Lord Patten said that high executive salaries are affecting public trust in the BBC Speaking on the BBC's Andrew Marr show yesterday, Patten said the level of executive pay "seems to fly in the face of public service ethos" and was behind "the public's lack of sympathy with the BBC as an institution".
He went on to suggest the number of managers at the corporation earning more than £150,000 a year would be cut, and said he had been "looking closely" at a recent report by the Work Foundation's Will Hutton into private sector pay structures.
Hutton's report ruled out linking a company's executive pay directly to that of its lowest staff, but recommended that it be tied to the median salary and performance related, and that transparency be increased by annually publishing the top earner's and the median pay.
Patten said he wanted the BBC to be "the first organisation in the public sector which actually gets into implementing some of Will Hutton's ideas", indicating a cap of 20 times the median pay at the corporation would be put in place for executive salaries.
According to the NUJ, median pay at the BBC is £30,000. If a cap were to be put in place, the director general Mark Thompson, who was paid £838,000 in the last financial year, could see his pay cut to around £600,000. This would still be 42 times more than the lowest-paid member of staff at the corporation, which according to the NUJ is a runner on £14,177.
NUJ general secretary Michelle Stanistreet welcomed the announcement, which will be made formally this week, but called for a salary cap to be set lower at five times the median salary. This would limit the director general and other senior executives to £150,000.
"With so many cuts coming down the line, this is a critical time for the BBC and the actions of the trust going forward will determine the future of this much-loved and widely respected corporation," Stanistreet said.
"If we're to protect what is a vital public service broadcaster and ensure viewers and listeners get the quality service they demand and deserve, Lord Patten and the rest of the trust need to take a strong stance and end this practice of fat cat renumeration amongst executives at the BBC."
Patten's announcement comes at a time of severe cutbacks at the BBC. There are proposals for up to 360 job cuts within BBC Online by 2013 as part of a 25 per cent budget reduction within the division; up to 650 job cuts at the World Service; and, according to the NUJ, around 700 jobs at risk from planned cuts at BBC local radio.
The corporation's annual financial report will be published next Tuesday.
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