No doubt IEA blog readers will have different views on the news that the BBC is likely to have to share its licence fee with ITV news and children’s programme producers (with expressions of interest from other parties welcome). Give the money back to the taxpayer will go the cry from some! Personally, though, I think this is an important move for the good.

The Peacock Report proposed that money should be available on a contestable basis for public service programmes (or, as I have expressed it elsewhere, “public service increments to programmes”). If I have a news programme that stands on its own two feet financially but there is a public service objective to broadcast the news in Urdu, I should be able to apply for TV licence money to do that. This approach will help stop taxpayers’ money being wasted on content that is viable financially and to which there might be a public service aspect that is minor and requires small amounts of money. Classic FM has obtained money from the Arts Council on this basis.

There would then be real competition. Currently, nobody can move onto the BBC’s patch unless a programme is 100% self financing (as the BBC can broadcast it for nothing, financed by the licence fee payers). Instead of competition we therefore get segmentation of the market. At the same time (and paradoxically) we would get elimination of wasteful duplication – if Classic FM can get some contestable public service broadcasting funds to produce some rarified programming, then why have Radio 3?

This move could be the hole in the dam. If this small amount of money is available to ITN, then why not offer it to other broadcasters? If this approach is good for £130m, then why not for all public service broadcasting money? If commercial broadcasters are receiving such funds then surely the BBC should become subscription only. Once it is realised that the public service increment (that is the aspect of a programme that does not stand on its own two feet financially) is small, then funds can be radically cut.

There will be concerns. Will this lead to the privatisation of the BBC or the nationalisation of the rest of the network? (In this context it is important that the total amount of money will be small). And it will not satisfy libertarians. However, in party political terms it is interesting. The government has been moving in this direction for five years and yet the Conservatives have been timid. Might it be a Labour government that paves the way for the privatisation of the BBC (it could be a privately-owned mutual trust along Whiggish lines – it does not have to be a commercial business corporation), the contestability of funding and the implementation of the Peacock Report?