BBC criticised over handling of Digital Media Initiative development

A Commons committee has criticised the BBC’s delivery of the Digital Media Initiative, which was meant to deliver savings of £17.9 million, but ended up costing around £38.2 million.

The Initiative was created in order to change the way that staff at the corporation used and shared video and audio material and was given a budget of £81 million with the aim of delivering benefits worth £99.6 million by 2015.

Siemens was contracted to deliver the project without a tender, having previously developed a project for BBC Scotland, but apparently failed to do so against ‘key contract milestones’, leading to a termination of the contract. This meant a delay of two years, costing £26 million in lost benefits, a report found.

Hearing this, the public account committee has said that the appointment should not have been made without open competition and also criticised the fixed-price contract which transferred all of the risk to Siemens.

The cost of the project is understood to have reached £133.6 million, which the BBC claims will still deliver savings.

Margaret Hodge, committee chairman said that the committee was ‘concerned’ with the ‘ease in which the BBC found over £50 million in savings to make up for the losses it suffered’ as a consequence of the project’s later delivery and its own increased costs, which she believed suggested that it take a ‘more vigilant approach’ to value for money.

The report also revealed that the project was undertaken in-house by the corporation and is expected to be delivered by Summer, five months later than planned, ahead of the move by departments to MediaCityUK in Salford where the project will be also utilised.

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