BBC 'does not have transparency' over cost of coverage for major events such as World Cup and Glastonbury, says NAO
Read the full NAO report
The National Audit Office has criticised the BBC's coverage of major sport and music events such as the football World Cup and Glastonbury, saying the corporation 'does not have transparency' over the way money is spent on its output.
The NAO report, commissioned by the BBC Trust, found that the corporation spent £357m on the rights for and coverage of sport and music events in the year to the end of March 2009.
It focused on six major events during the period: the Euro 2008 football championship in Austria and Switzerland, the Beijing Olympics, Wimbledon, Glastonbury, the BBC Proms and Radio 1's Big Weekend in Maidstone.
Although the NAO acknowledged that such programming is 'valued by millions of viewers and listeners', it criticised the BBC for failing to adequately measure the amount spent on many big events.
The NAO also revealed that coverage of one major event during the year in question – Wimbledon – went over budget, while BBC executives could not find the paperwork approving the production budgets for three events.
TV coverage of Wimbledon in 2008 was £700,000 above the BBC's approved budget of £3.5m, although the NAO emphasised that four out of the other five came in at or below budget.
'The BBC has told us the budgets for its coverage of the Beijing 2008 Games, Wimbledon, and Euro 2008 were approved at divisional level, but could not provide documentary evidence of this as the approval was not minuted,' the NAO said.
The NAO added that the corporation should ensure that total budgets for such events are more accurately collated, however. 'The BBC does not have transparency over the total budget for coverage of individual major events,' the report found.
'Approvals processes for expenditure mean that all expenditure is approved but not gathered together to allow the BBC to consider total costs against achievements.'
The NAO said the cost of major events are spread across different departments providing TV, radio and online coverage and the total amount spent is not therefore known.
'The BBC does not prepare a single budget for individual events that gathers together the total cost of coverage across platforms' it added. 'Separate budgets are prepared and approved for each platform (television channel, radio station, online), and the BBC told us some talent costs are approved separately as part of long-term contracts.
'For example, the BBC Sport plan included TV (including HD), radio and interactive plans of £13.7m for coverage of the Beijing Olympics. However, this figure did not include additional budgets of £2.5m for some talent, BBC staff and online coverage, which were approved separately. The total budget of £16.2m was not brought together anywhere.'
The NAO recommended that BBC management put in place a series of measures, including introducing better cost benefit analysis systems, and should 'adopt a more structured approach to the management of its coverage of major events'.
Paying presenters and commentators is a major part of the overall budget for big events, the report also revealed.
'The cost of talent (presenters and commentators) can be a significant element of coverage expenditure, particularly for the events covered by BBC Sport. The cost of talent was ... between six and 20% for sporting events,' it found.
The BBC has been taken for task by the Conservative party for spending too much money on top talent, and executives were criticised recently for failing to reveal salaries to the NAO.
A BBC trustee, Jeremy Peat, said: 'The report finds that the BBC has succeeded in coming in very close to or under budget for all but one of the major events considered.
'The trust notes that the executive has already implemented many of the NAO's recommendations, but there is still more to do and we will review progress on a regular basis in the context of the action plan that we have asked the executive to produce.'
Asked about the fact BBC management could not find paperwork relating to the Beijing Olympics, a BBC Trust spokeswoman said: 'We consider that to be a serious matter and we've made it known to the executive that its not acceptable. But there have been considerable improvements in records keeping since then.'
A spokesman for BBC management added: 'Today's review not only recognises that these events are enjoyed and valued by millions of viewers and listeners but that the BBC has for the most part delivered these events within budget and with appropriate staffing to provide thousands of hours of content for TV, radio and online. The BBC accepts and will now implement the recommendations made in the review.'
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