The BBC's new director general, Mark Thompson, and its new chairman, Michael Grade, will soon have to concentrate their minds on the one question which is crucial to their survival. How on earth can they justify the BBC's compulsory licence fee of £121 a year - which comes up for renewal in two years' time - as it becomes still less distinguishable from commercial television, which is free? And they are both well aware of the problem, having moved between the two sides, both having been under fire for vulgarising Channel 4.
The odd British system, which compels anyone who has a colour TV set to subsidise the BBC, now looks more anachronistic, while the law that enforces it looks increasingly nasty, as the BBC resorts to threatening advertisements warning viewers, in Gestapo style, "we know where you live". The insistence that viewers pay the full fee becomes still harder to justify when they cannot even pick up BBC2 or benefit from BBC4. It is only a matter of time before a popular martyr goes to jail to make the case, stirring up public outrage.
The BBC can only justify this huge subsidy if it can show politicians and voters that it provides an essential public service, one that follows the charter's original injunction to provide programmes "of information, education and entertainment" - in that order. But competitive pressures have pushed it to change its priorities - to entertainment, entertainment, entertainment. The more it does in that field, the less it can be distinguished from its commercial rivals; while, inevitably, it neglects its duty to inform and educate - which is what gave the BBC its unique reputation.
This trend was inevitably accelerated under the previous regime, after the BBC acquired Greg Dyke, the wizard of showbiz, as director general - an appointment that marked the triumph of commercial interests: it was fixed by the then chairman Sir Christopher Bland and the previous director general, John Birt - all three of them members of the cabal of graduates of London Weekend Television. Dyke was a brilliant showman and communicator who inspired many of his staff and boosted internal morale after the bleak management systems of John Birt. But he had no interest or experience in the much harder field of providing trustworthy news, and he regarded high culture with disdain.
It was relatively easy to be a popular director in the field of showbiz, which depends on innovation, enthusiasm and person-to-person skills of which Dyke was the master. But he was also, absurdly, the "editor-in-chief" of all news programmes, and that job did not call for easy popularity: it required stern, rigorous oversight of the integrity of the news - which could make a good editor very unpopular.
The consequences were all too clear from the evidence uncovered by Lord Hutton (though much less clear from his report). Dyke was determined to support his news staff when there were clear signs of trouble, and to close ranks without investigating the evidence - which was at the root of the row over the Iraq war that precipitated his downfall; while the chairman Gavyn Davies and his amateurish governors were content to support their director. It was the preoccupation with entertainment that was the basic flaw in the BBC's structure. Dyke, and many of his governors, appeared naively unaware that it was the handling of news - with all its political sensitivities and subtleties - that was the source of the serious prestige of the BBC, and its chief justification for the licence fee.
It was clear, as soon as Lord Hutton published his report - despite his obvious bias in favour of the Government and the intelligence services, and against the media - that the BBC had to reorganise itself to remain credible, both to politicians and the public, and that both the chairman and the director-general had to go. But it is still not clear that the lessons were fully learnt.
The new chairman, Michael Grade, is himself a master of entertainment, as opposed to news, and he was hailed because he was popular with the staff. And the governors - who remain for the time being - are still strikingly unsuited to be guardians of truthful reporting. Most of them were chosen as representatives of regions or minorities rather than as people who understand the crucial importance of news - with the exception of Dame Pauline Neville-Jones, the representative of the Foreign Office, who was the most effective questioner of the BBC's closing of ranks.
It is true that Michael Grade has a more serious interest than his predecessors in cultural programmes and in serious causes, including human rights. Even before Grade's arrival, there had been signs of more interest on BBC2 in high culture, including opera and art, which may be expected to grow. And Grade made the right choice when he picked the new director-general, Mark Thompson, who was well versed in the BBC's values before he defected to Channel 4.
Last Tuesday, Thompson made a promising start when he explained that the BBC's journalism had been "through the worst crisis in its 80-year-old history", and that it required "more continuous and concentrated editorial leadership at the top". And he has rightly undertaken to provide a proper training for reporters and editors. He rightly pinpointed the most serious flaw in the BBC's character under Dyke: that "it almost forgot about the outside world; [and became] an organisation whose tone of voice could sometimes sound spiky and defensive, arrogant even".
The arrogance is recognisable to any outsider who enters the BBC fortresses in White City or Portland Place - with their inhospitable receptionists, and internal bureaucracies, as if they were a branch of Whitehall. And it is all too evident on the screen, when a moralising Dimbleby can probe into ex-President Clinton's sex life as if he were an archbishop or a headmaster with a blameless reputation.
But the BBC will need to do more than show more humility and to open up its closed world if it is to justify its licence fee to a more sceptical new generation. It will need a shift of priorities away from the obsession with entertainment, back towards the central duty to inform and educate - even at the risk of losing ratings.
Of course, the provision of showbiz and fun will remain essential to attracting mass viewers. But the only justification for the government tax - which is what the licence fee is - is to provide reliable, responsible information and cultural standards that are not available elsewhere. The BBC has to be seen as presenting a crucial public service which can be seen - like universities or museums - as educating and informing those who can benefit from it, even if it does not interest the majority.
That service has never been so important as today, when distorted media reports and pseudo-news are polluting the air-waves, and the British electorate needs to have a source of news and analysis that is above suspicion. It is the BBC's unique reputation for unbiased and intelligent reporting, not its skills in entertainment, that has ensured its remarkable longevity and its influence around the world.
It was that reputation which was the real casualty of the Hutton inquiry, and its recovery must be the overwhelming priority of the new regime.Reuse content