Stephen McGinty: So who can save the BBC?

Top job or a poisoned chalice? Lord Patten’s successor as chairman of the BBC Trust faces the most difficult three years in the corporation’s history, writes Stephen McGinty

Some of predecessors were dubbed Daleks. Picture: Getty

IN August, it will be 21 years since Dennis Potter arrived in Edinburgh to deliver the James MacTaggart Memorial Lecture, in which he launched an eloquent attack on the management of the BBC.

The speech was entitled “Occupying Powers” and focused on what he regarded as the detrimental impact of two men, the director-general and chairman of the board of trustees. As Potter memorably quipped: “You cannot make a pair of croak-voiced Daleks appear benevolent, even if you dress one of them in an Armani suit and call the other Marmaduke.”

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He was referring to John Birt, the director-general who had an appreciation for quality Italian tailoring, and Marmaduke Hussey, who had been appointed by Margaret Thatcher as chairman in a bid to turn the wheel away from the broadcaster’s traditional left-wing bias. A few months after Hussey arrived as chairman, he had engineered the resignation of Alasdair Milne, the director- general who had antagonised Mrs Thatcher during the Eighties, for, among things, refusing to have reporters address British soldiers as “our boys” during the Falklands conflict.

In 1992, Hussey and the Conservative government’s choice as director-general was John Birt, and it was in the fine print of his employment contract that the seeds of one aspect of the BBC’s current problems were sown. Birt wished to run the BBC, he just did not wish to be an employee. To be an employee, like most of the staff under his command, would mean the tedious and expensive business of paying tax at 40 per cent, like Bartleby the Scrivener.

Birt then told Hussey: “I would prefer not to.” The chairman of the BBC’s board of trustees then astonishingly agreed that Birt could work as director- general on a “freelance” basis, with his salary paid to his own company which would allow him to, quite legally, reduce the amount he was eligible to pay in tax.

When this clandestine agreement came to light, staff at the BBC were furious and so Hussey insisted Birt go on the payroll, but with his salary inflated to cover the inconvenience of compulsory taxation. It was at this point, according to the authors of an essay in the new book Is the BBC in Crisis? that the BBC’s financial largesse towards senior management was loosened. As former BBC journalists Nicholas Jones and Suzanne Frank explain, this was “the beginning of the collision of private sector and public sector expectations”. Senior staff expected the security of a public sector post plus a salary that at times exceeded those in the private sector.

So when John Smith, chief executive of BBC Worldwide, resigned in December 2012, his pension pot stood at £5 million, which, as Ian Jack pointed out in the Guardian, would yield a tax-free lump sum of £1.2m and an annual salary of £200,000. While the majority of people who leave one job for the next work a notice period and depart with a good luck card and a bottle of warm wine, Smith, who left to take on the role of chief executive of Burberry on a new salary of £575,000, received a year’s salary instead of working his notice period and bonuses which meant in his final year with the BBC he was paid £1,396,000. He later returned six months’ salary.

Lord Patten, who resigned this week as chairman of the BBC Trust, will not miss the headaches produced by attempting to defend or otherwise what Tony Hall, the new DG, described as the generosity of “the officer class” to each other. In fact, the salaries and exorbitant pay-offs within the BBC, so excruciatingly detailed by Margaret Hodge, MP, chairman of the Commons public accounts committee, was only one of many fires that broke out under his watch. The former chairman of the Conservative Party, who later negotiated with Beijing as the last governor of Hong Kong – for which he was rewarded with the nickname “Fat Pang” – said that the job was “ten times harder than I had expected”.

Patten did not expect to deal with, first, the scandal of the BBC’s failure to report on the decades of sexual abuse by the late Jimmy Savile, then the erroneous Newsnight report that labelled Lord McAlpine a paedophile, nor did he expect to have to hustle the new director- general, George Entwistle, out of the door after just 54 days in post while simultaneously stuffing £450,000 – twice his contracted settlement – into his pockets so as to ensure a speedy and silent departure. Then there was the public grilling by Hodge about what he did and did not know about the fine details of the £25m pay-offs to 150 senior staff, including £400,000 to the director of marketing who wasn’t even eligible for severance, having worked for the BBC for only 17 months.

Toiling as chairman of the BBC Trust did not bring on the heart problems that have necessitated his resignation, but nor was the job a recipe for a quiet life. His successor faces huge challenges. Who that will be remains to be seen, but whispers along the corridors of Whitehall point to Sir Howard Stringer, the first western chief executive of Sony, who was pipped for the post of director-general by Greg Dyke in 1999.

Back then, he was asked in the interview panel if he was not too old for the role, and he is now 72 – however, many believe that having also been president of CBS in America he is suitably au fait with both content and technology to be able to help map out the BBC’s future along with Tony Hall, the current DG, and then negotiate a renewal of the BBC’s charter in 2016.

Others, most vocally Hodge, who so carefully scrutinised the BBC’s books, would like to see the first woman appointed to the post. This week, the Labour MP said: “I think it would be great and there are plenty of talented, brave women who could do the job. It would send out a positive message. I’m a huge supporter of the BBC and I think it is a really important appointment.”

George Osborne would agree that it is an important appointment, not that it need necessarily go to a woman. The Chancellor of the Exchequer has rarely cast himself as a fan of Auntie Beeb and the person responsible for compiling a shortlist of two names which will then be passed on to the Prime Minister to make the final decision is the new Culture Secretary, Sajid Javid, who is viewed as one of the Chancellor’s acolytes.

The worst outcome would be a political appointment whose agenda is to see the BBC reduced in stature and cost, and, while I have no doubt that there is fat to be trimmed within the corporation, certainly amongst the myriad layers of bureaucracy, we tamper with the licence fee at our collective peril.

The fact is that the BBC faces the most difficult three years in its history. Let us set aside for the moment the fact that it may no longer exist in its current form after the referendum on 18 September and accept that the licence fee, which has permitted the corporation to swim in a “jacuzzi of cash”, as Mark Thompson memorably said (granted while briefly working for Channel 4), is under threat. I agree that non-payment of the licence fee should no longer be considered a criminal offence as it currently constitutes 10 per cent of all criminal prosecutions and should instead be a matter of civil law.

The licence fee is almost 90 years old and we live in an age when so many devices are available which allow us to watch BBC content but which do not constitute a “television” that there is a valid argument for a change in how the BBC is funded. Yet I do still think all that is currently on offer from the BBC remains exceptional value at £145.50 per year.

Auntie Beeb can be an infuriating old dear, forever throwing away £100m here on a wonky computer system or being overly generous to departing “favourites”, waving them goodbye with a kiss and a bung and ignoring those who toil on at the coal face, but we would all miss her terribly if she was gone. She – and we – need a protector from the “croak-voiced” Daleks. It will be interesting who David Cameron picks in six months’ time – if indeed it even matters to Scots.