A very strange BBC report

OK, this:

The BBC is to launch a fightback against its critics by claiming that, far from being a drain on the licence feepayer and squandering millions on on-screen stars and behind-scenes apparatchiks, it in fact generates £7.6bn a year for the British economy.

Now I\’m perfectly happy to believe that an organisation as large as the BBC has spin off benefits. Even that there\’s a multiplier to their spending.

I\’m also absolutely certain that the report they commissioned from Deloittes will be full of the most basic economic howlers. It will entirely ignore opportunity costs for example. (What would be the multiplier effect if those billions in licence fee stayed in the pockets of the populace and fructified for example.)

But the bit that I\’ve got an extremely hard time believing is this:

The Guardian understands it concludes the licence fee generates £7.2bn for the UK economy by supporting the independent production sector and other parts of the \”creative economy\” – more than twice the value of the licence fee.

Why is the multiplier dependent upon how the BBC is financed? £3 billion cycled through a voluntary subscription scheme to be spent on TV and radio would have the same effect, wouldn\’t it? In fact, it should have a greater effect for being voluntary there would be no deadweight costs to it.
In short, \”big organisation has an effect on the economy\” seems fair. \”Big corporation must be financed by taxation\” doesn\’t.

8 comments on “A very strange BBC report

  1. They are just bullsh!ting to defend their friends, their friends’ jobs and their continued domination of “right thinking” British opinion. It is lying with numbers and nothing more.

    Who in their right mind would take it seriously?

  2. “It is expected to find that the independent TV production sector, which Deloitte describes as “one of the crown jewels of the UK creative economy”, would be around two thirds of its size if it wasn’t for the BBC”

    The independent sector is largely the result of Channel 4 and that Thatcher introduced “producer choice” which forced the BBC to put (I think) 50% of their programme production out to the independent sector. The independent sector would be a lot smaller if the BBC hadn’t had to do that.

    What I’ll bet the report doesn’t say is how much doesn’t happen because people don’t try to compete with them who are based in the UK because they know that they’ll use their power to enter another market.

  3. From the article: “The Guardian understands it concludes the licence fee generates £7.2bn for the UK economy by supporting the independent production sector and other parts of the “creative economy” – more than twice the value of the licence fee.”

    I am struggling to see what is so important here. Imagine we got rid of the BBC: UK telly industry would generate £3 and a bit billion less and cost taxpayers £3 and a bit billion less. That is all. They have not proven there is a net gain from having the licence fee.

    What they are trying to suggest is that without the licence fee acting as a subsidy independent telly companies would not be as successful as they are. That is surely a false premise.

    Optimistic Cynic,

    Making the BBC buy more independent material was a bit of a wheeze IMO. They slimmed down the workforce and those that left went on to start independent telly companies that the BBC then contracted work from. Same names and faces as before and costs continued to rise.

    How much of the independent telly industry is really actually independent of the BBC would be a tricky question to answer.

  4. Gareth,

    “How much of the independent telly industry is really actually independent of the BBC would be a tricky question to answer.”

    One way is to measure exports. There aren’t many BBC programmes that are significant abroad. And those that are (The Office, Dr Who, The Weakest Link, Attenborough, Little Britain) are in-house productions.

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