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Impossible to sustain BBC on current licence fee model, Culture Secretary says

BBC Broadcasting House in London. (Ian West/PA)
BBC Broadcasting House in London. (Ian West/PA)

The new Culture Secretary has said it is “impossible” to sustain the BBC on the current licence fee model as she addressed the future of the broadcaster.

Earlier this year, Michelle Donelan’s predecessor Nadine Dorries announced that the licence fee would be frozen at £159 for the next two years until April 2024 – but said she wanted to find a new funding model before the current deal expires in 2027 as it is “completely outdated”.

Appearing in front of the Digital, Culture, Media and Sport (DCMS) Committee meeting for the first time on Tuesday, Ms Donelan confirmed she would continue with the Government review into the annual charge.

Cabinet meeting
Culture Secretary Michelle Donelan (Stefan Rousseau/PA)

She praised the BBC as part of Britain’s “cultural fabric and society”, but said it is “undeniable that the licence fee is not a long-term sustainable model in its own right”.

Referring to licence fee payers as “subscribers”, she continued: “We know that because obviously, subscription figures are going down.

“There was a blip because of the change around for over 75, but it isn’t a long-term sustainable model.

“So if we want to make the BBC sustainable, we need to be honest about that and work together to make sure that we safeguard it into the future.”

Ms Donelan highlighted how the media landscape has “changed dramatically” over the last few decades and consumers’ “appetite for choice has been enhanced incredibly”, which she feels the BBC must keep at the forefront.

Asked what she would do if the review recommends no change to the funding model, Ms Donelan said she thinks that outcome is “impossible”.

She said: “Unless you were increasing the licence fee to a great deal per household, which would further drive down subscribers, then I can’t see how you would get to the figures that are required without topping up that funding somehow with another initiative.

“So the answer cannot simply be to continue with the licence fee if we want to protect the BBC, which I think we should be.”

The culture secretary admitted the licence fee review has not been commissioned yet, but ensured it will be “evidence-based” in its research.

In recent months, the BBC has announced a series of changes and cuts as part of its new strategy to create a “modern, digital-led” broadcaster.

Among the proposals, the corporation recently said it planned to make cuts to local radio stations and have them share more content and broadcast less programming unique to their areas.

Proposals confirmed by the broadcaster include the loss of 48 jobs across local staffing in England, amounting to a total reduction of 2%.

The plans have provoked criticism from figures including Culture Minister Julia Lopez and 90 Labour leaders from England, who wrote to BBC director general Tim Davie asking him to rethink the changes.

DCMS Committee
The BBC’s director of nations Rhodri Talfan Davies speaking at the Digital, Culture, Media and Sport Committee in the House of Commons (House of Commons/PA)

During the DCMS meeting, Ms Donelan said she understood why the cuts had been made but she was “disappointed” that the Government was not briefed about them in advance.

“I think there were two things that are disappointing about this, obviously the decision and we know that many members of parliament have aired their concerns on behalf of the local residents in relation to this decision and the subsequent decision in Northern Ireland,” she said.

“But also the way that it was handled because it would have been, I think, better for them to have approached us first and talked it through.”

She continued: “They are fully editorially independent and it would not be that we would be overriding their decision, but I think working constructively and together is always the best approach and certainly the one that I want to take.

“I have written to the BBC on this matter and they have recognised that in future they will adopt that approach.”

The culture secretary said she is not sure whether they will revisit the matter, adding: “But I think they do recognise that it could have been handled in a better way and they obviously recognise the level of concern aired by members of parliament and members of the public.”

Last week, the BBC’s director of nations, Rhodri Talfan Davies, defended cuts to local radio services as necessary to “keep pace with the way audiences are changing”.

He told the DCMS Committee the total amount of money being moved out of local radio amounted to about £11 million, with about £4 million of that being reinvested in the BBC Sounds service and podcasting.