Fears over job losses as BBC chief warns of radical shake-up

Mark Thompson, the BBC director general, warned yesterday that the corporation was facing a radical shake-up - and that means it is likely significant job losses could result.

Mark Thompson, the BBC director general, warned yesterday that the corporation was facing a radical shake-up - and that means it is likely significant job losses could result.

In his first newspaper interview in this role, Mr Thompson, the former chief executive of Channel 4, warned the BBC governors that the organisation would have to change more in the coming decade than it had in the last one.

"To me the urgency and the need for change is every bit as great today here as it was when I arrived at Channel 4, getting on for three years ago," he said.

At Channel 4, Mr Thompson presided over the departure of 30 per cent of the staff, many of them in the loss-making film subsidiary, which he closed. He predicted that if the BBC were to implement the changes he wants, the licence fee could remain in place until 2020.

Mr Thompson played down the likelihood of a £1bn privatisation of BBC Worldwide, the commercial arm of the BBC. "We are looking at BBC Worldwide with open minds but it is not a foregone conclusion that we are talking about large-scale sell-offs," he said.

Mr Thompson, who while at Channel 4 promoted talks on a possible merger with Five, said yesterday that he wanted to co-operate as much as possible with other public service broadcasters. "I am very much in favour of looking with Channel 4 to see whether there are areas where we can work with each other. But that is true also of the BBC and ITV and all the public service broadcasters."

The BBC director general confirmed yesterday that significant BBC services and channels would be moved out of London. Speculation has centred on Radio 5 Live and BBC sports moving to the provinces.

Announcing an urgent investigation by the accountancy giant Ernst & Young, Mr Grade said that the corporation had to improve the way it handled its £3bn annual revenue. Speaking in his glass box of an office at the BBC's new Media Centre in London's White City, Mr Thompson laughed loudly at the influence of Che Guevara on his destiny. For if Channel 4's Film Four had not made The Motorcycle Diaries, the story of Che's life-changing trip around South America, Mark Thompson might never have become director general of the BBC.

It was two days before the final interviews were to be held to choose a successor to Greg Dyke, when Thompson sat down to watch the movie at the Cannes Film Festival. "I went into the movie thinking ... I will not be a candidate. By the end of the film I thought I need to think about this some more."

The film, Mr Thompson explained, is about "a rather pampered, feckless, middle-class medical student who becomes a revolutionary as a result of this journey". At the end of the screening, Mr Thompsonpaced up and down the Croisette in Cannes, reconsidering his previous negative response to calls from friends and family who had pleaded with him to go for the BBC job.

Although the new director general was still sporting the stubbly beard he grew on his way to Channel 4, he is not a conventional revolutionary. Nonetheless, his vision for the BBC is decidedly radical.

"I told the governors I thought they had to think - and the whole organisation needed to think - pretty profoundly about change. And although the BBC had done a pretty good job under John and Greg [former director generals John Birt and Greg Dyke] in getting into the digital world, actually the BBC will have to change more over the next decade than the last decade."

Under Mr Thompson and the recently appointed BBC chairman Michael Grade, a series of reviews have been instigated into the future of the BBC. They range from investigations into whether it provides value for money,what the best structure for its commercial operations would be, and how many BBC services and channels should be moved out of London.

Mr Thompson will not pre-empt the findings of any of the reviews due to report in the autumn - well before the Government's planned Green Paper on the BBC, which is expected around the turn of the year. But radical change is certain, and thousands of jobs could go.

"We are not living in a world where there is much room for fat or for any kind of waste," says Mr Thompson, who emphasises that programme-making itself, as well as general overheads, will not be exempt from the process of seeking maximum efficiency.

He accepted that, because of growing competition in the broadcasting world and the BBC's battle to renew its Royal Charter, "pretty radical choices" will have to be made about the corporation's structure.

"It is reasonable to say that the BBC should be as small as it needs to be to discharge its mission," he said.

As if to underline his credentials in making tough choices, Mr Thompson points to his time at the helm of Channel 4, where there was no money in the bank when he arrived and every penny he spent had to be earned. The channel was also running at a loss.

"To me the urgency and the need for change is every bit as great today as it was when I arrived at Channel 4 getting on for three years ago."

At Channel 4 Mr Thompson returned the channel to profit largely by closing down the separate movie-making company and cutting jobs by around 30 per cent.

The BBC, he believes, cannot and should not rely on an ever-expanding licence fee. As a result, the organisation will have to focus its resources over the next decade on the things that matter most to audiences.

He began the process of defining what the BBC should concentrate on in future at the recent Edinburgh International Television Festival, when he suggested that home-grown comedy should take its place as a priority alongside news and current affairs, which was singled out for special treatment in the Birt years.

The full list of priorities is still taking shape in his mind, and yesterday he turned his attention to another area of programming. "The impact that this organisation makes on the musical life of this country, whether you are talking about new bands on Radio One or the Proms, is enormous.

"I certainly believe that music and the other arts are essential to the BBC," said Mr Thompson, who spent Monday evening at the Proms listening to Sir Simon Rattle and the Berlin Philharmonic.

It's not a question, the director general insisted, of turning some genres away from the pearly gates and casting them into outer darkness.

"The way things are done is everything," he said.

Mr Thompson admitted that he had once been worried about the BBC's commissioning the talent show Fame Academy, but now admits he was wrong. Fame Academy was a valid BBC programme because it was focused on talent and support for talent, he said.

"You have to be very, very careful about standing there like a headmaster saying we're not going to have anything like this. I try not to be prejudiced about any particular genre."

The BBC director general is phlegmatic about the increasingly active role played by the BBC governors and is reconciled to the fact that there may be "bumps" along the way.

"This is going to be a different relationship than for previous DGs," he said, adding that two of the last four director generals were dismissed by the governors. As long as the BBC manages to reform itself, Mr Thompson believes that the licence fee could run well beyond the next 10-year Royal Charter period, due to start at the beginning of 2007.

"The BBC has to prove its worth for every generation by focusing on exceptional content in key areas which the public really expects from the corporation. This is the heart of it. We must show our ability to deliver exceptional, indispensable high-quality content and deliver it in a lot of new ways," he said.

THE CV: MARK THOMPSON

Born: 31 July 1957, London

Education: Stonyhurst College Catholic boarding school in Lancashire. Merton College, Oxford

Family: Married Jane Blumberg in 1987; they have two sons and a daughter

Career: Joined the BBC as a research assistant trainee in 1979 , later working for Nationwide, Breakfast Time and Newsnight.

1988: Appointed editor of the Nine O'Clock News, and editor of Panorama two years later. Other positions he held in the organisation included head of features, head of factual programming, controller of BBC2, director of nations and regions, director of television

2002: Appointed chief executive at Channel 4. Appointed director general of the BBC in May this year