The BBC Offer The BBC pay offer is a 1-year deal for 2013-14 which applies to staff employed

ed on grades 2-11 within the public service BBC and Studios & Post Production. The offer is weighted towards the lower paid and includes a flat rate increase of 600 for all staff earning less than 60,000 which equates to a: 3% rise for staff on a salary of 20,000 2.5% rise for staff on a salary of 24,000 2% rise for staff on a salary of 30,000

For higher paid graded staff, earning more than 60,000, we propose to ensure everyone receives 1%. This offer, together with pay progression commitments, represents a budget spend of 1.8%. The pay offer is subject to the 1% cap to pensionable pay for contributing members of the BBC Pension Fund old/new sections and CAB 2006, in line with the pension arrangements agreed in 2010. Any increases to salary above the 1% cap during the period of 1st April 2013 to 31st March 2014 will be paid as non-pensionable salary, and staff will be advised of this in writing. This offer will be applied to all employees below Senior Manager level with the following exceptions: Local recruits overseas Where individuals are on explicit standstill arrangements, i.e. on terms where the pay review is explicitly bought out or excluded such as some special fixed salary (SFS) contracts, some Flexi contracts and some trainee arrangements

We propose to consolidate Unpredictability Allowance (UPA)/Flexibility Allowances for existing recipients into non-pensionable pay to align with the pay review implementation on 1 August 2013, subject to the following conditions: Consolidation will be on a non-pensionable basis but will form part of total pay for the purposes of over-time, redundancy calculations and future pay rises There will be no increase applied to UPA (Days) allowances in 2013 Eligibility for salary progression payments (110%/115% and local arrangements) will be determined after UPA/Flexibility Allowances have been consolidated. Current local salary progression target rates (i.e. Fully Effective Salaries, VJ rates and VJ progressions) will be frozen and eligibility assessed after UPA/Flexibility Allowances have been consolidated. There will be no increases applied to the floors and ceilings of grades 211 (including S&PP grades)

London Weighting, Night Pay, Christmas Day, Boxing Day and New Years Day and other protected continuing allowances for graded staff will be increased by 1%. We also propose to introduce a new on-call allowance for Technology roles that will apply in specific defined on-call situations.

FAQs Q: What did the unions ask for? The Joint Unions asked for RPI + 3% (current RPI is 3.2% at Aprils rates) for all graded staff. Q: For many staff 600 will not keep pay in line with inflation. Why cant the BBC be more generous? We are a publicly funded organisation and due to the current economic climate, many licence fee payers have seen their income reduced over the last 4 years, either as a result of unemployment or frozen or reduced pay. There is a public expectation that the BBC will behave responsibly in the current economic climate and ensure that as much of the licence fee as possible is channelled into great content. Although we are outside of the scope of the Government public pay cap of 1%, in the current climate, there is an expectation that we will align ourselves with public pay policy. Although the BBC has taken a tough approach to pay over the last 4 years, our overall employee deal remains competitive and well above the UK average pay. Our median earnings are 41,434 (as at 31 March 2013), compared to average UK earnings of 24,128 (Source - ONS effective from Feb 13 but published Apr 13)

Q: Have we done enough for the lower paid? In 3 out of the last 4 years, we have capped our pay settlements at c 40-60k in order to allow lower paid staff to gain greater benefit from our restricted pay budget. This year, we have again structured our pay offer to benefit the lower paid, offering a flat rate of 600 so that 36% of staff receive a rise of at least 2% and 10% of staff a 3% rise.

Q: Why are you freezing the floors of the salary ranges? Later in the year we plan to communicate and consult staff and the unions on a proposed new pay and grading structure. Included in those discussions will be a proposal for new arrangements for salary progression as an alternative to fully effective salaries and 110/115% growth in the job commitments. By freezing the grade floors, we limit the spend on salary progression payments and given that we have limited funding for the 2013 pay review its important to avoid investing in payments that will change in the near future. Spending a little less on pay

progression payments in our 2013 settlement, gives us more to spend on the overall pay settlement. Q: How much do we have to spend? We have agreement to spend 1.8% of the graded staff paybill on all elements of the August pay review; base pay increases, allowances, growth in the job and other salary progression payments.

