TV Licence fee evasion rates have hit their highest point since 1995, casting a long shadow over the BBC’s primary funding mechanism – a new report reveals.
As the landscape of television consumption shifts dramatically with the rise of on-demand streaming services, the mandatory annual fee is facing a growing wave of resistance.
In a world where Netflix and Disney+ are becoming household staples, the relevance and fairness of the TV licence fee are under intense scrutiny.
With the BBC grappling with a significant loss in revenue and growing public discontent, it’s trying to tackle these issues in several ways – including easier ways to pay, payment plans – and more enforcement officers.
Let’s delve into the BBC’s data – and its future plans for the TV Licence – as demonstrated in two reports that the corporation published this week.
The TV Licence fee, which is used to fund the BBC, currently stands at £159/year.
In 2022, the fee was frozen for two years, and it is scheduled to go up next year.
Anyone who watches the BBC live, or streams it via BBC iPlayer, has to pay the fee. In addition, if you watch any live TV from any broadcaster (even an international one) – you also need to pay the fee (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.
The Rise In TV Licence Fee Evasion
According to the BBC’s Television Licence Fee Trust Statement for the year ending 31 March 2023, and the BBC’s Annual Report and Accounts 2022/23, the TV licence fee evasion rate has been on the rise.
The TV Licence fee evasion has been a growing concern for the BBC, with the estimated evasion rate for 2022/23 reaching 10.31%, up from 9.38% in the previous year.
This is the first time since 1995 that the estimated rate of evasion has exceeded 10%. This increase represents a significant loss in revenue for the BBC, with the estimated loss amounting to around £430 million.
The evasion rate is calculated based on the difference between the estimated number of premises requiring a licence and the actual number of licences in force.
The BBC estimates that every percentage point reduction in the evasion rate equates to around £43 million of extra revenue.
Therefore, the rise in the evasion rate has a direct impact on the BBC’s financial health.
The increase in the evasion rate is likely due to a combination of factors, with the most significant factor being the change in viewing habits.
With the rise of on-demand streaming services like Netflix, Disney+ and local ones like ITVX, people are watching fewer traditional TV programmes and less live TV.
This shift in behaviour has led to a decrease in the perceived value of a TV licence, prompting some people to evade the fee (while also bringing up the BBC subscription model idea).
Affordability is another issue. With the cost of living on the rise, some households are finding it difficult to justify the expense of a TV licence.
The BBC’s Efforts To Fight Licence Fee Evasion
The BBC has been proactive in its efforts to combat licence fee evasion, which is a key area of focus for the corporation, as demonstrated in the 2022/2023 report.
The BBC’s strategy to tackle evasion involves a combination of enforcement activities, better customer support, and demonstrating the value of the TV licence.
The BBC employs a range of enforcement activities to ensure compliance with the TV licence requirement.
Individuals who do not pay for a TV licence receive targeted communications encouraging them to do so, and potentially a visit from an enforcement officer.
If the licence fee remains unpaid, the individual may be prosecuted and fined up to £1,000. In rare cases, where the person does not pay the court’s fine – they may end up in jail.
The Decline In Prosecutions
The number of prosecutions for TV Licence fee evasion has seen a significant decrease in recent years.
In 2019, there were around 114,000 prosecutions. However, by 2022, this number had fallen to 40,220.
This decline can be attributed to a combination of factors.
Firstly, the COVID-19 pandemic had a significant impact on enforcement activities. During the pandemic, enforcement visits were suspended, reducing the number of prosecutions.
The BBC’s analysis of 2021-22 evasion found that an increase in TVL enforcement activities, such as phone calls to the household, visits and prosecutions, can lead to a reduction in evasion.
However, the restrictions imposed due to the pandemic limited these activities.
Secondly, there was a shortfall in Field Officers during 2022-23.
According to the BBC, Field Officers play a crucial role in the enforcement process, visiting households to check whether they have a TV licence if they are watching licensable content.
The reduction in the number of Field Officers has limited TVL’s ability to collect the licence fee and conduct enforcement activities.
Despite these challenges, the BBC remains committed to enforcing the TV Licence requirement.
The corporation is working closely with Capita, the main provider of licence fee collection services, to increase recruitment of Field Officers in 23/24 and beyond.
This is part of the BBC’s broader strategy to maximise licence fee collection and reduce evasion.
Better Customer Support And Payment Plans
Recognising the financial difficulties that some households may face, the BBC has made efforts to make payments more manageable.
Licences can be purchased on an annual, quarterly or monthly basis, and there are a number of schemes to make payments more affordable.
These include the Simple Payment Plan (SPP) scheme launched in 2020 to provide a flexible payment plan for households in financial difficulties or liable to prosecution.
As we previously reported, the BBC recently created a dedicated ‘Payment Solutions Team’ to help eligible customers who are struggling with their payments to stay licenced, offering referral to debt advisory services or increasing awareness of Pension Credit eligibility for those aged over-75.
Demonstrating The Value Of A TV Licence
The BBC is also working on initiatives to demonstrate the value of a licence and the benefits it provides to households.
During 2022-23, the BBC has trialled targeted communications to demonstrate the value obtained from a licence fee and has clarified what constitutes licensable content on the TVL website and through a dedicated team.
The impact of these initiatives will be evaluated during 2023-24.
The success of ongoing and planned initiatives to demonstrate the value of a licence and supporting customers to pay will be key to reversing the fall in licences issued.
The BBC’s Future Funding Challenges
The TV Licence fee is the primary source of funding for the BBC, enabling it to deliver a wide range of services.
However, in 2022-23, net income from licence sales decreased by £59 million (1.6%) from the previous year, marking the first decrease in licence fee income since the reduction in 2019-20 due to the COVID-19 pandemic.
Furthermore, the licence fee has been frozen at £159 for two years; 2022-23 and 2023-24.
This is the first time the licence fee has not increased in line with inflation since 2017-18. The BBC estimates that this freeze will result in a loss of income of £400m over the remainder of the charter period.
The freeze in the licence fee, coupled with the rise in licence fee evasion, presents significant challenges for the BBC.
To maintain its financial health and continue delivering its services, the BBC will need to demonstrate the value of the TV licence, support customers to pay, and find new ways to maximise its income.