Government officials have announced that the BBC licence fee will see annual increases in line with inflation until 2027.
Starting in April, the fee will rise to £174.50, which reflects a £5 increase or about 42p per month. This follows a previous increase of £10.50 that brought the fee to £169.50 last April, after a two-year freeze at £159 due to ongoing scrutiny over the charge. The household fee, which provides substantial funding for the BBC’s operations, will adjust each year according to the consumer price index (CPI) inflation rate.
In addition, the Government plans to review the BBC’s Royal Charter and will conduct a public consultation to explore funding avenues that can ensure the broadcaster’s future viability. To help households facing financial difficulties, the Government is expanding the Simple Payment Plan (SPP), which is expected to allow an additional 9,000 unlicensed households each month to pay their annual fee in more manageable fortnightly and monthly payments. In light of these financial challenges, the BBC recently announced plans for major changes, including the termination of its long-running interview show Hardtalk and the reduction of over 100 positions in its news department.
Secretary of State for Culture, Media and Sport, Lisa Nandy said: “The BBC provides much-needed programming for households across the country, including children’s education, world-class entertainment and trusted news for all people in all parts of the UK. I want to see it thrive for decades to come.
“Through the Charter Review, we will have an honest national conversation about the broadcaster’s long-term future, ensuring the BBC has a sustainable public funding model that supports its vital work but is also fair and responsive to those who pay for it.
She added: “In the short-term, we are providing the BBC with funding certainty while supporting thousands more households facing financial hardship to spread the cost of a TV licence.”
Dame Caroline Dinenage, Chairwoman of the Culture, Media and Sport Committee said: “The licence fee rise is unfortunate timing.”
“At a time when many households are already feeling the squeeze, any increase that hits the pockets of the viewers and listeners who rely on BBC programmes could undermine the aim of commanding the support of the people who pay for the corporation.”
She concluded with an anticipation of further discussions: “We look forward to exploring the detail of the future funding plans when the Secretary of State appears in front of us before Christmas.”
A BBC spokesperson said: “We welcome confirmation that the licence fee will increase in line with inflation next year.”
They added: “We want everyone to get value from the licence fee and we are committed to delivering trusted news, the best homegrown storytelling and those special moments that bring us together.
“We also look forward to the debate about the future and working with the Government to ensure sustainable, long-term public funding.
“As part of these discussions we will run our biggest ever public engagement exercise in 2025 so that audiences are at the heart of shaping our future.”