Bonuses paid to top executives at the BBC have been suspended, the broadcaster said today, just before publishing its annual report, as it battles state plans to rein in its public funding.
Michael Lyons, BBC Trust chairman, said bonuses would be suspended "until further notice" as the corporation seeks to "maintain the trust and confidence of those who pay for the BBC -- the licence fee-paying public".
His announcement came as Culture Secretary Ben Bradshaw launched a robust attack on BBC chiefs, saying many senior staff felt a "feeling of despair" over the quality of leadership.
The BBC, the world's biggest public service broadcaster, is struggling to hold on to all the revenues from the licence fee -- the 142.50-pound annual charge which each home must pay to watch television and which funds it.
The government announced plans last month to ringfence some 3.5 percent of the licence fee -- roughly 130 million pounds -- to fund struggling regional news on a commercial competitor. BBC executives strongly oppose the move.
It has been a rocky 12 months for the BBC -- the boss of Radio 2, Britain's most popular radio station, quit in October after two top presenters caused a storm with a lewd telephone prank against veteran "Fawlty Towers" actor Andrew Sachs.
Last July, it was fined 400,000 pounds after it emerged that a string of shows had rigged the results of call-in telephone competitions.
And director-general Mark Thompson said in March the BBC needed to make cuts worth 400 million pounds. More than 7,000 jobs have gone in the last five years and 1,200 are still to go, he added.
Last month, BBC bosses were left embarrassed after details of their expenses were published, including 2,000 pounds to fly Thompson's family back from holiday after the Sachs row.
Announcing the bonus freeze in the Daily Telegraph, Lyons warned that while bonuses were being suspended, "we must be careful not to cut off our nose to spite our face" and lose the ability to attract talented staff.
Meanwhile Bradshaw, himself a former BBC reporter, told the Financial Times: "(There) are plenty of people within the BBC that do not feel it is a well-led organisation and that is almost for me the most worrying thing."Reuse content