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Internal report reveals "poor staff management" costs BBC £80m a year

Mismanagement of under-performing staff and erroneous "unpredictability" allowances cost millions fo

A leaked study by the BBC's People department shows how it is seemingly wasting £80m a year. This is mostly due to the erroneous granting of salary top-ups to employees that were not qualified for it, as well as the mismanagement of under-performing staff.

The latter were costing the company over £50m, the report said, recommending a new system of appraisal be set up. The study labelled 910 employees as "poor performers", roughly 5% of the 22 000 staff members.

The report also pointed out that an average of £28m in "unpredictability allowances" were paid to employees who were not working unpredictable hours. Unpredictability, a £33m scheme, accounts for close to 3% of the corporation's wage bill, which is close to £1bn.

Another costly flaw detected by the study came from an incoherent salary distribution amongst departments. The report pointed to how staff in adepartment can earn more on average than a colleague in a different department, even if the two are theoretically on the same pay grade - staff between pay grades seven and nine at BBC Vision earned 10 per cent more, on average, than their colleagues at BBC News

This study was carried out as part of the BBC's director general Mark Thompson's project to cut £400m from the broadcaster's budget. The company has already announced it will cut 1000 jobs from various services, while more cuts are to be expected which could reach up to 25% of the workforce. The report recommended further flexibility among the BBC workforce - including the increased use of short term contracts - as well less generous redundancy terms, to reduce costs.

The BBC is also contemplating measures such as merging local radios or abandoning coverage of events such as Wimbledon or Formula 1 races, to further cut spending.

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Geoffrey Howe dies, aged 88

Howe was Margaret Thatcher's longest serving Cabinet minister – and the man credited with precipitating her downfall.

The former Conservative chancellor Lord Howe, a key figure in the Thatcher government, has died of a suspected heart attack, his family has said. He was 88.

Geoffrey Howe was the longest-serving member of Margaret Thatcher's Cabinet, playing a key role in both her government and her downfall. Born in Port Talbot in 1926, he began his career as a lawyer, and was first elected to parliament in 1964, but lost his seat just 18 months later.

Returning as MP for Reigate in the Conservative election victory of 1970, he served in the government of Edward Heath, first as Solicitor General for England & Wales, then as a Minister of State for Trade. When Margaret Thatcher became opposition leader in 1975, she named Howe as her shadow chancellor.

He retained this brief when the party returned to government in 1979. In the controversial budget of 1981, he outlined a radical monetarist programme, abandoning then-mainstream economic thinking by attempting to rapidly tackle the deficit at a time of recession and unemployment. Following the 1983 election, he was appointed as foreign secretary, in which post he negotiated the return of Hong Kong to China.

In 1989, Thatcher demoted Howe to the position of leader of the house and deputy prime minister. And on 1 November 1990, following disagreements over Britain's relationship with Europe, he resigned from the Cabinet altogether. 

Twelve days later, in a powerful speech explaining his resignation, he attacked the prime minister's attitude to Brussels, and called on his former colleagues to "consider their own response to the tragic conflict of loyalties with which I have myself wrestled for perhaps too long".

Labour Chancellor Denis Healey once described an attack from Howe as "like being savaged by a dead sheep" - but his resignation speech is widely credited for triggering the process that led to Thatcher's downfall. Nine days later, her premiership was over.

Howe retired from the Commons in 1992, and was made a life peer as Baron Howe of Aberavon. He later said that his resignation speech "was not intended as a challenge, it was intended as a way of summarising the importance of Europe". 

Nonetheless, he added: "I am sure that, without [Thatcher's] resignation, we would not have won the 1992 election... If there had been a Labour government from 1992 onwards, New Labour would never have been born."

Jonn Elledge is the editor of the New Statesman's sister site CityMetric. He is on Twitter, far too much, as @JonnElledge.