Outsourcing deal uncertain as BBC finance revamp stalls

The BBC’s controversial plan to contract out its 700-strong finance department to Coopers & Lybrand and US computer services giant EDS has hit the buffers following a dispute over pension and redundancy payments.

Accountancy Age also understands that a scheme to develop a corporation-wide financial accounts systems, based on SAP’s R/3 software as part of the # 50m-plus project, is struggling to meet budget limits.

The BBC admitted the disputes had caused delays and could spell the end for the project – the Management Information Direct at Source (Midas).

‘There is no final decision that either Coopers will get the project or that the BBC will outsource at all,’ said a spokeswoman.

If the deal is abandoned, it will be an embarrassing blow for the BBC’s head of finance and information technology, Rodney Baker-Bates, who wanted to sign a deal this month when he sent out tender documents in February.

A spokeswoman said it would now be unable to sign a deal before the end of November at the earliest.

At the moment, the BBC is running four separate financial accounting systems and spending 2%, or # 40m, on collecting financial data. A report last year by management consultants McKinsey is understood to have said the corporation had inadequate financial controls and needed to migrate to a central system.

The Midas project gained notoriety in April when Andersen Consulting, Deloitte & Touche and IBM withdrew from the race amid accusations that the BBC had set stringent requirements which left little room for firms to make a profit.

BECTU, the broadcast union which represents most of the staff affected, said it was scheduled to meet BBC executives over the coming weeks to discuss the move. Spokesman Gerry Morris said the issue of pension payments would be at the top of the agenda for discussion. He added that more than 100 redundancies were expected if the 10-year deal went ahead.