BBC license fee to be frozen for six years in budget cut moves

BBC Trust chairman Sir Michael Lyons calls the new arrangement, which also sees the Beeb take on funding for the World Service and Welsh channel S4C, 'a tough settlement...that delivers certainity and stability for the BBC.'
October 20, 2010

A new deal reached between the BBC and the UK government will result in funding for the public broadcaster diminshing by 16% in real terms over the next six years. But the Beeb maintains the deal was necessary at ‘such an unprecedented time.’

The BBC license fee is to be frozen for the next six years at £145.50, or roughly US$228. The public broadcaster will also be tasked with taking over the cost of the BBC World Service, currently funded by the Foreign Office, as well as contributing to the funding of struggling Welsh language TV channel, S4C, through a partnership. Previously, the Welsh channel had been funded primarily by the UK’s Department for Culture, Media and Sport (DCMS).

News of the agreement between the public broadcaster and the government broke yesterday, with the formal announcement made today.

The new arrangement creates a 16% cut in funding in real terms over the next six years, as opposed to what would’ve been a 25% cut over four years if the license fee costs for households with a person over 75 became the Beeb’s to cover, as was earlier proposed by the government.

‘This is a tough settlement, but it’s also a settlement that delivers certainty and stability for the BBC and license fee payers through to 2016/17,’ said Sir Michael Lyons, chairman of the BBC Trust. ‘It reflects the centrality of the license fee in securing and safeguarding public service broadcasting. We recognise the importance of securing such a settlement at such an unprecedented time.

‘There is no doubt that the settlement will present us with some difficult choices, but importantly, these choices will remain firmly in the hands of the BBC Trust and we will of course seek the views of license fee payers.’

BBC director general Mark Thompson called the arrangement ‘a realistic deal in exceptional circumstances securing a strong independent BBC for the next six years.’

‘It means that efficiency and reform will continue to be key issues for us. But our focus remains providing distinctive, high quality programs valued by the public,’ he added. ‘This deal will safeguard that until 2017.’

Predictably, there has been opposition to the plan from different corners, including S4C. John Walter Jones, chairman of the channel’s governing body, the S4C Authority, said via a statement that he was informed of the ‘ill-conceived’ plan by Culture Secretary Jeremy Hunt after the news broke via the BBC and that the decision was arrived at without any consultation with S4C. ‘The effect of the financial cuts agreed between Jeremy Hunt and the BBC will have a disastrous effect for viewers across Wales, and this at a time when the BBC has already cut spending on both English- and Welsh-language programming in Wales,’ said Jones. The Welsh public broadcaster is calling for a judicial review of the decision, saying that it will effectively merge S4C with the BBC.

The broadcasting workers union BECTU also had strong words for the decision, via general secretary Gerry Morrissey. ‘From where we are standing, senior executives appear to have entered into negotiations on the hoof and the result will be largescale damage to the BBC’s services with the Corporation taking the flak for badly judged government decisions,’ he said in a statement, adding that the union will be seeking an ‘urgent meeting’ with senior executives to discuss the ‘appalling news.’

In reference to the additional financial responsibilities now given to the BBC through the deal, Lyons said, ‘The BBC is not government funded, but these are pressing times for the nation as a whole, and we believe license fee payers would expect us to see what contribution we can properly make. The extra responsibilities the BBC will now take on are consistent with this and will deliver benefits to license fee payers across the UK.’

About The Author
Daniele Alcinii is a news reporter at realscreen, the leading international publisher of non-fiction film and television industry news and content. He joins the rs team with journalism experience following a stint out west with Sun Media in Edmonton's Capital Region, and communications work in Melbourne, Australia and Toronto. You can follow him on Twitter at @danielealcinii.