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BBC to release report and accounts
14 Jul 2009The BBC will release its annual report and accounts today, amid turbulent times for the corporation.
The document comes weeks after the BBC detailed some £350,000-worth of executives' expenses claims, dating back over five years.
Writing in the Telegraph today, BBC Trust chairman Sir Michael Lyons revealed that bonuses for the corporation's 10 most senior executives are to be suspended indefinitely.
He said: "I can reveal that we have already reached agreement that Executive Board bonus payments will be suspended until further notice and not reintroduced without the trust's approval."
The corporation's executive directors had already agreed to waive their bonuses for 2009.
The annual report is expected to show the 10 directors earned almost £5 million in salary, 17% more than the year before.
Sir Michael said a review of executive pay was ongoing, with findings due in the autumn, but agreements had already been made to suspend bonus payments.
He added: "In determining the right level of salaries for BBC staff we must be careful not to cut off our nose to spite our face, ending up without the skills and abilities which make the BBC the world-renowned organisation it is.
"We must, however, also ensure that we maintain the trust and confidence of those who pay for the BBC - the licence fee paying public."
Sir Michael said big salaries were "always controversial" and added: "We have to be sensitive to the prevailing economic wind which currently can make the top BBC salaries appear too high."
Executives' expenses claims included more than £2,000 to fly director-general Mark Thompson's family home from holiday in the wake of the Andrew Sachs prank calls row, which plunged the corporation into crisis last autumn.
The wages of the BBC's 50 top-earning managers also showed 27 earn more than the Prime Minister's £195,000 salary.
Responding to Freedom of Information inquiries and calls for greater transparency, the corporation published thousands of claims, revealing executives spent public money on luxury hotels, vintage champagne, "thank you" dinners, parties and even a private aeroplane.
Last month's Digital Britain report in part addressed the widening funding gap between the BBC and its commercial competitors.
The Government document suggested suggested ring-fencing part of the TV licence fee to pay for ITV local news and other important but less profitable programmes on non-BBC channels.
From 2013 about 3.5% of the fee - around £130 million a year - could be allocated to public service programmes on non-BBC channels, in particular ITV regional news and shows for children.
But in a strongly-worded statement, Sir Michael said the body would not sit back quietly if the licence fee were to be used as a "slush fund".
The BBC has come under fire for not publishing salary details for its "talent".
It has promised to make public the total amount it spends on its stars, but will continue to keep individual talent fees secret.
Top BBC stars were recently called to a meeting at Television Centre during which they were warned to expect wages for talent to be slashed.
Those on screen or behind a microphone earning more than £100,000 a year reportedly face a pay cut of 25% when their contracts are renegotiated.
For some highly paid stars, it is thought the salary reduction could be as much as 40%.
Last November, Sir Michael said that the corporation's executive directors had agreed to waive their bonuses for 2009.
Mr Thompson would also forgo his entitlement, Sir Michael said, adding that the BBC was "not immune from financial pressures".
The corporation has come under scrutiny in recent years for the size of executives' bonuses.
Last July, Mr Thompson defended the decision to award pay rises to directors despite job cuts and phone-in scandals.
Mr Thompson waived his own right to a bonus then because of the "scale of disruption and uncertainty" facing BBC colleagues.
But nine executive directors did receive bonuses in 2007/08.
BBC Vision director Jana Bennett took a total rise of more than £100,000 including her bonus and other benefits, but Mr Thompson said her bonus had been cut.
The BBC is making efficiency savings totalling £1.9 billion over the licence fee period.
It has said it now has to find a further £400 million of "painful" cuts.
The corporation has implemented an 18 month pay and bonus freeze for senior managers, and suspended bonuses for BBC staff generally.
Sir Michael, Mr Thompson and Zarin Patel, the BBC's chief financial officer, are due to give evidence to the Culture, Media and Sport Committee at the House of Commons on Thursday.
