BBC did not lose plot over £1m pay-off, says Mark Thompson

 

Mark Thompson: "Mark Byford's pay-off was value for money"

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Ex-BBC director general Mark Thompson has told MPs the corporation had not "lost the plot" when it agreed a pay-off of almost £1m to his former deputy.

He accused Lord Patten, chairman of the trust which oversees the BBC, of making "unfair and untrue" claims not to have known about Mark Byford's payment.

Lord Patten said he "couldn't have been expected to know" about the sum.

Mr Thompson told MPs the trust had put him under "ferocious pressure" to make senior redundancies like Mr Byford's.

The BBC has been criticised for paying £25m ($39m) to 150 outgoing executives - £2m ($3.1m) more than their contracts stipulated.

'Full support'

Mr Thompson - who is now chief executive of the New York Times newspaper - was one of seven senior BBC figures giving evidence to the Public Accounts Committee (PAC).

He was asked about a £949,000 pay-off package given to former deputy director general Mr Byford.

Analysis

A "grossly unedifying occasion" which has damaged the reputation of the BBC - that was Margaret Hodge's verdict. But have we learnt anything?

MPs seemed to accept Lord Patten's argument that he really could not be expected to have questioned deals such as Mark Byford's £1m pay-off given it was done before he arrived and was said to be within contract. Mark Thompson appeared to convince the committee when he said he had tried to keep the trust informed.

The question about why the trust had not done more hung in the air. The answer that it was not their job did not go down well with some of the MPs. The former chairman Sir Michael Lyons accepted that perhaps they should have taken more of an interest.

The government has been watching with interest; the question of how the BBC is governed is being discussed. The debate over the renewal of the charter for the BBC is about to begin and today will only add weight to a growing debate about the future of the trust.

He said Mr Byford's redundancy had represented "value for money" as part of a wider effort to cut the number of highly-paid executives and save about £19m a year.

He said he had believed he had the "full support" of the BBC Trust in trying to do that within a very short time frame.

Committee chairman Margaret Hodge said under Mr Byford's contract he could have been paid off with £500,000.

But Mr Thompson said he was paid almost twice that because the corporation wanted him to be "fully focused" on his job in the final months of his tenure and not "worried about his future and taking calls from head hunters".

He said the fact that he had known Mr Byford for more than three decades and socialised with him did not affect judgement about his severance package.

Asked by Mrs Hodge if the BBC had "lost the plot", Mr Thompson replied: "I do not think we lost the plot."

'Eye-watering'

BBC HR director Lucy Adams told the committee the corporation was trying to "get people out of the door" with minimal disruption and no risk of legal action - and to do that, it was "occasionally" necessary to pay more than was contractually required.

BBC Trust

  • meant to act as the "guardian" of licence payers' money and ensure the BBC fulfils its remit to inform, educate and entertain
  • sets the BBC's strategy, approves how and where money is spent, sets editorial guidelines and reviews the performance of all BBC services
  • its chairman, Lord Patten, and 12 trustees are separate from the BBC's executive board, which is led by the director general and controls the day-to-day running of the corporation - in line with a framework set by the trust
  • also responsible for protecting the BBC's independence

Former trust chairman Sir Michael Lyons agreed with the MPs that payments like Mr Byford's "look eye-watering", adding that "clearly the trust is damaged" by the whole affair.

But he said the process of making "rapid reductions in senior management" was "very difficult", adding: "You think we should have done it for less....

"The price of that would have been that it would have taken longer and the savings would have been smaller."

BBC trustee Anthony Fry told the PAC there had been "months and months of arguments" between the trust and the BBC executive committee over financial issues such as pay, perks and bonuses - although he admitted that severance packages were not given much attention.

"It became a battleground. I got the distinct view... that our views were not being taken with what I believed was the seriousness they deserved," he said.

'Damaging'

In July, Lord Patten told the PAC he was "shocked and dismayed" by the scale of pay-offs and said that should Mr Thompson be called before MPs he would be as interested as they were to hear why the trust had not known about them.

Ahead of his appearance before the committee, Mr Thompson sent a letter to the PAC saying he had emails which showed trust members had approved the payments.

