MPs criticise BBC outsourcing deal

28 June 2007
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29 June 2007 | Paul Snell

The BBC's approach to its technology outsourcing deal was "distinctly second rate", according to the Public Accounts Committee (PAC).

The PAC said despite the contract being in place, "many areas of the BBC are still buying technology services and commodities from other suppliers".

The BBC signed the 10-year £1.5 billion deal with Siemens Business Services in October 2004, to provide commodities such as desktop computers and technological support for production and broadcasts.

In a report into the agreement, published yesterday, the PAC said the BBC needed to implement controls to ensure commodities and services are purchased through the contract to achieve better value for money.

BBC managers had also told the corporation's governors the deal would "guarantee" savings of £35.2 million a year. However, the first year's savings were £22 million. The BBC has said it now expects savings from the deal to reach £40 million per year, although the PAC said it "remains to be seen" if this will be achieved.

Conservative MP Edward Leigh, chairman of the PAC, said: "None of this inspires confidence in the BBC's ability to negotiate and manage large-scale commercial contracts."

The PAC was also critical of the BBC's management of the contract, saying there were inadequate arrangements to check the accuracy of invoices or to measure the performance of the contract. The BBC said it welcomed the recommendations and understood the need for adequate controls and processes to be introduced.

SMjun2007

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