U.K. Culture Secretary Nadine Dorries has confirmed that the national TV license fee, which is the primary source of income for the BBC, will be frozen at £159 ($217) per year for the next two years. It will then rise in line with inflation for the following four years.
Addressing the U.K. parliament on Monday, Dorries also said that she would review the license fee funding model ahead of the BBC’s next governing charter review in December 2027, and that those discussions would “begin shortly.”
The plans for the new licence fee settlement cover a period of six years and will take effect from Apr. 1, 2022 and run through until March 31, 2028.
The U.K. TV license provided the BBC £3.5 billion ($5.1 billion) in the 2020-21 financial year. A statement from the U.K. Department for Digital, Culture, Media and Sport said that the BBC is expected to receive around £3.7 billion in licence fee funding in 2022 and £23 billion over the duration of the settlement period, adding that the BBC also receives more than £90 million per year from the government to support the BBC World Service.
Dorries said: “Ultimately, the settlement strikes the right balance between protecting households and allowing the broadcaster to deliver their vital public responsibilities, whilst also encouraging them to make further savings and efficiencies.”
BBC director-general Tim Davie and chair Richard Sharp issued a joint statement as soon as Dorries made the announcement in parliament.
“Given the breadth of services we provide, the licence fee represents excellent value for money,” the BBC chiefs said. “There are very good reasons for investing in what the BBC can do for the British public and the U.K. around the world. A freeze in the first two years of this settlement means the BBC will now have to absorb inflation. That is disappointing – not just for licence fee payers, but also for the cultural industries who rely on the BBC for the important work they do across the U.K.”
Davie and Sharp said that the financial stability of the license fee is “crucial” and pointed out that the BBC’s income for U.K. services is already 30% lower in real terms than it was 10 years ago, and that the freeze would “necessitate tougher choices.”
The executives said they’ll do “everything” to ensure the BBC “continues to punch above its weight for Britain and for audiences around the world.” They have vowed to move more of the broadcaster’s output across the U.K., transition to a “digital future” and deliver impartial content.
Meanwhile, Dorries also addressed the BBC’s future during her speech, saying that she wanted the corporation to be a “global beacon” in the years to come.
“We need a BBC that is forward looking and ready to meet the challenges of modern broadcasting, a BBC that can continue to engage the British public, and that commands support from across the breadth of the U.K., not just the London bubble, a BBC that can thrive alongside Netflix and Amazon Prime, and all of its other challengers which attract younger viewers,” Dorries said. “The license fee settlement represents a significant step in that journey.”
On Sunday, Dorries sent shockwaves across the media landscape when she revealed plans to freeze the license fee via her Twitter account.
Freezing the license fee has been opposed by several prominent members of the British entertainment industry, including actor Hugh Grant, “The Thick of It” creator Armando Iannucci and sports presenter Gary Lineker.