Signage is seen at the BBC Broadcasting House offices and recording studios in London. | HANNAH MCKAY


A BBC funded purely by commercial means would fail to serve a universal British audience in the way it does now, its boss warned on Tuesday, after the government questioned whether its public funding model should continue in future.

Formed in 1922 to educate, inform and entertain, the BBC creates global, national and local radio, online content and television for mass audiences while also catering to those users who fail to have their interests served by commercial outlets.

It is funded by a licence fee paid by all television-owning households that is supposed to guarantee its editorial independence. In reality that forces the corporation to agree a funding round with ministers, often leading to tension.

On Monday Culture Minister Nadine Dorries, who has previously accused the BBC of metropolitan group-think, said the licence fee cost would be frozen for the next two years, and would rise in line with inflation for four years after that.

She added that a debate was needed on future funding models, questioning whether people should pay 159 pounds ($217) a year for the BBC when they can pay less for Netflix or Amazon Prime.

BBC Director General Tim Davie told BBC Radio that society would lose something precious if it pursued a commercial model.

"It serves the British public and all the British public," he said. "The principle of universality is absolutely the debate here. People say 'can this be a commercial operation?' Of course it can be a commercial operation, but it will not do what it does today."

The settlement, he said, would leave the BBC with a 285 million pound shortfall, requiring some services to be cut. He added that while BBC output needed to properly reflect all the communities it served, it was difficult to maintain an impartial reputation in an increasingly polarised world.