THE BBC is to splash three-times the annual budget of the new BBC Scotland channel on replacing the EastEnders set and facilities as spending spirals out of control.

The broadcaster’s E20 project, which includes creating a new, bigger soap set and other infrastructure at its Elstree centre, will come in 45% over budget, according to the National Audit Office (NAO).

At £86.7 million, the scheme is almost treble the entire £32m allocated for the first year of the new BBC Scotland channel, which will broadcast for just five hours per night with a schedule of which 50% will be repeats.

In a report published today, the NAO says the corporation failed to plan properly from the outset, underestimating the complexity, costs and risks involved in the E20 programme, which was originally expected to cost £59.7m and will come in two and a half years behind schedule.

Sir Amyas Morse, head of the watchdog, commented: “The BBC will not be able to deliver value for money on E20 in the way that it originally envisaged.”

And, with fewer than three months to go until the launch of the new Scottish channel on February 24, ex-broadcast journalist Hannah Bardell MP, the SNP’s media spokesperson at Westminster, said: “This is a ludicrous situation which typifies the BBC’s seriously warped London-centric priorities.

“The £32m budget for the new BBC Scotland channel has already raised concerns about the quality and quantity of the output. Now it emerges that the new BBC Scotland channel has to survive on an annual budget around one-third of that received by E20/EastEnders. That’s pretty insulting.”

BBC Scotland chief Donald MacKinnon Photograph: Alan Peebles

Yesterday BBC Scotland director Donalda MacKinnon told the Scottish Affairs Committee that the new channel represents the biggest BBC investment north of the Border in recent years and will generate 270 jobs by March next year.

It will include a new flagship news show The Nine and a new Question Time-style debate show, as well as hit comedy Still Game.

READ MORE: Scottish BBC viewers send £100m licence fee 'subsidy' to London HQ

Last month The National revealed Scottish Parliament research found BBC licence fee payers in Scotland contributed more than £100 million to the broadcaster’s programming operations in the rest of the UK in 2017.

However, the cross-party panel raised concerns that the proportion of licence fee cash raised in Scotland and spent on operations here – 69% of £324m – remains lower than the rates for Wales and Northern Ireland, which stand at 92% and 89% respectively.

Yesterday MacKinnon said the Scottish situation has “come some distance in the last 10 years,” adding: “Is it as good as I would like it to be or you would like it to be? Possibly not.”

The 1984 Albert Square set was supposed to last two years and its poor condition is said to be causing health and safety worries and production set-backs, and means the series cannot be filmed in high definition.

The NAO said the case for E20 is “clear”, but Morse cautioned it requires “close scrutiny”.

The BBC said this is taking place, adding: “The new set will be suitable for HD filming for the first time and extend Walford to better reflect modern East End London.

“It’s a large, complex project which has already delivered many other vital improvements at BBC Elstree.”