MUMBAI: UK pubcaster the BBC's board of Governors has published the BBC's Annual Report and Accounts (ARA) for 2005/2006. It records further progress in delivering an efficient BBC focussed on providing licence fee payers with quality content across all platforms.

BBC chairman Michael Grade noted that this was the last ARA from the Board of Governors who will be replaced by the BBC Trust at the end of the year. The chairman singled out increased efficiency as a key achievement, but noted also that further work was necessary.

"The challenging first year target of £105 million cash savings has been met. This is a considerable achievement but, the pressure is still on. The Governors have prescribed very clear measures to ensure the year two target of an additional £112 million of cash savings is also delivered, ensuring the continuing cash savings target of £355 million annually is met from 2007/2008.

"These savings will release the funds that are necessary to address audience expectations of quality content. But achieving the savings will require transformational change in ways of working, and not just the reduction in headcount that is already being implemented."

Grade went on to highlight improved performance that was in response to the concerns of licence fee payers and linked to the savings already achieved. "Last year, as a direct result of consultation with the public, the Governors requested a reduction in repeats in peak-time on BBC ONE. These have fallen from 9.7 per cent to 8.9 per cent and a new target of five per cent to be met by 2008/09 has been set.

"The BBC's distinctiveness from the commercial sector must be evident in a willingness to take creative risks - even if that means the inevitable occasional failure.

"But it also requires the confidence to end successful programmes that have reached the end of their natural creative life, to create space for the next round of innovation. CBBC and CBeebies demonstrated particular evidence of this last year, having the courage to discontinue some of their most acclaimed titles that could have been damaged if continued, to make way for new ideas and programmes.

"On behalf of audiences – who have identified tired formats and worn programming as indicators of poor quality – we will be looking for more evidence of creative renewal in the year ahead, and expect BBC ONE to make a particular effort in its early evening schedule. Overall, the Governors assess the BBC to have had a better year creatively and are pleased that total BBC reach to audiences is broadly stable."

He noted that two years ago, together with the Director-General, he launched Building Public Value, a prospectus for radical change at the BBC. At that time a new system of governance that would place the interests of licence fee payers was promised and not the interests of BBC management, at the very heart of the Board's remit.

"The Governors demanded that the BBC should become more efficient, and that the editorial teams should concentrate on providing a quality of content that is distinctive from what is provided by the commercial sector. We asked for renewed efforts by the BBC's commercial businesses, and set a target for Worldwide of doubling its profits in two years.

"We asked the BBC to prepare for the next Charter period by ensuring its services will be universally available to all licence fee payers. At the same time we also made clear that the BBC could not, and should not, attempt to do everything, and that it must work constructively alongside the rest of the industry in preparation for the digital future."

Commenting on the BBC's overall performance, BBC DG Mark Thompson said, "The BBC is going through huge change, moving from traditional linear broadcasting to the challenging and exciting world of interactive, on-demand digital media. It means the BBC's relationship with audiences is also constantly changing.

"Over the last year audiences have been telling us what they love and value from the BBC. There was huge appreciation for innovative drama and adaptations like Bleak House, Life on Mars and Doctor Who, to Strictly Come Dancing, The Apprentice, Martin Scorsese's Dylan epic No Direction Home, Catherine Tate and Facing the Truth.

"And on radio The Raj Quartet, the dramatisation of Paul Scott's novel about India in the 1940s, was a creative highlight; meanwhile, The Archers, the world's longest running radio drama, marked its 55th anniversary. Our website continues to set new records for reach - now over 15.3 million a month - and our radio portfolio continues to carve its distinctive path.

"Evidence of the changing nature of our relationship with audiences came on 7 July last year when audiences used bbc.co.uk to share their own pictures and experiences of the London bombings. Radio 3's Beethoven Experience and Bach Christmas and our ongoing podcasting trials show a real appetite for different ways of accessing, using and enjoying the BBC's content. New investment in content is coming through the value-for-money savings highlighted in this year's report.

"We have also launched our Creative Future content vision for the on-demand world. The next challenge is to bring about transformational change within the BBC to achieve that vision, to simplify how we bring the best creative ideas to our audiences and deliver the public purposes, including leading digital switchover, which have been laid down for us for the next Charter."