David Cameron is demanding greater control over the BBC as he seeks to keep the broadcaster on a tight financial leash over the next decade.
Downing Street and Lord Hall of Birkenhead, the BBC director-general, are locked in a stand-off prior to the publication next week of a white paper on the future of the corporation.
The prime minister wants powers to be inserted into the 11-year charter to ensure that ministers can hold the BBC to account at any time. The “break clause” could give the government the option of renegotiating the charter.
Downing Street also wants the government to appoint at least half the members of a new ruling body, including its chairman and deputy chairman. John Whittingdale, the culture secretary, will publish details of the BBC charter renewal next Thursday.
A draft circulating in Whitehall makes clear that he will press ahead with plans to replace the BBC Trust with a unitary board. Unlike the trust, however, it will make day-to-day operational decisions on areas including news coverage. Critics claim that this marks an end to self-regulation by the broadcaster.
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The BBC has an income of about £5 billion a year, including £3.7 billion from the licence fee, which is £145.50 per household. Lord Hall says that he has to cut £800 million annually from the running costs by 2022 after the latest financial settlement with the government. BBC News has been asked to contribute £80 million of the cuts.
Mr Cameron and the corporation are at odds over moves to keep it on a tight rein between charter renewals. The corporation wants the government to extend the period between renegotiations from 10 to 11 years but Downing Street is seeking a break clause in return. Details of the extra mid-term review are still being thrashed out.
“It makes sense in a world like broadcasting where challenges can get thrown up very quickly,” said a source close to negotiations over the white paper. “This isn’t a mini-charter renegotiation.”
Critics are set to claim that any break clause in the charter could be used by the government to intimidate the BBC, particularly during elections. Lord Patten of Barnes, former chairman of the BBC Trust, has already attacked plans for greater government control and said that they raised “serious questions” about the corporation’s independence.
A row is also brewing over the composition of the board, with the prime minister insisting that its chairman, deputy chairman and at least four non-executive directors are appointed by the government.
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The director-general, two lieutenants and an unspecified number of other non-executive directors will make up the rest. The proposals are included in a review into BBC governance by Sir David Clementi, former chairman of Virgin Money.
“The prime minister wants to ensure that there are a few entrepreneurs in there who know about business; people who know what waste looks like and how to get rid of it,” said the source.
Lord Hall, however, wants to limit the number of government appointees so that a majority of non-executive directors are chosen by the BBC itself. In a speech last month he said: “Unlike any previous governing body, this unitary board will make key decisions on programmes and services and it will work with me as editor-in-chief on how we manage our impartial journalism. It doesn’t feel to me that these tasks should be undertaken by government-appointed board members.”
Lord Patten said in a speech in Oxford this week: “Ministers of all colours have a predisposition to put in place ideological fellow travellers. I would not lose much sleep about that if we were talking about the White Fish Authority, but this is the BBC, damn it.”