BBC urged to review digital channels

The BBC Trust chairman Sir Michael Lyons has said that the BBC's digital channels should be reviewed as the corporation seeks to make major cost savings, potentially putting in doubt the futures of BBC Three and BBC Four.

In an open letter to the BBC director general Mark Thompson, Lyons said that efficiency savings alone would not be sufficient to secure the at least £300 million of savings required under the corporation's new licence fee settlement.

He stressed that the BBC should try to do "fewer things better", and concentrate on its areas of strength, such as BBC One, BBC Two, Radio 1 and Radio 2.

Lyons - due to step down from the Trust in May - also called on Thompson to "assess how the shape of the BBC's television portfolio as a whole might develop" after the digital switchover reaches completion in late 2012, suggesting that cuts could come in this area.

In 2009/10, BBC Three had a total budget of £118.6 million, while £74m was spent on operating BBC Four. Elsewhere, BBC HD cost £2m, BBC Alba £4m, the BBC News channel £48m and BBC Parliament £2m.

The Trust chairman said that "more can be done" to reduce the BBC's cost base in terms of back office savings and more efficient work practices.

However, he warned: "We do not expect that such efficiencies will fully meet the funding gap alone and some hard choices about content and services may need to be made as part of this process.

"In line with this, we are clear that the licence fee payer will not be best served by equivalent reductions in each area of BBC activity, rather that savings should be targeted in those areas where the BBC's public value is lower."

Lyons added: "We also want to emphasise the importance of not compromising your pursuit of greater distinctiveness on the BBC's main television channels, BBC One and BBC Two, and those radio services that operate in markets where there is the broadest range of commercial provision, particularly Radio 1 and Radio 2.

"We have also previously signalled that this process is a good opportunity to assess how the shape of the BBC's television portfolio as a whole might develop after digital switchover is complete in 2012."

Today, Thompson will address BBC staff about the impending cuts and reveal how the corporation will operate under the new licence fee settlement.