Good money after bad: BBC wastes £100m on digital archive

The Digital Media Initiative, which was intended to create a production system linked to the corporation’s vast broadcasting archive, has cost £98.4 million since it started in 2008.

Director-general Tony Hall said: “The DMI project has wasted a huge amount of licence fee payers’ money and I saw no reason to allow that to continue which is why I have closed it.

“I have serious concerns about how we managed this project and the review that has been set up is designed to find out what went wrong and what lessons can be learned.

“Ambitious technology projects like this always carry a risk of failure, it does not mean we should not attempt them but we have a responsibility to keep them under much greater control than we did here.”

The corporation’s chief technology officer John Linwood, who earns £280,000 a year, has been suspended on full pay pending the outcome of the BBC’s investigation.

BBC Trust member Anthony Fry said the project had “generated little or no assets” for the corporation.

In a letter to Margaret Hodge MP, who chairs the Public Accounts Committee which investigated the project, he said: “This is because much of the software and hardware which has been developed could only be used by the BBC if the project were completed, a course of action which, due to technological difficulties and changes to business needs, would be, I fear, equivalent to throwing good money after bad.”

He said accountancy firm PricewaterhouseCoopers would carry out an external review “to establish what went wrong” and said the trust wanted “to understand how the reporting to the executive board, its audit committee, and the finance committee of the trust appears to have failed to give any true picture of the extent of the problems with this project until late 2012”.

The contract to develop the project was initially given to Siemens but later cancelled and taken back in house when it was not delivered on time.

Matthew Sinclair, chief executive of the TaxPayers’ Alliance, said: “The BBC has squandered an exceptional amount of licence fee payers’ money on this doomed project. The DMI scheme has been beset by problems from the start while value for money appears to have been of only fleeting concern to those in charge. It’s all very well saying that actions will be taken to ensure this can’t happen again but that doesn’t excuse or explain how this incredible waste of money has come to pass in the first place.”