This apparently well-informed piece by the Spectator’s political editor appeared in The Times:

By James Forsyth
Thursday January 14 2021, 5.00pm GMT, The Times

Boris Johnson won his majority, many people expected him to celebrate by upending the BBC. His ministers started to boycott flagship radio and television programmes and Downing Street sources were talking about how they were going to “whack” the licence fee. No 10 has the power to appoint a new BBC chairman, and many expected a hammer to be sent in. But the nomination, in the end, went to an affable financier called Richard Sharp. Hardly a declaration of war.
His CV includes Goldman Sachs, the Bank of England’s financial policy committee and chairmanship of the Royal Academy of Arts. His twin sister is president of the Queen’s Bench Division, raising the prospect that in the next few years one set of twins might provide both the BBC chairman and the lord chief justice.
Sharp is the candidate of “change management, not political confrontation”, as one of those involved in his selection put it. But the sort of change he’ll bring matters. He’s certainly a Tory: he’s donated to the party and advised Boris Johnson when he was mayor of London. He has for years sat on the board of the Thatcherite think tank the Centre for Policy Studies and has advised his former Goldman protégé, Rishi Sunak, on the economic response to the coronavirus. He will bring a centre-right outlook to the job.

His nomination represents a new phase of Johnson’s premiership, an acceptance that if he is to change things, he needs people who know how the system works. Sharp represents “evolution not revolution”, one Johnson confidant told me. The view at the top of government is that Sharp will more effectively advance the government’s priorities for the BBC than a more bomb-throwing candidate would. “You could put in some boot boy and they’d just circle the wagons,” warned a Tory involved in discussions about the post.

Johnson’s political longevity is, in large part, down to his skill at adapting to changing circumstances. He is in a less confrontational phase of his premiership. The Vote Leave campaign veterans Dominic Cummings and Lee Cain have left and the former Treasury civil servant Dan Rosenfield has arrived as chief of staff. One secretary of state said: “We’ve got plenty of battles to fight. But we’re being more savvy about the ones we pick. We’re no longer crossing the motorway for a fight.”

Decriminalising non-payment of the licence fee — an idea that infuriated the BBC — is on the backburner. But the plan to make Paul Dacre, the former Daily Mail editor, chairman of Ofcom is still very much in place. Indeed, given Ofcom’s coming responsibility for regulating social media companies this choice has taken on greater significance with the growing debate about free speech online.
Underpinning the search for a new BBC chairman were three views on how the BBC needs to reform. The first is that it must be genuinely impartial. It would be wrong to think that Johnson’s beefs with the BBC are all about Brexit: they go much further back than that. After winning re-election as London mayor, he complained that he “sometimes felt that my chief opponent was the local BBC news”.

Some of this is the natural, and rightly inevitable, tension between a politician and a news organisation. But Johnson has long thought that the fact the licence fee frees the BBC from commercial pressures has created a statist culture in its newsrooms and a separation from the concerns of viewers. When out campaigning, Johnson often laments that regional newspapers are shadows of their former selves while the BBC’s local stations have carried on much as before. It’s hard, he notes, for anyone to compete with a media company that has a legally guaranteed revenue stream.

It is not impartiality on the news that causes the most concern among ministers, though. There is a sense that while the BBC does a reasonable job on party political impartiality, that approach goes out of the window on cultural issues. One minister told me “impartiality can’t stop at the doors of Millbank,” a reference to the corporation’s Westminster base.

The second, and related, challenge is: how do you get the BBC to reflect the whole of the UK? This is particularly problematic at a time when cultural divides are opening up around the country. Polling for The Times suggested that a majority of Leave voters, Conservatives and northerners do not believe the BBC reflects their values.
The third and biggest challenge is how to adapt to the new media age in which their main rivals aren’t British commercial channels such as ITV but global subscription services such as Netflix, Amazon and Disney. The flight to quality that these subscription services are engaged in makes it much harder for the BBC’s content to stand out. At the same time, the BBC keeps producing things — such as a Radio 1 podcast about reality TV — for which there is very little public service justification. “They do things because they can, not because they are necessary,” complained one government source.

One of the paradoxes of the government’s attitude is that despite all its frustrations with the corporation, it remains convinced that a globally strong BBC is in the national interest. There is concern that the organisation is punching below its weight internationally. Around the world people tend to know three things about Britain: the Premier League team they support, the monarchy, and the BBC. Despite this, there is a worry at the top of government that the BBC is starting to lag behind Russia Today in certain regions, such as Latin America.

The problem for the BBC is that the licence fee funding model won’t enable it to compete with its new global entertainment rivals. Netflix spends £4.5 million an episode on The Crown. It is clearly a political non-starter to think about increasing the licence fee to a level that would enable the BBC to spend anywhere near the same amount on a drama.
In front of the Commons culture select committee yesterday, Sharp was careful to avoid committing himself on the future of the licence fee, declaring that it “may be worth reassessing” in the next review. But he also emphasised “we have to ensure the BBC is in a position to take on the elephants”, in reference to Amazon and the rest. It is almost impossible to see how it can do that with the current compulsory charge.

So what funding model would work when its charter comes up for renewal in 2027? And, by then, how much bigger and better will its independent rivals have become? “They are going to have to reinvent themselves,” said one cabinet minister. “The second century of the BBC is going to have to be very different from the first.”

The challenge for Sharp is to help the BBC find a way to fund itself that will allow it to compete with the likes of Netflix. He will also be a test of whether you can deliver change without a head-on confrontation.