The Government said the BBC “needs to adapt” or risks “losing the trust of the audience it relies on”.
Ofcom could be allowed to take action over BBC News articles under new Government proposals.
The communications watchdog is currently able to give opinions on articles. But the new plans would see it given action powers on online services such as BBC News stories and YouTube channel.
The Government says the reccomendation is to focus on “impartiality” and the BBC‘s complaints system. It is thought the changes will be implemented in a “timely manner” after conversations with the Beeb and Ofcom.
The Government-approved regulator, which has authority over TV, radio and video-on-demand services through a broadcasting code, has also been given a new legally binding responsibility to review more of the BBC’s complaints decisions.
The new reforms are outlined in the first Mid-Term Review, published by the Government on Monday, introduced by the 11-year BBC Royal Charter, which forms the constitutional basis of the corporation and makes clear its public purpose. Alongside the Ofcom reforms is a legal responsibility for the BBC Board to actively oversee its own complaints process.
The review also recommends that the BBC considers how diversity and opinion could be better represented as the Government says some audience groups, including disabled viewers and people from lower socioeconomic backgrounds, feel underrepresented by the corporation.
Culture Secretary Lucy Frazer said the corporation “needs to adapt” to the reforms or risk “losing the trust of the audience it relies on”.
The BBC’s complaint’s process, called BBC First, was introduced at the last Charter Review in 2017, and the Mid-Term Review has concluded that it does allow licence fee payers to hold the BBC directly accountable, but said impartiality continues to be an ongoing issue for audiences.
Non-executive board directors and external advisors on the BBC’s Editorial Guidelines and Standards Committee will also be given greater powers to scrutinise and challenge BBC senior management’s complaint handling.
Furthermore, the job role which has responsibility for complaints handling will now report directly to the director-general rather than the director responsible for editorial policy, to separate pre-broadcast editorial policy and post-broadcast complaints resolution.
The review has also recommended the BBC develops a public strategy that outlines its intended partnerships with others and said the impact of commercial changes, including the introduction of a BBC Commercial Board in 2022, needs to be closely monitored.
Ms Frazer said: “The Government wants to see a strong, independent BBC that can thrive in the years to come as a major contributor to the nation’s successful creative industries. In a rapidly changing media landscape the BBC needs to adapt or risk losing the trust of the audiences it relies on.
“Following constructive conservations with the BBC and Ofcom, we have recommended reforms that I believe will improve accountability while boosting public confidence in the BBC’s ability to be impartial and respond to concerns raised by licence fee payers.
“These changes will better set up the BBC to ask difficult questions of itself, and make sure Ofcom can continue to hold the broadcaster to account. We all rely on the BBC being the best it can be and this review will help ensure that is what the British public gets.”
A BBC spokesperson said: “The Mid-Term Review was designed to look at the BBC’s governance and regulation. We’re pleased the Government’s findings reflect that overall these are working well.
“With regard to the BBC’s impartiality, no other organisation takes its commitment to impartiality more seriously. We have well-established and detailed plans to sustain and further improve standards. We know this matters to audiences and the BBC continues to be the number one source for trusted news, with the highest scores for impartiality and accuracy.
“During discussions over the Mid-Term Review, we proposed and implemented a number of reforms, including strengthening our complaints procedures, which now form part of the conclusions. We are pleased the Government has fully taken our proposals onboard. We remain committed to continuous improvement to ensure we deliver for all licence fee payers.
“The BBC is operationally and editorially independent and we will continue to engage constructively with Government, and our regulator Ofcom, over the second half of this Charter and as we look ahead to a new Charter in 2028.”
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