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BBC relocation payments 'excessive'

The BBC paid up to £150,000 in "excessive" relocation allowances to members of staff as part of the £224 million move to a new base in Salford, a powerful committee of MPs has found.

Some of the allowances paid were "hard to justify", the Commons Public Accounts Committee (PAC) found, and the BBC Trust acknowledged the deals would "aggravate" licence fee payers.

The committee said most aspects of the move were completed successfully and for £9 million under the budget, but raised concerns about the long-term future of the Salford site, which is owned by the Peel Group.

The broadcaster offered London-based employees relocation deals to move to Salford and spent £24 million on moving nearly 900 staff at an average cost of £28,000 per person.

But i n 11 cases, the cost of relocating staff exceeded £100,000 per person, with one costing £150,000.

The BBC claimed that these cases reflected the "higher stamp duty and other costs involved in relocating staff who owned high value properties in the South East".

Around 10% of staff who relocated to the MediaCity UK complex received allowances that were exceptions to the BBC's standard policy, with the reasons often not properly recorded.

The committee's Labour chairwoman Margaret Hodge said: "The BBC did a good job in completing the move to Salford on time, within budget and without disruption to the television and radio services we all enjoy.

"However, the scale of some of the allowances paid to staff to relocate to Salford is difficult to justify.

"There were 11 cases where the cost of relocating staff exceeded £100,000 per person, with one costing £150,000. And it is not acceptable that the BBC also failed to make a proper record of the exceptions it made to its allowance policy."

The PAC report said the BBC Trust acknowledged that " some of the individual relocation packages involved 'huge' amounts of money that would aggravate licence fee payers".

Some of the BBC's allowances, s uch as offering homeowners a guaranteed minimum price for their existing home if they moved, are standard practice for relocation projects.

But the corporation also offered a remote location allowance worth up to £1,900 a month covering the cost of renting property in Salford and travelling to and from London at weekends for two years so that staff who were unable or unwilling to commit to moving permanently could keep their homes in the South East.

Staff were also offered a £5,000 one-off taxable payment to move and homeowners were entitled to claim up to £3,000 towards household goods.

The committee raised concerns about the long-term deal with the Peel Group, which owns the Salford buildings and studio facilities, given the rapidly-changing nature of broadcasting.

"T he BBC locked itself into a 10-year contract for studio space at Salford, and committed to a guaranteed minimum annual spend during the contract term," the report said.

"The pace of technological change in the broadcasting sector means that the BBC could end up having to pay for studio services that it no longer needs. In the first year of this contract, the BBC underspent on one type of studio service by £500,000."

The committee also raised concerns about the tax status of the Peel Group, and the possibility of damage to the BBC's reputation by dealing with the firm.

"The BBC needs to demonstrate to the BBC Trust that it has assessed the potential risks of the Peel Group having a dominant position at its Salford site and taken appropriate steps to address them.

"It should also make clear its expectation that, as an organisation funded by the licence fee, it expects companies with which it contracts to pay their fair share of tax."

The report added: "The BBC's relationships with the Peel Group and other partner organisations involve potential reputational risks, for example, regarding the extent to which partner organisations are transparent about their tax status in the UK and the amount of tax they pay.

"Concerned that public bodies require their contractors to act responsibly in relation to paying tax, we raised a report published by ExUrbe on the Peel Group which suggested that the most profitable parts of the (Peel) Group pay no UK corporation tax.

"The BBC maintained that EU procurement rules prevented it from taking the tax affairs of companies into account when letting contracts.

"However, the BBC told us that it had i nsisted that the company within Peel Media which it contracted with was UK-based, and that the joint venture on the studios between Peel Media and SIS LIVE was also UK-based."

The MPs also raised concerns about the decision to scrap the Digital Media Initiative (DMI), at a cost of almost £100 million.

The DMI, which was intended to create a production system linked to the corporation's vast broadcasting archive, cost £98.4 million since it started in 2008.

Mrs Hodge said she was "dismayed" at the abandonment of the scheme and the committee would look at the decision once the facts had been established.


From Belfast Telegraph