Union challenges BBC sell-off

BECTU has condemned plans for the privatisation of BBC Technology.

The Corporation today, November 27, announced that the wholly-owned subsidiary company would be put up for sale, with a target of Autumn 2004 for completion of the deal.

BBC Technology's 1400 staff have been supplying most of the BBC's broadcast technology and IT services since the company was split from BBC Resources Ltd in March 2001.

Management claim that privatisation will raise up to £100m as a selling-price, and lead to savings of between £20m and £30m a year. However, the union believes that the company is already offering the BBC value for money, and will demand evidence that private suppliers could charge less.

There are also widespread concerns about the risk posed to BBC activities by handing control of its communication and IT networks over to a private company. "Worse than selling the family silver, they're trying to give away the BBC's entire nervous system", said one union official.

According to BBC management, almost all staff currently employed by the company would transfer to any new owner, and Director-General Greg Dyke, briefing BECTU officials on the sale, gave a personal pledge that pensions and employment rights, including the BBC redundancy formula, would be protected.

BBC management also said that they had opted for the sell-off in preference to a major redundancy programme in the company which could have cut more than 300 jobs in a bid to reduce prices. But the union fears that any new owner is likely to prune staff to meet the savings target once they take the company over, and might not offer severance terms comparable with the BBC's.

As well as taking over most current staff in Technology, the purchaser will also take on dozens of staff in News and Nations & Regions associated with IT, inflating the number of BBC employees whose job security and entitlements are at risk.

Management have not been able to identify exactly how many staff might be transferred into Technology before the sale, but say that English Regions will not be involved.

An advertisement inviting tenders for a contract worth more than £2bn over 10 years is due to be published in OJEC, the Official Journal of the European Communities, in line with EU procurement rules, but no sale can go ahead without approval from the DCMS.

BECTU is hoping to persuade government ministers that they should stick to the policy of no privatisation adopted in 2000 during the public debate on the future of the BBC licence fee.

Then, the union successfully blocked a proposal from an inquiry led by Gavyn Davies, now BBC Chairman, to sell-off BBC Resources Ltd and 49% of BBC Worldwide.

Since then, both BBC Resources and BBC Technology have moved into profit, although neither has achieved the ambitious targets set when they were first incorporated. Last year the Technology subsidiary earned £6.8m on its £220m turnover, turning round a loss of more than £8m in 2001/02.

Resources Ltd managed to buy back £40m worth of its own shares from the BBC, equal to half its original equity, and is also owed £27.5m in cash by the BBC, one third of it in the form of an interest-bearing loan.

Overall, the BBC's commercial activities earned a profit of more than £40m last year, and BECTU will be arguing that privatisation of Technology is operationally risky and financially unnecessary.

BBC management have already agreed to meet BECTU representatives on December 2 to discuss the controversial and unwelcome privatisation proposal. Meetings of members will take place during the first two weeks of December.