This section is dedicated to the unfolding saga of the BBC’s failed Digital Media Initiative, which the National Audit Office has said cost the licence-fee payer almost £100m as a result of a catalogue of fundamental management failures by both the board of management and the Trustees.
Chairman of the BBC Trustees Lord Patten and former director general Mark Thompson have earned a stinging rebuke from the National Audit Office for their handling of the failed Digital Media Initiative system (DMI),which was supposed to introduce a unified digital operating platform across the BBC.
The NAO report published on January 28 said the BBC executive board, led by then director general Mr Thompson, had failed to scrutinise enough the doomed IT project over an 18-month period and the BBC Trust, chaired by Lord Patten, had not done enough to challenge it.
The NAO also said the BBC was “too optimistic” about its ability to complete the project after it took it in-house from contractor Siemens in 2009, with reporting arrangements “not fit for purpose” and no single manager made responsible for the entire venture. DMI was eventually scrapped in May 2013, at a cost of £98.4m to licence fee payers.
The project – which was supposed to do away with the need for videotapes across the BBC and use digital technology to call up archive footage – was scrapped just a month into director general Tony Hall’s tenure in 2013, with the BBC Trust saying to continue it would be “throwing good money after bad”.
A PwC report commissioned by the BBC and published last month said the corporation should have identified that DMI would fail as early as July 2011, almost two years before it was eventually shut down.
The full NAO report can be seen here.
It has also emerged that Mark Thompson, along with , along with former BBC finance chief Zarin Patel, trustee Anthony Fry, ex-chief operating officer Caroline Thomson and director of operations Dominic Coles, will appear before the House of Commons public accounts committee on February 3 to face questioning about the issues raised by the NAO report about the DMI.
Margaret Hodge, the Labour MP who chairs the Commons public accounts committee, said the failures revealed in a National Audit Office report on the Digital Media Initiative (DMI) “go right to the top” of the corporation.
She added that the BBC Trust, the corporation’s governance body, chaired by Lord Patten, had questioned executives about slippages in the DMI programme in September 2011, “but then applied limited challenge until July 2012”.
Her full statement reads: ” This report reads like a catalogue of how not to run a major programme. I was shocked to learn how poor the BBC’s governance arrangements for the Digital Media Initiative were. There was no Senior Responsible Owner with complete oversight of all aspects of programme’s delivery.
“The report clearly demonstrates why regular reviews are necessary – and why external reviewers should be listened to. If the BBC had established clearer accountability and stronger reporting it could have recognised the issues much earlier and set about minimising the astronomic losses for the licence fee payer.
“These failures go right to the top. The executive board applied insufficient scrutiny during 2011 and the first half of 2012. The programme was not subject to any audit or assurance reporting between early 2011 until July 2012. The BBC Trust had questioned the executive about slippages in September 2011 but then applied limited challenge until July 2012. After the BBC executive board became aware of the problems it initiated a review in May 2012 of the DMI timetable, costs and benefits.
“The BBC Trust finance committee did not know until July 2012 that the DMI’s risk rating had increased to red for the period October to December 2011.
“The BBC needs to learn from the mistakes it made and ensure that it never again spends such a huge amount of licence fee payers’ money with almost nothing to show for it.”
Meanwhile, John Linwood, the former BBC chief technology officer, who it has emerged this week, was dismissed last summer over the failed initiative, has said in written evidence to the Commons public accounts committee that he is taking legal action against the corporation.
It is understood that Mr Linwood has claimed that the BBC allowed inaccurate statements to be made to the public accounts committee about DMI and has blamed a “changed vision” of how the project was supposed to work for its difficulties and closure.
In a separate submission to the committee, Bill Garrett, another former BBC technology executive who warned Lord Patten about problems with DMI in May 2012, said he believed that four years ago “a number of staff knowingly falsified estimates of financial benefits” in order to secure further funding for the project.
Filed January 27:
BBC technology chief ‘sacked’ as row over failed £100m scheme continues
The BBC has confirmed that the executive responsible for the corporation’s £100m digital media initiative (DMI) – which was supposed to create a unitary digital platform across operations – has been fired.
John Linwood, who held the post of BBC chief technology officer, on a salary of £287,000 a year, had initially been suspended during the summer when Director General Lord Hall announced publicly that the DMI objectives were not being met and the licence-fee payers’ money spent on it had been largely wasted.
It is understood that Mr Linwood, who left the corporation without a pay-off, is now claiming unfair dismissal.
Following the suspension of Mr Linwood, Lord Hall commissioned from accountants Price Waterhouse Coopers (PwC) a report into the reasons for the DMI failure. But Mr Linwood, it now seems certain, was fired before the inquiry was commenced.
The 54-page report cost the BBC £263,340 to produce. According to the Guardian newspaper, it found no single issue or event caused DMI to fail. But PwC said the BBC took ‘too long’ to realise DMI was in serious trouble, because of weaknesses in project management and reporting, a lack of focus on business change, together with piecemeal assurance arrangements.
BBC insiders were critical of the tone and scope of the report, arguing that the corporation has got off lightly for its £98.4m technical blunder.
“We are of the view that had appropriate governance, risk management and reporting arrangements been established from the outset, then the process of preparing a revised business case for DMI could have been commenced as early as July 2011,” said PwC. “It took longer than we would have expected for the BBC to reach executive agreement on the future for DMI”.
Confirmation of his exit comes less than a fortnight before former director general Mark Thompson is due to appear before the Commons public accounts committee on 3 February.
The collapse of DMI will also be the subject of a report by the National Audit Office, expected to be published later this month.
BBC Trust chairman Lord Patten has also come in for criticism from MPs over the issue. They accused him of “obstruction and secrecy” after he apparently ordered the corporation not to disclose key documents about the failed project.
They said Mr Thompson, now chief executive of the New York Times, incorrectly claimed the scheme was already up and running. He later said he gave evidence “honestly and in good faith” based on information from his executives.
Also appearing before MPs will be the corporation’s former finance chief Zarin Patel, BBC trustee Anthony Fry, ex-chief operating officer Caroline Thomson and BBC operations director Dominic Coles.