BBC criticised for applying to raise TV licence fee to £180

Britain, UK news from The Times and The Sunday Times - Times Online By Dan Sabbagh, Adam Sherwin and Philip Webster
Fifty per cent increase is called for to improve quality
: "BBC BOSSES have been summoned to a meeting with Gordon Brown next week after politicians and viewers groups attacked the Corporation’s bid to increase the licence fee by nearly 50 per cent by 2013.
The BBC asked for the Government yesterday to approve an annual increase in the licence fee of inflation plus 2.3 per cent — higher than expected — to help to fund new services and cut down on repeats.

Leading the attack was the Conservative Party, which has recently been wary of criticising the BBC in public. Theresa May, the Shadow Secretary for Culture, Media and Sport, said that the BBC’s proposals amounted to a “stealth tax” and the Corporation was asking the public to bear extra costs “without making sufficient savings elsewhere”.



If the BBC’s proposal is accepted, the licence fee will increase from £126.50 today to a projected £186.89 in 2013-14, assuming that inflation remains at current rates. Today, the licence fee increases by inflation plus 1.5 per cent a year, a settlement that was widely seen as generous when it was struck at the end of the last decade.

Until now, the Chancellor has not had the opportunity to study the BBC proposals in depth, but he is preparing to chair a Treasury meeting with Mark Thompson, the BBC Director-General, next week. At a recent Whitehall meeting, the Treasury made plain that the rise would not be “signed off” without the most rigorous scrutiny.

The BBC believes it will incur an additional £6 billion of costs between now and 2013, and estimates that it can only achieve £3.9 billion of savings, despite plans to axe or outsource 7,000 employees. It wants the rest of the money to come from the licence-fee payer. The cash will go on “improving quality”, by eliminating prime time repeats on BBC One and Two, and spending on new digital services, ranging from online local news, to delivering television via the internet from next year.

MPs on the Culture, Media and Sport Select Committee accused the BBC of setting its bid far too high, in a hearing attended by Mr Thompson, and Michael Grade, Chairman of the BBC Board of Governors. The MPs said the BBC risked creating licence fee martyrs similar to the council tax martyrs who have gone to jail rather than pay an increased rate.

John Whittingdale, chairman of the select committee, referred to a comment Mr Thompson had made when the BBC boss was chief executive of Channel 4. Mr Whittingdale said: “Somebody once said that the current licence fee had resulted in a BBC swimming in a Jacuzzi of cash. Some might argue that the demands made this morning will result in a BBC with a swimming pool of cash.”

Nigel Evans, Conservative committee member, told Mr Grade and Mr Thompson: “You are asking for an inflation-busting settlement. But there are millions of people out there who don’t get inflation-busting increases whatsoever.

“How have you got the nerve to come here and say you want to push up the licence fee to around £180 and expect those people to stump up the cash? There is a poll tax on their TVs and they have got to pay it.”

Viewers’ groups said the BBC bid would burden licence-fee payers with the full costs of converting the nation to digital television. Part of the BBC’s proposal includes paying £200 million to fund a public information campaign to make it clear that traditional analogue television will be switched off in favour of digital by 2012, and there will be a further cost to meet a government commitment to provide a free digital television set to the elderly and disabled.

Jocelyn Hay, chairwoman of the Voice of the Listener & Viewer, said: “It is totally wrong that Government should now expect licence payers to meet the additional cost of bringing a highly desirable social benefit of a kind which has traditionally been paid for out of general taxation.”

Help the Aged said that many elderly people would be unable to meet the increase. A spokesman said: “The BBC’s inflation-busting proposals will give poorer pensioners serious cause for concern. Many under-75s not eligible for free licences are already struggling to make ends meet in the face of increased household costs such as council tax and rising utility bills which far outstrip the meagre rise in the basic state pension."

Mr Grade admitted that the BBC management had called for an even higher fee rise but the Governors had forced the figure down. Mr Grade said he was “very unhappy” with the initial projected savings from efficiency targets.

He also believed that management had “over-egged” the returns likely to be made from the BBC’s commercial activities, pegging the figure back to £400 million over the seven-year period. The governors had called in PA Consulting to provide an independent review of the BBC proposal.

Mr Whittingdale said that the BBC, with its digital plans, was trampling on commercial businesses like an “elephant”.

FUTURE VIEWING

Television in 2013 will be completely different from the way it is today — and a large part of the change will be down to the BBC, which wants to use a generous licence fee settlement to transform the media landscape.

Watching will no longer be done exclusively on televisions. As download speeds improve, viewers will be able to watch programmes on their computer, via the internet, or on new versions of mobile phones.

The concept of a television channel will be weakened. Viewers will be able to pick and choose recent programming online, liberated from the tyranny of the programmers’ schedule.

Next year, the BBC wants to make the most recent seven days of programming available over the internet. Other companies may become broadcasters. Yahoo!, an American search engine, wants to start commissioning programmes, and some producers may be powerful enough to go it alone.

Today, a television licence needs to be paid if you own a television. It is a grey area as to whether this automatically covers television viewing on a mobile phone or a computer. At present 98.5 per cent of households own a television, and 95 per cent of them pay the licence fee.

The BBC indicated yesterday that it would be willing to change the rules to protect its revenue in the long term."