Report finds ‘failure to challenge’ at highest levels of broadcaster
MPs have criticised a “culture of cronyism” at the BBC that allowed excessive redundancy payouts to be made to some of its top departing executives.
The revelations of “inflated” severance payments that have emerged over the past year have also been a “kick in the teeth” for the wider workforce at the broadcaster, found the latest report on the issue from the Public Accounts Committee (PAC).
Committee chair Margaret Hodge said: “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.”
Overall, 150 senior managers received severance payments totalling £25 million in the three years to December 2012, as the BBC went through the process of reducing management headcount.
The PAC found that the BBC paid more salary in lieu of notice than it was obliged to in 22 of these cases, at a cost of £1.4 million.
“We were dismayed to find that many of these individuals received ‘sweeteners’ in their severance packages that were far larger than the sums to which they were contractually entitled,” continued Hodge.
“Some of the justifications for this put forward by the BBC were extraordinary. 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’.”
Byford was paid £949,000 when he left the BBC in 2011, including an additional eight months’ pay in lieu of notice. This was part of a BBC strategy to expedite the departure of around a third of senior management, the PAC had heard.
Byford’s case received particular attention from the committee of cross-party MPs, who grilled a range of leading figures from the BBC over the pay-offs this year, including outgoing HR director Lucy Adams.
In July she told the PAC that at the time, it was “custom and practice” to make a payment in lieu of notice to executives on top of their 12-month redundancy entitlement.
The BBC has now capped all redundancy payments at £150,000.
The PAC report also described the relationship between BBC executives and the over-seeing BBC Trust as “dysfunctional”, and suggested that the trust should be more willing to challenge decisions made at the public service broadcaster.
Other report recommendations included asking the BBC to “remind its staff that they are all individually responsible for protecting public money and challenging wasteful practices”, and to “establish internal procedures that provide clear central oversight and effective scrutiny of severance payments”.
In a statement, former director-general Mark Thompson said the “sole reason” for making the severance payments “was so that the BBC could rapidly reduce the number of senior managers and make far larger savings on behalf of the public”.
He added: “Despite some inflammatory language in the PAC report, there is absolutely no evidence of any wrongdoing by anyone at the BBC in relation to these severance payments.”