Sir Michael Lyons: BBC is not 'a convenient piggybank'

The BBC risks becoming “the Lloyds Bank of the media world” if its funds are used to “bail out” struggling rivals, the BBC Trust chairman has warned.

In a wide-ranging speech to the Cardiff Business Club this evening, Sir Michael Lyons sounded a note of caution about the BBC’s offer to forge partnerships with other public service broadcasters.

Lyons stressed that the corporation was committed to “helping secure a sustainable future” for public service broadcasting beyond the BBC.

But he used the troubled merger of Lloyds TSB and Halifax-Bank of Scotland to explain why the broadcaster should not partner with other media companies “at any price”.

“What we’re not interested in are proposals that simply transfer value from the BBC to other players in the market,” he said.

“That would weaken the BBC’s ability to continue to deliver the public purposes it is mandated to deliver by its Charter. And it would damage licence fee payers’ interests.”

Lyons added: “Let’s remember the law of unintended consequences.

“Let’s remember what can happen when a strong and successful organisation is used as a convenient piggybank to bail out a failing one.

“Let’s make sure that we don’t inadvertently turn the BBC into the Lloyds Bank of the media world.

“Of course the BBC must play its part in helping to sustain the wider public service broadcasting ecology. But not at any price.”

Lloyds TSB’s performance has been severely affected by heavy losses at HBOS, which it acquired in January.

Earlier this month, shares in the newly enlarged Lloyds Banking Group tumbled after it issued a profit warning.

The BBC receives £3.2bn in licence fee money each year – at a time when ITV and Channel 4 are suffering from the advertising downturn.

One of the options floated by media regulator Ofcom in its review of the future funding of public service broadcasting was the idea of “top-slicing” the licence fee – giving part of the £140-a-year levy to broadcasters other than the BBC.

This option has been criticised by both the BBC and the BBC Trust – but still remains on the table as part of communications minister Stephen Carter’s Digital Britain review, which concludes this summer.

The BBC announced a series of partnership proposals shortly before Christmas as an alternative to losing part of the licence fee.

It is in talks about developing a partnership between its BBC Worldwide commercial division and Channel 4, which has warned of a £150m annual funding deficit by 2012.

The corporation has also offered to help ITV’s financial problems by sharing newsgathering facilities, studios and some non-exclusive footage.

Lyons also suggested that Welsh-language broadcaster S4C and Trinity Mirror – which has a major presence in South Wales – could have a role to play in contributing to the future of public service broadcasting in Wales.

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