Most likely approach could include lower licence fee from 2028, with remaining BBC funding coming via other means.
The Government is launching a review into how the BBC is funded after its current Royal Charter expires.
Ministers are expected to sign off a review in the coming weeks, which will report back by Autumn 2024. This could coincide with a pre-election period: the next general election must be held by early 2025, meaning the report’s outcome could become highly politicised.
Various options are under consideration, including a household levy, a tax on broadband internet connections, introducing a subscription or allowing the BBC to show adverts.
But according to The Times, quoting Government sources, a hybrid solution, with the licence fee retained to part-fund the BBC is the “likely approach”. For example, a hybrid subscription-licence fee model would mean certain BBC services would require additional payment to access, while the licence fee funded part would continue to be available to all.
At a House of Lords Communications Committee hearing on Tuesday afternoon, BBC Director-General Tim Davie highlighted the difficult choices the BBC had to make due to cuts, but remained open-minded at the different options for funding available, providing whichever option chosen enabled the BBC to continue to achieve its purposes.
Last week, former BBC Chairman Richard Sharp suggested changes that would lead to wealthier households paying more. It’s unlikely the current Government would consider this, for ideological reasons.
Increase in licence fee
Meanwhile, the licence fee is due to increase once again from April 2024, after being frozen by former Culture Secretary Nadine Dorries for two years. The rate of increase is currently linked to an annualised inflation figure. However, this is expected to be changed to be linked to a particular monthly figure. This would be similar to how most broadband providers link their price rise to the inflation figure published in January.
As inflation is expected to fall later this year, this switch would result in a lower increase in the licence fee.
Marc Thornham