Q: Why cant you spend less on Executive Pay and more on the rest of the workforce? The BBC has made significant progress towards reducing the Senior Management population and paybill. Since August 2009 we have: Reduced both SM headcount and paybill by more than 30% (c200 heads, c25m) Reduced the paybill of those SMs earning 150k+ by more than 30% Reduced the ratio of SMs to total population (total heads) from 3.04% to 2.20% The future Executive Board pay bill (salary and car allowance) will be 2.5m compared to 2.7m in 2011/12. This is a reduction of 209k (8%). The pay multiple measuring the ratio of pay across the BBC and the Executive Board continues to reduce. In future it will be 8.2 compared to 8.7 in 2011/12. This illustrates our continued investment in staff throughout the corporation and our commitment to reducing executive pay. We now discount executive directors pay against the commercial sector by 73%, compared to 70% in the previous year. SMs have had just one salary review of 1% since 2009

The BBC has also taken further steps to contain Senior Management costs through: The removal of the provision of private medical cover for all new SM hires (internal and external) from 1 August 2011 The removal of the provision of a car allowance for all new SM hires (internal and external) from 1 April 2012

And we have plans for further reductions by 2015: a further reduction in the number of Senior Managers of c70 by 2015 the further reduction in the Senior Management paybill of c9m a reduction in the number of Senior Managers earning more than 150k by 20%

Q: Will BBC top managers receive a pay rise? This offer is for all staff in the BBC with the exception of senior managers, the Management Board and Executive Directors. There will be no increase for Executive Directors and the Management Board. There will be no standard increase for other senior managers in the BBC, but they will be considered for an increase. No more than 1% of the senior manager paybill will be spent on those increases.

Q: On what basis will SMs be awarded a discretionary pay rise? Pay awards for Senior Managers will be awarded on a discretionary basis to reward exceptional performance, or where salaries are falling behind the market and adjustments are required to ensure retention of critical skills and experience. Q: How will we compete when other broadcasters are paying 2-3%? Our market data confirms that we maintain our position around the market median for base pay for the majority of our roles, and our retention and attraction rates suggest that we do not have a significant issue on salaries other than in a relatively small number of specialist areas. Q: Is there any room for manoeuvre? We have challenging cost reduction targets to meet and therefore a restricted budget to spend on pay growth. Whatever we spend on pay, will create a bigger cost challenge elsewhere. Q: Why are you freezing the days UPA allowance this year? As part of this pay settlement, we have proposed the reform of UPA and the consolidation of UPA allowances into non-pensionable base pay. This is a more generous proposal on UPA reform than originally intended under DQF and as a result, we will not deliver the level of savings targeted for UPA reform. Its therefore important that we find ways limiting the spend on UPA. Spending a little less on UPA in our 2013 settlement gives us more to spend on the overall pay settlement and given that the majority of staff dont receive UPA, its important that we consider the advantage to them. Q: Why are you consolidating UPA? In October 2011 we announced our plans to reform UPA and Flexibility allowances and spent a number of months consulting staff, managers and the unions on the best approach. There were many and differing views expressed, ranging from removing the allowance to replacing it with payments for actual disruption, or consolidating it into basic pay. However the one commonly expressed view was that UPA doesnt work as it was intended and it isnt fairly applied. We know that other broadcasters dont pay a similar allowance, and yet do require their staff to take a flexible approach to their work, and when added to our basic salary, UPA pushes some BBC salaries above the market. Reforming payments for staff with a current entitlement is difficult and we gave a commitment to the unions last year that we would ensure that the reforms did not result in a reduction in take-home pay. So, the fairest and simplest way of achieving that aim is to build the allowance into pay for current staff and remove UPA for new joiners thus removing the allowance without reducing take-home pay. Q: Whats the advantage of consolidating UPA if it doesnt apply for pension purposes? Once UPA is consolidated into salary it will count towards the calculation of redundancy and overtime payments. UPA doesnt currently count towards either of these payments. Also, once consolidated, staff will keep the allowance when moving jobs, including moving to a role that would not have attracted UPA.

