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Jeremy Peat, ³ÉÈË¿ìÊÖ Trustee, said:

"We welcome the NAO's findings and recommendations. In 2007 the Trust set a demanding 3% net cash-releasing annual efficiency target for the ³ÉÈË¿ìÊÖ, and ³ÉÈË¿ìÊÖ network and nations radio has robust plans in place to meet this target over the coming years. However, we agree with the NAO that the ³ÉÈË¿ìÊÖ should adopt a more systematic approach to using comparative cost data and identifying potential savings. Any work on potential savings should take account of the possible impact on output. We have asked the ³ÉÈË¿ìÊÖ Executive to report back to us in 12 months' time with progress on key findings from this report."

Tim Burr, Comptroller and Auditor General, said:

"The ³ÉÈË¿ìÊÖ has already achieved savings in radio production across its Network and Nations radio services and has plans in place to make further savings. But the ³ÉÈË¿ìÊÖ needs a better understanding of why the cost of producing similar programmes on its different radio stations varies so widely."

Efficiency of radio production at the ³ÉÈË¿ìÊÖ

The NAO review looked at what the ³ÉÈË¿ìÊÖ is doing to maximise the efficiency of radio production across its Network and Nations radio stations, focusing on the use of cost comparisons for similar programme types within the ³ÉÈË¿ìÊÖ stations and with commercial competitors, the ³ÉÈË¿ìÊÖ's efficiency plans and the ³ÉÈË¿ìÊÖ's assessment of the impact of efficiency initiatives on performance.

The ³ÉÈË¿ìÊÖ spent over £460 million on Network and Nations radio services in 2007-08, producing a diverse mix of programmes. In the three year period ending March 2008, ³ÉÈË¿ìÊÖ Network and Nations radio services delivered efficiency savings of £11.7m against a target of £11.6m and has targets in place to deliver further savings of £21.1m in the five years to April 2013. The NAO found that there was limited documentary evidence that the ³ÉÈË¿ìÊÖ has systematically assessed the potential impact of savings on its radio output and that it has done limited work to examine significant cost variations. As a result, the NAO concluded that the ³ÉÈË¿ìÊÖ is not making full use of opportunities to increase the value for money it is achieving in radio production. It is likely that a systematic analysis of the costs and performance of the most expensive programmes would help the ³ÉÈË¿ìÊÖ to identify areas where it could make further efficiency savings.

The Trust has asked the ³ÉÈË¿ìÊÖ Executive to report back in 12 months on the progress they have made in addressing the NAO's conclusions.

The report has identified a series of recommendations to improve the efficiency of radio production at the ³ÉÈË¿ìÊÖ.

1. The NAO recommends that the ³ÉÈË¿ìÊÖ should make full use of its data on the costs of radio production to identify the scope for potential further efficiency savings across its Network and Nations stations.

The Trust believes that decisions over where to spend money - or cut costs- should be taken alongside consideration of the potential impact on services. The least expensive option is not necessarily the best outcome for audiences. Nevertheless the Trust believes that the ³ÉÈË¿ìÊÖ Executive could do more to demonstrate how they reach their assessments on what constitutes an appropriate cost for programmes. There is also more scope for careful use of comparative data. The Trust also notes as reasonable the ³ÉÈË¿ìÊÖ Executives' comments on the need to balance the cost of detailed benchmarking against the benefits likely to accrue.

2. The NAO recommends that the ³ÉÈË¿ìÊÖ should evaluate the effect of proposed savings initiatives using its performance measurement framework to demonstrate it is delivering efficiency gains without a decrease in the quality of the listener experience.

The Trust supports this finding, and has been instrumental in ensuring that achievement of the savings targets it has set is measured not only in terms of cost but also in the quality, reach and impact of performance.

3. The NAO recommends that the ³ÉÈË¿ìÊÖ should share ideas and good practice in making efficiency savings more systematically.

The Trust notes and welcomes the ³ÉÈË¿ìÊÖ Executive's commitment to share good practice through the ³ÉÈË¿ìÊÖ's Radio Network.

4. The NAO recommends that the ³ÉÈË¿ìÊÖ should explore with commercial radio stations how they might establish benchmarking arrangements to identify where and how savings can be made.

The Trust recognises that there are difficulties with benchmarking with commercial companies. This is due to a lack of competition in some areas (e.g. drama), a limit on what information can be shared under competition law and a reluctance from other organisations to share commercially sensitive data. However, the Trust will engage with Radio Centre and ask them to participate in an ongoing scheme moderated by the Trust. The Trust also notes that the ³ÉÈË¿ìÊÖ Executive has commissioned a talent valuation review and the Trust has required an update on the actions arising from this review.

