The BBC’s latest annual report reveals a stark reality: TV Licence fee evasion rates have soared to their highest level in nearly three decades, casting a shadow over the public broadcaster’s primary funding mechanism.
As the media market continues to change rapidly, with streaming services dominating viewer preferences, the mandatory annual fee is facing unprecedented resistance.
The evasion rate for 2023/24 climbed to 11.30%, up from 10.58% in the previous year.
This marks the second consecutive year that evasion has exceeded 10%, a level not seen since 1995, and represents a continuation of the upward trend observed in recent years.
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.
This alarming trend reflects a growing disconnect between traditional broadcasting models and modern viewing habits.
It also represents a significant financial blow to the BBC, with evasion accounting for approximately £466 million in lost income for the year.
The rise in evasion is part of a broader pattern of declining engagement with the TV Licence system. In 2023/24, the number of premises declaring they don’t need a licence swelled to 3.3 million, up from 2.8 million the previous year – a half million increase.
This surge in opt-outs could potentially translate to an additional £524 million in lost revenue for the BBC.
Experts suggest that this trend is driven by a combination of factors, including the proliferation of streaming services, changing viewer preferences, and economic pressures on households.
The BBC’s own analysis indicates that the primary cause is a reduction in customers’ consumption of BBC and other licensable content.
The TV Licence Fee: A Model Under Pressure
At the heart of the BBC’s funding model lies the TV Licence fee, a mandatory annual charge for households watching or recording live TV broadcasts, or using BBC iPlayer.
Currently set at £169.50 per year, the fee has been a part of British broadcasting since 1946, when it was introduced at a mere £2.
The licence fee covers more than just BBC content. It’s required to watch any live TV from any broadcaster, including international ones, regardless of the device used.
Those who evade the TV licence fee are subject to a £1,000 fine and can end up in court or, in rare cases, even end up in jail.
This broad application has become increasingly controversial in the age of streaming, where many viewers consume content primarily through on-demand services.
Recent years have seen the licence fee model come under significant strain. In January 2022, the then-government announced a two-year freeze on the fee at £159, lasting until March 2024.
This freeze, while providing relief for households during a cost-of-living crisis, has put considerable financial pressure on the BBC.
The impact of the freeze has been substantial. When we reported on the 2022/23 Trust Statement last July, the BBC had estimated that the two-year freeze would result in lost income of £400 million by the end of the Royal Charter period in 2027-28.
However, the situation has worsened. The BBC now estimates that rising costs and below-inflation changes to the licence fee equate to a real-terms annual reduction in income of 30% each year, amounting to over £1 billion.
From 1 April 2024, the licence fee increased to £169.50, rising in line with September 2023’s inflation rate.
While this increase provides some financial relief for the BBC, it comes after two years of frozen income during a period of high inflation, effectively representing a real-terms cut.
Licence Fee Income and Numbers: A Downward Spiral
The increasing evasion rate is just one piece of a larger puzzle of financial challenges facing the BBC.
According to the BBC’s annual trust statement, net licence fee income for 2023/24 dropped to £3,660 million, a decrease of £81 million or 2% compared to the previous year.
This decline is mirrored in the number of paid-for licences, which fell by around 556,000 to 22.9 million. The number of free licences issued to those aged over 75 saw a slight increase of 16,000, reaching 775,000.
The BBC’s financial outlook is further complicated by the changing viewing landscape.
The proportion of households watching licensable content – known as the TV penetration rate – fell to 90.19% in 2023/24, down from 91.54% in the previous year.
This shift reflects the growing preference for on-demand and streaming services, such as Netflix and Disney+, that don’t necessarily require a TV licence (though live events – even on Netflix – do still require a TV Licence).
Despite these challenges, the BBC remains a significant part of the UK’s media diet. The corporation reports that around 85% of UK adults engage with BBC TV/iPlayer, radio, or online content on average each week.
However, the average time spent with BBC services has decreased to 15 hours and 32 minutes per week, down from 16 hours and 41 minutes in the previous year.
TV Licence Collection Challenges
The BBC’s efforts to collect licence fees and combat evasion faced several operational hurdles in 2023/24. One of the most significant challenges came from issues with its main contractor, Capita.
