Operations and finance report

This section looks in detail at how the BBC operates: our finances; how we recruit, develop and retain the best people; and how we prioritise environmental sustainability.

lan and Amanda embark on another exciting renovation project as the hit show returns for a fourth Series, this time in Corfu for Alan & Amanda's Greek Job. (Credit: BBC/Voltage TV/Zak Walton)

Delivering value is at the forefront of our operations as we continue building a BBC for the future.

Financial performance

The BBC Group reported a deficit of £121 million again this year, slightly higher than last year (2024/25: £112 million). This reflects the fact that, despite delivering efficiencies across the Group and steady commercial performance, our licence fee income remains insufficient to sustain a universal public service hence the operating deficit for the third consecutive year.

BBC Group revenue remained largely flat in 2025/26 at £5,962 million (2024/25: £5,900 million). Group revenue comprises licence fee income which generated £3,879 million (2024/25: £3,843 million) and other income streams, including BBC Commercial, which is worth £2,083 million (2024/25:£2,057 million).

Growth in licence fee income was supported by the rise in the licence fee to £174.50 from April 2025. However, changing audience behaviours have had a significant adverse impact on licence fee income. Decline of households not requiring a TV licence due to not consuming licensable content accelerated in 2025/26 and a lighter sports year also led to fewer new licence sales. Together, these factors reduced licences in force to 23.3 million at 31 March 2026, from 23.8 million at 31 March 2025.

The existing ‘£700 million’ Public Service savings and reinvestment programme, due to be delivered by 2027/28, had reached £715 million by the end of 2025/26 (2024/25: £564 million). However, £113 million of this total is one-off and non-recurring, and further work is underway to secure the full £700 million in sustainable savings. These savings have supported continued spend in premium content and product.

Our other existing savings target – a net reduction of 500 public service equivalent full-time (EFT) roles over the two-year period to March 2026 – has not been fully achieved. This is due to operational and production fluctuations, as well as a reprioritisation of focus and delivery timelines in response to new savings targets. By March 2026, we had delivered a net reduction of ~400 EFT roles.

This comprised the closure of 1,400 roles, alongside the creation of 800 new reinvestment roles in growth areas such as software engineering and digital content, including 300 roles within our Product team. BBC severance payments, in cash terms, were £49 million (2024/25: £70 million).

The BBC’s financial outlook deteriorated in the second half of 2025. A steeper than projected decline in licence fee sales, combined with cost inflation and a challenging commercial trading environment, has exacerbated the gap between income and costs. This will be addressed in this Charter through securing Licence fee income as budgeted and delivering a new £500 million savings task by 2028, representing roughly 10% of total public service broadcasting costs.

BBC Commercial performed well in challenging conditions in 2025/26. Revenue, including intra-group transactions, remained flat at £2,155 million (2024/25: £2,155 million), whilst EBITDA increased to £267 million (2024/25: £228 million), driven by growth in BritBox’s profitable direct-to-consumer success in North America, the continued strength of the global brand Bluey and cost savings. Dividends to BBC Group of £197 million (2024/25: £161 million) were paid.

Due to the ongoing income and expenditure deficit, the BBC’s cash reserves continue to decline. As at 31 March 2026, BBC Group cash reserves totalled £257 million (2024/25: £477 million). However the BBC Group’s net debt remains comfortably within the authorised borrowing limit of £3,050 million, including leases and borrowings, standing at £1,956 million (2024/25: £1,616 million).

Borrowings of £585 million (2024/25: £444 million) were utilised at year end by BBC Commercial, within a £650 million debt limit (excluding leases), should it be required. BBC Public Service has a separate debt limit of £200 million. We regularly review our borrowing levels throughout the year and ensure that all covenants are met.

The BBC’s pension funds are not included within these net debt figures; the defined benefit scheme was in surplus (on a technical provisions basis) at the last actuarial valuation as at 1 April 2024, with the next actuarial valuation process under way.

David Olusoga stands outdoors in a historial site looking into the camera. He wears a black blazer and a grey t shirt, and rectangle glasses. — David Olusoga tells the story of the British Empire in Empire with David Olusoga. (Credit: BBC/Hillgate Films and Voltage TV)

People and culture

Ensuring the BBC is a great place to work is central to our Value for All strategy, and in our 2026 Staff Survey, engagement remained broadly flat compared with 2025 at 63%.

It is expected that everyone at the BBC understands and commits to our Values and Code of Conduct, and where behaviour falls below the expectations we have for anyone who works with or for us, we will take action. In July 2025 we welcomed the publication of the findings by Lewis Silkin, following the investigation into the conduct of Gregg Wallace. In light of those findings, Banijay UK and the BBC agreed Mr Wallace’s return to MasterChef was untenable.

