Post by Teddy Bear on Jun 28, 2007 17:29:37 GMT
While the story below has accusations of bad business skills levelled at the BBC, Surely some people there are getting kickbacks to make sure they are 'sloppy' at these dealings. There seems to be an obvious attempt to deceive the BBC governors, is it really incompetence or design?
Either way they suck!
Either way they suck!
MPs slam BBC Siemens sell-off
Bobbie Johnson, technology correspondent
Thursday June 28, 2007
MediaGuardian.co.uk
The BBC's decision to sell off its technology arm to Siemens came in for stinging criticism from MPs today, with senior management accused of taking a "distinctly second rate" approach to the contract.
A report published today by the House of Commons' influential public accounts committee said BBC management omitted millions of pounds of hidden costs when encouraging the board of governors to approve the sale of BBC Technology in 2004 to Siemens.
The report also suggested that parliament should be given greater control over the BBC's accounts.
Edward Leigh, the Conservative MP who chairs the PAC, said the technology sale to Siemens did not inspire "confidence in the BBC's ability to negotiate and manage large-scale commercial contracts".
"The BBC's submission to the governors seeking approval for the Siemens deal gave the impression that annual savings of some £35 million for 10 years were guaranteed," Mr Leigh said.
"This is not the first time BBC governors have been given inexact figures when asked to approve spending on major projects.
"The BBC must make sure that all of its future business cases are subject to robust quality assurance," he added.
"The BBC's approach to the contract has been distinctly second rate. Its estimates of annual savings have fluctuated widely; many parts of the BBC are still using other suppliers; and there was no provision for the BBC to share profits above an agreed level.
"Indeed, the BBC has chosen not to check on how profitable the contract actually is for Siemens.
"None of this inspires confidence in the BBC's ability to negotiate and manage large-scale commercial contracts.
"The BBC's arguments for resisting full independent audit scrutiny by the National Audit Office are looking increasingly threadbare."
The PAC report stated: "When BBC managers sought approval for the deal with Siemens, they told the governors that savings were guaranteed at £35.2m a year, but they made mistakes when they estimated the cost reduction that the contract would deliver.
"Contrary to the advice provided by the BBC to the board of governors ... the annual savings achievable under the contract were not guaranteed."
BBC Technology, which provides IT support and hi-tech infrastructure for the corporation, was sold to Siemens in 2004 as part of a 10-year outsourcing deal worth an estimated £1.9bn.
The move, instigated by former director general Greg Dyke and signed off by his replacement, Mark Thompson, came as the corporation faced intense pressure to cut costs.
But nearly three years after the deal was made, the committee said that the BBC's board of governors was not given the complete picture when it made its decision to sell the technology division. The result is that savings were drastically lower than predicted.
"In the first year of the contract with Siemens, savings were £22m, 38% lower than the BBC's original forecast," the PAC said.
The PAC report added that BBC managers did not include substantial extra costs totalling £60m when seeking approval for the sale from the board of governors.
And although Mr Thompson has said that the corporation now expects savings to increase to £40m per year, the PAC remained sceptical of such promises. The sale - which means that Siemens now controls the BBC's computer, broadcast and satellite transmission systems - faced strong opposition from many staff, including the 1,400 workers who were working for BBC Technology at the time.
Broadcasting union Bectu warned that the sell-off meant that the BBC was effectively "handing its central nervous system over to the private sector".
Reports from inside the BBC suggest that staff are less than happy with the new arrangements, with many complaining that the relationship with Siemens is proving inefficient, overly expensive and is unable to deliver in some crucial areas.
The PAC investigation found that 60% of projects commissioned from Siemens in its first year ran over budget or were subject to delay.
Its report also suggests that the National Audit Office, the parliamentary spending watchdog, should be given increased access to the BBC's accounts, bringing it in line with other public bodies. At the moment the corporation is exempt from such scrutiny.
"This is not the first time the BBC governors have approved multimillion-pound deals without the full facts," said Richard Bacon, the Conservative MP for south Norfolk and a member of the public accounts committee.
"The BBC needs to get a grip on its contract management, and the corporation as a whole must now open its book to full independent scrutiny by the National Audit Office."
