Siemens subsidiary Siemens Business Services has signed a 2.7 billion Euro, 10.5-year contract to deliver technology services to the BBC on a global basis.
As part of the deal, Siemens has acquired BBC Technology, a commercial subsidiary of the Corporation that employs around 1,400 staff, and will re-name it Siemens Business Services Media Holdings Ltd.
Siemens will run and maintain BBC’s IT infrastructure including among others: networks, servers, desktops, telephones, broadcast system and the internet site www.bbc.co.uk. Siemens will also provide IT consulting.
The news comes less than two weeks after a deputation of BECTU (Broadcasting Entertainment Cinematograph and Theatre Union) representatives briefed Culture Minister Tessa Jowell on a range of problems that the sale could cause, including the impact on 1400 staff employed by BBC Technology.
Gerry Morrissey, BECTU’s Assistant General Secretary, said: “This decision will come as a blow to our members in BBC Technology who have opposed this sell-off since it was first proposed. Despite the protection we have won for their terms and conditions after the sale, it could turn out to be bad news for some of them once jobs start to go, and it’s certainly not good for the BBC in the long term”.
“This isn’t just the BBC selling off one of its ‘Crown Jewels’, it’s a case of handing its central nervous system over to the private sector”, he said. BBC Technology is responsible for the Corporation’s entire IT network, most of its broadcast-critical engineering systems, and its main telephone switchboard.
Since the sale was announced last November, BECTU has campaigned against the principle of privatisation, with the full support of members in the company who recently rejected the sell-off by nearly twenty to one in a postal ballot.
The BBC has justified the move on the grounds that selling the company off will immediately raise more than £100m when Siemens pays for its shares, and should yield a guaranteed saving of £30m a year on the Corporation’s £200m technology bill.
However, BECTU has condemned the sale as a short-term manoeuvre to raise desperately-needed cash, which will rebound with serious consequences over the life of the ten-year exclusive contract that Siemens has been given.
According to the union, the BBC Technology sale will not save as much money as promised, just like most outsourcing exercises, and many of the BBC’s plans for a digital future will be frustrated by the involvement of a profit-lead technology provider, instead of an in-house subsidiary.
Managers have also been accused of “exporting a redundancy problem” by BECTU. Both the BBC and Siemens accept that job losses are inevitable some time after the sell-off, and the union has complained that it was not allowed to discuss a possible in-house restructuring, including redundancies, that could have cut costs.
Founded in March 2001, BBC Technology provides products and services for the BBC, other broadcasters, platform owners, content owners and government organisations.
BBC Technology’s products and services include the Colledia product portfolio which creates a tape free broadcast environment, media communications, internet solutions and consulting services. Customers include: BBC News, BSkyB, DirecTV, ESPN Inc, Hutchison 3G, SABC and Scottish Enterprise.
BBC Technology has a turnover of £230m.