BBC Licence Fee to Increase by £10.50 as Number of TV Licence Holders Declines
The BBC licence fee will rise by £10.50 to £169.50 a year, Culture Secretary Lucy Frazer has announced, along with a review into alternative funding models. The fee, which funds much of the corporation’s operations, had been frozen at £159 in 2022 for two years to “protect families from the sharp rise in the cost of living,” the government said.
Review into Alternative Funding Models
Ms. Frazer also announced a review into the licence fee model, but said that the government is committed for the fee to remain until the current charter period ends in December 2027. She said that the review will include looking at “how the BBC can increase its commercial revenues to reduce the burden on licence fee-payers.” She emphasized that the review will not consider creating any new taxes.
The TaxPayers’ Alliance argues that the licence fee forces TV viewers who do not consume or object to BBC content to fund the BBC in order to watch non-BBC material. The group calculates that the licence fee increase would mean “the BBC taking £365,596,950 more in licence fee payments, based on the March 2023 figure of the number of TV licences.”
Alternative Funding Model
Ms. Frazer said the BBC licence fee could be replaced by an alternative funding model, depending on the review and public consultation. She expressed the need to ensure that the cost of the BBC does not rise exponentially or burden a smaller number of fee payers. The number of households holding TV licences fell by 400,000 last year and has declined by about 1.7 million since 2017–18, putting increasing pressure on the BBC’s licence fee income.
She also highlighted the changing media landscape, with more ways for audiences to watch content. As audience viewing habits continue to shift towards digital and on-demand media, linking the TV licence to watching live TV will become increasingly outdated.
Impact on BBC and Creative Sector
In response to the fee increase, the BBC stated that it will require further changes on top of the major savings it is already implementing. The impact of these changes will extend to the wider creative sector across the UK. The consequences of these budget adjustments will be confirmed in the coming months.
Overall, the increase in the BBC licence fee and the review into alternative funding models reflect the challenges faced by traditional broadcasters in a rapidly evolving media landscape. As audience habits continue to change, finding sustainable funding solutions for public broadcasters becomes crucial.
