The Stage

BBC issues executive pay freeze and wage review

Published Tuesday 14 July 2009 at 15:09 by Maggie Brown

The BBC has today promised a full review of its top earners, paving the way for potential action in the autumn.

Speaking as the Corporation published its annual report for 2008/9 on Tuesday July 14, Sir Michael Lyons, chairman of the BBC Trust said that the pay review had started last February and that “nothing is ruled in or out” on the issue of pay and pensions.

In the meantime, executive bonuses are suspended indefinitely, and those on the 17,000 strong staff earning more than £60,000 a year will have a pay freeze. “We are facing different times. People see high salaries as hard to defend”, Lyons added.

On the issue of fees paid to top stars and talent the BBC Trust says the BBC cannot ignore the ongoing economic down turn and should do more to reduce its spending in the area, especially at the highest end of entertainment and radio.

Although it is refusing to publish specific, individual deals, by next year the BBC expects to disclose its overall spending on talent, and to show how this is distributed, from the stars down to thousands of contributors at the lower end.

The BBC also came under unexpected fire from culture secretary Ben Bradshaw, who chose the day of publication to roundly criticise the trust and director general for “wrong headed leadership” in opposing the Digital Britain policy of top slicing the BBC licence fee, by 3.5% a year, to fund regional news.

He added that they had lost the confidence of many senior staff and had failed to grasp that, by spreading around some of the money, they were in fact ensuring the long term survival of the licence fee system because more people would have a vested interest. The government opened a consultation on the process last week which runs until September 22, recognising that it is a historic change.

Lyons said: ” It is surprising that a secretary of state who has started a public consultation exercise should give the impression he has really made up his mind so firmly”.

The annual report showed that the BBC received £3.494 billion from the licence fee during the year, and spent the lion’s share of £2.336 billion on television, down 0.1%, and £588 million on radio, down 1.8%. The BBC’s reach - those who use its servcies regularly - was unchanged, at 93% of the population, a good result given digital fragmentation. Approval of BBC programmes, news and online services is on the rise.

BBC Worldwide, the commercial arm, had turnover of £1.004 billion, but saw its profits drop by 27% to £86 million, as it suffered from difficult markets, the collapse of Woolworth’s, its DVD sales partner, and the costs of investing in new channels globally.

There is no concrete news of the joint venture being negotiated with Channel 4, though discussions are said to be “fruitful”. The future direction of BBC Worldwide is inevitably tied up with the argument over top slicing, because of the losses the BBC would have to bear.