This is taken from The Sunday Times, December 14, 2008:

Secret deal secures BBC cash until 2033
The corporation’s grandiose plan for a new £813m HQ forced ministers to give an assurance on its future
by Steven Swinford

The BBC is shrugging off the recession by spending more than £800m on a magnificent new headquarters in central London of glass and Portland stone.

Now Greg Dyke, the former director-general who masterminded the deal, has disclosed that the project was so large it forced ministers to give a secret assurance that the corporation’s future was secure until at least 2033.

The disclosure has angered politicians who say the assurance — made by Tessa Jowell, the former culture secretary — may have bounced future governments into endorsing the future funding and survival of the BBC.

Philip Davies, a Tory MP and member of the Commons select committee for culture, media and sport, said: “We have always worked on the principle in this country that no government can bind a successive one, but that’s in effect what Tessa Jowell was doing.

“She was giving an assurance that she was not entitled to make. It’s a constitutional outrage. The BBC has forced the government’s hand by spending so much money at a time when the future of the licence fee is uncertain.”

The licence fee, which is due to be reviewed again in 2012, the year work is scheduled to finish on Broadcasting House, the BBC’s art deco headquarters. Its royal charter expires at the end of 2016. The rise of satellite television and limitless choice on the internet have undermined the rationale for the existence of the BBC.

Dyke was forced to resign as director-general after a clash with No 10 over the Hutton report on the death of the weapons expert Dr David Kelly. He said this weekend he extracted written assurances from the government that the BBC would be “properly funded” until 2033 to help secure an £813m bond needed to finance the redevelopment of Broadcasting House.

He embarked on a massive building programme, commissioning Pacific Quay, the BBC’s £190m Scottish headquarters in Glasgow, and new studio complexes in Hull and Birmingham. His real obsession, however, was the redevelopment of the grade II* Broadcasting House, which was built in 1932.

“Broadcasting House is important in terms of the long-term solidarity and security of the BBC for the next 40 years. We wanted to make something special, something wonderful that would stand the test of time,” Dyke said.

To fund the redevelopment, the BBC decided in 2003 to tap the bond market for the first time. Although the £813m 30- year bond was not guaranteed by the government, the BBC was given an AA credit rating.

According to Dyke, Jowell’s written assurances over the future of the BBC helped secure the deal. “When we were getting the bond we had to get an assurance from the secretary of state that the BBC will still be around,” he said.

“We had to agree a wording to make sure it looked like the BBC will still be properly funded. It basically said that it is our [the government's] belief that the BBC will still be there and still be funded by 2030.”

The redevelopment is already two years behind schedule and £20m over budget. Work is now under way on a nine-storey extension that will host BBC News and BBC Global News — including the World Service — alongside the national radio stations.

When completed, the centre will have more than 4,500 staff, 36 radio studios, six TV studios, two control rooms and 60 graphics and editing suites. It will also include the world’s largest newsroom, a 43,000 sq ft open-plan office equivalent to half the size of a football pitch.

In Britain, no other media organisation comes close, meaning that any minister who decided to slash the BBC licence fee would turn the building into a white elephant, wasting public money. ITN’s newsroom is a quarter of the size, while Sky’s is a fifth.

“We’ve got to the situation now when commercial broadcasters are on their uppers trying to survive, cutting costs here, there and everywhere, whereas the BBC has got so much money that they don’t know what to do with it,” said Davies.

A spokesman for the culture department insisted that ministers had not acted “unconstitutionally”, but declined to comment further. The BBC declined to comment.