Money Money Money

THE latest round of media speculation does not make happy reading for those backing the BBC’s move to Salford.
It predicts that, at best, the BBC will receive a licence fee settlement in line with inflation, or even a below inflation deal.
That compares to the corporation’s request for an increase of inflation plus 1.8 per cent to fund its future plans, including Salford.
There’s actually nothing much new in these stories or headlines saying the big move north is under threat.
One uses the boys’ book of logic and an office calculator to work out that even an increase in line with inflation will leave the BBC with a £1.6 billion funding gap.
All of which may well be true.

But here’s a novel idea. Why don’t we wait and see what the actual Whitehall announcement contains?
Whether it comes this month or next, it could leave BBC director general Mark Thompson with no option but to axe the transfer of five departments to Salford – or at least leave it up to the BBC governors (or BBC Trust after Jan 1) to decide the scheme is not affordable.
Will it be that simple?
We already know that the cost of the BBC Salford project is expected to be lower than the £400m figure currently quoted.
It’s still a lot of money but relatively small when seen against the background of what it could do for the BBC.
We also know that, in the long term, Media City is a no-brainer for the corporation, which has already secured a very good deal for the move.
As Mr Thompson made clear when visiting the proposed site earlier this month: “This is a project which will be very cost effective.
“In the long term it makes very, very good sense for the public, for the licence fee payers, in terms of value for money.
“Our financial challenge is about the issue of affording it over the next few years, at the same time that we’re also engaged in a number of other large scale activities, which are also quite cash hungry.
“We’re in a pinch point in terms of our funding over the next five or six years.”
Both Mr Thompson and the government want the move to Salford to go ahead. So even with a low licence fee settlement, might there be some way around this pinch point?
One area which could be flexible is the BBC’s statutory borrowing limit, currently set at £200m.
“So our ability to borrow money now to build things which will save us money in the future is more constrained than it would be for many private organisations,” explained the director general.
Which leads to the invevitable question – could that borrowing limit be extended?
“Looking at the future funding of the BBC,” replied Mr Thompson, “there are questions about all of the above.”