The British Broadcasting Corporation (BBC) is known all over the world for its radio and TV output, the latter being widely sold to public and private networks.

The unedifying appearance, on Monday 9th September, before the House of Commons Public Accounts Committee (PAC) of its present and recently in-post senior managers demonstrates four things:

  • How a large overblown organisation can continue to deliver good product in spite of gross failings by its senior management.
  • Despite the insistent questioning of the very effective chairman of the PAC, Mrs Margaret Hodge MP, the BBC’s former “Human Resources” director, on a salary of over £400,000 per annum at the relevant times, was still unable to say exactly how or why severance payments of much more than the BBC’s contractual obligations were made to dozens of senior staff, in one case amounting to over £1 million.  All told £64 million has been paid at an average of £125,000 to 512 staff leaving in the last three years or so.
  • The overlapping ill-defined responsibilities of the BBC Trust, current chairman (Lord Christopher Patten, also Chancellor of Oxford University) and the Director General and his senior managers, are all too reminiscent of that other leviathan of British society, the National Health Service (now beginning a long road to managerial efficiency).
  • The House of Commons select committee system, of which the PAC is the most needed and influential, is developing into an effective organ of government, being able to summon anyone to give an account of themselves and their job.

Pay fixed by each other

In paying the largest salaries of any established public sector organisation, the BBC has acted as if the funds were the private possessions of a few individuals awarding each other vast salaries.  Setting senior salaries has been by the usual device employed by large public bodies and some corporates in the private sector – hiring pay consultants to make comparisons, usually with the highest paying parts of the private sector, usually banks.  Thus the chairman of the BBC’s (senior staff) remuneration committee is a former chairman of Barclays Bank.  It is clear that the BBC’s reliance on a compulsory licence fee for all owners of TVs must end and be replaced by a pay-as-you-view system, plus a much reduced flat fee for existing infrastructure and cultural output.

A useful experiment to do

Here is an experiment that all public sector organisations can do to save taxpayers’ money and spread a little equity around.  Advertise all replacements of the most senior appointments at salaries say 20% below that of previous incumbents, and see how many applicants you get from within your own organisation.  Did the BBC do something like this for the new Human Resources director?  This experiment can also be made for Chief Executives of the approximately 400 County and District Councils and 50 Directors of Local Education Authorities in England, major Charities like Oxfam, the National Trust and Save the Children and so on . . . We will revisit this subject soon.

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