bbc-logo-21217808EXCLUSIVE Report & Analysis From Deadline|London editor Tim Adler: The BBC tells me that development funding is now flowing again. It had been frozen for 6 months. Indie producers supplying drama shows to the Beeb had to borrow money from outside financiers to keep script development going. Some indies faced going out of business before the BBC turned the funding tap back on. One producer I spoke to couldn’t understand why the BBC froze development funding in the first place. “I mean, it’s not as if the government stopped paying its £3.4 billion [$5.2 billion] annual licence fee, is it?” he says.

Now that the Beeb has opened its purse again, what exactly is BBC Drama developing? It used to be we could rely on the BBC to make period dramas. A glance now through the BBC America schedule shows vampires, dinosaurs and space monsters. Auntie, as the BBC is affectionately known, is facing unprecedented squeeze on her finances. Until now, it’s expanded with each year, mapping everything the private sector does. No more. It’s just announced plans to close two radio stations and halve its internet output. The budget for Hollywood acquisitions could be cut by one third. Critics complain it’s the least the BBC could do given the chorus of criticism.

The licence fee comes up for renewal in 2012. It’s expected that a Tory government will freeze it. The Beeb must show the next government that it’s living up to its public service remit. Tony Garnett, the influential TV producer of the seminal docudrama Cathy Come Home, believes that 33-year-old BBC Drama boss Ben Stephenson’s push towards one-off single drama and mini-series is politically motivated. Garnett tells Deadline|London, “The pressure is on. It is election year and the Beeb will always do what it thinks will help its survival chances.”

BBC Drama boss Ben Stephenson’s £200 million department has come under fire even as producers I’ve interviewed sympathize how he’s got an almost impossible job. He must satisfy a diverse viewership across four TV channels. (BBC1 and BBC2 are the main TV channels. BBC3 caters to a youth audience, while BBC4 is the arts channel.) The official shorthand for the upcoming drama slate is “engage and enrage.”

But it didn’t help that Stephenson enraged BBC golden boy Stephen Poliakoff. Stephenson told Poliakoff that he had to pitch alongside everybody else. The esteemed playwright has never had to submit projects for approval before, with Auntie always greenlighting anything he wanted. (This did not make Poliakoff popular with fellow screenwriters. Deborah Moggach (Pride and Prejudice) calls Poliakoff overrated and “resents him for having an over-reverential coterie of people at the BBC who think he’s got something significant to say.”) When Stephenson began reining in Poliakoff, the stand-up row between them was so intense that security was called.

Veteran screenwriter Lynda La Plante (Prime Suspect) complains that, under Stephenson’s management, she, too, now has to go through a “retinue of people” before “you get to the god”.

But the other problem is money. Indie drama suppliers know they can spend up to £900,000 million an hour on its main channels and up to £500,000 an hour on the smaller BBC3 and BBC4 digital channels. But the percentage of each show that the BBC covers is getting smaller. When the BBC first started funding Spooks (MI5), for example, the budget gap was around 3-5%. This has widened to around 20%. The BBC tells producers they can sell off international rights themselves, or they can profit from DVD revenue. But DVD sales are down dramatically. Illegal downloading is eating into revenue. Many producers fear they’ll be unable to paper over this funding gap if the BBC doesn’t increase investment.

Producer Stephen Garrett, who makes Spooks (MI5), has warned that his kind of big-budget drama will be impossible unless Auntie loosens her purse strings. Stephenson responds to me, “We recognize these are trying times and are regularly talking to producers like Stephen [Garrett] about funding issues and how the BBC can use its resources to be at the forefront of the future of drama.”

Of course, U.S. viewers want cozy period dramas from the Beeb, not the sci-fi fantasy that BBC America is currently showing. The problem is that America is the only market for costume drama, even if it does win the BBC Emmys (Little Dorrit). Period only accounts for 15 out of 450 hours of drama. PBS has just announced a remake of Upstairs Downstairs in partnership with BBC Worldwide, the BBC’s commercial arm. Arts channel BBC4 is remaking DH Lawrence’s Edwardian saga Women In Love. But UK TV execs still say that the BBC needs to program “more contemporary and less heritage stuff”.

Stephenson has announced 3 offbeat TV movies set in the 1980s: one about troubled pop singer Boy George; another about the impact of Charles and Diana’s wedding on a Welsh mining village; and the 3rd an adaptation of Martin Amis’ novel Money starring Nick Frost (Hot Fuzz). The BBC also announced a BBC2 series White Heat following the lives of London-based arts students from 1965 to the present.

The BBC also is making 3 big-budget TV movies starring Rufus Sewell as Italian detective Aurelio Zen. The shows are being made by Left Bank Pictures, which also makes the Wallender TV movies starring Kenneth Branagh. The idea is that the two detectives will play tag in the schedules – one in the summer and one in the winter.

UPDATED: Stephenson also has suggested that several long-running shows could have their life-support turned off. Spooks (MI5), whose 9th season airs this autumn, and another Kudos-produced show, conman drama Hustle, have been talked about as likely to go. Ashes To Ashes, a sequel to Kudos’ hit series Life On Mars, has already gone. The BBC has poured cold water on this, saying both series will continue. Stephenson has admitted that wielding the ax is “a bloody terrifying decision.” Hospital soaps Casualty and Holby City are safe, though. Stephenson tells me less than 30% of his budget is spent on continuing dramas such as soap operas, which are enjoyed by over 21 million viewers each week.