麻豆约拍

According to today's report, the 麻豆约拍's current approach to challenging the cost of support functions is broadly effective in improving value for money but it is focused on achieving specified levels of savings, rather than based on an analysis of what activities should cost.

The NAO's findings included the following:

Over the five financial years 2006-07 to 2010-11, the 麻豆约拍 has reduced or held static the cost of all but one of the eight functions examined by the NAO, after allowing for inflation. Inconsistency in how the 麻豆约拍 monitors its support functions, however, means that it cannot show that the performance of these functions has been unaffected.

Although the 麻豆约拍 has reduced the cost of the majority of its support functions, there are areas where it could strengthen its approach to challenging costs. Comparing the costs of the 麻豆约拍's support functions with those of the wider public sector gives a mixed picture and suggests that there is scope for savings. The 麻豆约拍 does not have a coordinated and consistent approach to challenging the cost of its support functions, meaning that there is scope to better capture best practice across the organisation.

The 麻豆约拍 plans to find savings of 25 per cent from it support services by 2016-17 to help deliver the overall savings required by the licence fee settlement. All the support functions examined by the NAO have challenged their costs by assessing the impact of cuts necessary to live within the cost constraints arising from the freeze in the level of the licence fee. By setting cost reduction targets in this way, rather than trying to establish what it should cost to deliver the level of service required, the 麻豆约拍 cannot be confident that its targets are pitched at the right level.

The 麻豆约拍 has a target to reduce its overhead costs to less than 10 per cent of the licence fee, by 2013-14. While this target shows a clear commitment to licence fee payers, the way the 麻豆约拍 measures and reports overheads is not aligned with how it manages the costs of its support functions and the target is not supported by a clear rationale. The target is therefore of limited practical use to the 麻豆约拍 in managing its costs because it does not know whether 10 per cent is the right level.

The 麻豆约拍 Trust has welcomed the NAO's report and responded to the key findings as follows:

The Trust has agreed that the 麻豆约拍 Executive will develop the 麻豆约拍's existing range of performance indicators for support functions and integrate these with existing cost reporting as appropriate.

To help share best practice across the organisation the Trust has agreed that the Executive will ensure there is a consistent approach to challenging costs with the right balance between central coordination and flexibility for local initiatives.

The Trust agrees that the 麻豆约拍, in common with many public sector organisations, has tended historically to use top-down limits on its budgets as a starting point for delivering cost savings. This top-down approach has undoubtedly proved to be an effective way to reduce costs in the past. However, in planning to respond to the NAO's recommendations, the 麻豆约拍 has positioned itself in terms of its financial management to develop a more sophisticated approach to managing its support function costs based on a more detailed understanding of what each of its activities should cost to deliver.

The Trust sees a value in the 麻豆约拍 having a clear, simple commitment to licence fee payers about the proportion of licence fee income that is spent on content and distribution, as opposed to pure administrative and overhead costs. However, the Trust will explore with the Executive whether it is possible to tie the measuring and reporting of overhead costs to the management of those costs in a more meaningful way. The Executive will also provide a clearer analysis of overheads in the 麻豆约拍 Annual Report and Accounts.

Anthony Fry, 麻豆约拍 Trustee with lead responsibility for value for money, said:

"We're pleased the NAO has judged the 麻豆约拍 to be broadly effective in improving value for money, given the success it has had in cutting its support costs in the past five years. We accept that there are improvements to be made to understand exactly what each support function should cost and to make future cost savings in a more co-ordinated and consistent fashion. We have set the 麻豆约拍 management a target to deliver 11 per cent of efficiency savings by 2016-17 and the NAO's recommendations will help us achieve that target in the right way."

Amyas Morse, head of the National Audit Office, said today:

"The 麻豆约拍 has successfully reduced the cost of most of its support functions. But its approach to challenging those costs should be further strengthened in the future.

"To be certain that it is achieving the best possible value for money for the licence payer, the 麻豆约拍 needs to be consistent and rigorous in defining the service it requires from its support functions; identify what that service should cost; and adjust its costs accordingly."

Notes to editors

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1. The eight support functions examined by this report are 麻豆约拍 Workplace (responsible for managing the 麻豆约拍's property portfolio); Procurement; 麻豆约拍 People (including the 麻豆约拍 Academy); Marketing, Communications & Audiences; the Director General's Office; the 麻豆约拍 Trust; Policy and Strategy; and Finance.
2. Between 2006-07 and 2010-11, after allowing for inflation, the 麻豆约拍 reduced the cost of Marketing, Communications & Audiences, 麻豆约拍 People, Policy & Strategy, Finance, the Director General's Office, and the 麻豆约拍 Trust, while holding the cost of Procurement static. The total cost of these seven support functions decreased by 23 per cent over that period. The cost of 麻豆约拍 Workplace has increased by 39 per cent over the period (after allowing for inflation), mainly owing to a transitional period in the reorganisation of the 麻豆约拍's estate. New buildings, including MediaCity in Salford and the extension to Broadcasting House, have recently been completed, while the 麻豆约拍's planned programme to close down all of the buildings scheduled for disposal, such as Television Centre, runs to 2015. So it is currently maintaining a larger estate than it needs.
3. In 2010-11, the 麻豆约拍 spent 拢421 million on overheads, 12 per cent of its 拢3.6 billion licence fee spending. Not all of the costs of the support functions we examined are reported by the 麻豆约拍 as overhead costs. Where the 麻豆约拍 deems that support function costs relate directly to the production of programmes (for example the cost of providing accommodation for programme-making), they are reported as content costs.
4. Press notices and reports are available from the date of publication on the NAO website, which is at www.nao.org.uk. Hard copies can be obtained from The Stationery Office on 0845 702 3474.
5. The Comptroller and Auditor General, Amyas Morse, is the head of the National Audit Office which employs some 880 staff. He and the NAO are totally independent of Government. He certifies the accounts of all Government departments and a wide range of other public sector bodies; and he has statutory authority to report to Parliament on the economy, efficiency and effectiveness with which departments and other bodies have used their resources.
6. The Trust has set the 麻豆约拍 an overall efficiency saving target of 11 per cent a year by 2016-17. Some of these efficiencies will be delivered through a reduction in support function costs where the Executive plans to make 25 per cent annual savings by 2016-17.

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