BBC Licence Fee to Rise to £169.50 Next Year, Culture Secretary Announces

Ministers Push for Inflation Rate Increase

The BBC licence fee will increase from £159 to £169.50 next year, according to Culture Secretary Lucy Frazer. The proposed hike of nearly £15 was scaled back to align with September's 6.7% inflation rate, following pressure from ministers. The decision comes as Frazer launches a review into the future funding of the BBC, aiming to reduce the impact of price rises on licence fee payers.

Review to Explore Alternative Funding Models

Frazer's review, supported by a panel of independent experts from the broadcasting sector and wider business world, will evaluate various options for funding the BBC. With an ever-evolving media landscape, increased competition, and changing audience behavior, the review aims to find alternative models that can ensure the broadcaster's long-term sustainability while alleviating the burden on licence fee payers.

Reduced Rise in Licence Fee

The government has introduced changes to minimize the cost to households, resulting in a smaller increase in the licence fee than initially anticipated. In 2022, the fee was frozen for two years to protect families from the rising cost of living. The current annual fee of £159 will remain unchanged until April 2024, after which it will rise in line with inflation for the following four years.

Ensuring Value for Money and Sustainability

Culture Secretary Lucy Frazer describes the agreement as a fair deal that provides value for money for licence fee payers while allowing the BBC to continue producing world-leading content. Recognizing the financial strain on families, the government has intervened to keep this year's increase to less than £1 per month. However, this settlement highlights the challenges the BBC faces in an increasingly competitive media landscape and with declining licence fee payers. The funding review aims to address these challenges and explore a reformed funding model that supports the BBC's sustainability while driving growth in the creative industries.

"I want a thriving BBC, supported to inform, educate, and entertain, and this funding review will help us make sure we can deliver this for decades to come," says Frazer.

In addition to the funding review, the government has allocated an extra £20 million to the BBC World Service to support its language services, English-language broadcasting, and efforts to counter disinformation.