Source · Select Committees · Public Accounts Committee
Recommendation 14
14
Accepted in Part
BBC's delayed adoption of milestone payments and Capita's lack of sales incentives.
Conclusion
To address these challenges, the BBC escalated issues directly with Capita’s CEO and co-located supply-chain technologists to improve coordination. The BBC told us it switched to payment by milestone part- way through the programme, after delays had already occurred, and acknowledged that it should have adopted this approach from the outset. When we asked about wider adoption of milestone-based payments, the BBC agreed that it had learned a lesson but had not applied this learning to other contracts. The BBC told us that Capita was not incentivised to increase sales and reduce evasion. It said that it tied Capita’s performance to customer-service SLAs and closely tracked customer satisfaction.26 25 Q 27 26 Qq 27-29 10 2 Growing commercial returns Investment and returns in commercial activities
Government Response Summary
Lessons learned from the Capita contract are shared across TVL and the wider BBC through a joined up strategic approach to procurement and contract management, but the BBC does not believe that incentives on income or evasion reduction would be appropriate.
Government Response
Accepted in Part
HM Government
Accepted in Part
2.17 The BBC partially agrees with the recommendation. 2.18 Lessons learned from the Capita contract are shared across TVL and the wider BBC through a joined up strategic approach to procurement and contract management. 2.19 The main Capita contract delivers well on service levels for TVL, and a regime of continuous improvement is in place across the range of services. 2.20 The IT upgrade element of the contract has experienced delays, leading to the project being rated as a red risk. However, the contract provided for escalation to executives of the respective companies, and this occurred regularly over the last year. The NAO report stated, ‘the BBC has continued to monitor Capita’s IT upgrade work closely and to renegotiate payment schedules based on delivery of contracted commitments.’ As part of milestone payments there is a detailed set of acceptance criteria that are agreed and closely monitored. 2.21 As the upgrade programme progresses and other work is carried out; payment is on delivery and there is strong governance and oversight. External expertise is brought in where helpful to setting milestones to incentivise delivery. 2.22 Other contracts include payment based on success measures, also related to deliverables of projects and programmes of work. 2.23 However, the BBC does not believe that incentives on income or evasion reduction would be appropriate. Past contracts where this has been the case have led to concerns about fairness and proportionality of collection.