BBC TV licence fee to increase from next year

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The BBC has announced the TV licence fee will be increased to £169.50 from next year.

The rise of £10.50 (a 6.6% increase), determined using the consumer prices index (CPI) inflation rate from September, will become effective from April 2024.

As it was initially set to go up by £15 (9%), the new licence fee will now cost less than the BBC and the Office for Budget Responsibility (OBR) had anticipated after a two-year freeze. For reference, the increase will amount to 88p a month.

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The decision to increase by a smaller amount is said to leave a funding gap of £90 million, with the government launching a review of the BBC's funding model, Culture Secretary Lucy Frazer told MPs.

In a statement, the BBC Board said: "We note that the government has restored a link to inflation on the licence fee after two years of no increases during a time of high inflation.

"The BBC is focused on providing great value, as well as programmes and services that audiences love. However, this outcome will still require further changes on top of the major savings that we are already delivering.

"Our content budgets are now impacted, which in turn will have a significant impact on the wider creative sector across the UK. We will confirm the consequences of this as we work through our budgets in the coming months."

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As for the future of the fee amidst a surge in streaming subscriptions, Frazer suggested that a new model could be introduced to reflect the change.

"Reach and viewing of broadcast TV fell significantly in 2022 with reach falling from 83% in 2021 to 79% in 2022," she said (via Sky News).

"As this trend continues, linking the TV licence to watching live TV will be increasingly anachronistic as audience viewing habits continue to move to digital and on-demand media.

"We know that if we want the BBC to succeed, we cannot freeze its income but at the same time we cannot ask households to pay more for the BBC indefinitely."

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