Elizabeth Peacock: The BBC needs a revolution to stay relevant and respected

I have for many years been a committed supporter of the BBC, of its broadcasting, its management and its ethics as a pre-eminent public service broadcaster.

However, I have to admit that my enthusiasm for the organisation has

worn thin; the time is rapidly approaching for change.

As a country, we are heading for a period of austerity which is demanding cuts of 25 per cent in Government spending and in other public bodies. It would seem inequitable if the BBC and the licence fee were an exemption to this scrutiny.

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Performers' fees, executive salaries and other costs are out of line and in my view can only be corrected by a fundamental restructuring of the organisation – and of the services it offers.

The BBC organisation and activity may not have been perfect in the 1980s but the last government's re-organisation has proved to be a disaster, leaving the corporation in a perilous state. It botched the re-organisation of BBC governance, moving from the traditional structure in which the governors ran the organisation and defended the interests of the licence fee payer.

The government of the day created a twin organisational structure, the BBC Board to run the business and the BBC Trust to monitor standards and look after the licence fee payer's interests. This two-headed structure is dysfunctional and neither organisation is satisfactorily fulfilling its role.

Leaving aside the BBC Trust, the basic problem at this stage is the size and complexity of BBC operations. The management is attempting to compete in all sectors of the media, from local public service radio and television through national and international broadcasting, publishing and marketing to a government-funded World Service.

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These day-to-day demands are being compounded by the pressure of new technology and a constant demand for even faster 24-hour news.

Each of these sectors is a service or business in their own right, demanding detailed management and investment in infrastructure and programming.

The BBC operation is currently too complex to manage efficiently and the current governance structure imposed by the last government is not fit for purpose for a 21st century broadcaster.

The BBC Board, composed of executives and very low-key non-executive directors, has no chairman. The director-general and his staff run the organisation, but with blurred responsibility and accountability, as their activities are overseen by the BBC Trust with a separate Board and chairman whose role is to defend the licence fee payer's interests. This structure is a recipe for disaster and to the disadvantage of the licence payer.

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The director-general and his team may well do an excellent job but they are not under the direct governance and guidance of a firm Board structure and have little power to affect change. This is proving a problem in terms of strategy and cost control.

Equally, the BBC Trust is a gatekeeper, not a doer, so has become a negative influence in an area where positivity is required.

We must, however, look forward and be constructive. Changes should be made without delay and we must not agree a new BBC licence arrangement before these are achieved.

The existing BBC should be reduced in size and scope. This could be achieved by revolution but it might be better by sensible evolution.

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The first step should be the setting up of a traditional two-level board structure for BBC Operations, made up of a Supervisory Board, composed of an independent chairman, the director-general, finance director and the non-executive directors, with a separate management board headed by the D-G.

The supervisory board should be given the remit of rationalising BBC Operations with a sale or float of BBC Worldwide, and transfer of other activities into a public service division. This division should manage all the excellent local radio and TV, BBC News, BBC 1 and 2, Radio 2 and 4 output, all to be financed by a reduced licence fee when it is time for renewal. All other programmes, both Radio 1 and 3 and specialist digital programmes, and in television BBC 3 and 4, should go into a commercial division to use and attract advertising support and live or die in the real world.

I hear shouts of horror at the thought of advertising on a BBC programme and arguments from existing commercial stations that there is not enough advertising revenue to go around. Tough – so be it. We already have too much radio and television – mergers and operating deals will need to be done because it's a competitive world.

What of the BBC Trust in future? It could be argued that it is not needed as the independent BBC chairman and non-executive directors could look after and defend the licence fee payers' interests as the governors did in earlier years.

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This structure worked well and would again with the help of the Audience/Licence Payer Forum.

However, I suspect that some people would want a quango to do an independent gate-keeping job. If so, the Trust could continue to exist in a simplified format, collecting viewers and listeners' opinions and reporting to, and advising, the chairman and non-execs on action.

If the BBC is to remain relevant, remain a respected worldwide broadcaster and be affordable for the British people it needs a revolution – the only question should be not if – but when?

Elizabeth Peacock is a former MP for Batley and Spen, and was chairman of the BBC Audience Council Yorkshire between 2007 and 2010.

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