BBC made to open its books to MPs

TOUGH NEW parliamentary controls should be placed on the BBC, ending decades of its near-total independence from Westminster, a government- commissioned report will state today.

The Gavyn Davies panel of experts investigating BBC funding will say that the corporation should be more accountable, with its pounds 2.2 billion expenditure opened for scrutiny by the National Audit Office.

The inspection would force the BBC to make public the millions of pounds it has spent refurbishing its corporate centre, funding costly business courses for television managers and on chauffeur-driven cars for corporation apparatchiks.

The BBC governors recently expressed concern that in surveys only 34 per cent of people said they thought the BBC was open and accountable. "The corporation reports on itself," David Elstein, the chief executive of Channel 5, said yesterday. "It doesn't have to abide by the normal rules that everyone else has to abide by. The truth is the BBC is not accountable, except in the most nominal fashion."

The BBC will be furious at the move, which it sees as threatening its editorial integrity. "The Tories never went this far, and this proposal will be seen as unjustified political interference by Labour," a BBC executive said. "It will be hard to convince foreign governments that the Beeb is politically independent when it reports financially to a government body."

But the Davies-panel announcement will please critics of the BBC who claim that it unlawfully subsidises some of its commercial activities with licence fee income. "Cross subsidy is always a problem," said Gerald Kaufman, chairman of the Commons Select Committee on Culture. "An organisation can have internal pricing which satisfies itself, is done with integrity, but gives outsiders something to be concerned about."

The National Audit Office proposal is seen as the price the BBC must pay for receiving income from the new digital surcharge of nearly pounds 19 per licence, which the Davies committee will also recommend today.

A storm broke over the digital fee yesterday, with an alliance of commercial broadcasting companies including BSkyB, Granada, Carlton and Telewest damning it as "a tax on innovation", saying "the UK leads the world in digital technology, creating thousands of jobs ... A digital licence fee would hinder export opportunities and put those jobs at risk. Over the longer term, introducing an unpopular digital licence fee risks compromising the legitimacy of the licence fee as a whole.

"A digital licence fee would be a flat-rate poll tax, with the duke and the dustman paying exactly the same amount," the alliance said. "People on income support and state pensions would be among the least able to afford the extra pounds 19 a year involved."

Last night the BBC, which had argued for a pounds 30-35 digital surcharge, issued an angry rebuttal. "Everyone accepts the BBC's need for more buoyant income... [and] the need for the BBC to be at the forefront of the digital revolution if digital is to be a success and if its benefits are not to be restricted to those who can afford expensive subscription channels."

The BBC appeared to be bracing itself yesterday to submit its accounts to the National Audit Office. Insiders said the corporation would "try to find ways of working with the National Audit Office. We are proud of our independence and always careful of it - but we also recognise the need for greater transparency."