Is this the end of the road for the TV Licence Fee?

As I write this Nadine Dorries, the Secretary of State for Digital, Culture, Media and Sport, is getting a telling off from the Speaker of the House of Commons for effectively announcing an end to the TV Licence via her Twitter account.

Dorries surprised people with not only the content of her tweet but also its baldness. The last big inquiry into future funding models for the BBC was published last March, it considered alternative models but concluded,

None of these were sufficiently better as a whole to recommend as an alternative“.

But it looks as though that debate is now being reactivated, as Dorries chooses to ignore the concerns of experts in the field.

Part of the reason why the Licence Fee was considered the least worst option was that none of the other alternative models would solve the intractable problems – many people still receive TV via their aerial rather than via broadband. Freeview can’t be turned into a subscription service, nor can radio, and so how can you still give people universal access to essential services?

The committee also concluded that this was a mess of the government’s own making – it hasn’t prioritised the rollout of fast, fibre broadband to enough of the country so a switch risks leaving people without BBC services.

The alternatives around Europe

Despite what you might have heard, licence fees are still quite popular around Europe for funding public service media. The European Broadcasting Union surveyed its members in 2020 and found 44% of member countries still use it.

It’s also far from the most expensive. Switzerland’s costs just shy of £275 a year.

But it is true that more countries are turning away from the idea. So what are the alternatives:

  1. Household levy – the TV Licence is a levy associated with your TV. Some countries have decided to do away with that connection and just to levy a fee based on your address, assuming that you will have some form of connected device, such as a smartphone or a laptop. Ireland, for example, has been debating a new broadcasting charge based on this principle. Levies are quite widely used, for example in France you pay through your property taxes, in Italy through your electricity bill.
  2. Funded through direct taxation. Some countries have removed the household connection entirely. The Netherlands, for example, funds its public service broadcasting through direct support from the public purse. But press freedom advocates warn that the closer funding comes to the government, the greater the temptation for ministers to interfere in the editorial content of the broadcaster.
  3. Tax supplement. There’s also the possibility of paying a hypothecated part of your income tax, as is the case in Sweden where users pay around £113 a year directly in their tax bills.
  4. Advertising. Although many public service broadcasters supplement their income through advertising, few rely solely upon it. It’s also the case that advertising funded media in the UK has struggled in recent years and ITV, Channel 4 and the rest are unlikely to warmly welcome an advertiser funded BBC.
  5. Subscriptions. While this seems to be the favoured solution for many on the Right of politics, no-one currently funds PSB media through subscription. It lacks the important component of being universally available, and would technically be impossible without closing off free-to-air services. It seems a non-starter at this stage. It is however great for funding Netflix.
  6. The nuclear option. Finally why have a BBC at all? One cannot help look at Dorries’ comments and feel that this is the underlying message. But the BBC’s popularity and widespread use by the public, some 87% of us use its services at least once a week according to Ofcom, might make this politically untenable

What happens next?

It is clear that the BBC is going to face an uphill challenge to explain why the Licence Fee should survive. It may be that this ship has already sailed.

In which case there is a very short time period during which a new funding model needs to be agreed and delivered, which has widespread public support, and provides a reliable income stream to fund the BBC in the future. And which the government of the day can support.

That will be a significant challenge for all involved.


Author: Matt Walsh


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