Could the TV Licence fee be facing major changes? The BBC’s own Chair has admitted he’s “troubled” by the criminal penalties for non-payment – raising fresh questions about the future of the broadcaster’s primary funding method.
During a revealing parliamentary session this week, BBC Chair Dr Samir Shah made the surprising confession while being grilled by MPs about the corporation’s finances.
Both Shah and Director General Tim Davie faced tough questions about soaring evasion rates, potential reforms to the licence fee, and whether alternative funding models might be considered.
The hearing offered a rare glimpse into the BBC’s thinking ahead of its 2027 charter renewal – including why they firmly reject subscription and advertising models, how the licence fee might be reformed to charge different amounts based on household income, and the financial realities driving these decisions.
With over 3.3 million UK households now legally declaring they don’t need a TV Licence at all, and evasion rates hitting their highest level in decades, the parliamentary session revealed an organisation that recognises the status quo can’t continue – even as it defends the principles behind the current system.
The TV Licence: Who Needs To Pay?
As a quick reminder, the TV Licence is currently a mandatory £169.50 annual fee (rising to £174.50 next month) that funds the BBC’s operations across television, radio, and online services.
You legally need to pay if you:
- Watch or record live TV on any channel or service (not just BBC)
- Use BBC iPlayer to watch any content (live or on-demand)
- Watch live content – even on streaming services like Netflix or Prime Video
Households that exclusively watch non-BBC catch-up services or on-demand content (and never any live TV) can legally opt out by declaring they don’t need a licence.
What many people don’t realise is that failing to pay the TV Licence when required is a criminal offence – not a civil matter. This means you can end up with a criminal record, a fine of up to £1,000, and in extreme cases of continued non-payment, imprisonment.
Approximately 1,000-2,000 people end up in magistrates’ courts every week for TV Licence evasion cases, with women disproportionately affected (because they’re more often home alone, so they’re the ones opening the door when the BBC comes knocking).
“Uncomfortable” With Criminal Penalties
It was against this backdrop that BBC Chair Dr Shah made his surprising admission that the criminal approach to enforcement troubles him.
“I am troubled by the idea that in today’s world not paying the licence fee is a criminal offence,” Shah told MPs directly.
This statement immediately drew follow-up questions from the committee, with MP James Frith pointing out the inconsistency of Shah’s position as BBC Chair while expressing personal misgivings about licence fee enforcement.
“It is remarkable that, as chair of an organisation, you do not come out so strongly in defence of there being a righteous cause to pay the licence fee,” Frith challenged.
Shah attempted to clarify his position, walking a tightrope between acknowledging his discomfort and recognising the financial reality:
“We must have enforcement, but we need to think about how that enforcement can be done. There have been questions of whether it should be a civil matter rather than a criminal matter.”
When pushed for a solution by MP Paul Waugh, Shah admitted: “We do not have a solution at the moment, but when we discuss the new funding model, we should make enforcement part of that debate and discussion.”
It appears that even the question of decriminalisation comes down to pounds and pence, with Shah revealing: “Decriminalisation would cost between £200 and £300 million a year, so it would add up to over £1 billion over the five-year period.”
Evasion Rates Hit Record Highs
The timing of this debate is particularly significant as TV Licence evasion has soared to 11.30% – its highest level since 1995, representing approximately £466 million in lost income for the BBC annually.
The problem is growing from two directions. On one hand, deliberate evasion is increasing – that’s people who DO legally need to pay, but do not.
On the other, the number of households legally declaring they don’t need a licence has jumped by half a million in just one year, reaching 3.3 million homes.
Davie acknowledged that technology could eventually provide better solutions for enforcement, noting there’s “definitely potential over time for a more rational, precise enforcement system” through digital data.
The BBC currently maintains 24 million licences in circulation, but both executives admitted they’re fighting against powerful trends as viewing habits shift from traditional broadcasting to on-demand streaming.
A Reformed Licence Fee?
Both BBC leaders acknowledged the need for significant reforms to the current system. Several potential reforms were mentioned during the hearing:
Making the fee more progressive based on household income – This would mean wealthier households might pay more than the standard rate, while those with lower incomes could pay less – similar to how council tax bands work.
Reforming the scope of what activities require a licence to better reflect modern viewing habits. This could include updating rules around streaming services and on-demand viewing to ensure the system captures how people actually consume content today, not just traditional TV.
Differently structured charges for businesses versus households. Currently, businesses pay the same licence fee as households for each premises where TV is watched, regardless of size. A reform could see larger businesses paying proportionally more based on their size or number of screens.
Reviewing the costs of providing free licences for over-75s on pension credit. The BBC took over funding this concession from the government in 2020 at a cost of hundreds of millions annually. Shah suggested the government could resume this responsibility, freeing up BBC funds.
