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The NAO report, prepared at the request of the Trust, builds on previous work by the Governors and the Trust and found that the ´óÏó´«Ã½ has learned lessons from phase one of Broadcasting House, which suffered from significant cost and time overruns. The Broadcasting House project will be completed in April 2013, four years later than first planned. The project will cost £1.046 billion, £55 million more than originally approved. On top of this, delays have added a further £52 million of costs.

The report acknowledges that the ´óÏó´«Ã½ has since improved the management of the three projects examined, which have a total budget of £2 billion, although there is room for further improvement. The report concluded that the ´óÏó´«Ã½ did not set out a clear assessment of the intended benefits for the projects at the outset, meaning it is not well placed to demonstrate value for money.

Alongside its acknowledgement of the progress in improving project management processes made by the ´óÏó´«Ã½ to date, the NAO has made a number of recommendations to bring the ´óÏó´«Ã½'s processes into line with good practice. These include:

business cases should at a minimum contain a detailed assessment of costs, delivery timetable, measurable expected benefits and a quantified assessment of the risks and opportunities before the ´óÏó´«Ã½ Trust approves investment;

the Executive should assess the skills needed for each project from the outset and match this against the skills available in the organisation to identify gaps; and

financial contingency should be calculated on the basis of an assessment of the cost and probability of known risks. This contingency should be released only when it is needed to deliver the approved scope of the project.

Jeremy Peat, ´óÏó´«Ã½ Trustee said:

"The Trust takes its responsibility for ensuring the ´óÏó´«Ã½ achieves value for money on behalf of licence fee payers extremely seriously, and we are supportive of the Executive's plans to modernise the ´óÏó´«Ã½'s facilities. Since its inception, the Trust has put pressure on the Executive to improve its project management processes, particularly in relation to the estates projects. Having identified the problems with Broadcasting House phase one and taken steps to remedy these, we then sought external examination of the ´óÏó´«Ã½'s changes. We asked the NAO to carry out this process, and we thank them for the analysis and recommendations within their report.

"Serious mistakes were made in the first phase of the Broadcasting House project. Licence fee payers were let down, and the Trust regrets this. The Governors took steps to get the issue under control and then the Trust, when it was formed in 2007, continued their energetic oversight. We are reassured that this report shows lessons learned have been applied in the second phase of Broadcasting House, Salford and Pacific Quays. But there is still considerable room for improvement, and consequently we will follow up the NAO's recommendations vigorously and as a matter of urgency.

"The Chairman has today written to the Director-General asking for his plans in response to the NAO's recommendations, and requesting a health check of all major projects currently being run by the ´óÏó´«Ã½ without delay. The Trust expects the Director-General to report his findings to the Trust next month."

Amyas Morse, head of the National Audit Office, said:

"The ´óÏó´«Ã½ let the Broadcasting House project run into serious difficulties before the Governors and then the Trust took action and the result is a four year delay and a cost overrun of £100 million.

"The establishment of a Programme Management Office in 2009 is a welcome development, but the ´óÏó´«Ã½ must take on board fully the lessons from its difficulties with Broadcasting House. For future major projects, the ´óÏó´«Ã½ needs to make sure that: investment decisions are based on a full assessment of the scope and cost of the project; there are clear baselines so that performance can be measured and project teams held to account; and proposals submitted by management are reliable and subject to effective challenge by the ´óÏó´«Ã½ Trust."

Ends.

Notes to editors

The Trust's responsibility for value for money at the ´óÏó´«Ã½

It is the responsibility of the ´óÏó´«Ã½ Trust, under the Royal Charter, to ensure that value for money is achieved by the ´óÏó´«Ã½ through its spending of the licence fee. In order to fulfil this responsibility, the Trust commissions and publishes a series of independent value for money reviews each year in consultation with the Comptroller and Auditor General – the head of the NAO. The reviews are undertaken by the NAO or other external agencies.

The Trust commissioned this report to scrutinise how the ´óÏó´«Ã½ Executive implemented a series of changes to the project management processes of the three projects, following the identification by the Governors of some significant failings in the first phase of the Broadcasting House refurbishment between 2003 and 2006. The NAO was also asked to look at how the ´óÏó´«Ã½ has applied the lessons learnt from these failings in the second phase of Broadcasting House, as well as the Pacific Quay and Salford Quays projects.

The Trust picked up the oversight of all three estates projects from its predecessors, the Governors, when it was formed in January 2007. The ´óÏó´«Ã½ realised in 2003 that the phase one of the Broadcasting House project was at serious risk, and at that point actions were taken to rectify the situation, including appointing a new project team. Following this, the Governors brought in consultants Ernst & Young to examine the contract for, and delivery of, the first phase of Broadcasting House. Ernst & Young's report was delivered in May 2006 and was shared with the NAO. Shortly afterwards, the Governors also agreed the Executive's proposal for a 30 per cent increase in building size for the Pacific Quay project, following a decision to produce more programming in Scotland (July 2006).

More on the NAO

The Comptroller and Auditor General, Amyas Morse, is the head of the National Audit Office which employs some 900 staff. He and the NAO are totally independent of Government. He certifies the accounts of all Government departments and a wide range of other public sector bodies; and he has statutory authority to report to Parliament on the economy, efficiency and effectiveness with which departments and other bodies have used their resources.