In April 2025 we published the findings of a BBC Board commissioned independent review of our workplace culture, led by Change Associates consultancy. It outlined a series of detailed findings and recommendations which were accepted in full. Since the publication we have refreshed our ‘Code of Conduct’, rolled out a Call it Out campaign, and are building a new Resolution Centre to improve the timelines and quality of case resolution. We remain focused on fully embedding the recommendations as we continue to strengthen behaviours, trust and alignment to our BBC Values.

Underpinning our plans to make the BBC a great place to work is the need to reward our people in line with our principles of ‘fair’, ‘clear’ and ‘competitive’ pay and this year we introduced manager-led assessment to create a more transparent link between performance, contribution and pay.

Our median gender pay gap remains in line with the prior year at 7.6% (2024/25: 7.6%) whilst our mean gender pay gap has reduced to 5.3% (2024/25: 5.7%). See our full gender pay gap report.

We are committed to creating an organisation where everyone feels they belong and are making good progress towards our diversity goals of 50:20:14:25- 50% female, 20% Black, Asian and minority ethnic, 14% deaf, disabled and neurodivergent, 25% working class representation. Our ambitions for gender diversity have been achieved but we recognise there is more work to do to build a BBC that is truly representative with ethnicity and disability remaining a focus for the year ahead. See Our people for more detail on our workforce diversity.

In December 2025 we exceeded our Target of 1,000 early careers and staff apprentices with a peak of 1,200 apprentices in September (March 2025: 808) on placements across 40 different schemes and 65 BBC bases. We have outstanding completion rates with 93% of BBC early careers apprentices completing their scheme.

We continue to support the growth of the creative industries across the UK, shifting significant amounts of content production, editorial leadership and decision-making away from London and the South East. 55% of our public service workforce are based outside of London. See Across the UK for more information.

Over the past year, geo-political crises have continued to pose significant challenges and risks to the security of our people. We remain focused on the safety of staff and the continuation of operations and output that provide vital services to audiences around the World. Increased protest activity at our UK sites, has required enhanced measures.

In December 2025 the President of the United States Donald Trump filed a lawsuit in the United States District Court, Southern District of Florida against (1) the BBC, (2) BBC Studios Distribution Limited (3) BBC Studios Productions Limited in relation to the Panorama edit of President Trump’s speech on 6 January 2021. The BBC had previously apologised to Donald Trump for the edit. See Note H4 for further details.

Technology

Technology is central to delivering our portfolio of digital and broadcast services. In March 2026 we announced the creation of BBC Media Tech, the bringing together of Product and Technology teams from across the whole BBC Group.

Operationally, the BBC is committed to a resilient and high-performing technology capability. In 2025/26, we continued to perform well against our key operational performance targets of 99.99% for TV Playout availability, 100% for TV accuracy (the correct content being available for our audiences) and 99.95% availability across our Digital Products.

In 2025/26 we hit our target for the average number of Weekly Active Accounts.

We continue to invest in innovation across our digital estate, including embracing the opportunities presented by AI to deliver new audience experiences and drive efficiencies. Adoption of AI tools increased rapidly throughout 2025 with staff accessing a broad range of tools including Copilot, ChatGPT, Runway, ElevenLabs and GitHub Copilot. Around 50% of our staff now use AI tools every week. Our guiding principles ensure we deploy GenAI technology in a responsible way, and where it adds real value, whilst protecting trust, creativity and editorial standards.

We are now scaling and operationalising some of our early pilots, for example, our Style Assist tool within our newsroom. The BBC continues to play a leading role in how AI impacts the creative and media industries and society.

In January 2026 we announced a new strategic partnership with YouTube focused on investments in new programming, collaborating to showcase more BBC moments that bring the UK together on YouTube, and upskilling the next generation of future creators and producers from across the UK.

In 2025/26, we undertook significant re-procurement activity in our third-party supply chain, including the extension of our current Capita Licence Fee Collection Contract.

Environmental sustainability

The BBC continues to deliver its environmental sustainability strategy, reporting clear progress towards our near-term decarbonisation targets and by further embedding our three strategic pillars of Net Zero, Nature Positive and People Positive.

Operational emissions have reduced by 38% against a 2019/20 base year, and we are on track to deliver a 46% reduction by 2030/31 (2024/25: 31%). Emissions from value chain activities have reduced by 12% against a 2019/20 base year, as we aim to achieve 28% reduction by 2030/31 (2024/25: 7%). Progress against our targets has been enabled by data quality improvements. See Environmental Sustainability for our detailed disclosure.

The reports provided over the following pages give further insight into the BBC Group performance over the past 12 months, demonstrating how we allocate finances and resource and how we intend to go further and faster to build a BBC for the future.