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BBC faces fresh funding threat

John Whittingdale

Whittingdale’s latest comments will cause concern for the BBC

The BBC could see its funding take a further hit after UK culture secretary John Whittingdale moved to clarify the government’s position on its licence fee.

In July, the UK pubcaster was forced to cover the £650m (US$1bn) cost of providing free TV licences for the over-75s.

In return, the government said it would allow the licence fee, which has been frozen at £145.50 for the past seven years, to increase with inflation. A loophole allowing those without a licence to use the BBC’s on-demand iPlayer service would also be closed, with the changes being phased in from 2018.

However, Whittingdale has now clarified that the agreement “was not the licence fee settlement,” with the future funding level dependent on the result of the government’s review of the broadcaster, which comes ahead of its royal charter renewal in 2016.

“We’ve made it quite clear that the decision as to the future level of the licence fee is connected with charter review, where we are having a full public consultation in which everybody is invited to express a view,” Whittingdale said.

“This was a decision about government spending. The licence fee settlement is part of charter review.”

Tony Hall

Tony Hall

BBC chief Tony Hall had said in July the agreement would deliver “financial stability” to the embattled broadcaster “and the ability to plan for the future.” However, a letter from the government to Hall, revealed shortly after the deal, outlined that licence fee rises would be “subject to the conclusions of the charter review in relation to the purposes and scope of the BBC.”

Today, BBC director of strategy James Purnell said that if the review resulted in additional changes to funding, the cost of licence fee provision to over-75s would have to be renegotiated.

“Our understanding is that quite properly if the government tried to change the BBC then of course the money would need to be looked at again,” Purnell said.

“If the government decides it wants to have a further licence-fee discussion, you would have to look at all of the elements that were up for grabs, both extra costs and extra income, and so you would have to start again.”

The agreement in July came just days after the BBC said it would be shedding a further 1,000 jobs in a bid to meet new budget restrictions.

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