I don't think the News Channel should be scrapped or go commercial. I think there is certainly ways to make it more efficient though, such as reducing the number of staff on-screen and obviously there will be waste in the NC that can be found and removed. The BBC is, and should, cut back on spending and should become a more efficient organisation than it currently is. Axing a reasonably popular news channel isn't necessary, I'm sure there are other ways to find savings within the news department and the corporation as a whole.
Yes, of course there are savings to be had that won't affect on-air. However it seems that the BBC has done it's sums and can take on the extra costs - after all it was their idea. There are savings to be made with integrating the World Service and by 2015 they'll be long shot of TV Centre, Bush House and all the expenditure on Salford will be history.
It may seem strange to those who don't work in the industry but £20 million a year in the context of television is nothing. There's no question of the BBC closing it's news channel and as I mentioned before there would be serious implications if it did close and leave Sky as the only game in town