Mark Thompson, head of Britain's state broadcaster the BBC, has set out his plans to save £320 million and preserve the way in which the Corporation is funded - by a £121 charge on every household with a colour television.

The reforms do not go far enough. Most of the proposed ("2,500") staff reductions are not real, and amount to merely moving staff out of London and up to Manchester, or outsourcing their jobs to cheaper private-sector providers.

The licence fee raises over £2,000 million for the BBC, which is around two-and-a-half times the budget of its most prominent competitor, the independent television network ITV. And why should families be forced to pay £121 a year when the BBC accounts for only a third of the nation's TV viewing? In order to preserve "public service broadcasting"? As our recent report shows, that means little more than allowing politicians to preen themselves on our TV screens. But if you do want quality current-affairs, documentaries and news, you can get them on Sky, CNN, Discovery and lots of other places. Spending £2,000 million to run an entire set of TV and radio channels and make tripe as well as the quality stuff is a hugely expensive way of delivering what other people do already.

There is a widespread feeling in both media an political circles that time is up for this 1930s dinosaur. Mr Thompson's reforms are not seen as being radical enough in an age where people have ample choice between hundreds of different radio and TV channels. The licence fee cannot last.