Government still pondering BBCT sale

Culture Minister Tessa Jowell is deciding whether to approve the privatisation of BBC Technology Ltd.

Ownership of the wholly-owned BBC subsidiary was due to be passed to German conglomerate Siemens at the beginning of September despite union resistance.

However the Department of Culture Media and Sport said that no decision would be made until the Minister had met a BECTU deputation to hear the union's views on the sell-off, and the BBC's target date was switched to October as a result.

BECTU representatives who met Tessa Jowell on September 13 were told that a number of points raised by the union would be forwarded to the BBC's Governors, whose response may have some bearing on the Minister's final decision.

The minister heard that when the BBC first established BBC Resources Ltd in 1998, part of which subsequently became BBC Technology Ltd, the union was promised by the Board of Governors that the move was not "a prelude to privatisation".

Other out-sourcing exercises at the BBC had not been good for staff, said the union, particularly the example of 3sixtymedia, a joint venture for TV studio and editing facilites with Granada Media in Manchester.

In the three years since 3sixtymedia was set up nearly two thirds of its staff had lost their jobs, and BECTU feared that redundancies in BBC Technology were inevitable once Siemens took over.

Siemens managers had been shown copies of a restructuring plan, Project Leo, which had been drawn up by BBC Technology, and according to rumours could involve more than 400 job cuts. Although union reps were refused open access to the plan, BECTU fears that Siemens now knows exactly where to axe Technology jobs if it chooses to do so.

Representatives at the meeting also pointed out the long-term dangers of the contract due to be signed with Siemens, which could allow further privatisation of BBC activities without any need to seek government approval.

Described as a "framework" agreement, the 10-year contract for provision of technology services to the BBC is designed to ease the transfer into Siemens of technical areas that have so far escaped privatisation. These include parts of News, Nations and Regions, World Service, and Radio, all of which could be transferred to Siemens as equipment is upgraded or departments move to new buildings.

BECTU called on the Minister to ensure that the BBC would have to seek permission for any further privatisation plans should the sale of Technology go ahead.

On the issue of the sale's impact on staff, Tessa Jowell was told that although the union had made significant progress in securing guarantees for terms and conditions, the talks had been rushed through too quickly because of the BBC's compressed timetable, and there were still detailed issues to do with pensions that had still not been resolved.

In a recent postal ballot among BECTU members in BBC Technology, 94% had voted against the sell-off in principle, despite the favourable terms and conditions package won by the union.

Apart from staff concerns, the union emphasised to the Minister that the sale involved most of the BBC's broadcast critical infrastructure, not just desktop IT activities, and representatives gave a detailed summary of the breadth of BBC Technology's service.

Tessa Jowell took particular note of the company's role in launching Freeview, the free-to-air digital terrestrial TV (DTT) service that has become an essential part of the government's plans to switch off analogue transmitters. She congratulated the staff involved, who had salvaged the DTT platform with only a few weeks' notice after ITV Digital collapsed.

She also took note of the role that BBC Technology might have to play by keeping public information services going in any national emergency.

Describing the BBCT sale as the most complex out-sourcing exercise in the BBC's history, BECTU representatives predicted that the contract with Siemens would prove to have gaps where services currently provided to the BBC by the company had been missed out.

As with most other out-sourcings the union had experience of, costly variations would need to be written in to the contract, undermining the savings projected. On top of this, the commercial nature of Siemens would inhibit the exchange of knowledge between BBC Technology and production departments who hope to move into a fully digital environment by 2010.

Union representatives asked the Minister to consider whether the BBC had been distracted from the potential long-term problems after a sell-off by the short-term opportunity of a large cash injection when Siemens buys BBCT's shares - said to be worth well over £100m.

The Minister was asked by BECTU to take up three specific issues with the BBC before making any decision on the sale:

• The risk to public broadcasting of handing its key infrastructure over to the private sector.
• Concerns about outstanding pensions problems, particularly for staff who may wish to take early retirment pensions before being moved out of BBC Technology into Siemens.
• The BBC's ability, contained in the Framework Technology Agreement, to privatise other areas without approval.

No timescale was set by the Minister for responding to the BBC's request to proceed with the sale, and the union is hoping for another opportunity to feed in comments.