Last week I attended a discussion about the future of the Beeb, with a particular focus on the poor level of diversity both on screen and behind the scenes. We challenged the universality of the organisation – the notion of "a BBC for all" – and learned why there should be no taxation without representation for licence fee payers.

The aim was to make a few recommendations to the House of Lords as part of a public consultation on the Royal Charter review, which closes on 8 October. The Royal Charter is the constitutional basis for the corporation. It sets out the public purposes of the BBC, guarantees its independence, and outlines the duties of the Trust and the Executive Board. The current Charter runs until 31 December 2016. What comes next could be dramatically different and set in stone for another ten years. So we need to get it right.

The mission of the BBC has always been “to enrich people’s lives … inform, educate and entertain.” However, given the rapid changes in technology, shifting market forces and media consumption habits, a review is long overdue. That review will explore the evolving purpose, scale and scope of the institution as well as how it’s funded and governed.

I have always felt immense pride in and privilege in being a BBC viewer and listener. The productions are reassuringly world-class, great entertainment and often deeply insightful – from old favourites such as Question Time, Match of the Day, Desert Island Discs and Gilles Peterson’s Worldwide show, to numerous BBC4 arts and culture documentaries and occasional one-offs such as Adam Curtis’ Bitter Lake. I could even live stream the Olympics and Glastonbury on the magnificent iPlayer from the comfort of my lounge. And let’s not forget the countless laughs, both old (The Graham Norton Show) and new (People Just Do Nothing). There's even a show about how bureaucratic and buffoon-laden the BBC is. You will have your own favourites. Strictly Come Dancing, Sherlock, Poldark, The Great British Bake Off, Wolf Hall… The list goes on.

All this, and much more, for £2.80 a week? That is a bargain. Satisfaction levels among the 97% of UK adults using BBC services each week are quite high, although they do vary depending on the region and age group.

But there are challenges, growing pains, a need to adapt… The main issue is budget, with the government forcing the BBC to cover the cost of TV licences for over-75s (that’s around £750 million each year). High-quality, on-demand programming is expensive and not everyone is willing to pay for it, particularly those who say they do watch the BBC. So do you impose a household media levy as in Germany, introduce a tiered subscription model geared to how much we consume, or perhaps a combination? How can you fund a public broadcaster and encourage development over time without diminishing value to the customer or imposing a stealth tax? For one thing, iPlayer on-demand viewers should not be getting a free ride. Regardless of whether the programme is streamed live or watched on catch up, everyone should contribute.

Another issue is the number of people who say they don't feel represented by the Beeb and that is where the figures on BAME (Black, Asian and minority ethnic) talent have been particularly damaging to the public broadcaster. Channel 4 has announced that 20% of its London staff will be BAME by 2020; at Sky it's 20% of all UK on-screen and writing talent before 2016. And at the BBC? A disappointing 15% (on screen) by 2017. This latter target was announced by Director-General Lord Hall in June 2014 as part of a diversity strategy. Other measures include a £2.1 million fund for BAME talent on and off screen to develop new programmes, more training internships, recruiting six Commissioners of the Future and setting up an Independent Diversity Action Group featuring Lenny Henry and Floella Benjamin, among others. But this doesn’t go far enough for the likes of Simon Albury, chair at the Campaign for Broadcasting Equality, who has called for £100m of ring-fenced funding. "Money changes things," he says.

Lord Hall maintains that the BBC is making progress but a quick peek at casts and credits suggests otherwise. Henry, a tireless campaigner on this subject, noted that between 2006 and 2012, the number of black and Asian people working in the industry had gone down by 30.9%. The issue is one of both recruitment and retention: Broadcast Now reported that between 2009 and 2014, BAME resignations at the BBC increased from 8.6% to 16.1%. Henry first appeared on British TV in 1975. Today, his fleetingly autobiographical drama Danny & the Human Zoo is one of the few BAME stories on the BBC. Progress?

It’s important for the flagship BBC One to be setting the right example, which is why Oscar winner Steve McQueen’s forthcoming six-part drama about a West Indian family in London is so exciting. Meanwhile Motown-powered musical drama Stop!, written by Tony Jordan (Eastenders, By Any Means, The Ark), will “reflect the diversity of modern Britain” apparently. What about emerging talent though and even more provocative storytelling?  

Clearly, jobs at the BBC should be going to the most promising, suitably experienced and talented candidates regardless of race, gender or sexual orientation. (And that goes for studio guests too, lest we have more car crash TV like this Straight Outta Compton discussion on Newsnight. No wonder viewers have “given up” on the BBC, according to producer Jasmine Botiwala.) But until commissioners, casting agents and other key decision makers can be trusted to better reflect the true breadth of British voices on TV, there will have to be targets across departments. And, presumably, penalties imposed by OFCOM or the DCMS. 

