By Andy McCue, 1 October 2004 12:30
NEWS The BBC has today completed the sell-off of its technology arm to German IT firm Siemens as part of a £1.9bn 10-year outsourcing deal - as exclusively revealed on silicon.com last month.
The move will see around 1,400 BBC staff will transfer to Siemens and the BBC said it expects to save £30m a year over the life of the contract.
Siemens will take over the running of the BBC's commercial IT unit BBC Technology but the publicly disclosed value of the deal only includes the services it will sell back to the Beeb and not the price it paid to acquire the unit.
BBC Technology will be also be renamed Siemens Business Services Media Holdings.
The sell-off has been the subject of strong opposition from staff and broadcasting union Bectu, and strike action that would have hit the Corporation's Olympics coverage was only narrowly averted on a legal technicality.
The deal finally got the go-ahead this week with the approval of the UK government's Culture, Media and Sport minister, Tessa Jowell.
John Smith, COO at the BBC, said in a statement: "The value and substantial savings created from the sale of BBC Technology and this procurement of our technology services is a significant step for us in ensuring the BBC is fit for the future and continues to create innovative programmes.”
But Bectu is still opposed to the deal despite achieving some concessions for the transferred staff. Gerry Morrissey, Bectu's Assistant General Secretary condemned the move as a short-term tactic to raise desperately needed cash, which could rebound dangerously in the future.
"This decision will come as a blow to our members in BBC Technology who have opposed this sell-off since it was first proposed. Despite the protection we have won for their terms and conditions after the sale, it could turn out to be bad news for some of them once jobs start to go, and it's certainly not good for the BBC in the long term," he said in a statement. "This isn't just the BBC selling off one of its 'Crown Jewels', it's a case of handing its central nervous system over to the private sector."
Comments
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1. Gary Thompson
Having been involved in a number of medium sized outsource deals (upwards of $100 million) through procurement and subsequent management, I think that the BBC will end up paying out more on managing the outsource agreement than the 30Million a year it is proposing to save, but no doubt will 'lose' these figures in creative accounting.
Many workers will have joined the BBC because it is the BBC. If they wanted to work for Siemens, I'm sure they would have applied for jobs there. Any loyalty that these people have will now be badly dented, and I'm sure no small number will move on to other jobs, taking with them some of the BBC's most important assests ( i.e. how to get things done in the BBC).
Once the new agreement gets bedded in , I look forward to the board answering questions on spiralling costs, as they don't own any of their equipment anymore and Siemens will charge back what they want. (a bigger gravy train than being a politician)
Personally, I'm not happy at seeing my PUBLIC broadcast license fee (a legal requirement if I want to watch a television) handed back wholesale to the PRIVATE sector, but once again it seems the bean counters and the government only have eyes for the next 6 months. So, What can we do ? nothing, we just have to keep paying for it...
2. anonymous
It's about time that the BBC got a much needed dose of commercial reality, for too long they have been immune to normal market pressures, most particulary the technical staff.
This will save the BBC millions, and siemens will also sell the BBc technology worldwide (assuming of course that anyone wants it..!).
I expect to see a significant improvement in program quality now they can stop playing at being a technology services provider, which was always way outside their remit.
3. Josephine Bacon
As has been pointed out, this is a poisoned chalice for the future, but Smith and all the other fat cats don't care, because they will have retired on large pensions before the you-know-what hits the fan. Tessa Jowell ought to be ashamed of herself for allowing it.