- .Row centres on £949,000 severance payment to Mark Byford in 2010
- .Ex-Director-General Thompson and Byford were friends and socialised
- .Thomsons says extra £500,000 needed to keep deputy 'focussed' on job
- .Thompson at war with BBC Trust over whether he told them about deals
- .Astonishment from MPs at claims the payouts were 'value for money'
- .David Cameron says licence fee payers deserve answers
- .Over-generous payments saw £1.4million extra given to senior managers
Former BBC boss Mark Thompson today denied 'losing the plot' after signing off huge payouts to persuade senior managers to leave the Corporation.
Margaret Hodge, chairman of the Public Accounts Committee, demanded to know why the ex-Director-General concluded that the contractual minimum of £500,000 was not enough for his then-deputy Mark Byford, and instead agreed a £949,000 severance payment.
BBC Trust chairman Lord Patten is battling to save his job over who was responsible for signing off the deals, and whether the Trust was kept in the loop.
Tense: Mr Thompson (circled left) was placed five seats away from BBC Trust chairman Lord Patten, with whom he is at loggerheads over whether the Trust knew about the payments
Clash: Mr Thomson defended the payment to Mr Byford and insisted the BBC Trust was kept informed, but Trust chairman Lord Patten insisted he was told the deal was 'standard' and 'contractual'
The blame game continued about who knew about the huge deals during an increasingly tetchy grilling in Parliament.
Mr Thompson said he stood by his claim that the committee had been misled when they were told the Trust had been 'kept in the dark' about severance packages, including Mr Byford's deal agreed in October 2010.
He added: 'I don't understand why those misleading comments were made.'
But sitting just feet away Lord Patten said he had been repeatedly told the deal was 'contractual' and 'standard'.
'I'm accused of having misled the committee on something that I never knew and couldn't have been expected to know,' Lord Patten, who became Trust chairman in May 2011, added.
Kicking off the evidence session, Ms Hodge said it was an 'extraordinary occasion' for seven former and serving BBC executives to have to be called back to Parliament.
Amid a long-wrangling blame game, she said she hoped to 'establish on behalf of both the public and licence-fee payer who knew what and at what time and who is responsible for decisions taken by the BBC'.
She said the deals led to ‘grossly excessive payments which most people now consider to be unacceptable’.
She added: ‘Even the most seasoned viewer of the BBC’s affairs and the way the BBC operates [will consider] the current arrangements which the BBC operates are bewildering, they are complex and they are confusing.'
The row centres on the £949,000 given to Mr Thompson's then-deputy Mr Byford in 2010.
Ms Hodge said under Mr Byford's contract he could have been paid off with £500,000.
'Why was half a million pounds, which to most people is mega bucks, why was that not enough?'
PAC chairman Margaret Hodge
She said: 'Why was half a million pounds, which to most people is mega bucks, why was that not enough?'
Ms Hodge said the average person would have to work for 40 years to earn the sum of almost £1million eventually received by Mr Byford.
But Mr Thompson said it was part of getting the ‘complete pay bill down’ and suggested he would sign off the same deal again.
‘I do not think we lost the plot.’ He said he had achieved a lot to cut the number of managers and reduce the pay bill.
He denied that BBC rules on payouts were 'lax' but conceded: 'Not all of the paperwork was done perfectly.'
Bizarrely Mr Thompson said the pay-off to his friend Mr Byford was needed to make sure he remained 'focused' on his job and not be distracted.
Mr Thompson told the committee that in his view Mr Byford's severance package represented 'value for money' and he explained that he had been under 'ferocious pressure' from the Trust to make savings.
Furious: Labour MP Margaret Hodge, chairman of the Public Accounts Committee, said it was 'extraordinary' that seven BBC bosses had been called back because they have accused each other of misleading Parliament
PATTEN: I WAS TOLD PAYOFFS WERE CONTRACTUAL AND STANDARD
Lord Patten said he had been repeatedly told the deal was 'contractual' and 'standard'.
He told the committee: 'I am in a slightly difficult position because I became chairman of the Trust six months after the Byford payments.
'I'm accused of having misled the committee on something that I never knew and couldn't have been expected to know.'
He said he had been through his induction pack from May 2011 and subsequent briefings, and there was no mention of the controversial severance payments.
One briefing ahead of a press conference stated: 'These were contractual payments which were essential in order to slim down the executive board.'
Lord Patten complained that it is 'Mark's contention' that he should somehow have deduced that the payment to Mr Byford was in excess of his contractual minimum.
Ahead of the grilling by the Public Accounts Committee, David Cameron warned licence fee payers deserve answers over how the big payments were agreed for Corporation fat cats.
Downing Street said the Prime Minister believes there are 'legitimate questions' about the way millions of pounds in severance payments were signed off at a time when cuts were being made to programme budgets.
But in a boost for Lord Patten, the government rubbished reports it was planning to scrap the troubled BBC Trust.
Mr Thompson, now chief executive of the New York Times, and Lord Patten blame each other over who was responsible for lavishing licence payers’ money on the generous payoffs.
Mr Thompson insists he told the BBC Trust about Mr Byford's deal.
In July he said: 'The BBC Trust was fully informed in advance, in writing as well as orally, about the proposed severance packages for Mark Byford and [marketing director] Sharon Baylay’.
He added: 'I had made sure the Trust were aware of and understood all potentially contentious issues. The Trust had every opportunity to express any concerns about the proposals before they were approved.'
