Many thanks for your letter to Lord Hall requesting further information from the BBC. We respond to your specific questions in the pages which follow. It may help the Committee if we begin by putting the information into context:
The Terms and Conditions (Ts and Cs) currently in operation for the vast majority of staff at the BBC date back to the 1990s, and earlier. Over time, a number of these have been amended or varied on a divisional, team or regional basis. These have been agreed through local union involvement to address local requirements that have contributed over time to a lack of consistency across the BBC as a whole.
In 2014, the current BBC management identified that the existing reward framework, policies, allowances and contracting arrangements were out of date for a modern media organisation. Staff also told us there was a need for greater consistency and transparency of pay decisions and career progression. Therefore, in 2015 the BBC commenced a major programme of reform of its overall pay framework, grading structure, contracts and policies known as the Terms and Conditions review (see Appendix for details for the current grading structure). As we explained at the Committee meeting on 31st January, this is a root and branch review across the organisation and is the first of its kind for many years. We are now seeking to put into place a number of core foundations which mean that decisions on pay are made in the context of the BBC as a whole. This means that we are better able to apply our pay principles of transparent, consistent, fair, clear and competitive.
Significant progress has been made on our review of Terms and Conditions. A key element of our reforms is the Career Path Framework. This gives 18,000 employees at the BBC a clear career structure and clarity on their job, career level and where they sit in the pay range. It also consolidates our number of individual jobs from over 5,000 to just over 600. The Terms and Conditions proposals, if accepted, will sit across six broad band career levels (A-F) rather than 16 grades. From October 2017, the majority of staff have been able to see where they sit within their job pay range and, in the jobs with more than 20 people, where all the rest of the individuals doing that job are positioned (in an anonymised format). The proposal on pay and grading is described in more detail later in this response. The BBC is now working with joint unions comprised of NUJ, BECTU and UNITE to agree these changes.
The complexity of on-air staff engagement meant that initially they were not all included in the new Career Path Framework, grading structure proposals and equal pay audit. These individuals, around 800 presenters, on-air editors and correspondents from within one of the following areas: Network News, Radio Continuous Programmes, Nations, English Regions, World Service or Sport News formed part of the review of on-air pay conducted by PwC which was published in January 2018. (When we refer below to on-air staff we are referring to these individuals).
Also in October 2017 the BBC published the equal pay audit, conducted to identify any differences in pay between men and women doing equal work. The audit was overseen by Sir Patrick Elias (a former Court of Appeal judge) and conducted by consultancy firm PwC and legal firm Eversheds.
While this concluded that there is no systemic gender discrimination in the way the BBC pays its staff, there are nevertheless issues for the BBC to address. As we said to the Committee, there was a lack of a consistent framework in terms of pay elements, ranges and jobs operating across the BBC. There are also cases where staff have raised questions with us about their pay since July 2017, which concern equality and fairness. We are addressing these as quickly as we can and if someone has been unfairly treated we are determined to put that right.
It is also worth noting that in October 2017 the BBC published its Gender Pay Gap report. The report shows that our median gender pay gap is 9.3%, compared to a national average median of 18.1%.
The report has been independently assured by consultancy firm Ernst & Young. The BBC has also voluntarily audited its BAME pay gap which is significantly lower at 0.4%.
Since we spoke to the Committee in January we have confirmed that, following the On-air Review and the proposals contained within it, we will be consulting directly with staff and with the joint unions to obtain feedback regarding the proposals. We will then develop a final set of proposals, on which we shall seek independent input and oversight from Naomi Ellenbogen QC who will be working with Jeremy Lewis, also of Littleton Chambers. We have also set up a project to look into female career progression at the BBC, which is being led by Donalda MacKinnon, Director, BBC Scotland.
While we would need to consider any request for anonymised data for individuals with reference to its intended use, we wish to be as helpful as we can to the Committee to enable its work, and there is some additional data contained in our appendix that we hope will be helpful. In addition, as outlined below, as we roll out our new grading structure there will be further data we could share with the Committee if desired.
As you will be aware, the BBC’s Annual Report and Accounts contains detailed information on the Corporation’s workforce including headcount, spend on talent and senior management in bands, severance payments and diversity and inclusion figures. In addition, in line with the BBC’s new Charter and Agreement, the Corporation also disclosed the names and remuneration of all staff paid over £150,000 from the licence fee in the financial year 2016-17, again in bands. The BBC will continue to provide this information alongside the Annual Report and Accounts each financial year.
In addition, the Committee might find the data on pay gaps by grade from the equal pay audit of interest – this is also provided in the appendix.
