It is funded to the tune of £2.6bn a year by the licence fee, described last week as a “poll tax” by Gerald Kaufman, chairman of the Culture, Media and Sport Select Committee.But Flynn dismisses the idea that the BBC takes the licence fee for granted. “The BBC was charged by the Government to drive more commercial revenues by exploiting more of its assets,” he argues. “If the public have paid for [the BBC's] assets and they remain in a cupboard commercially unexploited, that is doing a disservice to the people who bought them in the first place.”BBC Ventures now has contracts with the mobile operator 3, which uses its video technology; with the Office of National Statistics, whose website it runs; and with the American sports broadcaster ESPN, for which it provides software. Profits have also been boosted by the BBC’s new digital TV service Freeview, which uses its technology to compress video on to the airwaves, and by the launch of new channels such as UK History and BBC Three.The other side of Flynn’s job is to cut costs.

The BBC has closed its old special effects division, which staged explosions and snowstorms, and has also shut down relics from the dot-com era. The cost-cutting drive comes as the corporation faces one of the toughest tests in its history, a charter renewal process imposed by the Government. By 2006 the BBC must justify not only the licence fee but also its own existence. Flynn is a key player in the process and is advising the BBC team charged with justifying the corporation’s method of funding.He resists proposals for the BBC to operate more like its commercial rivals, by selling subscriptions to the public or opening its doors to advertising. “If you tried to sell the BBC on subscription, you would decimate all the other players in the market,” he says. “The market in the UK is about £4bn, and you would probably end up halving everyone else’s revenues.

It’s the same for advertising – you are not going to get advertisers stumping up another £2.5bn just because the BBC turned up, so ITV, Channel 4 and Five would have a big dent in revenues.”He also argues against privatising the BBC “You lose something if you do that,” he warns. “One of the BBC’s great strengths is that it has public service cut into it. You want to be very careful you don’t throw away the connection with the audience, doing things for their benefit rather than the bottom line.”But the BBC must remain strong to compete with powerful players in the media market, such as AOL Time Warner, BSkyB (part of Rupert Murdoch’s News Corp), Sony and Microsoft. The importance of this was underlined by last week’s passing of the Communications Bill, which will allow US companies to take over ITV and large newspaper groups to take over Channel Five.”To compete against those [big players], you have to have some scale,” says Flynn. “My fear is that you could end up constraining and curtailing the one organisation in the UK that can compete on a global basis.”Although the BBC is often perceived as a sprawling bureaucracy, Flynn says it is run as a plc “It’s got budgets and controls and audit committees. In terms of focus on cost control and head count, it’s the same as anywhere else.” But after arriving at the corporation in June 2001 he admits he had to adjust to his new role “It was quite difficult at first …