'Cronyism' blamed for BBC pay-offs

This Is Lancashire: The BBC 'put its reputation at risk' by handing over huge pay-offs to senior staff, says a committee of senior MPs chaired by Margaret Hodge The BBC 'put its reputation at risk' by handing over huge pay-offs to senior staff, says a committee of senior MPs chaired by Margaret Hodge

The BBC "put its reputation at risk" by handing over huge pay-offs to senior staff, according to a committee of senior MPs.

Margaret Hodge, who chairs the Public Accounts Committee (PAC), said some of the justifications for the pay-offs had been " extraordinary".

Among the excessive payouts given to senior staff were £470,000 to former director-general George Entwistle after only 54 days in the job and £680,000 to former chief operating officer Caroline Thomson.

Deputy director general Mark Byford departed the BBC with a total payout of £949,000.

The committee heard evidence in two sessions from BBC figures, including outgoing HR boss Lucy Adams, the current director-general Tony Hall and former director-general Mark Thompson.

Ms Hodge said: " The BBC is the world's leading public sector broadcaster, but recent revelations over severance payments to departing senior managers have put its reputation at risk.

" 150 senior managers between them received payments totalling £25 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."

She said there was " 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 MP also accused the BBC Trust, the corporation's governing body, of "sitting on its hands" while the pay-offs were being made.

The report, which is published today, said the committee " remain concerned about the veracity of other parts of the oral evidence we heard".

Ms Adams has already admitted making a mistake in her evidence. She initially told MPs she had not seen a note detailing plans for pay-offs to Mr Byford and marketing boss Sharon Baylay - but now admits she helped write it.

A BBC spokesman said: "One of Tony Hall's first acts on his appointment was to cap payments at £150,000 - the committee welcomed his decision."

Responding to the criticisms in the report about the corporation's governance, he said: "There needs to be absolute clarity over the responsibilities of the Trust and the BBC executive and we have already acted and announced a range of changes to deliver that."

A BBC Trust spokesman said the PAC's work had "helped inform" the corporation's plan to simplify the way it was run which were announced last week.

She 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 e xecutive to drive down senior manager pay; and we support Tony Hall's speedy action to impose a cap on severance payments in the future.

"We have already announced measures that address the committee's call for more rigorous scrutiny of the BBC's performance and clarify the Charter's requirement that the BBC Executive manages the BBC while the trust represents the licence fee payer.

"As part of implementing these measures, we will pursue the committee's recommendation that the trust and executive record and communicate decisions properly so that audit concerns raised in the PAC report are addressed.

"In addition, the trust's scrutiny role will, in future, be much more transparent, so that licence fee payers themselves can judge how well the BBC is run."

Mr Thompson said in a statement: "Severance payments for senior managers working for public organisations are inevitably unpopular and controversial.

"The sole reason for making these payments was so that the BBC could rapidly reduce the number of senior managers and make far larger savings on behalf of the public. The redundancy programme has released tens of millions of pounds to be ploughed back into BBC services.

"The severance payment that was made to Mark Byford was not decided by individual BBC managers but, as the records show, by a committee of independent directors and with the knowledge of the then BBC Trust. It was in full compliance with all relevant financial and governance procedures and controls. The members of the PAC are entitled to criticise the result, but the decision to make the settlement was made in an entirely proper and transparent way.

"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."

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