According to a leaked report commissioned by the government from Touche Ross, the BBC has been so successful at cutting overheads that it could be forced to reduce the cost of the licence fee.
The BBC has reduced overheads and costs producing savings of £65m, which has been ploughed into programme making. The BBC now faces a future of static revenue as the level of colour TV licence ownership has reached virtual saturation point, at more than 95% of households. Also inflation in the industry is about 2% over the 1.4% RPI, fuelled by rising inflation costs and the large sums demanded by actors.
The heritage department will consult within the BBC, the broadcasting industry and with Parliament and the Treasury before announcing a decision on the level of the licence fee in October or November.
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