BBC Funding Blow: Annual Licence Fee Could Be Frozen For Two Years
8th November 2021

The BBC looks set to have its funding frozen for the next two years in a major blow to the corporation’s ability to compete with the big players.

According to UK paper The Daily Telegraph, the fee is likely to stop rising with inflation from next year for at least the next 24 months as the BBC and government remain in the trenches negotiating over its sum from now until 2027.

Along with a small amount of commercial revenue from BBC Studios, the BBC is currently funded via the majority of households paying around £159 ($214.52) per year for the licence fee and has warned it will struggle to keep up with inflated programming costs if this fee stops rising with inflation. It is expected to return to an inflationary rise after the two years.

As has been the situation since 2015, the BBC’s preference is for the fee to continue rising with inflation but UK inflation is predicted to soar by a mammoth 4.4% next year due to the economic impacts of the pandemic, which would mean a sharp rise in the fee, and the UK government is keen to keep taxpayer bills down.

The licence fee was frozen between 2010 and 2015 and campaign groups in support of the BBC have stated this kickstarted a decade-long decline of around £1BN ($1.35BN) to the BBC’s purse in real terms.

Super-inflation continues to impact genres such as drama, comedy and documentaries and in order to compete the BBC is having to co-produce or seek deficit financing for more and more of its content. BBC Chair Richard Sharp revealed in July that the cost of some of the corporation’s biggest series has doubled and that drama costs have increased by around 35%.

This is taking place against the backdrop of the BBC’s push to improve diversity and make more of its shows out of London, both of which require investment.

The situation could be be eased by the government doubling BBC Studios’ borrowing limit to £700M ($944M) in its recent budget. Director General Tim Davie has been clear that the commercial arm will need to pull more weight in order to futureproof the BBC for future challenges.

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