House of Commons Public Accounts Committee BBC Digital Media Initiative Written Evidence Only those submissions written specifically for the Committee and accepted by the Committee as evidence for the BBC Digital Media Initiative inquiry are included. List of written evidence • Bill Garrett, former Head of Technology, BBC Vision Productions. • John Linwood, former Chief Technology Officer, BBC BBC’s management of its Digital Media Initiative Written Evidence – William Peter Garrett - “Bill Garrett” In summary of my submission to the committee;- • I find it difficult not to conclude that the National Audit Office was mislead during their previous 2010/11 investigation specifically with reference to the progress of DMI after the project was brought in-house by the BBC. [paragraph 16, 17] • I consider evidence given by the corporation to the committee hearing of the 15th February 2011 misleading and did not portray the true performance of the DMI project. [paragraph 21, appendix 090] • I believe the revised investment case (sometimes referred to as the “benefits case” or “business case”) of April/May 2010 which sought funds to continue DMI’s development in-house was a fundamentally flawed proposition consequently placing public funds at significant risk. I believe a number of staff knowingly falsified estimates of financial benefits to ensure case approval. [paragraph 8,9,10, appendix 040,042] • I raised concerns about various aspects of DMI in 2010 and again in 2012. [paragraph 5,6,7,14,16 appendix 024,031,084] • By virtue of its narrow remit I believe the PwC investigation has not been permitted to fully answer the fundamental question “What went wrong?” • I have provided additional documents as evidence to support assertions within this statement (attached as an appendix). As the culture surrounding DMI and the behaviours of individuals involved are key to understanding the events which I believe lead to the failure of the project this written evidence is provided in the form of a narrative witness statement. Introduction 1. From 2006 to 2010 I was Head of Technology BBC Vision Productions, a department of the BBC sometimes referred to as the corporation’s television programme making arm. Prior to 2006 I was an investigative journalist for the BBC working in business programming, I specialised in commercial misconduct, corporate finance and technology transformation. I am a professional engineer with significant experience in the broadcast industry. I am the author of the letter to Lord Patten of Barnes – Chairman of the BBC in May 2012 in which I raised a number of concerns about the corporation’s management of its Digital Media Initiative. 2. In January 2007 I had interaction with a team of BBC staff and hired consultants from Siemens and Deloitte as they prepared a proposal for DMI. This initiated a work stream of consultation with the production divisions of the corporation, effectively a requirements gathering exercise. It indicated the need for a "work in progress" asset management system for TV production and a digital "archive" for completed master recordings. The subsequent requirements document formed part of a business case for DMI submitted to the Director General’s Finance Committee in Q2 calendar year 2007. 3. Throughout the following two year period I had regular contact with the DMI team during their attempts to deliver a working system within the Siemens delivery contract. I represented the interests of the production communities and regularly liaised between senior production figures and DMI management. Within a year it became obvious that DMI was in significant difficulty as it continued to miss delivery commitments. By the end of 2008 the credibility of the project was very low and it became increasingly challenging to explain its failings to senior production figures who relied on my technical understanding. By early 2009 I was aware that problems with the project were causing tensions between the corporation and its technology partner Siemens. Siemens contract terminated 4. In the autumn of 2009 in a conversation with a senior technology manager who reported to John Linwood, I describe the decision to tear up the contract with Siemens as a "reckless act" adding "They (DMI team) will probably never be able to deliver the project now". I qualify my comments indicating that a key technical challenge and therefore risk for DMI was the capability of the BBC's computer network to support the system. I indicated that as Siemens operated and managed this network for the BBC, Siemens had effectively underwritten this risk by also being the contractor who had committed to deliver DMI. By tearing up the contract and bringing the project "in-House" the BBC took on this risk. The individual indicated that he understood this "dynamic". 5. In January 2010 I am asked to provide my subject matter expertise for a newly prepared benefits case for DMI. During a meeting I raise a question whether taking specific component parts of the DMI technology in isolation could more effectively deliver benefits. I highlight that this approach could also reduce project delivery risks by focusing in on one or two components. It was agreed between myself and a senior finance manager in BBC Vision that I should seek to interview the delivery leads of DMI to ascertain whether this would be an opportunity. It was also suggested that I raise some additional questions. 6. In the following days I meet with some members of the DMI leadership team for a Q & A session. I conduct the interview and take notes indicating that I will provide a copy of the notes back to the interviewees so they have an opportunity to moderate the recorded responses. Although the meeting is cordial and friendly I detect a note of frustration towards some of my latter questions particularly where finances of the project are questioned. Specifically one of the team becomes animated when I raise questions about DMI funding for the Salford Quays project (sometimes referred to as “Project North”/“North”), he indicates that the questions "were not for this forum". [page 024-026] 7. I send my notes and the moderated responses to senior staff of the Vision and Technology divisions setting out a number of my concerns. As these responses had been moderated by the DMI team I considered these to be an accurate reflection of their view. I felt the clarity of the responses were not of a standard that informed me satisfactorily about the future DMI proposition. They raised many questions about the funding for DMI specifically wrt to Project North where there appeared to be a significant gap in operational expenses, additionally a critical risk associated with the BBC’s computer network had not been mitigated or addressed. During various discussions with fellow senior colleagues within Vision Productions and Children's television I repeated my concerns that the finances for the project looked unclear and that I believed there to be a significant number of questions around the technology yet to be resolved. [page 024, 031-034] Preparation of the 2010 revised Benefits Case 8. I am invited to take part in a meeting to further address the benefits case for DMI. The proposed meeting is organised to consider a new benefit line item – “cost avoidance”. At the meeting we discuss what costs production divisions would be exposed to if DMI did not go ahead. These consisted of estimated costs of standalone data storage systems and their associated support costs, these have subsequently been labelled “digital islands”. Myself and executives from the relevant production divisions did some rough estimates of costs, our calculations totalled approximately £7 Million for the project lifespan. All agreed that these numbers were based on rough workings however some rationale had been applied. The meeting concluded with these cost avoidance figures being the only numbers discussed during the two hour session. 9. The following day I am forwarded an email, it is a copy of a summary briefing of the cost avoidance meeting [page 040,042]. Despite the importance of the email and that it requested feedback I had not received this directly. It was provided to me by one of the production staff who also attended the meeting and who wished to draw my attention to it. Attached was a spread sheet which purported to be a recording of the figures discussed, however there were three further columns detailing additional cost avoidance figures I had not previously seen (marked as columns A, B and C in appendix document 042). These additional columns totalled £8.4Million. Although the sheet indicated that these figures had been produced based on information gathered during the meeting, these columns had not featured in our discussions. I became concerned about the veracity of these numbers as I had not had opportunity to clarify them nor was I aware that any of my production colleagues had had a similar opportunity. One of the cost items was "Datacentre & Storage Management costs" and equalled £3 Million. This line item alone defied reason as this cost would only occur if DMI went ahead, not a cost avoided if it didn’t. It is my belief that the reason I was not recorded as having attended this meeting or been on the original distribution list of the email and summary document was because the authors would have known I would consider the additional £8.4Million unjustified. In looking at these costs it was clear to me that the numbers had simply been made up. 10. Sometime later in February 2010 I have a brief meeting with a Vision Productions finance colleague. They wished to clarify their understanding of some of the benefits and cost avoidance of DMI. I detect an element of concern in their own view and they show me a document which I believe to have been a section of the revised business case.