The current Royal Charter is quite vague on the subject of diversity. Wade through the weighty tome and you’ll see phrases such as “representing the UK, its nations, regions and communities”, “bringing the UK to the world and the world to the UK” and having Audience Councils “to bring the diverse perspectives of licence fee payers to bear on the work of the Trust”. The broadcasting agreement between the BBC and the secretary of state elaborates further: “The Trust must, amongst other things, seek to ensure that the BBC—

1.   (a)  reflects and strengthens cultural identities through original content at local, regional and national level, on occasion bringing audiences together for shared experiences; and

2.   (b)  promotes awareness of different cultures and alternative viewpoints, through content that reflects the lives of different people and different communities within the UK.”

The Audience Councils appear too region-focused and do not sufficiently reflect the cultural nuances within those regions. Culture Secretary John Whittendale acknowledged this fact when delivering his charter review statement in the House of Commons in July: “Variations exist, and there are particular challenges in reaching people from certain ethnic minority backgrounds and in meeting the needs of younger people, who increasingly access content online. Variations exist among the different nations and regions too.”

But back to the question of funding, and one way to bolster the BBC is to “by pushing ourselves more commercially abroad,” in the words of writer and producer Armando Iannucci. During his James MacTaggart Memorial Lecture at the Edinburgh TV Festival he went on to say: "Be more aggressive in selling our shows, through advertising, through proper international subscription channels, freeing up BBC Worldwide to be fully commercial, whatever it takes.”

Lord Hall has acknowledged the need to raise commercial income to supplement the licence fee “so we can invest as much as possible in content for UK audiences.” One example is the forthcoming over-the-top streaming service in the US. He went much further when outlining his vision for the BBC at the Science Museum in September. Presenting his “open platform for creativity”, Hall announced a partnership with local and regional news organisations (funded by cuts to other departments), and advocated an Ideas Service (presumably an echo of the World Service) where the BBC hosts content from leading cultural institutions such as the British Museum and the Royal Shakespeare Company. He also implied that WoCC (Window of Creative Competition) quotas would be relaxed, allowing more independent producers to bid for BBC commissions beyond the current minimum of 25%. In theory that would mean greater flexibility and diversity in TV production. In theory.

His vision garnered mixed reactions. The government has cautioned against placing too great a burden on BBC Worldwide to generate extra revenue for fear of prioritising global commercial appeal before investment in public service content for UK audiences. The Mirror emphasised the huge competition for today’s viewers (between 1994 and 2015 the number of available channels has risen from 61 to 536) and the importance of the BBC to the UK economy. “The money the BBC spends on actors, cameramen, sets, equipment, technical experts and many other areas means more private sector jobs are created and more small businesses are sustained," we're told. "A recent report showed that the BBC was responsible for spending £2.2bn in the UK’s creative industries – with around £450m going straight to small businesses. This helps Britain build a TV industry to rival any in the world. It helps the UK develop some of the world’s best actors, cameramen, and directors.”

In the Guardian, Ashley Highfield, the vice chairman of the News Media Association and chief executive of regional publisher Johnston Press, said: “It is hard to avoid the conclusion that the BBC’s proposal … [is] anything other than BBC expansion into local news provision and recruitment of more BBC local journalists through the back door.”

Innovation charity Nesta gave a more pragmatic and favourable reading, echoing Hall’s tone of evolution not revolution. “The central argument is that the BBC needs to add to its historic mission of educating, informing and entertaining, an additional goal of empowering – using its resources to energise a surrounding ecology of other creators and providers."

Few can doubt Lord Hall’s dedication to the BBC and its founding principles. He genuinely wants to make the corporation more efficient and to serve audiences better through more bespoke and portable content. We should all put a hand in our pocket if we want to reap the benefits. The real challenge will be to make BBC programming more reflective of modern multicultural Britain – complex, nuanced, surprising – one that’s concerned with a whole lot more than cakes and costumes and celebrities in and around the capital. It's about building trust. Otherwise viewers, particularly the 16-24s, will simply switch off and turn to alternatives such as YouTube, Vice and Netflix. Comedy and drama are two areas that require attention.

The loss of BBC Three as a linear broadcast is regretful but the right decision given its core audience's viewing habits and the £50m saving. Perhaps in a new online-only guise, the channel that gave us Little Britain, The Mighty Boosh and a host of other cult hits, will find its way into the lives of tech-obsessed 16-24s, quickly building a following and helping to nudge new talent into prime-time mainstream. YouTube can help to identify shows and concepts that will capture the public's imagination, as Sky have found with Baby Isako's Venus v Mars. There is such much talent out there. Why isn't the BBC investing in confident young voices like director Cecile Emeke? 

BBC Taster is a good attempt to allow the public to influence programming but they could be involved even earlier in the creative process. BBC Raw allows young talent to use media to confront issues that matter to them but the project could benefit from better promotion. A golden opportunity awaits to make the BBC a true reflection of the best of British. The time is now.

Have you say here or email BBCCharterReviewConsultation@culture.gov.uk before 8 October.