BBC ups programming spend by £180m as ratings fall

LONDON - The BBC is set to increase the pressure on its commercial rivals even further this year with a £180m increase on programming spend and large rises in spending on its digital services, its annual report has revealed.

The corporation is to spend an extra 40% on its digital services this year, bringing its planned expenditure on digital to £278m.

Last year, the BBC increased its programming budget for its flagship channel BBC One by £270m to £962m, at a time when ITV's programming budgets were frozen as a result of the advertising downturn and the drain on resources caused by ITV Digital.

For the first time, BBC One overtook ITV in the ratings war, even though its share of viewers fell to an all-time low of 26.5% from 26.8%. Last year, ITV1's programming budget was frozen at £750m a year, and only recently received a £25m boost.

The BBC's digital plans have been causing problems for commercial broadcasters. The BBC has so far launched arts channel BBC Four, which commercial rival Artsworld blamed for its planned closure last week.

It has also launched two daytime children's channels -- a decision attacked by commercial rivals who argued the market was already too crowded.

The BBC has yet to receive government approval for its youth channel BBC Three, which has also come under attack. Rivals argue BBC Three offers nothing that is not already being provided by commercial youth channels such as Sky One and E4.

Despite the broadcasters' high programming spend, it came under fire in the report from its governors over a number of issues.

The board of governors highlighted flops such as 'Celebrity Sleepovers' and 'The Joy of Text' as particular low points in the programming schedule.

Other problems include mistakes by some of its most high-profile shows such as the 'News at Ten' and 'Question Time'.

'News at Ten' is currently at the centre of a libel row following allegations that it made a false claim about diamond company Orynx's links to terrorism.

'Question Time' was criticised for screening an edition that showed the audience being less than sympathetic to Americans, just days after the September 11 terrorist attacks.

The governors also highlighted some high-profile difficulties with its 'MacIntyre Uncovers' show. The broadcaster was involved in another libel battle over a show that investigated the Elite Model agency and eventually settled out of court.

The BBC has also come under fire for paying its directors more than £1.1m in bonuses, with £97,000 of that going to director general Greg Dyke.

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