BBC's top brass bruised as MPs attack over PSCs

The most fraught exchange yet between MPs and the BBC over its use of Personal Service Companies has been held, leaving the broadcaster’s top brass visibly rattled.

It was led by a combative Lee Rowley MP, who tried to get the BBC’s number one and two to give straight ‘Yes’ or ‘No’ answers, despite the duo's claims that their replies had been “clear”.

“I wouldn’t be asking the questions if I’d thought you been clear,” the Tory MP shot back at the BBC’s deputy director-general Anne Bulford, for her “delightfully interesting narrative”.

'Play with words'

“If you want to play with words that’s fine,” Mr Rowley continued, pointing out that despite Deloitte finding no BBC stars were forced to be PSCs at the time of its review, emails show many have been forced.

Moreover, Lord Hall, the BBC’s director-general, acknowledged that radio and TV presenters were told they would not become a “star” at the BBC, if they declined to use a PSC.

But Ms Bulford, who will shortly step down from her job, claimed that in the vast majority of cases, BBC presenters who became PSCs were previously freelance anyway, as sole traders.  

'There are, not there may be'

Her follow-up was shouted down, however, twice, by two MPs intervening against her at the same time -- Caroline Flint MP, and Meg Hillier MP, chair of the PAC, which ran the Q&A.

 “There may be people who went straight from staff to PSCs”, Ms Bulford began, before getting cut-off: “No there were,” said Ms Flint, and Ms Hillier a second later, “No there are.

Pausing, looking up at the two MPs (at around 14:53:30 of the Q&A session), Ms Bulford then re-emphasised, “There may be” she restarted, with a downward, corrective nod, only for Ms Flint and Ms Hillier to state more loudly in unison: “There are.” Looking defeated, Ms Bulford finally conceded: “Okay, that’s fine”.

The Q&A session hosted by the Public Accounts Committee (PAC), which will shortly quiz HMRC ahead of issuing a full report on its findings, heard key evidence in and around four main areas:

1. BBC resolution and ‘global settlement’ with HMRC

  • The BBC has paused its internal resolution process, despite paying new compensation for additional presenters to aid with their accounting costs, which is on top of both the 33 recipients who have received a total of £12,000 to help pay their accountancy fees, and three presenters who have received 'bridging' loans, amounting to £2,550.
  • The internal resolution process has been paused because the BBC is still trying to secure a “global settlement” with HMRC, to clear and resolve all its presenters’ past tax liabilities under IR35.
  • This option for the BBC to settle on IR35 -- which no other organisation is known to have ever been granted by HMRC, has been condemned by a tax enquiry expert, but the uniqueness was not remarked on by the 16-strong MP panel.
  • The global settlement process with HMRC is “taking longer than we thought”, according to Lord Hall, who is aiming for it to conclude in the “next month or so.”
  • There is likely to be a “second stage” (-- wording from MPs that the BBC used in its answers), designed to reimburse presenters for lost income through cancelled benefits, such as pension loss or holiday pay removal.

2. Inside the BBC

  • Lord Hall has met with the ‘IR35 presenter group’ at the BBC, and apologised for “the way in which these matters have been dealt with.” He said was “happy to repeat that” -- the apology, “now.’
  • Anne Bulford admitted that where the BBC has “struggled” was in communicating the practical and compliance issues triggered by CEST (for many BBC presenters, it produced the opposite outcome to the IR35 asessments that the BBC carried out previously).
  • The BBC said a “big burden” was placed by the broadcaster on managing editors to explain to those under them about IR35 / the 2017 changes, and the likely impact on individuals. Communication was “not personal enough,” Ms Bulford acknowledged.  
  • Lord Hall believes there is no “secret place” inside the BBC where files or records on the BBC’s policies on PSCs (before he or Bulford joined the BBC) are kept.
  • The rejection that such a "secret place" exists came after a red-faced Lord Hall admitted that not a single internal document at the BBC showing PSCs being ‘debated, discussed or approved’ by his predecessor, or his predecessor’s senior colleagues, can be found.
  • The absence of this PSC policy-making paper-trail at the BBC was disbelieved by one committee member as “extraordinary,” and condemned by another as “incredibly sloppy.”

3. At the BBC today

  • Sacking people on a whim is ‘not what we do,’ according to the BBC’s Anne Bulford, in reply to Meg Hillier asking what happens to presenters 'if their face doesn’t fit.’  
  • Despite the views of its presenters, CEST is currently being used by the BBC as the main way for the corporation to decide whether newcomers to the BBC are inside or outside the April 2017 off-payroll rules.
  • ‘Responsibility’ for the PSC debacle at the BBC must ‘apply somewhere’ in the eyes of Lee Rowley MP, who tried to extract an answer from Anne Bulford about who should be held accountable, by telling her “this is what you guys are paid for,” and “this is why you get the big bucks.”

4. National Audit Office

  • Ms Bulford was asked “Why will you not answer the question” by Mr Rowley (at 15:35: 16). His question was about whether BBC individuals were working for a number of months on contracts that the BBC arbitrarily changed, and that the BBC informed them of only once it had charged them extra tax as a result of those changes.
  • “I’m not asking you about the NAO report” came from Mr Rowley, who had to reiterate: “I’m not interested in the report, forget about the report.”
  • Similarly irritated by Lord Hall and Ms Bulford often answering invitations to give their personal opinions by citing the NAO report, Ms Hillier said: “Let’s go back to the NAO report -- which you’re clearly pleased to go back to regularly.” (15:39:24)
  • Speaking on behalf of the committee, chair Meg Hillier said the MPs were not “reassured” by the evidence of Lord Hall or Ms Bulford.
  • The Labour MP repeatedly accused the BBC of creating and overseeing “a muddle,” or taking a “muddled approach” to internal status decisions, internal policy-making on PSCs and its communication to affected individuals, which suffered from a “lack of clarity”. The whole situation, she said, amounted to “a dog’s breakfast.”
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Written by Simon Moore

Simon writes impartial news and engaging features for the contractor industry, covering, IR35, the loan charge and general tax and legislation.
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