The UK government has frozen public broadcaster the BBC’s main source of income, the TV licence fee, at £145.50 (€166) per annum for six years after an intensive round of last-minute negotiations that saw the corporation forced to accept a number of additional burdens on its resources.
Under the settlement, the BBC was also forced to accept a commitment to fund the BBC World Service (hitherto financed by the Foreign & Commonwealth Office), meeting the cost of rolling broadband to rural areas and financing local TV services and Welsh-language broadcaster S4C in order to avoid an even more onerous burden of meeting the cost of supplying free TV licences to the over-75s. The latter would have cost about £556m – a sum likely to rise over time.
The settlement means that the BBC will be forced to take a cut of about 16% in licence fee funding in real terms in the run-up to its Charter renewal in 2017, as well as to take on additional commitments amounting to £340m.
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