BBC put reputation at risk with severance deals, says Margaret Hodge

The Public Accounts Committee chair accused the corporation of ‘cronyism’

A senior BBC executive could be held in contempt of Parliament after a report by the Public Accounts Committee (PAC) into huge pay-offs at the corporation suggested that witnesses may have misled MPs when they gave evidence. (Jason Alden)

A senior BBC executive could be held in contempt of Parliament after a report by the Public Accounts Committee (PAC) into huge pay-offs at the corporation suggested that witnesses may have misled MPs when they gave evidence.

Margaret Hodge, chair of the PAC, said the BBC had “put its reputation at risk” by handing over huge severance payments to senior staff.

Some of the justifications for the pay-offs had been “extraordinary”, said Mrs Hodge, who blamed a culture of “cronyism” that “allowed for the liberal use of other people’s money”.

The payments, totalling £25m handed out to 150 senior managers, included one to Deputy Director-General Mark Byford, who departed with a £949,000 settlement.

Mrs Hodge said the “dysfunctional relationship between the BBC Executive and BBC Trust”, revealed in the “unedifying disagreements between witnesses” at the hearing, “indicates that the governance model was broken”.

The report singled out the evidence of the BBC’s £320,000-a-year outgoing human resources boss Lucy Adams for particular criticism. The committee was “sceptical” when Ms Adams said she played no role in preparing a note on Mr Byford’s package. Ms Adams, who leaves the BBC next March, subsequently confirmed that she had been involved in the note.

The report said: “We remain concerned about the veracity of other parts of the oral evidence we heard. Misleading a select committee constitutes contempt of Parliament, which can have very serious consequences.” A spokesman for the committee said the panel would consider what further action to take. Penalties for contempt include prison but modern cases have been rare.

Mrs Hodge also accused the BBC Trust, the corporation’s governing body, of “sitting on its hands, failing to fulfil one of its primary duties”.

Mark Thompson, the former BBC Director-General, rejected the findings. He said the Byford package was approved by independent directors and was in “full compliance with all relevant financial and governance procedures and controls”.

A BBC spokesman said: “One of Tony Hall’s first acts on his appointment was to cap payments at £150,000 – the committee welcomed his decision.” Lucy Adams had “made it clear in her evidence to the committee that she did not attempt to mislead them, and while not immediately recognising a document that was being referred to, she clarified her position as soon as Parliament returned”.

A BBC Trust spokesman said: “We greatly regret that licence fee payers were let down by this episode. We will pursue the committee’s recommendation that the trust and executive record and communicate decisions properly so that audit concerns raised in the PAC report are addressed.”