The BBC mishandled the controversy over executive pay and needs more “discipline” to make sure it provides value for money, culture secretary Jeremy Hunt said over the weekend.
Hunt said he could not rule out a cut in the licence fee and warned that the BBC has to “live on the same planet as everyone else”.
The corporation has come under fire in recent years for the large sums of licence fee money paid to its stars and top managers.
Hunt said: “They [BBC] have to understand the rest of Government, apart from the NHS and international development, is looking at average cuts of 25 per cent.”
Referring to the scandal of MPs’ expenses, he said the public wanted more transparency.
He told an audience at the Edinburgh International Television Festival: “Why do I know that in ten years, 20 years, 30 years’ time no MP will ever try and claim for a duckhouse?
‘I know that because all expenses claims are going to be made public.
“That will be the discipline in the process and I will be asking the BBC what are the disciplines that they are putting into place to make sure that on a permanent basis they will be getting better value?”
Asked if he thought the BBC had mishandled the issue of executive pay, he said: “I do”, but added that it was not “our job” to set salaries for the BBC.
Hunt said there had been no discussions with the BBC about the future level of the licence fee, adding: “Of course I can’t rule out the BBC licence fee being cut”.
Delivering the James MacTaggart Memorial Lecture on Friday night, BBC director-general Mark Thompson warned that “established stars” would leave the corporation as budget cuts and job losses took effect.
He said “top talent” pay would be reduced, adding: “Sometimes we will lose established stars as a result. When we do, we will replace them with new talent.”
The BBC has recently lost several high-profile stars, including Adrian Chiles, Christine Bleakley and Jonathan Ross, to ITV in what were reported to be multimillion-pound deals.
Hunt said the BBC’s handling of the executive pay issue was one reason there was “such a lot of anger” over proposals to change the corporation’s pension scheme.
Staff are currently being balloted over whether to strike over the plans.
He said the problem could have been better dealt with if the BBC’s structure had been changed and a non-executive chairman brought in to take on some of Thompson’s role.
He said: “I think it is an example of where effective governance of the BBC and a different structure to the structure we have now could have avoided some of the problems that we had.”
In a wide-ranging interview, Hunt also said the UK media was “chronically over-centralised”.
He said: “It is crazy that a city like Sheffield, for example, does not have its own television station like it would have in most other developed countries.”