The BBC’s new director general has declared the traditional TV licence fee “yesterday’s model” and a “busted flush”, warning that the corporation is “held back by that straitjacket” as he urged the government to consider a compulsory household levy.
Matt Brittin, a former Google executive who took over the BBC six weeks ago, told the House of Commons Culture, Media and Sport committee that the £180-a-year licence fee is “no longer fit for purpose”. The number of households paying the fee has dropped to 80%, he said, as viewing habits shift towards streaming and on-demand content.
“BBC boss Matt Brittin calls licence fee 'busted flush', urges household levy”
“Consumers are living in today’s world – or tomorrow’s world today – and so we need to look again at the mechanism for funding the BBC as part of the charter,” Brittin told MPs on Wednesday.
Instead of the current system, which requires a licence to watch or record live TV or use BBC iPlayer, Brittin suggested a German-style mandatory household levy collected through utility bills such as broadband, mobile or electricity. “A number of European countries have moved to a household levy. It has advantages, it is universal and collection can be simpler,” he said.
If all households paid – rather than the current 80% – the fee could be reduced, Brittin said, adding that the government could make concessions for lower-income households and younger viewers. The BBC would also save hundreds of millions in collection and enforcement costs.
But the proposal has already been ruled out by ministers, who fear it could be seen as a new “TV tax”. BBC chair Samir Shah acknowledged the levy “could be seen as, and is effectively another tax”, but said the BBC was “certainly open to it”.
Brittin also warned against alternatives such as advertising or a subscription model. He said commercial funding would “take it away from others” and have “a devastating impact on the economy”. A Netflix-style subscription would force the BBC to cut services that generate less revenue, such as children’s shows like Newsround and local news. “We would stop being universal, we’d actually stop being the BBC that we know,” Shah said.
The debate comes as the BBC axes about 2,000 roles – roughly one in ten staff – to save £500m. Brittin said there would be “more to come” on restructuring. “My job is to do two things: come in and make sure that we are operating within the envelope,” he told the committee.
With the current licence fee model facing collapse and the government yet to signal a shift, the BBC’s future funding remains uncertain.