British Government to Probe Funding of BBC and C4

17 December 2002

A surprise inquiry into the way in which the BBC is funded by the taxpayer has been set in train by chancellor of the exchequer Gordon Brown. One possible outcome of the probe could be the scrapping of the licence fee which generates £2.5 billion ($3.97bn; €3.87bn) annually for the publicly-owned broadcasting behemoth.

Also under the microscope is commercial Channel 4, also funded from the public purse, which may or may not see its income stepped-up at the expense of the BBC.

The chancellor, who is widely expected to become the next prime minister, marches to a different drum to that of other government ministers. He has hired a firm of unnamed external consultants to work with Treasury officials on the study which could determine the outcome of the renewal in 2006 of the BBC’s Royal Charter.

Civil service moles imply that news of the Treasury’s initiative will come as an unwelcome surprise to Brown’s fellow minister, the secretary of state for culture media and sport Tessa Jowell, who has been deeply involved of late in drafting and steering the government’s controversial Communications Bill which claims to create a more competitive broadcasting environment.

Jowell's trumpeting of the bill's competitive merits surprises many industry onlookers, who see it as the thin end of a consolidation wedge that could place much of British broadcasting in the hands of a few (mainly US) giants.

Jowell has also been concerned recently with the BBC, notably on anticompetitive grounds, after howls from commercial broadcasters and internet service providers that the BBC is using its massive publicly-funded resources to muscle-in on their territories.

Likewise it is thought that Jowell will not take kindly to the heavy hand of the chancellor intruding onto her patch.

Data sourced from: BrandRepublic (UK); additional content by WARC staff