The BBC Trust proposes to freeze the licence fee for two years saying the move is response to the economic climate. Siobhan Kennedy finds the cuts do not match those in the rest of the public sector.
In a letter to Culture Secretary Jeremy Hunt, the Trust said it had proposed the freeze until March 2013 in response to the current “exceptional pressures.”
The move will cost the BBC Trust £144m.
The licence fee rose to £145.50 in April for colour televisions, and £49.00 for a black and white licence.
Sir Michael Lyons, the Trust’s chairman admitted savings from the freeze will mean “on-air changes”, but said he hoped these could be minimised.
“The Trust remains committed to the principle of ring-fenced multi-year licence fee settlements,” he said.
“It is a key part of the BBC’s independence that the government grants such settlements and does not re-open them before they come to an end. However, we also recognise that the British public is facing an exceptionally tough financial climate.”
Under the BBC’s existing financial settlement, it had been entitled to a two per cent rise a year.
Mr Hunt said he welcomed the decision to freeze the licence fee.
“I have made it clear that the BBC needs to take proper account of the current economic climate and this move, which comes with the Trust’s assurances that it will not significantly impact on the quality of services provided to licence fee-payers, will be welcomed by the public,” he said.
The governement has approved the freeze for next year. A decision on 2012/13 will be made in due course.
Dan Sabbagh, media commentator from Beehive City, told Channel 4 News that the delay in that decision could be because the BBC will be expected to make deeper cuts: “the message is we may want you to go down further.”
Today’s move is the latest in a highly public skirmish between the BBC and the culture secretary over the future level of the licence fee.
Last month at the Edinburgh Television Festival the BBC director general Mark Thomspon said: “Do not believe anyone who claims that cutting the licence fee is a way of growing the creative economy .. A pound out of the commissioning budget of the BBC is a pound out of the UK creative economy. Once gone, it will be gone forever.”
But the very next day, Mr Hunt hit back, warning “The BBC has to live on the same planet as everyone else. They have to understand that the rest of government, apart from the NHS and international development, is looking at average cuts of 25 per cent.”
Mark Oliver, the author of the report called Changing the Channel, was the BBC’s former head of strategy. He says the BBC has to scale back in the current economic climate.
“The context of the public sector is different, and all parts of public sector need to be seen to be controlling costs and reducing expenditure.
“There will be all sorts of work to reduce spending further beyond 2013 and to prioritise spending in different areas,” he said.
In the short term, Mr Oliver expects “a lot of small-scale cuts across the board” but says there needs to be discussions with governments about the BBC’s long-term purpose and role.
“I don’t think it’s the government’s aim to make them cut services. I think it’s the government’s aim to take a good hard look at what public money should go on and to reassess what is needed in the television, online and radio in a market that is changing rapidly.”
The current UK broadcasting system was set up in the 1950s and now struggles to keep up with the extraordinary changes of the digital age.
“It is clear that the 20th Century analogue institutions that were created are now worryingly out of date.
“We need a dramatic rethink if we are to continue to deliver public service broadcasting in an entirely new age.”