC Trust need to overhaul the way they conduct their business, and record and communicate decisions properly; the BBC Trust should be more willing to challenge practices and decisions where there is a risk that the interests of licence fee payers could be compromised; the BBC Trust and the BBC Executive need to ensure that decision-making is transparent and accountability taken seriously, based on a shared understanding of value for money, with tangible evidence of individuals taking public responsibility for their decisions.

In September 2005 the Government, after consultation with the broadcasting industry and Ofcom, announced a programme to replace analogue television broadcasts with digital television, region by region, between 2008 and 2012 (digital switchover). This report considers how this objective is being pursued by the Department for Culture, Media and Sport and the Department for Business, Enterprise and Regulatory Reform (the Departments), who have joint responsibility for delivering the policy objective. Switchover involves the conversion of more than a thousand television transmitter sites in order to ensure public service broadcasting is available to some 25 million households in digital instead of analogue form. Unless households have at least one television set capable of receiving digital television signals they will lose access to broadcast television after switchover. The Departments estimate it will cost the UK economy £4.6 billion, mostly borne by consumers through the cost of acquiring and installing digital receiving equipment. The Departments estimate the cost will be outweighed by benefits to consumers and business totalling £6.3 billion. The programme is progressing well, with main set conversion at 85 per cent and a successful switchover in the flagship area of Copeland. The complexity of the non-contractual delivery and governance arrangements poses inherent risks to the objectives. Public awareness of the switchover is high, though not in some sections of the population. The programme's communications and help scheme activities are funded through ring-fenced amounts within the licence fee spent by the BBC, and the BBC has started to set performance measures for the £800 million ring-fenced for switchover activities. Evidence from Copeland suggests that take-up of the help scheme might be significantly lower than that anticipated by the Departments in their cost model.