Rishi Sunak Urges BBC to Be Realistic with Licence Fee Increase

PM warns BBC to consider the cost-of-living crisis

Rishi Sunak, the UK Prime Minister, has issued a warning to BBC executives, urging them to be realistic about any potential increase to next year's licence fee. Sunak indicated that a rise in line with inflation, taking the fee from £159 to £173.30, should not be expected. His comments have sparked a debate among Conservative MPs regarding the future of the licence fee and whether it should be replaced with a new funding model.

"Cut its cloth appropriately"

Sunak stated that the BBC, like any other public-serving organisation, should be looking to "cut its cloth appropriately." He emphasised that the broadcaster should be realistic about what the public can afford to pay during the current cost-of-living crisis. The licence fee was frozen for two years in 2022, and proposed rises in line with inflation are expected from 2024 until the BBC Charter is renewed in 2027.

Potential significant increase

If the licence fee were to rise in line with prices next year, families could face a jump of almost £15, which would be the highest increase in 40 years. Sunak acknowledged that the BBC is making efforts to cut costs but stressed the importance of easing the financial burden on families during difficult times.

Government review expected

A major government review is now expected to examine BBC funding, with sources from Whitehall describing the current funding model as "unsustainable." The BBC's annual report revealed a decline of 500,000 in the number of people purchasing a licence, resulting in a decrease in revenue from £3.8 billion to £3.74 billion. Former Cabinet minister David Jones supported the review, stating that the licence fee is a regressive tax that needs to be examined. Former BBC executive Craig Oliver warned that the broadcaster must adapt or face dire consequences.