BBC online budget scandal - the truth at last

News broke yesterday of the BBC Trust's review of bbc.co.uk, the corporation's gargantuan website, of which News Online is a major part. The results make interesting reading and have been widely analysed in the media.

First up, even the press release offers some intriguing statistics.

In 2006/7 the BBC spent 3% of the licence fee on bbc.co.uk compared to 70% on television channels and 17% on its radio services, yet it is now the BBC's fourth most widely used service.

Right - so it gets a snippet of the cash available... But wait - there's much more going on. Scroll down the press release and you'll see an appended table detailing the budget, the overspend and misallocation costs, accompanied by a very dry statement.

It fell to the Guardian to get stuck in. Its PDA blog made a scathing analysis of the financial mismanagement afoot.

The world's biggest news and entertainment website breached its 2007/2008 budget by a staggering 48%. About two-thirds of the £35.8m overspend was down to "misallocation of general overheads and costs'' - accountants at the BBC had, apparently, failed to include costs such as the buildings that house its digital teams. Then there was the £3.5m in unauthorised overspend and a further £7.4m in overspending that - bizarrely - is permitted under generous BBC rules that allow for "10% leeway either side of the target,'' as a spokesman put it.

So who gets fired? Well, no one. In part, because no one, it turns out, is in charge of the sprawling BBC.co.uk network.

Shocked? There's more:

How will the Trust rein in the spending? They won't. Instead, the Trust's recommendation is simply to accept the overspend, integrate it into the budget and add an extra £4.4m of additional padding. So the baseline budget for 2007/2008 of £74.2m is bumped up to £114.4m - a healthy 54% increase at a time when the BBC's private sector rivals are feeling the full whiplash of a global credit crunch.

Journalism.co.uk was also scathing of the figures.

From the point of view of media rivals, that sounds threatening. But it's not the place of this blog to detail the long-running war between Aunty and regional news outlets that feel threatened by the BBC's dominance. From the licence-payers' standpoint, it's mixed - bad that things ran over budget but good because it's still committed to investing in what is, after all, a heavily used site.

Sitting here in Cheshire, I can only look at the report from the angle of value for money for us licence-payers in the county. It is quite staggering that the BBC can throw licence-payers' money around like this - losing control of budgets, no one apparently in charge, spending at least £3.5m on "additional content", etc. Yet, the BBC continues to claim that there is no budget as yet to provide dedicated Cheshire content (either news or other regional content) and a million residents in the county are still expected to wait until January 2009 for the BBC Trust to give official approval to provision of equal coverage for Cheshire...

Personally, I'm not massively surprised at the financial waste - stories abound of vast budgets being spent on pilot TV shows that are scrapped before transmission. Neither am I surprised that no one was "in charge" of the whole sorry mess. But let's be frank - if the BBC was a modern plc, it would be a lean, mean, fighting machine accountable to shareholders and expected to rein in costs. Us licence-payers are sort of shareholders but without the control, so this kind of profligate waste continues to abound while the very people that this world-renowned public broadcasting service is to supposed to serve renain unserved.

A scandal? You bet.