BBC director general Mark Thompson has called the decision to freeze the licence fee and for the BBC to take on funding of the World Service a ‘realistic deal in exceptional circumstances”.
Responding to confirmation in the Government’s comprehensive spending review that the BBC would be forced to bare an effective budget cut of £340m – equivalent to a 16 per cent cut in real terms – Thompson said ‘efficiency and reform’would be key issues for the corporation in the years to come.
Chancellor George Osborne revealed in the Commons this afternoon that the licence fee would be frozen at its current level of £145.50 per household for the next six years.
In addition to taking over the Foreign Office’s funding of the World Service the BBC would also fund Welsh language service S4C and the expansion of rural broadband, the Chancellor said, as it shares in the pain of widespread public sector cuts.
Thompson responded: ‘This is a realistic deal in exceptional circumstances securing a strong independent BBC for the next six years.
‘It means that efficiency and reform will continue to be key issues for us. But our focus remains providing distinctive, high quality programmes valued by the public. This deal will safeguard that until 2017.”
The Guardian reported yesterday that the BBC was on the verge of assuming control of the World Service as a way to avoid being burdened with the half-a-billion-pounds-per-year cost of funding the free licence fees handed out to the over-75s. That cost will continue to be paid for by the Department of Work and Pensions.
Sir Michael Lyons, chairman of the BBC Trust, said the 11th the deal was a ‘tough settlement’but one that delivered stability for the corporation and licence fee payers through to 2016/17.
“There is no doubt that the settlement will present us with some difficult choices, but importantly, these choices will remain firmly in the hands of the BBC Trust and we will of course seek the views of licence fee payers,’he said.
Lyons the settlement brought new obligations for the BBC to be a public service broadcaster of the highest quality that serves all audiences.
“In particular the new arrangements will ensure that the World Service remains a vibrant, independent service that brings impartial news to people around the world, while strengthening the BBC’s ability to bring international news to UK licence fee payers.
“The settlement also seeks to secure the long term future of broadcasting in the Welsh language through the extension of a partnership with S4C.
“The BBC is not government funded, but these are pressing times for the nation as a whole, and we believe licence fee payers would expect us to see what contribution we can properly make.
“The extra responsibilities the BBC will now take on are consistent with this and will deliver benefits to licence fee payers across the UK.”
The National Union of Journalists warned yesterday that it feared that cuts of between 25-40 per cent of the World Service’s £277m annual budget were likely to lead to service closures and significant redundancies in the UK and across the globe.
Responding to today’s news National Union of Journalists general secretary Jeremy Dear said: “This is a full frontal attack on valuable public service broadcasting which will see vital services cut and thousands of jobs axed.
“The proposals are even worse than they appear – a 16 per cent funding cut in real terms only includes the licence fee freeze.
“The BBC commitment to spend an extra £340m each year will devastate jobs and services and compromise the BBC’s independence. We are determined to challenge them.”