Grade's BBC reforms 'do not go far enough'

A new regulator should be set up to oversee the BBC, an independent panel has advised the Secretary of State for Culture, Tessa Jowell.

A new regulator should be set up to oversee the BBC, an independent panel has advised the Secretary of State for Culture, Tessa Jowell.

The panel, led by Lord Burns, which has been advising Ms Jowell on her review of the BBC's charter, published recommendations yesterday, proposing the establishment of a Public Service Broadcasting Commission, nicknamed "Ofbeeb", to ensure that licence-fee payers' money is spent in the public interest.

The panel rejected the argument of the BBC chairman, Michael Grade, that the overhaul of the governance system which he has already started to put into place will answer criticisms that the board cannot act as both cheerleader and regulator of the broadcaster.

In a letter to the Culture Secretary accompanying the panel's recommendations, Lord Burns said that Mr Grade's reforms "do not go far enough". "The dual role of the governors as both critical friend of management and defenders of the BBC on one hand, and providing public interest oversight of the licence-fee money on the other, is maintained," Lord Burns said.

Instead, the panel proposed a new independent body made up of a small number of non-executive commissioners appointed by the Government. The BBC's board of governors would continue to exist and would remain responsible for drawing up detailed financial plans and handling complaints, but would be freer to "promote the success" of the BBC. The new Ofbeeb would recommend the level at which the licence fee should be set and monitor the way in which it was spent.

It could also oversee the "top-slicing" of money from the licence fee to fund the public service broadcasting remits of other broadcasters.

Lord Burns's panel argued that the new regulator would ensure greater independence for the BBC, by taking over responsibility for approving and overseeing new channels and services from the Government.

The new regulator would also hear complaints appeals, leaving the Government freer to complain about the BBC and avoiding a repeat of the quarrel that led to the Hutton report.

Last week Mr Grade admitted that there had been a blurring of roles between governors and management, but said that by implementing the reforms set out in the BBC's charter review submission, Building Public Value, the board had achieved "clarity" that its job was to defend the interests of licence-fee payers. Reforms include moving governors to a separate location from management and being staffed by a separate governance unit, and greater transparency by publishing minutes of meetings and advice and research.

The BBC said that Lord Burns's panel had done its job with "intelligence and rigour".

The shadow Culture Secretary, John Whittingdale, welcomed the recommendation that the BBC should be subject to external regulation, but the Liberal Democrats' media spokesman, Don Foster, called instead for a regulator to oversee all public service broadcasters.

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