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BBC reduces bid for licence fee BBC reduces bid for licence fee
(about 2 hours later)
The BBC has lowered its bid for a rise in the cost of the licence fee from 2.3% to 1.8% above inflation.The BBC has lowered its bid for a rise in the cost of the licence fee from 2.3% to 1.8% above inflation.
The original bid - which would have raised the licence price to £180 by 2013 - had been criticised as too high by rival broadcasters. Rival broadcasters had criticised as excessive the original bid, which sought a licence price of £180 by 2013.
Director general Mark Thompson said a rise was still needed to meet the extra costs of the digital switchover. Director General Mark Thompson said a rise was still needed to meet the costs of switchover to digital TV.
He warned extra investment was still needed to prevent some of the BBC's plans being shelved. He also said plans to move Five Live, and the sports and children's departments to Salford would be shelved if the fee settlement was inadequate.
These plans include moving some departments to a new broadcast centre in Salford near Manchester. The reduced licence fee bid would mean a price of £149 by 2013 in today's terms - below the £162.66 which a government-funded report found was the level the public would be willing to pay.
The reduced licence fee bid would mean a cost of £149 by 2013 in today's terms - below the £162.66 which a government-funded report found was the level the public would be willing to pay.
Difficult decisions
The Department for Culture, Media and Sport has yet to decide the level of the licence fee settlement, which is expected to be announced at the end of the year.The Department for Culture, Media and Sport has yet to decide the level of the licence fee settlement, which is expected to be announced at the end of the year.
There has been speculation as to whether the government will sanction a settlement above or below inflation, which is likely to take effect next April.There has been speculation as to whether the government will sanction a settlement above or below inflation, which is likely to take effect next April.
We can't rob existing core services to pay for switchover Mark ThompsonBBC director general
Mr Thompson said in a speech in London that there would be difficult decisions ahead in the event of a low licence fee settlement, which he said needed to be "realistic" to fund the ambitious digital switchover.Mr Thompson said in a speech in London that there would be difficult decisions ahead in the event of a low licence fee settlement, which he said needed to be "realistic" to fund the ambitious digital switchover.
"This is a project of great size and intricacy. The risks are formidable. If it is under-resourced it will fail. It's a simple as that - and the failure will impact on many millions of households."This is a project of great size and intricacy. The risks are formidable. If it is under-resourced it will fail. It's a simple as that - and the failure will impact on many millions of households.
"We can't do everything. We can't rob existing core services to pay for switchover," added Mr Thompson"We can't do everything. We can't rob existing core services to pay for switchover," added Mr Thompson
Relocation plan
He added that only a BBC which did no more than it was currently doing would warrant a reduction in funding.He added that only a BBC which did no more than it was currently doing would warrant a reduction in funding.
Mr Thompson predicted that the new BBC Trust, which replaces the board of governors, would only approve the relocation of thousands of staff from London to Salford, near Manchester, if the plan "could demonstrate robust value for money, and the licence fee settlement made it affordable".
"In the event of a low settlement, I would not even be able to recommend it to them," he said.
"We would have to find other, more modest, ways of increasing our investment in the north."
The new agreement about the licence fee is unlikely to cover the entire 10-year period of the next BBC Charter, which comes into effect next year.The new agreement about the licence fee is unlikely to cover the entire 10-year period of the next BBC Charter, which comes into effect next year.