The BBC is unveiling radical plans to end the licence fee in its current form and replace it with a new “fairer” funding mechanism.
The broadcaster is expected to propose an overhaul of the charge, set to rise to £180 in April, as it seeks to combat rising levels of evasion and non-payment which cost the BBC more than £1bn last year.
In its response to a Government Green Paper on the future of the BBC, the corporation will rule out introducing advertising to its main channels and putting shows behind a Netflix-style subscription paywall, The i Paper understands.
It will instead propose to replace the licence fee, which last year brought in £3.8bn of revenue, with a new “universal funding model fit for the future”.
The new system would be “sufficient, sustainable and fair” and bring in enough money to support “universal public service media”.
Insiders said the BBC has been examining changes to its funding model, which could ultimately do away with unpopular house visits by licence fee collectors and “threatening” letters to people suspected of non-payment.
The BBC has looked at switching to a “fairer” system, such as a household levy that could be collected through council tax, The i Paper understands.
This option would potentially affect a much larger number of households than the 24 million who currently pay the licence fee. Payments could be adjusted so those on lower incomes pay less, with some social groups, such as students, receiving discounted or free TV.
German TV tax model
The mandatory charge could be similar to the German system where citizens pay a “digital public service media” tax of €18.36 (£16) per month regardless of whether they watch or listen to the nation’s equivalent of the BBC.
An insider said: “The BBC recognises we can’t keep asking households across the board to pay an increased licence fee every year which doesn’t keep up with the inflationary costs of programme-making.
BBC director general Tim Davie will leave the position in April (Photo: Getty)“Subscription is out because the BBC has to be a universal public service broadcaster,” they said.
“Taking advertising would just decimate ITV and Channel 4. We need a fair, progressive system that means the BBC can compete against streamers with secure funding for decades ahead.”
Any change to the licence fee would not be introduced before 2028, when the new Charter – which sets out how the BBC is run and funded – begins.
One major obstacle is that the BBC would have to persuade the Government of the merits of introducing a measure such as a household levy. Downing Street is likely to be wary of any measure that could be branded a new “TV tax” by political opponents.
Viewers to get a say over BBC
The BBC’s new Charter proposals also include allowing viewers to have a say in the broadcaster’s decisions through “citizen assemblies”.
“These could involve a cross-section of the UK public and could hear evidence, listen to the perspectives of others and deliberate on complex and difficult issues, driving more participatory decision-making,” the BBC will say in its Green Paper response on Thursday.
However, there could be fears that citizens’ bodies would become dominated by politically-motivated groups.
The BBC will also propose opening up its editorial complaints procedures so that it no longer can be accused of marking its own homework.
The submission says the current system “risks perceptions that the BBC is allowed to judge its own conduct and whether it remains best for the BBC to lead ‘Stage 2’ of the editorial complaints process”.
Ofcom could play a greater role in assessing complaints or an independent body created to examine editorial controversies.
Boss Tim Davie to leave
The BBC will call for a new “transparent” process for appointing its Chair and Board members. Ministers are looking at taking away the Government’s power to choose the BBC chair and board figures after a number of politically-controversial appointments.
It also wants a permanent Charter, to be reviewed by Parliament, instead of being given a time-limited constitution that has to be renewed and approved by government every decade.
The Charter submission will be director general Tim Davie’s final significant act at the BBC before leaving next month. Interviews are currently taking place for his replacement with former Google president Matt Brittin considered a frontrunner.
Ministers will examine the BBC’s submission, along with those of other media organisations, and publish a White Paper setting out its final recommentations for a new Royal Charter later this year.
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