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04.12.2023 - 09:19 / deadline.com
The BBC is staring down the barrel of another real terms funding cut after the UK government signaled its intention to renege on the 2022 license fee deal.
Culture secretary Lucy Frazer told BBC Radio 4’s Today show that the government would announce the new level of the license fee “very soon.”
Under a deal struck with the BBC in 2022, the broadcaster’s funding was frozen for two years, but ministers agreed it could rise with inflation from April 2024.
This would guarantee the BBC a funding increase of around 9%, pushing the annual household fee up £15 to £173.30 ($219.53) — the biggest single increase for nearly 40 years.
Asked if the government will halt the 9% increase, Frazer told Today: “I think that is a lot of money and that is one of the things that we are considering.”
The culture secretary said she disagreed with the suggestion that the government was ripping up the deal signed with BBC executives in January 2022.
“I wouldn’t put it like that at all,” she said. “As the government we have taken a number of steps to protect people from the rise of the cost of living over the course of the last few years … we froze the license fee for two years, and it is now due to rise with inflation. And what we’re looking at is the appropriate rate of inflation.”
Frazer argued that 400,000 fewer people opted out of paying for the BBC’s services last year because “they didn’t think it was affordable, or they didn’t want those services anymore.”
She added: “I would be very concerned that if we put it up significantly, even fewer people would be paying the license fee which would of course damage the BBC and its revenues.”
The two-year license freeze left a £2B shortfall in the corporation’s finances. Any deal below the level
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Naman Ramachandran The annual license fee for the BBC will rise by £10.50 ($13.20) to £169.50 ($213.35), lower than what the corporation expected, causing a funding gap of £90 million ($113 million). As revealed in the BBC’s annual report, the bulk of its income was from the license fee paid for by the public, which accounted for £3.74 billion, £60 million down from last year. The licence fee was been frozen for two years at £159.50.
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Culture Secretary Lucy Frazer has said that a £15 increase in the BBC licence fee would be "high". Her comments come after reports that Prime Minister Rishi Sunak is planning to block a 9% rise in the annual charge.