BBC licence fee: UK TV broadcaster boss Tim Davie wants progressive cost reform - will it be scrapped?

BBC director-general Tim Davie has said that he is open to exploring a "more progressive" licence fee system, as he revealed plans for the corporation's largest-ever consultation process in the upcoming year, allowing the public to shape discussions about its future.

The licence fee, which has been frozen at £159 for two years, will increase to £169.50 annually in April, after the Government announced it would use a lower rate of inflation to increase the household charge.

The combination of the freeze and escalating inflation has prompted the broadcaster to reevaluate its priorities as it seeks to make £500 million of savings - Davie announced on Tuesday (26 March) that an additional £200 million in savings would also be required.

Speaking at a Royal Television Society (RTS) event in London to discuss the future direction of the BBC and its role for the UK, Davie said the broadcaster is planning to “proactively research” how it will reform the licence fee post 2028, after the current charter agreement ends in December 2027.

In a speech, he said: “There is no doubt that the market has changed hugely since the licence fee was introduced and I think it is right to ask fundamental questions about its longevity in a world that is now full of choice…

“We should not create another commercial walled garden or a narrow BBC that provides a niche service for the most hardcore users.

The very wonder of the BBC is that quality news sits next to genres such as drama and sport, thus ensuring widespread engagement. This is a precious ecosystem.” He added that the corporation is “not defensive about the future” and believes it “will need reform”.

Davie said that when researching how the broadcaster could reapproach the licence fee it will be “looking at its scope, how it could be more progressive and making sure its enforcement is fair and proportionate”.

Alongside engagement with the Government’s review into the licence fee, he said that starting next year the BBC will open up its “biggest ever consultation process so the public can inform and drive the debate on the future of BBC”.

“Our aim is to make contact and get feedback from hundreds of thousands of people and we do so with an open mind”, he added.

Later answering questions on the future of the licence fee, Davie underlined that he feels it “needs reform” but regards it as “precious”.

The BBC boss noted that those over age 74 who receive Pension Credit are entitled to apply for a free licence and said he is open to considering who else could receive concessions.

He added: “That doesn’t necessarily imply means testing, there could be a number of ways you could make it progressive. I just think the idea we’re just sitting where we’re at is the wrong one.”

However, he confirmed he believes a licence fee should be still in place in some capacity as he feels it is important that everyone has a “stake” in it.

“We are curiously really accountable to the British public for that value. And I think that connection is really important and it keeps BBC on its toes in a way which I think is really helpful”, he added.

The BBC boss also discussed how the corporation’s focus for the future lies within three areas – “pursue truth with no agenda, back British storytelling and bring people together”.

It comes as the impartiality of the BBC’s news coverage and some of its presenters has been brought into question over the past year. On Tuesday, Davie said: “The BBC believes in the fearless pursuit of truth, anchored by the facts, with no political agenda.

“I set impartiality as our number one priority on taking this job… it was the right decision for the organisation and we need to hold our nerve amidst the storm.”

To hold to this aim, he said the broadcaster will “double-down” on brands such as BBC Verify, its fact-checking arm, as well as launching two new journalism brands.

One will provide “deeper analysis, longer reads and thought-provoking journalism which provide more context beyond rolling news” while the other will centre on BBC investigations to help people find all of their content in this area in one place.

To support these additions, Davie said the broadcaster is currently launching a new network of more than 70 multi-media investigative reporters across England, which is part of its plan to enhance local news.

The BBC boss also said it is “nearly done” in delivering £500 million of annual savings to fund its future plans, and is now working on plans to save a further £200 million so it can “deliver enough impactful content and ensure investment in digital products”.

As part of these adjustments, he announced BBC Three, the channel which caters to younger audiences, will once again face changes after it was only reinstated in 2022.

Davie said the broadcaster is planning to focus all of its “commissioning, marketing and social media activity” on BBC iPlayer rather than through BBC Three’s linear channel in order to “deliver more value for younger audiences”.

The BBC boss also said he feels the corporation should be seeking to make more partnerships with major “tech players” to help fill its funding gaps, like its recent pairing with streaming giant Disney+ for its upcoming Doctor Who series.

Davie added: “The commercial arm can expand enormously… the critical thing is protecting the funding for the UK public service and the World Service to do something that is absolutely driven by the values I’ve talked about.”