Leading Article: The public and the private BBC

JOHN BIRT and his managers at the BBC will feel a justifiable glow of satisfaction at the conclusions reached in yesterday's White Paper, which guarantees funding by the licence fee until the year 2001 and promises a Royal Charter to run for 10 years from 1997. The corporation will neither be broken up nor sold off. Its editorial independence will be enshrined in the charter.

During the Thatcher years, the BBC appeared to be an endangered species. Beset by political criticism and hampered by a poor management structure, it stood for many of the things Margaret Thatcher and her powerful supporters in the media disliked most. Its survival is not merely evidence of a different tone in government but a tribute to the political skills of Mr Birt in convincing ministers of the merits inherent in his reforms.

The question now is how the BBC can address the dynamic changes afoot in global communications and generate a renaissance of quality and motivation among its programme makers. With the great political battle won, it could be argued that the most urgent problem the director-general must tackle is the morale of his own staff and contributors. The most dazzling fruits of technology will be profitless without harnessing their creative talents.

Mr Birt's much-criticised policy of 'producer choice' created an internal market in the corporation. With some of its management- speak silliness stripped away, it is proving its worth. There are other contradictions, however, intrinsic in the application of business techniques to a publicly funded body. One is the promiscuous use of short-term contracts for full-time employees, which commit people to the risk, but not the reward, of the private sector. Mr Birt himself has acknowledged that the BBC often does not gain the best results from this system. It brings the principles of his reforms into question and it contributed to the recent damaging series of strikes. It should be modified, and fast.

Such are the problems that can arise when managers are asked to transform a cumbersome national institution into a public service broadcaster ready to compete with satellite and commercial rivals. It raises the uncomfortable thought that maybe the White Paper has actually not gone far enough.

Under its provisions, the BBC can enter some areas of the commercial marketplace provided that unfair subsidies do not leak across from the licence payer. But the Government was not convinced by the radical arguments raised, for example, in a recent pamphlet from the Demos think-tank. This suggested that only a BBC freed from political control and owned by its employees and audience could move into the next century on competitive terms with the new breed of global media conglomerates.

The BBC has won a reprieve from the ruthless discipline of the market, with its licence fee promised until the first year of the next century. But the sentence is suspended, not commuted. The debate is bound to continue.