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BBC set for £650m licence fee hit

Culture Secretary John Whittingdale, speaking in parliament July 6th, has confirmed that the BBC will take on the cost of providing free TV licences for over-75s. This will be phased in from 2018-19 with the BBC taking on the full cost from 2020-21. He also confirmed that the government will introduce legislation to enable the BBC to “modernise” the licence fee to cover the BBC iPlayer.

UK Chancellor of the Exchequer George Osborne is planning to announce in Wednesday’s Budget that the BBC will have to meet the cost of free TV licences for over-75s. The move is reported to cost the BBC £650 million (915m), or one-fifth of its budget. Free TV licences for over-75s are currently paid for by the government.

He told the BBC’s Andrew Marr Show: “The BBC is also a publicly funded institution and so it does need to make savings and contribute to what we need to do as a country to get our house in order.”

Charging for use of the iPlayer which could recoup some of the cost of funding free licences for over-75s. It would involve changing the law so that people who watch TV via the iPlayer and other online catch-up services would have to have a TV licence. Currently the licence fee does not cover these digital services. Such a move could raise at least £150 million.

Sir Christopher Bland, the corporation’s former chairman, described the Chacellor’s plan as “the worst form of dodgy Whitehall accounting. It is transferring social policy on to the licence fee.”

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