Alex Graham on broadcasting

Don't look Down Under forthe future of British television

Last week Ofcom kick-started a process which will have profound implications for the quality of programmes which we see on our television screens when it published the terms of reference for its review of public service broadcasting.

There's no doubt the stakes for PSB are higher than they've ever been before. The BBC's licence fee has been cut in real terms and the commercial broadcasters are being squeezed by competition for ad revenues from multichannel television and the internet. Meanwhile, the stick the Government has traditionally waved at recalcitrant networks – cheap analogue spectrum – will carry no weight once digital switchover is with us.

Not surprising then that both Government and regulator have flagged the need for a major rethink of the way public service content gets funded. There's even talk of a body with its own funds that organisations might compete for ("contestable funding" is the current buzz phrase) and that such funds might be open to all comers including (perish the thought) independent producers. It sounds attractive: producers able to access government funding directly without having to go through broadcasters. Were it not for one thing. I've seen the future and believe me, it doesn't work.

In both Australia and Canada producers can access such funding. (Admittedly, they also have public service broadcasters which are drastically under-funded but remember it's been suggested that one way to fund this new body would be to take the cash away from the BBC.) In Canada the emphasis is on tax rebates; in Australia it's a mix of tax incentives, direct subsidy and "soft" Government loans but the implications for producers are the same. And they don't look good.

A few years ago I made a television drama for the BBC with Canadian co-production money. Shifting the action from New England to Ontario involved minor creative compromises in return for a massive injection of state funding but then the problems started. First, while it took one meeting and half-a-dozen phone calls to secure the BBC funding, it was almost a year before all the Canadian funds were in place. And then six weeks before we were due to shoot, I took a call from my Canadian co-producer. The Ontario subsidy had disappeared but I was not to worry because he had a plan. They would switch production to Saskatchewan where they could access a training subsidy. There was only one problem. Our film was set in 1860 and Saskatchewan wasn't even settled until 1905. No matter. We would shoot the film's rural scenes in Saskatchewan and shift the rest of the film to England. So the next two months – whenwe should have been finalising the script and casting the film – were devoted to shifting the location of the film in pursuit of Government funding. The subsidy tail was wagged so hard the end result was a creative dog.

I'm hoping for a better experience on the Australian version of Who Do You Think You Are? where filming is almost complete on the first series featuring Australian celebrities. I've seen some of the films and they look terrific. But consider this. The Australian producers approached me about acquiring format rights in the show shortly after our first series aired in 2004. We're now shooting our fifth series but when it finally broadcasts in January 2008, their first series will have taken more than three years to get to air. And that's a show based on a successful format!

Not only that but they have also had to manage the relationship between broadcaster SBS and the federally owned Film Australia, both of which are putting up funds for the series. In the end, half the production team are commuting between Perth and Sydney (a 5000-mile round trip) in order to access more funds from the state agency in Western Australia. In addition to post-producing in the state, the WA agency also insists on at least one celebrity coming from that part of the country.

I've said several times that I wouldn't survive in the Australian or Canadian market. I've got neither the patience nor the resilience. Navigating the bureaucracy and squaring the conflicting priorities of the various funding bodies all divert the energies of producers from the important stuff – making the programmes in the first place.

What's more, separating the funding of a programme from its distribution further undermines the crucial relationship between creator and their audience. Many of these state funding agencies have honourable aims (expanding the skills base; raising cultural awareness) but entertaining the audience isn't necessarily one of them.

And finally, the more paymasters you have the more creative decisions will be taken by committee and the less bold these decisions will be. Bureaucracy is the enemy of innovation. You may not necessarily end up with a dog but you'll almost certainly end up with a camel.

I am sure that Ofcom and the Government is right to encourage us to think radically about the future funding of public service content and that the current model won't endure. But in doing so, let's think not just about where the money is going to come from but where it is going to go and – crucially – the impact it is going to have on Britain's world-beating creative producers.

Has Grade learned nothing?

Like most independent producers, I'm pleased to see Michael Grade standing by Simon Shaps and his talented team of commissioners.

I'm not quite so sanguine about his speechwriters.

Last week, Grade said that ITV's in-house production arm was going to be tasked with getting its share of ITV1 up to 75 per cent, the highest it can be under the ITV quota. It was a spectacular own goal, undoing in one fell swoop all the hard work that Shaps and his team have done in the past year or so to attract the very best suppliers to ITV.

It also sounded unpleasantly like the rhetoric of Grade's former LWT colleague Greg Dyke during his tenure at the BBC, where he openly declared that his strategy was to manage the independent quota as a ceiling rather than a floor.

Surely, broadcasters have learned the lesson that their shareholders are best served by competition in programme supply – the best ideas and the best price, whatever the source.

Alex Graham is chief executive of the independent producer Wall to Wall and is chair of Pact, the trade association that represents the commercial interests of the independent film and television sector