End culture of 'invidious, opaque decision-making' on pay, report says
25 October 2018
The DCMS Committee has published its Report into the BBC Annual Report and Accounts 2017/18: Equal Pay at the BBC.
- Read the report summary
- Read the full report: BBC Annual Report and Accounts 2017-18: Equal Pay at the BBC
- Inquiry: BBC Annual Report and Accounts 2017-18
- Inquiry: BBC pay
The Report finds that:
- BBC is failing to live up to its duty under the Equality Act to advance equal opportunity for women
- Evidence suggests women working at the BBC in comparable jobs to men earn far less
- New pay reforms have serious shortcomings
- BBC should offer compensation for financial loss to individuals coerced into setting up Personal Service Companies
Chair of the DCMS Committee Damian Collins MP said:
"The BBC acts as a beacon in public life. As an employer it has an even higher level of duty than others to advance equality of opportunity – but this it has failed to do. The BBC must take urgent action now if it's to restore its reputation on equal pay and win back the trust of staff. There must be a reduction in the time taken to resolve grievances."
BBC pay inquiry
The DCMS inquiry into BBC pay followed allegations made by the corporation's then China Editor Carrie Gracie of systematic pay discrimination against women. The Committee commended her for using a 'protracted and distressing ordeal' to make points of principle for other women employed by the BBC.
Evidence of a gender imbalance among the BBC's top-earning staff emerged in 2017 when it was forced to publish a list of employees earning more than £150,000 which showed that two-thirds, including the seven highest earners, were men.
In evidence, the BBC was accused of a lack of transparency that helped normalise an approach to pay that was 'discriminatory and unlawful' with many BBC staff being 'deliberately misled' by BBC management over salaries.
MPs found that 'ad hoc' personality-led pay decisions for senior positions and a lack of central oversight led to the development of pay inequalities, with responsibilities for setting salaries devolved to managers or programme editors; in some cases, 'misuses of managerial discretion' were highlighted.
The Committee criticises the BBC's handling of the grievance process, both formal and informal. MPs heard evidence of managers failing to acknowledge named comparators in equal pay complaints, in breach of employees' legal rights. To address this as a matter of urgency, independent full-time managers must be appointed to deal with grievances, with a commitment to complete all existing cases within six months.
Reformed pay framework 'no use':
Despite assurances from the BBC that a new ‘Career Path Framework' would provide staff with transparency on pay, the Committee heard that though staff can see in which area of a pay band they sit, female staff cannot see how many men are in the same area of the band. As a result, the framework will be of no use to women seeking to compare their salaries to those of male colleagues doing equal work.
Top earners: 'Shocking' balance in favour of men:
Despite some progress on this year's high earners list, MPs described as ‘shocking' a significant balance in favour of men, with no women among the top ten. Urgent action is needed to change the gender imbalance before the next annual report. The Committee recommends the BBC should also publish salaries of its top earning presenters in programmes made by independent production companies and BBC Studios, ensuring transparency on those salaries funded by licence-fee payers.
Personal Service Companies: Imposition 'a disgrace':
DCMS Chair, Damian Collins MP said:
"As a direct result of the BBC's policy of insisting that presenters set up Personal Service Companies, many are now facing bills of hundreds of thousands of pounds in unpaid income tax and national insurance contributions. These are life-changing consequences.
"Where there's evidence that people were coerced into setting up these companies so they could carry on working as presenters, the BBC should offer compensation to cover their losses.
"The fact that presenters were also cut adrift by losing out on maternity pay or sick pay is deplorable. It was unforgettable to hear BBC presenter Kirsty Lang describe how she continued working throughout her treatment after being diagnosed with cancer."
MPs condemned the imposition of personal service companies as falling short of standards expected by the BBC. The Committee described as ‘a disgrace' evidence that BBC presenters were made to feel that a PSC was a mandatory condition of work.
The Committee welcomes the BBC's decision to launch a grievance process for presenters under independent supervision to establish whether it should bear some liability for unpaid national insurance contributions. In cases where it is clear people were coerced into setting up a PSC in order to carry on working for the BBC and face substantial claims for outstanding tax, the BBC should offer compensation for financial loss.
The Committee found that the BBC's handling of staff concerns about equal pay and Personal Service Companies to be 'extremely disappointing' in terms of a failure to properly consult staff and take proactive steps.
- BBC must put in place a transparent pay structure for staff with training for managers to ensure they understand their legal duties on equal pay
- Ensure staff at all levels can compare numbers of men and women within areas of pay bands
- Appoint independent full-time managers to investigate pay grievances and hear cases
- Commit to completing grievance process in all existing cases within next six months
- Ensure sufficient oversight in pay decisions based on transparent objective criteria, not personalities
- BBC Board to require progress report from Director General on steps taken to resolve pay discrimination
- Commit to concrete targets by December 2018 to ensure that pay of high earners has no discriminatory element to it
- Publish the salaries of BBC Studios staff and those of high-earning presenters of BBC programmes made by independent production companies in 2018/19 annual report
- BBC should offer compensation for financial loss to individuals coerced into setting up Personal Service Companies who face substantial claims for outstanding tax
BBC Annual Report and Accounts 2017/18: Wider issues
BBC funding for free TV licences for over-75s:
The DCMS Committee was concerned at the lack of progress by the BBC to meet its obligation to take over funding free TV licences for those over 75, reducing its licence fee income by £200 million in the current year, rising to £727 million by 2020-21.
MPs are calling for immediate consultation with those affected by any changes with detailed plans produced in the next annual report.
BBC Parliament broadcasting channel:
The report expressed concern over the future of BBC Parliament channel, with the possibility of it moving to an online only service.
The Committee published a memo received from the BBC in October giving assurances that some announced changes were still up for discussion. The report welcomes this announcement but expresses concern about the future of BBC Parliament as a broadcast channel. It calls for the BBC to lay out its new strategy and report back to both Houses with a new vision of the service by the end of the year.