The BBC’s licence fee system is facing an unprecedented crisis, Director-General Tim Davie warned MPs last week, delivering his starkest assessment yet of the challenges engulfing Britain’s national broadcaster.
Speaking to the Public Accounts Committee, Davie abandoned any pretence that the current funding model could survive without major reform: “We cannot continue where we are. We will need reform of the licence fee. Just going on as we are and saying, ‘Look, it’s fine,’ is not a sustainable position.”
His admission comes as new figures reveal the scale of the funding emergency now facing the BBC.
Licence fee evasion remains at record highs while enforcement efforts struggle to keep pace – despite nearly 2 million doorstep visits, fewer people than ever are answering the door or ending up in court.
Perhaps most revealing of all, MPs exposed glaring gaps in the BBC’s digital enforcement capabilities, with the corporation unable to match iPlayer users with licence holders despite requiring viewers to log in.
Meanwhile, the BBC has quietly tightened the screws on households declaring they don’t need a licence, generating millions in extra revenue through seemingly minor rule changes.
The session revealed just how deep the BBC’s problems run, losing over £1 billion annually while the clock ticks down to the 2027 Charter renewal, which will determine its future.
The Numbers Keep Getting Worse
First, let’s be clear about who actually needs to pay the £174.50 annual TV licence fee.
You need one if you watch or record any live television from any broadcaster – not just the BBC – including international channels. You also need a licence if you use BBC iPlayer, even for catch-up programmes.
If you don’t pay when you should, it’s a criminal offence that can result in a fine of up to £1,000 or, in rare cases where fines go unpaid, even jail time. However, the BBC emphasises that prosecution is always a last resort.
The latest data presented to MPs shows the TV Licence crisis continues to deepen, with evasion holding at a record 12.52% while other key metrics deteriorate further.
This represents around £550 million in lost income annually, but that’s just the tip of the iceberg.
Separately, 3.6 million households have now legally declared they don’t need a licence – up 300,000 from last year. If all these households were to purchase licences, it would generate an additional £617 million for the BBC.
Combined, these losses total well over £1.1 billion annually – more than a quarter of the BBC’s total licence fee income of £3.8 billion.
The number of TV licences in force has fallen to just 23.8 million, down 300,000 from the previous year, even as the licence fee price rose to £174.50 in April.
Nearly 2 Million Enforcement Visits – But Fewer Answers
In response to the crisis, TV Licensing dramatically ramped up enforcement activity, conducting nearly 2 million visits to unlicensed households in 2024-25 – a staggering 50% increase compared to the previous year.
But the results haven’t matched the effort. As Shirley Cameron, the BBC’s Director of Revenue Management, told MPs: “The visiting environment is challenging. It can be harder to get an answer these days than, say, five years ago.”
Despite the surge in visits, there hasn’t been a corresponding increase in licence sales or prosecutions.
In fact, the number of people taken to court continues to fall – down 17% year-on-year according to the most recent data, continuing a downward trend since 2017.
MPs pressed the BBC executives on why the massive investment in enforcement wasn’t delivering results.
“There has been an investment in terms of the number of visiting officers and the increase in visits, which should be commended, but the return is not being seen in either licence sales or prosecutions,” observed Michael Payne MP.
The Cat-and-Mouse Game Over “No Licence Needed”
One of the most revealing exchanges came when MPs questioned how the BBC handles the growing number of households declaring they don’t need a licence.
It’s important to understand the difference here. There are two distinct categories of non-payers:
Licence fee evasion is when someone watches or records live TV broadcasts, or uses BBC iPlayer, without paying. This is illegal.
“No Licence Needed” (NLN) declarations are made by households that genuinely don’t watch live TV from any broadcaster or use BBC iPlayer.
These people can legally watch on-demand content from Netflix, Disney+ or Amazon’s Prime Video without needing a TV licence – as long as they’re not watching anything live.
There’s no legal obligation to inform the BBC that you don’t need a licence – but if you don’t, they’re likely to keep asking you.
