Overspent By $71 Million, 'Ineffective' Bosses Must Change, Investment Frozen

This story was written by Robert Andrews. management is "not sufficiently strong" and "financial oversight has not been sufficiently effective", according to the BBC Trust's review in to the service, which demands an overhaul of the top team by December and has ordered online investment be frozen until then.

The review said of 2007/08 expenditure, which excludes iPlayer and streaming media: "at 110million ($70.92 million), (it) is much higher than the upper level of spend permitted in its Service Licence of 81.6million" ($160.7 million), which is a 10 percent overspend buffer on the set budget of 74.2 million ($146.1 million). And it screamed that "the true level of spending on the service has only become known as a result of this review": "This lack of financial accountability is not acceptable."

-- 'More robust management' needed: In scathing criticism, the trust primarily blamed a devolved management structure, leading to "misallocation between cost centres". It noted "weaknesses in both the service's strategic and editorial oversight which need to be addressed" and said "there need to be improvements in (management) control of, alongside clear procedures for ensuring oversight by the trust". So it's demanded a new management system be implemented within six months. The new-look leadership will then be reviewed after a year in post. This throws the cat amongst the pigeons on finding a successor to Ashley Highfield.

-- Must be more 'distinctive': While users see the site as distinctive, competitors still fear the BBC is encroaching on their territory. The trust will ask the BBC to define and guarantee "distinctiveness", which seems rather woolly and appears to mean "don't overlap with the commercial sector".

-- 'Caution' on investment: In light of overspend and managerial concerns, the trust will now effectively withold a planned big planned spending hike that was due to kick off with 39 million top-up to its 2008/09 budget: "We will not approve the proposed new investment in until we are satisfied with management's proposals for improved management and control of the service and have subjected them to greater scrutiny."

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By Robert Andrews