A group of MPs has described the BBC’s licence fee as “outdated” and warned that if it’s not reformed, there might “not be a BBC as we know it” by the end of the 2030s.
According to a report from the cross-party Digital, Culture and Media Committee, the current licence fee model “does not reflect the way people watch television now”.
The committee said the licence fee should no longer be “linked to a television set” and instead suggested “there are strong arguments for a household levy, but it would be a difficult model to introduce in the short term given the significant implementation challenges”. They added that the government “should not have ruled out this option entirely”.
The committee recommended that the forthcoming White Paper on the BBC Charter should set out steps for broadening the scope of the licence fee in time for the start of the new Royal Charter in January 2028.
“At a minimum, the reformed fee should no longer be linked to a particular device or activity,” added the report. “The intention of broadening the scope of the licence fee should be to capture a greater number of households, which in turn should lead to an increase in revenue. This should be done on the condition that the cost of the individual licence fee is decreased, as long as doing so does not reduce the sustainability of the BBC’s income and ability to fulfil its public purposes.”
The committee said it “urged” the government to keep an open mind on a household levy as a potential future model for funding the BBC.
Considering other possible funding options for the future of the BBC, the committee said “all other[s] have drawbacks”. The report said general taxation would “risk the BBC’s independence”, and a levy on streaming services would “be unlikely to raise sufficient revenue and could be counterproductive”.
“Advertising would incentivise the BBC to focus more on commissioning commercial programmes and less on non-commercially viable content that is nevertheless valuable. It would also disrupt the business models of commercial public service broadcasters and radio,” added the report. “Subscriptions would change the BBC into a very different media provider and a partial subscription model would inevitably lead to less investment in the public service genres that we want from the BBC, reduce the distinctiveness of the BBC brand and undermine universality.”
The report said the committee does not support a paywall for domestic audiences to watch older content on iPlayer, stating that it would “make it more difficult for the BBC to deliver a universal service”. However, it did state there is potential for the BBC to earn revenue from limited older content on iPlayer and from its archive. “We do not expect revenue from this to be transformative and in no way could it come close to representing a sustainable funding model,” added the report.
“We recommend that the government and BBC commission an independent assessment of the likely economic impact of earning revenue from limited older content on iPlayer for the BBC and other commercial broadcasters and of exploiting its extensive archive.”
The full report is available to read here.
Speaking about the report’s findings, Philippa Childs, head of Bectu said the BBC needs a funding model “which secures the long-term future of the BBC and its ability to deliver on its public service broadcasting responsibilities. These are currently under threat from a decade of funding cuts and in the face of thousands of job cuts. The report’s recommendations on this matter should be given careful consideration.
“The BBC is central to the whole creative industries ecosystem and critical to deliver growth, skills and jobs across the country,” she added. “It is also a vital independent global, and local, news voice and a key developer of uniquely British content. The recommendations in this report set out a practical route forward and we hope the government adopts them.”
