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BBC strike special Part Three: The solution and why I support the strikes

November 17, 2010

First of all thank you for taking the time to stay with me over the past couple of weeks as I put together this three-part special on the BBC pension strikes by the NUJ. The original onus was to get the posts out over a course of three days but because I had a very bad cold and have since been very busy at work myself, the special has taken a little longer.  However as this is still an ongoing story with a final resolution yet to be reached, but the proposed 15 and 16 November strike dates currently averted as the union enters fresh talks with BBC management, I still feel this is relevant to finish at this time.

So in this third and final part I look at the solution that the BBC needs to effect, the problems Thompson is himself having and why I think he is being bull-headed with this reform and finish with a personal look at why I support this strike.

The solution

Despite what Mark Thompson would have us believe the BBC’s position on pension reform is not uniformly supported.  As I have made it clear in part’s one and two, despite several emails and press releases, the unions are not fully supporting it – BECTU have said that should the pension review show the deficit to be less than Thompson is claiming they will again ballot their members.

And it turns out the unions are not Thompson’s only problem.

The BBC pension trustee chairman, Jeremy Peat, said back in September 2010 that he is “frustrated” by the way the management are forwarding with their plans. Speaking to a meeting of 1000 BBC staff he said he was “frustrated and relatively powerless” and admitted that the trustee’s should have spoken out about their concerns long before he had.

In an article by The Guardian it is noted that:

The trustees were given very little warning about the proposals and Peat said that had the BBC given them to the trustees they probably would have rejected them.

He said the BBC should have looked at a range of alternatives and said that he expects the current proposal for a new career-averaged benefits option called “CAB 2011” would have to be implemented by rule changes to the pension scheme.

This is likely to require the pension trustees’ approval, an issue on which the trustees have been taking legal advice.

Thompson’s answer to this, was to suggest that the corporation would set up a new scheme to implement his third option (The Times), which to many shows a worrying trend that Thomspon is trying to push this reform through as a final legacy as DJ.

This move by Thompson to circumnavigate the trustees who are responsible for the pensions and push it through without at least running it past them has drawn much concern from union members and runs at the heart of the reasons why they are striking.  Why is Mark Thompson so eager to push through pension reform bypassing the trustees themselves? Why is Thompson so eager to push through the reforms without waiting for the review he and the rest of the management put through?  Peat’s admittance that he believes “it would not have made any difference [if the trustee got involved] given the direction the BBC chose to go” is an outrage and makes one wonder if they are not willing to vocally question the veracity of the pensions reforms what is the point of the trustee’s and it shows their absolute failure to abide by their own virtues, namely “to protect the benefits of the members”.

Jeremy Peat is not the only voice to have expressed concern within the management.  On the eve of the 5/6 November strikes, Helen Boaden, director of BBC News and a trustee of the corporation’s pension scheme admitted that the reform proposals were “mishandled”.  She believes that the management could and should have waited for the actual losses to the pension fund to be found out before any changes and proposals were made.

“I think it would have been much, much better if the BBC had waited for the deficit to be properly assessed and then worked with the [pension] trustees to come up with a viable, long-term plan for addressing it and the ongoing demographic challenges,” Boaden wrote. (The Guardian)

This came in direct contrast to an email Mark Thompson put out to members of staff that said “the whole point of introducing the reforms now was so that the reforms could themselves be taken account of in the valuation process”.  But this makes no sense whatsoever.

As I stated in part one of this report when speaking about Zarin Patel, another architecture of the Pension reforms:

if we look further at her statement she initially puts the deficit at £2 bn, based on an initial estimate by the Scheme’s Trustees, but as she notes the financial market to which the pension scheme is so closely linked to, improved and if you look at current, so-called final proposals, on the table the BBC management now estimate that the deficit is £1.5bn.