The problem for the BBC is that both categories represent lost revenue. While evasion costs around £550 million annually, the 3.6 million NLN households represent a potential £617 million in revenue if they returned to watching licensable content.
But here’s where it gets interesting: the BBC has been tightening the screws on NLN declarations.
Cameron revealed the BBC has changed the rules around “no licence needed” declarations. Previously, if you told them you didn’t need a licence, they’d leave you alone for two years before asking you to confirm this was still the case. Now they ask you to reconfirm after just one year.
This seemingly small change generated an extra £13 million in revenue during 2024-25. Why? Because people’s circumstances change – they might move house, get Sky TV, or start watching BBC iPlayer again.
By checking in sooner, the BBC catches people who now need a licence before they might have done under the old two-year system.
The BBC also deploys “specially trained agents” to ensure people don’t “inadvertently” declare they don’t need a licence when they actually do.
These agents explain “the wide range of licensable activity, such as watching a live overseas channel on YouTube” – something many people don’t realise requires a TV licence.
The BBC even makes visits “on occasion” to check that no licence needed declarations are correct, essentially auditing people who have legally declared they don’t watch live TV or use iPlayer.
This reveals the BBC’s dilemma: as more people genuinely move away from traditional TV viewing, the corporation is working harder to catch those who might still need a licence, while also trying to win back those who have legitimately opted out.
Digital Blind Spot
Labour MP Chris Kane pushed the BBC on why it can’t use digital data to improve enforcement, particularly given that viewers must log in to use BBC iPlayer.
“If someone is watching iPlayer, do you know whether they have a licence, given that they have logged in and provided you with information on who they are?” Kane asked.
The answer was revealing: “There is not a match for that. The licence is based on a household and an address, and a BBC account is a different form of information without an address,” Cameron replied.
Kane pressed further: “What I am hearing is that it is not yet part of your arsenal of licence-evasion tools. It seems that you are not exploiting the digital information, even if it is just to help you to target the visits and the letters.”
Davie acknowledged the limitation but defended the BBC’s approach: “We could gate the iPlayer tomorrow, but I do not think that is the right thing to do. We could gate BBC News tomorrow; that is not the right thing to do.”
It seems that unlike Netflix or Disney+, which can simply block non-paying users, the BBC’s public service remit means it can’t (or won’t) easily restrict access.
The Digital Transition Dilemma
Perhaps the most uncomfortable moment came when Kane challenged the BBC’s plans for digital transition, drawing on his experience representing a rural Scottish constituency.
“My constituency of Stirling and Strathallan is predominantly rural, and my mailbox is full of people complaining about the inability to get a digital service,” Kane told the committee. “For those who have broadband service, it ain’t of a level where they can do streaming.”
This exposes a flaw in the BBC’s digital strategy.
While the corporation pushes ahead with online services and talks about eventually moving away from traditional broadcasting and Freeview (with streaming platforms such as Freely), millions of households still lack reliable broadband.
Kane made the point starkly: “In a digital world, you now have my licence fee, plus £20-plus a month to get a broadband connection. The cost to access a BBC service will be £174 plus a minimum of £240 on top of that to get broadband.”
Davie insisted the BBC wouldn’t abandon traditional broadcasting until universal broadband is available, but admitted: “The BBC has no desire to have people who cannot get our services.”
The Charter Review Countdown
With the BBC’s current charter expiring in December 2027, pressure is mounting for radical solutions.
Davie was unambiguous about the need for change: “Without that level of radicalism, I do not think we are going to safeguard public service broadcasting for a generation – I really don’t.”
The government is expected to publish its Green Paper launching the Charter Review process in October, setting the stage for what could be the most significant overhaul of BBC funding since the licence fee’s introduction.
Speaking to MPs, Davie ruled out simply continuing with incremental changes: “Chipping away at it for years on end will not work. We have to make some serious decisions about what the fee covers, how we charge people and what is included.”
This builds on his warning in June that the BBC faces a looming “crisis” without funding reform, where he first suggested a progressive payment system similar to council tax bands.
