Government plans to abolish BBC governors, but licence given 10-year extension

The Government plans to abolish the BBC's Board of Governors, Culture Secretary Tessa Jowell announced today.

The BBC will continue to be funded by the licence fee for at least 10 years under Government plans announced by Culture Secretary Tessa Jowell today.

Ms Jowell told MPs that she intends to abolish the BBC's Board of Governors, replacing them with a new Trust to oversee the corporation's performance and an Executive Board responsible for day-to-day operations.

And she made clear she wants the BBC to give higher priority to public-interest programming, warning that it should not chase "ratings for ratings sake" or "play copycat" with commercial broadcasters.

The proposals sound the death-knell for the system of governance in place since the BBC's creation in 1927, but stop short of the thorough-going reform recommended by the Burns Report, which earlier this year called for the creation of an independent Public Service Broadcasting Commission to act as a regulator for the BBC.

They will disappoint critics of the BBC in the commercial sector, who believe the licence fee should be abolished or shared out between rival broadcasters in order to create a more level playing-field in the competition for audiences

Ms Jowell's proposals, set out in a Green Paper published today, end months of speculation over the future of the licence fee fuelled by the trenchant criticisms of the BBC in Lord Hutton's report on the death of Government scientist David Kelly.

Under the proposals, the BBC's 10-year Royal Charter will be renewed in 2007.

The licence fee will remain at least until the charter comes up for renewal again at the end of 2016, but a review will be set up to consider alternative funding sources - including the possibility of subscriptions for BBC services - after that point.

The level of the licence fee will be set at a later stage in the charter renewal process.

"The BBC, like any public institution, needs to adapt if it is to serve its audiences and keep pace with changes in technology," said Ms Jowell in a statement in the House of Commons.

"Its values, its global reach, its standards and its editorial independence from all-comers must be preserved. Our proposals, including keeping the licence fee and renewing the Charter for another 10 years, will enable it to do just that."

The Board of Governors' dual role as "cheerleader and regulator" for the BBC lacked clarity, transparency and accountability and the creation of the new Trust and Executive Board would create "much-needed daylight" between the two functions, she said.

Ms Jowell said that the chairman of BBC governors Michael Grade, whose term runs until 2008, would become the first chairman of the Trust.

On behalf of the governors, Mr Grade said he accepted their abolition, but expressed regret that the Government had not waited to see the results of the BBC's own reforms aimed at separating the Corporation's governance and management structures.

Mr Grade said the proposed BBC Trust represents "the biggest change in the governance of the BBC in 77 years".

It will be a radical departure for the Corporation but the Board is committed to ensuring an "effective and efficient transition to the new system", he said.

He intends to install director-general Mark Thompson as chairman of the new Executive Board.

Mr Thompson said the BBC faced "exciting and daunting new challenges over the next decade".

"A 10-year Charter and secure funding for the BBC will give us the right foundation on which to take on these challenges," he said.