UK
01/07/2013 12:26 BST | Updated 01/07/2013 17:42 BST

BBC 'Paid Too Much To Senior Staff' In Redundancy Payments, Reports National Audit Office

BBC pay-offs to senior staff have breached the corporation's own guidelines by being over-generous and have "put public trust at risk", the National Audit Office has said.

The NAO, which has been reviewing redundancy and severance payments to senior figures, concluded they have given "poor value for money".

In a three-year period up to December, the BBC spent £25 million on severance payments for 150 high-ranking staff, according to a report published today.

In almost a quarter of the cases reviewed by the NAO, the BBC paid out more than the staff were entitled to under their contracts - which it said cost licence-payers upwards of £1 million.

In two cases the BBC knew that the outgoing staff had already found new employment before they had left.

The BBC Trust said the NAO conclusions were "deeply worrying".

Concerns about payments have been heightened in recent months following the decision to award former BBC director-general George Entwistle twice the money to which he was entitled after resigning from his job after only 54 days.

And there has been disquiet from the Commons Public Accounts Committee about a redundancy payment to former chief operating officer Caroline Thomson last year who left with a £670,000 pay-off - more than twice her £330,000 salary.

The committee has already suggested that the money was effectively paid to "compensate" her for missing out on the director-general job.

The BBC's new director-general, Tony Hall, said he accepted the NAO's conclusions and added: "The level of some of these payments was wrong."

Mr Hall said the BBC had "lost its way on payments in recent years" and he has already announced moves to cap payments at £150,000 and improve the process.

The NAO said that the decisions to make payments higher than staff were entitled had until recently "been subject to insufficient challenge and oversight".

The report revealed that Mr Entwistle's final pay-off of £475,000 had also included a further three weeks' salary after the date of his resignation. His payment had previously been reported to be £450,000.

In its conclusions, the NAO says: "The BBC has breached its own policies on severance too often without good reason.

"This has resulted in payments that have not served the best interests of licence fee-payers. Weak governance arrangements have led to payments that exceeded contractual entitlements and put public trust at risk."

Amyas Morse, head of the National Audit Office, said: "The BBC's proposal to cap redundancy payments, announced in 2013 by the new director -general, is a signal of change for the better."

Anthony Fry, who chairs the BBC Trust's finance committee said: "Although the BBC has achieved significant savings in its senior manager pay bill, some of the NAO's conclusions are deeply worrying, particularly the failure to follow agreed severance policies in a number of cases as a result of weak governance from the BBC Executive in the past. Such practices are unacceptable, and I have no doubt that they will, quite rightly, be met with considerable dismay by licence fee payers and staff alike.

"The Trust is clear that there cannot be a repeat of such a fundamental failure of central oversight and control."