The BBC has been accused of a "cavalier" attitude towards licence fee money over a £450,000 payoff to director-general George Entwistle as MPs warned: "Public servants should not be rewarded for failure."
Entwistle resigned after just 54 days in the job as a result of his handling of the fallout from the Jimmy Savile crisis, and was paid the money – twice the amount to which he was entitled – in order to speed up his departure.
But a report by the Public Accounts Committee was scathing, saying it was "out of line both with public expectations and what is considered acceptable elsewhere in the public sector". It said further benefits paid to him were "an unacceptable use of public money".
MPs also criticised "excessive" severance payments to ten other senior managers, including former chief operating officer Caroline Thomson who received £670,000 when she left this year.
During the committee's hearing last month, MPs accused the BBC of offering her a large redundancy sum as "compensation" when she failed in her bid to become DG. The report said the committee was "extremely concerned" that the BBC Trust – which agreed the payoff to Mr Entwistle – had rejected an offer for the National Audit Office to examine the package for the ex-DG, who stepped down on November 10. It said: "This inhibited Parliament's ability to hold the Trust to account for its use of public money."
Entwistle would normally have been entitled to £225,000 – half his salary – if he had voluntarily resigned. But the Trust agreed to the larger amount to allow a speedy clean break allowing them to draw a line under the episode and seek a new DG without lengthy legal negotiations.
A BBC Trust spokeswoman said: "Of course £450,000 is a very substantial sum, but the terms reached were the best available in the circumstances. As already explained to the PAC and the Culture, Media and Sport Select Committee it is simply wrong to suggest the BBC Trust had a choice between a severance payment of £450,000 or half that level. Indeed, if we had faced a constructive dismissal situation it would have cost us more."
Public Accounts Committee chair Margaret Hodge warned that out-of-touch BBC executives risked inflaming "dangerous" calls for the broadcaster to be subject to more political oversight. She told BBC Radio 4's Today programme: "I don't think the BBC gets it and doesn't understand public opinion."
The MPs' investigation found 10 senior executives had left recently with more than £250,000 and that more than 400 senior executives got private healthcare packages, she said. "For our money, through the licence fee, to be used to fund public servants accessing private healthcare just doesn't seem right."
BBC Trust chairman Lord Patten said the corporation was looking at whether it could get some of the money back, but said he doubted that any bid to recoup some of the cash would be successful. He said: "We've taken legal advice about whether we could actually take any money back. In order for us to do so, we have to be able to argue that, on the basis of what Pollard says, it would have been justified to make a summary dismissal of the former director-general and I rather doubt whether we will get the legal go-ahead for that."
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