Oct 2010 19

Today’s Mail carries news that the BBC may have to fund free TV licenses. This would be a fantastic move and one we suggested in our book How to cut public spending. The Department for Work and Pensions transfers over half a billion pounds a year to the BBC to cover “lost income” for providing the licenses for all residents over 75 with a National Insurance number.

This is a absurd settlement and the BBC should provide these licenses as part of the broader public service commitment that we so often hear about. Licence fees generate around £3.6 billion for the beeb, so £500 million is more than adequate to facilitate such a move and may mean that the BBC takes greater care with how it spends licence-fee payers’ money.

The mass ranks of middle-management that receive overly generous remuneration could be scaled back and the BBC could finally realise that if ‘talent’ demand obscene salaries then they are best left to commercial stations to battle for. Viewers wouldn’t lose out as their favourite personalities would still be on tele but the BBC wouldn’t involve itself in contractual games that it shouldn’t be playing. Of course, this proposal has sparked fury at the BBC. But when you’re paying £54 million on top-earning stars and have raised the licence fee over a number of years it’s hard to justify asking the taxpayer to pay again for free TV licences.

Some at the BBC have said the corporation are prepared to fight the move “tooth and nail.” But Mark Thompson, the BBC Director-General, has responded by offering to remove the burden of funding the BBC World Service from the Foreign Office and cover the £300million annual costs out of its own budget in exchange for free licenses. This seems to be a concession that the BBC have had it easy for years – the DG knows that something has to give but he’s trying to save the Corporation a couple of hundred million.

When the BBC reduces its costs it doesn’t necessarily mean savings for the Treasury – paying for free licenses would change that. But when license fee payers are already paying £145.50 per year for a license, it would be completely unacceptable for an increase in this to cover costs the BBC should already be budgeting for.This is a measure that would mean the BBC plays its part in reducing the deficit.

It seems that this may be only the beginning of a long tussle between the BBC and the Government. After the quangos review last week the BBC should be in no way be exempt from drastically cutting their costs. It’s no good for them to say that they are cutting costs while the licence fee remains so high.

We will all have to watch closely as the negotiations begin in May 2011 over the size of the next license fee settlement. But what is obvious is that the Coalition should firmly stand its ground.

Chris is a Policy Analyst at the TaxPayers’ Alliance, focussing on local government spending. His work in this area includes papers on trade union funding and our Town Hall Rich List.

  • frankos

    One of the last of the nationalised institutions–the anachronistic BBC will eventually fade away as people access media via TV/phones/+ other media.
    There is no real affection towards this wasteful media provider from the new generation, who find it rather old fashioned.
    It has nothing to offer other than a rather chippy pinko attitude towards business which no doubt Guardian readers find charming.
    Begone BBC

  • http://profile.typepad.com/6p0133f544b3fe970b me.yahoo.com/a/2kEUtuItwcv0ka3DkHSZq7lEQb2r

    Indeed, begone BBC. As the BBC licence is a tax on watching television masquerading as a Public Service Broadcasting agency – read government stool pigeon…it should be eliminated under the scrutiny of simple logic that it is worth nothing if you only watch Sky and Coronation Street, and if the much-vaunted comedies and dramas are really that good (and with 3.5billion a year to spend some of them ought to be…), then selling them ought to be a snap…people all over the world are still paying to watch Monty Python and Basil Fawlty, to pick from a large selection available – even the Goons still sell. And all that from a nationalised industry – but then I could do as well easily if I 3.5billion a year to spend on talent…

  • Steve Collins

    I had to laugh at the comments from your two corrspondents above – they’re so out of touch and way off the mark, it’s laughable.
    The simple fact of the matter is that the BBC is the best broadcaster in the world.
    It produces high-quality content that in many areas, is second to none.
    You can watch programmes without being interupted by inane advertising every 10 minutes. You can watch news programmes and cutting edge journalistic research without the dark hand of proprietal influence dictating content. It even criticises itself – how many organisations do that?
    The right-wing press and the TPA really are on a losing wicket attacking the BBC – and you know it. The majority of Britons love the BBC and view it at as one of the great British institutions. Of course, it needs a bit of a kick up the pants and to run more efficiently, but it provides a helluva lot of good quality services for the £13 it costs each family each month.
    You wouldn’t get that kind of value and quality from the private sector, that’s for sure.

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