Culture Secretary Lisa Nandy has indicated that the UK Government is not considering general taxation as a replacement for the BBC licence fee. The BBC licence fee, which is set to rise to £174.50 in April, has been a source of financial strain for the broadcaster in recent years due to a two-year freeze at £159 and subsequent increases at a lower rate than expected, coupled with rising inflation.
The last increase saw the household payment, which funds much of the BBC’s operations, rise by £10.50 to £169.50 in April 2024. Speaking on BBC Breakfast, Ms Nandy criticised the licence fee as “not only insufficient, it’s raising insufficient money to support the BBC, but it also is deeply regressive”.
She highlighted the disproportionate impact on poorer people and the high number of women prosecuted for non-payment, stating: “I think that doesn’t help the BBC, it doesn’t help the Government, and it doesn’t help people in this country.”
While she mentioned that ministers were considering a “whole range of alternatives”, she confirmed that no commitment had been made to any specific option.
The Government is set to review the BBC’s Royal Charter, including a public consultation, to explore funding options for the broadcaster’s future. Ms Nandy revealed she has begun preliminary talks with BBC leaders about the charter review, aiming to “future-proof our national broadcaster until well into the latter half of this century”.
She said: “I think the one that has been speculated about is general taxation. That’s not something that we are considering, not least because we want to make sure that we protect the BBC from the sort of political interference that we saw under the last government.”
The previous BBC Funding Model Review and its expert panel, established by the Conservatives, have been disbanded by the Government. Ms Nandy admitted that after excluding general taxation, a subscription model remains an option, but noted: “It also leaves a whole range of options which the Culture, Media and Sport Select Committee has been exploring over recent years.”
She mentioned other European countries’ methods, such as France’s cinema levy, clarifying: “In other countries in Europe, they find different ways of raising money. In France, for example, they have a levy on cinemas. I’m not committing to any of these things at this stage.”
The BBC, under escalating financial strain, announced a series of proposed changes last year, including the cancellation of the in-depth interview show Hardtalk, as it plans to cut over 100 news roles. The corporation predicts its total deficit will rise to £492 million for the 2024/25 financial year.