BBC licence fee will rise from £159 to £169.50 next year, Culture Secretary Lucy Frazer tells MPs

The BBC licence fee will rise from £159 to £169.50 next year – an increase of 6.7 per cent – Culture Secretary Lucy Frazer has told MPs.

The household payment, which funds much of the corporation’s operations, had been frozen at £159 and was set to rise in line with inflation next year.

However, the expected 9% increase – which would have meant an increase of around £15 from April 2024 – has been reduced, the Government said.

Speaking in the Commons today, Lucy Frazer said the 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 per year.

The news comes after the veteran TV executive Dr Samir Shah was named on Wednesday as the Government’s preferred candidate to become BBC chairman.

Culture Secretary Lucy Frazer announced the rise to the licence fee in the Commons today  

The BBC is already planning £500million of savings in the face of high inflation and the licence fee freeze.

Corporation bosses have already announced major changes to programmes, with flagship BBC2 current affairs show Newsnight shedding its team of investigative reporters and having its viewing time cut to 30 minutes.

Media consultant Alice Enders believes the BBC’s world renowned wildlife shows could be next in the firing line, as despite selling well globally they also require a large amount of investment. The original Planet Earth in 2006 cost £16million to make.

‘If the licence fee continues to wither, you are looking at the BBC’s big-ticket items to make savings so nothing can be immune,’ Ms Enders told the i. ‘David Attenborough’s natural history series sell well globally but they are expensive too. There would need to be more co-productions with international broadcasters.’

Ms Enders warned big ticket drama could also be the focus of cost-cutting, adding: ‘There could be less high-end drama, it’s a big expense and streamers are forcing prices up. The costume budget alone for The Crown is huge.’

The BBC is aiming to reduce the amount of content it commissions by 1,000 hours to save money.

Newsnight will be cut down to 30-minutes and will continue to air on weeknights, but more than 60 jobs will vanish. As part of the further budget-cutting measures, an extended hour-long edition of BBC News At One will be relocated to Salford.

Rishi Sunak has said the BBC needs to be ‘realistic’ about what people can 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.

Discussing how sustainable he feels the licence fee is, Mr Sunak told reporters: ‘First thing to say is, I think it is welcome that the BBC are looking at making savings and efficiencies in how they operate.

‘It’s really important that when things are difficult, everyone is doing what they can to ease the cost of living on families.

‘That’s certainly what I have done over the last year and made a bunch of decisions that haven’t been easy.

‘But that’s helped to bring inflation down to ease the burden and the cost of living.’

Speaking while on his trip to Dubai for the Cop28 climate summit, he added: ‘The BBC like any other organisation that serves the public should be looking to do that and cut its cloth appropriately, so I think that is very welcome.

‘I think going forward, look the BBC – final decisions haven’t been made obviously – but the BBC should be realistic about what it can expect people to pay at a time like this. That, I think is the right approach.’

The BBC previously announced its nightly current affairs show Newsnight would be reduced to a 30-minute programme as part of the cost-cutting measures in its news output.

The BBC Two show will continue to air on weeknights as an ‘interview, debate and discussion show’ but more than half of Newsnight’s 60 jobs will go.

As part of further changes, an extended hour-long edition of BBC News At One will relocate to Salford while BBC Breakfast, also broadcast from Salford, will be extended by an extra 15 minutes daily, the corporation said.

More focus will be put on digital storytelling and live coverage across the BBC News division, with a ‘reduction in the amount of television packaging’.

The corporation expects the raft of changes to save £7.5 million.

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