The final report of the House of Lords BBC Charter Review Committee hit out at the government for failing to consult Parliament about the new licence fee and charter review and called for Parliament to be given a greater role in deciding the future of the BBC.
The committee says the current BBC bid of an annual increase of RPI plus 2.3% is excessive and will result in a licence fee of £180 by 2014. It argues that the involvement of the NAO would ensure that the BBC bid was independently checked.
The committee says that it is concerned the government is loading extra costs onto the licence fee.
In particular, ministers propose that the cost of helping the vulnerable with digital switchover should be borne by the licence fee payer. This is in contrast to the costs of helping the over-75s with their licence fee, which is borne out of general taxation.
Lord Fowler, chairman of the BBC Charter Review Committee, said: "Parliament should have a much greater role in examining the BBC Charter and the BBC bid for an increased licence fee.
"The BBC now receives over £3bn from the public. On the basis of the BBC's bid, this will rise to over £4bn in the next seven years. By any measure this is a very substantial sum. The way this bid is scrutinised is totally inadequate."
In a letter to Tessa Jowell, secretary of state for culture, media and sport, the committee said that the Government has not taken the opportunity to allow proper Parliamentary scrutiny.
The committee said that proceedings represented a democratic deficit and called for Parliament to be given a greater role in deciding the BBC's future.
It said the government had failed to meet its aim set out in the Green Paper, of a "strong BBC, independent of government", and had instead reduced the process to a deal between the chairman of the BBC and secretary of state for culture.
"At present the shape of the BBC's Royal Charter... is the result of negotiations between the government and the BBC. No bill is presented to Parliament. Provided the secretary of state for culture, media and sport and the chairman of the BBC agree, the deal is done," the committee said.
The committee also hit out at the way licence fee increases are decided, calling the procedure "inadequate" because of Parliament's in ability to amend the fee.
"Under this procedure, Parliament can accept or reject but not amend the licence fee. There is no opportunity to scrutinise the licence fee formula. This is wrong."
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