BBC licence fee set to rise by more than £10 next year

The UK government has announced a £10.50 increase in the BBC licence fee, raising the annual cost to £169.50.

This 6.6% hike, effective from April 2024, is based on September’s rate of inflation and is lower than what the BBC and the Office for Budget Responsibility (OBR) had projected, resulting in an expected funding shortfall of around £90m.

Culture Secretary Lucy Frazer has initiated a review, backed by an independent panel from the broadcasting and business realms, to examine various funding options for the BBC.

The review aims to guarantee the broadcaster’s longevity amid changes in the media sector, competition, and viewer preferences, while also lightening the financial burden on licence fee payers.

In line with government strategies to alleviate household costs, the revised approach for calculating the licence fee for 2024 utilises the annual CPI rate of 6.7% from September 2023. This method mirrors the process used for benefit increases.

The government’s plan seeks to minimise extra costs for licence fee payers, while still providing the BBC with over £3.8 billion in yearly funds, supporting its mission to offer impartial, high-calibre content.

Culture Secretary Frazer stressed that the new fee increment offers value for money and recognises the need for adaptation within the modern media landscape.

The impending review will assess the sustainability of the current licence fee model and consider other funding methods that uphold the BBC’s mandate and encourage growth in the UK’s creative industries.

In response, the BBC said, “The BBC is a crucial and positive force in the UK media market. It’s essential that the method of funding is debated to ensure the BBC’s continued success, upholding the UK’s values globally, while delivering unbiased news and content that mirrors life across the UK. The role of the BBC should not be detached from the funding discussion. We maintain that public service must be central to the BBC and any changes should be transparent, allowing the public to support and benefit from a BBC for everyone.”

The BBC Board noted, “We acknowledge the Government’s re-establishment of an inflation-based licence fee following a two-year freeze during a period of high inflation. The BBC is committed to providing excellent value and beloved programmes and services. Nonetheless, this decision necessitates additional changes beyond the significant savings already being made. Our content budgets are affected, which will have a substantial impact on the wider creative sector in the UK. The details of these impacts will be clarified as we finalise our budgets in the coming months.”