Tory body looks into BBC funding

David Elstein, the former chief executive of Channel 5, is to head a taskforce set up by the Conservative Party to investigate whether the BBC should show advertising.

The review is likely to pave the way for a Tory manifesto pledge at the next general election to cut the £116-a-year licence fee. A reduced fee, or direct Treasury funding, would safeguard the BBC's public service commitments and it would be partly funded by advertising or subscription.

Labour is expected to retain the licence fee in its current form when the BBC's seven-year Royal Charter comes up for renewal in 2006.

The Tories announced this Thursday the team of broadcasters who will draw up proposals on the corporation's future role, structure and funding.

Welcoming the Tory initiative, Elstein said: "Decisions about the future of the BBC and public service broadcasting are the most important affecting UK media in the next three years."

John Whittingdale, the shadow culture secretary, said: "I am determined that the Conservative Party should be at the forefront of the debate on the future of the BBC with a view to bringing forward specific proposals at the next election."

The other members of the party's Broadcasting Advisory Group will be David Cox, a former editor of LWT's Weekend World; Barbara Donoghue, a member of the Independent Television Commission; David Graham, the founder of Diverse Productions; Peter Ibbotson, a former Panorama editor; Alex Mahon, the head of strategy and commercial development at FremantleMedia, and Geoff Metzger, the managing director of the History Channel.

The group will report by the end of the year and the Tories will consider its recommendations as it draws up its general election programme.

The move comes amid worsening relations between the Tory leadership and the BBC. Conservative Central Office is drawing up a dossier claiming that the BBC is biased against the party, which will cite reporting of Iain Duncan Smith's leadership and this month's local elections.