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Introduction

This conference will not be the last in 2012 to debate the future of the creative industries; indeed politics, technology, economics and consumer behaviour make this topic ever more interesting. So conferences like this are likely to become a sort of creative industry themselves. But there is no denying there is a slightly febrile tone to the debate at this particular moment as we await the arrival of a Communications Green Paper and the Leveson Inquiry continues its investigations.

The Â鶹Éç has an interest, of course, in the policy debates around the Communications Review. We will have a point of view to express. But on the whole, the big questions for us will come in the next Charter Review.

One question will be about the case for public service broadcasting. And perhaps that case is best made by looking at our ninety year history, at public trust in our purposes, and at people's respect and affection for the quality of what the Â鶹Éç does.

But a second crucial question lies in the attempt to define better the philosophy that is at work here. What are we about? What should the Â鶹Éç be trying to do?

Optimism, ideas and ambition

It seems like the right time to think hard about this, given the degree of uncertainty in the current political and economic situation that is causing us all to ask existential questions.

There are those who look at recent events and diagnose inexorable decline: a collapse of trust in political and financial institutions, a crisis of morality in capitalism, a diminution of Western power in contrast to the rise of China; and at home and perhaps beyond a debasement of public sensibility and a decline in contemporary culture.

It's not for me to judge whether they are right or wrong, although I would observe the long heritage for this brand of pessimism: from T.S. Eliot to Matthew Arnold, from Swift to Shakespeare, even back to St Augustine and Tacitus.

The Â鶹Éç has an obligation to report these views and the alternatives, to challenge them and as far as possible to get underneath them. To try to explain and analyse what is actually going on. But our responsibility goes beyond reporting. We are an important part of contemporary culture. We should be able to demonstrate through what we do that Britain is not going to the dogs.

In this sense, I believe the Â鶹Éç is part of the argument, and a force for optimism amidst any gloom. And that while we live in serious times we need not be perpetually solemn.

First because of the quality of escapism and entertainment the Â鶹Éç can provide. Watch 90 minutes of Sherlock, puzzling though the end may be, and I defy you to recall the precise details of Standard and Poor's latest credit ratings.

Second because it remains a trusted national institution. And by upholding its standards, its civility, and its democratic intelligence the Â鶹Éç remains something for us all to be proud of.

Third because of what it does to take the UK to the world, through both the cultural and democratic contribution made by the World Service and the economic contribution made by Â鶹Éç Worldwide.

Finally, and most importantly, because the Â鶹Éç can carry ideas and ambition to many millions of people. And if millions of people are able to pursue new ideas and ambitions that can only be a good thing for the long-term health of our society.

I remain unashamedly of the view that introducing people to good books, great paintings, or beautiful music – allowing them to better pursue and appreciate their passions and interests - helps to enrich them as individuals and to improve the quality of civic life for all of us.

But to do any of these things, the Â鶹Éç needs to be at the top of its game.

A popular art form

That is partly about taking ourselves more seriously and giving our audiences the respect they deserve. Television at its best is a popular art form. It is not absurd to argue that it is the closest we get in modern life to the sort of collective experience that was created by Sophocles or Shakespeare.

Lord Reith, although he hated television, identified in the earliest days of broadcasting an opportunity to extend this noble artistic lineage. When he said it was 'better to over-estimate the mentality of the public than to under-estimate it', he wasn't being elitist. He was being meritocratic.

Read Jonathan Rose's book The Intellectual Life of the British Working Classes for a reminder of how, by the time of the Â鶹Éç's creation, there was already a strong tradition of ordinary working people using art and literature as a means of inspiration and self-improvement. One example he gives is the auto-didact Philip Inman, son of a widowed charwoman, buying up cheap reprints of Ruskin, Emerson and Austen and making detailed notes on them. He ended his career as a member of Clement Attlee's Cabinet and Chairman of the Â鶹Éç.

The Â鶹Éç itself has never been, and should never be, too self-consciously highbrow. To remind yourself why not, look at the queues for the Proms. Virginia Woolf might have thought this sort of popular success a little too, well, middlebrow, a bit (to quote her) 'betwixt and between'. But year by year the queues grow.

