Βι¶ΉΤΌΕΔ

Director, Βι¶ΉΤΌΕΔ Global News

Peter Horrocks' full statement on cuts to Βι¶ΉΤΌΕΔ World Service

Check against delivery

Check against delivery

Thank you for joining me today, particularly from our bureaux.

I'd like to start by thanking you for your patience. Not just since the funding settlement was announced back in October, but throughout the last year or so.

It has been a period of uncertainty that could have distracted you from our vital editorial tasks. But everyone has continued delivering brilliant programmes. In recent weeks, in Ivory Coast, Sudan and Tunisia, Russia, Egypt, you have performed superbly. I am very very proud of what you do. My aim is to ensure that, whatever the pain today, we will continue to produce that superb journalism.

Our news ethos in the World Service is to get to the point, with clear headlines and analysis from which each can draw your own conclusions. Today I will adopt that approach.

First, the key impacts:

Over the next three years we expect around 650 posts will be closed out of a current WS total of 2,400.

Today we are announcing the detail of the post closures in the first year from April this year – and that gross figure is 480.

I know this is going to be an extremely difficult time for all, especially for those whose jobs are at risk. It will be particularly sad for those whose services and programmes, which they have loved and devoted their professional life to, will close. We will carry out all of the changes as swiftly and compassionately as possible.

We need to find savings in our revenue budget in the three years before we become licence fee funded of Β£46m.

Why? To deal with the cut in funding itself, plus inflation and other unavoidable cost increases and also to set aside a very small amount of money for targeted strategic investments designed to take the World Service forward.

How will we make such savings and how will we sustain our great service to the world?

We can't do it all by efficiency – doing the same for less money. We have done efficiency drives for many years. While there is always more that we can do to work more smartly, efficiency isn't enough. We need to stop doing things.

There are full services we are stopping – five languages.

There are programmes we are stopping.

And there are platforms within services we are stopping – for instance in some languages we will be stopping radio programme production and broadcasting entirely. And there will be significant reduction in distribution and efficiencies in all support areas.

I will be giving details of the key changes in a few minutes.

Everyone who is in a language team whose service is being closed were spoken to yesterday afternoon. All others whose roles are now at risk will be told shortly. Being at risk doesn't mean your job will definitely go, but that you are in a category where there need to be reductions.

So, in plain language – there will be cuts – as a result of the reduction in our funding from the FCO. And it is worth reminding everyone that licence fee funding does not start until April 2014. This is about government funding and its impact.

However despite that very tight funding we still need to develop, as far as we can afford, the services our audiences need.

Today, I am also announcing new investments in and a new approach to our online video activity across all of Global News and a small new investment fund for innovations in new content and distribution for all platforms, including radio.

There is a lot to take in, but I hope I can give clarity to you on the major questions in your minds. When I have finished Liliane Landor will go into further detail for the language services, the largest part of our operation. And later other key members of the board will be doing their briefings to their teams.

Our aims

Our aims are to ensure that Βι¶ΉΤΌΕΔ World Service maintains and strengthens its reputation as the world's leading international news provider.

The changes I'm announcing today are driven by two key things – the needs of our audiences and the limited resources that we now have available.

Our decision-making started with the Choices sessions in autumn 2009. Of course, none of us would have wanted to make the deep cuts I am announcing today, as a result of the reduction in funding from the FCO.

Cuts to our funding have accelerated changes faster than we would have wanted and forced others on us that we would never have wanted to make.

However, Choices did help us identify the priority areas.

A clear message came through: you wanted us to focus on the parts of world where the Βι¶ΉΤΌΕΔ was needed most; where access to free and impartial news is most limited; where our global perspective is not offered by local news providers.

The scale of these changes are driven primarily by the level of funding available to us, but the choices that we are presenting are those decided by the World Service Board, influenced significantly by the direction that emerged from the Choices consultation

Spending review and licence fee

The spending review, as it applied to World Service, was the subject of my last announcement to the division.

