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BBC to fund over-75s' TV licences BBC to fund over-75s' TV licences
(35 minutes later)
The BBC is to cover the cost of providing free television licences for over-75s, the government has confirmed.The BBC is to cover the cost of providing free television licences for over-75s, the government has confirmed.
Ministers said the move would be phased in from 2018-19. In return rules on paying for catch-up services such as iPlayer might be introduced and the licence fee will rise with inflation. Ministers said the move would be phased in from 2018-19. In return, rules on paying for catch-up services such as iPlayer might be introduced and the licence fee will rise with inflation.
Funding free licence fees for over-75s cost the government £608m in 2013-14 - about a fifth of the BBC's budget.Funding free licence fees for over-75s cost the government £608m in 2013-14 - about a fifth of the BBC's budget.
The BBC said it was the "right deal... in difficult economic circumstances".The BBC said it was the "right deal... in difficult economic circumstances".
Shadow culture secretary Chris Bryant called the announcement "an utter shambles". BBC director general Tony Hall said: "Far from being a cut, the way this financial settlement is shaped gives us, effectively, flat licence fee income across the first five years of the next charter."
Shadow culture secretary Chris Bryant said Labour would oppose the government's plans if they were a "smash and grab raid" on the BBC.
Key pointsKey points
Mr Bryant questioned government policies being "briefed to the media" after the plans were revealed in a Sunday newspaper.
The current BBC charter is due for renewal at the end of 2016.The current BBC charter is due for renewal at the end of 2016.
In an angry exchange, Mr Bryant stressed the process must be "open and transparent", adding it was "no way to run a whelk stall let alone the world's most respected broadcaster". In a statement to the Commons, Culture Secretary John Whittingdale said the charter renewal process would ensure the BBC could "adapt to a changing media landscape".
Culture Secretary John Whittingdale said he was "surprised" Mr Bryant "was so hostile when I have answered his question", adding the BBC was satisfied with the agreement. Mr Bryant called the announcement an "utter shambles" after the plans were revealed in a Sunday newspaper ahead of Wednesday's Budget.
He said the charter renewal process would ensure the BBC could "adapt to a changing media landscape". In an angry exchange in the Commons, Mr Bryant stressed the process must be "open and transparent", adding it was "no way to run a whelk stall let alone the world's most respected broadcaster".
'Modernise licence fee''Modernise licence fee'
He said he was pleased "the BBC had agreed to play its part" in helping tackle the government's "challenging fiscal position" while further reducing its "reliance on taxpayers". Mr Whittingdale said he was pleased "the BBC had agreed to play its part" in helping tackle the government's "challenging fiscal position" while further reducing its "reliance on taxpayers".
* £271.4m of the total used by the Government to fund S4C, the local TV scheme and broadband rollout.* £271.4m of the total used by the Government to fund S4C, the local TV scheme and broadband rollout.
BBC director general Tony Hall said: "We have secured the right deal for the BBC in difficult economic circumstances for the country. This agreement secures the long term funding for a strong BBC over the next Charter period. Lord Hall said there had been "intense negotiations" to ensure the BBC had "secured a strong deal for our audiences".
"It means a commitment to increase the licence fee in line with inflation, subject to Charter Review, the end of the iPlayer loophole and the end of the broadband ringfence. "If anything, I believe it will put the BBC slightly up," he said.
"In the circumstances, the BBC has agreed take on the costs for free licence fees for over-75s, and after the next parliament, will take on the policy." "Crucially, it gives us room for investment in the first two years of that charter. This will help us to manage the transition we all know is coming to an online world."
In a letter to Mr Whittingdale, BBC Trust chairman Rona Fairhead said the Trust accepted the decision "although we cannot endorse the process by which it has been reached".In a letter to Mr Whittingdale, BBC Trust chairman Rona Fairhead said the Trust accepted the decision "although we cannot endorse the process by which it has been reached".
"We are disappointed that [licence fee payers] have not been given any say in the major decisions about the BBC's future funding. However, we accept that those decisions now set a clear financial framework, subject to the terms... for a Charter Review process that will focus on what the BBC provides in return for its funding. We will want to make sure the public are at the centre of that debate." "We are disappointed that [licence fee payers] have not been given any say in the major decisions about the BBC's future funding," she said.
"However, we accept that those decisions now set a clear financial framework, subject to the terms... for a charter review process that will focus on what the BBC provides in return for its funding. We will want to make sure the public are at the centre of that debate."
Mr Whittingdale also confirmed plans to bring forward legislation to modernise the licence fee next year "to cover public service broadcast catch-up TV".Mr Whittingdale also confirmed plans to bring forward legislation to modernise the licence fee next year "to cover public service broadcast catch-up TV".
He added the government would "carefully consider" decriminalising non-payment of the licence fee.He added the government would "carefully consider" decriminalising non-payment of the licence fee.
When asked if over 75s would be means-tested to determine whether an individual or household was eligible for the free licence, Mr Whittingdale replied: "The commitment made in the Conservative manifesto that all households with an over 75-year-old will be eligible to a free TV licence will be honoured throughout this Parliament.When asked if over 75s would be means-tested to determine whether an individual or household was eligible for the free licence, Mr Whittingdale replied: "The commitment made in the Conservative manifesto that all households with an over 75-year-old will be eligible to a free TV licence will be honoured throughout this Parliament.
"As requested by the BBC, they will take responsibility for this policy from thereon.""As requested by the BBC, they will take responsibility for this policy from thereon."
Speaking on Radio 4, former BBC Trust chairman Diane Coyle said: "It's the second time the government has forced a deal on the BBC. There has been no consultation with the public and it's a major change in the BBC's responsibilities. The public who pay for the BBC should have been consulted."Speaking on Radio 4, former BBC Trust chairman Diane Coyle said: "It's the second time the government has forced a deal on the BBC. There has been no consultation with the public and it's a major change in the BBC's responsibilities. The public who pay for the BBC should have been consulted."
Mr Whittingdale added the government, depending on the Royal Charter agreement, expected the licence fee to rise in line with consumer price index (CPI) inflation over the next charter period.Mr Whittingdale added the government, depending on the Royal Charter agreement, expected the licence fee to rise in line with consumer price index (CPI) inflation over the next charter period.
Ms Coyle said: "I don't think it will balance out in the long run. I welcome getting the inflation link back, but the number of people over 75 is going up all the time and it's not clear to me in the long time it can avoid service closures to cover it."Ms Coyle said: "I don't think it will balance out in the long run. I welcome getting the inflation link back, but the number of people over 75 is going up all the time and it's not clear to me in the long time it can avoid service closures to cover it."