Dramatic licence: how the BBC adapts to keep its crown

Like every other public organisation, the mighty BBC is feeling the pinch. Tightening budgets, well-publicised efficiency drives, and substantial restructuring have transformed the organisation behind the scenes. Front of house, there has been a sharp year-on-year decline in the number of hours of drama going out across all of the BBC's networks, a trend already in place before the bubble of Olympic coverage affected the statistics.

None of this dims Kate Harwood's enthusiasm, however, as she talks about the BBC's enduring strength as a badge of quality, the sophistication of the local audience, and just how much she loved Jane Campion's Top of the Lake.

Harwood, who will address the Screen Producers Association conference in Melbourne this week, is the BBC's head of drama in England, which means she oversees in-house production on shows as diverse as EastEnders, Luther, the single drama Burton and Taylor, and the zombie story In the Flesh.

Under the terms of its charter, at least half of the BBC's drama hours (almost 1300 last year across four channels) must be made in house, a quota-based model that's under frequent attack from the burgeoning number of independent companies claiming to be able to do the same things more cheaply and without the supposed drag of "the public service mentality", as one producer put it.

What does that mean, exactly? Harwood - who is brisk, upbeat and nobody's idea of a bureaucratic pen-pusher - started as a script editor at the BBC 23 years ago. She says there is an abiding awareness within the organisation that as a public service broadcaster, it answers to the people who pay the television licence fee - £145 ($250) per household - that provides its funding.

"I think it is very ingrained in us," she says. "You do, at the BBC, think about what you owe that audience."

This means that along with the literary adaptations that are synonymous with the BBC, they make soap operas, but it also means they aim to make the best possible soap operas. If this is the "public service mentality", she is certainly for it.

Harwood spent two years as executive producer of EastEnders, the BBC's flagship soap. She was appointed just after winning an award as producer of a mini-series about Charles II.

"This is going to sound rather pompous, but putting someone in who just won a Bafta for best series showed the BBC knew that show needed respect," she says. "It had been through rather a rocky time. I loved it.

"I say this quite often, but drama is drama is drama. EastEnders is a quick charcoal sketch, if you like, and a Hollywood movie is a big oil painting, but in the end, what makes them work is the same thing. However long you spend finessing something, it won't work if you haven't got the right connection between two brilliantly written, well-played characters. That's the same with EastEnders."

Forty years ago, critic Milton Shulman described British television as "the least worst in the world". Harwood believes the BBC continues to set that tone.

"There is a real ambition and aspiration across all British channels, which is a legacy of public service," she says. Audiences are correspondingly willing to be challenged.

"I love that about British audiences. I mean, I've shown shows of ours in France - Criminal Justice was one I remember - and people have said to me, 'Oh, this must be on a small channel, is it?' and you say, 'No, this is BBC1 at 9pm'. And that stretches across all the channels."

British audiences are also strikingly loyal. "We don't load up with acquisitions because, wonderfully, British audiences want home-grown drama," says Harwood. "We're very lucky."

She doesn't see innovative US cable series such as Mad Men or Game of Thrones as a threat to the BBC's dramatic laurels because their ratings are low. "All the people I work with love Breaking Bad and Mad Men, you know, but Mad Men plays to very low figures here now."

The contract with audiences is one brake on international co-production, which is increasingly the way to patch together a budget for expensive shows; there have been a few successful BBC collaborations with HBO, but Top of the Lake, a co-production between BBC2, Sundance in the US, and Australia's UKTV, was still an exception to business as usual.

"Co-production has got to serve the show," says Harwood. "What I think British television has been pretty free from - and I need to be careful how I put this - is the need to put the deal before the piece," she says, referring to a situation where producers would find a Canadian subject, for example, to snaffle Canadian money.

That was not the case here. "Ben [Stephenson, the BBC controller of drama commissioning] commissioned Top of the Lake from Jane [Campion] because he loved it, no other reason."

For some time, she adds, they seriously considered making it in house, until they decided that was unrealistic, given that filming was in New Zealand.

"So it went via the indie commissioners, and that was absolutely fine, but as far as Ben is concerned, it's an absolutely bona fide BBC commission. I have to say, it's one of my favourite shows of the year; I absolutely loved it."

Conspicuous successes from outside the organisation, such as Top of the Lake, however, can fuel questions about the future of in-house production at the BBC. Along with pressure from hungry independent producers and habitual BBC-bashers, there have been hints from BBC executives that the quota system may be reconsidered when the charter comes up for renewal in 2016.

This is a boom time for television production, but also, as Harwood observes, a time of uncertainty.

"I think we're going into a period of massive growth in drama production in this country, which is, you know, scary," she says. "When competition increases so fast - as it will do because of all the American shows coming here to use our tax breaks and skill base - something will change. As always with a gold rush, you just don't know who the winners and losers will be."