BBC misses efficiency target by £8m

The BBC missed a three-year efficiency savings target by £8m, it has admitted in its annual report.

The BBC Trust said it was "disappointed" executives had failed to deliver annual cash savings of £355m by March, though they had made a "significant achievement" towards the figure. The corporation said it expected to make up the shortfall in coming years, and new targets are now in place.

Director general Mark Thompson, releasing the 2007/8 report today, also revealed that the bonuses awarded to Jana Bennett, BBC Vision director, and Jenny Abramsky, outgoing director of audio and music, had been cut by 40% because of last year's deception scandals.

The pair still received £23,000 and £19,000 respectively, however, and their total pay increased by £103,000 and £90,000. Thompson's pay rose by £28,000 to £816,000, though for a fourth successive year he chose not to take his bonus.

Ashley Highfield, the outgoing director of future media and technology, was given a £107,000 pay increase despite a £36m bbc.co.uk overspend resulting in investment being put on hold.

On the issue of deception, Thompson said the BBC "knew we had to act quickly and decisively" when a "cluster" of scandals came to light last summer. However, he gave an upbeat reading of its response: "By year's end, survey evidence suggested that public trust in the BBC had fully recovered."

Sir Michael Lyons, chairman of the Trust, said: "The events of last summer were serious, but we have been reassured by the progress made so far by management in responding to them and the signs of recovery of the public's confidence."

The Trust also said it had commissioned a PricewaterhouseCoopers study into the BBC's impact on the "wider economy" at a time when the corporation faces scrutiny for competing with commercial services. The report, which will be used "to inform our judgements on future priorities and investment decisions", is expected later this month.

The BBC's income rose by 6%, or £238m, on the previous year to £4.4bn, because of TV Licence revenue and BBC Worldwide, whose revenues rose 13% to £720m. Spending, excluding a significant reduction in a pensions accounting charge, also rose by 6%.