When the founders of the Third Programme set out to create something deliberately elitist, they failed – a third of the listeners in the first week were identified as working class. And in 1949, when Wilfred Pickles brought poetry to his show on the Light Programme, its immediate success made him conclude that 'the Â鶹Éç had made a big mistake in making poetry the preserve of the 'arty' clique who dwell in a never-never world sealed off from everyone else'.

What does any of this mean for the Â鶹Éç today? That we must neither be afraid of the tag 'intellectual', nor become too attached to it for our own good. The Â鶹Éç occupies a broad cultural territory peopled by that great majority of the audience who do not seek to be members of any kind of clique but who want to be informed, educated and inspired and not merely entertained. It can have enormous impact by providing an introduction to concepts, subjects and artists that viewers and listeners can go away to pursue further for themselves if they choose. And increasingly, its internet-connected services will help people do that by providing immediate links, recommendations and opportunities to share their knowledge and passions with others.

I think it's a false dichotomy to say that the Â鶹Éç must seek either to be popular or to be intelligent. It ought to be both. It can combine broad reach with a distinctive edge. Through a range of programmes that run from Strictly Come Dancing to Live from the Met. And through a determination to make every programme as stimulating as it can be. To take one unlikely example that I stumbled across: if you watch the Great Sport Relief Bake Off, you can learn something about the importance of tea rooms as places for Suffragettes to meet and organise, even while you hone your crumble-making technique.

Living dangerously

The Â鶹Éç should never simply look to past successes as proof of its right to exist. It has some lofty ideals to live up to, and it can only do that by taking brave decisions and setting off in some new directions. It will never prosper simply by playing safe.

Think of the disruptive, challenging, intellectually seditious nature of great art – Goya or Beethoven or Grossman. Think of the wild potency that we celebrate in art and artists, so difficult to fit into any kind of mould. No wonder Denis Donoghue said, in his Reith lectures on The Arts without Mystery, that 'there isn't much point in having the arts at all unless we have them with all their interrogative power. They are not cosy or ornamental.'

How do these ideas affect us? We need be aware of the challenge for the Â鶹Éç. Any large organisation or bureaucracy will tend to stifle creative people – so how can we make sure that this one doesn't? And while parts of the Â鶹Éç need to feel cosy and unthreatening – think, for instance, of the superbly professional Antiques Roadshow – other parts need to retain their full interrogative power. The Â鶹Éç has to use the security of its licence fee funding to take risks that a commercial broadcaster would never consider. That is part of the justification for our existence.

For several years now the Trust has been encouraging the Â鶹Éç to be more 'distinctive' in its programming, particularly on the big mainstream television services. That means tapping into the spirit of the outsider, the interrogator of received wisdom. Another way of putting this is: we should be prepared to live more dangerously.

That should not mean any lowering of cultural standards, or any acceptance of the shoddy or vulgar. It means setting the bar high for ourselves. No one else will do this unless we do.

Confidence brings creativity

None of this is easy. New ideas cannot simply be willed into existence. And it is certainly not possible for the Â鶹Éç Trust to create them through more targets, quotas, compliance and measurement systems. John Kay, who was the first head of this business school, has written eloquently of the futility of this kind of top down re-engineering.

Happily, the Â鶹Éç starts with enormous advantages. The most important of which is its staff. In nine months as Chairman I have met an enormous number of hugely talented creative people, who care deeply about the Â鶹Éç's public service mission and who are bursting with ideas and enthusiasm – so the intellectual capital is there. Not only that, but we can draw on the strength and ingenuity of a flourishing independent sector.

The Â鶹Éç has no competing profit motives to distract it from the task of finding the best ideas, wherever they come from. And it has shown through its technological and online development in recent years how ambitious, innovative and fleet of foot it can be.

The risk is perhaps that an odd sort of corporate psychology interferes with the creative process. The Â鶹Éç seems to exist both inside and outside the 'Establishment' – depending who you talk to or, sometimes, when you talk to them. We must not allow the peculiarity of that position to make the Â鶹Éç unsure of itself. It can sometimes be too defensive in its behaviour – either worrying too much about what the Government or the critics might say or do or focusing too much on the size of the audience as the only concrete measure of success, the only guarantee of continuing viability. We must be wary of that dynamic. It will tend to stifle new ideas and new ways of doing things.

