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In 2009-10 the Â鶹Éç spent £102.5 million (down from £108.6 million in 2002-03) making six continuing dramas or soap operas.

The NAO has concluded that, although the absence of formal audience-related performance objectives for individual dramas meant the NAO was unable to say whether the Â鶹Éç is delivering value for money, the Â鶹Éç has taken important steps towards achieving this.

The six continuing dramas reviewed were Casualty, Doctors, Eastenders and Holby City (broadcast throughout the UK), River City (broadcast in Scotland) and Pobol y Cwm (produced by the Â鶹Éç for broadcast in Wales on S4C).

The review found that production costs on these long running shows are tightly controlled, and that the average cost of producing an hour of continuing drama has fallen by 20 per cent in real terms over the last eight years, with the programmes being delivered on time and largely within budget.

The report recommends the Â鶹Éç strengthens its approach to achieving value for money in continuing drama by being more systematic in comparing and challenging production costs and processes.

Key points from the report and the Trust's response include:

1. The average cost per viewer hour across the six programmes has increased in real terms by 8.9 per cent over the last eight years as a result of falling viewer numbers. However, this decline in viewer numbers has masked reductions in total production costs, which have declined by 20 per cent over the same period. Audience approval has increased by an average of 6.5 per cent over the last four years.

The Trust is pleased with the NAO's finding that the Â鶹Éç has reduced the cost of producing these dramas by 20 per cent in real terms while at the same time increasing audience approval.

2. All six programmes were found to have strong mechanisms for establishing a detailed budget and then monitoring and reporting expenditure against it, although the teams responsible for producing the continuing dramas do not use a consistent approach. Of the completed series examined by the NAO, 33 of the 46 were on, or under budget.

The Trust welcomes the NAO's statement that the Â鶹Éç has a strong culture of monitoring performance and strong mechanisms in place to establish and manage performance budgets.

3. The Â鶹Éç regularly reviews the performance of programmes by looking at the number of viewers and the level of audience approval but does not set formal objectives for what programmes are expected to deliver. By setting such objectives, the Â鶹Éç would demonstrably link the resources committed and what it is trying to achieve.

While some objectives – for example budgets – can be set at individual programme level, the Trust believes that it is not always appropriate for the Â鶹Éç to set audience-focused objectives for individual programmes. The Â鶹Éç currently sets these objectives at a channel or genre level; to set objectives at an individual programme level runs the risk of creating not only perverse or unintended consequences but also of unnecessary bureaucracy. The Trust remains committed to ensuring value for money from programmes and considers that a varied range of metrics by channel and genre is an essential tool to achieve this. However, the Trust will undertake some further work to understand how other creative organisations address the issues raised by this recommendation.

Anthony Fry, Â鶹Éç Trustee with lead responsibility for value for money, said:

"The report shows the Â鶹Éç has made real progress in delivering value for licence fee payers: an excellent achievement of which the Â鶹Éç can feel proud. Popular, long-running dramas like Eastenders sit at the heart of the Â鶹Éç schedule, generating loyalty from audiences as well as an environment for new writing, acting and production talent to flourish. They cost viewers less than they did ten years ago, while audience approval is on the up.

"We accept the majority of the NAO's recommendations, with the exception of the suggestion that the Â鶹Éç should set targets at drama level. We believe there is a risk that this could harm the Â鶹Éç's ability to produce distinctive programming by acting as a disincentive to take creative risks and creating unnecessary bureaucracy."

Amyas Morse, head of the National Audit Office, said:

"The Â鶹Éç is doing a good job of applying basic financial controls and achieving steady cost reduction across its portfolio of continuing dramas. However, it should take a more holistic approach and compare the cost of these programmes with audience levels and opinions, both targeted and achieved, as these are critical measures of broadcast performance, and a key guide to whether the continuing dramas are delivering value for money."

Notes for Editors

1. The six Â鶹Éç continuing dramas examined in this study are Casualty, Doctors, EastEnders, and Holby City, River City and Pobol y Cwm (River City is produced by Â鶹Éç Scotland and broadcast on Â鶹Éç One Scotland and Pobol y Cwm is produced by Â鶹Éç Wales for broadcast on the Welsh language channel S4C).

2. It is the responsibility of the Â鶹Éç Trust, under the Royal Charter, to ensure that value for money is achieved by the Â鶹Éç through its spending of the licence fee. In order to fulfil this responsibility, the Trust commissions and publishes a series of independent value for money reviews each year in consultation with the Comptroller and Auditor General – the head of the NAO. The reviews are undertaken by the NAO or other external agencies.

3. Press notices and reports are available from the date of publication on the NAO website, which is at www.nao.org.uk or the Â鶹Éç Trust's website www.bbc.co.uk/bbctrust. Hard copies can be obtained from The Stationery Office on 0845 702 3474.

4. The Comptroller and Auditor General, Amyas Morse, is the head of the National Audit Office which employs some 900 staff. He and the NAO are totally independent of Government. He certifies the accounts of all Government departments and a wide range of other public sector bodies; and he has statutory authority to report to Parliament on the economy, efficiency and effectiveness with which departments and other bodies have used their resources.