Govt to undertake review of BBC's funding model as licence fee frozen for two years

Govt to undertake review of BBC’s funding model as licence fee frozen for two years

Jan 17, 2022

The government will “undertake a review” of the BBC’s funding model and the licence fee will be frozen for the next two years, the culture secretary has said.

Making the announcement in the Commons, Nadine Dorries said it is time to ask the question whether “a mandatory licence fee is appropriate” and confirmed a government review into the matter will start “shortly”.

Ms Dorries told MPs it is “time to look further into the future” as we are now “living in a world of streaming giants”.

On Sunday morning, the culture secretary tweeted: “This licence fee announcement will be the last.”

Ms Dorries also confirmed the BBC licence fee will be frozen for the next two years and will rise in line with inflation for the four years after that.

It means the current £159 annual charge will remain in place until 2024 and equates to a severe real-terms cut in the corporation’s funding.

In a statement, the BBC said the decision is “disappointing” and “will necessitate tougher choices which will impact licence fee payers”.

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If the cost of the licence fee was not frozen and rose in line with inflation – currently at 5.1% – the total annual fee would be £167 from April.

Ms Dorries said the decision was being taken in light of Britons facing increasing living costs and that the new agreement gives the broadcaster certainty while protecting the public from the price hike.

“It’s a fair settlement for licence fee payers across the UK,” the culture secretary said.

The plans for the new licence fee settlement cover a period of six years and will take effect from 1 April 2022 until 31 March 2028.

“The BBC wanted the fee to rise to over £180 by the end of this settlement, instead it will remain fixed at £159 until April 2024,” she told the Commons.

“That’s more money in the pockets of pensioners, the pockets of families who are struggling to make ends meet.

“We are supporting households at a time when they need that support the most and this settlement sends an important message about keeping costs down while also giving the BBC what it needs to deliver on its remit.”

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