Public Service Broadcasting and the Licence Fee Settlement

There is an increasing consensus that the UK’s system of public service broadcasting (PSB) needs to evolve if it is to transition successfully to the internet era. That is why today the Government are announcing a new advisory panel to provide independent expertise and advice on this important issue. The panel will bring together representatives from the worlds of broadcasting, production, journalism and technology; and, it will support the Government in responding to Ofcom’s forthcoming report on the future of public service broadcasting. The full terms of reference and membership of the panel are available from gov.uk.

One vital issue that will proceed separately is the negotiation with the BBC and S4C, the Welsh-language broadcaster, regarding the next television licence fee settlement. We are now formally beginning this process to agree the level of the licence fee from 2022. To aid in our assessment of the appropriate level and to ensure we come to a settlement which offers the best value for money for licence fee payers, I have formally requested the BBC and S4C to provide the Government with specific financial information, as required under the BBC’s royal charter.

It is also the first settlement where S4C will receive full funding from the licence fee. S4C will be following the same process as the BBC.

As I have set out previously, the BBC is a world-class broadcaster, trusted and recognised across the globe. However, to ensure its long-term sustainability in a rapidly changing digital world it must also continue to reform. The Government’s priority is a BBC that affordably delivers its mission and public purposes; that truly reflects the whole nation in its activities and content; and that guards its impartiality in all of its output.

To reflect the Government’s priorities, I am asking the BBC to set out its financial information as far as possible in line with its public purposes. I have asked the BBC to consider in particular how it can maximise its commercial revenues and continue to make savings. I have also asked the BBC to include in its submission an assessment of the impact of the licence fee for those on the lowest income, including details of any further plans to support those in vulnerable groups, including the elderly.

In the interest of transparency, alongside this statement we are publishing on gov.uk the formal commissioning letters to the BBC and S4C. We will also publish future correspondence where appropriate. I will ensure that Parliament is informed of the outcome of the discussions with the BBC and S4C, and expect to lay my determination before the House to allow time for parliamentary debate before the settlement takes effect in 2022.

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