BBC programme cash to rise by 30 per cent

Greg Dyke, the BBC director general, has promised the biggest increase in spending on programmes in the corporation's history. By 2003 there will have been an extra £480m, or a 30 per cent real increase in expenditure, he said last night.

Greg Dyke, the BBC director general, has promised the biggest increase in spending on programmes in the corporation's history. By 2003 there will have been an extra £480m, or a 30 per cent real increase in expenditure, he said last night.

But he admitted that at present the main channel, BBC 1, was not as good as it should be. "It needs to be more modern, more in touch, more contemporary ... partly as a result of under-funding, the channel is not doing as well as it should."

Mr Dyke was giving the MacTaggart Lecture at the Edinburgh Television Festival. He also analysed the BBC's role in the digital age, explained more about BBC1, 2, 3 and 4 and disclosed that he would have two dedicated daytime children's services to stop the takeover of children's television by American networks. He also confirmed that he would move the 9pm news to 10pm next year.

Mr Dyke said BBC Choice would become BBC3, a youth channel, and that the other digital channel, BBC Knowledge, would become BBC4, an arts and education channel. Both would run children's programming in the daytime.

The repositioning of BBC Choice provoked a response from Michael Jackson, head of Channel 4: "We will be keeping an eye on the BBC's plans for a youth-oriented BBC3 in the light of Channel 4's own launch of E4 [also a youth service]". He also said the BBC must not use the change in the time of the news as an excuse to move Newsnight. "Any move to shift Newsnight to a later slot would seriously call into question the BBC's commitment to news and current affairs."

ITV executives said the news change was "good news". Insiders said they would use it in their dispute with the Independent Television Commission and suggest that they need not move their news back to 10pm, as there would now be a news bulletin at that time.

Mr Dyke said that although BBC2 was a success story, it had a "a split personality" - the Open University and League of Gentlemen. "This eclectic mix has worked brilliantly in the analogue world but in a digital world of 160 channels it may make less sense." In the long term BBC2 would increasingly focus on "intelligent specialist factual programmes, our key leisure and lifestyle programmes, thoughtful analysis, creatively ambitious dramaand comedy, and specialist sports".

BBC1 would not banish all current affairs, documentaries, religion and arts to other channels but "programming in these genre, just as in drama and entertainment, needs to be more engaging, more exciting, more gripping", Mr Dyke said.

BBC3 would offer original British comedy, drama and music, social-action programming and "a very different sort of news bulletin that breaks many of the conventions of traditional news services". Mr Dyke said BBC4 would be "unashamedly intellectual".

Referring to the new daytime children's services, the director general said: "Nearly half of all children live in multi-channel households, where for much of the time they are watching predominantly American-owned channels, largely showing American programmes. Shouldn't they, and their parents, at least have the option of choosing British children's programming on channels free from advertising? We believe they should."