The current funding model needs to be “reformed for the modern age”, says new BBC director-general Matt Brittin.
New BBC boss savages TV licence fee ‘straitjacket’ in new update (Image: Getty)
The new BBC boss has hit out at the TV licence fee, branding it a “straitjacket” for the corporation that’s “not fit for purpose”. Matt Brittin, the former Google executive who took the top spot at the BBC just six weeks ago, told MPs the licence fee is “yesterday’s model”.
Most of the BBC’s funding comes from its £180-per-year licence fee, but the number of households paying for it has dropped in recent years. Many have criticised the annual increases, while others have switched to streaming platforms that mostly don’t require a licence, such as Netflix and Disney+. Mr Brittin said: “[The BBC is] held back, I think, by that straitjacket of the current licence-fee mechanic, and obviously that’s no longer fit for purpose. It’s yesterday’s model. It’s a busted flush.”
The current funding model needs to be “reformed for the modern age”, says the BBC’s Matt Brittin (Image: Getty)
He added: “That’s why we need to make the case for the BBC and a shift of the licence fee model.”
Mr Brittin was questioned by the culture select committee on Wednesday, marking his first public appearance since joining the broadcaster in May.
It comes as ministers review the BBC’s Royal Charter, which is due to expire in 2027 and determines how the corporation is funded.
Mr Brittin did not say what he would replace the fee with; however, he and BBC chair Samir Shah have suggested the Government reconsider a compulsory household levy collected through utility bills, such as broadband, mobile or electricity.
If all homes paid through the scheme, they said the fee could be reduced from its current level.
Mr Brittin said: “The challenge is it’s been ruled out, and I can understand the concerns about cost of living and so on, on households, but I think it’s got merits and others have found it to have merits.”
Mr Shah added the levy “would solve a lot of problems for us, and we’re certainly open to it”, but admitted it “could be seen as, and is effectively another tax”.
Ministers were also considering expanding the current £180-per-year fee to cover households that use only streaming services, such as Netflix and Amazon Prime.
Mr Shah said: “The licence fee has always evolved to capture changes in behaviour and consumption.
“The consumption behaviour change, we all know, is moving away from linear to on-demand. The modernised licence fee needs to capture that moment, and that will include other platforms.”
He added: “The important thing here is a modernised licence fee must capture the way people are now consuming content, particularly the younger generation.”
Mr Brittin has dismissed the idea of a Netflix-style subscription fee or funding the BBC through advertising.
He told MPs: “I think the impact of the BBC taking advertising would be to take it away from others, and I think that would [have] a devastating impact on the economy. I think the same, to an extent, with subscription.”
Mr Brittin is seeking to reduce costs by 10% as part of wider cost-cutting measures launched by his predecessor, Tim Davie.
He warned on Wednesday that more job losses were to come, with as many as 2,000 roles at risk.
Who needs a TV licence?
In the UK, you need a TV licence if you watch or record live TV on any channel, or if you use BBC iPlayer – whether it’s live, on catch-up, or on demand. This applies no matter what device you’re using, including a TV, laptop, tablet, or phone.
You also need a licence to stream live content through platforms like ITVX, All 4, Amazon Prime Video, Now TV, or Sky Go. However, if you only ever use these services for on-demand or catch-up (excluding BBC iPlayer), a licence isn’t required.
Services like Netflix, Disney+, and YouTube don’t require a TV licence – unless you’re watching something being broadcast live, such as a live sports event or news stream.
Failing to purchase a licence if one is needed risks prosecution and a fine.
Fines vary depending on location and can see people in the UK mainland face a penalty charge of up to £1,000, while those in Guernsey and Jersey could face fines of up to £2,000 and £500 respectively.
Some people may also be able to apply for a discount on their TV licences, ranging between 50% and even 100%. Find out more about this here.