Pressure is growing on BBC director-general John Birt to resign as more details of his tax affairs have emerged in the press over the past few days.
The BBC governors will meet Thursday and are expected to argue fiercely about Birt’s future, and about the role played in the scandal by chairman of the governors Marmaduke Hussey.
Newspaper reports Friday suggested that many of the governors no longer supported Birt, and had refused early last week to add their names to a statement issued by Hussey and deputy chairman Joel Barnett declaring full confidence in the director-general.
The scandal began a fortnight ago with the revelation that for the past five years, Birt, the BBC’s deputy DG, was paid as a freelance consultant rather than as a full-time employee, thus enabling him to pay less tax.
The arrangement was approved by Hussey and Barnett, but it now appears that the other governors were not informed.
In an attempt to defuse the situation, Birt quickly announced he was now joining the BBC staff, and then published extracts from an independent accountant’s report which said his net gain from having his salary paid as a freelance last year was just T810 ($ 1,200).
He insisted the purpose of the arrangement had not been tax evasion, but was simply convenience relating to the fact that he had always been paid in that manner during his previous 20 years working in the commercial TV sector.
However, this was not enough to make the scandal go away. It emerged last week that John Birt Productions Ltd. — the freelance consultancy company to which Birt’s BBC salary was paid — had paid two salaries to Birt’s wife: one overtly as a director, and one covertly as a secretarial assistant, thus reducing the household’s overall tax bill.
It was also reported that Birt’s accountant actually has no accountancy qualifications, and therefore should not legally have audited the accounts of John Birt Productions Ltd.
It was further alleged that BBC personnel exex had tried on several occasions to persuade Birt to go on the staff, but that he had refused.
None of these allegations amount to much on their own, but overall they are doing considerable damage to Birt’s moral authority as the architect of substantial structural reforms at the BBC.
These reforms, which have caused much controversy because they involve sweeping staff cuts, are ironically designed to achieve greater financial responsibility and accountability within the pubcaster.
But some observers argue that it is Hussey, rather than Birt, who should be first in the firing line, since he was personally responsible for pushing through Birt’s appointment and for approving his exceptional freelance deal.