Image: BBC
A National Audit Office (NAO) report has criticised the BBC for its procurement of a replacement set for soap opera EastEnders, which is forecast to be £27m over budget and up to two and a half years late.
The BBC’s E20 programme involves the replacement and enlargement of the external EastEnders set, as well as the improvement of infrastructure at the broadcasters Elstree Centre.
But it is expected to cost £86.7m – 45% more than the original budget – and will miss the planned 2020 delivery date.
The BBC built the external filming set for EastEnders (including the famous ‘Albert Square’) in 1984. Originally it was envisaged that the set would last for two years but it has now been in use for 34 years and is no longer fit for purpose.
In 2013, the BBC proposed building a temporary set while it constructed a new permanent facility. It expected the E20 programme to cost £59.7m and be completed by August 2018 but revised its plans in 2015, moving its target completion date to October 2020.
But in October 2017, the BBC reported internally that its revised plans were no longer achievable due to forecast delays and cost increases.
Wates appointed
Most of the increases relate to the higher cost of the Front Lot, which the BBC now estimates will cost £54.7m – £23.5m (75%) more than planned. In September 2018, Wates was appointed by the to carry out the work at a fixed price of £24.2m.
The deal came following negotiation and clarification around the Front Lot construction contract, including the type and supply of bricks required, and costs £9.5m more than the BBC budgeted in October 2015. The BBC expects the Front Lot to be completed at the end of March 2021, 22 months later than originally planned.
Meanwhile, the E20 project as a whole is due for completion in May 2023 – 31 months later than envisaged in its 2015 plans.
The NAO found that delays stem primarily from procurement delays, because “limited market interest” resulted in the BBC revising its approach. Subsequent contract negotiations took longer than planned, and the BBC was also forced to make more realistic assumptions about the time needed to age the newly-built Lots.
By the end of September 2018, the BBC had spent £28.2 million and completed various elements of E20, though much of this work has cost more and taken longer than planned, the NAO said. In October 2018, the BBC began constructing the Front Lot, the most challenging part of E20, and the Back Lot was at an early design stage.
Because work is ongoing, the NAO said it is not yet possible to determine the value for money of the latest programme plan. It added that the BBC has made “many improvements to the programme” and still expects to realise the intended benefits of E20, albeit at a later date and greater cost than originally planned.
Delays ‘could have been addressed earlier’
It concluded that some of the reasons for the delays and cost increases could have been addressed earlier by the BBC. It found that early planning processes resulted in the BBC underestimating aspects of complexity, cost and risks of its approach. There was also insufficient construction project management expertise to identify critical design issues, for example with the Front Lot.
It also concluded that while they did engage with each other, the programme team and EastEnders production (the end users of the set) were not sufficiently integrated, leading to ineffective design development and change processes.
The BBC has also faced issues such as higher-than-expected inflation in the construction sector.
And it found asbestos in a boiler house and underground obstructions on the Front Lot site. These issues, which the NAO report said were “to some extent unforeseen” by the programme team owing to poor BBC site records and limited surveying work, have cost the BBC around £1.m and delayed works by around four months.
However, some of the issues, including the existence of an underground oil tank, have been known to the BBC for several years, with Overbury, a contractor appointed by the BBC, asked to confirm the size and location of the oil tank when carrying out preliminary ground works on the Front Lot site in 2014.
Aecom advised the BBC on its risk and contingency funding levels for the 2015 business case and the BBC applied a contingency rate. But the NAO said that given the project’s complexity it have been “prudent” to have allocated more funding to cover risk and contingency from the outset.
Not value for money
Amyas Morse, the head of the NAO, said: “The BBC will not be able to deliver value for money on E20 in the way that it originally envisaged. It is surprising that some of the reasons for this were built in from the beginning. Despite recent project management improvements, E20 is late and over budget against its 2015 plans. We believe that the planned benefits are still broadly achievable, but given the high-risk nature of E20 it will need close scrutiny until it is finished.”
A spokesperson for the BBC said: "The set of EastEnders was built in 1984 and only intended for use for two years. Over thirty years later, the show remains one of the BBC’s flagship programmes and yet is filming from a set that is no longer fit for purpose. The new set will be suitable for HD filming for the first time and extend Walford to better reflect modern East End London.
"It’s a large, complex project which has already delivered many other vital improvements at BBC Elstree Centre but like any building work of this scale there have been challenges on the way, including construction market issues beyond our control and from working on a brownfield site. As the NAO recognises we’ve already made improvements and are keeping the project under close scrutiny."
Wates has been contacted for comment.
