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BBC contracts out financial systems

The BBC is reorganising its internal financial systems as part of a cost- saving move designed to release millions of pounds for making programmes.

The move, part of director-general John Birt's drive to outsource the BBC's non-core activities, involves the setting up of a joint venture between Coopers & Lybrand, the accountancy firm, and EDS, the information technology group founded by US presidential also-ran Ross Perot. The 10- year contract is worth up to pounds 50m a year.

"This contract lays the foundation for the BBC's aim of greater business efficiency and improved financial information in the digital age," said John Smith, deputy finance director at the BBC.

The new company, Media Accounting Services, will redesign the BBC's financial processes and seek to standardise them as far as possible.

A spokeswoman declined to say how much money the outsourcing would actually save, but she insisted there would be no redundancies among the 850 staff in the BBC's accounts department.

Under the terms of the contract the BBC's financial systems and 90 related information technology (IT) support staff will transfer to the joint venture company at the start of next month.

"There is a significant task ahead of us but the result will be the best possible finance system for the BBC and its staff, and substantial savings will be ploughed back into programmes and services for licence payers," Mr Smith said.

The BBC said the IT staff would be transferred to the joint venture company under legislation which means the new employers must mirror existing contractual terms and conditions. Further staff may be transferred next year after the BBC has reviewed the initial phase of the project late in 1997.

If it is successful the BBC will proceed with building and implementing the new system and service, and in early 1998 transfer finance staff.

The contract is the result of a project initiated by the BBC in September 1994 when it aimed to provide new integrated financial systems for the whole organisation.

The findings of that project led the BBC's board of management to consider the possibility of outsourcing the service.