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Government plans to freeze BBC licence fee a 'real terms' cut

20 October 2010

The government has announced plans to freeze the BBC licence fee and impose additional costs on the Corporation. The plans linked to the Comprehensive Spending Review (CSR) unveil unprecedented public sector cuts and deliver a blow to the BBC.

The National Union of Journalists has expressed shock and anger at the announcement. The BBC is directly funded by the licence fee rather than through general taxation, but the plans mean that the Corporation is no longer shielded from Whitehall budget cuts or political interference.

The proposed cuts announced include:

  • Freezing the BBC licence fee at £145.50 for six years, which is a 16% cut in real terms in the period up to the renewal of its Royal Charter in 2017.
  • Cuts to the Welsh language broadcaster S4C that could put in jeopardy the future of the channel, lead to a greatly reduced service including limited hours of transmission and moving to more online content with accompanying job losses: S4C has already pledged to cut 40 posts, a 25.6% reduction from the current 156 full-time staff, over the next two years.
  • The BBC paying for the World Service annual £272m-a-year running costs (currently funded by the Foreign Office) and the BBC to take over the funding of BBC Monitoring.
  • The BBC to meet the cost of broadband internet roll-out to rural areas and to pay for local TV and online services – the BBC will provide £150m a year for the roll-out of superfast broadband to rural areas from 2013 and £25m a year for local TV and online content.
  • A further one-off capital investment in local TV and online services of £25m will also come from the licence fee and the BBC will also underwrite the roll-out of the digital radio network nationally.
  • Government departmental budget cuts between 25-40%; the Department for Culture, Media and Sport is due to be one of the worst hit.

The BBC has committed to spend an extra £340m of licence fee money to fund these changes by 2014-15. Government expenditure from central taxation will fall by an equivalent amount.

There may be further significant cuts announced in relation to the funding of the BBC World Service and BBC Monitoring later today as part of the CSR which could have a serious impact on jobs and services.

Jeremy Dear, NUJ General Secretary, said:

"This is a full frontal attack on valuable public service broadcasting which will see vital services cut and thousands of jobs axed.
"The proposals are even worse than they appear – a 16% funding cut in real terms only includes the licence fee freeze.
"The BBC commitment to spend an extra £340m each year will devastate jobs and services and compromise the BBC's independence.
"We are determined to challenge them."

Tags: , BBC, cuts, funding, bbc licence fee, bbc world service, s4c, broadband, local tv, digital radio, dcms, tax, broadcasting, new media, job cuts, government uk