What This Means for You
For now, the £174.50 annual licence fee remains mandatory for anyone watching live TV or using BBC iPlayer. But the writing is on the wall for major changes ahead.
The numbers paint a clear picture: nearly one in eight households that should be paying the licence fee aren’t, while another 3.6 million have legally walked away from it entirely.
Meanwhile, enforcement efforts are struggling to keep pace with the scale of non-payment.
With the BBC’s own boss now admitting the current system is unsustainable, the only question is what will replace it – and whether the government can find a solution that preserves public service broadcasting while addressing the funding crisis.
The charter review process beginning next month will determine whether that choice leads to reform or something more dramatic entirely.
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Don’t hold your breath for 2027 the BBC charter will get renewed under Labour when I paid the TV licence i got charged extra £10 for paying Direct debit tv will go internet only Freely them everyone will be tracked who is watching
Bbc needs to stop wasting money on programs stuffed full of overpaid celebrities. It’s bloody Celebrity this and Celebrity that these days. You could save millions.
Daylight robbery if you ask me why do I need to pay the bbc a fee when I already pay sky a premium for there service
I understand when tv fist came out they needed funding but now it’s time to change your model and stop forcing me to pay the bbc to watch other live events which have nothing to do with the
This has been a “problem” in Poland as well for years – while our equivalent of tv license is also mandatory is not paid by majority. Every tv and radio receiver should be in theory registered and paid either by a monthly or annual fee. And every postman is allowed to check if a household has these devices but you can simply refuse them entrance.
Our governments in the past had ideas of bundling that fee within electricity bill or replacing it with a new generic “modern” media tax. Handling the tv license and funding of public broadcaster is also often a trading card during elections.
Ditching this payment would in long turn force the public broadcaster to become a commercial one. And frankly many people raise an argument that TVP already isn’t any different than its competitors when it comes to content, its quality and ads, paid sponsored segments. And thus it should be allowed to change its form.
There also a political argument: some people don’t like that public broadcaster has always been a tool for gov’t at power. Previous PiS gov’t has really exploited that to levels not seen previously in 30 years; the flagship news service from TVP1 channel at 19:30 was even compared to North Korean state television in its form.
We don’t have some *mythical* vans that would run through neighborhoods in search of “illegal” broadcasts, nor I personally ever experienced our postman asking for tv and how my family uses it. And as far as I know nobody was taken to the court because of “radio and television license fee” avoidance.
This may be too little too late but I don’t understand why the BBC won’t let people in other countries who are interested in their programs BUY a license! Here in the US there are many of us who would like to purchase a license and get the iPlayer but the BBC refuses. They instead came up with a streaming service that I consider substandard compared to the BBC. Here in the US network TV is dying. I can say I haven’t watched it in years. Yet back when I could use a proxy to get the BBC iPlayer it stayed on all day. Sorry I love the day time light TV we have nothing like it here in the US where daytime TV went from horrible soaps to even more horrible ‘reality’ TV then the so called ‘news’ starts at 4pm. I won’t even go into the horror that is the BBC America channel…absolute rubbish.
So why not take some of the burden off of the UK people by letting the rest of the world who are interested buy a license?
Not sure I understand. BBC iPlayer content *is* streamed. It isn’t broadcast over the air to an aerial.
US citizens may not be aware of the reach of TV Licensing. It’s required if we watch live TV from any other station, whether over the air or via the internet, and whatever the equipment- even a phone.
Paying the BBC so I can watch ITV live? It’s a nonsense rooted in the days when current payment methods simply weren’t available.
Time it was binned and the BBC went to free with ads (news, current affairs etc) with a subscription option for premium content.
Terribly sorry I should have specified. The only thing available in the US from the BBC is a streaming service called “BBC Select” that only shows documentaries, BBC America which is a channel available with some streaming platforms (it’s awful and shows very little actual BBC programs instead it plays old television shows like Star Trek The Next Generation, Law and Order, Bones etc all US network shows). There is also a streaming platform called “Britbox” which shows better content but still not live BBC.