Under our reformed pay structure, staff will receive information on their pay range, their own pay and the pay distribution of jobs in a way that we believe will provide a level of transparency for staff on pay that is among the best to be found in the UK. An example of the information that staff will be able to see is shown below, this includes not only their ‘current’ pay and grade and their ‘proposed pay’ but, crucially, allows them to see where their pay sits in relation to their peers, along with their job family and pay range.
This system is still being rolled out, and there are ongoing changes being made via constructive engagement with the trade unions and with individual staff who quite naturally have questions about where they sit in the new structure. Once further progress has been made, and if it were helpful to the Committee, we could provide the data shown for a range of roles across the BBC. We believe the totality of the above should provide sufficient granularity for the Committee to make an informed commentary on the BBC’s progress in this area.
The BBC holds information on the total payments made to individuals working directly for the BBC from the licence fee whether via payroll or other systems.
In line with the BBC’s Charter and Agreement the BBC disclosed the names and remuneration of all staff paid over £150,000 from the licence fee in the financial year 2016-17 and will continue to do so going forward. This represents the total remuneration paid in that year to those individuals, and includes payments made via Personal Service Companies and payments made to those in self- employment or paid on a freelance basis.
We are required to publish payments made from licence fee revenue to people working under a contract for services. Consequently, these figures exclude amounts from: commercial investments into programmes; any payments made by our commercial entities, such as BBC Worldwide; royalties; and repeat fees. Expenses are also excluded.
Yes, the BBC holds data on the following protected characteristics of employees: age, disability, race, sex, sexual orientation and maternity status and this is all contained in the BBC’s Equality and Information Report (except maternity status). The most recent Equality Information Report 2016-17 was published alongside the Annual Report and Accounts in July 2017 and was provided to the Committee last year. It contains considerable details of our workforce data and demonstrates an increasingly diverse and inclusive organisation. We have met our 2017 workforce targets and are already exceeding our 2020 targets for disability and LGBT. This report also included our social diversity data for the first time and we are the first broadcaster to do so. We will continue to monitor this going forward.
On-air roles in News are those that involve being seen or heard by our audiences. Given the majority of journalists undertake some type of presenting a criteria was required to establish whether a journalist would be grouped as a presenter or otherwise. The criteria set was that a journalist who spent 80% or more of their time on-air or preparing to be on-air would be classed as being in an on- air job. This criteria is subject to staff consultation but was used to define the scope of the PwC On- Air Review which looked into the BBC’s approach to on-air presenters, editors and correspondents (who are engaged on a variety of different contracts).
Individuals in these roles may be contracted as graded staff, contracted on on-air talent contracts (OATS) or be engaged through a freelance arrangement. They will work within one of the following
areas: Network News; Radio Continuous Programmes; Nations; English Regions; World Service; or Sport News.
As Ms Bulford highlighted at the Committee, ‘On Air Talent’ (‘OATs’) contracts were introduced several years ago following various changes in tax legislation. In order to manage this transition we introduced two new ‘OATs’ employment contracts. One is similar to the staff contract (OAT B), and the other has statutory benefits rather than BBC benefits (OAT S). Staff had a free choice between them, one provided for higher upfront salary, the other for higher benefits. People made a decision between the two types of contract depending on which best fitted their individual circumstances and where they were in their career etc. There has been no gender bias as it was open to individuals to take up either and indeed 52% of the individuals impacted across the BBC were men and 48% were women (similar to the make-up of the BBC as a whole).
A key recommendation of the On-air Review is to reform contract arrangements across the BBC to simplify and improve transparency. As a result, and subject to current consultation, all on-air staff engagements, regardless of level, will be offered a BBC standard staff contract and sit within the Career Path Framework.
For those currently on an OAT S or OAT B contract, we will hold individual consultations to discuss the changes: consultations will be prioritised according to the end-date of the existing contract.
Individuals may remain on their current OAT contract if they wish to do so. For on-air PAYE workers, we will simplify and make a transition from the current contracting model of 11 contract types to 2.
Accompanying these changes, we will be taking steps to strengthen the contracting and governance structure, providing clearer guidance to hiring managers regarding the appropriate application of contract-type with decisions informed by an employment status test.