The Â鶹Éç should, in my judgement, be hugely confident about its position and its place in public life. It is a universal service, securely funded, with a wave of public trust and goodwill behind it. The public understand that it is unique, and they understand that it provides a service for the Nation, without being part of the State.

No other artistic or media organisation in the world has these advantages. The Â鶹Éç has to exploit them in order to further demonstrate what sets it apart from the market. It can take a long-term view that looks beyond the week-by-week performance of individual programmes or services. If the Â鶹Éç simply tries to defend its position and gets caught up in existential concerns, it will end up managing decline.

That may be doubly true in a period of considerable political and economic uncertainty, when the Â鶹Éç needs to use its unique and trusted position in public life try to explain, to interrogate, and to find artistic expression for the big ideas of the day. If we can get this right, the value for money of a £145.50 annual investment for a wealth of high quality British content will only become clearer.

What needs to be done?

The Trust has set out very clearly what it means for the Â鶹Éç to be distinctive:

• High editorial standards
• Creative and editorial ambition
• Range and depth
• UK-focused content and indigenous talent.

It has explained that it expects every Â鶹Éç programme to exhibit most of these characteristics, with every service fulfilling all of them across its schedule.

The Trust has pointed to some areas where it feels more can be done and more risks can be taken. The peak time schedules of Â鶹Éç One and Â鶹Éç Two, in particular, provide opportunities to reach significant numbers of viewers and should therefore be a showcase for the most ambitious and distinctive television we can make. And in other cases, the Trust has been even more specific about what it expects the result of its proposed changes should be – for example, a reduction in the average age of the Radio 1 audience.

This is not about a retreat to minority tastes and interests. The Â鶹Éç must remain universally relevant. And popular programmes can be just as distinctive as Â鶹Éç Four documentaries – look at the originality of the idea behind Strictly, now a global phenomenon. Or at what EastEnders has done in its lifetime to raise awareness and change attitudes around major social issues such as HIV.

One famous philosopher, John Rawls, argued that the way to create a just society was to build one without knowing what position one would oneself occupy in it, rich or poor, sick or healthy. When applied to the Â鶹Éç, that sort of thinking might help balance the need for wide audience reach with the task of pursuing distinctive programming. We need to try to imagine what formulation of programmes and services would provide the greatest value to the greatest number of people, but without defining that by reference to our own tastes. That way, we might avoid becoming either patronising at one extreme or mindless at the other.

When you take this viewpoint, it's clear that there is a big prize for the Â鶹Éç if we can bring an additional edge of boldness and experimentation to the heart of the most mainstream schedules. Of course, that is also where it is toughest to achieve the right mixture of broad appeal and new ideas – far tougher, for example, than on Â鶹Éç Four or Radio 3. Get it wrong, lose the mainstream audience, and you have lost the potential to do immense public good for that audience.

So this is a tough mission, certainly, but also achievable with the right base to start from. Because all the big Â鶹Éç services are currently performing extremely well in terms of quality and reach. Because those services complement each other – so that Â鶹Éç Two, for instance, can experiment and develop ideas in a way that's harder for Â鶹Éç One. Because I know that the senior management agree with me that the next step should be a renewed emphasis on how to do things that are new, different and even better. And because I am also confident that the most talented and creative writers, producers, artists and presenters will take inspiration from the canvas we can give them and from the huge potential audience that exists for them if they get it right.

We need to make the most of that creativity if we are to demonstrate that the Â鶹Éç is distinct from the rest of the market, and is using all the advantages of its scale, its funding and its independence for the right ends. And it is on the basis of its creative record that we want the Â鶹Éç to be judged at Charter Review in a few years' time.