Capita, responsible for TV licensing systems, is reportedly months behind schedule in a programme to update its software.
The BBC is closely monitoring Capita’s progress and has renegotiated payment schedules pending the delivery of contracted commitments. However, the upgrade work, originally set to finish in June 2024, is now estimated to be completed by December 2025.
Enforcement activities were also hampered by a shortage of visiting officers.
For most of the year, Capita failed to supply the contracted number of 233 full-time equivalent field officers, only reaching this target in May 2024.
This shortage likely contributed to the increased evasion rate, as fewer visits were made to unlicensed premises.
Despite these challenges, the BBC managed to increase the number of visits made by field officers.
In 2023/24, an average of 172 full-time equivalent field officers made 1,314,000 visits, up from 159 officers making 1,075,000 visits in the previous year.
The cost of collection also increased, rising to £145 million, or 4.0% of licence fee income, compared to £137 million, or 3.7% in 2022/23.
The BBC attributes this increase to additional marketing efforts, preparation costs for a new simple payment plan supplier, and inflationary pressures, particularly on postage costs.
Future Outlook: Uncertain Times Ahead
As the BBC grapples with these mounting challenges, the future of the TV Licence fee model looks increasingly uncertain.
The previous government announced a review of the BBC’s funding model in December 2023, set to explore alternatives for when the current Royal Charter ends in 2027/28.
The BBC has stated it is open to reform of the licence fee funding model and will engage with the government review.
It has also committed to conducting its own research on potential reforms, including exploring how payment could reflect customers’ income and ensuring that enforcement activities are fair and proportionate.
However, media analysts predict that pressure on the licence fee will continue to mount as more viewers switch solely to streaming services. Enders Analysis forecasts that by 2028, broadcasters’ share of UK individuals’ video viewing could fall to 48%, down from 64% in 2022.
In response to these challenges, the BBC is progressing a multi-year saving and investment plan to deliver its strategic priorities across the remaining Royal Charter period.
This plan aims to counter what the BBC estimates as a real-terms annual reduction in licence fee income of 30% each year, amounting to over £1 billion.
As part of these cost-cutting measures, the BBC has announced plans for significant job cuts, with an estimated 1,000 staff redundancies expected in the coming years, highlighting the severe financial pressure the corporation is under.
New Government, New Stance?
A bit of good news for the BBC comes from the change in government and the stance of the new Prime Minister, Keir Starmer.
In a statement made earlier this month, Starmer committed his government to both the BBC and its current funding model, at least until 2027.
“We’ve committed in our manifesto to obviously the BBC and to the licensing scheme,” Starmer stated.
“It comes up in 2027, so obviously there’s going to be some more thought between now and then. But we are committed to the BBC and we are committed to the licensing arrangements.”
This statement provides a degree of short-term certainty for the BBC, contrasting with the previous government’s more sceptical stance towards the licence fee model.
However, it also leaves the door open for potential changes after 2027, when the current Royal Charter period ends.
The newly appointed Culture Secretary, Lisa Nandy, has previously expressed strong support for the BBC and free media.
In a 2020 article, she argued that the licence fee provides an essential foundation for the BBC to “speak truth to power” and shields the broadcaster from government interference.
Nandy has also proposed making the BBC more accountable to its funders – the public who pay the TV Licence fee.
She suggested a model in which the BBC is “owned and directed by licence fee holders,” potentially giving viewers a bigger stake in the BBC’s decision-making process.
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It’s NOT evasion if you don’t pay for something you don’t watch!! I don’t go fishing, I don’t evade paying a Fishing Licence, and I don’t tell them every 2 years that I don’t go fishing. Again, biased reporting.
The BBC in their Charter are supposed not to be biased. You NEVER hear or read an unbiased report about Man-made Climate Change. You never hear the Scientists explain that CO2 does NOT CAUSE Climate Change, it is the RESULT of Climate Change. Ofcom NEVER punish them for their biased view.
