BBC pay-offs to staff ‘unacceptable’

The BBC made “unacceptable” severance payments to senior staff as a result of failures of management and oversight, a panel of MPs said today.

The corporation, which is funded by a license fee levied on everyone in Britain with a television, paid £25 million to 150 departing senior managers in the three years to December 2012, the House of Commons Public Accounts Committee said in a report.

In 22 cases, the leavers received more than they were entitled to in their contracts. "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," the committee chairwoman, Labour's Margaret Hodge, said in a statement.

“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 license-fee payers’ money.” Staff were paid “sweeteners” on top of what they were due, the committee said.

Mark Byford, a former deputy director general, was paid £300,000 extra to keep him focused on his job rather than "taking calls from headhunters," it said, citing his former boss, Mark Thompson, now chief executive officer of New York Times.

The extra money pushed Mr Byford’s payoff to more than £1 million. Executives on the corporation’s remuneration committee failed to keep control of payoffs and the supervisory BBC Trust held back from intervening because it didn’t want to interfere in “operational decisions,” the panel said.

“While the executive was handing out these inflated severance payments, the BBC Trust was sitting on its hands, failing to fulfill one of its primary duties which is to ensure the rigorous stewardship of public money,” Ms Hodge said.

The trust should intervene more and overhaul its practices to make it more effective, the panel said. The committee welcomed the corporation’s cap on severance payments of £150,000, introduced in April.

Bloomberg