Yesterday, the National Audit Office (NAO) released a fiercely critical report on the levels of severance pay at the BBC. It found that the corporation had given licence fee payers poor value for money with the £25 million it dished out in payoffs to 150 senior members of staff.
BBC severance payments hit the headlines last year when Director General George Entwistle was handed a £475,000 golden goodbye despite being shown the door after just two months in the job. The BBC then called in the NAO to determine the extent of the problem. The report is damning.
The severance payments for senior managers averaged an eye-watering £164,200 in the three years to December 2012. In a quarter of the cases the NAO looked at, senior managers were handed bigger payoffs than their contracts entitled them to, costing license fee payers at least £1 million.
Some of the more bizarre deals, include a commitment to buy £60,000 worth of consulting services for one former employee and £49,000 of IT equipment to “improve the individuals skills and career prospects” for another.
In one case, the BBC sought a quick exit for an employee “because the individual’s relationship with a key BBC client had broken down”. In this case the employee was not owed redundancy having only been at the BBC for 7 months, yet was handed a payoff of £95,000 - six months’ salary. Throughout this period the BBC continued to pay his car allowance, private healthcare and contribute to his pension.
Huge payoffs are not confined to the BBC, of course. Just last month we saw that NHS Trusts ran up a £2 million bill on gagging orders. Councils also hand out massive amounts of taxpayers' money to departing senior staff. These payouts are unacceptable and should not be written into contracts in the first place.