This is taken from the Guardian:

The BBC fears political interference by the back door
The National Audit Office is demanding full, unfettered access of a type the BBC has always said it cannot accept
by Steve Hewlett
April 4 2011

Whenever he talks about the BBC in public Jeremy Hunt couldn't be clearer – the corporation's independence is sacrosanct. Just last week he said in an interview with me on Radio 4's Media Show: "If the BBC doesn't stand for independence it stands for nothing." So far, so good. However, behind the scenes and in spite of the minister's profuse and no doubt genuinely meant reassurances, a furious disagreement about just that remains worryingly unresolved.

The source of the dispute is the terms under which the National Audit Office (NAO) gets access to the BBC's books and operations. At first sight the idea of independent scrutiny of the BBC's affairs in the cause of transparency in the public interest might appear to be a no-brainer. But look a little closer and it's really not that straightforward. Relations between the BBC and the NAO have always been fraught. Not so much because the BBC dislikes external scrutiny of its books – although it does – but because the NAO's work is overseen and directed by the Public Accounts Committee (PAC) of the House of Commons.

Indeed, it is not uncommon in Westminster circles to hear the NAO described as the "provisional wing" of the PAC. Because financial and editorial matters can't be entirely separated, NAO access to the BBC under the wrong terms would bring with it the very real threat of political interference insofar as the NAO's operations reflect the attitudes and prejudices of the MPs on the PAC.

Up until now – and enshrined in the current Charter and Agreement governing the BBC's activities – the NAO gets access to the BBC but only at the invitation of the BBC Trust, which dictates what gets examined and to whom it reports its findings.

Thus the NAO is cast in the role of helping the trust to fulfil its constitutional responsibility as the BBC's sovereign body - to deliver value for money to licence fee payers.

More recently, fuelled partly by the fact that each NAO inquiry – albeit commissioned by the trust – has found plenty to bash the BBC with, and also by the unquenchable desire of many MPs to treat the BBC like any other public body, demands for the NAO to have unlimited access have grown. And that political consensus was reflected in all three major UK parties advocating it in their election manifestos. But while such unfettered access – currently dubbed "Martini", from the old Martini ad slogan "anytime, anywhere, any place" – might sound like a good idea, the BBC regards it as a "red line" that it will not cross.

The prospect of the NAO alone deciding what to look at and when, at the behest of its political paymasters the PAC (at a moment's notice even), would risk undermining the BBC Trust – since it is ultimately responsible for stewardship of the licence fee – and leave the BBC operationally very vulnerable to direct interference of a most unwelcome kind. At the very least, second-guessing the NAO, as night follows day, would begin to destroy the managerial autonomy upon which the BBC's creative reputation depends.

The BBC thought it had a deal with the government. The NAO could choose what to look at but only as part of an annual plan agreed with the trust in advance. But now, with all the appearance of government backing, the NAO is demanding full, unrestricted access of a type the BBC has always said it cannot accept.

Throw in continued pressure for the BBC to make airtime available for government/community advertising – a threat the trust thought it had seen off as part of the licence fee agreement – and it begins to look as if having been given an inch or two, the government is coming back for miles.

The ensuing damage to the BBC's reputation and independence might well be unintended, but that doesn't make it any less of a worry.

In any event, continued failure to agree is likely to see relations come under much greater strain, which will really test the resilience of the BBC Trust and its new chairman Lord Patten. In my interview with him Hunt also went out of his way to point out that Patten had stood up to Margaret Thatcher and the Chinese government, and most probably would be standing up to this government too. And if you care about the BBC's independence and all that goes with it, let's hope Hunt was right.