House of Commons - Public Accounts - Twenty-Eighth Report

Select Committee on Public Accounts Twenty-Eighth Report

1 The organisation and delivery of digital switchover

1. Digital switchover is a major government objective. It involves the conversion of more than 1,100 television transmitters to make public service broadcasting available to 25 million households in digital form by 2012. As the new digital network is introduced, analogue television signals will be switched off, region by region, starting in 2008.The Government's policy goals are to:

provide near universal access to digital versions of the public service channels by extending the coverage of digital terrestrial television to 98.5% of UK households;
provide consumers with sufficient notice of switchover and a reliable source of information about the options; and
protect the interests of those people they expect to have the most difficulty with switchover.[2]

2. The Department for Culture, Media, and Sport and the Department for Business, Enterprise and Regulatory Reform (the Departments) are jointly responsible for switchover policy. They are not, however, directly funding or contracting for any of the principal activities on which the delivery of switchover depends. There is also no single organisation which has overall accountability for the value for money of the switchover programme.

3. The Departments passed to the BBC the responsibility for funding a public information campaign and delivering a help scheme to assist vulnerable groups to switch to digital. The BBC is accountable to the BBC Trust for expenditure on the government-designed switchover help scheme. The BBC is also responsible for funding the public information campaign. Digital UK Limited, a private not-for-profit company set up by the broadcasters at Government's request, is responsible for running the information campaign. Digital UK is accountable only to its shareholders, not the BBC Trust or the Departments. The commercial public service broadcasters are accountable to Ofcom for meeting switchover obligations set out in their licences.[3]

4. The complexity of the delivery arrangements poses inherent risks to achieving the Departments' switchover objectives, but the Departments argued that the arrangements were working well. Successful and co-operative relations had also been established with the relevant stakeholders such as Digital UK and Ofcom. To further demonstrate the effectiveness of their approach, the Departments pointed to national take-up of digital television having exceeded their expectations, and a successful procurement of the help scheme in Copeland in Cumbria, the first area to switch to digital.[4]

5. The Departments had not contracted directly for core switchover deliveries, such as the help scheme, which the BBC had passed on to another contractor, eaga Plc, because they did not have the direct experience of managing a procurement of that sort and scale. They had therefore chosen to use an existing delivery mechanism, the BBC, rather than creating a new one.[5]

6. The Departments decided to fund the help scheme and information campaign through the licence fee settlement. This decision removed the £803 million to deliver its switchover policy from the normal parliamentary supply process and the statutory arrangements for scrutiny of public expenditure. The Departments told us that funding switchover in this way had not weakened monetary control or Parliamentary scrutiny. This was because expenditure of these funds falls within the scope of existing arrangements for scrutiny of, and accountability for, the BBC's use of licence fee income. These arrangements rely on the BBC Trust holding the BBC Executive to account for achieving value for money from its use of public money. However, these arrangements do not provide for independent reporting by the Comptroller and Auditor General to Parliament on the BBC's expenditure on switchover activities. The BBC Trust retains the final decision on what subjects the Comptroller and Auditor General examines as part of its value for money programme.[6]

7. The programme for converting over 1,100 transmitters is largely on track, although some of the time contingency has been used up due to the bad weather in the summer of 2007. Contingency in the timetable for converting the main transmitter serving three million households in the Granada Region has already been used up. The witnesses told us, however, that they were confident that the conversion timetable remained on track and that plans were in place to mitigate the impact of delays in Granada.[7]



© Parliamentary copyright 2008	Prepared 26 June 2008