The House of Commons Public Accounts Committee has lambasted the BBC for its poor procurement of its E20 project to build a new set for its Eastenders soap opera.
The E20 project is now set to cost licence fee payers £87m, which is £27m more than budgeted. The new Albert Square is not set to be complete until May 2023, nearly five years later than originally planned.
The investigation by backbench MPs follows a report last December by the National Audit Office (NAO) that concluded the works at BBC Elstree Centre no longer represent value for money for licence fee payers. [See our previous report here.]
The MPs says that the BBC failed to get the right construction project management skills in place from the outset of the project and its procurement was flawed.
The BBC accepts that did not have enough construction project management expertise to plan and deliver E20 effectively. The project team did not introduce design development and change processes early enough and there was a build-up of change requests after the design was supposed to be stable.
Construction of the new Front Lot was expected to cost £14.7m. In 2016, the BBC carried out a single-stage open procurement for the Front Lot but this flopped due to limited market interest. So the BBC to move to a two-stage procurement through its Building Contractor Service Framework, which cost it £2.3m and delayed the project by six months. The second procurement, in which only two bidders met the BBC’s requirements, led to Wates being awarded the contract at a cost of £24.2m, £9.5m more than budgeted.
The Public Accounts Committee says that the BBC’s cost consultants were unable to validate £3.1m of the costs that were included in the final contract and concluded that limited market interest was likely to have inflated prices. In addition, the BBC's contract negotiations with Wates took six months longer than planned, partly because of discussions about what bricks to use for the set.
“The commercial problems the BBC has encountered on this project demonstrate its ineffective sourcing and negotiating approach, which may have implications for other contracts,” the MPs’report says.
Committee chair Meg Hillier MP said: “The BBC made fundamental mistakes in planning and delivering E20, at significant extra cost to licence fee payers. The apparent complacency with which the BBC approached the project is entirely at odds with EastEnders’ strategic importance to the corporation.
“It was a serious error at the outset not to consider exactly what skills would be needed to see E20 through. The resulting shortfall in key expertise set the tone for much of what followed.
“The revised completion date for E20 is still more than four years away and, as work continues, the BBC must demonstrate it now has a firm grip on the project’s costs and progress.”
The full report, Renewing the EastEnders set, is available at publications.parliament.uk