'BBC's governance model is broken,' says U.K. Parliament's Public Accounts Committee
LONDON — A powerful committee of U.K. politicians has made a stinging attack on the BBC’s management and trustees, claiming that a culture of “cronyism” had developed at the pubcaster.
The U.K. Parliament’s Public Accounts Committee, which monitors the use of public money, has been investigating the high level of severance payments for departing BBC execs. In the three years to December 2012, the BBC gave 150 senior managers severance payments totaling £25 million ($40.8 million) as part of an effort to cut the number of senior managers from 624 to 445.
PAC concluded that “the BBC paid more salary in lieu of notice than it was obliged to in 22 of the 150 severance payments for senior managers in the three years to December 2012, at a cost of £1.4 million ($2.28 million).”
PAC, which is chaired by Member of Parliament Margaret Hodge, concluded that “cronyism was a factor that allowed for the liberal use of other people’s money.”
The committee reprimanded the BBC Trust, the network’s governing body, headed by Chris Patten (pictured, above left, with BBC director-general Tony Hall), for not challenging the payments, which it said was symptomatic of a wider malaise at the pubcaster.
PAC said: “Our examination of severance payments exposed a dysfunctional relationship between the BBC executive and the BBC Trust that casts doubt on the effectiveness of the BBC’s governance model.”
It concluded that there had been a “breakdown in the relationship between the BBC Trust and the executive. At present the governance model is broken.”
The BBC last week revised the rules of engagement between the executive and the Trust in the hope that it would improve its effectiveness and transparency.
PAC warned that “The Trust and the executive have a limited amount of time to demonstrate that the current governance model can be made to work.”
The BBC was contrite in its response, stating: “We greatly regret that license fee payers were let down by this episode. They are entitled to expect that their money is spent wisely.”
It pointed to a decision last year by Hall to impose a $245,000 cap on severance payments.
Hall became director-general in April. He replaced George Entwistle, who departed after a furor over the BBC’s handling of the Jimmy Savile pedophile scandal.