BBC Faced with $1.01 Billion Bill as U.K. Government Shifts Welfare Costs (Report)

The BBC is facing the prospect of absorbing £650 million ($1.01 billion) in lost income as the U.K. government seeks to make the public broadcaster pay for television licenses for the elderly.

At present, the Department for Work and Pensions picks up the bill for the 4.5 million TV licenses, which cost £145.50 ($227) per household, for those who are 75 or older. According to the Sunday Times, George Osborne, the U.K. government’s chancellor of the exchequer, is seeking to shift that bill onto the BBC’s books.

In return, the BBC will be allowed to charge for its video-on-demand service, the iPlayer, which stores BBC content and is currently free of charge. Many people are avoiding the license fee, which is compulsory, by watching TV on tablets and other mobile devices rather than on TV sets. Charging for its streaming services would bring in additional revenue totaling around £150 million ($234 million).

The BBC receives £3.7 billion ($5.76 billion) in revenue from the license fee, and the lost revenue from the Department for Work and Pensions would represent a fifth of that total.

The measure, which is likely to be introduced in 2017, will be announced on Wednesday as part of the government’s annual budget, the Sunday Times said.

Last week, the BBC announced that it would shed more than 1,000 jobs in a major restructuring. The measures will deliver £50 million ($78 million) in savings from merging divisions, cutting down management layers, reducing the number of managers and improving processes. (See here for full story.)

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