BBC licence fee ‘likely to be frozen for two years’ due to rising cost of living

BBC Director general Tim Davie is in negotiations over the cost of the licence fee for the next five years (Picture: Getty Images / PA Images)

The BBC licence fee is likely to be frozen for two years to help families hit hard by the cost of living crisis, according to reports.

Households will continue to pay £159-a-year to fund the broadcaster’s television, radio and online content.

Negotiations between the corporation and the government are said to be ongoing but a one or two year freeze is now the most likely outcome, The Telegraph reports.

The talks – which will decide the cost of the licence fee from 2022 until 2027 – are taking place against a backdrop of rising bills due to the energy crisis.

Every worker will also have to pay more taxes from next year after the Chancellor Rishi Sunak raised national insurance contributions to help fund the NHS’ recovery post-Covid.

Insiders with knowledge of the negotiations have said the licence fee will be frozen as ‘now is not the time to be whacking up the amount households have to pay.’

It would in effect be a funding cut for the BBC because inflation is expected to soar by 4.4% next year.

After the freeze, the licence fee is expected to be allowed to rise again for the remaining years of the agreement in line with CPI, a measure of inflation.

Mr Davie has made tackling the broadcaster’s perceived problems with impartiality a priority (Picture: PA)

It would cover the remaining period of the current BBC charter, which ends in 2027.

At this point, major changes could be made to the way the broadcaster is funded. It has previously been suggested the licence fee could be removed altogether and replaced with a subscription model, similar to that used by Netflix and other streamers.

It’s after plans to decriminalise the licence fee – so that those who don’t pay it will no longer be prosecuted – were shelved earlier this year.

Director General Tim Davie, who recently celebrated his first year in the job, has made it a priority to tackled the corporation’s perceived problems with impartiality and elitism.

Last week he set out a 10-point plan aimed at maintaining editorial standards.

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