UK government to end BBC licence fee in 2027 & cut funding

Tim Davie (credit: RTS/Richard Kendal)

UK culture secretary Nadine Dorries has announced plans to abolish the licence fee and freeze funding to the BBC.

The minister tweeted: “This licence fee announcement will be the last. The days of the elderly being threatened with prison sentences and bailiffs knocking on doors, are over.

Green Planet

“Time now to discuss and debate new ways of funding, supporting and selling great British content.”

Funding & political manoeuvring

The BBC’s funding model has long been a target of the ruling Conservative party, with a review into non-payment announced as one of the first acts of current prime minister Boris Johnson’s premiership.

The new plans, which will formally be revealed this week, will see the licence fee remain at £159 (£217) until 2024, a move that had been mooted late last year. It will then rise slightly each year through to 2027, when it will be fully abandoned.

Typically, the fee would be adjusted due to inflation, but this will not be the case for at least the next two years.

The licence fee makes up the majority of the BBC’s income and its freezing effectively serves as a funding cut for the Green Planet and Around The World In 80 Days pubcaster. It is already having to stretch production budgets in order to remain competitive with big-budget content from US powerhouses like Disney and Netflix.

Dorries has shown little sympathy to this plight, with UK tabloid the Mail quoting an ally of the secretary as saying: “There will be a lot of anguished noises about how it will hit popular programmes, but they can learn to cut waste like any other business.

“This will be the last BBC licence fee negotiation ever. Work will start next week on a mid-term review to replace the charter with a new funding formula. It’s over for the BBC as they know it.”

Reaction & context

Industry watchers have argued that the announcement from Dorries – a staunch defender of the embattled prime minister – has been made to distract from a litany of scandals and calls for Johnson’s resignation, after it emerged numerous parties had been held at Downing Street during lockdowns in the UK.

That could explain the timing of the announcement, which came as a surprise to many UK insiders, although the future of the licence fee model has been in discussion for several years.

Alternative funding models could include a universal levy on broadband subscriptions or a subscription akin to the operation of SVODs, although BBC chief Tim Davie has previously ruled that approach out.

Around The World In 80 Days

Davie has also spoken of the need to bolster income from its commercial arm BBC Studios as the parent broadcaster faces ongoing funding squeezes.

Reacting to the news, a BBC source cited by The Guardian said: “There has been similar speculation before. There are very good reasons for investing in what the BBC can do for the British public, and the creative industries and the UK around the world.

“Anything less than inflation would put unacceptable pressure on the BBC finances after years of cuts.”

Liberal Democrat leader Ed Davey echoed this sentiment, saying: “Slashing the funding of a beloved national treasure just because you don’t like the headlines on the 6 o’clock news is no way for a responsible government in a democracy to behave.”