License Fee Freeze Portends BBC Cuts
October 21, 2010 at 4:53 AM (PT)
The British government's six-year freeze in the TV license fee paid by all consumers will result in a 16% cut in the BBC's overall budget, the network said WEDNESDAY (10/21). The fee will be frozen at 145.50 pounds after negotiations between the government and the BBC resulted in a last-minute agreement that avoided the BBC having to pay for free TV licenses for those over 75, which would have cost the company 556 million pounds each year.
As part of the agreement, the BBC will continue funding the WORLD SERVICE, will take over Welsh-language TV service S4C, and will pay for the expansion of broadband to rural areas.
In an e-mail to staff, BBC Director General MARK THOMPSON said that the settlement, which was widely reported as the BBC capitulating to the government's cuts, "offers the BBC a great deal of certainty over its funding," and allows the BBC TRUST, rather than the government, to oversee the BBC's future.
He said that the additional 340 million pounds per year of costs will be met by 4% per year "efficiencies on our cost base," or 16% over the perio between 2013-14 and 2016-17. The cuts, he said, "will require some difficult choices that will affect us all" but are part of "a realistic deal in exceptional circumstances securing a strong independent BBC for the next six years."