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BBC paid out £25m in severance pay BBC criticised for £25m severance bill for 150 managers
(35 minutes later)
The BBC paid out £25m in severance payments to senior BBC managers in the three years to December 2012, according to a National Audit Office report. The BBC has been criticised by the National Audit Office for paying out £25m to 150 senior BBC managers in severance payments.
The top 10 payments accounted for 20% of the total paid out. The top 10 payments in the three years to December 2012 accounted for 20% of the total paid out.
The BBC said the savings it had made during that time from senior manager redundancies exceeded the cost of severance payments. The BBC said the savings it had made from senior manager redundancies exceeded the cost of severance pay.
The BBC's director general Tony Hall said: "These payments were from another era and we are putting a stop to them. The BBC's director general Tony Hall said: "These payments were from another era and we are putting a stop to them."
"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."
The BBC announced in April that it was consulting staff on capping redundancy payments at £150,000 or 12 months' salary, whichever is lower.
The National Audit Office (NAO) found that the BBC had breached "its own already generous policies on severance payments".
Amyas Morse, head of the NAO, said: "Weak governance arrangements have led to payments that exceeded contractual requirements and put public trust at risk.
The BBC Trust also came in for criticism, with the NAO noting "decisions to award severance payments that exceed contractual entitlements have, until recently, been subject to insufficient challenge and oversight".
"The BBC's proposal to cap redundancy payments, announced in 2013 by the new director general, is a signal of change for the better. It is well below the maximum that applies to civil servants."
The NAO noted that the BBC Trust paid former BBC director general George Entwistle £475,000 after he announced his resignation. This included three weeks' salary worth £25,000 that was not part of his severance package of £450,000.
Mr Entwistle was entitled to a notice period of 12 months, although he was only in the job for 54 days.
The BBC Trust has since agreed with Mr Hall on a reduction to his notice period from 12 to six months.
The Trust asked the NAO to carry out a review following public concern about the BBC's severance payments to senior managers.
Anthony Fry, BBC trustee and chair of the Trust's financial committee, said: "Although the BBC has achieved significant savings in its senior manager pay bill, 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.
"Such practices are unacceptable, and I have no doubt that they will, quite rightly, be met with considerable dismay by licence fee payers and staff alike."
He added: "We have asked the Exec to increase the transparency of the BBC's severance payments by disclosing more information in the annual report and accounts."