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By | John Oates 29th June 2007 15:23

MPs rap BBC over Siemens deal

Not good value

The Public Accounts Committee said the BBC failed to ensure it got best value when it outsourced its IT department to Siemens.

The ten-year deal saw 1,440 Beeb staffers move across to Siemens. But public spending watchdog the PAC said BBC executives misled the board of governors about possible savings while trying to convince them to give the deal the go-ahead.

The committee of MPs found £60m of costs was excluded when budgets were put to the governors for approval.

The deal, signed in 2004, was meant to save the corporation some £35m a year.

But the Committee said in the first year the Beeb saved £22m - 38 per cent lower than originally forecast. The PAC said estimates of savings varied between £21.8m and £40m which "do not inspire confidence in the BBC's forecasting". It called for proper internal audits to discover the true figures.

The Committee complained that the Beeb was still using other tech suppliers and there is no way for the Beeb to share in future Siemens profits, nor does the broadcaster take advantage of its rights to check Siemens accounts.

The PAC said the BBC was failing to manage the contract properly. The Committee noted that 60 per cent of Siemens contracts are delivered late or go over budget.

The report suggests the BBC should open up its accounts to government officials for proper scrutiny.

The BBC said the deal had realised £55m in savings and is predicted to save the corporation some £275m over the course of the contract.

The report is available, as a pdf, from here.®

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