Report reveals pay hike for BBC director general and chairman

The total pay of the BBC's director-general and its chairman went up in the last year, despite the corporation's cost-cutting measures, its annual report and accounts showed today.

Director-general Mark Thompson's total remuneration increased by 2% in 2008/09, from £816,000 the previous year to £834,000.

Total pay for executive directors went down from £4.96 million last year to £4.601 million - a 7% decrease.

BBC chairman Sir Michael Lyons's total remuneration increased by £50,000, from £163,000 in 2007/08 to £213,000 in 2008/09.

Within this year's figure, his "taxable benefits" doubled over the last year from £35,000 to £70,000.

Sir Michael was appointed chairman in May 2007, so his fees for the 2007/08 period did not quite cover the full year.

Total remuneration figures for the BBC Trust, of which Sir Michael is chair, increased from £642,000 in 2007/08 to £677,000 in 2008/09.

The BBC is making efficiency savings of £1.9 billion over the licence fee period and it has said it has to find a further £400 million of "painful" cuts.

Mr Thompson and Sir Michael defended the figures, Mr Thompson pointing out that he has waived his right to be considered for bonuses.

He has not taken a bonus for each of the five years in the job, explaining why total remuneration went down for other directors, who took a bonus last year but have been subject to a freeze this year.

Bonuses for the corporation's 10 most senior executives are being waived indefinitely.

In today's Financial Times, Culture Secretary Ben Bradshaw criticised BBC bosses for creating "almost a feeling of despair" among staff by opposing plans to "top slice" the licence fee, which would pay for public service programmes on non-BBC channels.

Sir Michael said it was "surprising that a secretary of state who has just started a public consultation exercise should give the impression that he has already made his mind up so firmly."

Sir Michael said he had focused on the interests of those who paid the licence fee.

He said there was a risk of damaging accountability and the independence of the BBC as well of a risk of a higher licence fee in future.

Asked for Gordon Brown's response to the Culture Secretary's comments, the Prime Minister's spokesman said: "Ben Bradshaw is clear that he views the BBC as a unique and high-quality broadcaster. Ben Bradshaw is a champion of the BBC and is fully committed to its future.

"The specific issue in relation to the BBC that came out of the Digital Britain report was 'How do we ensure the future of local and regional news?'

"We know this is something that is much valued by the public and we have put forward our proposals as to how we think the future of regional news can be secured by using a small fraction of the license fee.

"We were always clear that, if other people have other proposals, of course we will look at those, but we are not aware of any such realistic proposals being put forward."

Responding to Mr Bradshaw's comments, Sir Michael said: "There is room for differences of opinion here."

He said not everyone needed to have the same view and there was no need to descend into "personal criticism".

Mr Bradshaw replaced Andy Burnham in a Cabinet reshuffle last month and is himself a former BBC journalist.

Liberal Democrat culture spokesman Don Foster backed Sir Michael's view, saying: "Ben Bradshaw's comments mark the thin end of the wedge and threaten to damage the BBC's strength and independence."

The Government's recent Digital Britain report has suggested ring-fencing part of the TV licence fee to fund ITV local news and other important but less profitable shows on channels other than the BBC.

From 2013 about 3.5 per cent of the fee - around £130 million a year - could be allocated to public service programmes on non-BBC channels.

Sir Michael said he feared that establishing the principle of sharing the money could lead to it being used as a "back pocket" for a range if activities which damaged accountability.

During the year, the BBC's overall weekly reach to the UK held steady at 93 per cent.

Digital channels BBC3, BBC4 and the BBC News Channel all saw increases, although BBC1, BBC2 and CBBC experienced slight drops.

Licence fee evasion rose slightly from 5.1 per cent to 5.3 per cent, reflecting "current economic conditions", the BBC said, but this was offset by more efficient collection.

The number of iPlayer users has reached 2.8 million a week.

The BBC also brought up its "truly notable mistake" of the year - the Sachsgate scandal - but said it was consulting widely on new editorial controls.

Mr Thompson, whose 2% rise was in line with other BBC employees, added: "In the year ahead we will continue to drive down our costs, become more transparent about how we operate and, above all else, focus on providing the best television, radio and online services for the public who own and pay for the BBC with their licence fee."

The BBC has come under fire for refusing to give a breakdown of its talent costs, but has promised to make the total amount public.

While salaries are being reviewed, Sir Michael said the BBC should be able to attract managerial and on screen talent to compete with the best.

He said: "Nothing is being ruled in or out" and the BBC would not simply "play to the gallery".

The report also showed that more BBC senior managers are earning £70,000-plus this year than last year.

In 2007/08 the figure was 669, whereas in 2008/09 701 top bosses were on this sum.

Shadow Culture Secretary, Jeremy Hunt, said it was important that the BBC's senior staff "don't lose touch with reality".

"This year there are even more managers on £70,000 or more than there were last year.

"We need to see more than a bonus freeze for 10 executives if licence fee payers are to be convinced they are getting value for money."

Mr Bradshaw later said Sir Michael should not interpret his comments personally.

He told BBC Radio 5 Live's Simon Mayo show: "He should not take it as personal criticism. It is not personal criticism. It is an appeal for leadership."

He also emphasised: "I'm not accusing any individual of a lack of leadership here."

Put to him that there was a "spat" going on, Mr Bradshaw said: "I don't want to have a spat with the BBC about this."

But he said there was a "serious problem in this country" and that the public and parliamentarians greatly value local and regional news, which is in "crisis".

He said: "There is a serious real question mark over whether ITV can continue to provide regional news.

"We are suggesting a very small fraction of the licence fee should be ringfenced ... to help fund some kind of alternative provision.

"We have made quite clear in the consultation document that we are open to other ideas.

"So far, we don't think anybody has come up with a better idea, but we have open minds on it."

Asked if his interview with the FT was a threat, he responded: "No, it is certainly not a threat. I hope it's a helpful distillation of my view."

He said there was a view that it would serve "the BBC's own interest" if it agreed to a small fraction of the fee to be used for local and regional provision.

Asked who had the say in the event of a stand-off, Mr Bradshaw replied: "Parliament does."

He said the idea that the BBC would fare better under any Conservative government was "illusory".

Mr Bradshaw was asked if Communications Minister Lord Carter, who spearheaded Digital Britain, had asked him to slow down the process.

But Mr Bradshaw replied: "He did not advise me to slow down. He advised me not to speed up."