These ideas align with Culture Secretary Lisa Nandy’s previous comments describing the current licence fee as “deeply regressive” and confirming she’s thinking “quite radically and creatively” about alternatives.
Nandy has previously mentioned how other countries fund public broadcasting, noting: “In France, for example, they have a levy on cinemas.”
Advertising and Subscription Models Firmly Rejected
Despite openness to reform, both BBC leaders were unequivocal in ruling out two potential funding alternatives that are often suggested: subscription and advertising models.
When asked directly which funding models they’d want to see “come off the table,” Davie immediately responded: “Advertising and subscription.”
Shah backed this up with a more detailed explanation:
“We are absolutely clear that advertising and subscription is not the right approach.
“It goes back to universality and back to that old phrase, ‘He who pays the piper calls the tune.’ If subscribers are paying, they will call the tune on what we make. If it is advertising, it is advertisers.”
This represents a defence of the BBC’s public service ethos, with Shah emphasizing: “We are certain that the people who should call the tune are the British public – the licence fee payer.”
The BBC has previously suggested that an equivalent subscription service could cost viewers up to £580 per year for a full package – more than three times the current licence fee.
General taxation funding was also dismissed, with Shah stating: “We would be sceptical because it allows the Government to have too close a say on it and we would like it to be slightly more independent.”
Financial Pressure Mounts
These discussions are happening as the BBC faces what it describes as a real-term annual reduction in income of 30% – that’s over £1 billion.
Both Shah and Davie hinted at potential solutions that would allow them to explore decriminalisation while maintaining financial stability:
“If the Government were to take back the funding of the over-75s, that would save us several hundred million. If the Government were to take back paying for the BBC News World Service, that would save us a few hundred million a year,” Shah suggested.
The financial strain has already led to difficult decisions, with the BBC announcing significant job cuts affecting approximately 1,000 staff positions in the coming years.
Looking Ahead
With the current charter set to expire in December 2027, these parliamentary discussions represent the opening phase of what promises to be an intense debate about the future of the BBC and its funding model.
The BBC is planning a major public consultation this year, giving viewers a chance to shape its future, while negotiations with the government about post-2027 funding are already underway.
One thing is clear from the parliamentary session – the status quo is increasingly difficult to maintain as viewing habits evolve and traditional broadcasting models face unprecedented challenges from global streaming giants.
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In retirement, I cannot afford the license fee. I suggest cutting the BBC programming and then vastly reducing the cost. Personally, most of it is rubbish, and if I never saw it again, it would not bother me, I can live without it.
I cancelled my licence. I have no streaming subscriptions. I just couldn’t afford them. I’m disabled and unable to work. I just watch catch up on non-bbc services. I’m lucky as I understand the computer stuff but its the older people I worry for.
It’s so simple really.
If you watch it you should pay for it.
If you don’t watch it you shouldn’t.
I’m not clear what you are saying. Do you agree with the current legal situation: if you pay for and watch Netflix live you should also pay for the BBC even if you don’t watch it?
We should not have to pay a license fee to watch any non-BBC TV be it live or not. I feel it is disgusting to make us pay even if we watch live TV on a streaming service.
Heck, BBC’s license fee is more expensive then streaming services. The other issue is iPlayer is not up to the current standards of streaming services. The sound is lousy. It 128k stereo that sound flat and lifeless. We need to have Dolby Atmos and Dolby Vision on iPlayer. We also need to not have such highly compressed sound even when the program is in stereo. When I see other BBC programs on say Netflix, we get Dolby Vision and Dolby Atmos or 5.1 sound. But on iPlayer we don’t. We get flat lifeless sound.
Also, if BBC wants us to pay then they need to up their service to warrant it. Glastonbury is a joke. The sound can be so poor sometimes as to be unlistenable. The sound should be high quality in 5.1 both on TV and on iPlayer.
Let’s not let BBC get away with shoddy service for such an outrageous fee. Given that this is a service for all, we need better local news coverage that’s not England. We need to get rid of all religious programming as they do not cater for all religions. All we have is religious programming for The Church of England. And that includes Royal events as they too do not cater to all religions.
Get rid of all of the world services, some of the excess radio stations, BBC Three and broadcast the programs on BBC 4 before 7PM.
Also up the bitrate of broadcast TV as it’s quite poor. BBC is a joke and we are the butt of that joke as we fund it as bad as it is.
There always seems to be an element of the BBC tip-toeing around the problem when it comes to TV Licensing. Admittedly, there is probably a small percentage of people who illegal watch ‘live’ content without paying for a TV licence, but there is a majority of people who simply cant afford to pay the fee and so they do look to digital streaming as a way of entertainment, without breaking the law. I’m one of the those people. I no longer have iPlayer and even when I did, this was purely for BBC News coverage, which does not justify the cost of a licence. But even the quality of programming into that went down and therefore, I took it upon myself to view any news platform via YouTube.
