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Thursday 20 December 2012

Have cake, will eat it.

The row over the financial package awarded to George Entwhistle, erstwhile Director-General of the BBC rumbles on today.

MPs have now accused BBC Trust Chairman, Chris Patten of being cavalier with licence payer’s money by handing over so much loot to Entwhistle when he quit.

Patten’s response on the Today programme this morning was to bleat on that MPs were wilfully ignoring the legal advice which he and the rest of the BBC Trust had received; namely, that had the terms of Entwhistle’s contract with the BBC been put to the test through litigation, that it would quite likely have ended up costing the BBC a lot more than it ended up paying voluntarily.

That may be so on paper, though in this case, it must surely be questionable whether Entwhistle would have had sufficient brass neck to push his contract to its logical limit in court, had the BBC Trust offered him a lesser settlement and decided to call his bluff.  Who knows. It would certainly have been interesting but you can’t really blame Patten and co. for not chancing their arm on that one.

So does that mean then that Patten is right? Not a bit of it. Unfortunately, the MPs taking a pop at Patten have followed the predictable, populist line by harping on about the money.  In doing so they have aimed their fire at the wrong target. What the MPs should have done is complained about Entwhistle’s contract.

I’ve not seen Entwhistle’s contract of course, but by the sounds of it, he had the sort of contract typically awarded to directors of UK listed plcs. The sort which when the proverbial hits the fan, the company in question can dispense with the services of the failing executive quickly and quietly, with the minimum of fuss and without due process or the need to attribute blame. For such facility there is a price to be paid.

Companies which operate in public markets with shareholders to please and customers to keep, need this flexibility and hence grapple with the over-generosity to executives inherent in such arrangements. But the BBC, a public service broadcaster with no stockholders and a privileged monopoly position enshrined by charter, surely does not.

If proof were needed that even the BBC itself thinks that it is different, just look at what happened yesterday. The Pollard report into the internal workings of the BBC over the Jimmy Savile debacle was published. Pollard found a lack of leadership at the BBC which left the management of the organisation in a state of chaos. Several senior BBC executives were singled out for sharp criticism; criticism which the BBC accepted unreservedly. Yet tellingly, not a single one of those executives has been fired.

Does anyone believe that if such a report had been written about a private sector broadcaster that any one of those executives would have survived?  That is what the fancy contracts are for.

The BBC and Patten cannot have it both ways.

Bruce Jones

MH Corporate

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