Director general should not have been rewarded for failure

Mr Entwistle resigned after just 54 days in the job as a result of his handling of the fallout from the Jimmy Savile crisis, and was paid the money – twice the amount to which he was entitled – in order to speed up his departure.

But a report by the Public Accounts Committee published today was scathing, saying it was “out of line both with public expectations and what is considered acceptable elsewhere in the public sector”.

It said further benefits paid to him were “an unacceptable use of public money”.

MPs also criticised “excessive” severance payments to ten other senior managers, including former chief operating officer Caroline Thomson who received £670,000 when she left this year.

During the committee’s hearing last month, MPs accused the BBC of offering her a large redundancy sum as “compensation” when she failed in her bid to become DG.

Today’s report said the committee was “extremely concerned” that the BBC Trust – which agreed the pay-off to Mr Entwistle – had rejected an offer for the National Audit Office to examine the package for the ex-DG, who stepped down on 10 November.

“This inhibited parliament’s ability to hold the Trust to account for its use of public money,” the report said.

Mr Entwistle would normally have been entitled to £225,000 – half his salary – if he had voluntarily resigned.

But the Trust agreed to the larger amount to provide a speedy and clean break, allowing them to draw a line under the episode and seek a new DG without any lengthy legal negotiations.

The committee concluded: “By agreeing to this payment, the BBC Trust may have secured the director general’s quick departure, but it did not act in the wider public interest. Public servants should not be rewarded for failure.”

Mr Entwistle’s other benefits under the deal drew further criticism. On top of his salary pay-off, he was given a year’s private medical cover and contributions to his legal costs.

The committee said it considered the additional benefits to be “an unacceptable use of licence-fee payers’ money”.

And it went on: “The BBC Trust should not have agreed to these terms and it should make it clear to all BBC managers that such payments will not be offered in the future.”

Public Accounts Committee chairman Margaret Hodge said: “This cavalier use of public money is out of line with public expectations and what is considered acceptable elsewhere in the public sector.”

A BBC Trust spokeswoman said: “Of course, £450,000 is a very substantial sum, but the terms reached were the best available in the circumstances. “As already explained to the PAC and the culture, media and sport select committee it is simply wrong to suggest the BBC Trust had a choice between a severance payment of £450,000 or half that level.

“Indeed, if we had faced a constructive dismissal situation it would have cost us more and could have been a messy and long drawn out process.”

Director general should not have been rewarded for failure – MPs