BDO, one of the UK’s leading accountancy firms, is refusing to pay back £4.5m in furlough money it received from taxpayers despite paying its 264 partners an average of £518,000 each. In total the company paid its partners £137m.
Paul Eagland, the firm’s managing partner, said there had been a “moral debate” at the firm about whether or not to pay the money back, but that the firm believed it had a greater responsibility “to invest in jobs”.
Eagland said the furlough money BDO received early on in the pandemic had helped the company save 700 people from possible redundancy. He said BDO partners had also taken a hit, as their pay had fallen from an average of £602,000 they collected a year earlier.
BDO rivals Deloitte and PWC did not receive any money from the government’s coronavirus job retention scheme, also known as the furlough scheme. But BDO did take advantage of the emergency funding to subsidise the pay of 450 first-year recruits and 250 administrators.
BDO received £2.7m of furlough support in its financial year to June 2020, and the firm said it had received £4.7m in total. He said the firm had topped up furloughed staff’s wages to 100% and had not made anyone redundant.
In a statement, Eagland said: “The government took bold action with its emergency funding measures which undoubtedly saved many jobs and businesses across the UK. We would ask the government to ensure future policies also support mid-sized businesses, which are vital to the UK but can be overlooked and undervalued despite providing around one in three UK private sector jobs.”
Luke Hildyard, the director of the High Pay Centre thinktank, said: “It’s pretty shameful for an organisation to take millions of pounds of public money while paying such vast sums to its senior management.
“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, putting them comfortably inside the top 0.1% of UK earners.”
BDO reported a £25m decline in underlying profits to £137m for the year to June. It blamed the drop in profits on the pandemic.
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 then increased again at the time of the second national lockdown in November.
The total cost of the scheme to the taxpayer was £43bn by the middle of November.
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