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Image caption The first day of the new year will bring big changes at the BBC, says the new chair

The BBC will need a £3bn operating budget over three years to keep pace with the global market, the BBC’s new chairman has warned.

Lord Hall – who was appointed chairman of the BBC Trust in February – said that the BBC, like other broadcasters, had to manage its future with a cost-benefit analysis.

He was speaking on the BBC’s World Service programme.

The BBC said that the new management would put in place a £500m fund for funding programmes and services on the digital channel.

Image caption Lord Hall said that the BBC was facing a long-term financial challenge

Lord Hall, who was appointed as the new chairman in February 2015, said the BBC “is in a period of intense global competition and we need to prepare as best as we possibly can for the long-term challenge”.

He also said that the BBC would be in a position to make substantial savings by 2018.


However, Sir Michael Barber was more reserved in his response to Lord Hall’s speech, saying the BBC would be better prepared to be a market leader by 2015.

BBC boss Tony Hall said that the BBC had made huge progress over the past four years and it was still being supported by the trust at scale.

“We have made huge progress in all areas at the same time and we believe we have a strategy which is taking us to the next step,” he said.

Sir Michael added that the next set of budgets – and the trust’s support for it – would help the BBC deliver new digital projects and services.

“It’s very clear from our plans now that we need to go from the present to a very strong financial position, not a financial position in terms of scale of operations but a financial position of long term growth, sustainability and reinvestment,” he told The World Service.

The BBC will not need to raise any new funds from the licence fee but in future it will have to find out how much money it can raise locally by putting in place a new fund from its digital arm.

The new chief executive of BBC Worldwide, Kim Shillinglaw, said that the BBC was in a “very competitive market” and would continue to focus on delivering programmes on social and economic need

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