BBC News to investigate ‘how we compare with the rest of the industry’ as it seeks £5m in cuts

BBC News is facing a £5m budget cut after the corporation today set out plans to make annual savings of £150m.

The corporation announced in the summer plans to make savings of £150m, which include cutting 1,000 jobs.

And an announcement today has broken down where the cuts are being made.

Included were £5m of cuts to BBC News.

A statement said: "This will include efficiency savings from a review of working practices, terms and conditions, and commercial income or cost reductions in BBC Monitoring (subject to approval from the BBC Trust)."

In addition, the corporation said £12m of cuts will be made to BBC Online. It said: "This will involve rationalising new features, innovation and development across the BBC’s digital services, and focusing on those with greatest impact."

BBC News is investigating "how we compare with the rest of the industry" as it seeks to find where the cuts will come from.

In an email to his staff, seen by Press Gazette, head of BBC News James Harding (pictured, Reuters) said: "We are reviewing our working practices, terms and conditions to identify ways in which we can work more efficiently and in a fairer and more consistent way."

Harding added: "We have begun to look in detail at how we currently operate, including the efficiency of our current rotas and scheduling and how well our rotas meet the needs of our services and programmes.

"We are also looking at how we compare with the rest of the industry. Once that analysis is complete, we will want to talk to everyone in News and to consult with the trade unions as we develop principles for the future followed by detailed proposals for changes. We expect to be able to share more information about our initial ideas and approach early in the New Year."

Harding said that £2.5m of the £5m is to come from BBC Monitoring.

He said: "The reduction is expected to be met by a combination of actual savings and increased commercial revenue.

"It is too early to say how the savings will impact on the operations but it almost inevitable that some services will be affected, including the likelihood of post closures.

"The funding reduction will need to be approved by the BBC Trust, and is in addition to what Monitoring is already doing through a programme of cost controls and the development of stronger commercial revenues to help reduce its call on licence fee funds."

Elsewhere, the corporation said it would save £50m "by creating a simpler, leaner BBC, with fewer divisions and senior managers, fewer layers between the top and bottom of the organisation and cutting 1,000 posts". This will be made up of "reducing back office and professional support services" (£25m), "reducing management layers in content areas" (£10m), merging the technology and digital divisions and making changes to the expenses, payroll management and "other areas".

The BBC said the 1,000 jobs would be lost by 2017 and that 300 have already gone.

The corporation also plans to cut £35m from its TV sports rights budget, £12m from the TV budget, £20m from "long-term contracts and other costs, due to the current lower levels of inflation" and £16m from: "savings in distribution costs", "exploring a phased exit from the broadcast Red Button service and focusing our interactive TV offer on connected televisions and iPlayer" and "exploring further savings from BBC Online".

The £150m set out today is said to be part of the £700m overall savings the BBC must find due to the flat licence fee agreed in the summer.

An announcement of how the remaining £550m savings will be met by 2021/22 will be made in the spring, but the BBC said these are likely to include major structural changes to how it works and fulfils its mission to inform, educate and entertain.