What you have to remember is if you watch a live TV channel which is not the BBC ,you still have to pay your license fee,they are not the content providers of that product nor are they the license holder of that content but they still charge you it is no different to illegal IPTV services,they are charging you money for content they do not produce or even provide, basically they are stealing from the content providers just like the content on illegal IPTV services
Whilst I fully understand your viewpoint regarding the licence fee I’d disagree with how you view its reporting of World events.
The BBC on the whole is still regarded as the gold standard of broadcasting around the World and is seen as the bench mark other broadcasters aspire to. Its reporting is held in very high regard and is often seen as the only reliable source of information.
You may see it as “preachy” but I would call it balanced, truthful and informative. Its also worth remembering that reporters are human to and if you’re reporting from a war zone or a scene of heart breaking human tragedy then you would also find it may colour your narrative a little.
I see the BBC as I see the NHS, a cornerstone of the UKs national identity and as such should be cherished and supported but still held accountable for any short comings.
My last point would be that the BBC’s motto is “Nation shall speak peace unto nation”. The phrase ” To inform, educate and entertain” were the ideals set out by the BBC’s first Director General Lord Reith.
I know people who won’t buy a license because they say they don’t watch BBC TV. The truth though is that people in their household do watch it, but know they can get away without paying.
I reluctantly pay a licence fee, only because I’m too lazy to sort out something else.
I’m not a fan of the BBC anymore, I think that it’s not complying with it’s moto and instead of informing the viewer, it preaches about the world according to it’s reporters and editorial staff. Justin Rowlatt is a good example but there are many more.
For balance, I find that I need to go to other media sources just to check that what the BBC is telling me is accurate, perhaps others are doing the same and that’s why licence fees are down?
Totally agree, I always check their reports against other news outlets.
Surprised nobody has commented on salaries so I’ll add my tuppence. I quite like Gary Lineker and other famous names [see list of the BBC’s top earners for 2024] but honestly just because they are quite good at their jobs, which are not too demanding after all, I can not see where the justification for salaries in excess of £1 million comes from, that I presume are totally funded by our licence fees. If you are thinking “Well, it is only in line with other similar [non BBC] jobs” then I would say “o.k. let them go there” – market forces and all that, but not out of my licence fee.
Well said.
I totally agree with your comment re the salaries paid to the likes of Gary Lineker, over one million pounds per annum is absolutely ridiculous. If he refuses to work for less then let him go and employ someone who is prepared to do a good job for a reasonable salary.
It’s quite simple really, the government refuse to do it, so the folks out there are doing it and in their tens of thousands, they really aren’t fond of people like Mr Lineker receiving obscene salaries of £1.3 million per annum paid for by us plebs, they are a law unto themselves and it has to stop. As the MP in charge of this, Lisa Nandy has, in the past, given her full support to the BBC and the licence, there is little hope of them ever going subscription, therefore, as I said earlier, it’s down to all of us to make a stand, unless of course you are happy with the BBC.
It’s interesting they call it evasion when it’s just more and more people getting rid of any kind of broadcast TV and switching to steaming only. They also expect you to declare to them every couple of years you don’t need one. Most people don’t see the point in having to contact them to have to tell them they don’t need one. Because you don’t have to contact anyone else when you don’t have any other kind of license or need one so why one to watch TV? Notice how even though the so called “evaders” have increased yet the conviction rate hasn’t? Probably because most people have started to realise they don’t have a magic van than can detect you watching TV like they used to claim and you don’t have to let them in to check.
My thoughts exactly. There is no legal requirement to inform anyone when you don’t require a TV license; and it’s disingenuous to class this as ‘evasion’, but I guess that’s all part of the spin…? It’s also a misnomer calling it a TV License when only the BBC benefits from it. Why not call it what it is: a BBC TV License? I also fail to see why the BBC are bemoaning the decrease in license purchases if they are still to receive nearly £4b – that’s four BILLION, folks! It is also time to scrap Capita’s contract as it is clearly ineffective and therefore wasteful of license fee payers’ money.
I pay the licence fee, but I find myself watching less and less BBC television, primarily because of the content it outputs: It’s aimed at a younger audience.
I wouldn’t say I watch much more on streaming, so I’m spending less time watching TV.
Of course, the fee covers more than just TV, such as news and radio.