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Failed ICT upgrade hindered BBC licence fee collections

02/02/17

NAO report says that collection rates are up but so are evasion rates – and calls for a renewal of efforts to improve systems

Failures in upgrading the relevant ICT systems have contributed to a poor performance in reducing evasion of the TV licence to fund the BBC, the National Audit Office (NAO) has said.

TV screen in loungeIts report on the issue says the public service broadcaster has done well in collecting the licence fee and reduced the relevant costs under a contract with Capita, but that its efforts to reduce evasion have been less successful.

The estimated evasion rate is between 6.2% and 7.2%, up from 5-6% between 2010-15 and moving away from the target of 3.95% by 2020.

One of the major shortcomings has been in the programme to modernise data and technology systems, which failed to update the legacy ICT by the target date of July 2016 and has now been stopped. As a result, the processes currently require more resources than they should, notably in understanding customer behaviour and realising efficiencies.

The programme has provided some improvements, such as an update of the TV Licensing website and handheld units for field staff; but it is an indication of the problems that the BBC has paid Capita only £22.9 million from the budget of £50.7 million for the work.

Need for timeframe

One of the NAO’s recommendations is that the BBC should clarify how it will upgrade its ICT systems and over what timeframe. This should take into account of lessons from previous attempts to upgrade the structure of its core database.

The BBC response, which is included in the report, says it is carrying out a review of how to upgrade the systems that it expects to complete this year. It also attributes the increase in the evasion rate largely to changes in the methodology used to calculate the number of households that have a TV.

The organisation has also been sufficiently confident of its contract with Capita to have said it has involved elements of best practice, and that it has been extended for two years to 2022.

Overall, TV licence fee revenue has increased every year since 2010-11, from £3.51 billion to £3.74 billion in 2015-16 - in spite of the cost being frozen since 2010. Meanwhile, the cost of collection has fallen by 25% in real terms to £99.6 million.

Nick Prettejohn, chair of the BBC Trust’s Value for Money Committee, said: “There is more that can be done to make further improvements and deliver better value for money for the public, including in tackling the small minority who try to avoid paying the licence fee and setting realistic targets on licence fee evasion. The new BBC Board should closely monitor the BBC’s performance as it implements the National Audit Office’s recommendations.”

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