Grade has the experience to pioneer a new era for BBC

THE British Broadcasting Corporation, the world’s biggest media brand alongside CNN, Disney and Murdoch, is seldom out of the minds of the politicians. Here in Scotland, the First Minister, Jack McConnell, has been saying farewell to the outgoing controller of BBC Scotland, John McCormick, while in London, the corporation has a new chairman, Michael Grade.

The choice of Mr Grade is the best news the BBC has had in several years. A highly respected former director of programmes (he got EastEnders going), he will restore confidence to an organisation demoralised by the shock resignation of its director-general, Greg Dyke, in the wake of the Hutton inquiry. Mr Grade is a consummate professional, but he also has Mr Dyke’s populist touch with the programme schedules, so the BBC’s new-found dominance of the airwaves is unlikely to disappear.

Mr Grade has another advantage of being strictly politically neutral, whereas both Mr Dyke and the outgoing BBC chairman, Gavyn Davies, were big financial donors to the Labour Party. Of course, that did not stop them falling foul of the government over the allegations broadcast on the Today programme that the Prime Minister, Tony Blair, had lied over Iraq. Possibly their closeness to Labour created a false sense of security, or else it made them want to over-compensate when it came to dealing with Alastair Campbell’s fury at the BBC. Either way, the cronyism did not help. Mr Grade’s appointment probably suits Mr Blair because it signals a necessary reaffirmation of the corporation’s independence - which is to the good. But under Mr Grade, it is likely to be a proper kind of journalistic independence, because he has no political axes to grind.

Mr Grade’s other key advantage is that, while he has served time in the BBC ranks, he is far from being a BBC clone. The Kelly affair and the Hutton inquiry have been distractions from the real agenda facing the corporation. The cigar-chewing Mr Grade, scion of a showbiz family of inveterate risk-takers, may just have the right blend of experience needed to make the BBC face a changing future its board of governors has been unwilling to contemplate. Other candidates for the job, like the broadcaster, David Dimbleby, or the corporation’s former vice-chairwoman, Lady Young, would have represented the BBC’s conservative establishment.

The first issue the BBC has to face - and it has been brought into focus by the Kelly affair - is how the corporation is regulated. The BBC is the only part of the United Kingdom broadcasting media not regulated by the new all-purpose watchdog, Ofcom. It was left out of the loop partly at the behest of the BBC governors themselves, who are jealous of their fiefdom; and partly because the government was wary of being accused of interfering with the corporation.

As a result, everyone now has egg on their face because the governors did not know whether their job was to investigate Alastair Campbell’s complaints or defend Today regardless. Basically there are two options for reform. The governors can transform themselves into a regulatory body, but become more independent of BBC operations. Or they can go on running the BBC, but hand over regulation to Ofcom. Expect a hands-on pro like Mr Grade to lean towards the latter, which would be sensible. Either way, the status quo is untenable.

There is another pressing issue facing Mr Grade: who to appoint as his new director-general and whether or not to split the jobs of director-general and editor-in-chief (the latter carrying the can for news presentation).

The acting DG, Mark Byford, was a faceless but efficient chief of staff under Mr Dyke. One view is that he need not get used to his desk as Mr Grade has the clout to pick the world’s best to be the BBC’s chief executive. His appointment should encourage some high-flying applicants who would otherwise not have touched the job with a bargepole because of the Kelly affair. On the other hand, there is always the suspicion that Mr Grade’s personality may lead him to over-step the boundaries of being a chairman - giving strategic direction - and try to do the programming himself. That would be a mistake. The BBC has to renegotiate its charter and deal with Ofcom’s investigation into public-service broadcasting. That is plenty for Mr Grade to manage. However, there is a sensible case for separating the job of DG, as the BBC’s head, and the task of being editor-in-chief.

YET these tasks are only the beginning of Mr Grade’s BBC "to do" list. Call them house cleaning. Next he has to fashion a new role for the BBC in the next decade. Under Mr Dyke, the corporation has become a giant - it thrashed its old enemy, ITV, in the ratings; it dominates radio; its new digital channels like BBC4 have regained the corporation’s reputation for upmarket, classy programmes; and its website is one of the most used on the entire planet.

But such enormous success has sown the seeds of criticism. Why give the BBC a 2 billion state subsidy, courtesy of the compulsory licence fee, if its commercial arm is so successful? Why subsidise the BBC to compete head-on in what should be commercial territory, eg children’s programmes? Why not, as a recent Conservative think-tank suggested, share the licence fee with other public-sector broadcasters or independent producers? Mr Grade will need an answer to these questions - and quickly.

There is a case for taking greater risks with the distribution of the licence fee, should it continue. There is also a case for mixing funding and offering the BBC’s excellent digital channels on subscription. The best thing would be for Mr Grade to initiate change rather than have the corporation picked off by its enemies. Certainly, he is virtually unique in having the breadth of experience to pioneer a new era for the BBC.