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Sides split on BBC funding deal

Pubcaster's independence called into question

The new BBC funding deal, rushed through in two weeks of breakneck negotiations with the government, is — depending on who you talk to — either a disaster or a sensible compromise in an era of austerity.

Announced Oct. 20 by pols desperate to cut the national debt, the deal imposes a six-year freeze on the BBC’s annual £142.50 ($224.70) license fee levied on all homes with a TV, which presently brings in $5.6 billion a year.

It also transfers the tab for the World Service, Welsh-language broadcaster S4C and BBC Monitoring (which checks on mass media worldwide) from government coffers to the BBC, costing the pubcaster an extra $536 million annually by 2015.

Media heavyweight David Elstein thinks the deal undermines the BBC’s long-vaunted independence from government.

Elstein, the ex-CEO of Channel Five and former BSkyB programming chief who is now chairman Screen Digest and the Broadcasting Policy Group, argues that the Beeb was ambushed — and the opposition Labour Party agrees. Labour’s culture secretary Ivan Lewis has called for an inquiry into the deal, which he says was reached without consultation with license fee payers or parliamentarians.

As the dust settles on the deal, the debate over how it was struck and its likely impact is only just beginning.

There is no doubt the BBC, which had been led to believe that funding talks would begin next year, was caught off guard when the new government announced the changes as part of its comprehensive spending review, which is attempting to trim the public sector by $128 billion and involves hefty cuts to welfare, defense, the police and the arts.

Critics insist the government infringed the constitutional rights of the BBC because it conflated its finances, paid for almost entirely by the license fee, with those services paid for out of the public purse and funded by direct taxation.

Part of the thinking behind the license fee is that it keeps an arm’s-length relationship between the British state and the pubcaster, guaranteeing its freedom to act as an impartial editorial voice.

The BBC has put a brave face on the financial settlement, arguing that it provides continuity and certainty while conceding that “difficult choices” are imminent.

However, skeptics like Elstein and the Labour Party are generating the most headlines.

They claim that the deal not only demonstrates that the BBC has been browbeaten by the new government, but that the level of the cuts — 16% over the six years of the deal — will eviscerate the org.

The Beeb has already said it will make operational savings of some $221 million a year for four years.

“Substantial cuts are inevitable,” says Steven Barnett, professor of communications at Westminster U. “I don’t think the BBC will be able to run all its existing services. Cutting a single radio network would not be enough.”

Barnett, who also is co-author of “The Battle for the BBC,” an account of former Prime Minister Margaret Thatcher’s attempt to curb the Beeb, notes that this is the largest cut in funding the BBC has ever had at one time.

“Some of the big-spending TV areas, such as high-end drama, will be badly hit,” he says.

As for the World Service, a lifeline for audiences in parts of the world where news is sanctioned by governments, large chunks of it likely will have to be eliminated, with cuts of 27% targeted over the next four years.

As recently as late August, BBC director-general Mark Thompson warned, in his Edinburgh Television Festival MacTaggart lecture, that “every £1 taken out of the licence fee is a £1 taken out of the U.K. creative economy.”

But writing in the Guardian Oct. 25, Thompson took a more sanguine view.

He insisted the new settlement “lifts the BBC out of a moment of potentially dangerous political and financial uncertainty, giving it the stability and confirmed independence it needs to fulfil its mission.”

Successful BBC leaders need to be shrewd politicians and ruthlessly clever strategists.

However, a prolonged battering by the BBC’s rivals, led by News Corp., over a variety of issues, including its huge budget, has left the pubcaster vulnerable.

Arguably, the BBC also lacks the bullish leadership necessary to stand up to the government, after chairman Michael Lyons announced his resignation last month.

One thing is certain. If Thompson thinks that a six-year licence fee agreement means his critics will stop bashing the Beeb, he had better think again. BSkyB CEO Jeremy Darroch has already made it clear he intends to stay on the BBC’s case.

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