Emergency funds were used to pay for external lighting
and other additions to the BBC’s Pacific Quay headquarters in Glasgow.
Phil Miller - Herald Scotland - 26th February 2010
BBC
Scotland should not have used £1 million in emergency funds to
pay
for “enhancements and additions” to its £188m headquarters in Glasgow,
a critical new report has found.Yesterday the BBC Trust said licence fee payers had been let down by the corporation’s “serious mistakes” in building three new sets of headquarters at a cost of £2 billion.
The BBC’s governing body published an independent report, prepared by the National Audit Office, on how the corporation managed the construction of its corporate headquarters: Broadcasting House in London, Pacific Quay in Glasgow and Salford Quays near Manchester.
It studies the mounting costs encountered when building Pacific Quay, and also details how £1m in funds, set aside for risks, were instead used to pay for other items.
The contingency money was spent on items that were not in the original scope of the site, including “additional infrastructure costs within the base build, “external lighting enhancements and improving the external and public environment”.
The report states: “Unspent financial contingency should not be seen as a means to fund enhancements or additions to the project that should have been included in the original business case.”
It reveals how in May 2002, the BBC governors approved Pacific Quay at a cost of £126m.
By November 2003, building plans had expanded by 30% and the cost of the project increased to £161m. In April 2004, the governors approved a revised cost of £173m and in July 2005 a final cost of £188m was signed off.
Pacific Quay opened in 2007 but during 2008 technical problems arose within the IT and broadcast network and, on one occasion, the BBC had to change programme plans to ensure there was no break in broadcasting.
The report said the technology provider, Siemens, bore the £500,000 cost of fixing the glitches.
The report also highlights the problems encountered in building the new Broadcasting House. It will not be completed until April 2013, four years later than planned, and will cost £1.046bn, £55m more than originally approved.
The report found that the BBC did not set out a clear assessment of the intended benefits for the projects at the outset, meaning it was now difficult to show value for money.
Jeremy Peat, a BBC trustee, said: “Serious mistakes were made in the first phase of the Broadcasting House project. Licence fee payers were let down, and the trust regrets this.
“The governors took steps to get the issue under control and then the trust, when it was formed in 2007, continued their energetic oversight.
“We are reassured that this report shows lessons learned have been applied in the second phase of Broadcasting House, Salford and Pacific Quays.
“But there is still considerable room for improvement, and consequently we will follow up the National Audit Office’s recommendations vigorously and as a matter of urgency.”
Sir Michael Lyons, the chairman of the BBC Trust, has written to the BBC’s director-general, Mark Thompson, asking for his plans in response to the National Audit Office’s recommendations, and asking for a “health check” of all major current projects without delay.
Sir Michael wrote: “Let me start by making it plain the trust’s view that initial planning and control arrangements for the first phase of the Broadcasting House project were unacceptable. They showed significant weaknesses and shortcomings, and must never be allowed to happen again.”
Sir Michael acknowledged that the failings identified in the Broadcasting House project had “left the BBC in a position where it is harder to demonstrate project success and value for money, since the actual benefits now being realised and delivered cannot be compared with an appropriate base line”.
Amyas Morse, head of the National Audit Office, said: “The BBC let the Broadcasting House project run into serious difficulties before the governors and then the trust took action, and the result is a four-year delay and a cost overrun of £100m.
“The BBC must take on board fully the lessons from its difficulties with Broadcasting House.”
See also:
Commonwealth Games organisers clash with BBC over £81m shortfall
Radio Scotland losing 1500 listeners a week
BBC documentary on fishing dismissed as codswallop
Leaders' television debates 'rigged' says SNP
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