4 Learning lessons to improve value
24. Identifying and applying lessons from previous
experience can improve value for money. The BBC's track record,
however, suggests that lesson learning is more opportunistic than
structured and culturally embedded.
25. We were pleased to see from our recent examination
of the BBC's three major estates projects, that the BBC had applied
lessons from phase 1 of the Broadcasting House project
to phase 2, and to the Pacific Quay and Salford Quay projects.
The BBC also, over the lifetime of these three projects, improved
the way it identified and recorded lessons learnt. For example,
it prepared a postproject implementation review for
the Pacific Quay project which identified good practice and areas
for improvement when managing future estates projects. In addition,
the BBC had introduced arrangements for sharing lessons between
26. Lesson learning has been less evident in other
areas of the BBC's work. The Comptroller and Auditor General's report
on the BBC's management of its strategic contracts showed
that the BBC's Strategic Relationships Board was little more
than a talking shop, and that the lack of executive authority
meant it was unable to enforce compliance with minimum standards
in contract management. The report also showed that while the
BBC's approach to supplier relationship management was above average
compared with other organisations, the engagement of senior managers
varied, as did the extent to which the BBC and the supplier had
a shared understanding of the status of the relationship. The
latter point was a particular difficulty in the case of the BBC's
largest strategic contract, the £230 million spent annually
27. In June 2007, we recommended that the BBC ensure
that contractors' profits were not excessive through the robust
enforcement of the 'open book' terms of its contract with Siemens.
However in 2009, the Comptroller and Auditor General reported
that the BBC had failed to utilise its 'open book' provisions
across four of the five strategic contracts he examined.
28. In looking to challenge the cost of programmes,
the BBC has made limited use of the information available to it.
The BBC's reviews of its coverage of major events lacked coherence
as they did not bring together a review of the cost and quality
of the coverage and of the management of the coverage, in one
place. The impact of the reviews was further weakened by the absence
of criteria for measuring success and the irregular frequency
of the reviews. Internally,
the BBC did not use the results of a report it commissioned into
the cost of similar radio programmes to identify possible savings.
Nor has it benchmarked internally the different cost elements
of its coverage of major sporting and music events.
29. Comparisons with rival programme makers can also
be helpful, although we recognise that commercial sensitivities
can make that difficult. However, in response to our report on
the efficiency of its radio production, the BBC committed to work
with the commercial radio sector to develop a suitable benchmarking
process and for radio production and major events it has acknowledged
the need to take a more systematic approach to cost comparisons.
30. The BBC recently established a panBBC Programme
Management Office to support its programme and project management
capabilities. The Office offers guidance and bespoke support to
specific programmes, and looks to spread good practice. The early
focus of the Office's work is on the BBC's strategic priorities.
Over time, the work of the Office could usefully cover, say, production
as a way of ensuring good practice is applied as widely as possible.
31. Elsewhere, the BBC faces and needs to manage
a variety of risks, ranging from the reputational risk of its
programmes to the health and safety risk of those working overseas.
Using external guidance, such as that provided by HM Treasury,
could help the BBC. For example, contrary to Treasury guidance,
the BBC had not aligned its main themes for risk management with
its corporate objectives, and had not assigned all risks to named
owners. In addition, many BBC risk managers (29%) had never looked
at the BBC's guidance.
32 C&AG's Report, The BBC's management
of three major estates projects, February 2010, para 2.33
and 2.34; Qq 196 and 197 Back
C&AG's Report, The BBC's management of strategic contracts
with the private sector, March 2009, paras 46 and 64 Back
Qq 9 and 33 Back
C&AG's Report, The efficiency of radio production
at the BBC, February 2009, para 55 Back
Q 97 Back
C&AG's Report, BBC's management of its coverage
of major music and sporting events, December 2009, para 58
Committee of Public Accounts, Sixtysixth Report
of Session 200607, The BBC's management of
risk, HC 643, paras 3, 4 and 11 Back