We are slowly becoming a nation that is happy to pay for content on-demand and not necessarily want to watch scheduled programmed tv content because its simply out there and in most cases, it doesn’t suit our needs. I rather live in a world where I can save time by pick and choose my content and not have it brainwashed scheduledly and shoved down my throat, all because its available and its out there.
And the main reason they want to decriminalise it is all criminal conviction funds go to the government
county court they keep the fine
nothing caring or kind by the bbc just looking to keep all the cash
As a licence is required to watch all live TV, why are the funds raised by that licence not split between all TV channels showing live content?
Why should people have to pay for the BBC if they never watch it?
Under the current system, there is no incentive for the BBC to make programs people want to watch, as the BBC knows they will get their money anyway. That is the reason the BBC are against a subscription model of funding.
Also the World Service is for people abroad (who don’t need a licence). Why should UK licence payers have to pay for this?
It’s interesting to read there is no mention of reducing the breadth of the BBC’s activities to lower it’s cost. If, as we are constantly being told many of their services are so popular revising them to a commercial format should be considered; radio 1,2,3 & 6 have commercial alternatives, cut them free and let them compete in the market. As most televisions support a broadband connection, and broadcasters all require the viewer to create an account & password to log in to their platform, I advocate all content should be accessed by micro-payments. Pay for what you view, the basic underlying cost could be funded from taxes which would give financial certainty to the BBC and also avoid license fee evasion. The BBC would have a financial incentive to provide more popular content that would subsequently provide more revenue. Broadcasting has evolved, requiring an innovative rethink to how it is paid for. There is a huge opportunity for the BBC to establish itself as a streaming service aggregator, allowing viewers to pick and mix from the numerous streaming platforms with a simple micro payment. Time to think innovatively, the framework is already in place, so why is this option ignored?
If you’re going to say that a licence is required to view any and all TV and streaming, live or otherwise then fine. I’m OK with a licence to watch content. BUT NOT TO FUND THE BBC!
I’m happy to pay a licence, but I’m not happy to give a single penny to the BBC, who are biased, overly woke and who generally put out nonsense programming and lie outright on their news shows. The BBC needs to die or go subscription. All public funding should be removed and they should be forced to compete on a level playing field with their competitors. Let’s see how many people actually want to watch their rubbish.
I agree!
I think one of the fairest option would be to make it a precept on the council tax. This would then allow for existing council tax discount rates to be applied to it (e.g. single occupancy). If it was applied to all households that pay council tax then in theory the cost should be lower than the existing TV licence fee.
It would presumably also save money in revenue collection, if it was collected as part of the council tax. Similarly enforcement would covered via the existing mechanisms used for non-payment of council tax.
Why? What about people who don’t watch tv – why should they be penalised? Its bad enough that council tax is going up by 5% this year and yet more and more services are being cut. It all boils down to what exactly are we paying into here if more and more services are being reduced? 5% more on what exactly? I think there does need to be a much clear, concessive and constructive charter on where does the council tax fee go towards, also allowing the opportunity for the average tax-payer to decide what should be paid into and what needs scrapping, rather than leave it to the council authorities to decide for themselves as to what we should be paying into, rather than go by assumption. I know from my own experience that Policing doesn’t go far enough and yet a majority of our tax goes out to them. Perhaps we should be allowed the option to pay into a company that actually delivers law and order and not into our current Police system that is constantly being mocked at.
I agree that the government should pay for free over-seventy-fives’ licences, and the World Service. The Tories should never have imposed that on the B.B.C.
But the licence fee also needs to take into account ability to pay, and be progressive, not regressive.
That’s why I favour funding the B.B.C. out of general taxation.
To anyone who says that would put the government in control, I say they already are! The B.B.C. is already run by the rich and powerful, FOR the rich and powerful.
To anyone who says that the B.B.C. would be run down, to save money, I say: so what? The B.B.C. already unfairly dominates British broadcasting, and is often just establishment propaganda. It should stick to genuine “Public Sector Broadcasting”, which it doesn’t!
Commercial broadcasters can then operate freely, giving the public what the public wants. They would also be funded how the public wants to pay: advertising, pay-per-view, or subscription.
That would also be very democratic.
That should be “Public SERVICE Broadcasting”.
The TV licence is becoming to expensive and this will encourage more and more to try and evade it. That’s why an alternative is now needed and enforcement to make sure a TV licence is purchased, even if the BBC isn’t viewed or listened to.
The other problem is a lot of people cannot afford to pay the TV license. It needs to go away. It’s ridiculous that we have to pay BBC to basically watch just about anything even when it’s nothing to do with BBC.