BBC wastes £7m on abandoned licence fee project

The BBC said it had halted the project because it needed to concentrate on charging over-75s

The BBC spent £11 million on a plan to modernise its licence fee demand system, only to abandon it after nine months.

The corporation put the upgrade out to tender in 2017, saying that the old system for storing addresses and mailing out letters was too antiquated.

Work began on the £46 million “technology refresh” in March 2019, but was halted in December because the BBC said resources should be devoted to implementing the over-75s policy instead.

Of the £11 million spent - equivalent to 77,000 licence fees - £4 million was “repurposed”and the remaining £7 million was wasted. The corporation admitted that it must now find an extra £3-5 million to keep the old system up and running.

Details of the failed project were contained in the annual TV Licensing report, released this week alongside the BBC’s annual report.

The modernisation plan covered Data Management Services, which store the names and addresses of UK households, and the Campaign Management System, which sends out “marketing” material - TV Licensing’s term for licence fee reminders and demands.

Tim Davie, the director-general, said that work started in 2019. “However, progress on the programme stalled because of the need for key resources to support the programme of changes for the new over-75 policy which took priority.

“Due to delays and increased costs the BBC decided to cancel the Modernisation programme at a cost of £7 million and work is now underway to extend the life of the existing systems.”

The wasted money adds to the cost of the over-75s scheme. In the report, the BBC said it expects evasion rates to rise in the next year as pensioners are asked to pay.

While most over-75s “will want to comply with the legal obligation to pay for a licence fee, vulnerable customers may struggle to pay for financial or health reasons and may become unwitting evaders”, the report said.

The BBC is spending £38 million on implementing the over-75s scheme this year, including the opening of a dedicated call centre.

The call centre was temporarily closed during lockdown and the report stated: “Although the centre is now operational again, due to social distancing requirements there is less physical space available to accommodate staff, and over-75s transactions are therefore being handled across a number of locations.”

Deferral of the launch from April to October, in response to the covid crisis, will increase implementation costs by an unknown amount, the report added.

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