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27/11/2003

BBC Technology to be sold; Bectu issue strong condemnation

The BBC are to sell their wholly-owned commercial subsidiary BBC Technology, subject to final approval by DCMS Secretary of State Tessa Jowell.
The move, which follows a report that predicted potential annual savings of between £20-£30m if services were outsourced, prompted Bectu to condemn the plans as: "Worse than selling the family silver, they're trying to give away the BBC's entire nervous system." Union representatives are to meet with BBC management on December 2 to make their feelings known.
As recommended by an internal strategic review, the BBC are to conduct an EU procurement process in which the winner would buy BBC Technology and, as part of that process, take on the 1400 staff currently employed.
Inevitably, the announcement raised fears of job losses, but the BBC maintain that the company can attract bids from "major technology businesses with scale and expertise" that will offer "growth opportunities for the staff."
In fact, the BBC say that one motive behind the sale was a desire to avoid "substantial job losses" that would have been necessary for the subsidiary to remain competitive.
Seeking to reassure staff, BBC Director-General Greg Dyke said: “While some BBC Technology staff will feel worried about the prospect of change, we’ve reached the conclusion that this is a win/win situation for the BBC and the staff.
“This way the staff will continue working on BBC business, but at the same time BBC Technology, which has been very successful at winning outside contracts, will get the capital injection it needs to expand further, albeit in someone else’s ownership.
"A major factor in this process will be ensuring that we make employment terms a priority and future pension arrangements will be an important issue for the BBC during the commercial negotiations. Obviously, we will be consulting fully with staff and Bectu.”
Bectu, however, were less than enthusiastic. Despite Mr Dyke's personal pledge on pensions and employment rights, Bectu fear that any new owner is "likely to prune staff to meet the savings target once they take the company over, and might not offer severance terms comparable with the BBC's."
They also expressed concern over the risk posed to BBC activities by handing control of communication and IT networks over to a private company, and their belief that the subsidiary is already offering the BBC value for money. They are to demand evidence that private suppliers could charge less.
Some observers believe that the sale of BBC Technology signals a failure of Greg Dyke's BBC vision, a notion refuted by the subsidiary's Managing Director, Ann Wilson. She said: “BBC Technology is, by any standards, a success story. Since creation, we have moved into profit within three years and, through the dedication of our staff, have improved the contribution that technology is making to the BBC. We welcome the opportunity that the procurement and sale will bring, as it will allow us to grow our products and services in a dynamic technology environment.”
Roger Flynn, CEO of BBC Ventures, said: “BBC Technology has delivered great value to the BBC and this deal will ensure that we are adding even greater value. The dedication and commitment of the staff has resulted in an impressive performance over the last two years in a difficult market.”
Mr Flynn also announced his intention to leave the BBC in spring 2004. He said: “I am pleased with the turnaround of BBC Ventures Group. All the businesses are now profitable and in a strong position to evolve further. By next spring the plan I put in place will be completed and the group ready to move to the next phase of development. It is therefore a natural moment for me to seek a new commercial challenge and I am satisfied that I will be leaving BBC Ventures in good shape.”
Thanking Mr Flynn for his contribution, Greg Dyke said Mr Flynn had been "instrumental in the decision to sell BBC Technology."
The procurement process is due to be completed by Autumn next year, and the BBC say they have no plans to sell any other commercial subsidiaries.
The BBC's commercial subsidiaries have long been a controversial subject among other broadcasters, who argue that the BBC have become too dominant due to a combination of ratings grabbing programming, commercial dealings and the licence fee.
(GB)
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