For Lord Burns read Lord Hutton - and a verdict that ill-serves the BBC

The proposed scrapping of the governors undercuts the corporation's reforms, writes Tim Luckhurst

The name on the report recommending replacement of the BBC board of governors with a Public Service Broadcasting Commission is that of Lord Burns, the former Treasury mandarin, or "Teflon Terry". But it owes its origins to an entirely different peer, Lord Hutton, and the condemnation of BBC journalism he published a year ago.

The name on the report recommending replacement of the BBC board of governors with a Public Service Broadcasting Commission is that of Lord Burns, the former Treasury mandarin, or "Teflon Terry". But it owes its origins to an entirely different peer, Lord Hutton, and the condemnation of BBC journalism he published a year ago.

Reflecting last week on the traumatic events of January 2004, the BBC chairman, Michael Grade, observed: "It's a measure of the weight and significance attached to BBC journalism that a single report broadcast early one morning should be able to precipitate such a cataclysm." The BBC has been frantic to reform itself ever since. New complaints procedures and journalists' guidelines have been introduced. Grade has led strenuous efforts to eradicate potential conflicts arising from the governors' 80-year-old dual role as the BBC's champion and its regulator.

This month he and his board began to move from White City to less prestigious accommodation in Marylebone High Street. The governors are to issue each BBC channel chief with a "service licence", setting out budgets and remits. The new director of governance, Nicholas Kroll, has been recruited to build a secretariat powerful enough to let the governors function without support from existing BBC structures. Last week, the governors published independent research voicing criticism of the BBC's Europe coverage.

Now it looks as if Grade's efforts have been to no avail. Lord Burns considers external regulation necessary. He has recommended that the governors be scrapped and replaced by what BBC insiders call "the OFFBeeb option".

The BBC is shocked and dismayed by that proposal, but still more so by the concomitant suggestion that licence-fee income should be shared with other broadcasters in a version of the "top-slicing" arrangement that they sincerely believed had been abandoned.

A BBC source says: "People are stunned by the inclusion of the top-slicing idea. What is that doing there? It would completely change the character of the BBC, and weaken it fundamentally."

Professor Justin Lewis of Cardiff School of Journalism agrees. "There is a serious problem with the proposal to allocate money to other broad- casters. It would change the definition of public service broadcasting beyond recognition. We would end up with an American-style system in which public service means dull and worthy, and nobody watches. If the government implements that we face a change in the very nature of British broadcasting."

Lewis is critical of the proposed reform of BBC governance. "It is re-inventing the wheel. The Government could achieve a lot more by changing the governors' remit."

The BBC's official response to Lord Burns's proposals was non-committal. A spokesman complimented panel members on the "intelligence and rigour" of their approach.

Privately, executives are incensed. They believe that Burns's ideas would prove expensive, bureaucratic and a poor way of strengthening regulation. One says: "Doing it his way means handing more power to the director general. At the moment he only attends governors' meetings by invitation and can be asked to withdraw if they want to talk about him. Burns would have the DG running a more powerful board of management and this external Public Service Broadcasting Commission exercising light-touch regulation from afar. There would be two boards running the BBC. It would be expensive."

Professor Steve Barnett of Westminster University, says: "It would be a great mistake. The changes Grade is already making will perform a similar function to what Burns is suggesting. We do not need another layer of state regulatory bureaucracy."

Some BBC journalists subscribe to a conspiracy theory. They believe Lord Burns has made recommendations that the Prime Minister wants to see imposed and that the Culture Secretary, Tessa Jowell, will implement them in order to enhance her own promotion prospects. Steve Barnett dismisses that. "Burns is genuinely independent. No doubt if Blair or Brown had strong feelings they would have made them known, but I think the panel reached these conclusions on their own."

If that is the case, Ms Jowell faces an uncomfortable dilemma. Several senior Labour MPs have already told the BBC that they have been impressed by the governors' efforts to change things. Many on the government benches have been chastened by public support for the corporation since Hutton.

Mr Barnett identifies another problem. "Even if Lord Burns's proposed commissioners are not party political apparatchiks, they will be political appointees. They are likely to be more in touch with what the people who appoint them want them to do than existing governors are. Governors tend to accept the BBC tradition and 'go native' in the sense of fighting to defend it. A new commission will be outside that tradition."

Lord Burns's report can only be read in the light of Lord Hutton's. For that reason it risks being stigmatised as an attempt to emasculate the corporation before reforms launched by Lord Grade and the new director general, Mark Thompson, have had the chance to work. Tessa Jowell should remember that many licence-fee payers are convinced Andrew Gilligan was right.