A new report by the National Audit Office says the BBC has broken its own policies on severance pay “too often without good reason.”
The report reveals that 150 departing BBC managers have been paid £25m in the three years to December 2012, often pocketing tens of thousands of pounds instead of having to work notice periods.
During the period more than £3m was paid out in lieu of notice, including where some staff had secured paid employment before leaving the corporation.
The NAO report finds that the BBC’s pay-off policies are more generous than at many large private sector companies and that they have not always been adhered too, leading to larger than contracted payments.
Highlighted areas of concern include agreeing to pay £60,000 for consultancy services and £49,000 for training and IT equipment as part of settlements with departing staff.
The report warns such expenditure risks “potential reputational damage”.
It also says the BBC’s breaching of its own guidelines “has resulted in payments that have not served the best interests of licence fee payers.”
“Weak governance arrangements have led to payments that exceeded contractual entitlements and put public trust at risk. The severance payments for senior BBC managers have, therefore, provided poor value for money for licence fee payers.”
Despite the criticisms, the report says salary savings arising from the £25m pay-outs have already exceeded £35m and that the sum will continue to grow.
However BBC Director General Tony Hall, who has already pledged to limit pay-outs to £150,0000, said the BBC had achieved its objective to reduce manager numbers “in the wrong way.”
Hall, who took up the post as Director General in April, said: “I believe the BBC lost its way on payments in recent years. I have already said that we will be capping severance payments at £150,000 and we have now begun to improve our processes. These payments were from another era and we are putting a stop to them.“
Anthony Fry, who chars the BBC Trust’s Finance Committee said: “Some of the NAO’s conclusions are deeply worrying, particularly the failure to follow agreed severance policies in a number of cases as a result of weak governance from the BBC Executive in the past.”
Fry added that such failures were “unacceptable, and I have no doubt that they will, quite rightly, be met with considerable dismay by licence fee payers and staff alike”