BBC broke own rules with golden goodbyes, says NAO

1 Jul 13
The BBC breached its own policies on severance pay too often and without good reason, the National Audit Office said today.

This had jeopardised public trust and represented poor value for money, it added.

The NAO launched its investigation into severance payments and wider benefits for senior managers at the corporation after the controversial payout to former director general George Entwistle, who left the BBC in November last year after just 54 days in the job.

Entwistle walked away with £475,000, made up of a £450,000 severance payment and three weeks’ salary worth £25,000, the NAO confirmed today.

Since Entwistle’s departure, the BBC has announced that it is capping severance payments at £150,000 or 12 months’ salary, whichever is lower. The director general’s notice period has also been reduced from 12 to 6 months.

The watchdog’s probe found that, between 2005/06 and 2012/13, the BBC spent £60m on severance packages for departing senior managers. However, the redundancies saved the BBC £188m, more than three times this amount.

In 14 of the 60 cases reviewed by the NAO, the BBC paid senior managers more salary in lieu of notice than what was required by their contracts, costing licence fee payers at least £1m. There were also two cases where the BBC knew that departing senior managers had secured new employment before they had left.

Severance payments were subject to insufficient challenge and oversight. In five of the 60 cases, the BBC made unusual payments that were subject to little central assessment of the potential risks to the corporation of making them.

The NAO recommended that the BBC’s revised severance policies were communicated clearly and applied consistently. Scrutiny of payments that deviated from standard entitlements should be enhanced.

The BBC Trust said it accepted all of the NAO’s recommendations and would ensure they were implemented in full.

Anthony Fry, BBC trustee and chair of the trust’s finance committee, said the BBC’s failure to follow agreed severance polices was ‘deeply worrying’ and ‘unacceptable’.

He added: 'I have no doubt they will, quite rightly, be met with considerable dismay by licence fee payers and staff alike.

‘The trust is clear that there cannot be a repeat of such a fundamental failure of central oversight and control.’

NAO head Amyas Morse said: ‘The BBC’s proposal to cap redundancy payments, announced in 2013 by the new director general, is a signal of change for the better. It is well below the maximum that applies to civil servants.’


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