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U.K. broadcaster BBC has revealed a 4.2% pay increase for staff in August, followed by a further 1.% hike later in the financial year. Senior Leaders will not receive an automatic increase, and their pay is subject to a different process, the BBC said.

The move comes at a time when the license fee, the BBC’s main source of income, has been frozen for two years and when inflation in the country is at 7%. Last year’s annual pay increase was 1% and in 2020 there was a pay freeze across the BBC.

“For 2022/23, we will provide the following which we think is right and fair – we will invest in our people with 4.2% in August followed by 1% in progression later in the financial year,” the BBC said in a statement.

“Inflation is currently running at 7%. This pay deal is below that. The BBC is able to make these awards because we have been cutting staff numbers and saving costs,” the statement added. “We would rather have fewer people paid closer to the wider media market. The BBC will never be able to meet the levels of pay at some of our rivals – and nor should we be expected to – but we are operating in a global market for talent, and without that talent, there are no programs or content.”

The corporation said that its public service staff numbers are getting smaller and that in 2021, the number of employees fell by over 1,200 – 6% of the total workforce – and senior leader numbers were also down by over 5%.

Tim Davie, BBC director general, said: “The BBC is the home of creative excellence and world-beating impartial journalism. We want our staff to thrive, produce their best work and feel valued for their output. Last year the number of employees fell by over 1,200. The BBC is smaller but we also need to attract and retain world-class talent, within a reformed, modern and efficient organisation that provides great value to audiences.”