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Last Updated: Friday, 7 July 2006, 11:24 GMT 12:24 UK
Jargon buster: The BBC's future
The BBC annual report for 2005-6 comes at a time when a number of major developments are shaping the corporation's future.


Michael Grade and Mark Thompson
Michael Grade and Mark Thompson must drive the BBC forward
The BBC's purpose and remit are outlined in a Royal Charter, which is reassessed every 10 years.

The current charter expires on 31 December 2006, with the next agreement - set by the government - coming into force after that.

As part of the charter review, the Department for Culture, Media and Sport has been examining every area of the BBC's activities, with input from the corporation, public and industry.

The final text of the charter has yet to be confirmed, but the government set out its plans in a White Paper in March.

Culture Secretary Tessa Jowell called for entertainment to be at the heart of the BBC's activities.

She also outlined six aims for the corporation, including the expansion of digital services throughout the UK and reflecting the identity of the UK's nations, regions and communities.


The BBC will still be funded by the licence fee, but the government has yet to decide how much money in will get in the period of the next charter.

The corporation has asked for an increase of 2.3% above inflation to boost its programmes and digital services.

But Tessa Jowell has said the BBC will not get its full amount and commercial rivals such as ITV have opposed its request for more money.

A TV licence currently costs 131.50 and the new licence fee settlement is expected to be announced in October, according to reports.


The BBC is currently regulated by 12 governors who act "as trustees of the public interest" and ensure licence fee payers receive the best possible service from the corporation.

They set objectives, maintain the BBC's independence, appoint senior managerial figures and set their salaries.

But the Hutton Report into the death of Dr David Kelly after a contentious BBC broadcast highlighted problems with the governors' dual role as both the corporation's champions and regulators.

So the BBC and government have agreed that the governors will be replaced by a BBC Trust, which is intended to be more removed from BBC management and more accountable to licence fee payers.

Three current governors, as well as chairman Michael Grade, will stay on to take positions with the Trust.


The BBC must consider its aims and ensure it remains a world leader in broadcasting while continuing to deliver the best value to its audiences.

Creative Future is an internal scheme headed by director general Mark Thompson to ensure it survives in the digital age.

He has said it must embrace new technologies and offer innovative output that will reach as many people as possible, such as greater personalisation of online and interactive services.

Mr Thompson is already implementing plans to streamline the corporation in order to achieve this, which have resulted in 3,780 job cuts and the restructuring of various departments.


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