In Depth

BBC licence fee: the pros and cons

Culture secretary signals that national broadcaster will have new funding model from 2027

Nadine Dorries has warned that the next announcement about the BBC licence fee “will be the last” as the national broadcaster braces for a multi-billion-pound funding cut. 

In a tweet yesterday, the culture secretary said it was time “to discuss and debate” new ways of funding “great British content”. She is expected to confirm this week that the annual cost of the BBC licence will remain frozen at £159 for the next two years, before rising slightly for the following three years.

The BBC’s Royal Charter – which is agreed with the government and lays out the corporation’s structure for the next ten years – is then up for renewal in 2027. And Dorries’ comments signal that a new funding model will be found to replace the licence fee, paid by viewers for access to all live BBC television programmes, BBC iPlayer, BBC radio, BBC podcasts via the BBC Sounds app and more. 

The expected changes have fuelled fears about the “long-term financial future and editorial independence of the public service broadcaster under a Conservative government”, said The Guardian. The licence fee accounted for £3.52bn of the corporation’s total income of £4.94bn in 2019-20.

But in recent years, the BBC has seen a drop in the number of TV licences sold, as younger viewers in particular switch over to streaming services such as Netflix, Amazon Prime and Disney+.

The National Audit Office reported last year that the average amount of time spent by aduilts watching broadcast BBC TV had dropped from 80 minutes a day in 2010 to 56 minutes in 2019.

Match of the Day host Gary Lineker, the BBC’s highest-paid star, has also questioned the future of the annual licence fee and called for it to be made voluntary. 

Pros of the fee

Advertising

The BBC has no need for third-party commercial advertising to generate revenue and has remained advert-free since its inception. This is perhaps the most commonly cited benefit of the TV licence.

In 2016, then director-general Tony Hall made a pledge that the BBC “will never run adverts” in the UK as it would “harm the country’s broader broadcasting and news ecosystem”.

“We have a good ecology in this country, ITV and Channel 4 are doing public service broadcasting but funded by ads, and Sky has subscribers. That kind of works and I don’t think it is for us to get into the advertising market,” he said.

Quality broadcasting

An editorial in The Guardian in 2018  argued that thanks to the BBC,  “this is a bonanza time for audiences” and that there had never been “so much high-quality material available to watch, whenever we like”.

Our “voracious appetite for content” should not “blind us to the preciousness of the BBC”, which has “taken artistic risks to create brilliant, radical and innovative work that would be in the interests of no profit-driven private company”, the paper said.

A string of high-profile figures have also praised the broadcaster over the years. During a 2019 debate in Parliament on the licence fee, Tory MP Julian Knight said that “when one travels around the world and sees other TV, radio and media offerings, one sees that the BBC is absolutely first-class”.

Editorial independence

The licence fee allows the broadcaster to “remain independent and distanced from government initiatives, campaigners, charities and their agendas, no matter how apparently worthy the cause or how much their message appears to be accepted or uncontroversial”, BBC guidelines state.

Informing the public

Some observers believe that the BBC is a vital tool in ensuring that everyone in the UK is granted access to fair, unbiased news.

Sirena Bergman has warned in The Independent that “access to impartial information is crucial to the democratic process”, adding that a media organisation free of third-party interests will “at least be perceived as more reliable than the for-profit alternatives”.

Cons

Undemocratic

Critics have argued that forcing people to pay for a service they either don’t use very often or do not agree with politically is unfair.

“When you can stream a library of millions of shows on a laptop or tablet, it feels a bit backwards to sit down and subject yourself to a TV schedule which someone else has decided for you,” wrote The Sun’s George Harrison. “The fact that, by default, everyone is forced to pay for the BBC fuels its Europhile tendencies by providing it with no incentive to actually engage with British people – or produce any decent shows for that matter.”

Unrepresentative 

In 2018, then Labour leader Jeremy Corbyn floated the idea of allowing BBC licence-fee payers to elect board members of the national broadcaster, PoliticsHome reported. Currently, they are appointed from within.

“One proposal would simultaneously reduce government political influence on the BBC while empowering its workforce and licence fee payers,” he said. “That would see some elections of places to the BBC Board, for example of executive directors by staff and non-executive directors by licence fee payers.”

Too centralised

Some critics have expressed concerns over the lack of BBC funding for minority languages and cultures of the UK.

In 2019, a 68-year-old woman was arrested after she was revealed to be one of a group of around 80 people in Wales who had stopped paying their TV licence over a lack of representation of Welsh culture by the BBC.

The non-payment campaign was led by the language campaign group Cymdeithas yr Iaith Gymraeg, which according to The Guardian, believes that Wales is “being ill-served by the media to the detriment of the Welsh language and the country’s democracy and culture”.

Flat tax

The Independent’s Bergman suggested that the licence fee should be “scrapped in favour of a form of progressive taxation, whereby a percentage of your income tax relative to your earnings goes directly into the coffers of the BBC”.

“The reason we have a licence fee system instead is because the British public struggles to wrap its head around the concept of paying more for something you might use less for the benefit of society as a whole, even though this is the basis of a welfare state which we purport to value in this country,” she added.

Too expensive for viewers

LoveMoney has argued that the fines for not paying the BBC fee are an “unpayable charge” for people on low incomes, who are the “most likely to be done for licence fee evasion”. 

“The problem is that they can't afford to pay the £145.50 TV licence fee, either,” said the site.   

Too expensive for BBC

LoveMoney has also argued that the current system of licence collection is inefficient and far too costly for a publicly funded institution. “It costs a ludicrous amount in admin”  that could easily “be saved by using a different funding model,” according to the site. 

Official figures show that in 2019/20, the cost of licence fee collection was £119m out of a total income of £4.49bn. The collection cost was £103m in the previous year.

However, from June 2020, the BBC ended its policy of giving free licences to all over-75s, which was costing the corporation £750m a year.

Too old-fashioned

John Sergeant, the BBC’s former political correspondent, said last year that the licence fee had become “increasingly out of date”. He told the Radio Times that “the case for the licence fee, a form of poll tax, has been steadily eroded” by rival services offered by the likes of Netflix and Amazon.

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