Bonuses scrapped for BBC bosses

Hundreds of senior BBC managers are to have their bonuses scrapped and their pay frozen this year in moves to save millions of pounds, the corporation announced today.

Director general Mark Thompson said the decision was the right one in the current economic climate, although he agreed it was a "tough" message.

Around 400 senior staff, including departmental heads, would have been entitled to a bonus of up to 10 per cent of their salary if they met performance targets.

This has been scrapped until further notice, while their pay will be frozen this year.

Thousands of other BBC staff who would have expected a bonus this year were also told it will not be paid.

The corporation signalled to trade unions representing most of its 20,000 employees that this year's pay increase will be modest.

Staff at the corporation's commercial arm, Worldwide, will continue to be eligible for annual bonuses in line with existing contractual commitments.

The measures are expected to lead to savings of more than £20 million.

Gerry Morrissey, leader of the broadcasting workers' union Bectu, said: "We have never been in favour of bonuses being paid so believe this should happen every year, and the money go towards eradicating low pay.

"We expect our members to receive a pay settlement this year. If they don't, I would anticipate our members taking industrial action."

Unions are about to lodge a claim for a flat rate increase of £1,800 this year to help lower-paid staff.

Mr Thompson met the BBC's senior leadership group today to discuss the current financial position, taking into account the effects of the recession.

"A strategic contingency exercise, led by a senior group of managers, has been looking at what additional funds are needed should we need to put aside additional funds to cover our current estimate of the financial risks we face.

"It is important that we start this exercise now. We need to be in as strong a position as possible if we are to deliver distinctive content and meet our key strategic projects, such as moving to the new Broadcasting House, moving network production to the nations and funding our broadband future.

"This exercise will look at additional savings which will come from tighter cost control, lowering overheads and slowing down some of our investment proposals. This is on top of our ongoing efficiency targets of 3 per cent per annum," said Mr Thompson.

He added that he and the directors discussed pay "very carefully" before concluding it was not appropriate to award an increase in pay or award a bonus this year to the senior managers of the organisation but a modest pay review will be made for the majority of the BBC's employees.

In a message to staff, he said: "I recognise that the position on senior management pay, and on bonuses across much of the BBC, is a tough message for all of us, but I think that all of you will know the considerations behind it.

"I hope that you will appreciate why we believe that in the current climate, and given the circumstances, this is the right position for the BBC."