The head of the BBC has said it was “not for one person to decide the funding model” of the corporation, in a swipe at the culture secretary, Nadine Dorries.
Dorries confirmed on 17 January that the licence fee would be frozen for two years, remaining at £159 until April 2024, after which it would rise in line with inflation for four years. The announcement was made in a Sunday newspaper and on Twitter.
Addressing the public accounts committee on Wednesday, Tim Davie, the BBC director general, said the announcement had taken him by surprise, but he had been “expecting an agreement within the next few days”.
He said he had been disappointed by the announcement and it would leave the BBC with a funding gap of £285m by 2027. However, he was pleased the corporation would have “six years of certainty”.
He said that after that there would be a “process” with a public consultation to decide future funding models. “I don’t think it’s for one person to decide the funding model of the BBC. We need to go through that properly. And I think the licence fee has proven itself to be very strong in what it delivers.”
Davie said there was “a lot to play for and a lot at jeopardy”, and he praised the corporation’s unique model. He said the BBC was important for democracyand for its commercial and economic value.
“There is a lot made at the BBC that flows out [to the broader economy]. We are accountable, and obsessed with household value … I worry if we dismantle this then it is a disservice to culture and democracy but also the economic health of our creative industries,” he said.
Davie gave a projection on the hole that the licence fee settlement has blown in the BBC’s finances, telling MPs the corporation had a “£1.4bn challenge” over the next six years.
After the freezing of the licence fee was announced last week, Davie told BBC Radio 4’s Today programme there was “no doubt” the deal would affect the broadcaster’s frontline output. He argued for a publicly backed model for the organisation, in the face of recent suggestions from the Conservative government that the future of its funding was up for discussion.
Revealing that the settlement would leave a £285m gap in funding by 2027, Davie said: “We are disappointed, we would have like to have seen an inflation rise throughout the period. We’ve got four out of six years and on we go. I would say having certainty of income for six years – as you know the media market is moving so fast – is very material to us.
“Our estimate is – and just to set this clearly for everyone – by the year end 2027, the licence fee income will be about £4.2bn, based on our assumptions around inflation. Obviously guessing games around inflation are difficult. We know this settlement … gives a £285m gap at the end of the period.”