In the first days of the iPlayer anyone with a UK IP address could stream the iPlayer. Sooner or later someone in the government finally figured out that you didn’t need to be in the UK to have a UK IP address all you needed was a proxy service to mask your IP address in another country. So I would watch that way.
Now you have to have an account with a UK address, phone number AND valid TV license.
I agree with you %100 that it is an archaic holdover from an idea that in 1950 probably made sense but in today’s world it’s just stupid. Especially charging this tax for ANY live televised media whether BBC or not no matter the device. With the mass of content that is out there right now I would hazard a guess that most people do NOT get the bulk of their media, live or not, from the BBC anymore. Same is happening here with network TV. US TV is struggling to stay relevant.
I never understood why the BBC wouldn’t let people in other countries pay for the service whether as a tax license or as a paid streaming platform since they probably couldn’t call it a ‘tax’ in other countries. It looks like that would bring in millions of pounds. Make it free to those in the UK. Citizens would still have to have an account with UK address and phone number that way they could cut down on the vpns and proxy’s getting it. Then charge the rest of the world a fee to stream the service. I think it would make money for the government IF they want to stay commercial free that is. Or start commercials and let everyone have it free and still charge for a ‘premium’ package (like you stated above).
Thank you for your reply.
You’ve hit the nail on the head, the reason they don’t charge other countries for their content is two fold, one, there programs mostly suck and they wouldn’t raise a penny and two, because they make us in the UK pay, therefore subsidising the rest of the world. It’s the BBC way.
We are as one 👍
It should be scrap too expensive
I made the decision to go NLN and ditch live TV/streaming years ago as a protest at the removal of the free licence for pensioners whilst at the same time massively over paying their ‘talent’. The standard of BBC content has also detiorated year on year. Despite declaring NLN and giving a full explanation, calling them numerous times, making 2 separate complaints and threatening them with legal action for harassment, they continue to send me threatening letters. I now mark their correspondence Return to Sender and post, but not before writing F*** O**! on it.
I’ve just been charge £1400 for not having a license because my direct debit never came out!!! I dont even watch the TV. They sent a guy round at 8pm asking me to pay on the spot and when I declined because I was unaware of my direct debit cancellation, I asked him to send a card that I could top up on but nothing turned up and the website is always down, now I have a CCJ and a fourteen hundred pound bill!!
Don’t get where the £1400 bill comes from you only get a £1000 fine for
not having a license!
Was reading in the Telegraph the other day that the BBC were looking to pay £800m into there gold plated retirement scheme
the BBC are having a laugh or what…feather the nest before you fly right enough
BBC is not publoc TV. It is a corporate TV. Therefore if you did not sign the contract with them you don’t need to pay. Anyway. I have never agreed to be bombarded by their signal on my property.
Hilarious
A Tin foil hat should protect you from their signal on your property
The licence fee is a racket. We had no TV for 10 years and were hounded as though we were criminals . Disgusting. I don’t have a helicopter but no one is chasing me for a pilots licence.
The bbc are trying to make a computer tax . Let them die. There living in the past, they hindered JLB developing TV now their hindering the
Digital era.
It’s disgusting this is still a legal requirement.
What to pay for something you use?
Not sure you thought that through mate.
Netflix has Live TV but how are they even going to police that?
By paying for a TV license.
I stopped watching the BBC a long time ago, and got rid of the telly. Best thing ever. Reading and my audible books are my go to now, happy days. Hope the BBC get consigned to the dustbin of history, where it truly belongs.
The BBC could save a fortune by stopping or cutting back on trying to appeal to everyone in every country. BBC isn’t asked to broadcast worldwide, they want to which drives the separate company that sells TV and productions worldwide. Bring some of that revenue back to UK to support the… No, OUR national broadcasting.
I don’t think the BBC ‘deserve’ to continue past 2027 as their thinking seems to be… Don’t you know who we are? Nobody cares anymore as BBC are increasingly irrelevant to independent broadcasters in which I count podcasters and webmasters.
