This article is from the source 'independent' and was first published or seen on . It last changed over 40 days ago and won't be checked again for changes.

You can find the current article at its original source at http://www.independent.co.uk/news/media/tv-radio/bbc-warns-its-services-will-suffer-after-agreeing-to-foot-650m-bill-for-free-tv-licences-10370158.html

The article has changed 2 times. There is an RSS feed of changes available.

Version 0 Version 1
BBC warns its services will suffer after agreeing to foot £650m bill for free TV licences BBC warns its services will suffer after agreeing to foot £650m bill for free TV licences
(35 minutes later)
The BBC has warned that its services will suffer after agreeing to accept the £650m annual cost of providing free television licences for the over-75s in return for an increased licence fee in line with inflation.The BBC has warned that its services will suffer after agreeing to accept the £650m annual cost of providing free television licences for the over-75s in return for an increased licence fee in line with inflation.
Labour criticised a “shabby backroom deal”, hastily agreed before Wednesday's Budget, describing the transfer of the Government’s social policy to the broadcaster as an “assault on BBC independence”.Labour criticised a “shabby backroom deal”, hastily agreed before Wednesday's Budget, describing the transfer of the Government’s social policy to the broadcaster as an “assault on BBC independence”.
The BBC will take on the cost of providing free television licences for over-75s, currently met by the Department for Work and Pensions.The BBC will take on the cost of providing free television licences for over-75s, currently met by the Department for Work and Pensions.
The change will be phased in from 2018 - when the burden is expected to rise to £700m due to an ageing population - with the BBC taking on the full costs from 2020/21.The change will be phased in from 2018 - when the burden is expected to rise to £700m due to an ageing population - with the BBC taking on the full costs from 2020/21.
The new Arts Secretary John Whittingdale is an outspoken critic of the BBC (Getty)
In return, a seven-year licence fee freeze will end with the charge rising in line with the CPI measure of inflation, currently standing at 0.1%In return, a seven-year licence fee freeze will end with the charge rising in line with the CPI measure of inflation, currently standing at 0.1%
The Government will bring forward legislation to “modernise the licence fee” in order to cover viewers who say they only watch “catch-up” programmes on the iPlayer. The BBC estimates this will add £150m a year to its income.The Government will bring forward legislation to “modernise the licence fee” in order to cover viewers who say they only watch “catch-up” programmes on the iPlayer. The BBC estimates this will add £150m a year to its income.
A further £150m a year will be saved when the BBC no longer has to fund the roll-out of broadband services, by the end of 2021.A further £150m a year will be saved when the BBC no longer has to fund the roll-out of broadband services, by the end of 2021.
John Whittingdale, the Culture Secretary, who along with the Chancellor George Osborne, hammered out a deal with Tony Hall, the BBC Director-General, said: “Having inherited a challenging fiscal position the Government is pleased that the BBC has agreed to play its part in contributing to reductions in spending like much of the rest of the public sector, while at the same time further reducing its overall reliance on taxpayers. As part of these new arrangements, the Government will ensure that the BBC can adapt to a changing media landscape.”John Whittingdale, the Culture Secretary, who along with the Chancellor George Osborne, hammered out a deal with Tony Hall, the BBC Director-General, said: “Having inherited a challenging fiscal position the Government is pleased that the BBC has agreed to play its part in contributing to reductions in spending like much of the rest of the public sector, while at the same time further reducing its overall reliance on taxpayers. As part of these new arrangements, the Government will ensure that the BBC can adapt to a changing media landscape.”
Plans to decriminalise the non-payment of the BBC licence fee, which could cost the BBC a further £200m a year will be discussed as part of the Charter Renewal negotiations, the minister said.Plans to decriminalise the non-payment of the BBC licence fee, which could cost the BBC a further £200m a year will be discussed as part of the Charter Renewal negotiations, the minister said.
In angry exchanges in the Commons, Chris Bryant, Shadow Culture Secretary, called the deal “a smash and grab raid on the BBC”, designed to undermine the corporation.In angry exchanges in the Commons, Chris Bryant, Shadow Culture Secretary, called the deal “a smash and grab raid on the BBC”, designed to undermine the corporation.
Ben Bradshaw, a former culture secretary, told Mr Whittingdale: “You have succeeded in making the BBC a branch office for the Department for Work and Pensions. This is a significant assault on BBC independence.”Ben Bradshaw, a former culture secretary, told Mr Whittingdale: “You have succeeded in making the BBC a branch office for the Department for Work and Pensions. This is a significant assault on BBC independence.”
The Chancellor said the deal fulfilled the Conservatives’ manifesto pledge to maintain pensioner benefits but critics said there was no guarantee that the BBC would continue to fully fund free licence-fees for the over-75s after 2021. The BBC said it would have “control over the policy” from that date onwards but could not commit to maintaining the free licences.The Chancellor said the deal fulfilled the Conservatives’ manifesto pledge to maintain pensioner benefits but critics said there was no guarantee that the BBC would continue to fully fund free licence-fees for the over-75s after 2021. The BBC said it would have “control over the policy” from that date onwards but could not commit to maintaining the free licences.
