This is taken from The Guardian:

BBC puts controllers on spot
by Chris Tryhorn
Monday December 18, 2006

BBC TV channel and radio station controllers will face the axe if they fail to keep within their budgets and the conditions of new service licences unveiled by the corporation today.

Serious breaches of the licences can be punished by the removal of failing channel and station managers, the BBC said.

The licences stipulate that the controllers cannot exceed budget by more than 10%, and in some cases will be bound by a separately specified upper limit on spending.

Any changes to this arrangement will be the responsibility of the BBC Trust, the supervisory body that will supersede the board of governors on January 1.

The Trust has been set up to act in the interest of licence fee payers, ensuring that BBC services offer quality output and value for money.

"If non-compliance or poor performance is due to culpable acts or omissions on the part of the executive, then the [BBC] Trust may require the executive board to reconsider management of the service or area," the BBC said in a document outlining how the licences will work when they come into force on January 1.

Today, the BBC published the 27 licences that will bind the controllers of the BBC's eight TV channels, 16 radio services, its website, interactive service and digital education service.

The new licensing system means there will be a reallocation of budgets, with newsgathering costed within a channel's spending rather than separately.

Service licences set out "the key characteristics of each BBC service, including its remit, the scope of delivery mechanisms, annual budget, and an overview of its aims and objectives".

Each BBC service will be subject to extensive review by the Trust at least once every five years.

The BBC website, bbc.co.uk, and the digital curriculum, BBC Jam, will be reviewed in the 2007-08 financial year.

The Trust is to set up a public consultation on the licences from January.

"The first set of service licences is the result of extensive work by the governance unit," said Chitra Bharucha, the Trust's acting chairman since Michael Grade left the BBC for ITV.

"The Trust is satisfied that they represent a solid baseline but we want to know from licence fee payers if they properly reflect their expectations of the BBC. We look forward to the responses we receive from the consultation."

Mark Wakefield - who leads the BBC Trust's performance team, responsible for developing the licences - added: "The service licences seek to strike the right balance of providing clear and effective accountability on the one hand, and operational flexibility for the BBC on the other.

"The objective is public confidence in the BBC meeting the high expectations of licence fee payers."