Licence to change: BBC future funding

Communications and Digital Committee


Our inquiry looked at how the BBC should be funded in future. 

We heard from a range of people across the country.

The BBC’s income is around
£5 billion. Around 75% of this
comes from the licence fee.

The BBC has a central role to play in the life of the nation, the creative economy, and the UK’s soft power. Any decision to change the funding model must be led by a clear vision of what the BBC is for.

We are calling on the BBC to publish a bold, long-term vision that sets out its role, and how it will deliver value and distinctiveness in a rapidly changing world.

Changes in the media landscape are occurring at unprecedented scale and pace.
The BBC must make choices and be honest about what it can and cannot deliver in the context of rising costs, restricted funding, and a ruthlessly competitive future marketplace.

The BBC must also do more to maintain the legitimacy of public funding by doing a better job of representing the full range of perspectives and communities that make up our diverse society.

Some form of public funding for the BBC remains necessary. The licence fee is one option, but the link to a television set looks increasingly outdated. Its regressive nature means that regularly raising the fee to the levels the BBC requires will hit the poorest hardest.

There are alternatives. A universal household levy linked to council tax bills is one option which could take greater account of people’s ability to pay. A ring-fenced income tax is another. Reforming the existing licence fee to provide discounts for low-income households is a third.
The BBC will also need to be open minded about exploring more ambitious commercial options, such as domestic or international hybrid subscription services. There are a range of possible versions, with varying levels of investment and risk.
The BBC’s future must be driven by a positive approach from the leadership. It should publish costed options for future funding mechanisms, and how these would affect the BBC's ability to deliver on its mission in the next decade and beyond. This will require fresh thinking and a more open-minded approach than it has shown in the past.
We were concerned that the Government did not have a specific plan for engaging the public. We call on the Government to commit to holding national public consultation in advance of it proposing changes to the funding model.