Michael Grade: 'I nearly didn't apply to the BBC. I thought there's no chance'

In his first interview since becoming chairman of the BBC, Michael Grade stands up for the corporation's independence, governors and licence fee. Raymond Snoddy reports

The team responsible for putting the Premiership highlights programme, Match of the Day, back on BBC screens for the first time in three years is going to get an unexpected distinguished visitor at kick-off time tomorrow.

The visitor will be Michael Grade, the chairman of the BBC, and the man who in another life as a London Weekend Television executive was responsible for "Snatch of the Day", an earlier, and ultimately unsuccessful, attempt to take football highlights from the BBC.

Mr Grade will not, however, be there to supervise the quality of the BBC production effort. He is both a fan and a non-executive director of Charlton Athletic and all he will be interested in doing is finding a screen with a live feed of his favourite team's away match at Bolton.

It is a small perk of a very big job that the experienced broadcasting executive never imagined he would ever have.

In fact, in his first interview since becoming chairman of the corporation, Mr Grade revealed yesterday that not only did he believe he had no chance of getting the job, he very nearly did not apply at all.

In early February, soon after Gavyn Davies had resigned as chairman, quickly followed by director-general Greg Dyke in the wake of the publication of the Hutton report, Mr Grade took his wife Francesca to dinner at a leading London restaurant to celebrate her birthday. He admits now that he spent the entire evening boring his wife to death by talking endlessly about how he was the man for the job. But they would never give it to someone like him. After more than 25 years in broadcasting he believed he "was overqualified" for the job.

Francesca told him: "If you've taken over the whole of my birthday treat to hammer me about how you know what the BBC needs then you've got to go for it, win, lose or draw."

Then the calls started coming in from colleagues urging him to apply and 88 days ago Michael Grade with his trademark red socks became the first professional TV executive in recent times to become chairman of the BBC.

"My heart has always been in this place because I am a believer. The only certainty I have in life is that I believe in the BBC and I would do anything to try to help it," says Grade, who notes that he has been called to the corporation twice in his life when the organisation was in trouble.

The first was more than 20 years ago when he gave up a $1m salary in the US to become controller of BBC1 on £36,000 a year. He says the BBC was "in a shambles".

The new chairman now faces the immense task of persuading both the Government and the public that the BBC should have a new 10-year royal charter when the existing one runs out at the end of 2006, despite the ever increasing choice offered by multi-channel television.

A good royal charter settlement, he believes, will be one in which both the independence of the BBC is safeguarded for the future, the licence fee is retained as the funding method of the corporation and the BBC governors survive as the representatives of the public.

"I fundamentally believe, and I think the fall-out from Hutton proves this, that quite a bit of the licence fee that people pay... is for the independence of the BBC," he says.

The Government has also been left in no doubt that the new BBC chairman is completely wedded to the licence fee. He submitted a separate letter to that effect when he made his formal application.

Almost by definition the Government should not have appointed him as chairman if they had any doubts about how the BBC was going to be funded in future. "You can have the BBC funded any way you want - subscription, advertising, sponsorship but it won't be the BBC. Anyone who kids themselves that putting the BBC into a competition for revenue isn't going to change the nature of the organisation is living in cuckoo land," Mr Grade insists.

The actual size of the future licence fee will depend on what the Government decides the role and size of the BBC should be in future.

He is talking in his temporary office in the new media centre at White City in west London. As well as the red socks, a large pink silk handkerchief is flourished. There is a residual paunch after rather too many beers and Cornish pasties on a recent "bucket-and-spade" holiday in Cornwall with his young son Sam.

Above the door of his office it says in large letters: Chairman - Governance and Accountability. Both governance and accountability are going to be important themes in Michael Grade's chairmanship.

The former chief executive of Channel 4 concedes that during his last stay at the BBC, the corporation was arrogant and sometimes almost contemptuous of the opinions of individual viewers.

"That's unacceptable today," says Mr Grade, who is driving through the concept of service agreements, which will set out what the governors expect of every BBC service, and public interest tests to determine what areas the BBC should be involved in - although he concedes no simple formulas exist for such things.

"You can't measure everything. We mustn't pretend we live in a world where judgement doesn't matter and that is why the calibre and make-up of the governors is vital to the future," the BBC chairman says.

Although he accepts that the governance of the BBC is going to be a huge issue in the charter review process, he believes that the Government should be very careful about tinkering too much with the present system of governors. He does, however, want to see a much greater separation between the governors and the management, and in particular is determined to make sure that the governors have their own independent sources of information on which to take decisions. The head of a new governance unit is about to be appointed.

