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BBC forced to make cutbacks as licence fee price frozen

THE BBC has been forced to make cutbacks after ministers rejected the broadcaster’s plea for the cost of its licence fee to keep up with inflation as it has done in the past.
As it stands, the licence fee will go up by less than the rate of inflation over the next five years, reportedly leading to a reduction in funding for the media company. The Government decision is thought to have been by ministers’ fears of hitting households with an increase in line with inflation. Ministers are in the process of wrapping up the negotiations with the BBC about the fee, which currently stands at £159 a year.
A Government source told The Times: “The BBC is a hugely important national institution. But equally, these are hard times.
“Nobody wants to punish the BBC but it’s got to be subject to the same efficiency savings as everyone else.”
The BBC has asked for the fee to rise in line with inflation to allow the broadcaster to compete with streaming companies such as Netflix.
And the corporation has now warned it will have to cut programmes and services if it does not receive an increase that keeps pace with inflation over the next five years.
The BBC has asked for the fee to rise in line with inflation. (Image: Getty)
The Government, however, cited higher energy bills and a mooted tax rise to cover the costs of social care that is set to hit households, as a reason for the rejection.
A second source told The Times that refusing to raise the cost of the licence fee, which brings in £3.2bn a year for the BBC, in line with inflation could lead to significant cuts to “quality” programming.
In March, the corporation said that the licence fee “is the best way of funding a universal BBC”.
Instead, the Government is considering a deal that would see a below-inflation licence fee rise for the next two years, rising to an above-inflation increase for the remainder of the five-year period.
Ministers are in the process of wrapping up the negotiations with the BBC. (Image: Getty)
That, however, would still mean the fee had not kept pace with inflation in the period.
Sources inside the BBC have reportedly claimed they believe the BBC is being punished by the Government for ending free licence fees for the over-75s, against ministerial wishes.
According to figures, around 260,000 over-75s contacted by TV licencing have yet to arrange a payment.
Currently, those aged 74 and over who are receiving pension credit are able to apply for a free TV licence.