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BBC may face 26% funding cut

Free licenses for seniors would cost $874 mil

LONDON — The BBC faces another threat to its funding as the U.K. government prepares to make the biggest cuts to public spending since World War II.

It has emerged that pols are considering transferring the cost of a scheme that provides British senior citizens with free TV licenses, which at present is paid out of state coffers, to the corporation’s own funds.

Were this raid on BBC coin to happen it would cost the BBC £556 million ($874 million) a year, effectively the cost of running the corp.’s BBC2 channel, its second main domestic network.

Commentators reckon this would amount to a 26% cut in real terms to the BBC’s income and would provide a devastating blow to program budgets.

Blighty’s Department for Work and Pensions currently stumps up the cost of paying for the oldies’ license fees, but there is speculation that from 2012 this could instead be paid for by the BBC.

An announcement could be made Wednesday, when the government announces details of how it will cut public spending in order to reduce the U.K.’s $135 billion deficit.

A spokeswoman for the BBC Trust said it would be “unacceptable” for license fee payers to foot the bill.

“Anything at this stage is speculation as we have yet to see the detail of the Spending Review.

“That said it would be unacceptable for license fee payers to pick up the bill for what is a Department for Work and Pensions universal benefit.”

The new U.K. coalition government has already tightened its grip on BBC finances by leaving the door open for a license fee cut from 2012, and accepting a proposal by the BBC Trust to freeze the fee from next year.

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