Tim Davie, the BBC director-general, has said he is open to “reform” of the £174.50 annual charge, which could mean wealthier households paying more to subsidise cheaper or free licences for people on lower incomes.
With hundreds of thousands of people cancelling their licence fee every year and turning to streamers, questions have been raised about the mandatory charge and how to make it fit for purpose. Some have even called for it to be abolished entirely.
A White Paper, detailing the Government’s chosen solutions, will follow after detailed negotiations.
Setting out his pitch to the Government – at a recent appearance before MPs on the Public Accounts Committee – he said that in return for a “universal, fairly applied and robustly enforced” licence fee, the BBC will pledge to deliver entertainment for every household in Britain and market itself as a “trusted source of information” in a world of fake news.
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Options for change include replacing the licence fee with a levy added to household broadband bills or council tax, which would remove the link between watching the BBC and paying for it. The Government is committed to retaining a “fair” and “sustainable” method of funding the BBC at a time when a significant number of households are opting out.
“Our research is very clear that the licence fee holds up when you are delivering value to every family in terms of usage of the BBC,” Davie told MPs.
BBC boss Tim Davie says police drama ‘Blue Lights’ is one of his favourite shows (Photo: Two Cities Television/BBC)
England’s victory in Saturday’s Women’s World Cup Final, watched by 5.8 million viewers across BBC TV and streaming, a record audience for a women’s match, illustrated the importance of national sporting events.
Channel 4 poached broadcast rights to the Boat Race from the BBC, which first broadcast the event on radio in 1927. The BBC’s portfolio has dwindled over the years after losing live rights to events including the Grand National, Open Golf and Formula 1.
Licence fee is ‘least-worst option’
Davie said the licence fee has historically been the “least-worst option to fund” the BBC, but told MPs he understood the rules may have to change.
But the Government wants to ask the views of licence fee payers before committing to a new “sustainable” BBC funding mechanism. Sources said a nationwide consultation will be launched alongside the Green Paper.
It would be for the Government to decide which other groups should get subsidised licences, said Davie. The decision to end free licences for most over-75s was opposed by pensioner groups who say elderly people are being harassed with letters from TV Licensing threatening prosecution if they do not pay.
England players celebrating their Women’s Rugby World Cup win. The final won a record viewing audience on the BBC (Photo: RFU)What might the BBC cut?
But hit dramas like Line Of Duty, which is expected to return next year according to reports, play a major role in securing the £3.8bn of licence fee income generated last year.
A spokesperson for the Department for Digital, Culture, Media and Sport said the upcoming Charter Review will consider “how the BBC can continue to prosper supported by a sustainable funding model”.
The BBC currently foots the bill for £262m of the Service’s £400m budget and has been asked by the Foreign Office to draw up plans for millions of pounds of cuts.
The BBC has protected budgets for investigative journalism and local news by slashing staff numbers on Newsnight and ending its filmed reports. “The good news is that the audience has grown by 24 per cent, but we did take some money out,” Davie said.
He said consent for the licence fee depended on maintaining a high level of usage across the UK. “If we get 80 per cent of people using us a week and over 90 per cent in a month, we broadly get the support.”
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