Times up dudes
La De Da Gunner Graham presenters … zzzzz
What the hell does that mean??
In all the BBC reports, always mentioned is non payment of licenses.
Never mentioned is the number of extra households via new builds dragged into paying.
So not all bad news for the poor BBC which pays wildly bloated salaries .
They pay salaries in comparison with their competitors.
As any sector or business must
The way he talks, you must pay something, whether it comes as a license or from another tax, we’re an institution, you’re are wrong, keep your BBC, I personally want no part of it in any shape or form, in fact, take it to your precious EU and set it up there, we’ll be well shot it it.
Britain, which is British, isn’t in The EU 🤦.
The EU isn’t even the same argument 🤦
No one said it was, but they are always cheering for the EU, so let them move there.
The principle should be that, like almost every other product, if you don’t use it you should not be forced to pay for it. I never watch any BBC television but am forced to pay for it which is wrong. There is nothing on the BBC that you cannot get free elsewhere.
It’s utterly obscene that a licence is required to watch any live TV. Fair enough, if you’re watching the BBC’s odious output, you should probably pay them, but if not they should be told to Foxtrot Oscar!
Obscene ?
Why should the BBC get all this TV TAX FOR ITSELF,? And all the other channels get NOTHING, but they have to advertise to keep afloat,so therefore the BIASED BROADCASTING CORPORATION SHOULD BE MADE TO ADVERTISE TO GENERATE ITS REVENUE AND NOT HIT THE BRITISH PEOPLE IN THE POCKET IMHO!!!
There’s not a big enough advertising revenue pool to allow for that. It’s the reason why ITV has had to cut its programme budget by £10 million.
Advertising spending overall is at record highs, so ITV’s falling revenue reflects changes in viewing habits, not a lack of ad money. The idea that the BBC must always be funded, even if consumer demand can’t sustain it commercially, is flawed. If it truly offers unique value, it should be able to compete in the market – like everyone else.
Surely that what it does now?
In that case the BBC will have no problem attracting subscriptions and/or advertising revenue when the TV Licence is abolished.
Absolutely spot on.
The license fee would be worth it if there wasn’t so many repeats. I counted 24 in one day between bbc 1 and bbc2 this is not good. The day when the bbc was top in drama are gone
You should try ITV on a Sunday!
The use of the BBC’s loaded term “evasion”, to categorise all non-payers who haven’t submitted a NLN declaration, is misleading.
Just because you haven’t submitted the NLN, doesn’t mean you’re evading. If it did, then everyone in this category would automatically get prosecuted.
If you don’t do anything that requires a TV Licence, you are not breaking the law.
There is no legal requirement to submit NLN to TV Licencing – it’s a private company, not a government department.
People say NLN declarations increase frequency of visits & harassment.
It’s no wonder people are ditching the BBC, when I see things like, you need a license to watch an overseas programme on YouTube, I think that really takes the biscuit. However the bit about blocking TV sounds great, get your finger out BBC and work on a way to block all live TV unless you have a license, now that would be most welcome, for our household at least.
This claim that I need TVL to watch Uzbekistan TV online has never been tested in court. Far from taking people to court to establish these precedents, prosecutions are invariably of people who have signed NLN or been interviewed ‘under caution,’ very dubious, and signed the document.
I remain of the opinon that Sky News on YouTube is not the TV channel because it has different captions, no clock, no ads.
Your opinion doesn’t matter mate. That’s the law as it stands.
Voters opinions don’t matter.
That’s a good indication of fascism, mate.
Absolutely correct, ignore the number 1 BBC fan.
That’s a TV license condition not the BBC.
Number 1 BBC fan, you love it so much, you continue to pay for it, we have better things to spend our hard earned on than the rubbish the BBC churn out.
I’ve said it before, but I’ll say it again, the Telly Tax should be scrapped, and the B.B.C. funded out of general taxation. The B.B.C. should also concentrate on GENUINE public service broadcasting, which it currently doesn’t do, and stop competing with commercial broadcasters.