The deficit has already been reduced by £500 million in estimation by Thompson and co.  And there is speculation that the deficit may even be £1 bn only (The Guardian) – which begs the question why is the management working on phantom numbers? Yes it is possible that the figures proposed are the exact figures but until the report comes out on the deficit no one should be making such wholesale reforms to the BBC pension scheme without knowing the final deficit figure. A sentiment echoed by NUJ General Secretary Jeremy Dear:

“Helen Boaden is echoing what we have been saying all along. When you do not even know the scale and nature of any deficit how can you claim to have the solution to addressing it. The BBC should suspend its planned changes and continue its consultation with staff, unions and trustees until the real deficit is known. If it pledges to do so we will cancel any strike action.”

And this is the simple solution – no one is saying that changes may need to be made to the pensions and no one is saying they are unwilling to pay more or work longer to ensure a more healthy pension pot, but at the heart of this, is a complete aghast as to why the management of the BBC are pushing through changes without having all the facts at hand.

It is common knowledge within the BBC that Mark Thompson may be ready to move on as Director General of the BBC and there is already speculation that Helen Boaden may replace him.  Thompson’s inner circle of management is already dwindling as new senior managers take the place of those Thompson pulled in to support him. One of those most noteable is Mark Byford who was made redundant earlier this year. His redundancy is also at the heart of some of the anger expressed by staff.  When he leaves the BBC he will recieve a £1 million pay off as well as a pension package well into the several millions.

Mr Byford, who joined the BBC at the age of 20 in 1979, received £485,000 in pay and other benefits from the licence fee payer last year, according to the corporation’s own figures. If the package rises in line with average wage inflation, that could swell to almost £600,000 by 2019. With 40 years service accrued he would then be entitled to two thirds of his salary as a pension, or £395,000 a year. If bought as an annuity on the open market, such a pension would require a total pension pot of at least £7 million, according to analysts. (The Telegraph)

His redundancy and that of Lucy Adams mentioned in part one, (human resources director of the BBC) and others in a shake-up to reduce the management, do not sit well – not because they are going, but because the BBC is honouring their committment and promises to Byford et al’s pensions whilst at the same time telling everyone else they must pay more, work longer and get less back.  As one BBC member of staff told me “we’re not asking for more, we’re not asking for the earth, we just feel we should get what Thompson promised and not have him shift the goalposts, five years after he tried to shift them before.”

Byford’s pension has been reported “one of the biggest ever seen in the public sector” (The Wire). Whether he has earned it or not, is not the question, what is, is why he and other redundant managers will keep their pension schemes intact but the rest of the staff are being asked to forfeit in what could be £100,000 off their final pension. Why are promises only being kept for some but not for all?

Many see Mark Thompon’s solutions to the pension deficit as short term and not long term.  Many have argued that with the solution being proposed, many staff will be dependant on state pensions in order to live when they reach retirement.  How is this helping the license fee payers in the long term if as tax payers they will still have to foot a pension bill.  As I have said, and as the NUJ have said, no one is looking for huge payouts, no one is looking to take money unfairly nor unreasonably.

So the solution is simple – suspend all changes to the pension reform until the full scale of the deficit is known. When that report is known and if changes muct be made, make sure they work in the long term and not just to secure Mark Thompson a quick legacy.  Management can not ignore the concerns of it’s staff regarding the pensions whilst still fulfilling promises it has made to management who will now be leaving.

Thompson is not doing himself any favours within the BBC because of this and other decisions he has made and his handling of certain crisis’. As The Independent points out, he is “facing a leadership crisis with growing doubts being expressed by senior corporation executives about the judgement of the Director-General Mark Thompson.”

Stephen Mitchell, deputy director of news at the BBC who was addressing an audience at the University of Kent and speaking about Thompson’s actions by writing a letter to Business Secretary Vince Cable regarding Rupert Murdoch’s proposed takeoever of Sky said: “Mark Thompson is the editor-in-chief and I feel that that letter in a way compromises the perception of his impartiality on an issue of current controversy… For me, he compromises his role in life by signing a letter in the way that he did.”

