New BBC HQ costs branded 'staggering'

New BBC HQ costs branded 'staggering'

The running costs of the BBC’s prestigious new headquarters at Broadcasting House are almost three-times as high as for other comparable buildings in the UK, the Whitehall spending watchdog has disclosed.

The National Audit Office (NAO) said the building – which became fully operational in 2013 after a major £1bn decade-long redevelopment programme - costs £89m a year to run, accounting for a third of the annual £273m running costs of the BBC’s entire UK estate.

Even compared to other buildings in the same part of central London, the annual cost – at £1,422 per square metre of floorspace – is 49% higher than average, the NAO said.

Margaret Hodge, the chairman of the Commons Public Accounts Committee which oversees the work of the NAO, described the scale of the costs as “staggering”.

“The huge cost of Broadcasting House is the single most important reason why the overall cost of running the BBC’s main properties is well above external benchmarks,” she said.

Mrs Hodge also expressed concern that the £200m sale of the Television Centre in Shepherd’s Bush, west London, was financed by overseas investors using Luxembourg-based investment companies.

The NAO said that the BBC and the BBC Trust were informed of the structuring of the deal and obtained legal advice that it was “commercially appropriate”.

However Mrs Hodge said: “I am deeply concerned that the BBC sold Television Centre, a publicly funded asset, to companies that used Luxembourg-based financing structures when we believe so many of these financing structures are used to avoid paying tax.”

Overall, the NAO said that the BBC had made “good progress” in rationalising and upgrading its estate replacing many ageing buildings with a smaller number of modern facilities.

But despite reducing the size of its total internal floorspace of its buildings by 29% – from 640,000 to 457,5000 square metres – the NAO said that it still had around 42,600 square metres that was unoccupied.

The BBC Trust has now set a new target to reduce the amount of floorspace per person from 12 to 8.3 square metres, taking it below the 10 square metre target for the wider public sector.

Nick Prettejohn, the chair of the Trust’s value for money committee, said: “The BBC has reduced the size of the estate by almost a third while at the same time adding new TV channels and radio stations, and modernising its buildings.

“These are significant achievements and I am pleased that the NAO have recognised the good progress made.

“Today’s report also gives a clear steer on where further improvements can be made and the Trust will continue to track progress to make sure the NAO’s recommendations are implemented in full.”

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