BBC major funding review

BBC major funding review

The British Government is conducting a major review of the BBC’s funding as the expiry of its current licence fee funding draws near. The Director-General is calling on the British public to “champion” the broadcaster to secure its future.

Man in front of the BBC HQ
Image: Tim Davie, BBC Director-General - Alexander Svensson & UK Department for Culture, Media and Sport (Creative Commons)

In a major speech around the future of the BBC, whose current licence fee funding is only assured until 2028, BBC Director-General Tim Davie said that the British public needs to decide if it is willing to “champion an institution that is admired worldwide and is needed more than ever”.

Davie’s speech to a room of industry experts and partners and streamed to BBC staff around the world follows the announcement in December that the UK Government will review the “sustainability of the BBC’s current funding model”.

Davie told the audience that the BBC will engage with the review, but “as ever, our most important relationship is with our owners, the UK public”.

Starting from next year, Davie said, the BBC will hold its biggest ever consultation process so the public can “inform and drive the debate on the future BBC”. 

“Today a new wave of technological change is reshaping our media landscape at extraordinary speed. It’s bringing fresh challenges for our democracy, our creative economy, and our society. It’s time to make a choice once again, to decide to intervene.”

BBC Licence fee

Unlike Australia, the BBC is funded primarily through licence fees rather than direct government grants.

The BBC operates in accordance with a Royal Charter, which is due to expire at the end of 2027. The national broadcaster’s 2023 income from the licence fee (paid by every UK household with a TV set, regardless of financial position) was £3.74bn, which accounted for about 65% of the BBC's total income of £5.73bn (the remainder comes from commercial activities, grants, royalties and rental income.

For many years the licence fee helped keep the BBC at arms length from governments but, increasingly, people are consuming news and entertainment through devices other than TV sets thus bringing into question the framework on which the fee is based.

Davie said the BBC is looking at ways to reform the licence fee if it is extended beyond 2028, including making sure its enforcement is fair and proportionate.

“There is no doubt that the market has changed hugely since the licence fee was introduced. And I think it is right to ask fundamental questions about its longevity in a world that is now full of choice.”

BBC hurt by “short-sighted” government funding cuts

“Short-sighted” government funding cutbacks – 30% in real terms between 2010 and 2020 – and a two year freeze on CPI increases to the licence fee imposed in 2022 have had a major impact on BBC operations and capacity, Davie said. 

 “This is particularly problematic as a strong balance sheet and the ability to deploy capital strategically is essential if we are to navigate digital transition. To strip money from the BBC during this period has been particularly short-sighted.”

As a result, the BBC’s staffing numbers have been cut by more than 1800 and over 1000 hours of content.

Davie said the BBC will now be focusing its limited resources on three key roles the BBC needs to play “for our democracy, our creative economy, and our society; roles which can make the impact of the BBC more, not less, precious”.
These, he said, are to pursue truth with no agenda, back British storytelling and bring people together.

In relation to pursuing truth, Davie said BBC Verify, the broadcaster’s fact checking service, will be joined by two new BBC programs: one which provides deep analysis, longer stories and more context than rolling news and the second which will bring all the BBC’s investigative journalism into the one place.

Davie said to continue to promote British storytelling, the broadcaster will use the best UK creative talent to produce authentically British stories, with production continuing to move away from London. By 2026, he said, more than 60% of the BBC’s TV production will be outside London and 50% of radio by 2027.

A narrow BBC not the best future

Davie warned that future funding of the BBC should not result in the creation of another “commercial walled garden or a narrow BBC that provides a niche service for the most hard-core users”. 

“The very wonder of the BBC is that quality news sits next to genres such as drama and sport thus ensuring widespread usage. This is a precious ecosystem.”

Read Tim Davie’s full speech