Margareta Pagano: Governance - one of the BBC's best-ever farces

MPs must get to the issues that have turned the BBC into a version of 'The Thick of It'
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The Independent Online

You couldn't make it up. Lord Patten, chairman of the BBC Trust, is due to give a speech on corporate governance at a global conference being held in Singapore later this autumn. The speech is entitled: "Global Conversation on Governance – Today's Issues, Tomorrow's Challenges". Quite how Lord Patten feels he is fit to give such an address – billed as exclusive – is beyond belief after presiding over one of the most shambolic periods of governance in the BBC's recent history.

We will see again just how messy Lord Patten's stewardship has been when he appears before the parliamentary Public Accounts Committee (PAC) tomorrow afternoon to account for the big payoffs to departing BBC staff. Apparently, £369m has gone out in severance pay over eight years to 7,500 or so senior managers and staff. Until now, Lord Patten has consistently denied the Trust was aware of the payoff details, going as far as to suggest the Corporation's governance body was misled over the issue.

But in a new twist the BBC's former director general, Mark Thompson, who will be also appearing at the PAC meeting, is claiming Lord Patten "fundamentally misled" MPs with his earlier evidence and that the chairman did know about the payments. In his 25-page submission to Parliament, Mr Thompson goes further, claiming he has emails to prove Lord Patten did know about the payments, particularly to the former deputy director general Mark Byford, and that the BBC Trust deliberately withheld information from the National Audit Office investigation into payoffs.

So who is right? Apart from both of them being devout Catholics, Lord Patten and Mr Thompson are chalk and cheese. The latter is known to be precise – his evidence is 11,000 words long and thick in detail – while the former has shown sloppiness over the debacle of George Entwhistle's short tenure as director general and appears to be easily confused. Whether MPs will be able to unravel who knew what, where and when is hard to say, but it is important that this latest cat-fight doesn't obscure the real issues that have turned the BBC's top brass into a version of The Thick of It.

There are two issues that stand out. The first one is whether the broadcaster has been egregious in overdoing its payoffs. The second is the way the BBC is governed and why it got into such a ridiculous muddle on corporate governance.

On pay there is a supreme irony that it is Labour's Margaret Hodge, the PAC chairman, who is leading the charge over the payoffs, as it was under Labour that public sector pay exploded. After years of criticising stratospheric pay increases in the private sector, Tony Blair's government pushed through its own huge inflationary pay rises in the public sector, where more than 800,000 new jobs were created.

Even though the BBC had been one of the leading critics of fat cats, it fell under the same spell; who but the divine would say no to tripling salaries?

Just as pay to FTSE executives spiralled out of control, so did pay to the public sector. It's not perhaps the best defence but the BBC was leading the charge into the digital world, and was competing for the top talent. Like it or not, the salaries and severance deals at the BBC that are being criticised today by the PAC were put into place from 1997 onwards and have to be honoured.

However, this latest episode also demonstrates the dangers of allowing politicians to appoint political chairmen to the BBC Trust, and for that the blame lies with the government. It's no secret that David Cameron's government sent Lord Patten into the BBC with a mission to smash its budget as well as its alleged left-wing bias ahead of the next election. In trying to be so clever, they have all got egg on their faces, and a nonsensical bun-fight between Lord Patten and Ms Hodge.

Luckily for the BBC, most of the population won't bother to watch tomorrow's slanging match, although it promises to be dynamite TV. But when Lord Patten is replaced next year, the Government must be brave enough to find someone with both commercial nous and an understanding of corporate governance if it is expecting us to keep paying the licence fee.