bbcBritain’s Public Accounts Committee, a Parliamentary oversight group, has strongly criticized the BBC over severance packages paid to senior execs that in the three years to December 2012 totaled £25M ($40.8M). “There was a failure at the most senior levels of the BBC to challenge the actual payments and prevailing culture, in which cronyism was a factor that allowed for the liberal use of other people’s money,” the PAC said today. The BBC is funded by a compulsory £145.50 license fee paid by British households on an annual basis. The committee called some of the justifications provided by the BBC “extraordinary.” The group particularly noted comments made by former BBC director general, Mark Thompson, who is now president of The New York Times Company, when he appeared before it in September. Thompson “claimed that it thompsonwas necessary to pay his former deputy and long-term colleague Mark Byford an extra £300,000, not because the BBC was obliged to, but to keep Mr Byford ‘fully focused’ instead of ‘taking calls from head hunters’,” the PAC noted. In 2010, Byford was paid two years’ salary, half of it in lieu of notice, and was retained and paid for eight more months. The spokeswoman for the New York Times provided that paper with a statement from Thompson that reads in part: “Severance payments for senior managers working for public organizations are inevitably unpopular and controversial. The sole reason for making these payments was so that the BBC could rapidly reduce the number of senior managers and make far larger savings on behalf of the public… Despite some inflammatory language in the PAC report, there is absolutely no evidence of any wrongdoing by anyone at the BBC in relation to these severance payments.”

New BBC director general Tony Hall, who succeeded George Entwistle after he lasted only 54 days on the job and was forced out over a series of scandals that erupted in late 2012 (and was given a controversial £450,000 payout), has moved to cap severance pay at the broadcaster. The PAC says it welcomes the changes and agrees with Hall that the BBC had “lost the plot” in its management of severance payments in recent years. PAC chairwoman Margaret Hodge said the payments had put the BBC’s reputation at risk. The stinging rebuke comes at a time when the BBC has been making some headway in rebuilding its tarnished reputation after the late 2012 crises that included child sex abuse revelations surrounding Jimmy Savile, and editorial missteps at flagship news program, Newsnight.

The committee recommended that the BBC “remind its staff that they are all individually responsible for protecting public money and challenging wasteful practices” and that “to protect license fee payers’ interests and its own reputation, the BBC should establish internal procedures that provide clear central oversight and effective scrutiny of severance payments.” Further, it said, “The BBC Executive and the BBC Trust need to overhaul the way they conduct their business, and record and communicate decisions properly.”

Get Deadline news and alerts sent to your inbox.