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BBC warned of problems with failed Digital Media Initiative three years ago BBC warned of problems with failed Digital Media Initiative three years ago
(4 months later)
BBC managers were warned three years ago that there were problems with the failed Digital Media Initiative (DMI), recently axed by director general Tony Hall after wasting almost £100m of licence fee money.BBC managers were warned three years ago that there were problems with the failed Digital Media Initiative (DMI), recently axed by director general Tony Hall after wasting almost £100m of licence fee money.
A whistleblower alerted executives in 2010 that the projected £95.4m of benefits the BBC promised the project would deliver were "hugely overoptimistic and difficult to deliver".A whistleblower alerted executives in 2010 that the projected £95.4m of benefits the BBC promised the project would deliver were "hugely overoptimistic and difficult to deliver".
The warning was proved right as MediaGuardian has learned that in addition to DMI costing £98.5m it has delivered absolutely no savings at all to the corporation.The warning was proved right as MediaGuardian has learned that in addition to DMI costing £98.5m it has delivered absolutely no savings at all to the corporation.
Questions are likely to be asked by politicians next week as to how the BBC failed to achieve any of the projected £95.4m savings that were built into its financial forecasts, as well as spending £98.5m fruitlessly on the digital content management system that was supposed to remove the need for video tape editing.Questions are likely to be asked by politicians next week as to how the BBC failed to achieve any of the projected £95.4m savings that were built into its financial forecasts, as well as spending £98.5m fruitlessly on the digital content management system that was supposed to remove the need for video tape editing.
The projected savings were based on assumptions that included the idea that DMI would make it easier for programme-makers to produce archive programmes.The projected savings were based on assumptions that included the idea that DMI would make it easier for programme-makers to produce archive programmes.
It emerged this week that former BBC Vision head of technology Bill Garrett wrote to Lord Patten in 2012 telling him of his concerns about DMI.It emerged this week that former BBC Vision head of technology Bill Garrett wrote to Lord Patten in 2012 telling him of his concerns about DMI.
However, in his correspondence with Patten – which was leaked on Tuesday – Garrett also said he had made his concerns clear to BBC management in 2010. He had questioned the basis of the financial forecasts used to justify continuing DMI after it was taken in-house that year.However, in his correspondence with Patten – which was leaked on Tuesday – Garrett also said he had made his concerns clear to BBC management in 2010. He had questioned the basis of the financial forecasts used to justify continuing DMI after it was taken in-house that year.
Technology giant Siemens was originally given a £79m contract to create DMI but failed to deliver and the deal was terminated in 2009. The result was a two-year delay and a loss of £26m in projected cost-saving benefits.Technology giant Siemens was originally given a £79m contract to create DMI but failed to deliver and the deal was terminated in 2009. The result was a two-year delay and a loss of £26m in projected cost-saving benefits.
The BBC's technology division took over the project but when Garrett looked at the figures he said in his letter to Patten that it was "professionally difficult for me not to question the value proposition of the revised investment case. I believed the stated benefits to be hugely overoptimistic and difficult to deliver, accordingly I made my concerns clear to BBC management."The BBC's technology division took over the project but when Garrett looked at the figures he said in his letter to Patten that it was "professionally difficult for me not to question the value proposition of the revised investment case. I believed the stated benefits to be hugely overoptimistic and difficult to deliver, accordingly I made my concerns clear to BBC management."
The fact that BBC managers were warned of concerns about DMI in 2010 is likely to be of interest to the BBC Trust, which has appointed PricewaterhouseCoopers to conduct an investigation to establish what went wrong in terms of project management, control and governance.The fact that BBC managers were warned of concerns about DMI in 2010 is likely to be of interest to the BBC Trust, which has appointed PricewaterhouseCoopers to conduct an investigation to establish what went wrong in terms of project management, control and governance.
The trust was said to be "shocked" when it learned last month that none of the £95.4m benefits were being delivered following a review carried out by the BBC's director of operations, Dominic Coles.The trust was said to be "shocked" when it learned last month that none of the £95.4m benefits were being delivered following a review carried out by the BBC's director of operations, Dominic Coles.
According to sources, the trust had been told that DMI's delay would have some impact on the projected savings but they were "in single figure millions" and likely to be recoverable.According to sources, the trust had been told that DMI's delay would have some impact on the projected savings but they were "in single figure millions" and likely to be recoverable.
Coles's shock findings were the final nail in the coffin for the project and the BBC Trust is now keen to find out why executives did not tell it earlier of any problems.Coles's shock findings were the final nail in the coffin for the project and the BBC Trust is now keen to find out why executives did not tell it earlier of any problems.
Meanwhile a letter has been released by the BBC Trust that trustee Anthony Fry sent to Labour MP Margaret Hodge, chair of the Commons public accounts committee, last November warning her that he was "not content" with DMI's progress.Meanwhile a letter has been released by the BBC Trust that trustee Anthony Fry sent to Labour MP Margaret Hodge, chair of the Commons public accounts committee, last November warning her that he was "not content" with DMI's progress.
Fry said: "I said to you during the previous committee hearing that I was not content with the BBC's performance in delivering DMI and that I was taking the matter very seriously. I regret to say that this is still the case."Fry said: "I said to you during the previous committee hearing that I was not content with the BBC's performance in delivering DMI and that I was taking the matter very seriously. I regret to say that this is still the case."
The PwC report is not expected to be completed before autumn. However, Hodge and other MPs on the committee are expected to put some tough questions about DMI to Fry and BBC chief finance officer Zarin Patel during an evidence hearing in Salford on Monday. The hearing will also look at the cost of the corporation's move to its new base in the north-west.The PwC report is not expected to be completed before autumn. However, Hodge and other MPs on the committee are expected to put some tough questions about DMI to Fry and BBC chief finance officer Zarin Patel during an evidence hearing in Salford on Monday. The hearing will also look at the cost of the corporation's move to its new base in the north-west.
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