Focus: GD for new DG?

The choice of a new director-general for the BBC is much like the election of a pope. It happens quite seldom, it is done behind closed doors and the victor gets to exert a profound influence on the cultural and spiritual lives of millions. Moreover, the institution of which he (it is invariably a he) becomes leader is habitually steeped in a mire of controversy as it struggles to keep abreast of rapidly changing times.

The comparison breaks down only when you look at the likely outcome of the race to replace Sir John Birt as pontiff of Portland Place. Though it is early days yet, the feeling is growing that Sir Christopher Bland and his college of cardinals are likely to anoint Greg Dyke, the 51-year- old chairman of Pearson Television, who has spent most of his career outside the true church of Broadcasting House and could be unsound on some central areas of doctrine.

He was chief executive of London Weekend TV, with Bland as his chairman, until the company was taken over by Granada. The two men worked well together and are still friends. A few weeks ago, rumours that Dyke was being lined up for the BBC job gained strength when he and Bland were spotted taking breakfast in a West End hotel, although the truth is that they have met regularly for years.

DYKE IS a declared Labour supporter and contributor, and has just completed a report for the Government on the National Health Service. This party allegiance should help the Corporation when the Government takes decisions on its future. He has spent most of his career with commercial TV, making his name in the 1980s by launching LWT's Six O' Clock Show and then by rescuing TV-am, the new breakfast TV franchise- holder, as programme controller after its disastrous launch. In his early days he was notorious for plain speaking and impatience with officialdom, and once told friends that he had as much chance of becoming the BBC's director-general as Pol Pot. Today, at 51, he has matured and learned how to cope with committees.

Whether he is the right man for the job depends on decisions that have yet to be taken on the BBC's future role in an age of multiplying television and radio channels. The task of the 12 governors who will make the choice is all the harder because they appear to have no coherent vision about any future strategy.

There is an irony about John Birt's legacy. He was vaunted as a great reformer, duster away of cobwebs, and pioneer of sophisticated (if cumbersome) management systems. Yet we can now see that his principal achievement is to have left the Beeb in much the same state of health as when he came - bravely keeping its end up against intensifying competition, its two terrestrial TV channels clinging tenaciously to about 40 per cent of the audience, still with its protective charter and still funded by the licence fee, though with growing revenue from commercial enterprises.

This is not a criticism of Birt. When he arrived as deputy director-general to Michael Checkland in 1987, the Thatch- erite assault on the BBC was in full swing. There was talk of forcing BBC1 to accept advertising and of selling Radio 1 to a private operator. Between them, Birt and Checkland headed off those threats, in part by introducing tight controls on spending and programme- making that alienated their staff but assuaged the Tory snipers. Birt became director-general in 1992 and in 1996 the BBC's charter was renewed for 10 years, with the licence fee confirmed as the funding mechanism for the duration.

By Birt's reckoning, that was a triumph, but it left open the question of the BBC's long-term role. Two unresolved issues are financing and the range of programmes to be offered, as competition intensifies for an audience that shows signs of being less hooked on the small screen than it was.

The conventional argument has it that these two factors are connected by an umbilical cord; that only by producing popular as well as elitist programmes can the BBC justify its claim on the purse of all viewers and listeners. That is why there was gloom at TV Centre last week when figures came out showing that, faced with a revitalised ITV and a growing Channel 5, BBC1's share of the audience in the last quarter of 1998 slipped to 29.3 per cent, 1.3 per cent down on the previous year.

Many believe it is time to challenge the link between ratings and funding. The principle that money raised from the public should be spent on providing benefits for all the public does not apply to any other subsidies to the arts: what percentage of taxpayers, for instance, patronise the publicly supported National Theatre?

Trying to compete with commercial TV on every level is wasteful and ultimately unsustainable, as the BBC discovered when Channel 4 outbid it for the rights to cover home cricket Test matches. Aiming to be all things to all viewers means that licence revenue is squandered on trash such as the National Lottery show, formulaic sitcoms and docusoaps that duplicate what is available on ITV. But Dyke, with his record of success in popular programming, would almost certainly oppose restricting the BBC's remit to providing up-market drama, news and arts.

The BBC sets great store by the licence fee mechanism, principally because the corporation has the right to pocket all the revenue derived from it. When devised in the 1920s it was a clever way of raising money from all those who used the nascent service - ie anyone who had a radio. Now that nearly everyone owns a television set there is no logical reason at all why broadcasting should not be funded from general tax revenue instead of through a universal poll tax, which would be expensive to collect and to enforce.

Dyke is believed to be agnostic about the licence fee. What is certain is that, starting with a blank sheet of paper, nobody would dream it up today. Those who oppose funding through general taxation say it would make the Beeb vulnerable to Government pressure. But since the level of the licence fee is already set by Whitehall, and sometimes has been used as a weapon to influence the way the BBC is run, not much would change.

