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Service licences help the Trust govern the ´óÏó´«Ã½'s activities. They provide an open account of each ´óÏó´«Ã½ service's remit, scope, budget, aims and objectives, any essential activities (known as conditions), and a description of how the Trust will assess their performance.

The service licence changes fall into two categories. The first comprises accounting changes to budgets for all licences to allow for a reallocation of existing costs among services to reflect new accounting methodology - and this accounts for the bulk of the changes. The second comprises a small number of one-off revisions – some budgetary and some relating to the scope of an individual service – as the result of recent service reviews. The main changes are summarised below.

One-off changes:

• An increase of £8.5m in the budget for children's services. This follows the Trust's review of ´óÏó´«Ã½ children's services, published in February 2009. This review also recommended that costs for children's services should be recorded exclusively under C´óÏó´«Ã½ and Cbeebies rather than being partially included as part of the ´óÏó´«Ã½ One and Two budgets.
• A change to the service licences which cover local TV and radio services in the regions and nations, to reflect service enhancements following Trust approval of plans in July 2009. The extra budget needed to achieve this is largely coming from ongoing service efficiencies, although an extra £2m has been allocated for local radio, funded by efficiencies from non-content costs.
• Changes to the service licences for Radio 2 and 6 Music to reflect the findings of the Trust's review from February 2010.
• Reductions to some individual baseline budgets to reflect enhanced efficiencies, notably ´óÏó´«Ã½ HD and ´óÏó´«Ã½ Parliament.

Accounting changes:

• Adjustments to some baseline budgets to reflect cost re-allocations between services following a review of accounting methodology. These costs include transmission spend and royalty fees.
• Raising overall service licence baseline budgets by an aggregate £23m to reflect the planned and foreseen rise in property costs as a result of the modernisation of the ´óÏó´«Ã½ estate and the planned transition from a freehold to a leasehold estate. This means rent is payable on the new leaseholds, while the ´óÏó´«Ã½ has freed up capital previously tied up in buildings it owned. This is a much more cost-effective approach overall, giving the ´óÏó´«Ã½ cash to invest and greater flexibility in its commitment to the amount and type of facilities it occupies. These operating costs are separate from the planned capital expenditure on new ´óÏó´«Ã½ buildings – they are allocated out to the individual services on an averaged basis according to the space occupied and this has been reflected into service licence budgets.

Rotha Johnston, ´óÏó´«Ã½ Trustee and chair of the Finance and Compliance Committee said:

"Following careful scrutiny, the Trust has approved these new service licences on the basis that these are, in the main, accountancy changes to more accurately reflect the costs that services incur, along with some targeted increases in investment in children's and local programming identified as part of recent reviews. We are clear that service licences must be as transparent as possible; our forthcoming scheduled review will tell us if this is the case."