Low licence fee rise ‘will hit BBC shows’

Published Thursday 18 January 2007 at 11:15 by Liz Thomas

BBC director general Mark Thompson has warned that programming budgets will further suffer following today’s disappointing licence fee settlement.

Speaking at a conference, Thompson commented on figures leaked before Christmas, ahead of the government’s official announcement which is expected to come later today.

He explained that the expected settlement of a 3% rise in the licence fee for the next two years, followed by increases of 2% for the following three years and between 0% and 2% in 2012-13.

In real terms this means around a £20 jump in the levy to £151 by 2012 but it is the first time that the licence fee has not been tied to inflation. Originally the BBC had been hoping for a rating at 1.8% above the RPI.

The shortfall Thompson said would cut £2 billion from spending plans and in added that such a low deal from the government “risks diverting money away from content creation”.

He added the quantum of the deal was a real disappointment and warned that money would have to be saved by cutting many of its proposed investments and moving money from existing departments to new initiatives.