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U.K. Watchdog: BBC Severance Pay Has 'Too Often' Been Excessive

George Entwistle – H 2012
Getty Images
Former BBC director general George Entwistle.

Overpayments to departing top executives, such as former director general George Entwistle, put the broadcaster's public trust at risk, Britain's National Audit Office says in a report.

LONDON – The BBC has breached its own policies on severance payments "too often" and without good reason, exceeding contractual entitlements and putting public trust at risk, Britain's National Audit Office said in a report published Monday.

The spending watchdog found that the severance payments for BBC managers have overall provided "poor value for money." It cited the controversial severance pay for BBC director general George Entwistle, who resigned last fall amid the Jimmy Savile abuse scandal, as one example of insufficient oversight of payouts to top managers.

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"Decisions to award severance payments that exceed contractual entitlements have, until recently, been subject to insufficient challenge and oversight," it concluded, citing 60 sample cases of "unusual payments that were subject to little central assessment of the potential risks to the BBC of making them."

The BBC Trust paid Entwistle $723,000 (£475,000) after announcing his resignation. "This included three weeks' salary worth $38,000 (£25,000) that was not part of his severance payment of $685,000 (£450,000)," the report concluded.

The watchdog's report for the BBC Trust, the public broadcaster's governing body, did find, however, that the savings the BBC has made from cutting top executives have exceeded the cost of severance payments.

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Among the NAO's recommendations are that the BBC include within its remuneration strategy "principles that will guide decisions on severance entitlements and ensure that its revised severance polices are communicated clearly and consistently applied." The BBC should also increase scrutiny of severance payments that go beyond standard entitlements, the report said.

The BBC Trust said it accepted the recommendations and would "ensure they are implemented in full."

New director general Tony Hall said in April that the BBC plans to cap severance payments at a full year of salary or $228,000 (£150,000), depending on whichever is lower.

E-mail: Georg.Szalai@THR.com
Twitter: @georgszalai