This editorial appeared in the Financial Times, July 13 2012:

BBC needs to tune in to harder times
Broadcaster needs better governance and accountability

Funded by taxpayers yet independent of political control, the BBC occupies a unique and privileged place in British public life.

The corporation enjoys huge freedom to interpret its remit as the nation’s broadcaster. But with that comes an obligation to tread wisely and to husband its resources with care. Recent scandals about lavish severance payments to former senior employees and vast sums wasted on a technology project suggest that on both scores it has fallen well short of the mark.

The first is particularly toxic, involving as it does high pay and lax controls. Whatever the rights and wrongs of the dispute between Lord Patten, chairman of the overseeing BBC Trust, and the corporation’s former director-general, Mark Thompson, over who knew what about contract-busting payments to top managers, there can be no excuse for the handouts.

Mr Thompson, now chief executive of The New York Times, must bear the primary responsibility. During his time at the helm, which straddled the pre-crisis boom, the BBC became notorious for handing out fat salaries to a top-heavy tier of senior managers.

This did little for programme quality but cost the BBC dear in terms of public credibility. For Mr Thompson to have sanctioned top-up payments to this overpaid and supernumary caste is scandalous, even if the Trust approved them as he claims.

Lord Hall, Mr Thompson’s successor, has sought to draw the poison. He has capped severance payments at £150,000. He has also terminated a failed technology project that trundled on, apparently without adequate supervision, under Mr Thompson and may have cost the BBC more than £100m.

Unlike his predecessor, whose relationship with Lord Patten was disfigured by turf battles, Lord Hall has a cordial partnership with the chairman. Closer collaboration between the Trust and executive board may help the corporation dodge similar scandals in future.

But relying on individuals to get along is not enough. The BBC is still too flabby. Fewer managers and more accountability would not go amiss. There remains a sense that whatever goes wrong, managers rarely take the rap.

The governance structure should also be examined. The rigid split devised under the Labour government of the BBC Trust, with its focus on protecting the licence payers’ interest, and the executive board, which is responsible for operations, is unwieldy. Big decisions can too easily get lost in the cracks. The Trust seems to lack both the expertise and information to hold the executive to account.

Several simple reforms suggest themselves. First, the BBC should have a proper executive board, with a separate chairman rather than the current imperial regime where the director-general performs both roles. The Trust chairman would be the obvious choice.

Second, with discussions on charter renewal starting soon and value for money high up the agenda, the BBC should give the National Audit Office much greater freedom to investigate its activities on behalf of the public.

Lastly, there is the regulator. The Trust must be beefed up or replaced. Ofcom should be considered as an alternative.

In austere times, the BBC cannot rely on its historic prestige to sweep aside complaints about overspending and weak governance. The scandals are a deserved wake-up call that it must heed.