BBC licence fee frozen for two years ‘to tackle cost of living’
‘Now is not the time to be whacking up the amount households have to pay’ said one insider
THE BBC licence fee will remain frozen at £159 for up to two years in a bid to ease Britain’s cost of living crisis under government plans.
The Sunday Telegraph has been told that negotiations between the corporation and the Government are expected to conclude shortly on the cost of the licence fee from 2022 until 2027.
According to multiple insiders with knowledge of the talks, the licence fee will remain frozen at the beginning of the settlement, helping to alleviate the strain on households facing rising energy and other domestic bills.
While the Government insisted no final decision has been taken, three sources said that a 12-month or two-year freeze was now the most likely outcome. “The sense is it has to be firm but fair,” one said, while another added: “Now is not the time to be whacking up the amount households have to pay.”
If confirmed, the settlement is likely to prove a significant headache for the BBC in the short term as it would lead to a squeeze on its finances. While the licence fee nets more than £3 billion a year for the corporation, inflation is expected to soar by up to 4.4 per cent next year, meaning it could be forced to endure real-terms cuts.
The issue of surging inflation is considered a particular problem for the broadcast and media industry, with insiders at the corporation warning that the pandemic has added to the financial pressures it is experiencing.
However, for the remainder of the settlement, the licence fee is texpected to be allowed to rise in line with CPI, a measure of inflation. One insider suggested that this would represent a generous settlement for the BBC and would be seen as recognition for the recent progress it has made on addressing concerns over its impartiality.
Others believe it is necessary to ensure that the BBC remains financially robust in the run-up to 2027, when its current charter runs out.