BBC may have to subsidise rivals' public service programmes

The BBC could be forced to hand up to £150 million a year to rival television companies to pay for regional news and children’s programmes. The money could be clawed back from the licence fee to safeguard so-called public service content on commercial television, the communications regulator said yesterday.

The proposals from Ofcom come amid gloomy predictions from the regulator about the future for British television after the switch to digital in 2012. Ed Richards, Ofcom’s chief executive, published projections showing that spending on programmes could tumble from £2.7 billion a year now to £1.1 billion as broadcasters shed audiences and advertisers alike and relied on repeats and American content. “The current system [of funding television] is breaking down,” Mr Richards said, adding that viewers wanted “public service competition to the BBC”, which could be provided by pumping licence fee money, or another form of public money, direct to commercial broadcasters.

Ofcom’s proposal marked the beginning of a review of public service broadcasting, which is likely to form the starting point for a parliamentary Bill shaking up the television industry as it enters the fully digital era. That could mean the biggest alteration in the funding of television since the introduction of the joint radio and television licence fee after the Second World War.

Implementing radical change will prove controversial among most broadcasters, with the BBC opposed to sharing even a small proportion of the £3 billion a year licence fee and ITV sceptical about whether it should take any public money. Only Channel 4, which is worried about its financial future, is keen to take a slice of the licence fee, or any other public cash. Andy Duncan, the chief executive of Channel 4, said: “This is a clear statement about the importance of plurality, of having public service competition to the BBC. We welcome the strong statement about the need for funding, and the new sense of urgency is very welcome.”

Mr Richards said that already some valued types of programming were under threat because of the growing financial pressures on ITV and Channel 4, which are suffering from fragmenting viewing and declining advertising at a time when people can choose from more than 300 channels. Mr Duncan said the problem could best be seen in children’s television, “where we have seen such a reduction in commercial broadcasters spending on children’s television that S4C, the Welsh language channel, is the second-biggest commissioner of children’s programmes after the BBC.”

Ofcom also identified question marks about the funding of regional news at ITV, and in Scotland and Wales, although not Northern Ireland. It said that Channel 4 may need some financial help if it is to survive, a statement that came after a long lobbying campaign by the broadcaster. Ofcom highlighted options for the future structure of Britain’s most popular channels. All placed the BBC at the heart of the system, but differed in the amount of public money that could be available to ITV, Channel 4 and other commercial broadcasters. However, in reality the debate will focus on whether some BBC licence fee or other money should be given to Channel 4, and how far ITV should be allowed to reduce its obligations to show regional programmes , although Mr Richards insisted that “we are not expressing a preference at this stage”.

The strongest criticism of the proposals came from BSkyB, the satellite broadcaster that is 39.1 per cent owned by News Corporation, parent company of The Times.A spokesman said: “Is it necessary to start pouring money into public service broadcasting, when the system is leaking like a sieve? The BBC, for example, uses licence fee money to pay for US programmes — cash that could be saved and spent elsewhere.”

In other news, the most powerful woman in British radio announced yesterday that she would be stepping down from her role as the BBC’s director of audio and music, after four decades at the corporation. Jenny Abramsky, who was ultimately responsible for the appointments and controversial pay packages of key BBC presenters, from Jonathan Ross to Chris Moyles, has been appointed by the Prime Minister to chair the Heritage Lottery Fund.