The BBC faces a smaller, cheaper future And so the crisis of British institutions goes on. As he laid a wreath in honour of the war dead on Remembrance Sunday, David Cameron might have reflected that the military is one of the few pillars of his country's public life that continue to command respect. The crash made fools of the City. Scandal disgraced parliament, the press and the police. The competence of the Bank of England and the relevance of the Church of England are increasingly impugned. Even the Football Association, custodian of the national game, has become a byword for farce. Now the national broadcaster is tainted, having compounded its failure to report allegations of sexual abuse against a deceased celebrity by helping to smear an innocent political figure with similar accusations. As my colleague Philip Stephens has argued, the BBC's immediate task is to rediscover the rudiments of journalism. It has enough talented and conscientious people to do that. The corporation mourns George Entwistle, the well-liked and shortlived director- general who never seemed to have the measure of his job, but it can be proud that he was ultimately undone by a forensic radio grilling by one of its own stars, John Humphrys. However, the appointment of a new boss is not only a chance to fix the particular failings exposed recently. It is also a strategic opportunity to confront larger questions about the BBC's future. Its charter was last renewed in 2007, as the economy entered its 15th consecutive year of growth. In 2016, when the next renewal is due, the UK will probably be enduring its sixth year of austerity. The price of the licence fee that funds the BBC will be set around the same time. Economic circumstances alone will put pressure on the broadcaster to prune its empire of operations - which span the high culture of Radio 3 and the junk television of BBC 3 - in order to trim its cost. Then there is the pitiless stampede of technology. By 2016 it is possible that the average Briton will have more viewing options available on their mobile phone than they had on their television in 2007. In a world of bespoke entertainment, where audiences enjoy kaleidoscopic choice over not only what they watch but when and in which format, the idea of paying a flat-rate annual fee to a particular broadcaster will seem odder and odder. Negotiations over the charter will also revisit the question of how the BBC is held to account. The present crisis has exposed the internal contradictions of the BBC Trust, which seemingly acts as line manager and chief advocate at the same time. Submission to regulation by Ofcom, the industry watchdog, is becoming hard to avoid. A new director-general empowered to think radically could draw up various strategies for the corporation's future. Perhaps the most plausible is to commit the BBC to news and current-affairs programming, and little else. Its drama and comedy output has been left for dust by US competition over the past decade, and the most coveted live sport - football's Premier League and European Champions League - is already broadcast by others. A smaller BBC would not only be cheaper but easier to manage, making the elementary errors of recent weeks less likely in future. It would also be able to focus on becoming the ultimate news channel, a position challenged domestically by Sky and globally by various state-funded broadcasters. The money saved might go to a central fund for public sector broadcasting that any media outfit could compete for. Sadly, there is little sign that the opportunity that has just emerged will be grasped. The decision to appoint Mr Entwistle, a cautious insider, earlier this year speaks to the trust's lack of imagination. In his somewhat de haut en bas remarks of recent days, its chairman, Lord Patten, has not seemed like a man with his eye on the future. The BBC too often vindicates public choice theorists by conflating its own interests with the general good. It defends every aspect of its output as strictly necessary and tenaciously guards a licence fee designed for another age. But if the BBC does not contemplate its future shape and direction, politicians will. Despite the post-Iraq feud that did for Greg Dyke, Mr Entwistle's predecessor-but-one, the BBC enjoyed sympathetic treatment from a New Labour government with which it shared sensibilities and sometimes traded personnel. The Conservatives are less admiring and likely to grow hostile over time. The party has traditionally combined resentment at the broadcaster's perceived bias to the left (insiders say Mr Cameron hired Craig Oliver, a former BBC man, partly to influence its coverage of the party) with reverence for it as a British institution. The emerging generation of Tory MPs tends to hold only the first view, along with bafflement at the BBC's anachronistic funding. Even if Labour is again in power by the time of the next charter renewal and licence-fee settlement, economic and technological pressures will make it hard to leave the BBC untouched. An organisation founded 90 years ago to embody a new technology would be foolish to stand athwart history now.