The UK government has announced that the current BBC licence fee of £159 will see an increase of £10.50, or 6.6%, in April. The rise is determined using September’s rate of inflation rather than an average across the last year, which resulted in a lower figure than the BBC and Office for Budget Responsibility (OBR) had anticipated. However, the decrease in the percentage of increase will produce an expected funding gap of around £90m in the budget.
The fee has remained unchanged at £159 for the past two years and was expected to rise by approximately 9%; however, Culture Secretary Lucy Frazer warned earlier this week that an increase of £15 would be “absolutely” too much. According to a review of the BBC’s funding model launched by the government, the broadcasting sector is undergoing rapid change, and the traditional funding model based on the licence fee may no longer be viable.
In response, the BBC’s Board noted the restoration of a link to inflation on the licence fee after two years with no increases during a time of high inflation. However, the resulting impact means that content budgets will be affected, which, in turn, will significantly affect the wider creative sector across the UK. The consequences of such changes will be confirmed as budgets are worked out in the coming months.
The BBC’s funding amounted to £3.70bn in 2013 and increased to £3.74bn in 2023; however, if the licence fee had increased with annual inflation, it would have received an additional £1.16bn in funding from the fee alone
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