Is the BBC licence fee about to rise again?

Rishi Sunak has said the BBC needs to 'cut its cloth appropriately' as the corporation looks to increase its licence fee. Credit: PA

By Daniel Boal, ITV News Multimedia Producer

Culture Secretary Lucy Frazer has denied that the government is "ripping up" a licence fee deal with the BBC, after reports that Rishi Sunak is planning on blocking a 9% hike on the annual charge.

For the past two years the licence fee has been frozen at £159 per year. But, it was previously agreed that it would rise in line with inflation after April 2024.

It comes as the corporation looks to recoup £500 million worth of savings in the face of rocketing inflation and the two-year freeze on fees - which provides most of its funding.

As the cost-of-living crisis continues to rumble on, many might not be able to afford another financial burden being placed on their already stretched budgets.

How much will the BBC licence fee cost?

Currently, the BBC licence fee is set at £159, and has been at this level for the past two years.

But, as corporation bosses look to claw back savings, a proposed 9% increase has been mooted ahead of the next financial year.

This would be a rise of around £15 annually, to an expected £173.30.

When asked about a rise above £170, Culture Secretary Lucy Frazer said: "Well, obviously, that’s high. This is something that we’re looking at, at the moment. And we’ll be making a decision on this in due course.”

Culture Secretary Lucy Frazer is looking at which measure of inflation to measure how much the license fee should increase by, Political Reporter Jasmine Cameron-Chileshe says

When will costs rise?

If licence fees do rise, they would likely change in April 2024.

What has the government said?

Culture minister Lucy Frazer has confirmed that the government is looking into the planned price rise as concerns over cost of living impacts grow.

She said: “I wouldn’t put it like that at all, no. What we’re concerned about is the cost of living. And as the government, we have taken a number of steps to protect people from the rise of the cost of living over the course of the last few years.

Culture Secretary Lucy Frazer has confirmed that the government is looking into the planned price rise. Credit: PA

“What we’re looking at is the appropriate rate of inflation. And we’re considering that with an eye on the fact that we want to ensure that people continue to be able to afford their bills.”

Ms Frazer said a decision would be made “very soon”.

The PM said that “final decisions haven’t been made” about the future of the licence fee.

Discussing how sustainable he feels the licence fee is, Mr Sunak told reporters: “First thing to say is, I think it is welcome that the BBC are looking at making savings and efficiencies in how they operate.

“It’s really important that when things are difficult, everyone is doing what they can to ease the cost of living on families."

Speaking while on his trip to Dubai for the Cop28 climate summit, he added: “The BBC like any other organisation that serves the public should be looking to do that and cut its cloth appropriately, so I think that is very welcome."

In a bid to cut costs elsewhere, an extended hour-long edition of BBC News At One will relocate to Salford. Credit: PA

How else is the BBC planning on cutting costs?

The BBC previously announced its nightly current affairs show Newsnight would be reduced to a 30-minute programme as part of the cost-cutting measures in its news output.

The BBC Two show will continue to air on weeknights as an “interview, debate and discussion show” but more than half of Newsnight’s 60 jobs will go.

As part of further changes, an extended hour-long edition of BBC News At One will relocate to Salford while BBC Breakfast, also broadcast from Salford, will be extended by an extra 15 minutes daily, the corporation said.

More focus will be put on digital storytelling and live coverage across the BBC News division, with a “reduction in the amount of television packaging”.

The corporation expects the raft of changes to save £7.5 million.

A BBC spokesperson said: “The government and BBC agreed a six-year licence fee settlement in January 2022, which froze the licence fee for two years with increases in line with inflation from 2024.

“As is usual practice the government sets and confirms the cost of a licence each year and this remains unconfirmed for 2024/25.

“The BBC will continue to focus on what it does best: working to deliver world-class content and providing great value for all audiences.”

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