REVEALED: HUGE COST OF BBC MOVE
THE BBC’s controversial decision to move part of its operations to Salford will cost a staggering £876m, City PM can reveal, provoking outrage among the state-funded broadcaster’s commercial rivals.
And according to confidential documents leaked to this newspaper, moving the five divisions – which include sports and children’s – to Salford’s Media City development near Manchester could cost the licence-fee payer even more than currently projected.
An internal BBC budget analysis shows that the broadcaster expects to spend a total of £170m on rent by 2030, as well as £218m on new TV studio services and £15m on new radio and orchestra studios.
Luke Johnson, chairman of Channel 4, said the costs associated with the project were “ludicrous”.
He added: “This is typical of the politically correct, Stalinist behaviour of the BBC, which is embarking on a grand scheme for political reasons.
“Unlike those in the private sector, they are not subject to the commercial realities of a structural and economic recession. This is an Alice in Wonderland approach.”
Another senior broadcasting executive said they were “shocked by the size of the figures”.
Furnishing the new offices will cost £37m, according to the budget analysis, including £6.8m on 2,253 desks or “workspaces” at £3,000 each, while three bespoke adjustable desks will cost £77,000 and chairs, sofas, tables and screens will set the BBC back £120,000.
The BBC is hoping to reduce the cost to the licence-fee payer with the proceeds from the sale of its Manchester headquarters as well as a £20m tax-payer funded grant from Salford Council.
It also says there will be significant cost-savings associated with moving out of London, such as not having to pay staff a London Weighting Allowance.
But another document leaked to this newspaper suggests the final costs could in fact be higher than £876m. It warns of “major risks around the cost budget”.
The document admits that refitting and designing the offices could cost more than the amount set aside for contingency, while there is a risk that the sale of its Manchester headquarters on Oxford Road could fail to fetch the £20m the Beeb has budgeted for due to the depressed state of the property market.
And the corporation fears that the longest-serving, most expensive staff will opt for redundancy, the document says, while those with low redundancy costs will decide to relocate, in which case the BBC must buy their homes at 85 per cent of market value.
This would mean the £64m earmarked for relocation, redundancy, training and recruitment could prove insufficient.
Elsewhere, the £71m set aside for technology doesn’t account for training costs, according to the document, while the fall in the value of sterling will also increase the total cost of the move.
A spokesperson for the BBC said: “The figures in the document fail to reflect the significant savings that will be made in moving departments out of London after 2013 to the North of England, which will also create new opportunities and local investment.
She added: “Additionally, a requirement for financial approval is that the project must be cost neutral in the next licence fee period. The move to BBC North is still in its early stages so any budgets are clearly not final.”