Today he repeated the claims, telling the committee: 'I don't want to impute intention to it but I believe there were damaging and unfair misleading statements made specifically on this point.'
However this is something that trustees - including Lord Patten - deny.
Five BBC trustees have poured scorn on Mr Thompson’s claims that ‘multiple documents establish’ that details of the payoffs was disclosed to the BBC Trust before the settlements were approved.
In a statement, Richard Ayre, Diane Coyle, Anthony Fry, Alison Hastings and David Liddiment said: ‘We were not asked for approval of [Mr Byford’s] financial package - formally or informally - nor did we give it.’
Today Nicholas Kroll, the director of the BBC Trust, insisted he was not 'closely involved' in the preparation of a note on October 7 2010 about the Byford payment.
He conceded the pay-off was 'unquestionably a large figure' but a matter for the remuneration committee and not the trust.
Ms Hodge asked Mr Kroll, who is paid £238,000, how much he earns and told him 'the job of the trust is to protect the licence fee payers' interests'.
She said: 'There is not one person around the table who can understand why there was no challenge from you.'
As part of the extraordinary deal, it was decided in October 2010 that Mr Byford would not be told formally that he was being made redundant until April the following year, allowing him to continue drawing on his salary.
Grilling: BBC Trust chairman Lord Patten walks through the Houses of Parliament to the hearing at the Public Accounts Committee
Ms Hodge hauled Mr Thompson and Lord Patten in to give evidence side by side with other BBC bosses because ‘they all accuse each other and nobody accepts responsibility for what happened’.
They are appearing with BBC HR director Lucy Adams, Marcus Agius, the former chairman of the BBC Executive Board Remuneration Committee, BBC director Nicholas Kroll, BBC Trustee Anthony Fry and former BBC Trust chairman Sir Michael Lyons.
Pay deal: The row centres on the £949,000 payout given to former deputy Director-General Mark Byford. Mr Thompson insists the BBC Trust were told in advance - something trustees deny
Senior BBC managers received a total of £25milion in severance deals between 2009 and 2012.
Nearly £3million was paid over and above what they were entitled to in their contracts in the six years to 2012, a National Audit Office report found.
The NAO examined 60 severance payments earlier this year and a new report published last week report looked at another 90.
The damning report states: ‘Across all 150 severance payments to senior managers in the three years to December 2012, the BBC paid more salary in lieu of notice than it was contractually obliged to in 22 cases, at a total cost of £1.4 million.’
In 18 of the extra 90 cases, severance deals were agreed before going through the relevant scrutiny and approval process. In one case £141,000 was paid out before approval had even been given.
Mr Thompson last week sent his own dossier to MPs to refute claims he did not make the BBC’s governing body fully aware of controversial payments to former executives Mark Byford and Sharon Baylay.
But former BBC chairman Sir Michael Lyons insisted on Friday that he was not told of the Byford payment. ‘I do not think I was ever told the full, final, terms of the deal after it was agreed in October 2010,’ he said.
Lucy Adams, BBC director of human resources, arrived at the House of Commons to face questions about her role in agreeing the deals
Criticised: The BBC could not prove that approval had been given in 12 cases
Controversy: The NAO found 22 cases where payouts were higher than contracts demanded
WE NOW HAVE A GRIP ON SPENDING, SAYS NEW DIRECTOR GENERAL
New BBC director general Tony Hall today insisted the corporation now has 'a grip on the money' it gets from licence-fee payers.
He has repeatedly warned of the damage done to the Corporation's reputation over the size of severance payments, and the mid-slinging between executives over who signed them off.
Lord Hall, who introduced a cap on pay-offs after starting in the top job earlier this year, told LBC 97.3: 'We've put in a cap of £150,000, we've put in all sort of measures to make sure that we have a grip on the money that our licence payers are giving us.
'And what I now want to do is to concentrate - as our audiences and staff expect us to do - on our fantastic services.'
Tory MP Rob Wilson has called for Lord Patten and other senior BBC figures to ‘resign immediately or be sacked’ if they were shown to have misled Parliament.
Ahead of the hearing, Mr Cameron's official spokesman said the PM was expecting answers to key questions about who knew about the deals, and how they were approved.
'There are legitimate questions the licence fee payer should get an answer to,' the spokesman said.
'The issue that is in front of the House is the one around payments that have been made. I think it is very understandable that there are concerns about them.'
With the corporation in a state of near civil war, the BBC has written to 150 former managers warning them that their severance arrangements may be made public.
Referring to the NAO report, the BBC’s letter said: ‘PAC has recently confirmed in writing to the BBC that it is applying its Standing Order power to call for the 150 names and details of the 150 recipients of severance payments cited in the report, which includes you.’
One of the 150 fatcats is thought to be Peter Fincham, the former BBC1 controller who walked away in 2007 with £500,000 after resigning over the so-called Crowngate scandal.
Mr Fincham, who is now ITV director of TV, wrongly told the Press at a screening that the Queen walked out of a photoshoot featured in a royal documentary ‘in a huff’.
It later emerged that a promotional trailer for the programme had been misleadingly edited and that his account was untrue.
However some among the 150 ex-staff believe they are being unfairly targeted.
One former senior manager said: ‘The concern I would have is that a senior manager such as myself, whose redundancy settlement was perfectly in order, will be lumped together with the very small number of senior managers whose deals seem to have been rather more generous.’
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