Audit office slams BBC for DMI fiasco

Editor | 29-01-2014

The UK's leading public spending watchdog, the National Audit Office, has severely criticised the BBC over its conduct in the disastrous Digital Media Initiative, shelved after it spent 98.4 million to no real end.

Soon after taking over as Director General, Tony Hall pulled the plug on the controversial project in May 2013 immediately after an operational review of the five-year project found that DMI was not going to deliver on its stated objectives of moving the BBC's production and archive operations to a fully integrated, digital way of working. Hall condemned the 98.4 million spent as a huge waste of Licence Fee payers' money. In agreement with the BBC Trust, which has launched an independent review into the fiasco, Hall also suspended CTO John Linwood who was subsequently fired.

Yet it seems certain that the matter will not rest there and will likely spell trouble for those senior BBC executives who sanctioned the project and now stand accused not only of incompetence but also of misleading the official parliamentary enquiry into the fiasco. In an excoriating condemnation of the BBC's actions, Margaret Hodge MP, chair of the Committee of Public Accounts, said: "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. 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."

Hodge concluded that 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. Ominously for senior executives at the time she added that she 'looked forward' to discussing the matters raised with senior, and former senior, members of the BBC, such as former Director General Mark Thompson, when they come before the committee on 3 February.

Somewhat bruised, the BBC humbly conceded that big mistakes had been made and accepted the thrust of the findings. Said Dominic Coles, the BBC's director of operations: "We are grateful to the NAO for its report. As we have previously acknowledged, the BBC got this one wrong. However, we have taken swift action to overhaul how major projects are managed after the new management team closed DMI last year."

Coles also revealed that the corporation had commissioned an independent technical review by Accenture of key elements of the project to assess the likelihood of the project delivering successfully. "We have also very carefully considered the views of Accenture, PWC and the NAO, as well as our own assessment of what went wrong, to implement a series of measures addressing the future governance of our major projects," Coles added.