The BBC’s E20 programme, to replace and enlarge the external EastEnders set and improve various infrastructure at BBC Elstree Centre,1,2 is now forecast to cost £27 million more, and take an additional two and a half years to complete, compared to its plans in October 2015. In its report, published today, the National Audit Office concludes that the BBC will not be able to deliver value for money on the E20 programme in the way that it envisaged in 2015.
The BBC built the external filming set for EastEnders (including ‘Albert Square’) in 1984, and originally planned to use it for two years. It has lasted for 34 years but is no longer fit for purpose. The poor condition of the set means the BBC cannot film in high-definition, degradation has led to increasing filming delays owing to stoppages in production due to health and safety concerns, and there are ongoing maintenance costs to ensure filming can continue.
In 2013, the BBC proposed building a temporary set, two-thirds of the size of the existing external filming site, to use while it constructed a new permanent set. It expected E20 to cost £59.7 million and to be completed by August 2018. Due partly to forecast cost increases, the BBC substantially revised its plans in 2015, moving its target completion date to October 2020. The case for E20, and the rationale for the current approach, is clear. However, in October 2017, the BBC reported internally that its revised plans were no longer achievable due to forecast delays and cost increases.
As a result of more realistic plans, the BBC now forecasts E20 will cost £86.7 million – 45% more than the original budget. Most of this increase relates to the higher cost of the Front Lot, which the BBC now estimates will cost £54.7 million – £23.5 million (75%) more than planned. Following negotiation and clarification around the Front Lot construction contract, including the type and supply of bricks required, Wates was appointed by the BBC in September 2018 to carry out the work at a fixed price of £24.2 million, £9.5 million more than the BBC budgeted in October 2015. The BBC expects the Front Lot to be completed at the end of March 2021, 22 months later than originally planned.
The BBC now intends for E20 to be completed in May 2023 – 31 months later than envisaged in its 2015 plans. Delays primarily stem from: procurement delays, as limited market interest resulted in the BBC revising its approach; subsequent contract negotiations taking longer than planned; and more realistic assumptions about the time needed to age the newly-built Lots. The overall forecast delay, which includes contingency time, is additional and separate to the 26 months the NAO reported in 20163.
By the end of September 2018, the BBC had spent £28.2 million and completed various elements of E20, though much of this work has cost more and taken longer than planned. In October 2018, the BBC began constructing the Front Lot, the most challenging part of E20, and the Back Lot was at an early design stage. Therefore, it is not yet possible to conclude on the value for money of the latest programme plan. Nevertheless, the programme has been subject to ongoing scrutiny and reporting and, in the last 18 months, the BBC has made many improvements to the programme. The BBC still expects to realise the intended benefits of E20, albeit at a later date and greater cost than originally planned.
The NAO considers that some of the reasons for the delays and cost increases could have been addressed earlier by the BBC. Early planning processes resulted in the BBC underestimating aspects of complexity, cost and risks of its approach. There was also insufficient construction project management expertise to identify critical design issues, for example with the Front Lot. Furthermore, while they did engage with each other, the programme team and EastEnders production (the end users of the set) were not sufficiently integrated, leading to ineffective design development and change processes.
The BBC has also faced issues such as higher than expected inflation in the construction sector, as well as asbestos and obstructions in the ground which to some extent were unforeseen by the programme team, partly due to poor site records. Inflation has had a greater impact than it would have done had the programme completed without any delays.
“The BBC will not be able to deliver value for money on E20 in the way that it originally envisaged. It is surprising that some of the reasons for this were built in from the beginning. Despite recent project management improvements, E20 is late and over budget against its 2015 plans. We believe that the planned benefits are still broadly achievable, but given the high-risk nature of E20 it will need close scrutiny until it is finished.”Amyas Morse, head of the NAO