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The BBC needs to put in place a new system for considering the impact of its website on commercial rivals, the BBC Trust said today.
New investment in BBC.co.uk has been put on hold until management propose new ways of taking account of the market impact, distinctiveness and public value of web content.
The move was announced in the Trust's first review of the website. In part it is a response to complaints that the BBC's presence limits success in the commercial sector.
The review also discovered that BBC.co.uk went 48% over budget in 2007/8 - largely because of overheads and costs being misallocated - and accused management of "poor financial accountability".
Plans for a "substantial" increase in the website's six-year budget, including a "front-load" of £39m investment in 2008/9, will not be approved by the Trust "until we are satisfied with management’s proposals for improved management and control of the service and have subjected them to greater scrutiny, taking into account questions of public value, distinctiveness and competitive impact".
The Trust said: "We believe that without investment in content and such areas as improved search and navigation, personalisation and audience participation, the service will lose its appeal and thereby be hampered in its ability to promote the public purposes...
"However, we are also aware that this review has highlighted weaknesses in management’s financial, strategic and editorial oversight of the service and believe we therefore need to proceed with caution in approving new investment."
Management have been asked to come up with new controls for the website within six months.
Dame Patricia Hodgson, the Trustee who led the review, said: "The Trust endorses the management’s plans to develop the service further – particularly on areas like search and navigation, which audiences tell us could be improved.
"But we need to be sure that additional investment of licence fee payers’ money will deliver their expectations and – in doing so – does not stifle enterprise from others who seek to offer excellent online services to the public. For the benefit of those who pay, the Trust wants evidence of stronger management controls to improve financial accountability and strategic and editorial oversight before we consider new investment in the service."
The BBC's iPlayer video on demand service is funded within the BBC.co.uk budget. The Trust's report does not cover the service in depth because it was largely carried out before the iPlayer's Christmas public launch. However, the Trust said it supports online development in the area of entertainment.