Then, in person, he told the MPs that Lord Patten's claims not to have known about them were "damaging, unfair and misleading statements".

Lord Patten tells the committee that he "cannot accept" that he misled them over payments

In reply, Lord Patten said he took the charge of misleading the committee "very strongly" and insisted he had been told settlements for Mr Byford and former marketing boss Sharon Baylay were "contractual payments" agreed before his appointment.

"I'm in the position in which I'm accused of having misled the committee on something I didn't know and couldn't have been expected to know," he added.

Trust director Nicholas Kroll said the deputy director general's severance package was not part of the trust's remit.

But Mrs Hodge said the the job of the trust was "to protect the licence fee payers' interests", adding: "There is not one person around the table who can understand why there was no challenge from you."

Former chairman of the BBC executive board remuneration committee Marcus Agius said there had been "a great deal of concern" within his committee "about these redundancies and the amounts".

"We challenged and tested Mark Thompson and after sustained debate we were finally persuaded on value for money grounds," he said.

'Grossly unedifying'

Ms Adams apologised to the committee for stating in the July hearing that she did not know of an email explaining the pay-offs when in fact, she had helped to compose it.

The BBC has recently introduced a £150,000 cap on severance pay.

Ms Adams said she suggested a cap to the executive board before Mr Byford's package was agreed, but it had decided it would be "inappropriate to introduce the cap at that time".

The BBC's head of HR said she made a mistake in her earlier evidence to MPs

Summing up the hearing, Mrs Hodge said it had been a "grossly unedifying occasion which can only damage the standing and the reputation of the BBC".

She said the committee believed the governance of the corporation was "broke".

Lord Patten told her he accepted there was "a cultural issue" around pay at the BBC "that we really do have to recognise and apologise for and deal with very robustly" - but that "trying to get people to face up to lowering salaries and reducing the number of managers is an uphill struggle".

He rejected suggestions that responsibility for governance should be taken from the trust and handed to Ofcom, and said he hoped over the next couple of years the corporation could demonstrate that the existing system could work.

The biggest severance payments included:

  • Mark Byford, deputy director general, 31 years of service - £949,000
  • Jana Bennett, executive director, 33 years - £687,333
  • Departmental director, 25 years - £866,300
  • Caroline Thomson, chief operating officer, 17 years - £680,400
  • Controller, 31 years - £476,700
  • George Entwistle, director general, 23 years - £470,300
  • Departmental director, 2 years - £394,500
  • Controller, 26 years - £381,600
  • Roly Keating, departmental director, 29 years - £376,000 (money returned minus tax)
  • Project director, 19 years - £356,200
  • Head of department, 33 years - £347,900

The PAC meeting in July followed the publication of a report in which the National Audit Office criticised the corporation, saying the scale of the payments put public trust at risk.

A spokesman for the prime minister said earlier that "legitimate questions" had been raised about the use of licence payers' money and should be answered.

 

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  • rate this
    +2

    Comment number 292.

    The idea that shareholders are in control of salaries and severance payments is a joke. As long as a company is making money, there is a lack of real accountability to the shareholders. The idea that private sector management are in control, and public sector is always inept, is laughable. A lot of private sector executives wouldn't know a decent strategic plan if they fell over one. G4S/Olympics?

  • rate this
    +2

    Comment number 291.

    we gave the bbc a 4billion a year blank cheque without them giving us a list of the programmes they would make. do you do the same with your builder or plumber? No wonder there has been skimming going on.

    rather than give them 4 billion a year and then be 'grateful' for anything they might produce let tv firms present lists of programmes they would make for slices of money and then we can choose.

  • rate this
    +2

    Comment number 290.

    I can understand how a job that should be paying no more than 40-50k maximum has such massive payouts, the BBC throws money away like its worthless, try investing it into some decent programs for once

  • rate this
    +7

    Comment number 289.

    Financial nepotism with Our money!

  • rate this
    +5

    Comment number 288.

    Thompson said that if he hadn't paid his MATE Byford off with a nice juicy million quid he would have earned over a million pounds,presumably though he might have DONE something for the million quid??

