Lord Patten: 'Shock and dismay' over BBC payments

Lord Patten: "It was a question of shock and dismay for us to discover how many had been beyond contractual"

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BBC Trust chairman Lord Patten has called the size of severance payments made to senior BBC managers a matter of "shock and dismay".

Lord Patten and director general Lord Hall have been questioned by MPs on the Public Accounts Committee (PAC) over £25m paid to 150 outgoing executives.

Lord Patten said he was not told some pay-offs went beyond contractual terms.

He told the committee he would "be as interested as you are why we didn't know".

The chairman said the trust was only contacted about two of the payments by former director general Mark Thompson and was assured they were within contractual terms and had been signed off by the executive remuneration committee.

'We got this wrong'

The corporation was criticised by the National Audit Office (NAO) in a report published earlier this month saying the scale of the payments risked public trust.

Analysis

The issue that appalled and dismayed MPs most was the BBC giving managers pay-offs above what they were owed. The National Audit Office said that of the payments it investigated one in four was over what was contractually required.

Did the BBC Trust know this was happening? No. Should it have known this was happening? The answer from the chairman Lord Patten was a straightforward "Yes".

The follow-up firmly pointed the finger at the man who was said to have given the BBC Trust assurances on two occasions about certain payments, the former director general of the BBC, Mark Thompson.

Chris Patten's words "I would be as interested as you are why we didn't know," firmly shifted attention to Mr Thompson's position in all of this.

Mr Thompson, who was unable to attend today, is due to give evidence in November.

Lord Hall told the committee "the onus of responsibility for these decisions on these payments lies with the BBC".

"We got this wrong - we were overpaying. The fault lies with us - the executive of the BBC," he said.

The NAO noted that former BBC director general George Entwistle was paid £475,000 after he announced his resignation in November 2012. This included three weeks' salary worth £25,000 that was not part of his severance package of £450,000.

When asked by the committee what Mr Entwistle had done in those three weeks, Lord Patten replied: "Very little."

"We were worried there might be issues in the handover to [acting director general] Tim Davie but he coped brilliantly on his own and in 12 days we had hired Lord Hall as the new director general. As it happened he wasn't required to do anything," he said.

He said he was aware the package he agreed would not be the "most popular" thing he has done but the alternative would have "been more expensive and left a gap at the top of the BBC".

In its report, the NAO provided analysis of several case studies, one of which was the former deputy director general Mark Byford who was paid £949,000, which included £73,000 for unused leave.

'Lost the plot'

BBC Trust member Anthony Fry was questioned about a letter from Mr Thompson to the trust which said the pay-off to Mr Byford was within contractual arrangements, when it was not.

Committee chairwoman Margaret Hodge repeatedly asked Mr Fry whether Mr Thompson had lied to him. He refused to answer but said there was "some disconnect" between the letter and what the NAO found.

Mr Fry added he thought some senior BBC staff were "completely out to lunch as to what they thought was acceptable pay in a public body".

Lucy Adams: "The overwhelming focus was to get numbers out of the door as quickly as possible"

Mark Thompson now works for the New York Times. The company has issued a statement saying: "Mark continues to have the full support of the New York Times Company board and of his colleagues in management."

Lucy Adams, the director of HR at the BBC, also appeared before the committee. She explained Mr Byford's payout was 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".

Lord Hall told the committee that the culture in the BBC that allowed these payouts was "accepted but was wrong".

"We'd lost the plot. We'd got bedevilled by zeros on salaries. There was not enough grip at the centre of the organisation. Things were devolved far too low down," he said.

In 14 of the cases looked at by the NAO, the payments far exceeded the amount to which the outgoing executives were entitled.

Amyas Morse, head of the NAO, said: "Weak governance arrangements have led to payments that exceeded contractual requirements and put public trust at risk."

'Similar gesture'

The NAO report highlighted the case of former BBC2 controller Roly Keating, who was given a £375,000 payout but returned the money after he found out it had not been properly authorised.

But Lord Patten told the committee he would not be asking others to pay back money.

"I would not risk asking to get money back - lose in court and fetch up paying more money from the licence fee payer than would have been the case otherwise," he said.

Lord Patten said he was "very pleased" Mr Keating had paid the money back.

"I think other people with an appropriate sense of seemliness would see whether they should make a gesture similar to Roly Keating," he added.

The BBC announced in April it was consulting staff on capping redundancy payments at £150,000 or 12 months' salary, whichever is lower.

It is the BBC's executive board remuneration committee that takes decisions on senior pay packages but the BBC Trust has to hold the executive board to account.

The trust asked the NAO to carry out a review following public concern about the BBC's severance payments to senior managers.

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