BBC criticised over £24m Salford relocation bill

The National Audit Office has criticised the BBC for failing to fully document relocation allowances for staff in its move to Salford.

It said controls over the exceptions to its relocation policy for the move to Salford were "inadequate", which the BBC Trust agreed today was "unacceptable".

In a report published today the NAO noted the final cost of the move was likely to come in under the £233 million budget.

But it said it was too early to assess whether the move - which included a number of departments such as sport and children's programmes - would give long-term value for money to licence fee payers.

By December there were 2,300 BBC staff working in Salford including 854 who relocated from outside the Greater Manchester area.

The NAO report said the BBC made 91 exceptions to the relocation policy, often to take into account personal circumstances such as disabilities and caring responsibilities, although some of these had not been documented.

In one case, which was verbally approved, according to the report, a member of staff received an allowance for selling a second home in the east of England while retaining a London home.

Although the corporation was committed to fully documenting authorisations, the NAO found 44 staff received more than the monthly maximum £1,900 remote location allowance, but only six were recorded as exceptions.

The report also said the BBC "did not apply a consistent approach to checking that relocating staff had actually incurred the costs that they were claiming".

Reacting to today's report the BBC Trust said it accepted a relocation allowance policy was "justified" to encourage staff to move, maintain continuity for audiences and minimise redundancy costs.

But the trust added: "Any exceptions should have been rare, clearly justified and supported by well-documented business cases. It is unacceptable, therefore, that the NAO found BBC management did not adequately document the reasons for all exceptions to the standard policy."

The NAO also said the BBC could not show that some of its allowances were set at a suitable level and when it was considering offering them to staff, the corporation should test value for money using "appropriate benchmarks".

It suggested the BBC should also set up a robust system with clear records so it can demonstrate that allowances "are appropriate in all cases".

The NAO said: "The BBC's documentation of exceptions to its standard relocation policy was not sufficiently clear. This creates financial and reputational risks. The BBC will need to address this in future moves, which include relocating a further 1,000 posts to Salford."

The BBC made a commitment in 2004 to move much of its activities outside London to serve audiences better and deliver increased public value. The biggest part of this has been to move staff to MediaCity at Salford Quays.

The NAO report concluded the move was "successfully completed" with clear delivery plans, and the BBC exceeded its target of moving 30% of the staff whose roles were transferring north, with a final figure of 38%.

BBC forecasts suggest the relocation allowances will come to £24 million using a variety of financial incentives. These included the remote location allowance which covered the cost of renting property in Salford and travelling to London at weekends for two years for those who could not make a permanent move.

The report also concluded it was too early to judge the long-term impact of the move, which is projected to come in at £9 million under budget.

The NAO said: "There have been some early impacts, such as an increase in the gross value added by the BBC's spend in the region. However, in our view, it is too early to assess the full impact of the move as it will take at least two to three years for it to take effect."

Peter Salmon, BBC Director North said: "I am pleased that the NAO has recognised that BBC North was delivered on time, under budget and with no break in business continuity, however I also accept that there are some things that we could have done better. While the NAO notes it is too early to judge whether BBC North will deliver value for money, I believe that our achievements over the past two years in terms of investing in the creative and cultural economy of the North of England are positive first steps towards a long-term and sustainable role for the BBC here."