One of the oddities of BBC News is that it spends so much time talking about itself — like a snake ingesting its own tail. This time the self-ingestion is justified. On November 9, the British Broadcasting Company’s director-general, Tim Davie, and head of news, Deborah Turness, resigned in a scandal that goes to the heart of its claim to public money: objectivity.

The most serious charge is that it spliced together two distinct parts of a speech by Donald Trump in 2021 to give the impression that he had told supporters to go to the Capitol and “fight like hell”. But there are others: that BBC Arabic consistently took the Palestinian side in the Gaza war; that the BBC was too accommodating of trans activists, talking about “pregnant people” rather than women; and, more generally, that BBC News is overwhelmingly slanted towards the opinions of London’s metropolitan elite.

The reaction to this scandal could determine the future of the century-old public broadcaster, which has to renew its royal charter by the end of 2027. There are undoubtedly people on the Right — many of them employed by rival media organisations — who would love to drive the BBC out of existence. And there is an opposing faction in the BBC determined to dismiss the present brouhaha as a “conspiracy” and “coup”. Both groups are wrong. The scandal is worrying precisely because the institution is so essential to the preservation of liberal democracy. It must be treated as an opportunity for renewal rather than destruction or retrenchment.

The case for a publicly funded but independent national broadcaster rests on the fact that a liberal democracy cannot survive without well-informed citizens. The BBC’s funding model gives it the resources to operate as a gold standard for news gathering, while institutional independence ensures that it avoids party political pressures. The Right has long argued that this is sophistry: the market provides no shortage of news and the claim to independence is a nonsense. A publicly funded broadcaster will always lean towards the big state and the narrowly educated elite that runs it. But here the Right is wrong and the BBC establishment right.

The problem with the free-market argument is that technological innovation and market pressure are pushing the news media in the wrong direction: towards partisanship rather than balance, shallowness not depth and, more worrying still, lies rather than truth. We need public funding more than ever.

Just look over the Atlantic. Cable News programmes such as Fox News and MSNBC thrive on partisan divisions — the late Dick Cheney insisted that hotel TV channels were tuned to Fox News lest he be irritated by a rival point of view. Mainstream news shows provide the news equivalent of easy listening or sensationalism. Internet sites, which provide a growing share of the public with their news, particularly the young, are injecting poison into the heart of the body politic. Researchers at MIT tracked 126,000 stories, some true and some false, tweeted by three million people more than 4.5 million times from 2006 to 2017. They discovered false claims were 70 per cent more likely than true ones to be shared on Twitter — known now as X — and true stories took six times as long to reach 1,500 people as false ones.

The biggest threat to democracy — bigger than Vladimir Putin’s machinations or the rise of the radical Right — is the threat that our common information universe will disappear: that we will cease to have a shared framework of tested facts and instead be lost in a babble of pseudo-facts and strong opinions. Once people have not only their own opinions but also their own “facts”, the possibility of liberal democracy disappears. Britain is lucky to have a global news outfit that, more often than not, provides a common framework of information based on professional news gathering and careful judgment. That’s why it is vital that the accusation at the heart of the existing uproar is tackled.

The BBC’s conservative critics are right that, for all its excellent reporting, the organisation suffers from an institutional bias: towards the sort of people who study the humanities at university and roll their eyes at worries about immigration. This is reinforced by a habit of listening to single-issue pressure groups that are skilled at manipulating the Westminster system, not least over gender politics. This world view is even more marked in cultural coverage than news. Long-running rural radio drama The Archers sounds these days as if it was dreamt up in an academic cultural studies department.

The country’s biggest divide is between people who went to university and those who didn’t. Yet the BBC routinely sides with the first.

BBC News also suffers from a less-remarked-upon problem: a bias towards sensationalism and triviality. One of the BBC’s glories, as a publicly funded organisation, should be the freedom to be serious. But too many managers are obsessed with beating commercial rivals at their own game. Panorama’s reporters spliced together different bits of tape to produce a dramatic headline not just because they didn’t like Trump but because they wanted a spectacular headline. The tragedy here is that in a world of quick takes, there is a large market for what the BBC is peculiarly equipped to provide: slow and considered news. Serious isn’t boring.

The most memorable line in Giuseppe Tomasi di Lampedusa’s novel The Leopard is that “we must change in order to remain the same”. The BBC’s charter demands that it should “provide impartial news and information to help people understand and engage with the world around them”. To deliver that it needs to change. It needs to shake itself out of its metropolitan torpor by recruiting from a wider range of backgrounds and opinions. It needs more use of local correspondents, particularly in the North and Midlands. It needs to bin its dog-eared Rolodex of talking heads and find some more interesting people. And it needs to stop talking down to its audience.

Davie’s resignation means the BBC is now looking for a new director-general: not only one of the hardest jobs in a divided country but also, for that very reason, one of the most important.

• Adrian Wooldridge is the global business columnist for Bloomberg Opinion. A former writer at The Economist, he is author of The Aristocracy of Talent: How Meritocracy Made the Modern World