BBC failed to pass on money pledged to charity

Just one day after ITV was landed with a record fine over its misuse of premium rate phone lines, the BBC has been forced to apologise over money raised during television phone-ins which was not paid to the charities it was intended for.

The BBC is to make an on-air apology after it was discovered that £106,000 from phone-ins which should have gone to charitable causes instead went in to the coffers of the company running the phone lines – a subsidiary of the BBC's commercial arm BBC Worldwide.

In a separate case, an editorial failing on Eurovision: Making Your Mind Up 2007, the BBC show which chose the pop group Scooch as the UK's entry for last year's Eurovision Song Contest, led to large numbers of the public calling when voting was closed, and being charged about £6,000.

The BBC is to repay all the money from both cases to charity with interest, making a total donation of £123,000. The BBC chairman, Sir Michael Lyons, insisted yesterday that the BBC had put new systems in place to ensure similar mistakes would never be made again. Although there is no suggestion of any criminal impropriety, the BBC Trust has asked the director general, Mark Thompson, to consider disciplining a "handful" of BBC Worldwide staff.

On Thursday, ITV was fined a record £5.7m by the media regulator Ofcom for repeatedly cheating viewers who entered premium rate phone competitions out of their money.

The discrepancies at the BBC emerged after PricewaterhouseCoopers (PWC) was brought in as independent auditor.

Over a two-year period between October 2005 and September 2007, about two dozen BBC shows which raised money for charity using premium rate phone lines were affected.

PWC identified a practice by Audiocall, a trading division of BBC Worldwide, of keeping all money raised when voting lines were closed, including money that could be owed to charity.

The BBC Trust commissioned a further investigation by its legal adviser Baker & MacKenzie, who concluded that although there was no legal impropriety on the part of the BBC, a small number of BBC Worldwide staff knew that funds were being diverted in this way and failed to raise the matter.

Sir Michael said: "It was a matter of serious misjudgement by a small number of people and a serious failing in how the BBC controls its PRS [premium-rate phone services] and its relationship with viewers and voters. This was not company policy, nor was it known about by senior members of the company." He added that the sum concerned represented just 1.3 per cent of a total £8m raised for charity by the BBC over the two-year period. The £123,000 compensation comes out of Audiocall's budget.

The BBC chairman declined to identify the programmes concerned, but shows under scrutiny by PWC included BBC1's Strictly Come Dancing, How Do You Solve A Problem Like Maria?, Just The Two of Us and Sports Personality of the Year.

The British television industry had a troubled time last year as the full extent of breaches of trust became apparent. The BBC was subjected to a battery of criticism over incidents including a press trailer which wrongly appeared to show the Queen storming out of a photo shoot and a Blue Peter phone-in in which a child studio guest was asked to pose as a caller.

After review of editorial integrity by the former BBC news chief Ron Neil, the BBC implemented a series of measures intended to restore trust, including a new interactive compliance unit which will monitor telephony contracts. New pan-industry technology introduced in September also ensures that no telephone calls can be charged after voting deadlines in phone-ins are closed.

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