In his keynote
address to the CBI Annual Conference in Birmingham today, BBC
Chairman Michael Grade said the BBC's public service mission for
the 21st century remained unchanged, but the BBC has to change to demonstrate
it can and will deliver it.
"[The BBC has] to return a dividend to the public
whose licence fees support the BBC. A dividend
not in cash. But a dividend nevertheless of real and measurable value
to the public, both as individuals and as citizens," he said.
He described how the BBC's five core purposes, together
with new governance initiatives, like service licences and the public
value test, will provide greater clarity to drive the BBC to deliver
its public service mission and to be more accountable for its performance.
Michael Grade said the Governors' response to the Graf
review of bbc.co.uk published today demonstrated these
changes in action.
He said: "We are publishing
new, much more tightly drawn, objectives. They focus on how bbc.co.uk
can be made more distinctive, and deliver more public value, in this
developing and growing market.
"We've reviewed our portfolio
of websites and closed some sites down because they would not meet our
new test of public value.
"There are further closures and spending reallocations
within online to come as we specify what we won't do, as well as what
Michael Grade said an important element of the BBC's
reforms was the changes to the governance system.
He said the need to change had been too pressing to
await the outcome of the Charter review debate and he announced the
Governors will be moving to new premises, located apart from BBC management,
in the New Year.
He said: "Last week the Culture
Secretary, Tessa Jowell, was making headlines about the BBC Governors.
She said the status quo was 'unsustainable'. I agree. I thought the
old system was unsustainable too.
"Our aim is not to demolish
the BBC's constitution, which has served the independence of the BBC
so robustly. Rather it is to make the Board more clearly independent
of management and ensure we have the objective evidence we need to make
our judgements in the wider public interest.
"For the first time, the
BBC Governors will be located apart from BBC management. We're about
to start packing our bags in preparation for a move to separate premises,
located between Broadcasting House and White City.
"Our independence from management will be underlined
by the powerful symbolism of physical separation."
Michael Grade said that, whilst the current system of
governance had been in need of radical reform, he believed it remained
the most appropriate model for the BBC and he explained why other governance
models currently being discussed would not work for the Corporation.
He said: "It's sometimes
said that there's a fundamental design problem with a system that asks
BBC Governors to be both cheerleaders and regulators.
"Of course there is a potential contradiction.
But it's not significant as long as the Governors don't confuse
championing the BBC with championing the management of the BBC.
"The supervisory structure
appropriate to a commercial broadcaster albeit one with some
public service obligations is not right for the BBC which receives
nearly three billion pounds in public money.
"The scale and character
of the licence fee investment demands a supervisory structure that is
both detached and engaged:
"Detached enough to take
an objective and informed view of strategy and spending and wider public
"But engaged enough and experienced enough to be
able to offer ongoing support and advice to management as they spend
that public money."
He identified some practical issues that an 'OfBeeb'
model would generate - notably the potential for confusion and duplication
- and questioned where ultimate responsibility would sit if there were
both internal and external boards controlling the BBC.
He said: "Governance is not
the same as regulation. Governance at the BBC is about stewardship.
Stewardship of the public interest. And stewardship of the money.
"External regulators carry many heavy responsibilities.
But they carry no responsibility at all for anybody's money."
He said one area of great importance to the Governors,
and where they are looking to do more, is getting closer to licence
payers in order to understand their concerns.
He said: "I think the internet
and the new digital technologies should contribute to a solution.
"In the New Year, we will announce our programme
of action to connect with the licence fee payers who are our customers
and our owners. They deserve better than a passive role."
Michael Grade concluded by saying the BBC had contributed
significantly to the quality of life in the UK for over 80 years and
added: "If we want that contribution to continue
into the 21st century then it's clear the BBC has to change and change
"The leadership of the BBC is committed to making
those changes happen, so that a strengthened BBC can continue to meet
public expectations and public aspirations."