This is taken from the FT:

This is the wrong way for the BBC to be governed
By Howard Davies
Published: December 11 2005 18:54

Amid all its concerns about the risk of parliamentary defeats on the projected National Health Service and education reforms, the government must be grateful that in one important policy area it is unlikely to have any trouble: the review of the BBC’s royal charter. But that is not because, two years on from the Hutton inquiry into the death of David Kelly, the arms expert, peace has broken out. It is because, as the House of Lords select committee on broadcasting’s recent report said: “It is entirely up to the government of the day to decide what goes into the royal charter.” No parliamentary approval is required.

Their lordships’ view was that this is no longer a satisfactory basis for underpinning the independence of the BBC and that the corporation’s mandate and structure should instead be defined in statute. This may seem merely a nice constitutional point. If there is a strong consensus, as indeed is the case, in favour of renewal of the charter and the maintenance of the licence fee, should we care desperately if parliament is denied the opportunity to grandstand about the manifold wickednesses of the two Johns, Humphrys and Motson?

Unfortunately, we should. Because although the confirmation of the licence fee for the next 10 years is not hugely controversial, other aspects of the government’s proposals certainly are.

The Lords committee, chaired by Lord Fowler, described the proposals for reforming the governance and regulation of the BBC as “confusing, misguided and unworkable”. In evidence to the committee, important features of them were opposed by Ofcom, the media regulator; by Michael Grade, BBC chairman, and his predecessors, Gavyn Davies and Sir Christopher Bland; by Greg Dyke, former BBC director-general; and by Lord Burns, chair of the independent panel advising the culture department on the review of the charter (of which I was a member). Had he been allowed to appear, Lord Birt would surely have opposed them too. They were also rejected as inadequate by Channel 4 and BSkyB.

How has the government achieved this remarkable full house of opposition? It has done so by proposing a new structure that bows in several directions at once. There would be a so-called BBC Trust (though the white paper says it might not actually be a trust), which is part regulator, part supervisory board. Below it it plans an executive board, which is part management committee and part corporate board, with a chairman who might be executive or non-executive. That, in itself, is an indication that its role has not been properly thought through. Sir Christopher Bland was right to describe it as an uneasy compromise between creating a separate regulatory body and imposing a German-style two-tier form of governance.

In the light of this devastating and unanimous critique it seems astonishing that the government appears determined to plough on. To endow the BBC with a new governance system that does not command the confidence of those who have been most closely involved in running it would be highly damaging. We must hope that, privately, it is having second thoughts. Reflection ought to persuade Tessa Jowell, culture secretary, to rethink.

One difficulty, admittedly, is that the critics do not themselves coalesce around one alternative. The Lords committee accepted the logic of the Burns panel’s view that governance should be separated from regulation but did not, as Burns did, favour the creation of a new regulatory body. It believes Ofcom could do the whole of the regulatory job, while a unitary BBC board, with a majority of non-executives, should run the corporation.

In practice, either the Burns or the Fowler model would fit the bill quite well. The key advantage of a new Public Service Broadcasting Commission, as recommended by Burns, is that it could also handle contestable funding for public service broadcasting.

There will be a need in due course to find alternative sources of funding for Channel 4 and ITV if they are to offer public service programmes in the future. But if that alternative funding is not in immediate prospect – and it may be an idea slightly ahead of its time – then the Ofcom solution achieves a similar effect and at least gives the BBC a best practice board.

Unfortunately, one organisation the Lords committee did not consult was the Association of Chief Police Officers, whose views are decisive these days. If they could be persuaded to address the issue, we might just see a needed change in policy.


Sir Howard Davies, director of the London School of Economics, was a member of the Burns panel on governance and regulation of the BBC.