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BBC's Lord Patten asked to account for £740m payment into pension scheme BBC's Lord Patten asked to account for £740m payment into pension scheme
(about 17 hours later)
The BBC Trust chairman, Lord Patten, has been asked to account for how the corporation has been forced to use £740m of licence fee payers' money over the next four years to plug its £2bn pension deficit.The BBC Trust chairman, Lord Patten, has been asked to account for how the corporation has been forced to use £740m of licence fee payers' money over the next four years to plug its £2bn pension deficit.
Tory MP Rob Wilson has written to Patten asking him to explain when the BBC Trust became aware of the scale of the problem and the plan use licence fee money to prop up the scheme.Tory MP Rob Wilson has written to Patten asking him to explain when the BBC Trust became aware of the scale of the problem and the plan use licence fee money to prop up the scheme.
"The BBC Trust's core responsibility is to safeguard licence fee payers' money," said Wilson, in a letter made public on Wednesday. "Lord Patten needs to explain what he and the trust knew about this deficit, and what they did to protect licence fee payer's money, and when.""The BBC Trust's core responsibility is to safeguard licence fee payers' money," said Wilson, in a letter made public on Wednesday. "Lord Patten needs to explain what he and the trust knew about this deficit, and what they did to protect licence fee payer's money, and when."
On Tuesday, the BBC Trust's internal report to members of the pension scheme was leaked, revealing that the deficit has doubled from £1.1bn to £2bn between 2010 and 2013.On Tuesday, the BBC Trust's internal report to members of the pension scheme was leaked, revealing that the deficit has doubled from £1.1bn to £2bn between 2010 and 2013.
A plan to plug the hole will involve £740m being injected over four years, with the BBC opting to use licence fee payer money rather than try and force the costs onto the scheme's existing members.A plan to plug the hole will involve £740m being injected over four years, with the BBC opting to use licence fee payer money rather than try and force the costs onto the scheme's existing members.
Wilson was critical of Patten, who said in a speech last year that "openness and transparency are the best custodians of responsible housekeeping", for not publicly revealing about the scope of the issue.Wilson was critical of Patten, who said in a speech last year that "openness and transparency are the best custodians of responsible housekeeping", for not publicly revealing about the scope of the issue.
"I am surprised that ... even though licence fee payers will be left to pick up the bill ... that the BBC chose to reveal the dramatic increase in the scheme's deficit through an internal document to staff who are members of the scheme, without apparently communicating these developments to the licence fee-paying public," said Wilson."I am surprised that ... even though licence fee payers will be left to pick up the bill ... that the BBC chose to reveal the dramatic increase in the scheme's deficit through an internal document to staff who are members of the scheme, without apparently communicating these developments to the licence fee-paying public," said Wilson.
Wilson also queried whether the BBC Trust had bothered to commission any "expert assessment" of the performance of the scheme and its deficit.Wilson also queried whether the BBC Trust had bothered to commission any "expert assessment" of the performance of the scheme and its deficit.
"I am sure that licence fee payers and my fellow members of parliament would find it useful if you were to state the alternative options that the BBC proposed," he said."I am sure that licence fee payers and my fellow members of parliament would find it useful if you were to state the alternative options that the BBC proposed," he said.
The BBC has said that the scheme suffered due to the global economy – interest rates and government bond yields remain low – and life expectancy has also increased.The BBC has said that the scheme suffered due to the global economy – interest rates and government bond yields remain low – and life expectancy has also increased.
The corporation tests the level of the pension deficit each year and every third year does an official valuation and updates the deficit repayment plan.The corporation tests the level of the pension deficit each year and every third year does an official valuation and updates the deficit repayment plan.
A worsening of the deficit in the 2010-13 period had been anticipated for at least two years, the BBC said, and that the corporation's financial plans have been prepared with that in mind.A worsening of the deficit in the 2010-13 period had been anticipated for at least two years, the BBC said, and that the corporation's financial plans have been prepared with that in mind.
"External factors have caused the BBC's pension deficit to increase significantly since 2010 but without recent reforms to staff benefits the BBC would now be facing an even bigger problem," said a spokesman for the BBC Trust. BBC Trust spokesperson said: "We have received a letter from Mr Wilson on this subject and will respond in due course. As we have already publicly said, external factors have caused the BBC's pension deficit to increase significantly since 2010 but without recent reforms to staff benefits the BBC would now be facing an even bigger problem. Before approving the BBC's new funding plan, the trust considered the various options and set parameters around what would be acceptable given our responsibility to licence fee payers. We concluded that this plan provides the best solution because it addresses the shortfall in an affordable and manageable way."
"Before approving the BBC's new funding plan, the trust considered the various options and set parameters around what would be acceptable given our responsibility to licence fee payers. We concluded that this plan provides the best solution because it addresses the shortfall in an affordable and manageable way."
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