Because the price of the licence fee has been frozen, the BBC has been compelled to make cuts.
The BBC has been forced to make cuts after government rejected its request for the cost of its licence fee to keep up with inflation, as it has in the past.
Currently, the licence price will increase at a slower pace than inflation over the next five years, resulting in a cut in funding for the media corporation. Ministers’ fears of hitting households with an increase in line with inflation are said to have influenced the government’s decision. Ministers are nearing a conclusion in their negotiations with the BBC about the price, which is presently £159 per year.
“The BBC is a highly vital national institution,” a government source told The Times. But, on the other hand, these are trying times.
“No one wants to punish the BBC, but it has to make the same efficiency reductions as the rest of us.”
The BBC has requested that the fee be increased in step with inflation in order to compete with streaming services such as Netflix.
And the corporation has now warned that if it does not receive a rise that keeps pace with inflation over the next five years, it would have to slash programs and services.
Higher energy prices and a proposed tax increase to support the expenses of social care, which are expected to impact households, were highlighted by the government as reasons for the rejection.
According to a second source, the BBC’s refusal to raise the licence fee, which brings in £3.2 billion a year, in line with inflation might result in major cuts to “quality” programming.
The BBC stated in March that the licence fee is “the greatest way of funding a universal BBC.”
Instead, the government is mulling a proposal that would see a below-inflation increase in license fees for the next two years, followed by an above-inflation hike for the remaining five years.
However, this would still suggest that the charge did not keep up with inflation throughout the time period.
According to BBC sources, the corporation is being penalized by the government for ending free license fees for the over-75s, despite ministerial intentions.
Around 260,000 over-75s contacted by TV licensing have failed to make a payment, according to data.
Individuals who are receiving a pension at the moment are those aged 74 and up. “Brinkwire News in Condensed Form.”