By Vivienne Russell | 20 December 2012
The BBC Trust’s £450,000 payout to former BBC director-general George Entwistle displays a ‘cavalier’ attitude to public money, MPs have said.
Entwistle resigned on November 10 following criticism of the BBC’s handling of the Jimmy Savile sexual abuse allegations and editorial failings at the Newsnight programme. He had been in the job for just 54 days.
To expedite his swift departure, the BBC Trust agreed a payoff deal that included his £450,000 annual salary, twice what he was contractually entitled to. The trust also agreed to provide Entwistle with private medical cover for a year and contribute to the costs of his legal fees and public relations advice surrounding his departure.
But the Public Accounts Committee today criticised the deal. Chair Margaret Hodge said: ‘Public servants should not be rewarded for failure. But that is exactly what happened when the BBC Trust paid off the former director-general George Entwistle.
‘This cavalier use of public money is out of line with public expectations and what is considered acceptable elsewhere in the public sector.’
Hodge also criticised the BBC Trust for failing to take up an offer from the National Audit Office to scrutinise the Entwistle deal. She noted that there had been several other instances of the BBC agreeing generous severance packages for departing senior managers. A total of £4m had been spent in severance on ten other executives since November 2010. The largest payment was £949,000 given to the BBC’s former deputy director-general.
The provision of private medical cover to senior executives, worth almost £670,000 in 2012, was also criticised. ‘It is difficult to see how the use of public money to fund private health care for senior BBC managers can possibly be justified,’ Hodge said.
The PAC has asked the comptroller and auditor general to examine severance payments and benefits to senior BBC managers as part of his 2013 programme of work.
But BBC Trust chair Lord Patten told the BBC Radio 4 Today programme that the PAC’s treatment of the trust was a ‘bit shabby’ and its conclusions hadn’t taken into account the legal advice the trust had shared with the committee. BBC lawyers had suggested that defending any legal action brought by Entwistle could have been more costly than the severance package agreed.
‘If we hadn’t done the settlement there and then, we’d have had to do a more costly settlement with a constructive dismissal and probably an unfair dismissal on top of that. It would have taken time,’ said Patten.
He added that it was the trust that had asked the PAC and the NAO to look at severance arrangements at the corporation.