Tony Hall, BBC Director-General, said he had “secured the right deal for the BBC in difficult economic circumstances for the country.” The agreement would deliver “financial stability” and “secures the long term funding for a strong BBC over the next Charter period.”Tony Hall, BBC Director-General, said he had “secured the right deal for the BBC in difficult economic circumstances for the country.” The agreement would deliver “financial stability” and “secures the long term funding for a strong BBC over the next Charter period.”
BBC sources suggested that the licence fee inflation rise along with the closure of the iPlayer loophole and the end of its broadband commitments could ensure that its income remained flat over the next five years.BBC sources suggested that the licence fee inflation rise along with the closure of the iPlayer loophole and the end of its broadband commitments could ensure that its income remained flat over the next five years.
However the BBC Trust criticised the manner in which the deal had been stitched together. In a critical letter to the Chancellor, who had warned the BBC to rein in its “imperial ambitions”, Rona Fairhead, BBC Trust Chairman, said: “We accept this decision is a legitimate one for the Government to take, although we cannot endorse the process by which it has been reached.”However the BBC Trust criticised the manner in which the deal had been stitched together. In a critical letter to the Chancellor, who had warned the BBC to rein in its “imperial ambitions”, Rona Fairhead, BBC Trust Chairman, said: “We accept this decision is a legitimate one for the Government to take, although we cannot endorse the process by which it has been reached.”
The Trust “could not, ultimately, obstruct any decision that you made” but Ms Fairhead warned that: “The (BBC) Executive are clear that the necessary savings will not be achieved through productive efficiency alone and will inevitably have some impact on the nature of the BBC’s services.”The Trust “could not, ultimately, obstruct any decision that you made” but Ms Fairhead warned that: “The (BBC) Executive are clear that the necessary savings will not be achieved through productive efficiency alone and will inevitably have some impact on the nature of the BBC’s services.”
The size and scope of other BBC services, such as its website, criticised by the Chancellor for its impact on newspapers, will come under scrutiny during the Charter Renewal negotiations,The size and scope of other BBC services, such as its website, criticised by the Chancellor for its impact on newspapers, will come under scrutiny during the Charter Renewal negotiations,
BBC sources suggest that the corporation's income may remain flat over the next five years (BBC)
Toby Syfret, a television analyst with the Enders research organisation, said “This may not be as promising a solution as it first appears. The reality is that the BBC may still end up losing up to a sixth of its total annual income, some £650 million – and to put that is perspective, that is the total budget of all BBC Radio – staff, broadcasting, content, the lot.”Toby Syfret, a television analyst with the Enders research organisation, said “This may not be as promising a solution as it first appears. The reality is that the BBC may still end up losing up to a sixth of its total annual income, some £650 million – and to put that is perspective, that is the total budget of all BBC Radio – staff, broadcasting, content, the lot.”
Colin Browne, Chairman of Voice of the Listener and Viewer pressure group, said: “It is disgraceful that this decision has been taken with no public consultation of any kind. We were promised a full and transparent discussion about the future of the BBC, but this has effectively been pre-empted by this announcement.”Colin Browne, Chairman of Voice of the Listener and Viewer pressure group, said: “It is disgraceful that this decision has been taken with no public consultation of any kind. We were promised a full and transparent discussion about the future of the BBC, but this has effectively been pre-empted by this announcement.”
One senior broadcasting figure said the BBC had no choice but to put a positive spin on the settlement. “The BBC is being left with a long-term deficit, because it remains unclear just how the mitigations can make up the shortfall from the over-75s burden, especially if inflation remains so low,” he said. “The BBC have simply been handed the over-75 problem and told get on with it without any means testing – so the government has simply shifted a problem to the corporation.”One senior broadcasting figure said the BBC had no choice but to put a positive spin on the settlement. “The BBC is being left with a long-term deficit, because it remains unclear just how the mitigations can make up the shortfall from the over-75s burden, especially if inflation remains so low,” he said. “The BBC have simply been handed the over-75 problem and told get on with it without any means testing – so the government has simply shifted a problem to the corporation.”
George Osborne said the BBC was a “publicly-funded body, so it is right that it, like other parts of the public sector, should make savings.”George Osborne said the BBC was a “publicly-funded body, so it is right that it, like other parts of the public sector, should make savings.”
He added: “The decisions the BBC and the Government have reached together will also secure its long-term future, with a funding model that is sustainable and can adapt in an age where technology is rapidly changing.”He added: “The decisions the BBC and the Government have reached together will also secure its long-term future, with a funding model that is sustainable and can adapt in an age where technology is rapidly changing.”