Notes for Editors

1. It is the responsibility of the ³ÉÈË¿ìÊÖ Trust, under the Royal Charter, to ensure that value for money is achieved by the ³ÉÈË¿ìÊÖ through its spending of the licence fee. In order to fulfill this responsibility, the Trust commissions and publishes a series of independent value for money reviews each year in consultation with the Comptroller and Auditor General – the head of the NAO. The reviews are undertaken by the NAO or other external agencies.
2. This review covers the ten ³ÉÈË¿ìÊÖ Network radio stations (³ÉÈË¿ìÊÖ Radios 1-5, ³ÉÈË¿ìÊÖ 1Xtra, ³ÉÈË¿ìÊÖ Asian Network, ³ÉÈË¿ìÊÖ Radio 5 Live Sports Extra, 6 Music and ³ÉÈË¿ìÊÖ 7) and the six Nations stations (two each for Scotland, Northern Ireland and Wales). The NAO report does not evaluate matters relating to content and target audiences, which are matters of editorial judgment for the ³ÉÈË¿ìÊÖ.
3. The ³ÉÈË¿ìÊÖ's efficiency target for the five years to April 2013 is to reduce spending on Network and Nations radio stations by £21.1 million, releasing £68.7 million in cumulative cash efficiency savings (£57.4 million from the Network stations and £11.3 million from the Nations stations).
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, Tim Burr, is the head of the National Audit Office, which employs some 850 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.

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Further Trust statement

05 February 2009

The Trust issued a statement to address concerns that it had put unreasonable restraints on the Comptroller and Auditor General in having access to certain salary and staff data:

"This report forms part of a rolling programme of reviews which the ³ÉÈË¿ìÊÖ Trust commissions the NAO to undertake on its behalf, as part of the ³ÉÈË¿ìÊÖ Trust's Charter responsibilities for ensuring value for money for the licence fee payer. The ³ÉÈË¿ìÊÖ Trust shares these reports with the Public Accounts Committee as part of a dialogue on use of licence fee funding and its wider accountability. But it is an important component of the ³ÉÈË¿ìÊÖ's independence that the ³ÉÈË¿ìÊÖ Trust rather than Parliament should take responsibility for oversight and scrutiny of the ³ÉÈË¿ìÊÖ.

"For its work on this study the ³ÉÈË¿ìÊÖ Trust offered the NAO full access to relevant data, subject to safeguards in certain areas linked to compliance with contractual and wider legal requirements on the ³ÉÈË¿ìÊÖ such as Data Protection. While in our work with others we have been able to agree non-disclosure agreements in order to fulfil these legal requirements, we were disappointed that the NAO could not in this case guarantee the confidentiality of private data shared with it, despite potential implications for Data Protection law. We are working with the NAO to address this point for future studies and hope to arrive at a satisfactory solution.

"Through these reports and its other activities the Trust will continue actively and robustly to hold the ³ÉÈË¿ìÊÖ to account on behalf of licence fee payers and work to ensure that the ³ÉÈË¿ìÊÖ achieves value for money in all its activities."

He is currently Head of News at the Department for Environment, Food and Rural Affairs (Defra) and has previously held senior communications roles at the Department for Culture, Media and Sport (DCMS) and the Department of Health.

Nicholas Kroll, Director of the ³ÉÈË¿ìÊÖ Trust, said:

"I am pleased to welcome Mark Devane to lead the Trust’s communications strategy. He has substantial experience in communications, including at DCMS where he worked on ³ÉÈË¿ìÊÖ Charter Review, digital switchover and the Communications Act 2003."

Mark Devane said:

"It's great to be taking up this role at what is undoubtedly a challenging but fascinating time not just for the Trust and wider ³ÉÈË¿ìÊÖ, but for the whole of the public service broadcasting sector."

Mark Devane has been Head of News at Defra since December 2007, intially filling the post on an acting basis before being permanently appointed to the role. He joined Defra as Chief Press Officer, Environment and Climate Change in March 2007.

At DCMS, he was Chief Press Officer, Creative Industries and Tourism from 2004 to 2007 and Senior Press Officer, Media and Tourism, from 2002 to 2004. He previously worked in the Department of Health Press Office from 2000 to 2002 after starting his career in regional journalism.

Mark Devane replaces Tina Stowell who is now Head of Corporate Affairs at the ³ÉÈË¿ìÊÖ.

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