The BBC licence fee will rise by just over £10 next year as the Government reduces the planned increase due to the pressure of the cost of living.
Culture Secretary Lucy Frazer confirmed in the House of Commons on Thursday the licence fee will rise from £159 to £169.50 next year.For the past two years the licence fee has been frozen at £159 but it was previously agreed it would rise in line with inflation after April 2024, which would have seen it increase by 9% – or £15 – to £173.30.
However Ms Frazer said the annual increase will instead be based on September's consumer prices index (CPI) rate of inflation which was 6.7%. This will mean an increase of £10.50 to £169.50 next year.
She said: "The Government is committed to supporting families as much as possible during these difficult times.
"We recognise bill rises are never welcome and family budgets remain under pressure."
Earlier this week on BBC Radio 4’s Today programme, Ms Frazer said she had been discussing the issue with the broadcaster for a number of months and that ministers would have a further discussion with director-general Tim Davie before they made the announcement.
Prime Minister Rishi Sunak told reporters over the weekend that the BBC should be “realistic about what it can expect people to pay at a time like this” and the BBC should be looking to “cut its cloth appropriately” as the country continues to deal with the heightened cost of living.
The lower fee increase will come as a blow to the BBC, which is seeking to make £500 million of savings in the face of high inflation and the two-year freeze on the fee, which provides most of its funding.
The corporation previously announced its nightly current affairs show Newsnight will be reduced to a 30-minute programme, axing more than half of the show’s 60 jobs, as part of the cost-cutting measures in its news output.
An extended hour-long edition of BBC News At One will move to Salford while BBC Breakfast, also broadcast from Salford, will be extended by an extra 15 minutes daily.
The corporation expects the raft of changes to save the news division £7.5 million.
Earlier this year the BBC also announced it would broadcast 1,000 fewer hours of new TV programmes this year as part of a drive to save money.
Other cost-cutting measures include moving a number of World Service TV and radio broadcast services online, and merging the domestic and global news channels.
The licence fee announcement comes just a day after veteran TV executive Dr Samir Shah was named as the Government’s preferred candidate to become BBC chairman.
The role was vacated earlier this year by former Goldman Sachs banker Richard Sharp, who resigned after failing to declare his connection to an £800,000 loan made to Boris Johnson.
