By Vivienne Russell | 16 December 2013
The size of severance payments offered to senior BBC managers was ‘unacceptable’ and indicative of a ‘culture of cronyism’ at the corporation that meant licence payers’ money was not well spent, the Public Accounts Committee said today.
PAC chair Margaret Hodge said the revelations about severance packages, which in some cases far exceeded contractual entitlements, had put the reputation of the BBC at risk.
According to the report, the BBC gave 150 senior managers severance payments totalling £25m in the three years to December 2012. In 22 of these cases, the corporation paid more salary in lieu of notice than it was obliged to, at a cost of £1.4m
‘Some of the justifications for this put forward the BBC were extraordinary,’ Hodge said.
‘We are asked to believe that the former director general Mark Thompson had to pay his former deputy and long-time colleague Mark Byford a substantial extra sum to keep him “fully focused” on his job instead of “taking calls from headhunters”.
‘There was evidently a failure at the highest levels of the BBC to challenge payments to senior managers and what appears to have been a culture of cronyism that allowed for the liberal use of licence fee payers’ money.’
The committee also highlighted a ‘dysfunctional’ relationship between the BBC Trust and the BBC Executive, with the trust ‘sitting on its hands’ and failing to fulfil one of its primary duties to rigorously steward of public money.
Its report noted that the number of senior managers had been cut from 624 in March 2010 to 445 in March 2013, and the corporation’s decision to cap severance pay at £150,000 was welcomed.
The MPs called on the BBC to ensure that severance payments to not exceed what is absolutely necessary, to remind staff that they have an individual responsibility to protect public money and to establish internal procedures that provide clear central oversight and effective scrutiny of severance payments. The BBC Trust was also urged to be more willing to challenge practices and decisions that risks compromising the interest of licence payers.
In a statement, the BBC Trust said: ‘We greatly regret that licence fee payers were let down by this episode. They are entitled to expect that their money is spent wisely. Since 2009, the trust has worked successfully with the executive to drive down senior manager pay; and we support [director general] Tony Hall’s speedy action to impose a cap on severance payments in the future.’
It added that its scrutiny role would be more transparent and it would ensure future decisions were properly recorded and communicated.
