The annual cost of a TV licence will remain at current levels until 2024, under proposals leaked this weekend. From 2027, the BBC will move to alternative funding.
It means the cost of a TV licence will not increase by the previously expected 5.1%. As a result, the fee will stay at the £159 level set last year by the Government. That works out as £8 per year less than, for example, the cost of a premium Netflix subscription.
The Sunday Times reports a formal announcement will be made soon. Culture Secretary Nadine Dorries is reported to have told the Prime Minister he should throw “red meat” – policies such as freezing the licence fee – to his backbenchers, who hold the key to his survival. The Government is expected to herald the move as evidence it is tackling the cost of living crisis. However, the fee freeze is only expected to save households £8 a year. Increases to national insurance, council tax, the energy price cap, broadband and mobile subscriptions will more than cancel out the saving.
Between 2024 and the end of the BBC’s charter in 2027, inflation-linked increases are expected to continue. From 2027, the Government will remove the licence fee, according to the Culture Secretary on Sunday, replacing it with an as yet unconfirmed alternative method of funding.
Part of a wider plan
It forms part of a wider Government mission to end British public service broadcasting in its current form. Channel 4 is also expected to be sold off, possibly joining Channel 5 under ownership of an American media company. ITV will also face scrutiny over its output ahead of its broadcast licence renewal in two years.
The BBC is now in its second decade of cuts. In 2010, a six year licence fee freeze was imposed. When that ended, increases in the licence fee were consumed by the cost of covering free TV licences for over 75s on Pension Credit. This occurred when the DWP ended financial support for the original free TV licence scheme.
It is unclear how the changes in funding will affect Welsh broadcaster S4C and BBC World Service radio, which have also benefited from licence fee funding over the last decade.
Alternatives for BBC funding
Subscription
At the present time, the preferred funding option of the Government.
Positives: voluntary to pay subscription. This move might make it possible to offer a truly global subscription streaming service. Able to follow an editorial agenda freely, without concerns over Government interference.
Negatives: Endangers the future of universal free-to-air television in the UK. Unclear how this would affect radio. There’s currently no method to block reception to non-subscribers on FM and DAB. Unclear if the BBC would still be forced to adhere to a remit – effectively a subscription service with Government imposed limits.
Critics say this will end free-to-air public service television. It will open the provision of free-to-air news to US media giants as well as billionaire and hedge-fund owned news services. GB News, for example is controlled by interests ultimately based in Dubai and the USA. News UK’s new talkTV service is part of Rupert Murdoch’s media empire. Sky News is owned by Comcast.
Advertising
Positives: Remains free-to-air, universal access guaranteed. Able to follow an editorial agenda freely, without concerns over Government interference.
Negatives: ITV and other commercial broadcasters would object due to the threat to commercial revenues. Power to massively distort the market.
Government Grant
Positives: Secure funding without the volatility of commercial income. Universal free-to-air access.
Negatives: Government control over funding, which may influence editorial lines taken by the broadcaster.
Household charge (or levy)
Positives: Secure funding, universal free-to-air access.
Negatives: Each household would be obligated to pay, regardless of whether anyone in the house consumes public service broadcaster. Unlikely to be feasible unless money raised by the charge is spread across multiple public service broadcasters. (Argument of “why should I pay, I don’t use the BBC” is watered down if some of the funding is spread out across broadcasters in return for public service output.) Could be attached to council tax or broadband subscriptions, which would be controversial.
Updated: 14:55.