The BBC has improved oversight of its portfolio of critical projects, following the serious shortcomings that the National Audit Office identified in the oversight and delivery of its Digital Media Initiative (DMI) project. However, according to a new NAO report, the BBC’s assurance arrangements cannot give confidence that projects will achieve value for money if performance and expected benefits are not defined from the start. The report also calls for the BBC to increase its focus on how their projects work together to achieve strategic aims.
The BBC has identified eight projects that are the most strategically important, complex and high risk. It forecasts that seven of the eight critical projects will cost a total of £885.1 million, while the BBC expect the eight projects in total will achieve £1.9 billion in financial benefits. The BBC’s performance reporting suggests that by February 2016 delivery was ‘probable’ or ‘highly likely’ for six of the eight projects. It rated delivery to be ‘feasible’ for one project (Aurora), and ‘in doubt’ for another (MyBBC). In March 2016 the BBC informed the NAO that it expected the outstanding issues on MyBBC to be resolved. The BBC rated achievement of planned outcomes as ‘probable’ or highly likely’ for seven projects and ‘feasible’ for one (E20).
The NAO found five of the eight projects in the portfolio have been delayed in comparison with the timetable approved in the business plan, which suggests optimism bias at the business plan stage. Three projects (Aurora, E20 – rebuild of the EastEnders set, and Smart) have each been delayed by 22 months or more. Overall, the BBC has sought to remain within approved budgets by re-examining planned costs and its approach to delivery. In only one case (Smart) were delays associated with significant cost increases, from £39 million to £55.7 million, during implementation. At the same time, forecast benefits increased by £12.4 million. In response to the failure of the DMI project, the BBC has increased the frequency of reporting on project performance to the Executive Board from quarterly to monthly. It has also reduced the time taken to get performance information to the Board, from 66 days in 2013 to 27 days in 2015. This has helped the Executive Board to recognise and respond to problems more quickly than before.
The assurance arrangements have worked well where projects have been clearly defined, but there remain some weaknesses in defining responsibilities and expected benefits. Six of the projects the NAO examined had a clear scope, defined benefits, and it was clear from the documentation who was accountable for delivery. For the most part, the assurance arrangements were effective in challenging potential weak points in those projects. For MyBBC, responsibilities and expected benefits were less clearly defined early in the project, and for End-to-End Digital – which included a number of sub projects – it was not clear from the documentation what the overall accountability for the project encompassed.
The BBC’s critical project portfolio has helped focus the attention of the Executive Board on key projects. However, the Board needs a greater top-down focus on how the projects as a portfolio are performing against delivering the BBC vision. In particular the NAO considers that there is scope for all members of the Executive Board, including non-executives, to take a more active role in deciding which projects are included in the portfolio.
Among the NAO’s recommendations are that the BBC should make it clear who is accountable overall for projects, ensure that reporting on project performance is always clear and comprehensive and to set out at an early stage the expected benefits and outcomes.
"We welcome the National Audit Office report, which recognises that the BBC has strengthened its oversight of critical projects. Learning from experience is important in any organisation, and the BBC has done a lot to speed up project reporting and introduce stronger oversight. As the report notes, these key changes will help the BBC to deliver expected benefits worth £1.9bn to licence fee payers. We will continue to press the BBC Executive to make sure these benefits are delivered on time and on budget, as well as monitor the implementation of the NAO’s recommendations."
Nick Prettejohn, Chair of the BBC Trust’s Value for Money Committee, 10 May 2016
"The BBC has learnt from our report on the failure of DMI and taken a number of steps to strengthen its oversight of critical projects. But further concerted action is needed. The BBC needs to do more to manage its critical projects as a coherent portfolio if it is to achieve value for money from its assurance arrangements."
Amyas Morse, head of the National Audit Office
Notes for Editors
The number of critical projects examined by us
The BBC's estimated total cost of seven projects in the portfolio (at February 2016). This estimate excludes one project (E20) where contracts have not been let.
The BBC's estimate of the total financial benefit, over their expected lifetime, of delivering the eight critical projects examined by us
Overall funding for the BBC in 2014-15
6 out of 8
Number of critical projects where the BBC had rated successful delivery as “probable” or highly likely at the point of our review
1 out of 8
Number of critical projects where the BBC had rated successful delivery as ‘feasible’ as at February 2016
1 out of 8
Number of critical projects where the BBC had rated successful delivery as ‘in doubt’ as at February 2016. In March 2016, the BBC informed us that it expected the outstanding issues to be resolved quickly.
Time it took reports on project progress to reach the Executive Board in 2013
Time it took reports on project progress to reach the Executive Board in 2015
1. The BBC’s critical projects as of March 2015 are: End-to-end-digital (to enable digital production, archiving and playout of BBC content to move from videotape to digital); W12 (relocating staff from part of the BBC estate in West London to other locations); Wales Broadcasting House (designing and constructing a new building for BBC Wales); Newsroom Computer System (to replace the existing system); MyBBC (aims to create a set of nine capabilities for use by BBC online services including iPlayer and the BBC news website); E20 (a new set for EastEnders); Smart (to replace and integrate business systems and software used by finance, procurement , human resources and the BBC Academy); Aurora (to procure and integrate IT services across the BBC). A ninth critical project (BBC Store) is undertaken by BBC Worldwide and lies outside the scope of this study.
2. Press notices and reports are available from the date of publication on the NAO website. Hard copies can be obtained by using the relevant links on our website.
3. The National Audit Office scrutinises public spending for Parliament and is independent of government. The Comptroller and Auditor General (C&AG), Sir Amyas Morse KCB, is an Officer of the House of Commons and leads the NAO, which employs some 810 people. The C&AG certifies the accounts of all government departments and many other public sector bodies. He has statutory authority to examine and report to Parliament on whether departments and the bodies they fund have used their resources efficiently, effectively, and with economy. Our studies evaluate the value for money of public spending, nationally and locally. Our recommendations and reports on good practice help government improve public services, and our work led to audited savings of £1.15 billion in 2014.