BBC license fee review must be honest
A thorough review of the BBC’s licence fee is necessary, but it must consider that such a fee, perhaps turned into a household charge, may be the least-bad option.
You may have missed the informal Government announcement that it plans to launch in the autumn a formal review of the future funding of the BBC and its licence fee.
The story suddenly popped up in a number of newspapers, not least on the front page of The Times.
It made little impact, mainly because there has been so much other news going on — including quite a few noisy stories about BBC presenters and the Corporation coverage of the great Nigel Farage-Coutts scandal.
For the UK media it could turn out to be an important story even though nothing fundamental can happen until the Corporation’s current Royal Charter runs out in 2027.
It is absolutely right that there should be a thorough review of the BBC licence fee and the possibility of alternative means of funding, in part or in whole, the UK’s 100-year-old public service broadcaster. So much has changed in the media landscape, even in the last five years, such as the rising competition from international streaming organisations, and increasingly from enormous social media groups such as TikTok.
A formal, independent review is both timely and necessary — as long as there is clarity about what role the BBC is expected to play in future.
Are we clear that the desired aim is the maintenance of free, at-the-point-of use rather like the National Health Service?
It is also vital that the outcome is not prejudiced in advance by the political predilections of those ordering the review.
It would also help if it were realised that, again rather like the NHS, the problem is too complex to be “fixed” by any simple magic bullet.
Less than overwhelming evidence of ‘unsustainability’
There is a lot of history here. Remember that 30 years ago former Prime Minister Margaret Thatcher wanted to replace the licence fee with advertising but the committee chaired by free market economist Alan Peacock came up with the “wrong answer” and the licence fee endured, and endured.
On the face of it the Government position seems to be even-handed and reasonable: “We remain committed to reviewing the licence fee model ahead of the next charter period to explore the potential for alternative ways to ensure the BBC remains appropriately funded over the long terms,” the Government said.
There is, of course, one classic weasel word, “appropriately,” to which the obvious response is appropriate to what?
The political framing of the story was less benign. The autumn review was going ahead because of ministerial concerns that the “evidence” shows a “growing unwillingness.”
As a result: “the licence fee model is becoming unsustainable.”
That may or may not turn out to be true, but the evidence cited in support is somewhat less than overwhelming.
The recently published BBC annual report showed that the number of individuals buying a licence fee had fallen by 500,000 to 24.3 million resulting in a drop in licence fee income from £3.8 billion to £3.74 billion.
Unfortunate for the BBC, but evidence that the licence fee is “increasingly unsustainable”?
Given the almost endless competition the BBC faces, it is entirely possible to argue that those numbers represent a remarkable degree of stability for these disrupted, revolutionary times. Indeed, there is no sign of anything falling off a cliff anytime soon.
Any review should therefore be completely open-minded between the existing licence fee and potential alternatives.
The farce over the consultation on privatisation of Channel 4 should serve as a warning to ministers if there is any intention to have an honest dialogue on an important matter for society.
Despite consultation questions loaded in favour of privatisation to an embarrassing degree, 88% of the respondents, including the main professional bodies involved, argued against privatisation. Naturally all this was ignored and Channel 4 only escaped the self-harm of privatisation because of the fall of Boris Johnson and his dear friend Nadine Dorries.
The other sign of trouble will come from the setting of a panel of specialist advisers to assist ministers with their decision. The danger is that such a panel will be packed with those who already believe the licence is unsustainable, such as lifelong opponent of the licence fee David Elstein, to name but one.
Oh and please spare us from dodgy opinion polls asking people whether they like paying the licence fee or not.
In search of the least-bad form of funding
The Government apparently likes the idea of funding the BBC through partial subscription — paying for some premium content.
Possible, although by definition it would create a two-tier system and would be a significant move away from a universal service available to all for the same price. Those without broadband — around 8 million — would be denied access to presumably the BBC’s best drama at least at the same time as everyone else.
Other options cited by the Government include advertising, a broadband levy and increased commercial activity.
The BBC could redouble its efforts to sell more programmes overseas and it would still make little impact on the scale of revenue raised by a universal licence fee.
As for advertising, Peacock found there was not enough TV advertising revenue to fund the BBC and the existing commercial broadcasters. The more advertising revenue the BBC takes the greater the damage to ITV, Channel 4 and Channel 5.
A broadband charge might work, perhaps combined with a reduced licence fee for those without broadband, although it would be complicated and you still would have the cost of maintaining over-the-air broadcasting.
It is possible to add a percentage charge to electricity bills, although that might be psychologically unpopular in the midst of a cost-of-living crisis. Turkey had such a broadcasting charge until recently but has now abolished it.
Perhaps the strongest alternative contender is a household broadcast charge, which would mean everybody pays for a universal service. It could also alleviate the worst aspect of the licence fee — the poor pay as much as millionaires — by linking the amount paid to council tax bands.
Ireland plans to go down the household charge route, although the money will be divided between RTE, the national public broadcaster, and other public service operators.
The time is right for a thorough review of how the BBC should be funded for the next Royal Charter period. Just make it honest, please, and do not rule out anything including the surprising possibility that a licence fee, perhaps turned into a household charge, might remain the least-bad way to fund a universal service in the public interest.
Raymond Snoddy is a media consultant, national newspaper columnist and former presenter of NewsWatch on BBC News. He writes for The Media Leader on Wednesdays — read his column here.