Is the BBC about to go bust ?

bbc cameraman image

Is the BBC about to go bust?

Is the BBC close to bankruptcy?


The BBC (British Broadcasting Corporation) has recently been cutting and culling shows. First it was Newsnight losing half its “journalists” and then Question of Sport axed completely.  Panorama is rumoured to be next (34 jobs cut on Newsnight as it becomes interview and discussion show – Press Gazette). Nothing unusual in that. Programmes come and go and any broadcaster wishing to survive will need to accept that its offer to its audience is constantly changing. What is different about these cuts is that the BBC are admitting that they are cuts. They are the result of financial pressures. The BBC reporting on itself has admitted that there are

“significant financial challenges on the BBC at a time of high inflation and media super-inflation”. (

The BBC has its own perfect storm of financial challenges. Licence fee income is now falling again as an increasing number of Brits object to paying for propaganda. Production costs are subject to the inflation that is rampant across the UK economy. The corporation runs a final salary pension scheme which is lucrative for the pensioners but  a potential financial millstone for the employer.  Viewing figures are also falling fast but given the BBC’s peculiar funding model that doesn’t have any direct impact on revenues.

Firstly credit where credit is due. The BBC produces and publicises its financial statements quickly. Accounts to 31st March 2023 have been on the BBC website since 27th July 2023 (BBC Group Annual Report and Accounts 2022/23) The UK government in contrast has ( as at 9thth January 2024) “whole of government accounts” up to 31st March 2021 on its website.( Whole_of_Government_Accounts_2020-21_Final_Version_for_laying_and_publishing.pdf)

The BBC accounts, unlike the woefully inadequate “whole of government” accounts are comprehensive, detailed and provide all the information needed to fully understands the corporation’s predicament- and why it is cutting programmes.

So, what can we glean from the accounts?

Firstly, the BBC is in genuine financial difficulties. But not yet bankrupt and probably in better financial shape than many British public sector bodies.

The table below summarises it’s income, costs, profit and net asset position over the last four years.


Year To

31st March 2023

31st March 2022

31st March 2021

31st March 2020






Licence Fee Income





Other Income





Total Income





Operating Costs





Operating Profit










Cash Holdings





Net Assets






The corporation has half a billion of cash in the bank and net assets of £2.7 billion. Admittedly much of the net assets is represented by intangibles. But still a long way from bankrupt. Repeating the 22/23 operating loss of £120 million will result in the corporation running out of cash in four years’ time. The asset base and (relatively) guaranteed licence fee income would though provide plenty of scope for borrowing.

So, what is really going? Why are the BBC management slashing and burning their product offer?

The key figure in the above table is the increase in operating costs from £5.2 billion to £5.9 billion in the 12 months to March 2021. That’s a 13.8% increase. Roughly at the true level of inflation in the UK economy during that 12 month period. The projection below details what could happen if the BBC is unable to rein in expenditure.

Licence fees are controversially increasing by £10 a year but further attrition in licence numbers can be expected. Other income can be expected to continue to increase modestly. But again the key figure is those sky rocketing operating costs.




31st March 2024

31st March 2025

31st March 2026

£ million








Licence Fee Income




Other Income




Total Income








Operating Costs




Operating Profit








Net assets





If this rough and ready projection has any validity then the BBC will already have depleted its cash balances and will be insolvent at some point within the next 18 months.

It doesn’t look like the problem rests with licence cancellations.


Pensions aren’t the key issue either. The BBC, unlike central government, operates a funded pension scheme and critically its closed to new entrants. The pension cost for the corporation fell from £286 million in 21/22 to £239 million in the current year. The balance sheet is able to show a pension scheme asset of £695 million at 31st March 2023.

Equally staff costs in total are not the issue here. £1.52 billion was spent on direct staffing in 22/23 compared to £1.47 billion in the previous year. Compared to previous decades the BBC has now outsourced most of its production and consequently staff costs. It is that area that is subject to the 14% inflation and that’s the essence of the problem. The BBC has probably lost the ability to produce anything like its full content requirement in house. Outsourcing saved money initially, especially on pension costs, but is now exposing the organisation to financial meltdown.

What’s important about the BBC’s perilous financial position is that it perfectly illustrates the impending financial collapse of the entire publicly funded sector and with it the end of the Keynesian/statist socio-economic model.

If inflation creates deficits across the public sector that can’t be covered by taxation increases, then the government must either let those organisations collapse or create the money to plug the holes. But the money creation process exacerbates the inflationary catastrophe and creates new and larger deficits which must also be plugged by yet more money printing. Ultimately the state has created so much new money that that money becomes immediately worthless, and the failing organisations implode anyway.

And no the state won’t simply get to do a “reset” and start again with its new money- whether digital or not. Whilst we need a medium of exchange all money is ultimately a confidence trick. If your last confidence trick has just been exposed as precisely that then you don’t get the opportunity to create  a new one.

So what will happen? Will the BBC simply run out of cash and fold? Probably not. But the options are limited. They will be able to raise finance for a while but escalating interest rates will make that a short term option. They can’t control inflation and there is no political support for significant licence fee increases.

My best guess is that the government, of whatever colour, steps in and “saves the day”. It won’t be a subsidy some form of warm words such transitional funding will be used. The funding may even be presented as a loan. The real issue is then for central government and from where this funding will come. With no scope to raise further taxes the money will almost certainly come from borrowing and the borrowing will probably be of newly printed money. So a problem caused primarily by inflation will be temporarily solved by creating new money and monetising it as government debt. As the cause of the current inflationary wave in the UK is too much government debt and too much artificial money creation then the solution will exacerbate the problem and provide very short term relief.

And this is important as it demonstrates how the current pyramid monetary scheme will soon die. The BBC is not alone and in many respects is in better shape than most other public bodies. If £1-2 billion a year is going to needed to keep the BBC afloat then when we add in local government, police forces, universities and central government itself then we could easily be looking at hundreds of billions of extra public funding a year. Just to stand still. The new money will create the next inflationary wave and then the hundreds of billions will quickly become tens of trillions.

The BBC isn’t bankrupt, but the UK government soon will be.

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