BBC faces damning criticism over failed $170m digital project

Execs failed to realize in time that Digital Media Initiative was in trouble, watchdog says

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The BBC came under fire on Tuesday for botching a 100 million pound ($170 million) digital project in the latest of a series of reports to criticize top management for their running of Britain’s publicly funded broadcaster.

Public spending watchdog the National Audit Office (NAO) said BBC executives led by then Director General Mark Thompson, now New York Times Company chief executive, failed to realize in time that the Digital Media Initiative was in trouble.

The project, axed in May last year, was meant to allow staff across the BBC to create and share video and audio content on their desktops but technical problems and delays eroded confidence in the scheme.

The NAO found the BBC executive board led by Thompson was too optimistic about its ability to handle the project and did not have “sufficient grip” over an 18-month period, while the BBC Trust, chaired by Chris Patten, did not challenge it enough.

“If the BBC had better governance and reporting for the programme, it would have recognized the difficulties much earlier than May 2012,” NAO head Amyas Morse said in a statement.

Overall, the BBC lost 98.4 million pounds on the project which was cancelled by the corporation’s current director general, Tony Hall, a month after he took up the top job.

Thompson, who quit the BBC in 2012 after eight years to join the New York Times, is due to return before parliament’s public accounts committee on Feb. 3 along with other past and present BBC executives to answer questions about the failed project.

A spokesman for Thompson said on Tuesday he would not be commenting until then.

Damning reports

The NAO report comes after a series of controversies that have rocked public confidence in the BBC, including criticism over large payments to departing executives, a child sex scandal involving ex-TV presenter Jimmy Savile, and workplace bullying.

Political oversight of the BBC, which has an annual budget of 5 billion pounds, has escalated, with management called in front of 18 parliamentary hearings in the past year.

The BBC’s handling of the failed IT project was also the subject of a damning report by accountants PwC last year that was commissioned by the BBC Trust. It found failings in the Digital Media Initiative could have been identified two years earlier.

The BBC Trust is charged with ensuring an annual license fee paid by all British households with televisions is well spent.

Margaret Hodge, chair of parliament’s public accounts committee, said the NAO report read "like a catalogue of how not to run a major programme”, with no senior officer having oversight of the project and no regular reviews on its progress.

“If the BBC had established clearer accountability and stronger reporting, it could have recognised the issues much earlier and set about minimising the astronomic losses for the licence fee payer,” said Hodge, who will chair next week’s parliamentary inquiry. “These failures go right to the top.”

Hall, who took over as director general at the BBC in April last year, has called for managers to take individual responsibility for their decisions.

The BBC’s director of operations Dominic Coles said the BBC had “got this one wrong” but defended the corporation’s record.

He said the BBC’s chief technology officer at the time, John Linwood, has since left the broadcaster.

“DMI aside, we have a strong track record of successfully delivering major projects such as BBC iPlayer and the digital Olympics and we will continue to innovate to deliver new technology to the public,” Coles said in a statement.

Diane Coyle, vice chairman of the BBC Trust, said they were working with the BBC executive to ensure serious problems were spotted and addressed at an earlier stage.

“It is essential that the BBC learns from the losses incurred in the DMI project and applies the lessons to running technology projects in future,” Coyle said in a statement.

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