    In addition this non wanting to give an interview by the BBC great and the good leaves a bad taste in the mouth and seta dangerous precedent.

  • rate this
    -22

    Comment number 287.

    I don't see the problem
    If you want someone to do their best work after you've told the. To get lost, do you give them their standard notice period and financial package? In most areas, someone getting such a deal would be asked to leave immediately, so they could do no damage.
    Their salaries were high, so their package of remuneration in redundancy was high. The extra was incentive to be good.

  • rate this
    -2

    Comment number 286.

    It's time to go private. The license fee is an outdated idea from some communist-era thinking.

    Let the BBC fight it out amongst other media and those who wish to watch the BBC, opt in.

  • rate this
    +3

    Comment number 285.

    Dad's Army is one of the best programmes on the BBC in prime time compared to the rest of the dross! If the BBC want to save money - when are they going to get rid of BBC Chav (BBC Three) ?

  • rate this
    +2

    Comment number 284.

    Come on Parliament. Let Hodge loose on Lucy Adams.

  • rate this
    +3

    Comment number 283.

    @ 248. Mark

    I CHOOSE to pay Sky and can cancel that payment whenever I so choose. The license fee is imposed on me irrespective of if I want to watch the drivel that the BBC both makes and shows. If they are confident they provide value for money, give the public the chance to opt out, see how many people pay for their service when they have a choice!

  • rate this
    +1

    Comment number 282.

    I wonder how much people pay for their licence watching the BBC abroad on cable or satellite?

  • rate this
    +2

    Comment number 281.

    @246 Dave666
    "Now we know how the organization achieves its outstanding left wing bias" - firstly please give evidence of political bias (isn't the Chair of the BBC Trust a famous Tory?) and then could you explain how mismanaged redundancy payoffs "achieve" perceived political bias?

  • rate this
    -17

    Comment number 280.

    Ironic that the anti-BBC propagandists are given the space on a BBC forum to indulge in their comical rants. Shame that Speak you're Branes isn't running any more, they'd have a field day.

  • rate this
    +2

    Comment number 279.

    BBC gravy Train, See power does corrupt!
    close this Quango....

  • rate this
    +2

    Comment number 278.

    Re 249
    A customer of Sky can decide to leave and stop paying for the privilege. Not so with the BBC. And how can an organisation justify throwing £0.5m at a manager simply to retain his 'goodwill' over his last 6 months. Utterly ridiculous waste of licence payers money (that we can't stop paying).

  • rate this
    +8

    Comment number 277.

    Like all government programs, and the BBC is no different, once people are put in charge of money taken from people by force, the scope for corruption is as great as accountability is lacking. Can you wit hold your payment to this corrupt oraganisation like you could a private one? Nope! Try it and get fined!

    "The BBC's head of HR said she made a mistake in her earlier evidence to MPs"
    =
    Whoops!

  • rate this
    -9

    Comment number 276.

    Firstly I think we need to forget this is the BBC as so much political bias gets in the way.

    When a post is being made redundant then the terms of the contract have to be honoured - simple.

    If the post is not disappearing but the organisation wishes to reduce costs by employing someone at a reduced rate then negotiations have to take place to make it happen - hence enhanced payments - simple.

  • rate this
    +10

    Comment number 275.

    1/ BBC needs to pay these monies back to the treasury.
    2/ If the BBC have money to give away government should cut their budget accordingly

  • rate this
    -40

    Comment number 274.

    Look pay off, I would careless

    The bottom line is I am on a 6 figure sum, I deserve it. My bonus alone is mind blowing but I have several degrees and a couple of postgraduate courses, and anyone who has attained this knows we deserve this

    Go and study more, There is a correlation between Postgraduate degrees and salaries

    When you do then come and comment please

    The BBC did not lose plot !

  • rate this
    +1

    Comment number 273.

    Patten has been at the forefront of scandal after scandal in his tenure at the BBC, its been an utter shambles top to bottom, he has personally and almost single handedly dragged the BBC into the mire of his squalid little empire of cronyism.
    "Crowngate" , freeloading by executives,Saville, George Entwistle fiasco and now severance pays - if he had a shred of decency he would fold the RESIGN NOW.

 

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