'A complete failure' - MPs accuse BBC of complacency over £100m scrapped digital initiative

The BBC was "far too complacent" in its handling of a major new digital production system which was scrapped at the cost of almost £100m of licence fee-payers' money, according to a powerful backbench committee.

The corporation ploughed £125.9m into the Digital Media Initiative (DMI)  before it was scrapped by current director-general Tony Hall in his first weeks in the job leaving a net cost of £98.4m.

Margaret Hodge, who chairs the Public Accounts Committee which investigated the issue, said DMI was "a complete failure".

She said: "When my committee examined the DMI's progress in February 2011, the BBC told us that the DMI was 'an absolutely essential have to have' and that a lot of the BBC's future was tied up in the successful delivery of the DMI.

"The BBC also told us that it was using the DMI to make many programmes and was on track to complete the system in 2011 with no further delays. This turned out not to be the case. In reality the BBC only ever used the DMI to make one programme, called Bang Goes the Theory.

"The BBC was far too complacent about the high risks involved in taking it in-house. No single individual had overall responsibility or accountability for delivering the DMI and achieving the benefits, or took ownership of problems when they arose."

Hodge said the BBC executive and its governing body, the BBC Trust, needed to "overhaul" their approach to major projects to ensure "they properly safeguard licence fee payers' money".

She added: "The main output from the DMI is an archive catalogue and ordering system that is slower and more cumbersome than the 40  year-old system it was designed to replace. It has only 163 regular users and a running cost of £3m a year, compared to £780,000 a year for the old system."

A BBC spokesman said: "Tony Hall was right to scrap the DMI project when he took over as DG last year As we said at the time, the BBC didn't get DMI right and we apologised to licence fee payers – since then and we have completely overhauled how these projects are delivered so that there is crystal clear accountability and transparency."

A spokeswoman for the BBC Trust said: "As we have said before, this represented an unacceptable loss to licence fee payers.

"Acting on the conclusions of previous reports into DMI, we have strengthened reporting to the Trust so that problems are spotted early and dealt with quickly. We are also carrying out follow up reviews once projects are completed to make sure the lessons from DMI are being implemented."

The committee's report has the following key recommendations:

  • "The BBC should ensure that governance and assurance arrangements match the scale, strategic importance and risk profile of its major programmes and projects."
  • "Projects like the DMI need to be led by an experienced senior responsible owner who has the skills, authority and determination to achieve transformational change, and who sees the project through to successful implementation."
  • "In its reporting on major projects, the BBC needs to use clear milestones that give the Executive and the Trust an unambiguous and accurate account of progress and any problems."
  • "The BBC Executive should apply more rigorous and timely scrutiny to its major projects to limit potential losses that will ultimately fall on licence fee payers."
  • "The BBC Trust should set out in response to this report what changes it will make to be more proactive in chasing and challenging the BBC Executive’s performance in delivering major projects, so that it can properly protect the licence fee payers’ interest."
  • "The BBC Executive should report back to us on which of its original requirements for the DMI are still essential, how and when it will meet them, and at what cost."
  • "We expect the BBC to be completely transparent in its dealings with us and the NAO and inform us of any potentially significant evidence or facts in a timely way."

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