The government announced that World Service funding would decline by 16 per cent in real terms over four years. However that figure that the Government gave did not take into account: that the funding for rental costs in W1 was withdrawn, the baseline for the new settlement was lowered and the capital budget has also been reduced by 52 per cent. Also that figure did not take into account the pension cost increase and the need to make investments.

The combined effect of those funding changes requires us to find annual revenue savings in the three years prior to licence fee funding by 20 per cent.

In my last talk to you I compared the 16 per cent real terms Spending Review reduction in the World Service budget with the figure the Chancellor gave in the spending review for 24 per cent savings across the whole of the FCO. However it has since become clear that that figure of 24 per cent is only achieved by the Βι¶ΉΤΌΕΔ licence fee taking over the funding of World Service in April 2014 and the WS budget disappearing from the FCO's books. The actual cut for the FCO itself is 10 per cent in real terms. The FCO themselves have since described that to the Foreign Affairs Select Committee as a "flat cash" settlement, that is, no practical reduction in their current budget. By comparison, we are having to make 20 per cent cash savings over the next three years.

Beyond the underlying funding position we have also been wrestling with the cost of the changes – primarily redundancy payments which are very significant. The settlement included no provision for restructuring costs. We initially faced the prospect of making cuts much deeper than those I am announcing today, simply to be able to afford the redundancy payments.

The time needed to sort this issue out is the main reason for the delay since October. From then began a period of discussion with the Βι¶ΉΤΌΕΔ Trust and the FCO. In the licence fee settlement between the Βι¶ΉΤΌΕΔ and the Government, both agreed that the Βι¶ΉΤΌΕΔ would be allowed to use some licence fee funding to cover World Service restructuring costs prior to formal transfer to the licence fee. In order to safeguard the scope of the World Service the Βι¶ΉΤΌΕΔ Trust has agreed that a limited amount of licence fee funding can be used.

I am also pleased to tell you that the Director General, in an article in the Daily Telegraph this morning said that it he hopes to increase World Service transfers to the Licence Fee in April 2014.

As you know, the decision to close language services requires the approval of the Foreign Secretary.

It is only been in the last two days that the approval from the Βι¶ΉΤΌΕΔ Trust and the Foreign Office has been received around the complex permissions that we required, hence the delay before I could make these announcements.

Changes

In all the changes that I will now outline in detail, the aim has been to protect the WS, its quality and reputation and, where possible, our footprint.

Language service Closures:

We will be closing five language services: Portuguese for Africa, Caribbean English, Macedonian, Serbian and Albanian. This results in a total of 70 posts which we propose to close.

Making any decision about closing services is extremely difficult. It has been the hardest part of our discussions.

As I said to the teams yesterday, I'd like to emphasise that the closures are not a reflection on the performance of individual services or programmes. They are all extremely important to their audiences and to the Βι¶ΉΤΌΕΔ. It is simply that we need to make savings and we need to focus our efforts in the languages where there is the greatest need and where we have the strongest impact.

We are deeply conscious of the effect on people's lives and careers, and on the loyalty of our audiences.

Secondly there will be Platform changes starting in April.

By platform change we mean the loss of a particular distribution method for a particular service.

This means the end of radio programming in the following languages: Azeri, Mandarin Chinese, Russian (save for some programmes which will be distributed online), Spanish (the remaining residual service for Cuba), Turkish, Vietnamese, and Ukrainian.

These services will focus instead, as appropriate, on online, mobile and television distribution of content which is where we have decided that our best prospects for audience growth and impact lie. As with the full service closures, these decisions should not be seen as a reflection on the editorial delivery by those radio teams. They are a response to changes in audience behaviour and, of course, prioritisation within the tight funding picture.

There will be a phased reduction in medium wave and short wave throughout the period. Βι¶ΉΤΌΕΔ World Service will cease all short wave distribution in the following services in March of this year: Hindi, Indonesian, Kyrgyz, Nepali, Swahili and the Great Lakes service for Rwanda and Burundi.

The platform on which World Service historically has been strongest – short wave radio – is, as you'll all know, under great pressure as FM radio, TV and mobile phones offer compelling alternatives to audiences, even in less developed markets. Reducing short wave distribution is not a risk free choice and the reductions are speedier than any of us would want. Nonetheless shortwave listening is in long-term decline and we believe this is a responsible and cost effective response to funding pressures.

