The Tories versus the BBC

Why's the BBC in the news?

Because the Conservative government seems to be gearing up for a scrap not over its supposed left-wing bias, but over its whole raison d'etre and future, and who should pay for it. Last week, George Osborne, the chancellor, went on the BBC's Andrew Marr show to accuse the corporation of "imperial" over-reach.

"If you've got a website that's got features and cooking recipes, [then] effectively the BBC website becomes the national newspaper as well as the national broadcaster", which wrecks the commercial sector, he argued. He then announced that in future the BBC would have to pay for free licence fees for the over-75s, shifting £650m of costs directly from the Treasury to the BBC in effect slashing its funding by at least 13% without warning or discussion.

What was the reaction?

The BBC took it on the chin (or lying down, according to some, including its ex-chairman Christopher Bland) and negotiated some concessions (those who watch TV only via iPlayer must now get a licence, for example). Newspapers owned by the BBC's commercial rivals crowed while others worried about what the move portends.

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"Osborne's television licence wheeze is crude and compromises the BBC's independence", argued the Financial Times. "If the state wants to offer perks to pensioners, it should direct and pay for them itself." Either way, this is likely just the first skirmish: a green paper setting out the government's options for the BBC was due to be published as we went to press, but its main provisions had been widely briefed.

What are they?

These include a "root and branch" review of the BBC's mission and operations, overseen by outside experts. This will outline options including scrapping the licence fee, which provides £3.7bn of the BBC's £4.8bn budget (in favour of a subscription model); ending the principle that the BBC should provide a "universal" service (ie, something for everyone); and reducing its website content.

The culture secretary, John Whittingdale, a noted long-term critic of the licence fee, will then probably publish a white paper early in 2016, with a settlement expected next summer, in tandem with renegotiation of the BBC's Royal Charter.

Why is reform needed?

The BBC is too powerful, damaging commercial rivals, and its funding model no longer makes sense, say critics. It is partly a victim of its own success. It was quick off the mark on digital broadcasting and online news, but stands accused of putting local papers out of business and threatening the nationals. Many of the BBC's problems are "beyond its control: a rapidly changing marketplace and a multiplicity of rivals geared to specific audiences," argues Rod Liddle in The Sunday Times.

Even so, the thrust of the reform case is clear: in our world of choice and competition, giving one broadcaster the astonishing privilege of being funded by a compulsory levy (a "poll tax", say critics) looks like an anachronism."What turns that from an anachronism to a scandal", says Stephen Pollard in The Times, is that "the BBC uses its guaranteed vast income to go after other broadcasters" with the same "meretricious ratings fodder" as ITV, etc.

What's the case for the status quo?

The BBC's defenders point to "universality" the principle that the licence fee is justified because the BBC is a public service providing something for everyone. Director-general Tony Hall, who has made it clear that he is up for the fight, argues that the Reithian maxim that the BBC must "inform, educate and entertain" remains critical populist entertainment, from Strictly Come Dancing to EastEnders to Radio 1, must remain part of the BBC's core offering.

Lord Hall argues that the BBC doesn't damage the commercial sector, but acts as a catalyst for the creative economy. It must remain a programme-maker, not just a publisher of independently made content, and it must be able to exploit its intellectual property in global markets. "You could fund it by subscription", he told The Guardian, "but it wouldn't be the BBC. I believe utterly in universality."

What will happen?

Presumably some kind of British fudge that slims the BBC down a bit and gives it a kick up the pants without doing too much damage. Former BBC Trust chair Chris Patten reckons that Osborne and PM David Cameron won't want to be remembered as the pair that began the destruction of a great British institution.

But there are no guarantees, and the way in which the responsibility for the over-75s subsidy was thrust upon the BBC without discussion is a decisive sign, says The Economist, of how "power has shifted in favour of the government. When Mr Osborne tried the same trick in 2010, the head of the BBC and its governing trust threatened to resign. Not this time."

Cut the bureaucratic dead wood

The Tories should lay off popular BBC programmes, saysex-culture secretary David Mellor in The Daily Telegraph. "Wot,no Strictly? Wot, no Sherlock? Where's the mandate for that?"And they should lay off Tony Hall, a "decent, reform-mindedman of considerable ability and moderate opinions".

Instead,they should focus their fire on the core problem, which is thatthe BBC still has a bizarrely "inflated bureaucracy, years afterJohn Birt's brave attempts to reform it". The Beeb claims tohave saved hundreds of millions of pounds by cracking downon overstaffing and inefficiency, yet it still has ten tiers ofmanagement. There's a lot more dead wood to be cut out yet.