MEDIA ANALYSIS FORUM: Can Smith’s ruling force the BBC to raise its game? Is the culture secretary’s statement on BBC funding tough enough? Alasdair Reid reports

Viewers will not easily forget the threatening tone with which Christopher Bland reminded a Newsnight interviewer that they both worked for the same organisation. Sometimes it’s possible to believe the stories of low BBC morale.

Viewers will not easily forget the threatening tone with which

Christopher Bland reminded a Newsnight interviewer that they both worked

for the same organisation. Sometimes it’s possible to believe the

stories of low BBC morale.

Bland, the BBC’s chairman, appeared on the show to argue that the

Government’s statement on the corporation’s future funding should be

welcomed as a victory. Unfortunately, he behaved like a sore loser.

Perhaps understandably.

The BBC had asked for at least an extra pounds 700 million a year from

licence-fee payers to fund ambitious digital expansion plans. Instead,

it was given pounds 200 million and told to do some serious


So Bland was not exactly amused when he was ambushed on Newsnight - not

only by the presenter but also by Andrew Neil, a man who began tweaking

BBC tails as a Rupert Murdoch employee more than a decade ago. Both Neil

and the presenter suggested the BBC needed focus. Bland proceeded to

question Neil’s mental state. And as for the presenter, he’ll probably

be consigned to oblivion - Radio Scotland or religious broadcasting,


BBC culture will not change overnight; and if Bland’s performance is

anything to go by, it will not easily be deflected from its territorial

claims on large parts of the UK broadcast economy. Indeed, you can

interpret the Government statement as a classic Whitehall compromise - a

pounds 3 across-the-board licence fee increase does not wholly quash the

BBC’s grand designs, while the commercial sector will be relieved that

there will be no tax on digital early adopters.

In his Commons speech, the culture secretary Chris Smith underlined the

Government’s continuing commitment to public service broadcasting with a

strong BBC at its hub. But there will be a quid pro quo. ’The BBC,’ he

stated, ’needs to raise its game. It must become even more cost

effective and quality conscious. That is why we are not going to allow

the BBC the massive injection of funds it has sought from the licence

fee ... We are setting it a number of challenges in terms of sources of

finance and in operations.’

In particular, Smith insisted the BBC look to ’self-help’ for the money

it wants to fund ambitious expansion plans. Self-help means cutting

costs and increasing revenues from commercial activities. The BBC will

also come under greater scrutiny, particularly as to whether it measures

up to its public service remit. Specifically, the Government will insist

the BBC does not waste public money in launching digital services

already being supplied by the private sector. It will start by examining

the rationale behind the expensive News 24 and the corporation has

already been warned off launching dedicated film or sports channels.

Rival broadcasters were unanimous in welcoming the Government’s

intention to subject the BBC to greater scrutiny. For years they have

been arguing that the BBC should be ’put back in its box’ - in other

words, forced to return to a strictly defined public service

broadcasting ethos. Tony Ball, the chief executive of BSkyB, is pleased

with the Government’s decision not to proceed with a ’digital poll tax’

but he adds: ’This is still a huge pay day for the BBC. Despite the

culture secretary’s recognition that the BBC needs to raise its game and

be more cost effective, the corporation is being given millions more in

public money.’

Michael Jackson, the chief executive of Channel 4, is not surprised that

the BBC didn’t get exactly what it wanted. ’I thought it was a generous

statement but a good one for the industry in that it provides for the

BBC’s future but also sets important guidelines. It’s a pretty sensible

equation. It is important for us to know what the BBC is going to do and

how it’s going to happen.’

Most observers in the advertising industry agree that this is to a large

extent a holding exercise. The Government has deferred all the really

important decisions, especially on public service broadcasting

requirements and the BBC’s status as a self-governing organisation,

until the forthcoming Broadcasting and Communications White Paper.

But Bob Wootton, director of media and advertising affairs at the

Incorporated Society of British Advertisers, says Smith’s statement

gives encouragement to ISBA’s fundamental argument, which is all about

opening the BBC up to greater commercialisation. He comments: ’The

self-help side of the equation is intriguing. The BBC would have us

believe that it has already generated incredible savings through

improved efficiency. So how much more is there to be saved? Why hasn’t

this huge potential for further savings come to light before? Similarly

with commercial revenues. The received wisdom is that the BBC is already

an extremely commercial beast.

So if it’s already busting a gut in this direction, how much further

should it be allowed to go? BBC 1 and BBC 2 may continue to be

ring-fenced in terms of advertising or sponsorship but perhaps we can

assume that Radios 1 and 2 are now in play. We will certainly continue

to press our message.’

In line with other industry bodies, the Institute of Practitioners in

Advertising welcomes some aspects of the Government statement. But Ray

Kelly, chairman of the IPA’s Media Policy Group, says: ’The IPA was

deeply concerned that the surcharge for a digital licence would arrest

the development of digital TV in this country, so we are gratified the

Government has decided to go for a general increase. However, the IPA is

not convinced an increase is required. It believes the BBC is providing

services for which there is no evidence of consumer demand - for

example, News 24.

There are also other areas where the BBC could reduce costs and where

the commercial sector could better serve the customer, particularly in