That would likely lead to a significant drop in the B.B.C.’s budget. And Britain should move towards a more free market broadcasting landscape.
You do realise the traditional BBC “Catch 22” that you’re up against and what befall ABC in Australia.
If you restrict the BBC to public service broadcasting; i.e. “worthy but boring” where are the new ideas going to come from? The familiar example being Only Fools And Horses; the original showing of the final episode had 26 million viewers, but the first series peaked at only 6 million, if it had been on ITV, that would’ve been classed as a failure and it would’ve been scrapped!
You’re living in the past. The American telly industry has always been a free market, with a small amount of public service broadcasting, and American telly now dominates the whole world.
With that set-up and the internet, I’m sure there will be plenty of new ideas.
And remember, I.T.V. has always had to compete with unfair competition from B.B.C. and its unfair telly tax.
Your “Only Fools and Horses” example is false, especially in this day and age.
If a programme is deemed to fail, it can, and will, simply change broadcaster.
An obvious example in Britain is “Big Brother”. It’s been happening in America for decades.
No it is not, “Evasion.” It is avoidance.
NLN is not a legal requirement. Those of us who simply refuse to answer the door to Capita are entirely within our rights.
The Charter expires on Dec 31 2027. Sky will cease Sky Q in 2028. It will not be broadcast so it will not be television.
The entire model of TVL is dead, and who said the BBC had the right to hold the Public Service Broadcasting Licence forever?
Put it up for tender.
Not sure if you actually understand what is defined as television. Perhaps do some more research!
If the licence fee is to remain essentially in it’s currently form then there definitely needs to be a system where the BBC accounts are linked to a licence fee ID. For example, allowing up to 5 BBC accounts to be linked to one licence fee, with up to 3 devices per BBC account to be using iPlayer simultaneously.
It should be noted though that when the House of Lords reviewed the alternatives, a household levy was one of the few options which they were favourable on, most likely as a council tax precept.
I think the council tax route is the best idea; as it will also sort out those who can afford to pay more from those who can’t afford to pay at all.
Don’t forget; when broadcasting goes completely online, that will also be the end of being able to dodge out of paying the Licence Fee.
I wish I had dodged working for forty five years then I would be getting everything free in retirement, no council tax enforcement is not the answer, my parents didn’t have to pay in their old age, this privalige should still be in place!
It is for lower income.
One of the big problems with the BBC is that it still thinks it’s the ninthth century and tries to cater for too many minority viewers, it pays to keep six orchestras afloat and that is an extravance no longer needed in this day and age.
The corporation is desperate for a root and branches reform and ditch over paid presenters and correspondents in every corner of the globe.
We see money wasted on a weekly basis like sending the breakfast weather forecasters all the way up to Salford just to present it when it could be done in the London studio, this must cost more than one persons annual licence fee!
The twenty one thousand employers that work for the BBC is far too many and in any other type of business would have been trimmed back long ago.
It’s always worded by them in such a way that everyone not paying is classed as evader and is instantly guilty. The whole notion that you have to declare to them that you don’t need a licence is also absurd. If someone doesn’t need a driver licence then they don’t have to declare that the the DVLA every few years. Equally you don’t have to declare to any other media services that you won’t be using them for the foreseeable future even if you aren’t currently a customer. They really need to start changing their wording as it really does label those as not paying as instantly as some kind of criminal.
The B.B.C.’s recent “consultation” was also worded “badly”. I filled in the “form” but it felt like a straight-jacket!
I thought that my answers could be taken as support for the current set-up, which I DON’T support, but there was no obvious way to say what I wanted to say!
It was the usual fix, by Britain’s un-democratic fascists!
Look up what fascist means mate. And also the consultation was nothing like that. Absolute rubbish
I know what fascist means, mate, and it’s applicable in Britain’s “Elective Dictatorship”.
I also know that the so-called “consultation” was rigged, as I couldn’t express my opinion correctly, mate.
The BBC’s number 1 fan and probably their only one.
The article literally says exactly the opposite of what you have stated . Did you read it?