The PWC report identified 168 individuals whose jobs were evaluated and assigned, subject to consultation, to sit above career levels A-E in the Career Path Framework. PwC identified this group as career level F and we have taken this to be the group to which you refer. These are presenters,
on-air editors and correspondents working on the BBC’s highest profile output working on Freelance, Graded Staff and ‘OATs’ contracts. The breakdown is as follows:
Engagement type | Total | Male | Female |
Graded staff | 92 | 54 (58%) | 38 (42%) |
OATB | 6 | 3 (50%) | 3 (50%) |
OATS | 26 | 13 (50%) | 13 (50%) |
Freelancers | 44 | 26 (59%) | 18 (41%) |
Of which PSCs | 12 | 9 (75%) | 3 (25%) |
Total | 168 | 96 | 72 |
Following the Deloitte Review of the BBC’s contracting arrangements in 2012, the BBC developed a new employment status test for tax purposes in conjunction with HMRC. This was finalised in 2013 and rolled out in the Autumn of that year. In Television, if talent were assessed as self-employed from this test then the BBC did not prescribe the method by which they were contracted. Instead it
allowed talent to elect to be contracted as individuals (sole traders) or via a PSC (which remains a legitimate contracting vehicle for self-employed talent). In either case, the BBC contracts included wording to ensure that the talent either as an individual or through a PSC would pay the appropriate amount of tax and National Insurance. In Radio, the BBC continued to rely on the Radio Industry Guidelines to assess the status of radio talent it engaged. The BBC also provides to HMRC a statement each year of the amounts paid to the PSCs cross-referenced to the individuals concerned.
The 12 people currently contracted on PSCs (noted in the table above) are people who went through the test in or after 2013 and were assessed as self-employed. Had they been assessed as employed, they would have been offered On-Air Talent staff contracts.
The relevant data is included in the appendix of this paper, along with details of the pay gaps by gender for each grade reviewed as part of the Equal Pay Audit. However, it is important to provide the context to why the BBC has proposed to change the current approach to pay and grading.
As mentioned earlier, in 2015, the BBC started its review of Terms and Conditions, focussing on four key areas: Contracts, Policy and Allowances, Pay and Grading, and scheduling for a 24/7 broadcasting organisation. At the core of the review was a different way of working and the BBC and the joint unions comprised of NUJ, BECTU and UNITE have worked together to agree the issues that need to be addressed, and designed proposed solutions. These solutions would apply to all employees within the public service 2-11 structure.
Specifically on Pay and Grading, we identified the following issues:
This, coupled with the local approach to applying Ts and Cs, has led to the uneven application of pay and allowances.
The BBC needs to have modern, fair and consistent working practices, as a global 24/7broadcaster. It needs to be competitive on pay that is informed by the ever-changing market conditions. As discussed, the BBC has been working with the joint unions on these proposals and they include the replacement of 16 current grades (2–11 and additional grades for specific roles) with six new broad band career levels (A–F). In each of these bands there is a range of jobs, each with their own market
informed pay range. If an employee is paid below the minimum of their job pay range they would be brought up to the minimum.
The BBC operates a number of different pension arrangements which provide equal access, normal pension ages and gender neutral assumptions. These arrangements offer different levels of benefit. The reason for introducing new arrangements was to help the BBC manage its pension cost and risk, like many other organisations. There was no distinction between men and women underlying the decisions.
Because access to BBC pensions is gender neutral, equal pay claims are primarily an issue about pay - implications for pensions will be a secondary element flowing from any altered pay. The BBC will therefore consider the rules of the relevant pension arrangements (or section within the BBC Pension Scheme) and track through, and where appropriate, address the pension implications of any pay uplift resulting from an equal pay claim.
Since July 2017, four grievances have been concluded (as of 1st March 2018). In all cases the allegations of pay discrimination were not upheld. However, in all cases from a fair pay perspective, further pay reviews were recommended.
The Grievance Policy, as agreed with the trade unions and already shared with the Committee, states that grievances will be concluded within 90 days unless exceptional circumstances apply. As at 1 March 2018, 6 out of 14 grievances exceeded the 90 days and a revised timetable was provided.
All of these were due to exceptional circumstances and in all but one of these cases the extended timetable was agreed.
We hope that the above information and the attached appendix is helpful to the Committee, and we look forward to keeping members up to date on our progress in this area.
February 2018
Appendix - provides a breakdown of the BBC pay structure, including details of current 2-11 grades.
Table 1: The table below provides the salary range and average full-time equivalent salary and full- time equivalent salary before London Weighting (which applies to around 25% of our staff) shown for all employees by grade, across our two contract types. The ten grade 2-11 structure applies to the majority of staff and the six additional grades are special grades apply to certain roles.