Mr Grade would like the governors not only to have their own staff but also their own separate headquarters - as long as the cost would not be too great.

If he had to take the decision today he says, he would opt for separate headquarters to make a symbolic statement - to let everyone know that something of importance had changed.

But independent sources of information are even more important than a change of address.

"I never want to be in a position where the only way the governors can justify a decision they make is on the basis that that is what management told us," says Mr Grade.

In future he also hopes that it will be the governors and not the Culture Secretary, Tessa Jowell, who will appoint independent assessors of digital services such as BBC News 24 or BBC Online.

The return of Mr Grade to the BBC was hugely welcomed by the corporation's staff but there is little doubt that he will not flinch from tough decisions on staffing levels if a clutch of internal reviews now under way demonstrate that the BBC can be made more efficient. If the case is made, "there will be no hesitation", he insists.

All the candidates for the director general's job had impeccable public service credentials, he says. Mark Thompson, the former chief executive of Channel 4,won the day because the governors decided that he demonstrated the greatest ability to manage the BBC. "I have no doubt that the reviews that Mark and I have set in train will identify where the problems exist.

"We are going to be judged over the next few years on implementation because that is what matters and that is the difference between words and action.

"In the past, the BBC has been more about words than action," the BBC chairman admits.

One area where there is definitely going to be action is in the commercial activities of the BBC. Mr Grade, who has spent a lot of his working life in the commercial media sector, is adamant that the BBC has the right to maximise returns for licence-fee payers on the intellectual property of the BBC.

"But any commercial activities must be programme related," says Mr Grade - a judgement that would rule out in future deals such as the acquisition earlier this year of a stand-alone magazine publisher by BBC Worldwide, the Corporation's commercial arm. The parameters of the BBC's commercial activities are clearly going to be drawn more tightly in the future.

The current review under the chairmanship of the BBC's chief operating officer, John Smith, will decide whether different structures such as joint ventures or even outright sales are the best way to maximise revenue.

But how will we know whether Mr Grade's chairmanship can be judged a success or merely an honest attempt by an avowed fan of the BBC? How can he be judged?

"I would like people to say, what he said he was going to do he did. Everything he said he was going to do he has done," says the man who truly believed he would never become chairman of the BBC.

It will be some time before we know whether Mr Grade's chairmanship of the BBC represents a win, draw or loss. But how will Charlton fare away to Bolton? "Definitely a win," predicts Mr Grade, the football fan.

THE BBC BY NUMBERS

55.2 million: total BBC radio and television reach in the UK, equivalent to 92.9 per cent of the population. BBC1 reach is 83.7%, BBC2 is 67%, while competitor ITV1 stands at 78.9%. In 1997-98 the reach was 89.4% for BBC1 and 72.9% for BBC2

27,632 Total staff. Total salaries and wages is £1.03bn, an average of £37,275.62 a head

£135mCash-flow from commercial subsidies (increase of £11m in 12 months)

£248.9m BBC operational deficit for the financial year 2003-04

5.7 The percentage rate of licence fee evasion (down from 6.7% in 2003)

43 Number of languages in which BBC World Service broadcasts. The World Service now reaches 146 million people, down four million during the past year

85 Percentage of BBC staff who believed they understood the purpose of the organisation

60 Percentage of BBC staff claiming to live up to its values

2.7 Percentage of staff with disabilities

10.13 Percentage of BBC staff from an ethnic minority

37 Percentage of senior management who are women

£2.8bn The revenue from licence fees, £140m higher than last year. Total income was £3.7bn

72 Percentage of the general public who believe the BBC to be trustworthy, up from 59 per cent in 2003. However, 18 per cent said their perception of the BBC had worsened as a result of the Hutton inquiry, rising to 38 per cent among "opinion formers" such as MPs.

2072 hours of news on BBC1 and BBC2

5.2 million people watch BBC1's Ten O'Clock News

1.8 million: the number of people in Iraq who listen to the BBC World Service

£2.99bn Total broadcasting expenditure (was £2.15bn in 1998/99)

750 thousand costumes are available from BBC Resources

1,640 The number of complaints dealt with by the Programme Complaints Unit, 389 of which were upheld

£141m The rise in commercial borrowing, in one year, from £31m to £172m

50 Years since the first television news bulletin broadcast by the BBC on 5 July 1954. The first radio news bulletin was broadcast in 1922

30 Years since the first Ceefax (text bulletins) transmission, on 23 September 1974

Oliver Duff