The BBC is one of Britain’s most important organisations. It underpins our society’s democratic debate, its cultural activities and its social life. So the bitter row over the Hutton inquiry should underline, not question, the BBC’s importance.
It is precisely because of the BBC’s influence and reputation here and abroad that the government was so exercised about the broadcaster’s reporting of David Kelly’s comments.
But the continuing bitterness about Lord Hutton’s inquiry should not contaminate the vital issue of the upcoming review of the BBC’s charter. This will examine whether we need the BBC and, if so, what kind of BBC.
These reviews happen every 10 years but this one is more open because of the growth of multi-channel television.
The argument against the BBC is simple – as we get more channels, and we can choose whether to pay for those channels, why should we all be forced to pay for the BBC? The answer is simple: government funds broadcasting because it is the only way to guarantee universal access and because common funding of television and radio delivers better, cheaper programmes.
With magazines and books, the government ensures universal access by funding libraries. In effect, we leave the production to the market, but fund public distribution. With television and radio, government also funds production because of a particular characteristic of programmes: we can all watch the same ‘copy’ of a TV programme without increasing the cost of that programme.
The most efficient way of funding most programmes is for us all to fund them and for us all to access them, ie through advertising or public funding. Subscription funding, in contrast, generates less money to fund programmes and makes it more expensive for those who do want to watch that programme to do so.
Moving towards subscription would restrict access by pricing parts of the audience out: that may be acceptable for Porsches, but it isn’t for information. We want everyone to have access to high-quality information, entertainment and education.
The virtue of the cost structure of broadcasting is that it costs the same amount for everyone to access the programme as it does for just one person to watch it. Universal access is both desirable and possible – public funding exploits the economic characteristics of broadcasting to deliver its socially optimal distribution.
As the number of subscription channels rises, so the need for the BBC increases. More programmes will be likely to require payment, so fewer people will be able to access them. Advertiser-funded television may reduce its public service content, under competition from other channels. We will rely more than before on the BBC to promote universal access to information, entertainment and education.
The charter review, therefore, must conclude that the BBC should continue to be publicly funded and be a universal service, rather than just a niche service producing those programme genres not delivered by the market. Hutton does not alter this fundamental conclusion. It does, however, question the governance system of the BBC. The failure of the governors properly to investigate the government’s complaints was the key regulatory issue to come out of the inquiry. This failure was a product of the governors’ conflict of interests: they both defend and regulate the BBC. The review will need to find a new way of governing the BBC.
The BBC needs to respond to the charter review confidently and imaginatively. Its role has always been to make the good popular and the popular good. Recently, there has been too much that just seeks to be popular. The BBC needs to reinvent that role for the multi-channel world.
Of course, this is a hugely difficult challenge – how to be distinctive without losing audiences to the point where support for the licence fee drains away. The BBC has met that challenge in the past – if it can meet it again in the next charter period, it could create a consensus for its continued existence thereafter.