TV licence fee to rise by £10.50, government says

December 8, 2023 11:28 am

[Source: BBC]

The current TV licence fee of £159 will increase by £10.50 – a rise of 6.6% – the government has announced.

The figure has been determined using September’s rate of inflation, rather than an average across the last year.

Due to the recent fall in inflation, that means the £169.50 figure is less than the BBC and Office for Budget Responsibility (OBR) had anticipated.

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The decision to raise it by a smaller percentage will leave an expected funding gap of around £90m.

The government is also launching a review of the BBC’s funding model, Culture Secretary Lucy Frazer told MPs.

The increased fee will come into effect in April, having been frozen at £159 for the past two years.

In a statement, the BBC Board said: “We note that the government has restored a link to inflation on the licence fee after two years of no increases during a time of high inflation.

“The BBC is focused on providing great value, as well as programmes and services that audiences love. However, this outcome will still require further changes on top of the major savings that we are already delivering.

“Our content budgets are now impacted, which in turn will have a significant impact on the wider creative sector across the UK. We will confirm the consequences of this as we work through our budgets in the coming months.”

The BBC had expected a rise closer to £15 – around 9% – based on the average rate of inflation over the past 12 months – a metric which has been used previously.

However, the culture secretary said earlier this week that an increase of £15 would “absolutely” be too much.

On Monday, Ms Frazer said said she was concerned a “significant rise” in the fee would add to cost of living pressures.

Labour’s John McDonnell however questioned whether the move was “revenge” for ministers being grilled on BBC Radio 4’s Today programme.

The former shadow chancellor said a 6.6% rise would result in a loss of journalist jobs “at a key time when we’re going to a general election and they’re desperately needed”.

Addressing MPs on Thursday, Ms Frazer also confirmed the government would look into the future of the BBC’s funding model.

There has been speculation in recent years that the funding model could change – with an increasing number of the BBC’s critics suggesting a universal fee no longer makes sense in a digital era of abundant choice.

The government has published the terms of reference for its review online, which praises the BBC as “a great national institution”.

“However,” it continues, “the government believes that there are challenges around the sustainability of the current licence fee funding model.

“The broadcasting sector is evolving rapidly, and the public has much more choice about how, when, and where they access content.”

Speaking on Thursday, Ms Frazer said that, as the media landscape changes, “linking the TV licence to watching live TV will be increasingly anachronistic”.

“We know that if we want the BBC to succeed we cannot freeze its income,” she continued, “but at the same time we cannot ask households to pay more for the BBC indefinitely.”

Ms Frazer said the government is supporting the BBC to “realise commercial opportunities which will make it more financially sustainable and we’ll continue to explore these provisionally” with the corporation.