The board of governors was replaced as the corporation's governance and regulatory body in January by the BBC Trust, headed by chairman Sir Michael Lyons.
Bobbie Johnson, technology correspondent
Thursday June 28, 2007
MediaGuardian.co.uk
The BBC's decision to sell off its technology arm to Siemens came in for stinging criticism from MPs today, with senior management accused of taking a "distinctly second rate" approach to the contract.
A report published today by the House of Commons' influential public accounts committee said BBC management omitted millions of pounds of hidden costs when encouraging the board of governors to approve the sale of BBC Technology in 2004 to Siemens.
The report also suggested that parliament should be given greater control over the BBC's accounts.
Edward Leigh, the Conservative MP who chairs the PAC, said the technology sale to Siemens did not inspire "confidence in the BBC's ability to negotiate and manage large-scale commercial contracts".
"The BBC's submission to the governors seeking approval for the Siemens deal gave the impression that annual savings of some £35 million for 10 years were guaranteed," Mr Leigh said.
"This is not the first time BBC governors have been given inexact figures when asked to approve spending on major projects.
"The BBC must make sure that all of its future business cases are subject to robust quality assurance," he added.
"The BBC's approach to the contract has been distinctly second rate. Its estimates of annual savings have fluctuated widely; many parts of the BBC are still using other suppliers; and there was no provision for the BBC to share profits above an agreed level.
"Indeed, the BBC has chosen not to check on how profitable the contract actually is for Siemens.
"None of this inspires confidence in the BBC's ability to negotiate and manage large-scale commercial contracts.
"The BBC's arguments for resisting full independent audit scrutiny by the National Audit Office are looking increasingly threadbare."
The PAC report stated: "When BBC managers sought approval for the deal with Siemens, they told the governors that savings were guaranteed at £35.2m a year, but they made mistakes when they estimated the cost reduction that the contract would deliver.
"Contrary to the advice provided by the BBC to the board of governors ... the annual savings achievable under the contract were not guaranteed."
BBC Technology, which provides IT support and hi-tech infrastructure for the corporation, was sold to Siemens in 2004 as part of a 10-year outsourcing deal worth an estimated £1.9bn.
The move, instigated by former director general Greg Dyke and signed off by his replacement, Mark Thompson, came as the corporation faced intense pressure to cut costs.
But nearly three years after the deal was made, the committee said that the BBC's board of governors was not given the complete picture when it made its decision to sell the technology division. The result is that savings were drastically lower than predicted.
"In the first year of the contract with Siemens, savings were £22m, 38% lower than the BBC's original forecast," the PAC said.
The PAC report added that BBC managers did not include substantial extra costs totalling £60m when seeking approval for the sale from the board of governors.
And although Mr Thompson has said that the corporation now expects savings to increase to £40m per year, the PAC remained sceptical of such promises. The sale - which means that Siemens now controls the BBC's computer, broadcast and satellite transmission systems - faced strong opposition from many staff, including the 1,400 workers who were working for BBC Technology at the time.
Broadcasting union Bectu warned that the sell-off meant that the BBC was effectively "handing its central nervous system over to the private sector".
Reports from inside the BBC suggest that staff are less than happy with the new arrangements, with many complaining that the relationship with Siemens is proving inefficient, overly expensive and is unable to deliver in some crucial areas.
The PAC investigation found that 60% of projects commissioned from Siemens in its first year ran over budget or were subject to delay.
Its report also suggests that the National Audit Office, the parliamentary spending watchdog, should be given increased access to the BBC's accounts, bringing it in line with other public bodies. At the moment the corporation is exempt from such scrutiny.
"This is not the first time the BBC governors have approved multimillion-pound deals without the full facts," said Richard Bacon, the Conservative MP for south Norfolk and a member of the public accounts committee.
"The BBC needs to get a grip on its contract management, and the corporation as a whole must now open its book to full independent scrutiny by the National Audit Office."
The board of governors was replaced as the corporation's governance and regulatory body in January by the BBC Trust, headed by chairman Sir Michael Lyons.
