BBC set June deadline to fix freelancer ‘mishandling’

The BBC has been set a deadline of June 2019 to say how its “fractured, chaotic, muddled,” ‘shocking’ and for some people, ‘life-changing’ treatment of PSCs will be rectified.

So within the next 60 days, the corporation must put in writing how it plans to make hiring arrangements with Personal Service Company workers "simpler, clearer and more consistent."

It also has until June to set out how it intends to ensure that “proper governance” over key operational changes, including PSC engagements, will be exercised in the future.

'Forced'

Similarly by June, it must outline how it plans to assess the potential loss of employment benefits to individuals who were on staff contracts but were “forced” by the BBC to go PSC.

Finally and before the same deadline expires, the BBC must detail the progress it has made in the number of benefit-stripped people it has assessed, said the Public Accounts Committee.

It is MPs on the PAC who issued both the June deadline and the corresponding actions for the BBC to take, so it can “get a better grip of its management of its freelancer workforce.”

'Mishandling'

Currently, the BBC’s “mishandling” of PSCs has caused “misery” and “financial hardship” for those affected -- thousands of people out of a total freelance workforce at the BBC of 60,000.

Some have been given “low-level financial assistance” from the corporation, notably if they earn less than £45,000 a year; were given no option but to use a PSC and face an IR35 probe.

But an estimated 300 presenters are now at risk of HMRC investigation, the BBC has conceded, part of a wider group of 800 whose status shifted following the IR35 reforms of 2017.

The BBC’s communication of these reforms to affected presenters was unacceptable, the committee found, in line with admissions from the BBC’s top brass in a recent Q&A session.

Stress and hardship for loyal BBC freelancers ensued, partly because in August 2017, the BBC began to deduct ongoing income tax and NI from the amount they paid individuals.

'Very difficult, very chaotic'

At the same time, the corporation also started deducting the amount of tax previously paid in advance on the presenters’ behalf for April to July 2017, the PAC found.

The MPs said: “The BBC told us that it had communicated with individuals before deducting tax from their payments, but accepted that its communication ‘had not been personal enough to take into account this complex transition period.”

More in line with the distressing evidence given by some of its presenters, the BBC admitted that its recoupments from August to October 2017 proved “very difficult and very chaotic” for some of its people.

That same sense of chaos appears to have engulfed the BBC’s engagement with workers who were PSCs or forced to be PSCs.

“We heard of cases of people working in the same job but hired through different contract structures and consequently paying different amounts of tax and national insurance,” the MPs said.

“There may be justifiable reasons for these differences, but we found no sense of transparency or clarity about the sorts of contracts the BBC put people on.”

'Shocked'

In an attempt to find accountability, the committee tried to ascertain what decision-makers inside the BBC decided what; when, but it was in vain.

“We are shocked that the BBC is unable to confirm whether its early PSC policy was discussed at an appropriately senior level,” the MPs said.

“We are seriously concerned that the BBC cannot provide us with sufficient assurance that its policy changes relating to its historic use of PSCs, affecting a key and operationally important part of the BBC’s workforce, were adequately discussed at a senior management level.”

'Admitting responsibility after the event'

In a report on its findings, which includes the deadline-tied actions for the BBC, the PAC tells the corporation that its mishandling of PSCs threatens to bring the taxpayer-funded organisation “into disrepute.”

"The BBC has apologised to people affected by its policy changes and its approach to implementing government reforms and is now trying to reach a settlement”, the report says.

“This is taking longer than expected. We cautiously welcome the BBC’s commitment to helping those affected, but admitting responsibility after the event is not sufficient without taking effective steps to resolve the situation. The BBC needs to get a better grip of its management of its freelancer workforce if it is to repair its relationship with TV and radio presenters and restore its reputation.”

A BBC spokeswoman said: "Everyone in the media industry agrees that the roll out of the new employment test introduced by HMRC was rushed and problematic.

"We fully understand and regret the stress this has caused presenters, we are supporting them and we recently set out how we will calculate our contribution to any historic outstanding amounts sought by HMRC to help resolve the matter as soon as possible."