From the Financial Times, May 25, 2004:

BBC must acknowledge its faults
By Philip Stephens

All is well again. The BBC has a new chairman in the shape of Michael Grade. Mark Thompson has listened to his "inner voice" and, unlike Sonia Gandhi, decided he must accept the role fate has thrust upon him. Chairman and director-general have both reminded us that the organisation over which they now preside is a unique treasure, the world's best broadcaster, a vital pillar of our national life. All that remains is to rebuild the morale of BBC staff after the trauma of the Hutton inquiry.

At the risk of seeming a spoilsport, it seems to me that something is missing here. There is no harm, of course, in a little self-adulation. And yes, the wounds inflicted by the BBC's infamous misreporting of the government's Iraq weapons dossier must be allowed to heal. One group, though, seems to have been overlooked in the rush to pronounce the BBC fit for another decade of generous public funding: the licence payers. The BBC gets many things right. The sorry saga of the past year has also shown us what it gets wrong. A touch of modesty would not go amiss.

The myriad challenges facing the Grade-Thompson duo as they contemplate negotiations on a new royal charter have been well-rehearsed. The BBC must argue the case again for public service broadcasting in the multi-channel digital age. The chairman must demonstrate how the board of governors can balance the twin responsibilities of management and regulation. The organisation must explain why it should remain the sole recipient of the licence fee.

The dilemmas are easier to state than solve. There will always be a tension between the urge to maximise audiences on the mainstream television channels and the Reithian mission to inform and educate. Distancing the governors from the day-to-day running of the organisation will solve one problem at the expense of creating another. As Gavyn Davies, Mr Grade's predecessor, has pointed out, the chairman has to decide whether he wants to preside over the BBC or over an increasingly distant board of governors. The BBC will have to show, too, why Mr Thompson's old stamping ground, Channel Four, should not get a slice of its funding.

For all that, my sense is that, as far as the next charter is concerned, the BBC can summon up an adequate case. The departure of Greg Dyke as director-general will hopefully put an end to the avalanche of cheap reality TV on BBC1. Word has it that the new controller at BBC2 already plans to rid the channel of the bland lifestyle programming that has become its trademark. Mr Grade seems to take an intelligent approach to capturing the BBC's worth. He is interested in its overall "reach" rather than the puerile ratings contest with ITV on any particular evening.

The corporation can also expect a sympathetic audience in Whitehall. Having won the battle over the reporting of its Iraq dossier, Tony Blair's government is in no mood to pursue a vendetta. Listening to Tessa Jowell, the culture secretary, applaud the appointments of Messrs Grade and Thompson, I had the distinct impression that the government would prefer a deal sooner rather than later.

It also needs the BBC. The planned switch-over from analogue to digital television is a vast and potentially perilous enterprise for politicians. The BBC alone has the expertise, the resources and the digital programming to make it work. Played astutely, that is a pretty unbeatable card.

As it happens, I support the case for charter renewal on terms not too far removed from the present agreement (though the BBC will have to accept limits on its commercial activities and a less generous increase in the licence fee). The BBC'S contribution to the nation, in terms of culture, identity and, yes, entertainment, stretches well beyond filling the gaps left by what economists call "market failure".

There is, though, one important condition. The strongest argument for public service broadcasting lies in its role in nurturing democracy - in acting as an unbiased and informed mediator between elected politicians in all their guises and citizens. Yet in its daily output of news and current affairs, the BBC is at its weakest.

The mission to probe and explain has given way to a breathless superficiality which takes its cue from the tabloid press. What remains of the challenging journalism that once sustained the BBC's reputation has been shunted to the edges of the television schedules. Respect for, and knowledge of, politics has made way for the early morning sneer. Laziness and arrogance sit side by side. Public policy - as opposed to endless gossip from the febrile world of Westminster - has all but vanished from the television schedules. Radio 4 is much better than the rest, but even on the best of the BBC the tendency to sensationalise too often overwhelms the duty to analyse.

Perversely, the BBC seems to have convinced itself that it is the victim of the Iraq furore. Never mind all those viewers and listeners misled, or politicians and officials falsely traduced. How dare anyone attack the integrity of the BBC? Therein lies the problem and the challenge for the corporation's new leaders: a producer mindset that elevates the amour propre of the BBC above the interests of those it serves. Mr Thompson has a reputation as a strategic thinker. That will be useful in the charter negotiations. Not as important, though, as the less cerebral task of rebuilding BBC journalism.