"The Trust takes its responsibility
for ensuring the BBC achieves value for money on behalf of licence
fee payers extremely seriously, and we are supportive of the
Executive’s plans to modernise the BBC’s facilities. Since its
inception, the Trust has put pressure on the Executive to improve
its project management processes, particularly in relation to the
estates projects. Having identified the problems with Broadcasting
House phase one and taken steps to remedy these, we then sought
external examination of the BBC’s changes. We asked the NAO to
carry out this process, and we thank them for the analysis and
recommendations within their report.
"Serious mistakes were made in the
first phase of the Broadcasting House project. Licence fee payers
were let down, and the Trust regrets this. The Governors took steps
to get the issue under control and then the Trust, when it was
formed in 2007, continued their energetic oversight. We are
reassured that this report shows lessons learned have been applied
in the second phase of Broadcasting House, Salford and Pacific
Quays. But there is still considerable room for improvement, and
consequently we will follow up the NAO’s recommendations vigorously
and as a matter of urgency.
"The Chairman has today written to the
Director-General asking for his plans in response to the NAO’s
recommendations, and requesting a health check of all major
projects currently being run by the BBC without delay. The Trust
expects the Director-General to report his findings to the Trust
next month."
Jeremy Peat, BBC Trustee,
25 February 2010.
"The BBC let the Broadcasting House
project run into serious difficulties before the Governors and then
the Trust took action and the result is a four year delay and a
cost overrun of £100 million.
"The establishment of a Programme
Management Office in 2009 is a welcome development, but the BBC
must take on board fully the lessons from its difficulties with
Broadcasting House. For future major projects, the BBC needs to
make sure that: investment decisions are based on a full assessment
of the scope and cost of the project; there are clear baselines so
that performance can be measured and project teams held to account;
and proposals submitted by management are reliable and subject to
effective challenge by the BBC Trust."
Amyas Morse, head of the
National Audit Office, 25 February 2010.
The BBC Trust has today published an
independent report prepared by the National Audit Office (NAO) on
the BBC’s management of three major estates projects. These were
the refurbishment and redevelopment of Broadcasting House in
London, the construction of Pacific Quay in Glasgow and the
Corporation’s forthcoming move to Salford Quays.
The NAO report, prepared at the request of the
Trust, builds on previous work by the Governors and the Trust and
found that the BBC has learned lessons from phase one of
Broadcasting House, which suffered from significant cost and time
overruns. The Broadcasting House project will be completed in April
2013, four years later than first planned. The project will cost
£1.046 billion, £55 million more than originally approved. On top
of this, delays have added a further £52 million of
costs.
The report acknowledges that the BBC has since
improved the management of the three projects examined, which have
a total budget of £2 billion, although there is room for further
improvement. The report concluded that the BBC did not set out a
clear assessment of the intended benefits for the projects at the
outset, meaning it is not well placed to demonstrate value for
money.
Alongside its acknowledgement of the progress
in improving project management processes made by the BBC to date,
the NAO has made a number of recommendations to bring the BBC’s
processes into line with good practice. These include:
- business cases should at a minimum contain a
detailed assessment of costs, delivery timetable, measurable
expected benefits and a quantified assessment of the risks and
opportunities before the BBC Trust approves investment;
- the Executive should assess the skills needed for each project
from the outset and match this against the skills available in the
organisation to identify gaps; and
- financial contingency should be calculated on the basis of an
assessment of the cost and probability of known risks. This
contingency should be released only when it is needed to deliver
the approved scope of the project.