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British Government Freezes TV License Fee

Annual U.K. fee funds the BBC, including raising about £654 million for BBC Radio

The British government has frozen the country’s long-standing TV license fee for two years as it pushes for a new funding stream for the 100-year-old British Broadcasting Corp.

First levied in 1923, the license fee has evolved over time, but currently it is required to watch or record television programs in the United Kingdom, Channel Islands, and the Isle of Man, no matter how the programs are delivered (over the air, streaming, or satellite) and regardless of where they originate.

Under the new policy, the fee is frozen at £159 (about $216) for color television until April 1, 2024, then it would be allowed to rise with inflation until Mar. 31, 2028. It is envisioned that a new funding mechanism will be identified as part of the BBC’s Royal Charter renewal in 2027.

In a statement on the government’s move, BBC Director-General Tim Davie and BBC Chairman Richard Sharp, called the freeze “disappointing.”

“We actively look forward to the national debate on the next Charter and, of course, all options should be considered. The BBC is owned by the public and their voice must always be the loudest when it comes to determining the BBC’s future,” Davie and Sharp stated.

With the two-year license fee freeze, the BBC is expected to need some £2 billion ($2.7 billion) in savings over six years to fill the funding gap left by the freeze. “If the BBC’s license fee income is capped at £3.8 billion, then costs have to be capped, or it has to increase its commercial income from £1.3 billion,” analyst Alex DeGroote told Radio World’s sister publication TVBEurope.

The BBC 2020/21 Annual Report breaks out how the TV license fee is spent in per month per household terms.

In 2021, some 25,208 households paid the TV license fee (including four households that paid a lower fee for having only a black and white television set), according to the BBC’s 2020/21 annual report. This raised some £3.75 billion (about $5.1 billion), according to TV Licensing, the agency that oversees administration of the fee. According to the BBC, TV license fee revenue made up about 74 percent of the corporation’s income in the fiscal year ending Mar. 31, 2021.

The original 1923 license fee covered radio receivers and it was expanded to cover television in 1946. In 2016, the BBC iPlayer app was incorporated into the TV license fee framework.

In 1971, the radio license fee was ended; however, the funds raised via the TV license fee continue to support BBC Radio. According to the BBC, nearly 17.5 percent of license fee revenue, about £654 million ($889 million), went to support BBC national and local programming. An additional 9.75 percent, nearly £366 million ($497 million), went to support the BBC World Service.