A new unitary board which will govern the BBC is to replace the trust overseeing the corporation, while Ofcom will become its regulator, the culture secretary John Whittingdale has announced.
Whittingdale – who is speaking to the Commons now – said the Trust was "no longer fit for purpose" and said it was unclear where the division of responsibilities came between the governance body and the broadcaster's board.
Ofcom will be given the power to regulate all BBC services and the director general – currently Tony Hall – will continue to have editorial oversight, Whittingdale said.
He said the BBC needed to be more transparent and accountable. "The National Audit Office will become the financial auditor of the BBC and have the power to conduct value for money investigations of the BBC's activities."
The licence fee will remain until 2022, Whittingdale confirmed, due to the "stability it provides and the lack of clear public support for alternative model". However, the licence fee freeze will end rise by CPI inflation.
The BBC agreed to cover the £725m cost of providing free licence fees for over-75s in last year’s financial deal. In return, the government has agreed the £145.50 TV licence will rise with CPI inflation and the BBC will be free from commitments including funding super-fast broadband.
He revealed that viewers will have to pay the licence fee in order to use catch up services on the iPlayer – BBC's online offering – closing the loophole whereby those who do not watch the broadcaster "live" are exempt from the annual charge.
His statement is detailing a major overhaul of the BBC Royal Charter – the agreement that sets the broadcaster's rules and purpose – confirming that the licence fee will continue for at least 11 years.
BBC's star talents and executives – execs on more than £150,000 per year and talent earning more than £450,000 per year – will be named under wide-ranging changes announced to the broadcaster's governance today.
And Whittingdale said that the government now wants all programmes, with the exception of news and current affairs, to be tendered out. Currently the BBC tenders out 50 per cent of its programmes.
Shadow culture secretary Maria Eagle responded by saying: "We know the secretary of state is extremely hostile to the BBC. He wants it diminished in size.His views are totally out of step with the licence fee-payers who value and support the BBC."
Meanwhile, the TaxPayers' Alliance hit out at the white paper too. "It is regrettable that the government has ducked the opportunity for substantial reform of the regressive and arcane TV licence fee,"" said Jonathan Isaby, chief executive of the TPA.
"With the technology now in place for people to subscribe to their choice of thousands of competing channels and watch them wherever they happen to be, the time has surely come to explore a new, fairer funding model fit for the 21st century."
"Licence fee payers deserve to know how their money is being spent and so only revealing the salaries of those earning more than an eye-watering £450,000 just doesn’t cut the mustard," he added.
And Professor Steven Barnett, professor of communications at the University of Westminster, was critical for altogether different reasons.
"Today's government announcements about the future of the BBC are profoundly worrying for anyone who cares about the BBC's independence from government interference and its creative freedom. To allow government ministers to appoint up to half of the BBC's unitary board, which will be making vital strategic and editorial decisions, is wholly inappropriate for an independent public broadcaster," he said.
"Coupled with new powers for the National Audit Office to investigate any aspect of the BBC's activities (including its journalism), and a ‘mid-term’ review with as yet unspecified government powers, these proposals are a recipe for potential state intervention in the BBC on an unprecedented scale."
But Hall was more optimistic. he said: “This White Paper delivers a mandate for the strong, creative BBC the public believe in. A BBC that will be good for the creative industries – and most importantly of all, for Britain.
"At the end, we have an 11-year Charter, a licence fee guaranteed for 11 years, and an endorsement of the scale and scope of what the BBC does today. The White Paper reaffirms our mission to inform, educate and entertain all audiences on television, on radio and online."
However, he added: "We have an honest disagreement with the Government on this. I do not believe that the appointments proposals for the new unitary board are yet right. We will continue to make the case to government. It is vital for the future of the BBC that its independence is fully preserved."
The BBC's current Royal Charter comes to an end in December, causing a public consultation into its future to be launched last year.