The criticism came after the National Audit Office revealed a report on the use of confidentiality clauses and the size of severance payments authorized by the Government. It was specifically revealed by the NAO that the BBC had paid £60m to departing staff in severance packages since 2005.
The National Audit Office’s report found that 367 of the 436 senior managers at the BBC were still operating on terms that allowed them to claim two years’ pay if they were to be made redundant by the organisation – far higher than the statutory minimum which allows only up to a maximum of 12 weeks to be paid, a figure which is eight times smaller than the enhanced contractual pay-offs. It’s not unusual for senior staff members in organisations to be awarded packages where they receive enhanced contractual redundancy pay but the BBC was criticized for the excessive nature of the payments. Under the arrangements the average redundancy settlement for a senior BBC manager in the three years leading up to December 2012 was £164,200. In over a quarter of the cases reviewed by the National Audit Office, the senior managers who were being made redundant were paid more pay in lieu of notice (“PILON”) than they were contractually-entitled to, leading to a cost to the taxpayers of apparently over £1 million.
Anthony Fry, chairman of the BBC Trust’s Finance Committee stated that the payments would be “quite right, met with considerable dismay by licence fee payers and BBC staff” and “there can be no repeat of such a fundamental error of oversight and control”.
The redundancy payments came after the BBC was restructuring its management in an attempt to bring the number of senior managers down.