BBC chairman rejects "top slicing" to C4

BBC Trust chairman Sir Michael Lyons has attacked the notion of "top slicing" the licence fee to bolster the finances of Channel 4.

The proposal is one of several suggested by Ofcom in its latest consultation on the future of public service broadcasting in the UK. Channel 4 says it should be given £150m in subsidy to continue providing a public service alternative to the BBC, though it has not said where it thinks the money should come from.

Giving the channel public money would compromise its independence, Lyons suggested. "Channel 4 is the way it is, in part because of the way it is funded and governed," he said. Presently it is entirely funded by advertising revenue, but this is falling as costs rise. "Change the mechanisms of funding and governance and you change the channel."

ITV and Five have said they do not want a share of TV licence proceeds, but Channel 4 remains a prime candidate.

Lyons also criticised another proposal to give funds currently allocated to the BBC for digital switchover help to other broadcasters.

He said: "What they don't seem to have noticed is that the fund will have been spent by the time the current licence fee settlement expires, and who knows what will happen to the licence fee after that?"

Another BBC trustee, Dame Patricia Hodgson, reiterated the point at a policy debate on PSB yesterday. She suggested taking from the licence fee could "destroy the critical mass that makes the BBC the most effective public service broadcaster in the world".

Channel 4 chief executive Andy Duncan used a speech at the Westminster Media Forum to call for an end to "squabbling" over the PSB and emphasise a "sense of urgency" in finding a solution. "There's a very clear opportunity for us to cooperate as an industry," he said.