Q: Why cant you make the consolidated UPA count towards pension? Consolidating UPA into pensionable pay would be too expensive. A substantial number of employees, c7,500, currently receive UPA. The cost of employer pension contributions on this many allowances is unaffordable. Added to this, the consolidation for pension purposes would increase the liabilities in the CAB 2011 section of the pension scheme. Many staff who receive UPA are in one of the defined benefit schemes where growth in pensionable pay is already capped at 1%. Q: I dont receive UPA but I work just as unpredictably as colleagues who do receive UPA? It doesnt seem fair that their pay is increased and mine is not? It is difficult to tackle differentials in the pay system without either leveling up some peoples pay (which we cant afford), or leveling down some peoples pay (which would break our promise not to reduce take-home pay). Removing UPA for new joiners and consolidating UPA for current staff will at least ensure a level playing field going forward and, over time, we may be able to manage pay so that the differentials created are reduced. Q: Will I continue to be expected to work unpredictably once my UPA is consolidated? Yes. We will continue to require the same level of unpredictability as now. The requirement to work unpredictably is defined in the contractual conditions of service and remains in place. Q: What is the proposed on-call allowance and how does it work? We propose to introduce a new on-call allowance that will apply in specific defined on-call situations as follows: Payment of an on-call allowance of 200 per week for those on an on call rota (typically 1 week in every 4-8 weeks). Within this context, on-call assumes that employees must respond to callout within 20 minutes and must be contactable and fit to work throughout the period. Failure to respond would be dealt with as a disciplinary matter.

Our conversations in the business suggest that this allowance will only apply in a limited number of situations in Technology, Future Media and the Nations. We expect it to reach around 130 to 140 employees most of whom are currently in receipt of UPA. This allowance will be paid as an actuality payment. The application of the on-call allowance will be complicated by the fact that some areas already have in place an on-call payment and most also pay UPA. With this in mind, we would like to talk to local managers and to the unions about how best to implement the allowance.

Q: How many people currently receive UPA/Flexibility Allowances? Around 7,500 staff receive UPA or flexibility allowances. Around 1500 receive UPA1 and 4,200 UPA2. A further 2000 colleagues receive flexibility allowances. Jobs that attract UPA are typically in craft, technology, journalism or production roles. Q: How much money will you save? Under DQF, we were targeted with delivering c6m p.a. savings by 2016/17 as a result of the reform of UPA. This proposal makes some savings as a result of ending the payment of flexibility allowances for new joiners, c0.5m p.a. by 2016/17, so less than the target under DQF. Q: How will you make up the shortfall from not making the savings from UPA you planned to under DQF? Any savings not achieved through reforms to UPA and Flexibility Allowances will have to be absorbed by divisional budgets. Although we dont anticipate this will directly translate into further job losses, it will create further challenge in terms of having to find the savings elsewhere. Q: What if I go on attachment to a new role? Will I lose my allowance? No. Once consolidated into your pay you will retain that level of pay when you move to a different role. Q: What if I am on attachment in a role that does not qualify for UPA on August 1, 2013 but in my substantive role, I do receive UPA? Individuals who are currently on an attachment that does not qualify for UPA or Flexibility Allowances will have their UPA/Flexibility Allowance consolidated on return to their substantive role in the following circumstances: The individual was in receipt of a UPA or Flexibility Allowance in their substantive role which discontinued on commencement of the attachment, resulting in a reduction in total pay; The individuals substantive role was kept open during the period of attachment; Scheduling requirements in the substantive role have not changed, i.e. there is a continued requirement for flexibility.

Q: How will we resolve a dispute if this offer results in industrial action? It is always our preference to reach an agreed pay settlement with the joint unions and we will continue these pay talks in the spirit of reaching agreement.