BBC accused over Entwistle payoff

The BBC has been accused of a "cavalier" attitude towards licence fee money over a £450,000 payoff to director-general George Entwistle as MPs warned: "Public servants should not be rewarded for failure."

Mr Entwistle resigned after just 54 days in the job as a result of his handling of the fallout from the Jimmy Savile crisis, and was paid the money - twice the amount to which he was entitled - in order to speed up his departure.

But a report by the Public Accounts Committee was scathing, saying it was "out of line both with public expectations and what is considered acceptable elsewhere in the public sector".

It said further benefits paid to him were "an unacceptable use of public money".

MPs also criticised "excessive" severance payments to ten other senior managers, including former chief operating officer Caroline Thomson who received £670,000 when she left this year.

During the committee's hearing last month, MPs accused the BBC of offering her a large redundancy sum as "compensation" when she failed in her bid to become DG.

The report is the latest blow to the BBC, after a review by former Sky News executive Nick Pollard - published on Wednesday - painted a picture of a top-down organisation beset with rivalries and faction fighting.

The Pollard Review found that the decision to drop a Newsnight report into Jimmy Savile's decades-long campaign of sexual abuse plunged the BBC into "chaos and confusion", revealing a corporation where "leadership and organisation seemed to be in short supply".

One senior executive has resigned in the wake of the report, with several others shunted aside into new roles.

The Public Accounts Committee report delivers another blow to the beleaguered corporation.

In it, MPs said they are "extremely concerned" that the BBC Trust - which agreed the payoff to Mr Entwistle - had rejected an offer for the National Audit Office to examine the package for the ex-DG, who stepped down on November 10.

"This inhibited Parliament's ability to hold the Trust to account for its use of public money," the report said.

Mr Entwistle would normally have been entitled to £225,000 - half his salary - if he had voluntarily resigned.

But the Trust agreed to the larger amount to allow a speedy clean break allowing them to draw a line under the episode and seek a new DG without lengthy legal negotiations.

The committee concluded: "By agreeing to this payment, the BBC Trust may have secured the director-general's quick departure but it did not act in the wider public interest. Public servants should not be rewarded for failure."

Mr Entwistle's other benefits under the deal drew further criticism. On top of his salary pay-off, he was given a year's private medical cover and contributions to his legal costs.

The committee said it considered the additional benefits to be "an unacceptable use of licence fee payers' money".

A BBC Trust spokeswoman said: "Of course £450,000 is a very substantial sum, but the terms reached were the best available in the circumstances. As already explained to the PAC and the Culture, Media and Sport Select Committee it is simply wrong to suggest the BBC Trust had a choice between a severance payment of £450,000 or half that level.

"Indeed, if we had faced a constructive dismissal situation it would have cost us more and could have been a messy and long drawn out process. It is also not the case that the Trust refused to take up the offer to review the package - on the contrary, we suggested a wider study of severance payments at the BBC, which the NAO will now undertake."

Public Accounts Committee chair Margaret Hodge warned that out-of-touch BBC executives risked inflaming "dangerous" calls for the broadcaster to be subject to more political oversight.

"I don't think the BBC gets it and doesn't understand public opinion," she told BBC Radio 4's Today.

The MPs' investigation found 10 senior executives had left recently with more than £250,000 and that more than 400 senior executives got private healthcare packages, she said.

"For our money, through the licence fee, to be used to fund public servants accessing private healthcare just doesn't seem right."

She said there was "a disparity between those... who don't get paid a lot and who work because they are committed to public service broadcasting and then a management tier who I think just don't get it.

"They don't get it that they are being paid through the licence fee, which is a form of taxation, and they don't understand that people find this astonishing.

"When you find behaviour like this where the BBC appears just not to understand how the public feel about the way their money is used, what you then get is you rekindle the argument about 'have we got the right structure, should the BBC be more accountable to parliamentarians or to government?'

"I think that is dangerous."

BBC Trust chairman Lord Patten said the corporation was looking at whether it could get some of the money back, but said he doubted that any bid to recoup some of the cash would be successful.

He told the BBC Radio 4 Today programme: "We've taken legal advice about whether we could actually take any money back.

"In order for us to do so, we have to be able to argue that, on the basis of what Pollard says, it would have been justified to make a summary dismissal of the former director-general and I rather doubt whether we will get the legal go ahead for that."

The former Cabinet minister said that with "hindsight" the Trust chose the wrong candidate for the top job.

He said that if the BBC had refused Mr Entwistle's payoff claim, it would have ended up in "an appalling mess" in the courts.

"It was precisely because we were dealing with public money and a great public service broadcaster that we took the view that it was more sensible to settle for the amount that we were being asked for rather than fetch up paying more for a constructive dismissal," he said.