Number 10 to consider scrapping BBC licence fee and introduce a subscription service

Reform: Could the BBC become a Netflix-style service in the near future? Source: StockSnap (via Pixabay).

By Lowri Pitcher

On Sunday, February 16, The Sunday Times reported that a Downing Street source had said “We are not bluffing on the licence fee. We are having a consultation and we will whack it. It has got to be a subscription model…They’ve got hundreds of radio stations, they’ve got all these TV stations and a massive website. The whole thing needs massive pruning back.​”

It is reported that the Government will consider forcing the BBC to sell off some of its television channels, most of its 61 radio stations and largely reduce its online presence while expanding the BBC World Service. 

The licence fee came into the spotlight last year after it was announced that the Government-funded scheme which provided free TV licences for those aged over 75 would come to an end in June 2020. It was estimated that this will impact over 3.7 million pensioners and it became a topic of discussion during the December General Election, with parties including Labour, the Conservatives, Plaid Cymru and the Green Party vowing to reinstate the free tv licences for over 75s. 

The Government’s Secretary of State for Transport, Grant Shapps responded to the reports of scrapping the licence fee all together on Sky News’ Ridge on Sunday Show by stating: “It is simply not the case that there is some preordained decision about the future funding of the BBC out there. The charter runs to 2027 so there is long way to go on all these decisions.”

In addition to the potential changes in the services offered by the BBC, one of the most notable changes in the proposed reforms is the scrapping of the licence fee which currently, for a full-colour licence fee, costs £154.50 per year and is set to rise to £157.50 from April. 

According to TV Licensing’s website, a licence is needed to “watch or record programmes as they’re being shown on TV,  on any channel”, “watch or stream programmes live on an online service (such as ITV Hub, All4, YouTube, Amazon Prime Video, Now TV, Sky Go, etc)” and to “download or watch any BBC programmes on iPlayer.” 

However, while countries such as Denmark and Finland have recently scrapped their tv licence systems and have replaced the cost through taxation, Number 10 is implying that the fee would be replaced by a subscription service. 

According to Ofcom, approximately fifty per cent of UK households subscribe to at least one streaming service. Platforms such as Netflix, Amazon Prime Video, Now TV and Sky TV are growing in demand while traditional broadcast channels including BBC One, BBC Two, ITV and Channel 4 are in decline. 

Many people are dismayed at having to pay over £150 a year for a TV licence when subscription services such as Netflix start from £5.99 a month (totalling nearly £72 pounds a year). However, supporters of the licence fee, which is the BBC’s main source of income, highlight that the subscription costs to streaming services such as Netflix do not fund national and regional rolling news channels, weather forecasts and live radio across multiple platforms. Services which do provide live-tv and commercial rights to sporting events such as Sky TV start at £22 a month (totalling £264 a year). 

Details about the changes facing the BBC are unknown, as is the potential cost of a subscription service, especially so given that major changes are unlikely to come before 2027. However, Culture Secretary Nicky Morgan has announced that there will be a public consultation into the possibility of decriminalising the non-payment of the licence fee with results due to be published this summer.

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