Leading article: A cherished institution in need of confidence and rigour

The BBC is right to prepare itself for chilly political and economic winds

The open letter sent to licence-fee payers yesterday by the chairman of the BBC Trust, Sir Michael Lyons, is a curious document that is at once hopeful and dispiriting. It is hopeful because, in announcing a full-scale review of BBC activities, it recognises public concern about the way in which the BBC has expanded into areas that might be said to lie beyond its original, public-service broadcasting, remit. It is hopeful, too, in that it recognises that the BBC flourishes – or not – at the behest of the licence-payers and cannot take their goodwill for granted.

But there are also negatives. While the Trust recognises the extent of outside concern, it is rather late in acknowledging this. What has now, in many quarters, grown into a groundswell of criticism, even hostility, in relation to the BBC, could have been stemmed if such a review had been initiated earlier.

Nor does the process, as announced, inspire much confidence. Rather than appointing a respected outsider with inside knowledge to head the review, the Trust has chosen the BBC's present director-general, Mark Thompson. If Mr Thompson had shown himself to be a strong leader in that role, a competent manager able to convince licence-payers their money was well spent, and a robust advocate of the Corporation when necessary, that might just about have been acceptable. But Mr Thompson scores low on too many indicators. During his time in office, the BBC has seemed to lurch from one crisis to the next, with the director-general and his multiple line-managers reluctant to defend their staff, even when it is editorial and managerial responsibility that is being called for. The Jonathan Ross saga was just the most egregious example of well-paid executives scurrying for cover, in the face of public and political pressure.

Mr Thompson has also given his blessing to some of the BBC's more questionable expansions, including the purchase of Lonely Planet and the proliferation of digital services. If the BBC had been better led in the recent years of profound change in the media landscape, it might not have been as beleaguered as it currently is.

The – slightly spurious – pretext for yesterday's open letter was a survey about what should happen to £5.50 of the licence-fee once the digitalisation project is complete. It found, unsurprisingly, that a majority would like to pay less. In the context of what is happening in the media generally, however, there are bigger questions to be addressed: about the principle of the licence-fee, and whether it funds only the BBC.

Sir Michael Lyons said – correctly – that the BBC needs to "focus on what makes it different and distinctive from commercial media". That should surely be the starting point of its review. Nor should the Corporation's defects blind anyone to what is the excellence of the service offered in many areas. It makes programmes that are the envy of the world. It has radio and television stations that are unmatched for their quality and, sometimes, for their daring. And the breadth, depth and accuracy of its national and international news places it in a class apart. Little wonder that, as another recent survey showed, it is treasured by the majority of Britons.

In mounting this review, the BBC is clearly preparing itself for a political and economic climate that is likely to be chillier than for many years. It remains a deeply admirable institution, despite its defects. So it is in all our interests that it should emerge not only fitter from the process, but more confident and better run.