£2bn BBC technology contract up for grabs

The BBC is to put out to tender a £2bn contract to run its technology services, and at the same time will sell its technology arm.

The corporation has decided to outsource technical services, such as internet support and IT. It aims to save between £20m and £30m through the move.

It will sell BBC Technology, which was started in 2001, along with a contract to provide the services to the corporation for the next 10 years. The contract would be worth £2bn over that time. BBC Technology has assets worth £50m, although it is hoped it will fetch up to £200m.

Possible buyers include BT and Capita in Britain and, from abroad, EDS and CSC.

John Smith, the BBC's finance director, denied that the move would endanger the 1,400 jobs in the division or that the announcement heralded a wholesale sell-off of assets by the BBC. The corporation's charter is up for renewal in 2006 and much of the debate over this will focus on what it should sell.

Mr Smith said: "This is not the thin end of the wedge ... We don't want big cash injections at the BBC. We can't do anything with them."

He said the BBC on its own could not benefit from the economies of scale available to the "big boys" in the IT support market. He added that making the desired savings in-house would be possible only with the loss of 300 jobs.