It was announced in 2016 that the licence fee would increase with inflation over the first five years of the next Charter period (2016-21). As of 1 April 2021, the annual TV licence fee stands at £159, a £1.50 increase on the previous year. The Culture Secretary confirmed in January 2022 that the licence fee will remain at £159 until 2024 and then rise in line with inflation for the following four years.
I recognise that the licence fee represents a significant expense to households and therefore I welcome the decision to freeze the fee which will shield licence fee payers from the current inflationary pressures. The settlement strikes the right balance between protecting households and allowing broadcasters to deliver their vital public responsibilities while also encouraging them to make further savings and efficiencies.
Under this settlement, the BBC is expected to receive around £3.7 billion in licence fee funding in 2022 and £23 billion over the duration of the settlement period. The BBC also receives more than £90 million per year from the Government to support the BBC World Service. In addition, to support the BBC even further in what is a fast-changing broadcasting landscape, the Government is more than doubling the borrowing limit of the BBC’s commercial arm to £750 million.
Later in 2022, as part of the broader reform of the BBC, I understand the Government will start to consider the overall governance and regulation of the BBC, whether the current arrangements are working effectively and whether reforms are necessary in the Mid-Term Review of the BBC’s Charter.