The BBC‘s licence fee will not rise by as much as previously promised, the UK government has confirmed, condemning the corporation to a difficult year that could see more cuts and less shows commissioned, while the government has launched a review into the BBC’s funding model.
Culture Secretary Lucy Frazer announced in parliament in the past few minutes that the annual fee will rise by around £10.50 ($12.50) to £169.50, below the previous £14.50 increase that was tied to a higher rate of inflation. The licence fee has been frozen for the past two years, leading to difficult decisions for the BBC, and the government had initially said it would return to rising with inflation from 2024. The licence fee will rise by 6.7%, the figure of inflation from
The news was expected after Prime Minister Rishi Sunak said over the weekend that the BBC had to be “realistic” over what people can pay during the cost-of-living crisis. The BBC, however, is facing up to rampant increases in production costs and rival streamers have hiked subscription by far more than the rate of inflation.
Cuts have been a constant over the past couple of years, most recently to the BBC’s news teams that will see long-running topical format Newsnight restructured. The BBC is also cutting its progaming budget by around 1000 hours. “The BBC’s financial structure is such that inevitably program expenditure will be cut first,” said one source with knowledge of the current situation.
The news comes a day after TV vet Samir Shah was unveiled as the new BBC Chair, replacing Richard Sharp. Shah used to be a senior BBC News exec and was a non-exec director during the ‘Crowngate’ affair involving Queen Elizabeth II. One source close to the government said Shah had been working closely with the Culture, Media and Sport department of late and was “aligned” with licence fee plans.
The licence fee is in place for the next three years but the BBC’s funding model after 2027 will soon be negotiated. Many believe that the model is no longer fit for purpose and that the corporation should explore a new mode of funding such as subscription, advertising or being linked to taxation.
