Compromising Auntie

Nick Morriosn looks at what this means for the future of the world's most respected boradcasting organisation.

ON November 14, 1922, a group of wireless manufacturers, including the pioneer of radio, Guglielmo Marconi himself, started broadcasting a daily programme from Marconi's London studio. Over the following 80 years, this British Broadcasting Company, which swapped the company for corporation in 1927, became not only the best known, but also the most trusted, news organisation in the world.

Now its future is at risk. Bearing the brunt of the criticisms of the Hutton Report, the corporation has lost both its Chairman, Gavyn Davies, and its Director General, Greg Dyke, and seen its reputation for impartial reporting seemingly thrown into doubt.

But the fall-out from the report may not end there. With the BBC's Charter, which guarantees the corporation's independence and sets out how it is to be funded, up for renewal in two years, executives at Broadcasting House would be twitchy in any event, but with the added pressure of a recently bruising, and unsuccessful, fight with the Government behind it, any uncertainty is likely to be greatly magnified.

Crucial though this is, perhaps more important is the effect the report will have on the BBC's approach to reporting on the Government in the future. Even though many newspapers and commentators have rallied to Auntie's defence in the face of what is widely perceived as a ludicrously unbalanced report, its consequence may be to temper questioning of the Government's policies, even if this is done "subconsciously", to adopt Hutton's facile formulation.

But the top priority is the appointment of a new chairman and director general. It was one of the ironies of last summer's bitter conflict between the Government and BBC, and of this week's resignations, that both Davies and Dyke were branded Labour cronies on their appointments, Davies because his wife is an aide to Gordon Brown and Dyke because he bankrolled Tony Blair's leadership bid in 1994 and is a past donor to the party.

The appointment of the new chairman is in the hands of the Government, but the need for whoever takes up the post to demonstrate their autonomy has never been stronger. No doubt ministers will be sensitive to the charge that the resignations have given them an unrivalled opportunity to bend the national broadcaster to their will, but finding someone both acceptable to politicians and of sufficient independence to command the respect of the corporation's staff will be a tall order.

The job of director general is in the hands of the BBC's Governors, the 12-strong body charged with monitoring the corporation's activities on our behalf. Last night it was not clear if this appointment would wait until the new chairman was in place, with Deputy Director General Mark Byford, a candidate for the top post last time around, acting in Dyke's place and an obvious candidate.

But in the meantime, the BBC has been left rudderless, a state of affairs which could hardly have come at a worse time. Ever since the BBC was granted its first charter in 1927, a review has been held every ten years into how the corporation serves the public. With the existing charter due to expire on December 31, 2006, that review is now underway.

Of prime concern to the BBC is the continuation of the licence fee, which allows it to remain free from the commercial considerations which affect other broadcasters, disastrously in some cases, as falling advertising revenue this year has hit ITV's programme-making budgets, with obvious consequences in terms of quality.

The licence fee has long been a bone of contention among the BBC's enemies, particularly rival broadcasters who see it as giving Auntie an unfair advantage at their expense. It is no surprise that the paper most critical of the BBC during the whole debacle has been The Sun, allied as it is to Sky.

The BBC's humiliation in the Hutton Report, over both its journalistic standards and its response to Government criticism, will give ammunition to those who argue that the role of a public broadcaster is now defunct, and it should sink or swim in the market place like everyone else. Culture Secretary Tessa Jowell may have virtually ruled out abolishing the licence fee last year, but there is still room for forcing the BBC to seek more of its money from its commercial arm, not least through limiting or preventing a rise in the fee.

Similarly, Hutton could also prompt a re-examination of the way the BBC governs itself. The BBC fought hard to remain largely free of Ofcom, the new regulatory body created at the beginning of this year, but pressure to come within its umbrella may now become irresistible. As both champions of the BBC and its regulators, the governors have been accused in the past of blurring their roles, a criticism given weight by Hutton, who charged them with not taking the Government's complaints seriously and not investigating the accuracy of Andrew Gilligan's original report.

Although Dyke attempted to head off anticipated censure on this point before Hutton's publication by instituting a new complaints procedure, it may not prove enough for the governors to retain control over this part of the BBC's operations, and it appears likely some part of this role will be ceded to Ofcom.

But the most far-reaching effect of Hutton's report may be on the climate within the BBC. Throughout its history, the BBC has fallen out with the government of the day, from incurring Winston Churchill's wrath by broadcasting interviews with leaders of the General Strike in 1926, to upsetting Margaret Thatcher by showing the damage caused by American bombers in Libya 60 years later, earning itself opprobrium and credibility in equal measure.

During the Second World War, Churchill frequently complained about the BBC reporting British losses before the Germans did, but one result was that when the tide turned, the public believed that reports of Allied victories were not just propaganda.

The reputation the BBC has built up over 80 years, which makes it the most trusted news organisation in the world, and the only reliable source of information for many of the 140 million World Service listeners, is dependant on its reporting what is happening, regardless of whether any government approves. If this reputation is compromised, if it makes reporters think twice before a broadcast which could upset ministers, if even reliable sources have to be supported by a second opinion, then Hutton will have done a greater disservice than even the noble lord could have imagined.