HomeInsightsHouse of Lords Communications and Digital Committee publishes report on future funding of BBC

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The Lords Communications and Digital Committee says that rapid changes in media, technology and consumer habits, combined with increasing competition, mean the BBC must define its role and publish a new vision for how it will deliver for audiences and benefit the nation.

The Committee warns that the BBC faces “stagnation and decline” if it does not urgently set out a bold new plan for its future. The Committee says this needs to include costed options for future funding models that go beyond the existing licence fee system, which the Committee describes as “regressive”.

The report finds that some form of public funding will remain necessary beyond the existing licence fee settlement, but for any form of public funding to remain legitimate, the BBC “must do a better job of representing the full range of perspectives and communities that make up our diverse society”.

The Committee also says that the BBC would need to expand its commercial operations and be “open minded about exploring more ambitious commercial options, such as domestic or international hybrid subscription services”.

The report finds that:

  • there remains a “vital” role for a BBC which delivers value and benefit to audiences, society, and the UK’s global position but that role needs to be defined more clearly and inform a bold new plan for the future, which sets out how the BBC will change;
  • the existing licence fee has several benefits but also drawbacks; the link to a television set looks increasingly outdated; its regressive nature means that regularly raising the fee to the levels the BBC requires will hit the poorest hardest;
  • there are alternatives: a universal household levy linked to council tax bills is one option that could take greater account of people’s ability to pay; others include a ring-fenced income tax and reforming the existing licence fee to provide discounts for low-income households;
  • the BBC will need to expand its commercial operations to generate additional streams of funding; this could include exploring options for domestic and/or international hybrid-subscription services;
  • a model based fully on subscription or advertising would not work, nor would a BBC funded wholly by government grants; and
  • the BBC will need to operate within a nimble regulatory framework in future; it currently takes too long for sensible changes to be introduced under the current arrangements with Ofcom.

The Committee expresses concern at the lack of plans by the Government for public engagement and calls upon DCMS to consult the public extensively before any major decisions about future funding are made. The Committee urges that any discussion on BBC future funding should move beyond the binary “for or against” licence fee debate. To read the Committee’s summary in full and for a link to the report, click here.