This Library Paper looks at the BBC's decision to end the current scheme of free TV licences for the over-75s. The scheme was due to end from 1 June 2020. This has been put back to 1 August 2020 because of the coronavirus situation.

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TV licences for the over-75s have been free since November 2000. The concession is received by around 4.55 million households. In 2021/22, the cost is expected to be £745 million.

In July 2015, a funding deal was agreed between the Government and the BBC. A key element of the deal was that the BBC would take over the funding of free licences for the over-75s. Responsibility for the cost of the concession transfers to the BBC in June 2020. The legislative basis for this is section 89 of the Digital Economy Act 2017.

A BBC consultation on the future of the licence fee for older people ran from 20 November 2018 to 12 February 2019. This sought views on three options:

  • copying the existing scheme for the over-75s;
  • restoring the universal licence fee that existed in the past, meaning no concession;
  • reforming the scheme – through, for example, discounting the cost of a licence fee for older people; raising the age from 75 to 80; or introducing means-testing.

June 2019: BBC announces current scheme to end

On 10 June 2019, the BBC announced that the current scheme would end and that, from 1 June 2020, a free TV licence would only be available to a household with someone aged over-75 who received pension credit.

According to the BBC, over 1.5 million households could get a free TV licence under the new scheme. The cost to the BBC would be up to £250 million by 2021/22. The BBC said that its decision had been guided by three principles:

  • fairness – the potential impact on older age groups and the potential impact on all licence fee payers, across all generations.
  • financial impact – the cost of any concession to the BBC, and the possible effect this might have on programmes and services.
  • feasibility – being able to implement any new concession simply and effectively.

The BBC’s decision document, an Equality Impact Assessment, and some of the consultation responses are available online.

On 16 March 2020, the Government and the BBC issued a joint statement announcing that the change would not come into effect until 1 August 2020 because of the coronavirus situation:

…The BBC’s priority over the coming period is to do everything it can to serve the nation at this uniquely challenging time. As the national broadcaster, the BBC has a vital role to play in supplying information to the public in the weeks and months ahead.

Recognising the exceptional circumstances, the BBC Board has decided to change the start date to 1 August and the issue will remain under review as the situation continues to evolve.

Reaction to the BBC’s June 2019 decision

The BBC’s decision has been controversial. For example, an Age UK petition demanding that the Government take back responsibility for funding free licences for everyone aged over-75 received over 634,000 signatures.

However, the Intergenerational Foundation has said there is “simply no reason why retired judges, lawyers, bankers and doctors should receive a free TV licence when younger generations are struggling financially.”

An October 2019 report from the Digital, Culture, Media and Sport Committee criticised the process leading to the BBC’s funding settlement in 2015. It concluded, among other things, that:

  • the BBC had met its obligations under the 2017 Act;
  • funding free licences for all of the over-75s was not a sustainable option for the BBC alone;
  • there was a lack of clarity for those affected by the BBC’s decision.

In its March 2020 response to the Committee’s report, the Government noted its disappointment with the BBC’s decision to restrict free licences to those in receipt of pension credit. The Government recognised the the value of free TV licences for the over 75s and said they should be funded by the BBC.

  • Commons Research Briefing SN04955
  • Author: John Woodhouse
  • Topics: Press & Media

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