The BBC overestimated the annual savings from
an
IT service contract with Siemens by £13m, according to the
Public Accounts Committee.
In September 2004, when the Governors approved
£1.5bn 10-year contract with Siemens, they were told it would
deliver, on average, guaranteed annual savings of £35.2m for 10
years. But by April 2006 the corporation estimated that annual
savings from the contract would be £21.8m.
Edward Leigh MP, Chairman of the Committee of Public Accounts,
today said, “The BBC’s approach to the contract has been distinctly
second rate. This is not the first time BBC Governors have been
given inexact figures when asked to approve spending on major
projects. The
BBC must make sure that all of its future business cases are
subject to robust quality assurance.
“None of this inspires confidence in the BBC’s ability to
negotiate and manage large-scale commercial contracts. The BBC’s
arguments for resisting full independent audit scrutiny by the
National Audit Office are looking increasingly threadbare.”
A spokesman for the BBC said the National Audit Office had
already highlighted the fact that total savings under the contract
could not, in practice, be guaranteed. “That the savings made so
far, while substantial, are not fully in line with the figures
reported to the Governors in September 2004, and that the use of
the term 'guaranteed savings' was inexact. This error was accepted
and acknowledged by the BBC in July last year.”
The BBC’s Board of Governors had already begun to act on the
NAO's recommendations for strengthening performance management and
an internal review has commenced to ensure these issues are being
addressed, the spokesman said.
In its first year, the contract did save £22m and the BBC now
says the contract will make up the shortfall by saving around £40m
a year.
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