'Cash machine culture' at BBC: Lord Patten says sky-high salaries and golden goodbyes have damaged corporation's reputation

The BBC appears to spend taxpayers' money as if it comes from a cash machine, Lord Patten said today.

The Chairman of the Corporation's Trust admitted the public’s trust in the BBC had been rocked by revelations about financial largesse and was braced for more damaging headlines over vast severance pay deals to departing executives.

But he defended the cost of moving staff to the a new £1billion headquarters in Salford, insisting the only mistake was not keeping checks on how money was spent furnishing the new homes of employees who made the move north.

Lord Patten said the public's trust in the BBC had been rocked by revelations about financial largesse and was braced for more damaging headlines over vast severance pay deals to departing executives

The licence fee has been frozen at £145.50 until 2015, and Lord Patten warned that if it did not rise in future there would be a ‘storm’ of protest as services are switched off.

But he lifted the lid on the attitude of staff towards spending the public’s money.

Speaking at a lunch in Parliament, he said: ‘I think there are particular challenges for us in the BBC because we depend above all else on trust and the trust people have in us.’

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He said there were several things about which he is still ‘particularly concerned’.

‘The first is we should be seen to be spending licence fee payers money as though it was not just cash out of an ATM which we could do with as we wanted.

‘We have to demonstrate that we are using licence fee payers money reasonably.’

North: Lord Patten defended the BBC's decision to pay generous allowances to persuade staff to move to the Media City in Salford

Former director general George Entwistle, who quit over his handling of the Jimmy Savile sex scandal, received a £450,000 pay-off last year, double the amount he was entitled to, while Caroline Thompson, the former chief operating officer, was given a £670,000 pay-off.

Lord Patten also revealed that in the coming months, there will be more ‘difficult stories’ about the BBC’s use of money.

It includes the controversial decision last month to cancel a bungled £100million IT project.

‘We have quite a difficult story this summer to deal with on severance pay which the National Audit Office are dealing with,’ he added.

'IF TORIES ARE SPLIT ON EUROPE IT WILL NOT WIN THE ELECTION'

Conservative eurosceptics could be sending the party down the path to 'political suicide', Lord Patten warned.

The BBC chairman said it was 'perfectly possible' that David Cameron will be able to achieve in the renegotiation of the UK's membership with Brussels which he has promised.

But he warned that the electorate will punish the Conservatives at the ballot box if they appear disunited over the issue.The former European Commissioner said:'If your response to that is that nothing would be acceptable, then I think that would be bad news for the Conservative Party.'If nothing is acceptable, I recall Winston Churchill's very wise observation that the problem with political suicide is that you live to regret it.'

BBC Director General Lord Hall has agreed to cap payouts to senior managers at £150,000, a limit Lord Patten said was ‘reasonable’.

But he warned against future cuts to the licence fee, even if the country is still in the grip of austerity when negotiations begin.

‘It surprises me that support for the licence fee is substantially higher than it was two, three or four years ago,’ he told journalists.

‘I have no doubt at all that a smaller licence fee would result in cuts in services and every time we have tried to reduce services there has been a storm, either local radio or Radio 6 or other things.

‘We have to produce good programmes. We above all will be judged and our figures for trust and the regard in which the BBC is held will be judged by the quality of the programmes we make at a reasonable cost.’

The decision to move BBC Sport, BBC Breakfast and children's programmes to Salford has been widely criticised for its cost.

Last month the National Audit Office found 894 staff were handed an average of £23,000 each to persuade them to move, including 11 who received more than £100,000 for homes worth between £500,000 and £1million.

However, they did not have to provide basic evidence of train fares or utility bills to back up their expense claims.

Hundreds claimed up to £1,900 a month to cover all rent, bills and council tax in Salford, while others received £3,000 to buy new curtains and carpets.

But Lord Patten said he was ‘quite surprised at the hostility in some quarters to Salford’.

‘I think there is slight tendency to think that they haven’t heard of paninis north of Watford.

‘Salford has been a fantastic success and whatever the problems about exactly how much people have been paid for their curtains on the whole it has been a success.’