An analysis carried out by Howard Reed of Landman Economics says that the cuts outlined in the BBC’s Delivering Quality First are likely to lead to a reduction in UK economic output of between £1.1 and £1.7 billion pounds per year at current (2011) prices.
His research concluded that there is a strong case for re-opening the licence fee deal and that people would be prepared to pay extra for a quality service.
The report, The BBC’s Delivering Quality First proposals: an assessment of the economic and social impact, and the potential for revisiting the licence fee settlement, says: “It is clear that the BBC cuts will have a huge adverse impact on the UK’s creative industries sector, just at the time when the country is relying on world-leading sectors such as this to spearhead economic recovery from the most serious economic crisis for seventy years. Economically, cutting the BBC by this much, at this time, looks like a dangerous and wrongheaded strategy.”
The report also found that the pattern of cuts to TV and radio services places into doubt several aspects of the BBC’s ability to meet its wider social objectives, in particular:
- Smaller channels such as BBC Three and BBC Four which account for much of the wide diversity of the BBC’s output are being cut by more than average.
- Older people are likely to be disproportionately affected by the planned cuts to BBC local radio services.
- Currently, households outside London and the South of England are less likely to say that the BBC offers good value for money. The pattern of cuts to regional radio services is likely to exacerbate these regional imbalances.
Howard Reed looked at the recent polling evidence of people’s willingness to pay extra on the licence fee and believes there is a solution to the BBC’s situation.
He said: “My analysis concludes that an alternative settlement where (for example) the BBC licence fee rose in line with inflation for the next six years, rather than being frozen in nominal terms, would have been viable, based on the headline polling evidence. In short, there is a clear case for revising the terms of the current BBC funding settlement.”
Michelle Stanistreet, NUJ general secretary, said: “This report shows that the cuts to the BBC are not only putting the corporation’s future as a quality broadcaster in danger. The repercussions to the UK’s wider creative industries sector will also be adversely affected.
"Equally worrying is Howard Reed’s analysis which shows that the cuts will put in doubt the BBC’s ability to meet its wider social objectives laid out in its charter. The report also makes a compelling case for re-opening the licence fee deal.”
The report forms part of the NUJ’s submission to the consultation on Delivering Quality First.