The BBC wasted £100million on a botched IT after failing to get a grip on a raft of problems which ran out of control, a damning report said today.
In a fresh wave of criticism, the Corporation was accused of failing to realise that the Digital Media Initiative was in dire trouble until it was too late.
The IT system was supposed to allow staff to share and manage videos from their desks but was axed in May last year.
It emerged this week that the BBC’s chief technology officer was sacked weeks after being suspended over the project’s failure.
John Linwood was suspended in May when the BBC realised that most of the £125.9million spent to date had been wasted.
Today the National Audit Office said the scale of the failure damaged the faith staff put in IT at the BBC.
It found the management did not recognise the extent of the problems ‘until a late stage’.
When the BBC took the project over from Siemens in July 2009 it did not have time to meet deadlines and failed to establish whether it was ‘technically sound’, the NAO said.
The timetable was repeatedly changed after technical problems were found, ‘eroding user confidence’
The management of the project was also at odds with ‘its scale, complexity and risk’.
Overall the BBC spent £125.9 million on the DMI, but clawed back £27.5million by transferring assets, cash and service credits that formed part of its financial settlement with Siemens.
It still means £98.4 million has been written off.
Damingly, the NAO found that the BBC ‘cancelled the DMI without examining the technical feasibility or cost of completing it’.
Amyas Morse, head of the National Audit Office, said today: ‘The BBC Executive did not have sufficient grip on its Digital Media Initiative programme.
‘Nor did it commission a thorough independent assessment of the whole system to see whether it was technically sound.
‘If the BBC had better governance and reporting for the programme, it would have recognized the difficulties much earlier than May 2012.’
It follows a report by PwC report last year which found numerous areas were ‘not fit for purpose’ including governance of the project, arrangements for reporting progress to BBC bosses and risk management.
The DMI was supposed to allow BBC staff to access the entire archive from their computers, doing away with the need for audio and video tapes.
It was expected to save the corporation £18million in production costs because staff could share and download material remotely instead of transporting tapes between headquarters.
First the original contractor, Siemens, was dropped in 2009 after months of costly delays.
Control of the project was handed to Mr Linwood, hired as the BBC’s chief technology officer from Yahoo! on a salary of £280,000 per year.
But Mr Linwood left the corporation in July when his contract was ended and did not receive a pay-off.
A BBC spokesman said at the weekend: ‘We can confirm that John Linwood is no longer employed by the BBC.’
Diane Coyle, Vice Chairman BBC Trust, said: ‘We are grateful to the NAO for carrying out this report, which reinforces the conclusions of the PwC review commissioned by the Trust. 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.
‘The NAO’s findings, alongside PwC’s recommendations will help us make sure this happens. As we announced last December, we are working with the Executive to strengthen project management and reporting arrangements within a clearer governance system.
‘This will ensure that serious problems can be spotted and addressed at an earlier stage.’
Dominic Coles, the BBC’s Director of Operations, said: ‘As we have previously acknowledged, the BBC got this one wrong.
‘We took swift action to overhaul how major projects are managed after we closed DMI last year. DMI aside, we have a strong track record of successfully delivering major projects such as the BBC iPlayer and the digital Olympics and we will continue to innovate to deliver new technology to the public.’
THE ‘DON’T MENTION IT’ PROJECT
When the Digital Media Initiative (DMI) was launched in 2008, it was hailed by BBC chiefs as ‘the single most important initiative we are working on’.
But before a year had elapsed, it was floundering so badly insiders referred to it as ‘Don’t Mention It.’ The BBC originally appointed IT firm Siemens to implement the scheme. But it ditched the company in 2009 as the project floundered and took it back in house.
By then, £26million had already been wasted but it is understood the BBC later recouped the cost from Siemens.
In February 2011, the National Audit Office condemned the corporation over its handling of the DMI after it ran 21 months behind schedule.
The public spending watchdog found the expected gains had been overstated and the difficulty of delivering it was underestimated.
The Public Accounts Committee criticised the BBC for awarding the contract to Siemens without putting it out to open tender.
The project was meant to allow production staff to access all video and audio material – for example last year’s Olympics coverage – on their computers.
As hundreds of staff moved to the corporation’s new headquarters in Salford, this would prevent them having to transport tapes of archive material by road from London, reducing production costs.
But the costs of the project continued to spiral to £98.4million until it was finally halted in May.