The price of the BBC licence fee is set to rise to more than £200 in five years, according to official forecasts.
The BBC receives most of its funding from the TV licence – currently priced at £180-a-year – but the number of households paying it has dwindled in recent years.
Estimates by Office for Budget Responsibility (OBR) state it is expected to rise to £202.60 by 2031.
The OBR also said the number of people paying the licence fee will drop by 2.7 million to just 19 million over the next five years.
In July the BBC’s director-general Matt Brittin told MPs the traditional licence fee model was a “busted flush” and warned that more programmes would be axed if the £180-a-year charge is not replaced by a “sustainable” funding mechanism.
The Government is in talks with the BBC about reforms to the corporation’s funding model as part of its charter review. The i Paper takes a look at what proposals are being considered.
£11 internet charge for BBC ‘members’
One radical proposal put forward is an £11-a-month internet levy replacing the licence fee and viewers being invited to become “BBC members”.
A long-term solution drawn up by the Social Market Foundation (SMF) is that the charge is added to broadband bills, which would be nearly £50 cheaper than the TV licence fee.
The SMF also said BBC “members” would get the opportunity to join a special council, which would give them an opportunity to hold corporation bosses accountable for their decisions.
The report, understood to have been discussed with advisers to Culture Secretary Lisa Nandy, warned that the BBC would have to axe some of its popular shows like The Celebrity Traitors and Sir David Attenborough’s Planet Earth if its public funding is slashed.
German-style scheme
Brittin has suggested that that a new funding model for the BBC could be introduced that mirrors a scheme in Germany called Der Rundfunkbeitrag.
All households in Germany pay €18.36 per month (£15.70) to fund all public TV and radio broadcasters across different stares.
If such a scheme was rolled out in the UK, BBC funding would no longer be directly linked to whether people watch or listen to its programmes.
Brittin told the Department for Culture, Media and Sport (DMCS) select committee if 100 per cent of homes paid through such a scheme, it would save hundreds of millions of pounds in collection and enforcement costs.
He also predicted the scheme would enable the fee to be reduced by 20 per cent from its current level – meaning the cost of watching TV would be cut by £36-a-year.
Director-general Matt Brittin suggested the £180 annual charge could be cut by 20 per cent under a new funding system that would consign the licence fee to history.
Brittin said: “A number of European countries have moved to a household levy. It has advantages, it is universal and collection can be simpler.
“You can imagine broadband or mobile or electricity bills could be ways to do this.”
He added if the BBC was funded for by all households the “licence fee could be lowered for everyone”.
The BBC has warned that popular shows like Celebrity Traitors could be axed if its funding is reduced (Photo: BBC/Studio Lambert/Cody Burridge)Concessions for low incomes and young people
Brittin also suggested the Government could reduce the cost of the licence fee for lower-income households and younger viewers, adding this prospect is “quite appealing”.
But Ministers ruled out household levies in a policy paper on the future of the BBC.
Culture Secretary Lisa Nandy has also previously said: “We ruled out a new tax on households because of the cost of living crisis.”
She added paying for the BBC from general taxation opens the broadcaster to interference from the government of the day.
A BBC source previously told The i Paper: “It’s a decision the Government has to make soon. The outcome isn’t set until the ink is on the paper. The BBC has done work on the likely cost of a wide range of options including a levy.”
A spokesperson for the public broadcaster added: “Matt’s comments are based on the fact that if all households pay, rather than 80 per cent, some form of discounted price would be possible.”
Streaming levy for Netflix, YouTube and TikTok users
Another proposal suggested by Brittin is a streaming surcharge being slapped on anybody who watches videos on platforms like Netflix, YouTube and TikTok on mobile and laptop devices.
Brittin said: “The challenge is how many people would pay it and how much the cost of collecting it would increase.”
He also warned that the BBC was finding it harder to persuade younger people, used to instant “click and access” viewing, that they need to pay for a licence.
Another idea put forward by several Conservative politicians is transitioning the BBC to a Netflix-style subscription model.
But the BBC said this would force it to prioritize profitable entertainment and abandon essential public service genres like news and education – which US streamers aren’t required to provide.
This would force the broadcaster to prioritize profitable entertainment and abandon essential public service genres like news and education
Nandy has suggested charging a smaller levy or “surcharge” for households that only watch commercial streaming services and rarely consume BBC content could be a solution.
This would be justified on that basis that many programmes on those services are either licensed from the BBC or made with talent developed by the BBC.
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