The BBC has announced a pay increase and a review of its pension schemes, the latter of which have seen contributions surge to £182m annually.
The broadcaster will award a 4.2% pay rise in August, followed by a further 1% later in the financial year. It said it hoped this would ensure a “motivated, high performing BBC”.
Senior leaders are not eligible for the automatic increase because their pay is set via a different process.
The BBC acknowledged that its pay offer fell significantly below inflation, which rose to 7% at the consumer prices index measure in March 2022.
“The BBC is able to make these awards because we have been cutting staff numbers and saving costs. We would rather have fewer people paid closer to the wider media market,” the broadcaster’s pay announcement said.
It said it would “never be able to meet the levels of pay at some of [its] rivals – and nor should [it] be expected to”.
Last year’s BBC pay increase was 1% and in 2020 it implemented a pay freeze.
In 2021, staff numbers at the BBC fell by more than 1,200.
BBC director-general Tim Davie said: “The BBC is the home of creative excellence and world-beating impartial journalism. We want our staff to thrive, produce their best work and feel valued for their output.
“The BBC is smaller but we also need to attract and retain world-class talent, within a reformed, modern and efficient organisation that provides great value to audiences.”
The announcement came as The Times reported that the BBC was to seek advice from the High Court on its options to “reduce the burden” of its pension schemes on the licence fee, as part of a wider review of its pensions.
An email to employees revealed that the cost of its legacy defined benefit scheme had increased from 15% to 42% of pensionable salaries over the past decade. It paid an average of £182m a year into pensions, £147m of which was into the defined benefit scheme. Fewer than 40% of BBC pension scheme members belonged to the defined benefits scheme.
The news of the review prompted a trustee of the BBC Pension Trust, David Gallagher, to resign.
Gallagher told The Times that the BBC’s plans were “unethical and unjustified” and that management’s justification for the review was “disingenuous, misleading and heavily wrapped in spin”.
A BBC spokesperson said: “In line with many organisations, the BBC is reviewing our pension options in the interests of both our staff and licence fee payers.
“We are committed to offering a pension that is among the best in the industry and that is fairer and sustainable.”