BBC director general Tony Hall today announced a Scompetition revolutionT which will overhaul TV production at the corporation.

He said that the BBC will go Sfurther than we have ever done beforeT to ensure that standards are higher and costs are lower.

Under his Scompete or compareT strategy, Hall is planning on scrapping current quotas which guarantee that 50 per cent of BBC programming is made by in-house producers. The move would also see BBC production teams able to create content for rivals such as Channel 4 and ITV or for broadcast overseas.  

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Tony Hall announced his plans for the new "compare and compete" plan for the BBC (Credit: Sanya Burgess)  

He said: SI have always felt strongly that challenge was essential, that monopoly was wrong, and that complacency was dangerous.T

SI want proper competition in programme supply, overturning the current system that no longer works as it should.

SI want a level playing-field between BBC producers and independent ones.

SCompetition works just as you would expect. We do well. Others have to compete. They raise their game. They challenge us. We respond. Competition spurs us all on. It’s better for Britain.T

He said that under the current system of Smanaged competitionT BBC Production has only one buyer, BBC Commissioning, which constrains opportunities for the corporation and prevents it competing on the same level as big independent studios.

SWe’re finding it harder to retain talented people, who grew up with the BBC but who now feel they have the freedom to be more creative and competitive elsewhere,T he admitted.  

Independent production companies already make popular shows such as The Great British Bake Off and Sherlock for the BBC.

John McVay, chief executive of Pact, the independent producers’ trade body, described the announcement as ShistoricT and said that the ability for independent production companies to compete for a slice of the BBC’s programming budget would SliberateT the corporation.

But others raised concerns about the practicalities of changing a system which has always been inwardly focused.

Hall made the announcement during a speech delivered at an event at City University in London, designed to discuss the future of the BBC licence fee.

Lis Howell chaired a panel of (left to right) Louis Heinsman, Vicky Pryce and James Purnell who discussed the economic reality of funding alternatives (Credit: Sanya Burgess)

Lord Burns, current chairman of Chanel 4 and former chairman of the Independent Panel on BBC Charter Review during 2004-2005, was interviewed by Professor George Brock in detail over the future of the BBC licence fee. 

He said he was "very sorry" that the BBC are not looking seriously enough into the future of the licence fee, including whether it would even exist in 30 years time and the option of conditional access. Additionally, features such as the BBC iPlayer should be carefully examined in regards to their place within BBC funding. Lord Grade ventured that a two-tier subscription to cater for those who wish to use iPlayer as well or on its own could be worth exploring. 

Panellists including Vicky Pryce, James Purnell and Louis Heinsman dove deeper into the economic reality of alternatives to the licence fee, with James Purnell clarifying that the BBC already offers subcriptions across the world and so is not solely funded from the licence fee. However, Vicky Pryce was quick to argue that the BBC "is a public service, [and so] it needs to be funded by tax". Louis Heinsman added a note of caution from his own experience in the Netherlands, warning that once the licence fee model is abandoned it is near impossible to go back to it.

Neil Blain, who was joined by Robin Foster and Jean Seaton, said that irrespective of the result in September, the Scottish relationship with BBC is something to watch. He was followed by Dame Colette Bowe who disagreed that the role of the BBC as a nurturer of creative talent should be focussed upon, rather than the distractions of the confusion surrounding the licence fee.