BBC to sell Technology subsidiary

The BBC announced today that it is to sell its wholly owned commercial subsidiary, BBC Technology Ltd, despite delivering £19 million in profits last year.

The BBC is to sell its wholly owned commercial subsidiary BBC Technology Ltd. The move is said to follow a strategic review of the BBC’s technology requirements for the next decade.

The review identified potential annual savings for the BBC of between £20 and £30 million if its technology services were outsourced.

The review concluded that the BBC should conduct an EU procurement process in which the winner would buy BBC Technology and, as part of that process, take on about 1,400 staff currently employed by BBC Technology Ltd.

BBC Technology was created in 2001 to deliver savings to the BBC through its contract for technology services, including desktop support, and to generate third party revenues. Last year, BBC Technology delivered £19 million in profits and price reductions back to the BBC.

An internal review carried out by BBC Technology concluded that for the subsidiary to be competitive further rationalisation would be needed, which would have resulted in substantial job losses.

BBC Director-General Greg Dyke said today: ‘While some BBC Technology staff will inevitably feel worried about the prospect of change we’ve reached the conclusion that this is a win/win situation for the BBC and the staff.

‘When we were given our current funding agreement in the year 2000 by Chris Smith, the then Secretary of State for Culture, Media and Sport, he made it a condition that we raised an additional £1 billion over the next seven years.

‘He suggested one way of contributing to that was to sell a BBC asset. This is what is now planned.’

The sale is subject to the approval of the Secretary of State for Culture, Media and Sport. It is anticipated that the new contract will begin by the end of 2004.

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