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http://www.ex-bbc.net/cgi-bin/yabb/YaBB.pl >> News and Comment >> DG's letter to Public Accounts Committee. http://www.ex-bbc.net/cgi-bin/yabb/YaBB.pl?num=1373473417 Message started by Administrator on Jul 10^th, 2013, 4:24pm

Title: DG's letter to Public Accounts Committee.
Post by Administrator on Jul 10^th, 2013, 4:24pm

BBC Director-General's letter to Rt Hon Margaret Hodge MP - 10 July 2013

Dear Margaret,

I thought it helpful if I set out to the Committee the steps that I have taken to address the issue of payments to staff leaving the BBC since I became Director-General.

I should start by repeating that I believe the BBC lost its way on this issue in recent years. Poor procedures and a lack of central oversight helped to create a climate where the wrong culture was allowed to flourish. The ambition - to reduce management costs - was right. The approach in certain instances was fundamentally flawed. As the NAO Report makes clear the decisions taken put trust in the BBC at risk. As a publicly funded organisation the trust of licence fee payers is our most precious currency.

I said on the Today Programme on my second day in post (April 3) that I would address this issue. I announced a £150,000 cap at the Culture Media and Sport Select Committee hearing (24 April). The cap will apply to all staff - old and new - from 1 September 2013.

As the NAO Report says, it is less than the maximum available under civil service terms but I believe that it is fair. This does of course mean changing existing contracts but there is a recognition across the senior management team that it is the right thing to do.

Before my arrival, promises had been made to some employees under threat of redundancy, for sums above this £150,000 cap based on their existing entitlements. This was part of the programme to reduce the number of senior managers and there were 26 such cases as at 22 April. At the Senior Management Remuneration Committee that day I asked that all of those cases be reviewed. We have managed to get this number down further, for example through extra effort at redeployment, and those individuals, like everyone else, will be subject to the new cap from 1 September.

There are 11 cases where redeployment has simply not been possible to date and it is therefore highly likely that the individuals will have left the BBC by 1 September. Given the contractual promises that had already been made by the BBC, these individuals will in all likelihood receive amounts above £150,000 upon departure.

I recognise that this position is not ideal but it was always going to be difficult to transition from one regime to another overnight.

The cap is obviously important but so too is proper audit. In recent times only severance payments for Executive Board members went to the Executive Remuneration Committee. This meant that there was far too much delegated authority across the organisation on an issue of great public sensitivity. Of the payments highlighted in the NAO Report it would appear that over 40 different individuals were involved in their approval. This serves to underline that this was an institutional rather than an individual failing. It also demonstrates the need for more rigorous Executive oversight and simpler processes going forward.

We announced last week that we are streamlining the system and that all payments over £75,000 will now be signed off by the Senior Remuneration Committee, which I will chair and which will also have a Non-Executive Director, Sally Davis, as a member. There will be no opportunity for agreements to be signed off outside this process. We cannot change the decisions of the past but I believe that this should ensure that future settlements are proportionate alongside an approval and audit process that is appropriate. We will then take stock to see how the new system is working

I believe this issue of approvals speaks to a wider truth about the BBC which we need to acknowledge and address. Our systems and decision making need to improve - not just in the area of pay but more widely across the corporate side of the organisation.

In short, we need a simpler BBC where managers are given more freedom to manage but with proper central oversight. I do not believe that is what we have at the moment. In some instances it could be argued we have the worst of both worlds - too many Boards which are, in turn, delivering too little effective assurance.

For example, there are some 55 separate Boards and Committees looking at operations and back office functions. Some major projects have had to secure an excessive number of Board approvals in recent years. This is something I am getting the leadership of the BBC to deal with as a matter of urgency

We are custodians of licence fee payers’ trust and money. I fully understand that the BBC must show that it recognises the difficult economic times we are living through.

Yours sincerely,

Tony Hall

Director-General

Source:-
http://www.bbc.co.uk/mediacentre/statements/dg-letter-margaret-hodge.html

Title: Re: DG's letter to Public Accounts Committee.
Post by Administrator on Jul 10^th, 2013, 5:04pm

Meanwhile:-

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

"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"."

Source:-
BBC News.

"Patten said some of the payments had been approved to "get people out of the door" after the BBC decided to cut the number of senior managers it employed." Source:- "The Independent".

Title: Re: DG's letter to Public Accounts Committee.
Post by double-vision on Jul 11^th, 2013, 12:47pm

In the latter part of Hall's letter it states "For example, there are some 55 separate Boards and Committees looking at operations and back office functions." I find this figure incredible. What in all honesty do they all do? Decide when to have the next meeting, decide when to create another board. It's like some giant amoeba reproducing by fission unsure of or not really caring what the true purpose of the BBC is. Truly awful!

Title: Re: DG's letter to Public Accounts Committee.
Post by Administrator on Jul 11^th, 2013, 3:29pm

Ex- DG Mark Thompson's reply is reported here, on the BBC News site.

Former BBC director general Mark Thompson has said the BBC Trust knew about £949,000 in severance pay to his deputy Mark Byford.

In a statement, Mr Thompson said he was "looking forward to laying the facts in front of the Public Accounts Committee in person, but there are a couple of inaccuracies that emerged in yesterday's testimony to the PAC which I would like to clear up immediately".

Title: Re: DG's letter to Public Accounts Committee.
Post by FoxyFace on Jul 12^th, 2013, 11:35am

The complete Public Accounts Committee meeting of 10/7 is currently available through the BBC Democracy Live site. Most interesting.

Title: Re: DG's letter to Public Accounts Committee.
Post by Administrator on Jul 12^th, 2013, 4:34pm

"BBC Democracy Live" may be found here.

"The Public Accounts Committee took evidence on BBC severance packages from senior BBC executives, on 10 July 2013."

Thank you FoxyFace, for the link.