The TV Licence fee debate took another turn this morning, as Culture Secretary Lisa Nandy ruled out using general taxation to fund the BBC – but hinted at some major changes on the horizon.
Speaking on BBC Breakfast today, Nandy described the current licence fee as “deeply regressive” and confirmed she’s thinking “quite radically and creatively” about alternatives to the current system.
But what does this actually mean for your wallet – and the future of British TV?
The Current Crisis
The TV Licence fee, which is used to fund the BBC, is currently set at £169.50 per year and has been a hot topic of debate in recent years.
All UK households that watch the BBC live, recorded, or on BBC iPlayer must pay the fee. Furthermore, if you watch any live TV from any broadcaster (even an international one) – you also need a TV Licence (See our full guide on whether you need to pay the TV Licence fee or not).
Failure to pay the TV licence fee is a criminal offence and can lead to a fine of £1,000 – and even, in rare cases, jail time – if you fail to pay the fee and the fine in court.
If you’ve been following our coverage, you’ll know the TV Licence fee is facing unprecedented challenges. Evasion rates hit a dramatic 11.30% in 2023/2024 – the highest we’ve seen since 1995.
Even more striking is the number of households legally declaring they don’t need a licence at all.
That figure jumped by half a million in just one year, reaching 3.3 million homes. When you’re paying £169.50 a year for something you might barely use, it’s not hard to see why some people are opting out.
“There is a genuine sense out there in the public that the licence fee was built for a different era,” Nandy acknowledged on BBC Breakfast this morning.
And she’s not wrong – the landscape of British TV has changed dramatically since the licence fee was introduced.
What’s Actually Changing?
While Nandy didn’t rule out a subscription model today (more on that in a bit), she was crystal clear about one thing: the BBC won’t be funded through general taxation – putting to rest recent media speculation about this possibility
Why not? As she explained, there are serious concerns about political interference.
After all, whoever controls the purse strings could potentially influence the BBC’s editorial decisions – not exactly ideal for a public broadcaster meant to hold politicians to account.
Meanwhile, the licence fee is set to increase to £174.50 in April 2025.
That’s after last year’s jump from £159 to £169.50, which came after a two-year freeze that put significant pressure on the BBC’s finances.
The Subscription Question
Today’s comments from Nandy are particularly intriguing given what BBC Chairman Samir Shah said just two months ago.
In a landmark speech, Shah firmly rejected both advertising and subscription models, arguing they would “introduce a commercial agenda, which means the priority becomes, not how you serve British audiences, but how you profit from them.”
Shah had particularly strong words about putting BBC content behind a paywall, warning it would prioritise “the needs of the better off” while leaving behind “the poorer, the more marginalised or the digitally disenfranchised.”
The BBC has previously suggested that a subscription service could cost viewers up to £580 per year for a full package (that includes BBC News, the radio station, the website, etc) – that’s more than three times the current licence fee.
Nandy’s Vision Takes Shape
Today’s announcement gives us more insight into how Nandy’s thinking has evolved since taking office.
Before becoming Culture Secretary, she wrote about wanting the BBC to be “owned and directed by licence fee holders” – suggesting a more democratic approach to running the broadcaster.
Her comments this morning about thinking “radically and creatively” about alternatives suggest she’s still open to major structural changes.
Nandy also referenced how other countries fund their public broadcasting: “In France, for example, they have a levy on cinemas,” she explained, though she was quick to add “I’m not committing to any of these things at this stage.”
But with taxation ruled out and subscription models controversial, what options are left?
The Money Problem
The timing of all this couldn’t be more critical. The BBC is facing what it describes as a real-terms annual reduction in income of 30% – that’s over £1 billion.
This financial squeeze comes from multiple directions:
- That previous two-year licence fee freeze
- Rising operational costs during high inflation
- Increased competition from streaming services
- Changes in government policy (like having to fund the World Service)
- The growing number of households opting out of the licence fee
Looking Ahead: The 2027 Question
While the current system stays in place until December 2027, negotiations about what comes next are already underway. Nandy confirmed that she’s started talks with the BBC about post-2027 funding.
Meanwhile, the BBC is planning its biggest-ever public consultation exercise this year, giving viewers a chance to shape its future.
This follows the government’s surprising decision to scrap its expert panel that was exploring alternative funding models.
What’s clear from today’s interview is that major change is coming – but exactly what form it’ll take remains up for debate.
With streaming services dominating viewing habits, evasion rates at record highs, and the Culture Secretary calling for radical thinking, the TV Licence as we know it looks set for a significant transformation.
