The National Audit Office has criticised the BBC’s early management of its Digital Media Initiative for failing to deliver value for money.
The Digital Media Initiative (DMI), which was green lit by the BBC Trust three years ago, was supposed to move the broadcaster into a tapeless workflow environment with the aim of allowing BBC staff across the corporation able to content from their desktops.
But the project has been beset by difficulties, the most notable of which was the termination of IT firm Siemens’ contract to develop the programme, as revealed by Broadcast.
The BBC Trust-commissioned National Audit Office (NAO) report criticised the appointment of Siemens and the BBC’s subsequent decision to take the project in-house in July 2009, saying that it did not test the value for money of this approach.
In response, the BBC Trust agreed that the corporation’s decision to award the contract to Siemens “did not lead to the planned outcome”, but it said it was satisfied that the BBC Finance Committee made the right decision taking the DMI in-house.
Amyas Morse, head of the National Audit Office, said the BBC’s approach to the early stages of the DMI were “disappointing and did not achieve value for money”.
She said: “Since taking the programme back in house, delivery of the system has progressed well, and users have responded positively.
“The real test of value for money as a whole will be the take up by users across the BBC and elsewhere, and on this it is too early to conclude.”
The NAO also said the initial financial benefit of £17.9 million, which was made in January 2008, was overstated.
The latest forecast is of a net cost to the BBC of £38.2 million by March 2017, but that will be partly offset by a £27.5 million financial package agreed with Siemens, leading to a final net cost of £10.7 million.
The BBC Trust agreed that “greater rigour should be applied than was evident in the 2008 business case”, but it countered that although the financial benefits of DMI are important, they are “are only part of the picture”.
The BBC Trustee with lead responsibility for value for money, Anthony Fry, said: “The DMI is a cutting edge project that will improve the way the BBC operates and transform the way it makes programmes and content.
“The Trust agrees with the NAO that the early phase of the project ran into significant difficulties, but the BBC reacted with speed and efficiency, and since bringing it in-house delivery is progressing as planned. Clearly there are lessons to be learnt and the Trust will continue to monitor progress against the action plan we’ve asked the BBC Executive to produce.”