I can understand it will sometimes be difficult for channel controllers and commissioners to think about the long-term when the overnight ratings provide such a public form of scorecard. That is only human. And it is not wrong in itself – when you know you have produced something special, of course you want to get the biggest possible audience for it. But working with the DG I want to find as many ways as possible to help those people to define what is means to do well at the Â鶹Éç in other ways too. To prove themselves by the quality and ambition of the ideas they pursue. And to help provide as much freedom and creative space as possible for programme makers.

In trying to do that, I wonder if there might be - for instance - something a little limiting about a commissioning process where ideas are defined from their earliest stages as a very specific type of commodity: as a programme for a specific channel; or an 8pm programme; or a 16-24 year-olds' programme; or a £150,000 per hour programme? And I know the Â鶹Éç management is thinking hard about how to create more fluidity in the commissioning system – so that ideas are given more space to develop before they get battened down.

It's clearly for Â鶹Éç management to work through this sort of detail. But whatever the Trust itself can do (or stop doing) to help, we will do it.

DQF

I have been speaking up to now about the big picture and the next few years of Â鶹Éç Output. I wanted to finish today by reflecting on the project that has occupied much of my time in my first months as Chairman – Delivering Quality First.

This is the name given by the Director General to the exercise designed to implement the strategy set by the Trust and to save the Â鶹Éç the money it needs to implement its licence fee settlement.

The conclusions we reach on DQF will determine the shape of the Â鶹Éç between now and 2017 and they will have a considerable impact on its ability to provide the range of inspirational programming that we want.

That means that this is not simply a managerial process or one about making cuts. The choices we make about where to spend the licence fee go to the heart of what the Â鶹Éç is about, including the tension that exists, as I have just said, between one objective to be distinctive and the other to maintain a broad reach.

Our public consultation closed at Christmas and we have published our initial conclusions today. In general, we remain of the view that the Â鶹Éç management's approach is correct and we agree they should proceed with the great majority of the changes they proposed.

It makes sense to make the maximum possible savings through off-air efficiencies, to protect the DG's five editorial priorities, to maintain investment in the peak schedules of flagships like Â鶹Éç One and Radio 4 that bring the greatest value to the greatest number of people. This is money that can help to increase ambition and innovation in those schedules wherever possible.

However, our consultation and our research have raised real concerns that some aspects of the plans as they stand would have a disproportionate impact on its local and regional output and the contribution such output makes to the most important priority for the Â鶹Éç – its journalism.

While the Â鶹Éç needs to reduce costs in these areas just as it does everywhere else, we agree that local and regional services in England provide something unique for audiences that can otherwise be neglected by the mainstream media. The Â鶹Éç cannot afford to get these changes wrong.

So we have asked the management to look again at the planned cuts to local radio. To see if they can find more money to protect the local identity of services:

• To scale back the plans for local stations to share their afternoon content with their neighbours, although we accept that in some cases that might still be the best option
• To ensure they have an adequately staffed newsroom
• And to give them a bit more freedom to protect some of their more specialist content out of peak, whether it be rugby league or specialist music.

We have also asked for a re-think of the plans for merging regional current affairs programmes in England into 'super-regions'. We want to see a plan that will preserve the regional integrity and investigative quality of this programming, which no other broadcaster provides.

In total, we expect these changes to cost the Â鶹Éç no more than £10m. We have asked the Executive to bring us new proposals along with suggestions for how they might save the money from non-content budgets. Meanwhile, we will continue to analyse the detailed responses to our consultation, to work with Ofcom to test the regulatory impact of the changes and to complete our ongoing reviews of English local radio and the Asian Network, so that we can publish our final conclusions on the whole DQF plan in the Spring.

Conclusion

This has not been an easy process. And it does not end here. There will be more work for the Trust to do in future years. Not least to make sure that efficiency savings don't end up compromising the sort of standards we expect, particularly in news.

But the need for budgetary rigour at the Â鶹Éç should not plunge us all into morale sapping gloom. Nor should the sense that for some time ahead, here in Britain and in our neighbourhood, we will be living in more austere times. We should stand four square against any decline into 'down at heel' mediocrity. We should make a bold assertion of excellence and demonstrate that, whatever the GDP figures, Britain is home to some of the finest cultural institutions in the world, including, in my view, its greatest broadcaster.