BBC Trust approves 48% online budget rise
Monday, July 21st, 2008in spite of poor financial management
The BBC Trust has approved a 48% rise in the budget allocation for the BBC website, to £110 million. The increase comes after a review by the corporation’s regulator found that BBC websites cost over 50% more than had been budgeted for last year, due to misallocation of funds and “poor financial management.”
The BBC had planned to spend £74 million on its websites last year, but ended up spending a whopping £110 million because it did not properly account for the cost of maintaining its large collection of sites, which include online local, national and international news, as well as sports commentary pages and weather. 
£13.8 million of spending for IT support for the websites was misallocated, while staffing costs were £11.1 million higher than had been planned for.
The overspending displayed a “lack of financial accountability” in BBC institutions which resulted in a “serious breach,” according to the trust.
In response to the report, the BBC has said that it will adopt a “cautious approach to new investments” this year. However, in addition to the corporation’s current online services, it wants £39 million extra cash next year for local video news services and educational websites for primary school children, taking the BBC online budget to over £150 million. The iPlayer catch-up service comes under a separate budget.
In a statement the BBC management said that the poor budgeting was “regrettable and we recognise the need to address this.” It is currently drafting a timetable to apply for fresh investment.
