MPs raise concerns over BBC savings

Public Accounts Committee has criticised the broadcaster's IT outsourcing contract

MPs say the BBC is still using other suppliers

The BBC substantially over-estimated the savings expected from outsourcing IT services to Siemens under a 10-year £1.5bn framework contract, according to an influential group of MPs.

A Commons Public Accounts Committee (PAC) report released today accuses the corporation’s management of giving its Board of Governors the impression when seeking approval for the deal that annual savings of £35m were guaranteed.

But first-year results for the contract provided savings of just £22m – 38 per cent lower than forecast – for work previously carried out by its own subsidiary BBC Technology.

PAC chairman Edward Leigh says the BBC’s approach was ‘second rate’, complaining that many parts of the broadcaster still use other suppliers. Leigh criticised the lack of provision for the BBC to share profits above an agreed level, and failure to check how profitable the contract is for Siemens.

The deal struck in 2004 covers the provision of systems such as desktop computers, specialist technology projects, and technological support for programme production and broadcast functions.

The PAC report says BBC managers now expect to make average savings of £40m a year.

‘It remains to be seen whether this estimate will be achieved,’ it says.

While reported performance against key service targets has been high, most of the early technology projects commissioned from Siemens experienced delays or cost overruns, says the report.

Siemens has borne the additional costs, but delays mean that some benefits from the projects have not been available until later than planned.