U.K.’s Right-Wing Government Invites Commercial Rivals to Critique Publicly Owned BBC

BBC director general Tony Hall: 'This is a period of high risk for the BBC'

U.K.'s Right-Wing Government Invites Commercial Rivals Critique Publicly Owned BBC
Max Mumby/Indigo/Getty Images

LONDON — The hostility of the U.K.’s right-wing government toward the BBC, one of the world’s largest broadcasters, was raised a notch Sunday with the invitation to its commercial rivals to critique the publicly-owned network. Meanwhile, the BBC’s senior executives and their allies have started to fight back.

The government signals the start of a rigorous re-evaluation of the way the BBC operates and is funded with the publication this week of draft proposals, known as a Green Paper, that set out how it will go about reviewing the BBC’s operations. The review will culminate in the passing into law of a new 10-year charter for the broadcaster, which will come into force at the beginning of 2017. This charter protects the BBC’s freedom, and imposes on it a requirement to be politically impartial, but also restricts the scope of its operations and defines the way it is funded. It also sets out how the BBC is governed.

According to the Rupert Murdoch-owned Sunday Times, John Whittingdale, the U.K. culture secretary, will set up a panel of experts who will advise the government on the future scope and funding of the BBC. This will contain several people who are competitors or previously worked for rivals of the BBC. It includes former Channel 5 chair and chief executive Dawn Airey, who is now Yahoo’s senior VP, Europe, Middle East and Africa; Alex Mahon, former chief executive of Fox-owned production company Shine Group; Ashley Highfield, chief executive of regional newspaper group Johnston Press, and a former BBC director of new media and technology; and Stewart Purvis, a former chief executive and editor-in-chief of ITN, which produces news shows for commercial TV channel ITV, amongst others.

Whittingdale said: “Each member of the independent advisory group brings individual skills, experience and expertise.
Together they will contribute to the oversight of the government’s review of the BBC royal charter. I look forward to working with them on this important issue.”

The BBC’s competitors have long complained that the BBC is using its dominant position in the U.K. media landscape to strangle opposition, both in traditional broadcasting and in the digital space. That view was reinforced by the U.K. finance minister George Osborne last week when he said that the BBC was becoming “imperial in its ambitions.”

Osborne said the BBC’s digital services should not push out the digital operations of commercial providers, including those runs by newspapers. “If you’ve got a website that’s got features and cooking recipes — effectively the BBC website becomes the national newspaper as well as the national broadcaster. There are those sorts of issues we need to look at very carefully,” he said.

“You wouldn’t want the BBC to completely crowd out national newspapers. If you look at the BBC website it is a good product, but it is becoming a bit more imperial in its ambitions.”

A few days later Osborne announced that the BBC would be forced to absorb a cut of £650 million ($1.01 billion) in its revenue as he transferred the cost of giving free TV licenses to the elderly from the Department for Work and Pensions to the broadcaster. This represented 20% of the revenue from the compulsory TV license fee that every viewers has to purchase.

At the start of the month, the BBC said that it would shed more than 1,000 jobs in a major restructuring. The measures will deliver £50 million ($78 million) in savings from merging divisions, cutting down management layers, reducing the number of managers and improving processes.

Supporters of the BBC have started a rear-guard action to mitigate the damage of the government’s assaults.

Diane Coyle, a former member of the broadcaster’s governing body, the BBC Trust, criticized the government for appointing the panel of experts before saying how it would consult the public.

“One of the really odd things about this is that nobody appears to be talking about how to involve the public. You wonder whether it’s because they’ve already announced their own minds before consultation has taken place,” she told the Guardian newspaper. “It’s very hard to avoid the suspicion that this is a fundamental attack on the scope of the BBC. If not the government should move very quickly to allay that impression.”

She added: “Anybody overseas finds it inexplicable that we have this amazing national assert and it seems to be constantly under attack from the government and the rest of the industry.

“It’s absolutely gob smacking for those who look with envy at the health and quality of the British sector and the amazing things the BBC does to the reputation of the U.K. as a whole. It seems public interest is the last thing to get a look in in this debate.”

Rivals have accused the BBC of undermining commercial rivals by using its public subsidy to chase ratings with nakedly popular shows. A senior BBC source told the Guardian: “The BBC doesn’t nakedly chase viewers, but we do seek to make the good popular, and the popular good. Research has shown that an element of competition drives up quality across the industry. The voice of the public will be key and they will have their own view about the merits of BBC programs like ‘Strictly’ (known as ‘Dancing with the Stars’ in the U.S.) and ‘Sherlock.’

“In a world where broadcasting is increasingly global, it is important for Britain that we have a strong, vibrant and successful creative sector and the BBC has been a key driver of delivering that. A key test for the Green Paper (draft legislation) is whether it enhances or diminishes that status. The BBC is a British global success story. If we get this wrong, in 10 years’ time it will no longer be.”

Writing in the Observer newspaper on Sunday, the BBC’s director general Tony Hall acknowledged that negotiations over the new charter will be challenging. “The BBC has negotiated a strong financial settlement from the government that gives us stability and clarity, but we should be in no doubt that the charter process will be tough,” he wrote.

Hall claimed that the financial settlement he has reached with the government in the past week will protect the license fee and ensure stable funding. “The way this financial settlement is shaped gives us, in effect, flat funding for our content and services for the first five years of the next charter,” he wrote.

Part of the BBC’s financial settlement is a commitment by the government to raise the cost of the license fee in line with inflation over the 10-year period of the next charter. The license fee is crucial to the BBC’s survival as it contributes the bulk of its revenue. At present every TV household has to buy a TV license, which costs £145.50 ($227) a year. The BBC’s revenue in 2014 was £5.07 billion ($7.86 billion), and the license fee contributed £3.7 billion ($5.76 billion) of that. Other income, mainly from its commercial activities, contributed £1.34 billion ($2.08 billion).

Hall sounded a note of caution as he looked forward: “We should be under no illusion that this is a period of high risk for the BBC. While no one wants to abolish the BBC, there will be some who want to diminish us for their own narrow interests. We must remind them that the British public do not share their views.

“There will be others who want to join in the debate about public service broadcasting with ideas for reform. We will listen and learn and reflect on what we hear. We have our own plans for adapting the BBC further to become a truly internet-first organization over the coming years, which we will set out in the autumn. I believe that they will open up even greater opportunities for our audiences and for our creative industries.”