THE BBC is finalising plans to cut up to a quarter of its 28,000 workforce in the biggest single reorganisation in its history.

The changes, orchestrated by Mark Thompson, the Director-General, threaten thousands of jobs in news and production.

About 6,000 jobs are under threat from next year, although the final number of redundancies is yet to be decided, according to current thinking among BBC senior managers.

Key staff will be moved out of London, more programme production contracted out and some activities partly privatised. Most of the staff expected to be transferred from the capital will relocate to Manchester, with others moving to Birmingham, Glasgow, Belfast and Bristol.

Radical proposals include substituting the 1 pm BBC One news bulletin with a live “feed” from the BBC’s News 24 channel. Helen Boaden, the new BBC Controller of News, is examining options but the BBC said that no final decision had yet been taken.

Mr Thompson wants to make the BBC as lean as possible as it faces the debate on the renewal of its ten-year Royal Charter, which falls due at the end of 2006. By demonstrating that costs are under control, the BBC believes that it can justify the receipt of substantial public money — last year’s income from the licence fee was £2.8 billion.

“We’re going to have to make tough choices and driving value for money means change,” Mr Thompson told a meeting of the BBC’s top 200 managers earlier this month. He added that most people at the broadcaster did not realise “the scale of what needs to be done”.

The corporation, which had a deficit of £249 million last year, is also worried that the future licence fee settlement that comes with charter renewal will not be as generous as it is now. Today, the BBC is allowed to levy a fee that rises by 1.5 per cent above inflation every year.

Mr Thompson is targeting high costs that he inherited from his predecessor, Greg Dyke. During Mr Dyke’s tenure, staff numbers went up by 5,000, and efforts to rein in costs were put on hold during the nine-month-long battle between the BBC and the Government over the reporting of British intelligence leading up to the war in Iraq.

Employees across the organisation have been told of impending layoffs, although in most cases details have been sketchy.

In some parts of News and Current Affairs, where job duplication is rife among its 3,000 staff, employees have been told that 30 per cent of those employed will be laid off.

The lack of firm information is angering trade union representatives. Luke Crawley, an offical at BECTU, the broadcasting trade union, said that he was expecting “thousands of redundancies”, and added: “Our members are very frustrated. Their jobs are on the line, and some could get one hell of a Christmas present.”

Mr Thompson’s reorganisation of the BBC is made up of four separate reviews. It kicked off when he returned from Channel 4 to take over as Director-General in June. Three of the reviews are expected to report back in December. The most controversial is likely to be the wide-ranging “Value for Money” review, which is targeting the BBC’s £320 million annual overheads.

One target already identified is BBC People, the corporation’s human resources department. Senior BBC sources told The Times that they were shocked to discover that BBC People had nearly 1,000 staff, making it clear that it was a prime target for cost saving.

Cuts are also expected in the BBC’s online and interactive services which had expanded to 1,000 employees during the Dyke era. A report for ministers by Philip Graf, the former Trinity Mirror chief executive, said that the BBC should not duplicate websites which commercial companies can provide.

Also due to report in December is the “Out of London Review”, which will see the BBC move key operations to Manchester. Prime candidates for upheaval are the sport or children’s departments and at least one of the BBC’s national radio stations, with Radio 5 Live the favourite. A commercial review will decide whether the BBC wants to sell off some of its money-making activities, which employ nearly 6,000 people.

Although the BBC has doubled profits from its principal commercial arm, BBC Worldwide, over the last seven years to £141 million, its cost base is considered to be high.

The final review, an examination of “content supply”, is considering a massive increase in the number of programmes commissioned from outside the BBC. This review is considered to be the most complex subject of the four, and is not expected to conclude until early next year.

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