CLOSE-UP: NEWSMAKER/GAVYN DAVIES - Bean counter who charmed the BBC's governors. Gavyn Davies is a popular choice as chairman of the Beeb

Gavyn Davies knows all about money. On a personal level, he has an

estimated fortune of £150 million. On a professional front, he was

an economic adviser to the Government at the age of 25 and, now 50, he

has risen to be partner and chief economist at the investment bank

Goldman Sachs and recently came close to the job of governor of the Bank

of England.

More to the point, given the job he has now landed as the chairman of

the BBC, he knows all about money and the British Broadcasting


Having chaired the Davies Report on the future funding of the BBC in

1999, he had to get stuck in to the thorny question of how and why the

Corporation should be funded.

For several years during the 90s, Davies was an oft-quoted commentator

on financial issues. He is said to be fascinated by the media, but it

seems unlikely that he spends much of his time familiarising himself

with EastEnders or the Tweenies, since he's known for a huge capacity

for work and an earnest disposition. Though the fact that he has a

£3 million modernist holiday home in Devon for himself, his wife

and their three children - complete with pink-lined swimming pool - and

that he harbours a passion for Southampton football club (he even tried

to buy it) creates a curious contradiction.

Despite unfair accusations of his appointment to the BBC chairmanship

smacking of cronyism (he is a stalwart Labour supporter and his wife,

Sue Nye, runs Gordon Brown's private office but his political views are

hardly as relevant as his qualifications), he's a popular choice at the

BBC. He has already been getting to know its corridors as the

vice-chairman of the board since January this year and senior executives

are happy that someone with his commitment has been given the top


In the run-up to the charter renewal in 2006, his five-year stint will

be a crucial one - especially because it's a moment in time when the

whole definition of the BBC as a public service broadcaster is being

called into question. "Clearly he is a believer in public service

broadcasting," one senior BBC executive says, "and we need to understand

what a public service broadcaster is in the 21st century."

Davies' declaration on landing the job demonstrates that he's on-side:

"The BBC occupies a central place in the life of our nation because of

what it stands for - independence, impartiality, journalistic freedom,

creativity, quality and public service. As the broadcasting marketplace

evolves in the next five years, these are the attributes that will

ensure a thriving future for the BBC."

His financial acumen will also undoubtedly come in handy as the BBC

tries to find £1.1 billion in cuts - the target set by the

Government with the last licence fee hike. The BBC's director-general,

Greg Dyke, despite being well known for his commercial nous, could do

with any help and, naturally, he has made the right welcoming noises

about Davies' appointment. "His grasp of the challenges facing the BBC

and his insight into how to respond to them mean he is highly respected

by the governors and senior management alike," Dyke says.

But Davies hasn't always been flavour of the moment with the


The key recommendations of his report - a digital licence fee and

privatisation of BBC Resources and a chunk of BBC Worldwide, as well as

outside scrutiny of BBC accounts - were opposed by the former

director-general of the BBC, John Birt. Greater scrutiny, Birt argued,

could lead to the Government meddling with the BBC's independent status;

the suggested £24 digital licence fee was not enough; and profits

from Worldwide and Resources should be ploughed back into the


In the end, Davies' suggestions were not adopted by the culture

secretary, Chris Smith.

However, with a new regime under Dyke, there may be room for at least

some of what Davies suggested in 1999 to resurface. Dyke is known to be

in favour of greater accountability, though accountability in what sense

is part of the greater debate about the role of the public service

broadcaster. And the question of the BBC's role and funding in a digital

era will have to be revisited.

As far as the advertising industry is concerned, some of this could be

good news, since there is a broad consensus that the BBC should be more

accountable. However, the existence of the licence fee and certainly its

possible increase is being called into question across the business.

Ian Twinn, the director of public affairs at ISBA, says that Davies

"clearly knows a lot about the issues so he will be a strong chairman,

but he is going to face some tests that he may not want to face. The

funding of the BBC is going to be called into question as fewer and

fewer people turn to the BBC as their channel of choice."

Jim Marshall, the chairman of the IPA media policy group, says Davies,

despite his own recommendations for more financial transparency, might

turn out to be a brake on getting more outside scrutiny. He says:

"Ultimately, if he's a very bright guy and a good money man, it could be

counter-productive and could strengthen the BBC's autonomous position."