|
| Days Conditions of Service |
| Hours Conditions of Service |
| |
Grade | Minimum | Maximum | Average base salary | Minimum | Maximum | Average base salary |
02 | £15,687 | £24,077 | £18,467 | £15,687 | £23,043 | £21,281 |
03 | £17,515 | £27,368 | £21,576 | £16,780 | £26,223 | £22,245 |
04 | £19,950 | £31,212 | £25,571 | £19,104 | £29,883 | £25,784 |
05 | £22,489 | £35,608 | £26,537 | £21,519 | £34,059 | £27,194 |
06 | £25,669 | £40,610 | £30,201 | £24,534 | £38,855 | £31,193 |
07 | £29,235 | £46,251 | £34,882 | £27,978 | £44,259 | £35,209 |
08 | £33,287 | £52,662 | £41,615 | £31,849 | £50,384 | £39,668 |
09 | £37,724 | £59,673 | £48,839 | £36,089 | £57,113 | £47,862 |
10 | £42,161 | £66,721 | £59,947 | £40,364 | £63,831 | £61,681 |
11 | £47,136 | £74,615 | £81,514* | £45,118 | £71,366 | £73,324 |
034 | £17,515 | £37,212 | £22,043 | £16,780 | £29,883 | £21,990 |
057 | £22,489 | £46,251 | £31,020 | £21,519 | £44,259 | £33,758 |
067 | £25,669 | £46,251 | £36,485 | £24,534 | £44,259 | £32,841 |
07L | £21,564 | £46,251 | £33,842 | £20,636 | £44,259 | £36,219 |
079 | £29,235 | £59,673 | £42,254 | £27,978 | £57,113 | £29,776 |
089 | £33,287 | £59,673 | £44,054 | £31,849 | £57,113 | - |
*Across all grades, but particularly at Grade 11, there are a number of individuals whose pay sits outside of the band on individual salaries that were benchmarked separately and reviewed through a separate process. The historic reasons for this and our actions to address the issue are outlined in the section detailing pay structure.
Source: BBC Gateway, BBC Payroll (Copex Report), 18th January 2018
Table 2: The below shows the gender pay gap by grade for the majority of the BBC’s population as identified through the Equal Pay Audit conducted in October 2017 – this is for salary only. Pay gaps which are shown with a minus are in favour of women. The additional six grades are consolidated with their main grade in this table. The fact that there are more women in the lower paid quartile and at the lower grades at the BBC is a major driver of the overall gender pay gap. This underlines our need to improve representation of women at senior levels in order to reduce the gender pay gap.
|
| Headcount male | Headcount female |
| Current |
|
Grade pay gaps | Headcount |
|
|
| ||
|
| Median | Mean | |||
02 | 139 | 47 (34%) | 92 (66%) | 0.4% |
| 0.2% |
03 | 379 | 151 (40%) | 228 (60%) | -2.8% |
| -1.0% |
04 | 967 | 321 (33%) | 646 (67%) | -6.5% |
| -5.9% |
05 | 1,638 | 727 (44%) | 911 (56%) | -1.2% |
| -0.2% |
06 | 849 | 396 (47%) | 453 (53%) | -1.7% |
| -0.2% |
07 | 6,270 | 3,267 (52%) | 3,003 (48%) | 4.1% |
| 3.9% |
08 | 3,638 | 2,151 (59%) | 1,487 (41%) | 0.7% |
| 1.6% |
09 | 1,939 | 1,098 (57%) | 841 (43%) | 5.5% |
| 4.4% |
10 | 1,731 | 1,024 (59%) | 707 (41%) | 3.4% |
| 4.0% |
11 | 596 | 384 (64%) | 212 (36%) | 4.5% |
| 7.0% |
Notes:
1. This data is at September 2017 and is slightly different from the data in the Gender Pay Gap report which was based on snapshot data for the entire BBC as at 31 March 2017 and covered all pay elements in line with the statutory requirements. The Gender Pay Gap report also includes information on around 300 Senior Managers within the BBC where the median pay gap is 2.2% and mean pay gap is 5.2% in favour of men.
Source: BBC Equal Pay Report 2017
Table 3: The below shows the overall numbers for each Career Level for the on-air population reported in January 2018, the majority of which were excluded from the original review.
Pay Gap (gap and allowances) | |||||
Grade | Headcount | % Male | % Female | Median | Mean |
C (Grades 6 - 7) | 115 | 54 (47%) | 61 (53%) | 7.4% | 8.4% |
D (Grades 8 - 9) | 222 | 125 (56%) | 97 (44%) | 0.8% | 3.5% |
E (Grade 10) | 319 | 213 (67%) | 106 (33%) | -3.6%% | -2.9% |
F (Grade 11) | 168 | 96 (57%) | 72 (43%) | 0.4% | 4.6% |
Notes:
1. This data for 824 individuals spans the entire on-air presenter population covered by the PwC review. Data has been “normalised” for full-time working and includes some freelancers (within Band F).
2. There are 271 individuals who were also included in the original Equal Pay Audit as Journalists and subsequently identified as “On-Air”. Therefore their data is included in both tables.
Source: PwC On-air Review 2018
