MPs have labelled the BBC “complacent” for its attitude towards declining audiences, with 200,000 people per year cancelling their licence fee and young people switching to Netflix.
The Commons Public Accounts Committee (PAC) also accused the publicly owned broadcaster of having “ducked the hard choices” when it came to shoring up its finances, and branded its plans to raise revenue outside the annual £159 television licence “unambitious”.
Parliament’s spending watchdog, in a report published on Friday, urged bosses at Broadcasting House – who are in talks with ministers over the future of the licence fee – to “radically re-engineer its offer” in the face of declining audience numbers.
The committee’s BBC Strategic Financial Management report said that in the last half of 2017, 16 to 24-year-olds were spending more time on Netflix than BBC TV and its iPlayer service.
During 2019, the corporation also lost its place as the media provider that youngsters aged six to 15 spent most time with, while licence fee subscribers continue to dwindle, with sales falling by nearly half a million in the past two years, MPs said.
“When giving evidence to us the BBC appeared complacent and unconcerned by the declining time that people spend using its services, or the fact that around 200,000 new households each year choose to opt out of paying for the TV licence,” the MPs said.
The 18-page report also said the BBC’s plan to make up revenue through commercial sales was “unambitious”.
Commercial returns represent less than 6% of the income the BBC gets from the licence fee, with the broadcaster aiming to increase that by 30% over five years.
PAC chair Meg Hillier said: “We can see the BBC might be reticent to share detailed plans at this delicate moment, in the middle of licence fee negotiations, but we expected a clearer vision of how it will address the decline in its audiences and revenues, and manage the global transition from traditional TV viewing to online.
“The BBC has enjoyed a truly unique position of privilege and trust, it should have been capitalising on the cosy buffer of its guaranteed income from taxpayers.
“Moving bits of this Titanic organisation around the country, reorganising the deckchairs, just won’t cut it in the face of intense and rapidly changing global competition.
“The BBC needs to radically re-engineer its offer.”
Tim Davie, who took over from Lord Hall as BBC director-general in September, has looked to reshape the organisation since being appointed.
He is said to want BBC presenters to follow tighter impartiality rules on social media and has also talked up the prospect of increasing commercial sales to the US.
But MPs said plans announced this year to increase programme spending outside London by £700 million by 2027-28 appeared “unclear and disjointed”, given it is at the same time intending to make 600 redundancies in its Nations & Regions division and reducing regional news output.
They said the corporation “appears to have put off the hard choices” on its financial situation, particularly given “considerable uncertainty” about the impact of the loss of Government funding for free TV licences for the over-75s.
“While we recognise that these choices are difficult, the BBC was unable to name any recent content cuts or future plans to cut content, despite plans to only produce 80% of its current programming,” the report said.
“At this stage, we would expect to see a clearer articulation of which programming the BBC views as a priority going forward.”
The PAC called for greater transparency in the plan for the BBC’s regional set-up, as well as a detailed blueprint for how it will “reverse the decline in its audiences within three months”.
The committee also recommended that the broadcaster set out how it will achieve its £1 billion savings target by March 2022, and produce a revised financial plan on completion of the licence fee negotiations.
A response from the BBC said: “We do not feel that this report reflects the evidence or the facts provided to the committee. There is no complacency at the BBC. We have taken great pains to stress, including to this committee, that the jeopardy for the BBC is high. We have also explained very clearly how the challenges we face are directly driving our strategy to deliver more value to all audiences.
“Our commitment to reform is beyond question. We are taking tough choices. Our ‘Across the UK’ plan represents the boldest and most ambitious reshaping of the BBC in our history, and it has been warmly welcomed by MPs from all parties and in all parts of the country. Our latest efficiency programme is on track to deliver nearly £1 billion of annual recurring savings by March 2022. In one year, we have reduced our headcount by over 1,000 roles.
“As the NAO report notes, the BBC is the UK’s most used media brand – reaching over 90% of adults on average per week and 80% of 16-34-year-olds. It pays tribute to the new initiatives we have introduced to capitalise on the opportunities of the new marketplace, most recently with BBC Sounds and improvements to iPlayer. We are the most trusted source of news in the country. We believe the case for the BBC remains compelling, but we know we must earn the right to exist through the value we provide.
“We understand that the committee will want more details of our plans and we will be able to provide them once a financial settlement is in place.”