Lucy Frazer says the has been biased 'on occasion' and audience trust in its impartiality is on a 'downward trajectory' - as ministers give Ofcom powers to regular its website.
The reforms, announced as part of the BBC mid-term review, would give media regulator more powers over BBC's online services, meaning it could gain enforcement action over BBC News website articles it does not believe meet relevant broadcast standards.
Currently, the communications regulator is only able to issue an opinion, but Government recommendations say Ofcom will be given increased oversight over the BBC's online public services, including its
channel.
Asked if she believed the BBC was sometimes guilty of bias, Ms Frazer told Times Radio: 'We have seen audiences are feeling like impartiality in the BBC is on a downward trajectory. We have heard that 39 per cent of complaints last year were about impartiality when the previous year only 19 [per cent] were.
Lucy Frazer today claimed audience trust in the BBC's impartiality was 'on a downward trajectory'
'So trust in the BBC in relation to impartiality is going down and that is why the BBC rightly recognises it needs to do something about this and it is taking on board the recommendations that we are putting forward and have discussed with the BBC.
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Separately, Ms Frazer said the corporation had been biased 'on occasion', citing its reporting of a hospital attack in .
Ms Frazer refused to say which other broadcasters she believed might be impartial, saying they were in 'totally different positions' from the publicly funded corporation.
She told that 'evidence' suggested there was a 'perception amongst audiences' that there was some bias at the BBC.
When it was put to her that perceptions are not necessarily reality, she said: 'There are only perceptions and perceptions are important.
'What's important about the BBC is that it's , so the perception of audiences of the public are important.
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And speaking to BBC Radio 4's Today programme, the minister declined to say whether she thinks it is right for someone on a six-figure salary to pay the same TV licence fee as someone on minimum wage, suggesting it was not a 'simple question'.
'I appreciate that you think that's a really simple question that I could answer today,' she said.
'But that's why I have quite an extensive review into all these questions and you can't just answer that question in isolation.
'I'm putting together an expert panel to look at how the media market is changing. That's a very, very complex issue which will require expert evidence on.
.. what revenues does the BBC need, what can it do commercially that it's not doing at the moment?'
She said she would be 'led by evidence' in her review and insisted it would be 'inappropriate' for her to express a view on the matter.
The Government said its recommendations are expected to be implemented in a timely manner, following talks with the BBC and Ofcom.
Ofcom, which , has also been given a new legally binding responsibility to review more of the BBC's complaints decisions.
Alongside the Ofcom reforms is a legal responsibility for the BBC board to actively oversee its own complaints process.
The review also recommends that the BBC considers how diversity and opinion could be better represented, as the Government says some audience groups, including disabled viewers and people from lower socioeconomic backgrounds, .
Ms Frazer said the corporation 'needs to adapt' to the reforms or risk 'losing the trust of the audience it relies on'.
The Government's intervention follows a string of impartiality controversies about the corporation's highest paid star Gary Lineker and his political tweets
The BBC's complaints process, called BBC First, was introduced at the last Charter Review in 2017, and the mid-term review concluded that it does allow licence fee payers to hold the BBC directly accountable, but said impartiality continues to be an ongoing issue for audiences.
Under BBC First, audience complaints are normally addressed by the corporation before they can be escalated to Ofcom.
To improve the complaints process, the BBC board, which previously had a responsibility to oversee only the establishment of a complaints handling process, will now oversee the process as a whole.
Non-executive board directors and external advisors on the BBC's Editorial Guidelines and Standards Committee will also be given greater powers to scrutinise and challenge BBC senior management's complaint handling.
Furthermore, the job role that has responsibility for complaints handling will now report directly to the director-general rather than the director responsible for editorial policy, to separate pre-broadcast editorial policy and post-broadcast complaints resolution.
The review has also recommended the BBC develop a public strategy that outlines its intended partnerships with others and said the impact of commercial changes, including the introduction of a BBC Commercial Board in 2022, needs to be closely monitored.
A BBC spokesperson said: 'The mid-term review was designed to look at the BBC's governance and regulation.
We're pleased the Government's findings reflect that overall these are working well.
'With regard to the BBC's impartiality, no other organisation takes its commitment to impartiality more seriously. We have well-established and detailed plans to sustain and further improve standards. We
'During discussions over the mid-term review, we proposed and implemented a number of reforms, including strengthening our complaints procedures, which now form part of the conclusions. We are pleased the Government has fully taken our proposals onboard. We remain committed to continuous improvement to ensure we deliver for all licence fee payers.
'The BBC is operationally and editorially independent and we will continue to engage constructively with Government, and our regulator Ofcom, over the second half of this Charter and as we look ahead to a new Charter in 2028.'
Today Ms Frazer also took aim at the BBC's use of 'criminal tools' to prosecute people who don't pay their TV licence.
Asked about a series of cases brought against people by TV licensing, she told Times Radio: 'I don't think it's appropriate for the BBC to .'
Ms Frazer has said she will look at the prosecutions in an upcoming review.
The Government said its recommendations are expected to be implemented in a timely manner, following talks with the BBC and Ofcom
Asked whether she thought there would still be a licence fee enforced by the Government in 10 years time, she said: 'It's something that we and that's why I've launched a review into the funding of the BBC.'
No10 said a discussion about decriminalising TV licence evasion could only come when the BBC's charter is next reviewed.
The Prime Minister's official spokesman said: 'That's something the Government could only look at as part of the charter review, rather than outside of the process, that's my understanding.
'We'd obviously be concerned if there were instances where prosecutions were taking place when it was not suitable or in the interests of justice.
'Those are questions for the BBC in the first instance.'
Downing Street said the PM agreed with Culture Secretary Lucy Frazer that the issue of licence fee prosecutions should form part of the next charter review.
'The Secretary of State said it was something they would look as part of the review,' the spokesman added.