BBC News - Q&A: BBC pay-off scandal

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ENTERTAINMENT & ARTS

9 September 2013 Last updated at 11:02

Q&A: BBC pay-off scandal

The BBC has been criticised for paying 25m to 150 outgoing senior executives between 2009 and 2012 - some 2m more than their contracts stipulated. Executives, including former director general Mark Thompson and BBC Trust chairman Lord Patten, are being questioned by politicians over the payments. Here's how the situation arose, who is involved and what might happen next. What prompted the investigation into BBC pay-offs? MPs took issue with director general George Entwistle's severance payment following his resignation in November 2012 in the wake of the Jimmy Savile scandal. Mr Entwistle received 450,000, after spending 54 days in the job. The figure amounted to one year's salary rather than the six months he was entitled to under the terms of his contract. Chairman of the BBC Trust, Chris Patten, issued a letter explaining the trust's decision, saying the amount was "justified and necessary". What happened next? The National Audit Office (NAO) asked if it could investigate Mr Entwistle's severance pay, but the BBC said a broader look at severance packages was more appropriate. Around the same time, it was disclosed that redundancy payments at the corporation had doubled to 58m between 2010 and 2011. The figures came to light as part of a Freedom of Information request by the Telegraph. The biggest pay-off was awarded to Mark Byford, the former deputy director general, whose total severance package amounted to 1,022,000. What did the investigation find? In its report, published in July, the NAO found that the BBC had paid 25m in severance payments to 150 senior staff. Furthermore, it showed that the BBC had paid 14 staff more than it had been contractually obliged to. The top 10 payments amounted to 5,298,900 - 20% of the total. They included the 1,022,000 paid to Mr Byford in 2011 and a payment of 670,000 to the former chief operating officer, Caroline Thompson, who left in September 2012. The NAO also discovered instances in which departing managers were given large pay-offs even after they had found work elsewhere, and examples of staff who were offered consultancy roles at the time of their departure. "The BBC has breached its own policies on severance too often without good reason," concluded the report, published in July. "Weak governance arrangements have led to payments that exceeded contractual entitlements and put public trust at risk. Severance payments for senior BBC managers have, therefore, provided poor value for money for licence fee payers." How did the BBC respond? "Deeply worrying" and "unacceptable" - that's how BBC trustee Anthony Fry described the NAO report in July.

http://www.bbc.co.uk/news/entertainment-arts-24013974

09/09/2013

BBC News - Q&A: BBC pay-off scandal

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Called in front of the Public Accounts Committee, BBC Trust chairman Lord Patten called the payments a matter of "shock and dismay". Both men suggested they had been misled by Mark Thompson, the BBC's former director general, about the scale of severance payments to executives. Lord Patten told the committee he would "be as interested as you are why we didn't know". Mr Thompson was not present at the hearing, but denied the accusations. In a submission to the committee, leaked in early September, he accused Lord Patten and his counterpart of giving "fundamentally misleading" testimonies. "The insinuation that they were kept in the dark by me or anyone else is false and is not supported by the evidence." The BBC Trust has denied Lord Patten had been fully briefed and described Thompson's statement as "bizarre". Lucy Adams, the outgoing director of human resources at the BBC, also appeared before the committee. She said Mr Byford's 949,000 payout had been part of "custom and practice" at the time. When asked about why there had been overpayments, she said: "The overwhelming focus was to get numbers out of the door as quickly as possible." Were any criminal proceedings launched as a result of the report's conclusions? Police received allegations of misconduct and fraud but said an assessment of the material found "insufficient evidence of dishonesty or criminal misconduct". It said no further action would be taken in relation to the payouts. What happened next? The Public Accounts Committee asked the NAO to make a more detailed report, looking at all senior staff pay-offs from 2009 to 2012. Its analysis of 90 settlements showed eight managers received more than they were contractually entitled to, costing more than 200,000. Added to the figures in the previous report, it meant the BBC had given out 1.4m more than it needed. The BBC also commissioned a separate report by auditors KPMG, looking into severance pay between July 2006 and December 2009. It found over-spending of 1.5m on another 30 cases. In total, it means 2.9m was overpaid in 2006-12. Have BBC redundancy policies changed as a result? In April, the BBC capped severance pay for senior staff at 150,000, or 12 months' salary, whichever is lower. "We have to limit the size of these payments," said the new director general, Tony Hall. "This isn't something done lightly, but I think it responds to the public mood out there." "These are difficult economic times for people across the country and the BBC is not immune from them. The financial settlements of the past cannot be justified in the future." The 150,000 cap was extended to all staff in September. Was any money recouped? Some of it. Roly Keating, previously the BBC's director of archive content, decided to give back his severance payment in June, after helping the NAO compile its report. Mr Keating, who left the BBC in 2012 to become chief executive of the British Library, said in a letter to Tony Hall: "You will understand that as a matter of principle I would never wish to benefit from a payment that could not be demonstrated to have been fully and appropriately authorised." The BBC also clawed back a 687,333 redundancy payment it had made to Jana Bennett in 2012.

http://www.bbc.co.uk/news/entertainment-arts-24013974

09/09/2013

BBC News - Q&A: BBC pay-off scandal

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Ms Bennett had been director of BBC Vision, putting her in charge of the BBC's licence-fee-funded TV channels, but moved to a new role at the BBC's commercial operation, BBC Worldwide, in 2011. When she was made redundant the following year, the BBC thought it was obliged to pay her redundancy and met the cost unbeknownst to Ms Bennett. It later reconsidered, and recouped the money from BBC Worldwide, which does not derive its income from the licence fee. What happens now? Seven senior BBC officials, including Mark Thompson, are appearing in front of the Public Accounts Committee (PAC) on Monday. The meeting is a follow-up to July's hearing, and will delve deeper into Mr Thompson's row with the BBC Trust over who knew what. Lucy Adams will face questions about her previous testimony. She admitted last week that she had made a mistake when she had told MPs she had not known about an email about pay-offs to top executives. And the BBC Trust will want to prove it is up to the job of overseeing the BBC. MPs on the Public Accounts Committee have already castigated it for not doing more about pay-offs over the past six years. Reports in certain newspapers have suggested ministers are planning to axe the body and hand responsibility for governance of the corporation to media regulator Ofcom.

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http://www.bbc.co.uk/news/entertainment-arts-24013974

09/09/2013