There will also be a phased reduction in medium wave and shortwave distribution for the English radio service during the period that will be done on a careful market by market basis, more details will follow later.

Across the languages operation there will therefore be service closures, platform changes and changes in distribution. And there will be savings across all areas, including significant reductions in our TV operations for Arabic and Farsi, plus reductions in online. The savings are not solely in radio.

In total that comes to net 291 proposed post closures in languages, including 70 caused by the five full language service closures.

Because of the service closures, platform changes and changes in distribution there will need to be a matching reduction of studio managers and staff in Studio Operations supporting TV as well. In total, 53 posts are expected to close.

In World Service English the schedule will become simpler and some programmes will be decommissioned. But will also be focusing on our best-known programmes and investing in some of them. Our aim has been to maintain the great quality of the English programming, despite the need to make significant savings. And I believe it is possible to do that.

There will be a reduction from seven to five daily pre-recorded "non-news" programmes. This includes the loss of one of the weekly documentary strands. Europe Today and Politics UK are also being closed.

However I am also pleased to say that there will also be investment in some of our highest quality and best known radio programmes. For instance World Have Your Say will have an extra daily edition and From Our Own Correspondent will add short daily programmes to its weekly offer. The strength and quality of radio in English is the cornerstone of the World Service and that will be maintained.

As a result of these changes we are proposing that 68 posts will be close in the next financial year.

Craig Oliver will update teams on further details.

All the detailed figures are net. The overall 480 proposed post closures figure is gross.

There will be significant changes in Professional Support Services

Non output teams in Finance, HR, Business Development, Strategy, Marketing, Distribution and other administrative operations will face a cut averaging 33 per cent which equates to an estimated 32 post closures. The coming together of Βι¶ΉΤΌΕΔ's UK and global news operations in W1 will also mean that there will be more efficiencies in support areas. We rely enormously on our colleagues in professional support but it is right that, as far as possible, we protect front-line editorial areas.

Lastly, I should refer to cuts in senior management. Since August 2009 there have been nine net post closures in the leadership of World Service. That represents a more than 25 per cent reduction in SM. Some of the proposals being put forward may reduce this figure further subject to consultation and any necessary selection process.

What happens next?

Managers responsible for the various areas will give specific details to their teams after this session. You will also be provided with written information and there is a lot of detail that will be available online.

In your team meetings there are bound to be questions about where the savings are being made. Some may question why one area has been cut more than another. However every area is being affected. The balance of savings is one that has been discussed long and hard by the World Service Board and the choices I am announcing have their unanimous support.

The Βι¶ΉΤΌΕΔ will consult trade unions and all staff about these changes. Consultation will focus on reaching agreement with the trade unions on ways of avoiding, reducing or mitigating compulsory redundancies, wherever possible. However given the scale of the changes, we can not rule out the need to have compulsory redundancies.

Moving forward and investments

I want to talk briefly now about the future for the World Service after these cuts. I know many of you may think, "You have just told us we are not part of that future, so that is irrelevant to us". Or you may be so concerned for your own job that it is hard to think about the future at all. That would be completely understandable. But of course the majority of people who work for the World Service will still have a job here and it is vital that we work out how we sustain ourselves.

Unfortunately, the changes I am announcing today will result in loss of audience. We estimate that there will be an immediate drop of more than 30 million in our audience figures as a result of these measures. Successful investments in new content and services as a response to competitive pressure and audience and technology changes will be essential to avoid further reductions in our reach.

The only way to sustain our position, and to cope with the savings, is to share content more effectively and to invest where we can in the distinctive journalism that audiences most want from us.

Some of the changes I have already made in the Becoming More Global announcements announced previously will help us – a joint approach across all languages under Liliane, bringing the strategy for all English platforms together under Craig, and having a combined approach to digital across Global News under James.

We now need to build on that re-organisation. All of the following changes will fit naturally into the exciting new headquarters we will be moving into next year – new Broadcasting House. And the way we will organise ourselves is based directly on what we can best offer our audiences – the strongest news gathering and the widest range of expertise and perspectives that are on offer in international journalism.

