BBC Funding

Thursday 7th December 2023 Written Statements

[The Secretary of State for Culture, Media and Sport (Lucy Frazer)]

The Government are today announcing the level of the licence fee for 2024-25 and the launch of a review of the BBC’s funding model.

As agreed with the BBC in the 2022 licence fee settlement, following a two-year freeze the licence fee is due to rise in line with inflation from April 2024. The Government will use the annual rate of the consumer prices index in September 2023 to calculate this uplift. This is the same way the Government calculate inflation-linked increases to state pensions and benefits.

This decision means that next year’s licence fee increase will be kept as low as possible. In April, the licence fee will rise by 6.7%, to £169.50 annually. This will limit the increase to £10.50 over the year, or 88p per month, rather than a rise of £14.50, which would have happened under the previous CPI measure of an average of the 12 months to September.

The Government engaged with both the BBC and S4C to understand the impacts on the finances of both broadcasters.

The Government recognise that the licence fee model faces challenges in an increasingly competitive media landscape. The Government are therefore launching a review of the BBC’s funding model. The review will look at how we can ensure that the funding model is fair to licence fee payers, sustainable for the long term, and supports the BBC’s vital role in growing our creative industries.

The review will be led by DCMS and supported by an expert panel.

The findings of the review will support the Government to make an informed choice on whether to consult the public on moving to alternative funding models. This would take place as part of the charter review process, where any final decision on reforming the BBC’s funding model would be taken.

The terms of reference for the review will be published on gov.uk.

[HCWS107]