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Kees Kruythoff

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Sir Martin Sorrell

founder & executive chairman

Licence fee, BBC Trust and scale of services up for debate as first steps toward overhaul are announced

The most comprehensive review of the BBC in a decade has been announced, with the government outlining six key topics for debate.

As expected, the licence fee is among the key issues to be addressed. The rise in people opting out of buying a TV licence to watch content via catch-up and streaming services has left a £150m hole in its expected income.

As such, the BBC has been on a cost-cutting drive to streamline the business – most recently this saw 1,000 redundancies across the corporation – but the BBC’s Royal Charter review is now vital to ensuring the broadcaster remains in public hands.

The current Charter – which governs the BBC – is due to expire at the end of 2016 and Culture Secretary John Whittingdale's consultation paper is the first stage of the process in setting a new Charter.

He said: “Ten years ago, the last time the Government ran a Charter Review, the media landscape looked very different. The BBC has adapted to this changing landscape […] however we need to ask some hard questions during this Charter Review. Questions about what the BBC should be trying to achieve in an age where consumer choice is now far more extensive than it has been, what its scale and scope should be in the light of those aims, how far it affects others in television, radio and online, and what the right structures are for its governance and regulation.”

In addition to looking at how the BBC is funded, the government has suggested the scale and scope of the BBC’s services and operations is addressed.

Twenty years ago the BBC had two television channels and five national radio stations. It is now the largest public service broadcaster in the world, with nine television channels, ten national radio stations, and a major online presence. The consultation paper looks at whether this range of services best serves licence fee payers and the impact it has on the commercial sector given the current and future media environment.

Finally, how the BBC is governed is up for debate. The BBC Trust – established by the current Charter - exists to represent licence fee payers and hold the BBC to account.

However, failures such as the £100m technology project suggest the current system is not fit for purpose. The proposal issued today offers three broad alternative options - to reform the Trust model, create a unitary board and a new standalone oversight body or move external regulation wholesale to Ofcom.

The publication of the paper today marks the start of a 12 week period for the industry and public to respond and contribute before the government brings forward proposals in the Spring 2016.

The full Charter Review proposal can be viewed here.