The future of the BBC licence fee

Under the BBC’s Royal Charter (PDF) and Agreement (PDF), the BBC is funded primarily through a licence fee. The current Charter began on 1 January 2017 and runs to 31 December 2027.

The licence fee model was conceived at a time of linear viewing – watching television programmes at the time of broadcast. Changes in viewing habits, such as a move to video-on-demand, and the growth of new technologies, has resulted in the model being challenged.

In December 2023, the government launched a review into the future of the licence fee and alternative funding options. The terms of reference explain that it will consider:

1. The context of a rapidly-changing broadcasting and media market.
2. The sustainability of the BBC’s current funding model.
3. Whether the BBC should provide more services to audiences on a fully commercial basis, and what those services could be.
4. The potential for the BBC to generate more commercial revenue.
5. The evidence around other funding models to support BBC services and output.
6. How the BBC could transition to any new funding model.

The findings will feed into the review of the BBC’s Royal Charter before it ends in December 2027.

In a July 2024 response to a written parliamentary question, the government said it was committed to the licence fee for the remainder of the current Charter period and would keep an “open mind” about its future.