Our Languages teams in the future will be organised in new clusters – by geography or by platform type. For instance services that are online-focussed will be grouped together. Immediately after I have finished Liliane will be giving details of these big changes.

And as well as re-organising I am announcing some targeted investments to enable the sharing and creation of content.

Ahead of our move to W1 we are planning to set up a global video production unit based at TVC. This will be a joint enterprise between our English and non-English language teams. It will bring together an online video team from across Languages and News. These teams goals are to increase dramatically the quantity and quality of video news for our websites and TV channels. The first year is a launch and learn period – from 2012 this unit will be based around a dedicated multiplatform area that has been designed for W1 (Broadcasting House).

We will also want to make additional savings to allow limited investment in new services and platforms, starting with a Β£1m modest investment fund in the next year. Services that can make a strong strategic case for new investment to maintain their relevance and impact will be able to make proposals for funding with the aim of getting new initiatives on air as soon as possible. Only services that have delivered their savings will be eligible for this funding.

On top of that we will seek partnerships in priority markets – such as India, Pakistan and sub-Saharan Africa – to launch new TV programmes in some countries, modelled on the very successful Turkish TV project.

Now I can imagine some may question whether limited investment is wise at all, given the scale of cuts I have announced. Firstly to emphasise, these investments are small. But if we don't invest then again the future for the World Service is continual retrenchment. And I should stress that these investment funds are for all platforms. Where radio services have ideas for new content and new distribution arrangements, especially on FM, we will continue to invest in radio. Radio is the mainstay of the World Service and will continue to be so far as I can see.

And some may ask whether an increased focus on shared global journalism is the right thing for our audiences. For many of our audiences – for instance in Somalia and Burma – we will continue to produce a highly localised offer. But in many of our markets what the Βι¶ΉΤΌΕΔ can deliver – that's global newsgathering and expertise – is the extra factor that the local news providers cannot do. So a significant shift to a greater proportion of global journalism makes audience and economic senses, as does remaining relevant to our audiences.

You may ask, indeed some already asked since October, whether it is possible to raise some income commercially so we can offset some of the cuts. The answer to that is yes. In fact we have been asked by the Foreign Office to raise Β£3m via commercial routes. There are some policy issues we need to sort out with the Βι¶ΉΤΌΕΔ Trust. And if you have any suggestions, please propose them. We will look into this option, but of course without ever undermining the underlying ethos of what we do.

This is a major shift, but at the end of all these changes Βι¶ΉΤΌΕΔ World Service together with Βι¶ΉΤΌΕΔ World News and bbc.com will be part of a fully integrated global news offer, working with our colleagues in UK services, in providing services in English and very significant 26 languages.

Looking ahead, in three years from now, World Service will be funded by the licence fee.

The move to the licence fee offers a great opportunity for the wider availability of WS within the UK. And we can build on the already high popularity of the World Service among UK licence fee payers.

The Director General and the Βι¶ΉΤΌΕΔ Trust have committed to protecting the World Service. Mark Thompson has said today he intends to restore some of the funding we are losing in the interest of audiences when World Service becomes Licence Fee funded in 2014.

This is as I can see around me, a fundamental set of changes, but:

Βι¶ΉΤΌΕΔ World Service's fundamental ethos, its universal values, respect and understanding that inspire our work – they are not up for change.

What won't change is our aim to continue to be the world's best-known most trusted news broadcaster – offering a uniquely global editorial agenda – bringing the Βι¶ΉΤΌΕΔ's distinctive expertise, perspectives and brilliant content to the UK and to the largest worldwide audience of any international news provider.

There is no doubt that the period ahead is going to be difficult and sad – both personally and professionally. We will handle the whole process with sensitivity.

I know it won't be easy for many of you to go back to your jobs and carry on. But I am sure you will be professional as you have been all along, and make sure that our audiences get the service they deserve.

Today is an extremely tough day for all of us. But I promise that the World Service will get through this and we will continue to deliver brilliantly for our audiences. What we do is too important to fail in that task.