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There clearly needs to be a new way of paying for the BBC as there is a percentage of the country who does not care to watch anything on the BBC and feels robbed by having to buy a licence because they watch other live channels. I get it. However, the money the BBC brings in to the economy through their production is not insignificant. Just because some of the population don’t like a thing it’s no reason to call for it to be shut down as that spoils it for the rest of the population. But I can understand how having to pay for something you don’t like can feel galling. I disagree that BBC is stuck in the past, they still have some amazing shows which get the lions share of the viewing figures. So, to say it’s no longer relevant to the majority of the viewing public is not born out by the figures, it’s not like the people watching don’t know of the existence of of Netflix, Disney+, Sky etc. I pay for Sky as it has some stuff I like to watch but so do C4, BBC, Netflix, AppleTV+, et. al. You only need to listen to a lot of media commentators in the commercial sector to understand that having a fully functioning BBC helps standards remain high in the commercial sector, even producers working with the likes of Sky will tell you this. So, getting rid of it really ends up reducing the quality of everything else as they don’t have to compete with the BBC. So, like the BBC or not, it is a net benefit even if you chose not to watch it. I realise I’m going to get flamed to death for this post as going by the other comments there is a lot of animosity towards the BBC from readers however I would restate that getting rid of a broadcaster because you don’t like it, is hardly fair on those of us (still a majority based on viewing figures) who do still enjoy it. There is a happy medium to be found which would mean those who don’t watch any live TV or listen to live radio not having to pay for it. It’s worth noting that if you like your HD picture quality on you DVB-T and T2 broadcasts the BBC R&D was one of the PSBs that worked on developing these standards. Should we take a step back from having a PSB that can contribute to open interoperable broadcast standards? If we want to continue to be a country that can hold its head up high and punch above its weight on the international stage, all of these little things help. And, like it or not the BBC is one of the ways we punch above our weight on the cultural landscape of the planet.
I agree.
Having worked abroad I can tell you the majority of their radio and tv is terrible.
The problem is funding, not shutting it down.
Bbc is not even “Last year” more like “Last decade”. They waste millions on overpaid celebrities. I don’t want celebrities on every conceivable program. BBC needs a huge clearout and shake up or just shut them down. I wouldn’t miss them
Everyone wants something different, and that’s the problem.
The licence fee is good value for what the BBC does, but some don’t listen to radio, and some don’t read bbc news, and some don’t watch bbc tv channels, and some don’t watch specific channels, etc. You can reverse that in so far as some read bbc news, some listen to radio, etc.
I’m no expert, but something needs to be done.
The space left by the BBC in all areas would be filled with in a year at most, it would be just a distant memory.
I could quite happily live without the BBC, so would never pay a subscription.
I do not know why people complain about the fee, it is value for money in the main!! I agree it needs re adjusting,ie it no longer it being a criminal offence. But the the service and quality of product we get for the fee is by far value for money, compared to other ppv tv companies available. And I can’t hear anyone complaining about those costs. Take away the criminal aspect of the tv licence is definitely the way forward.
Add £1;50p to poll tax per households per year
Once I heard about the next license fee rise my mind was made up, I cancelled my license straight away,I watch mostly on demand stuff, I have and pay for quite a few streaming services, I use those so don’t mind paying, the BBC has nothing for me so why should I pay for it, if they’re so popular as they think, then go subscription, they’ll soon find out that they’re not as popular as they think, they need to cut down their channels, get rid of bbc3 and bbc4, cut right back on radio channels, cut half of the orchestra’s that they have, get rid of all of the online channels, have bb1 & bbc2 show adverts, cut back on the ridiculous salaries that most of the presenters are on, make non payment a non crime, stop sending out the threatening letters, make BBC IPlayer a subscription model, for say no more than £5.99/£6.99 a month, no more than that, and finally make programmes that people want to watch, cut out the wokery, every week I read through the tv guide in the hope there’s something of interest on the bbc , but no same old drivel, thank god for streaming, the BBC is a giant dinosaur that needs extinction.
Just close down the BBC, after a few weeks very few would miss it.
Try watching TV on a caravan site etc. without broadband!
Without Freeview there would be nothing to watch, as streaming is not possible.
Have the powers that be thought this one through?
There are thousands of people with holiday or residential caravans.
Why should we be forced to watch inferior (mainly SD) quality TV, when we can get HD, & UHD with Freeview & BBC iPlayer? Why all the hype about top of the range OLED/4K/8K TV’s if we are reverting to SD TV?
Also, why does ITV, Channels 4 & 5 catch-up not have HD/UHD picture quality?
Why???
I don’t watch anything on the BBC and definitely dont want to pay for something I don’t use
Happy to pay 46p per day for the BBC. Worth every penny!!
The way ewe live in 2025 has passed the BBC by. How can people be forced to pay for a licence for a TV in this world. Lisa Nandy should firstly stop not having a TV licence a CRIMINAL offence, stop the BBC from targetting the poor especially singe mothers through the courts for TV licence evasion. I want Netflix, SKY, Prime or Disney, I pay them and am not forced into buying their service. ITV, CH4, are free…Draconian, Archaic and Obsolete, make the BBC an independent company.
I don’t pay the TV Licence as I have no need for it. I stopped watching BBC News last year after it showed itself incapable of being neutral. However, I would be willing to pay, say, £1 a week to listen to the Archers Omnibus. Nothing else the BBC produces interests me.
The problem arises in my mind – what do viewers (and listeners) want. Do they want a BBC with all the bells and whistles it is now, or do they want a simplified system with say 1 TV channel and a couple of radio frequencies, all producing stuff not found elsewhere, without the iPlayer, News, local radio stations, orchestras, etc.
Then, the matter of who runs the BBC? Should it be those appointed by the Government from the ‘great and the good’ as now, or should TV Licence holders get to vote for Chairman, Controller, etc, etc?
Me – I couldn’t care less. I’m out of it. Don’t pay, no say!
Add the levy to broadband bill and be done with it