Move follows backlash over taking £4m state handout while paying average £500,000 bonus to partners
One of the UK’s leading accountancy firms has performed a U-turn and will pay back £4.1m in furlough money it received from taxpayers after a backlash about bumper payouts to partners.
BDO, which employs 6,000 people in the UK, said it would be returning the cash to HM Revenue & Customs within days after “recognising the public mood”.
BDO prompted a row last week after deciding to keep the furlough money despite paying its 264 partners an average of £518,000 each. In total, the company paid its partners £137m.
The firm had initially refused to pay back the money, saying that while there had been a “moral debate” internally about what it should do, the company had concluded it had a greater responsibility “to invest in jobs”.
Announcing the firm’s rethink, Paul Eagland, the firm’s managing partner, said: “BDO accepted £4.1m of furlough money from the government in order to protect jobs that were otherwise at risk. We were planning to review paying this back at the end of our current financial year, which is June 2021. Recognising the public mood requires a much quicker process, we have accelerated this and we will be returning the money before Christmas.”
Last week, Eagland had said the furlough money BDO received early on in the pandemic had helped the firm save 700 people from possible redundancy. He said BDO partners had also taken a hit, as their pay had fallen from the average of £602,000 that they collected a year earlier.
The High Pay Centre thinktank had claimed it was “pretty shameful” for an organisation to take millions of pounds of public money while paying “vast sums” to its senior management.
It added: “The defence that they need it to protect jobs is risible when a small sacrifice from each partner would comfortably cover the costs of repayment, and would still leave the partners earning over £500,000 a year.”
BDO operates in 167 countries with revenues of $10.3bn (£7.8bn).
Under the coronavirus job retention scheme, the government paid 80% of furloughed staff’s wages up to a maximum of £2,500 a month. The amount paid was reduced from August, but rose again at the time of the second national lockdown in November.
The total cost of the scheme to the taxpayer had reached £43bn by mid-November.