BBC’s funding future is still all to play for
Opinion
The government insists everything is “still on the table” regarding the BBC’s funding model post-2028 and there is no shortage of proposals. But not all ideas for replacing the licence fee are equal.
If The Sunday Times is right, then prime minister Sir Keir Starmer is keen on doing something radical about BBC funding its licence fee.
His culture secretary, Lisa Nandy, would like the licence fee to be abolished, with the corporation’s funding coming from general taxes and the BBC turned into a mutual organisation owned by all of us.
The well-researched and balanced article, which provided the cover story for Culture magazine under the tendentious headline “Why time is running out for the BBC”, is almost certainly an accurate description of the current state of thinking in Whitehall.
It has to be emphasised, as indeed The Sunday Times makes plain, that no final decisions have been made, consultations on a new royal charter for the post-2028 BBC begin later this year and there are still lots of arguments to flow under the bridge.
Radical change
It is entirely understandable that a new government coming to power after 14 years might want to do something about the licence fee, which is manifestly regressive and obviously unfair when those prosecuted for non-payments are often single mothers and among the poorest in the country.
Unfortunately, decriminalising non-payment could cost the BBC an estimated £1bn a year.
Then again, there is all that choice out there, from Netflix and YouTube to TikTok and a myriad of streamed channels from the Hollywood majors. There can be no doubt that viewing habits, particularly of the young, have already changed dramatically and may well have some way to go.
The latest information from communications regulator Ofcom shows that 16- to 24-year-olds spent only 5% of their screen time with the BBC, compared with 23% for the over-35s. Will this generation of the young change with age or have they already been changed forever?
Media Nations: YouTube influence on the big screen grows — will TV ad budgets follow?
Potential loss of independence
It would be wise, though, if Nandy and her boss avoided allowing their early predilections to become too set in concrete.
Like most of the alternatives to the licence fee, funding from general taxation has obvious merits alongside serious disadvantages.
It would remove the cost of separate collection and the need for specific prosecution for non-payers — and overall non-payers may amount to around 10% of the total.
Plus, it would be more equitable in that, since the poorest do not pay income tax, a thorny issue could be resolved for the equivalent of half a penny.
There is the additional merit that, if the aim is to fund a universal service available to everyone and free at the point of use, rather like the media equivalent of the National Health Service, funding by general taxation seems to fit the bill.
Snoddy: Complain about the BBC with ads all you like – the real threat lies elsewhere
There are, however, a number of huge problems — foremost of which is the fact that governments do not like courting unpopularity by raising taxation. Over time, unless there is an agreed formula, the value of the BBC financial settlement will be allowed to enter a period of permanent decline, at least in real terms.
It also cannot be excluded that the purse strings will be deliberately tightened as an act of political revenge because of one controversial programme or another.
Without very careful thought, direct government control of the finances could lead to a serious loss of independence.
There is only one practical way forward if such a system is to be viable. The government would have to hand over control of the setting of the BBC’s funding to a completely independent body, which would have the power to set the level based on the services the BBC offers and the importance of its contribution to the creative industries of the UK.
As for mutualisation, it sounds like a good idea but needs a lot of detailed exploration — and, indeed, explanation — of how handing over ownership of the BBC to us all would actually work in practice.
Alternative funding options
Not all ideas for replacing the licence fee are equal, however superficially attractive they seem.
Significant funding of the BBC by advertising can be quickly rejected, as years ago Margaret Thatcher had to do, because of the damaging effect it would have on commercial broadcasting. And, anyway, many people like to have the choice of watching programmes without interruption by advertising.
There are long-term proponents of voluntary subscription, just like Netflix. You can choose to subscribe to Netfix or not; why can’t people have the same choice over the BBC?
Such arguments usually come from the libertarian right and neglect the fact that such a “solution” would end forever the concept of a universal service for all of society. It would also be the antithesis of broadcasting and would require spending vast sums excluding non-subscribers from being able to view.
The BBC believes such a system would cost subscribers £580 a year compared with the licence fee, which will rise to £174.50 from April.
A more serious contender can be found in Germany, where a charge to pay for public broadcasting is levied on all households, whether they have a television set or not.
This spreads the cost more equitably across the entire social base and presumably makes it relatively easy to prevent evasion.
Two-tier system
The former Conservative culture secretary Lucy Frazer has put forward her own hybrid solution — again in in this week’s Sunday Times.
It is that there should be a much smaller universal fee to pay for essential public services such as news and current affairs, and there should be a top-up — essentially voluntary subscription — for entertainment such as Gavin & Stacey, which incidentally pulled in 20m viewers over Christmas.
Frazer also believes that the government should pay for the World Service.
With the exception of a government-funded World Service, the Frazer proposal seems messy, complex and expensive to deliver.
There is one final radical option that ought to be seriously considered by a government that insists everything is “still on the table”.
That obviously is a reformed licence fee — one that does not place such a burden on the poorest. Here, the government could help by either paying for, or at least subsidising, the licence fee for those on social security.
As the consultations begin, it is absolutely vital that everything really is on the table, including the revolutionary thought that if the TV licence fee is to be replaced after nearly 80 years, it should be by something that is actually better in the overall public interest.
Raymond Snoddy is a media consultant, national newspaper columnist and former presenter of NewsWatch on BBC News. He writes for The Media Leader on Wednesdays — bookmark his column here.