South Norfolk MP Richard Bacon has called the BBC’s approach to public spending ‘unacceptable’ as a new report finds that a £1.5 billion contract with Siemens has not delivered the £35 million in annual savings which the Corporation’s managers guaranteed when they persuaded the BBC Governors to approve the deal.
Mr Bacon said today: “BBC managers guaranteed the BBC Governors this contract would save millions of pounds a year, but the true savings were much lower than promised”.
“This is not the first time the BBC Governors have approved multi-million pound deals without the full facts. This approach to public spending is just as unacceptable from the BBC as it would be from any government department or agency”.
“The BBC needs to get a grip on its contract management. The Corporation as a whole must now open its books to full independent scrutiny by the National Audit Office. The BBC’s claim that this would compromise editorial integrity is simply wrong. The BBC World Service, which is a by-word for editorial independence, has been fully audited by the National Audit Office for many years”.
Mr Bacon was speaking as the Commons public accounts committee published its report into the BBC’s contract with Siemens. In October 2004 the BBC entered a ten-year contract with Siemens worth £1.5 billion for a range of technological services, ranging from desktop PCs to support for programme production and broadcast functions. When BBC managers sought approval for the deal they told the BBC Governors that savings were guaranteed at £35.2 million a year.
However, the BBC managers made mistakes when they estimated the cost reduction that the contract would deliver, resulting in savings of only £22 million in the first year, some £13 million lower than the guaranteed level. The BBC says it expects to make average savings of £40 million a year for the rest of the contract, although it remains to be seen whether this estimate will be achieved.
This is not the first occasion on which the BBC Governors have been given inexact figures when asked to approve expenditure on major projects. When the Governors approved the White City property deal in 2001, £60 million of costs were excluded from submissions to the Governors.
The BBC has resisted calls for total independent scrutiny of its finances, and the corporation still has the final say in which topics are examined by independent auditors. The report calls for the National Audit Office to have the same access to the BBC as it does to other publicly funded bodies.
28 June 2007
PAC REPORT: BBC Outsourcing
PARLIAMENT: BBC Procurement
|
|
|
|
