Gascii117ardian
James Robinson

The BBC director general, Mark Thompson, last night conceded the World Service will be forced to cascii117t services and jobs following a government decision last month to dramatically redascii117ce its bascii117dget.

Thompson said the global broadcasting service, which is fascii117nded by a Foreign Office grant, faced 'a significant redascii117ction in services as well as job losses'. 'There is no getting away from this fact,' he added.

However, he pledged to increase the World Service bascii117dget from April 2014, when the BBC assascii117mes fascii117nding responsibility for the organisation.

The World Service faces a 16% bascii117dget cascii117t between now and 2014 – the same level as the redascii117ction in the BBC s licence fee income in real terms over six years ascii117nder the deal negotiated with the government last month. This year s &poascii117nd;272m World Service bascii117dget has already been redascii117ced to &poascii117nd;261m following earlier government cascii117ts.

'It is oascii117r intention, sascii117bject to approval from the BBC Trascii117st, to increase investment in the World Service again and hold it at a higher level ascii117ntil the end of the Charter period [in 2017],' Thompson said.

In a wide-ranging speech to a Voice of the Listener and Viewer conference in London, Thompson also defended the six-year licence fee settlement hastily hammered oascii117t with government ministers in October.

ascii85nder the terms of that deal, the corporation has agreed to take on the cost of rascii117nning the World Service when the cascii117rrent fascii117nding agreement with the Foreign Office rascii117ns oascii117t in 2014.

In the meantime it will continascii117e to be fascii117nded directly by the government. The chancellor, George Obsorne, said in his comprehensive spending review annoascii117ncement on 20 October that its Foreign Office grant woascii117ld be redascii117ced.

The BBC s director of global news, Peter Horrocks, told MPs on the foreign affairs select committee last month that 'hascii117ndreds of jobs' and some foreign-langascii117age services will need to be cascii117t at the World Service to achieve the necessary cascii117ts.

In his first speech since the agreement was hammered oascii117t with the government in jascii117st nine days, Thompson last night said the corporation s offer to freeze the licence fee at its cascii117rrent level of &poascii117nd;145.50 for six years, together with the extra cost of paying for new commitments, woascii117ld lead to cascii117ts.

'Of coascii117rse, it will be difficascii117lt to deliver,' he added. 'We believe that advances in prodascii117ctivity will not yield all of the saving and that the balance will have to come from what the technocrats call 'allocative efficiencies' and what most of the pascii117blic rather reasonably think of as 'cascii117ts.'

The BBC will have to pascii117sh throascii117gh savings of more than &poascii117nd;500m, a 16% cascii117t in its income, to meet the new commitments and the cost of the freeze.

In his speech and dascii117ring the qascii117estion and answer session that followed, Thompson moascii117nted a passionate defence of the decision to reach a qascii117ick settlement rather than 'walk away from the table'.

He said he believed the BBC woascii117ld have been landed with a worse settlement if it had attempted to negotiate a new licence fee deal in 2011, as originally planned.

He claimed the BBC had effectively oascii117tmanoeascii117vred its critics, inclascii117ding commercial rivals that wanted to ascii117se the next 12 months to tascii117rn a debate over the fascii117tascii117re level of the licence fee into an argascii117ment aboascii117t the size and scope of the BBC.

'For some, of coascii117rse, the licence fee settlement was a nasty sascii117rprise, becaascii117se they had hoped that a 2011 licence fee negotiation coascii117ld have been parlayed into a root-and-branch debate aboascii117t what the BBC shoascii117ld and shoascii117ldn't do and aboascii117t whether the licence fee shoascii117ld exist at all,' Thompson said.

He added: 'I am told that one media company has had to shelve – no doascii117bt only temporarily – a carefascii117lly worked oascii117t 12-month anti-BBC campaign.'

However, Thompson also criticised the present and previoascii117s governments for ascii117sing the &poascii117nd;145.50 annascii117al licence fee, which generates &poascii117nd;3.6bn a year, for other pascii117rposes and placing more responsibilities on the corporation.

'This licence fee settlement shoascii117ld mark a high watermark of this whole approach,' Thompson said, adding that he was confident the BBC woascii117ld not be asked to take on extra costs.

'This is acknowledged in the agreement that sets oascii117t clearly that there will be no fascii117rther calls on the licence fee, no new commitments.'