Market Watch

TV Licence Kept at Same Level to 2013



The UK's TV licence fee will be kept at its current level for the next two years. In a move proposed by the BBC management body the BBC Trust and quickly agreed by the government, the current payment of £145.50 a year will remain in place until March 2013 - the end of the current licence fee settlement. The fee is payable by any household in the UK with a TV set (any device used for viewing live television) and is used to fund the BBC's commercial-free TV and radio services.

The Trust estimates the move will take £144m out of planned BBC budgets, which it said would be require 'some on-air changes'. BBC management has already drawn up proposals to refocus its spending on original programmes made in the UK by cutting senior management wages, talent payments and curbing spending on overseas programmes and sports.

Analysis
The BBC Trust's move follows the election of a new Conservative/Liberal Democrat coalition government in May, which has set reducing the UK's budget deficit as a priority task. It also follows a severe decline in the TV advertising market last year which has impacted on the BBC's commercial competitors.

The BBC's self-imposed budgetary restraints are clearly aimed at showing that it is not disconnected from the economic realities of the UK media industry and to minimise catastrophic changes in its funding when the new licence fee settltement is negotiated.

In June Germany's federal governments - responsible for media regulation - agreed to freeze the German TV licence at its current level (€213) until 2013, after which the system will be reformed.

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