Urban myths

In Ariel today Mark dismisses the idea that assets like BBC Worldwide could be used to cover the deficit as an “urban myth”. Unfortunately for him, in the very next article his finance officer contradicts him. Zarin Patel is quoted as saying in last week’s pensions seminar (in answer to my question about using the assets of WW to cover the deficit): “Asset security only pays for the deficit, it doesn’t reduce it (in the long term). We could put WW into the pension scheme but what happens in 5 years time when the deficit returns?”

Let’s just rephrase Zarin’s reply. Assets like WW DO cover the deficit. Or as she puts it, they “only” pay for the deficit. That’s not an urban myth, that’s a statement from the BBC’s chief finance officer. (Incidentally, that’s some “only”: you might have been forgiven for thinking that the deficit was the reason the BBC wanted to rob you of your pension rights; now when there’s a reasonable way of covering the deficit it turns out not to be that important after all.)

So it is official: the deficit CAN be cleared, relatively easily, by allocating the assets of BBC WW to the pension scheme. By the way, this doesn’t involve handing over WW lock stock and barrel to the pension trustees. It simply means declaring that if at some future date the BBC’s pension fund liabilities exceeded their assets, then the assets of BBC WW would be available to cover the gap. This would satisfy the regulator that the deficit was being covered. And incidentally this was also the strategy that was followed – to widespread acclaim – by ITV to deal with their pension fund deficit.

Zarin then shifts the goalposts and says, yes putting WW assets behind the pension scheme may clear the deficit, but it doesn’t reduce the risk of the deficit returning. True. There is always a risk that a deficit will return, there always has been. But it is highly unlikely that a deficit on this scale would return. And if there was another deficit the BBC could negotiate with the trustees to deal with it.

I’m afraid we come back to the same interpretation again and again: Mark Thompson is scare mongering to try and force through a savage reduction in our pension entitlements in order to buy political capital for the licence fee negotiations. We are being sacrificed to buy favour with the government.


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