Only one contender for director-general has publicly come out against the licence fee. He is David Elstein, head of Channel 5, who believes the BBC should eventually be funded by subscription, like a premium satellite channel. In other words, if its programmes play as unique a role in the nation's cultural life as its supporters claim, then viewers should be prepared to pay for them. Ladbroke's make Elstein a 20 to one outsider - a good value bet, if the governors are prepared to think the unthinkable.

At Birt's annual drinks party last week, nearly all the gossip centred on the forthcoming contest, but no clear choice emerged. Senior BBC people, even those who might be candidates themselves, agreed that it was an exceedingly open race.

It is 11 years since there has been a real contest for the job. When Birt succeeded Checkland in 1992 he had been his deputy for five years and was all but promised the succession. So it was a seamless handover.

By contrast, Checkland's appointment in 1987 came after a well-publicised day-long series of interviews in which Marmaduke Hussey and the board of governors put six of the most glittering names in broadcasting through their paces, including David Dimbleby, Jeremy Isaacs and Michael Grade (listed by Ladbroke's at eight to one this year, but ruled out by most knowledgeable judges).

Although Checkland had been deputy to his ousted predecessor, Alasdair Milne, it was a surprise when he came through the pack as the only candidate to whom no governor had a rooted objection.

That precedent is worth bearing in mind this time. The highest-profile candidates, beloved of media tipsters simply because they are high profile, often carry too much negative baggage to come out on top.

The amount of influence that Bland can bring to bear on his fellow governors could be crucial to Dyke's chances. Baroness Young, appointed deputy chair last August, has already flexed her muscles. She is said to have been principally responsible for the appointment of Jenny Abramsky as head of radio a few weeks ago. If she is looking for a likely woman this time, the only one with any sort of chance is Patricia Hodgson, the prim director of BBC policy and planning and a fervent defender of the licence fee - but her past as a Tory activist and lack of broadcasting experience will count against her. Technically, there is no official list of runners and riders, because the costly but cosmetic preliminary rituals have not yet begun. This week headhunters will be appointed and soon afterwards advertisements will be placed in newspapers.

ALL THIS is to give the illusion of transparency. The headhunters will not, for sure, stray far from the clutch of candidates already acknowledged to be in the frame. Few potential director-generals are likely to be found running chip shops in Hartlepool. Nor will the governors strike gold among the deluded crazies who will respond to the advertisement (there were 300 replies in 1987) with meticulously handwritten prospectuses for a golden broadcasting future based on wall-to-wall reruns of Dr Who.

Joint favourite Michael Jackson, 40, has been running Channel 4 for less than two years and not everyone thinks he has done an especially good job. In the last quarter of 1998 Channel 4's share of the audience was only fractionally higher than the previous year - 10.4 per cent compared with 10.3 - while its direct rival BBC2 increased its lead by nearly one per cent.

Next in Ladbroke's list, at 5-1, is Matthew Bannister, 41, chief executive of BBC Production and former head of radio. He might be a shrewd ante-post wager. As Controller of Radio 1 he made changes that provoked a dramatic drop in audiences while gaining plaudits from colleagues and opinion-formers. Such sleight- of- hand may be the quality most required as the BBC arms itself for its next battle for survival.

The choice is theirs: the 12 BBC governors

Appointed by the Conservatives pre-1997:

SIR CHRISTOPHER BLAND, chairman since 1996, former chairman of London Weekend TV.

SIR KENNETH BLOOMFIELD KCB, former head of Northern Ireland civil service, national governor for Northern Ireland since 1991.

ROGER JONES, OBE, founder of Penn Pharmaceuticals, national governor for Wales since 1996.

THE REV NORMAN DRUMMOND, former head of Loretto School, national governor for Scotland since 1994.

JANET COHEN, director of Charterhouse Bank and member of Sheffield Development Corporation, a governor since 1995.

SIR DAVID SCHOLEY, chairman of Warburgs and a director of the Bank of England, a governor since 1996.

SIR RICHARD EYRE, former director of the National Theatre, a governor since 1995.

ADRIAN WHITE, chairman of Biwater Ltd and founder chairman of British Water, a governor since 1995.

Appointed by Labour since 1997:

BARONESS YOUNG OF OLD SCONE, chair of English Nature following a career in health services management, vice-chair of the BBC since 1998.

DAME PAULINE NEVILLE-JONES, managing director of NatWest Markets, a former diplomat, governor since 1998.

RANJIT SONDHI, lecturer and veteran of many quangos, governor since 1998.

TONY YOUNG, senior official of the Communication Workers Union and a member of the TUC general council, a governor since 1998.