BBC faces tough review for charter renewal, warns Jowell

The Government issued a stark warning yesterday to the BBC that it would face a comprehensive review to win the renewal of its charter, which runs out in 2006.

Tessa Jowell, the Secretary of State for Culture, Media and Sport, scotched rumours the charter and licence would automatically be handed to the BBC. She said the corporation would have to mount a staunch defence of its activities before renewal was granted.

Ms Jowell, speaking at a conference on communication in Oxford, said: "Charter renewal gives us the opportunity to look at the heart of the public service broadcasting system ... [The BBC] must be able to justify to its audience that it uses their money, and earns their support, by offering services that extend the range and enhance the standards of what is available."

Ed Richards, Downing Street's adviser on broadcasting, told industry delegates: "Whatever has been said about charter renewal – and more importantly what has been interpreted about charter renewal – there is no doubt the review will be far-reaching and substantial. It will ask fundamental questions about the scope and scale of the BBC."

The Government came under fire last year after Ms Jowell was seen to be defending the licence fee before a review had taken place.

Sources said yesterday the Government was not against scrapping licence fees, but felt no one had suggested a better alternative. "We are determined to test to destruction the arguments for the fee," one said. "But no one has come up with anything better."

The review, details of which will be announced next year, will examine value for money and the originality of programmes. It will also examine digital services to check they are being broadcast in accordance with the detailed schedules agreed with Government.

The tough talking follows complaints from commercial rivals that the Government is soft on the BBC. But Mr Edwards said one of the achievements of the past 18 months had been the scrapping of the "cosy and complacent" way the BBC and Government used to operate.