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Budget-busting EastEnders job ‘flawed from the start’

20 March 2019 | By Neil Gerrard

The procurement of a new external set for BBC soap opera EastEnders which will be completed nearly five years late and £27m over budget was “flawed from the start”, MPs have concluded.

The BBC underestimated both the scale and complexity of the E20 set, according to the Public Accounts Committee, and suffered from “fundamental project management failures”.

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. In October 2017, the BBC reported internally that its revised plans were no longer achievable due to forecast delays and cost increases.

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 to carry out the work at a fixed price of £24.2m. It is now due to complete in 2023.

A recent report from the National Audit Office criticised the BBC for its procurement of its project.

Cause of cost escalation

Now the Public Accounts Committee has added to that criticism.

MPs found that costs had risen due to inflation in the construction industry, and that the BBC failed to get the right construction project management skills in place from the outset of the project.

The Public Accounts Committee said: “One of the impacts of this was that the project team did not introduce design development and change processes early enough. After the 2015 project business case had been approved, it took over a year for a design change process to be agreed between the E20 programme and EastEnders production teams. This led to a build-up of change requests after the design was supposed to be stable. This issue was exacerbated by the project and production teams failing to work together effectively in the early stages of E20.”

It also concluded that the BBC initially failed to allocate enough money to manage risks and contingencies. It has encountered problems including asbestos and obstructions in the ground, which have, to date, cost the BBC around £1.8m and delayed works by around four months. Under its latest plans, the BBC has “substantially increased” its risk and contingency budget.

The Committee has called for the BBC to update it annually on progress of the construction from October 2019, demonstrating how it has learned lessons from previous failings and whether its revised risk and contingency budget has been adequate.

It has also recommended that the BBC develops processes to make sure the right skills are in place from the outset for all of its critical projects and to update the Committee on its progress, as well as providing evidence of how it ensures best practice in procurement and contract management across its contracts – for E20 and other contracts.

Fundamental mistakes

Its chair, Labour MP Meg Hillier, 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.”

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