As the story goes on to say, and has been mentioned in this piece:

In addition to Mitchell’s criticism, his boss, Helen Boaden, the BBC director of news, has attacked the way that Thompson and his senior management team have handled BBC employees’ pensions. In a leaked email, Boaden says: “All I can say is that as a pension Trustee, I think it would have been much, much better if the BBC had waited for the deficit to be properly assessed and then worked with the Trustees to come up with a viable long term plan for addressing it.” The National Union of Journalists, which is staging the strike over planned changes to the BBC pension scheme, released the email and said that it agreed with Boaden.

The management also needs to make it very clear why they ignored concerns staff raised in 2003 about a £1 bn hole in the pension fund then, where John Smith, at the time BBC’s finance director, now their BBC Worldwide boss said:

“It is essential that we take a long-term view and do not get swayed by the ups and downs of the stock market and the short term impact it has on the scheme’s value.” He went on: “The fund is healthy: it earns more income from its investment and contributions than it pays out. The BBC cannot offer staff stock options but we can offer very good pensions.” Not any more, John. According to an article in the Daily Mail on 10 July 2003, Smith then “noted that as a young pension fund, the BBC has 55,000 people paying in and just 20,000 receiving pensions. With that balance he said there should mean there will be no fundamental problem for decades to come.” (The Guardian)

Zarin Patel herself made a mockery of this by saying that “The Scheme’s assets, like those of many other pension schemes, have been affected by market volatility”.  So who is right and if one is wrong, who is going to answer for this glaring mismanagement.

Staff have offered solutions to plug the gap in the pension fund but have been ignored more or less.  There have even been concerns that staff have been stopped from asking questions of the management.  One report by The Media Blog suggests that “a special, one-off edition of its Money Box show for BBC staff was planned, dedicated to explaining the deficit and its implications. However, the show reportedly collapsed when the powers-that-be demanded to approve the content before it aired.”

At this point the NUJ are now in talks with the BBC management again and it is hoped Mark Thompson can be be swayed from his third and final change made a couple of months ago. As the New Stateman suggests ” Union sources said that Thompson has promised to reopen pension talks if the current scheme’s deficit is less than £1.5bn when it is valued again. They also said that the BBC chief had agreed to allow independent advisers to have a say on future valuations of the pension payments.”

Whether this is true will only be known once the talks have concluded and what the union then says after.

But as I said the solution at this time is not to make knee jerk reactions and make sure all the information is known to the staff and the trustees, without circumnavigating them, before any long term decisions are made on the pensions.

Why I support the strikes.

As I said I would conclude this piece with, I would tell you why I support this strike and the actions the NUJ has taken.  Despite what you may hear from certain sections of the media and from people commenting on message boards, not all BBC staff are simply lazy graduates looking for some kind of underserved golden handshake, already paid extraodinary sums of money.  As I pointed out in the first part of this piece, if you only believe that everyone is paid the same amount as stars such as Jonathon Ross or Huw Edwards, Nick Robinson et al, then it is understandable in some ways, but for the majority of staff they are not.

Most BBC journalists work below the average that their private sector or commercial rivals do.  Yes it is easy to say that if the pay is not so hot at the BBC why not move! but why should someone move from an institution that worldwide is still seen as one of the most trusted broadcasters and news gatherers.

My husband is one of those people.  We don’t live the life of the high and mighty, we have the same financial worries as everyone else, we have a mortgage, bills to pay, shopping and other day to day necessities.  We don’t live in a huge mansion, we live in a modest three bed semi detached.  We have one car and we save for our holidays like everyone else. And this reflects most of the people he works with. He is not askign for anything more, he doesn’t believe he deserves a golden platter, he just asks that his pension is not cut.  I know many will say that this is the way it is and the BBC are not the only ones to loose out, but the point is, why shouldn’t he fight for something he feels is being taken away not with proper evidence and analysis before a decision is made but by force and by subtifudge.

I know some may say that this revelation will make my three part special bias – maybe it is, I love my husband and I know he is a hard worker and has given above and beyond for a job he loves.  But I have spent the time delivering as much background knowledge and supporting evidence that I hope will at least show there is more to this than meets the eye and that if not fought for, once again management will get away with bad management, golden fence their own pensions while allowing others to take a direct hit.

This is not in my view, fair.

Thank you for reading.

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