The Stage

Jowell retains option of sharing out Corporation’s licence fee

Published Tuesday 26 July 2005 at 13:45 by Liz Thomas

Culture secretary Tessa Jowell has refused to rule out the possibility that the BBC will be forced to share its £2.8 billion annual licence fee after analogue switch-off in 2012.

Jowell told a House of Lords select committee that digital switchover would cause such huge changes to the broadcasting industry that sharing the money must remain an option.

She explained to the cross-party committee of peers reviewing the renewal of the BBC charter: “I want to keep that flexibility available.”

Jowell admitted that the proposed BBC Trust - the body that has been put forward to replace the current board of governors - could be given powers to allocate some of the licence fee to other broadcasters for public service programming.

In March the government’s green paper on the Corporation’s future said that the current system of funding should be kept in place until 2016 but a review should take place after analogue switch-off in 2012. Since then former BBC director-general John Birt, who is now a special adviser to Tony Blair, and media regulator Ofcom have called on the government to ensure that the Corporation shares the licence fee with commercial rivals as soon as possible.

Any move to share out the cash has been met with strong opposition from executives at the Corporation but other broadcasters have warned that without public funding they may not be able to meet their public service obligations.

Recently ITV chief executive Charles Allen told the committee, headed by Tory peer Lord Fowler, that the network would be forced to cut regional programming unless more cash is provided when the country starts the switchover process in around three years. Executives at Channel 4 have also warned that it could face a £100 million annual shortfall by 2009 because of the cost of digital switchover.

Jowell also said the government was looking into proposals to stop sending people who refused to pay the licence fee to prison. Non-payment is currently a criminal offence and those who fail to pay the fine face jail. She admitted that this autumn’s white paper on charter renewal would deal with the issue. “We are looking at alternatives to the present criminal sanctions,” she said.