Understanding the BBC's finances
The licence fee supports the greatest volume and range of original television and radio programming and public service online content to be found in the UK.
Facing the dual challenge of a licence fee frozen at current levels and new funding commitments, the BBC is making the licence fee go further, through efficiency savings and by generating revenues from the pursuit of a strong commercial strategy.
The licence fee
In parallel with the Government's Comprehensive Spending Review, a new six-year licence fee settlement was agreed with the Secretary of State in October 2010, in effect freezing the licence fee at £145.50 until the end of the current BBC Royal Charter period in December 2016 – the equivalent of just under 40p per current licensed household per day.
As well as supporting the commissioning, creation and broadcasting of the whole range of BBC television, radio and online content, the licence fee also has a broader economic impact, in supporting the wider creative economy.
The latest survey of this economic contribution to the UK economy concluded that the BBC made a contribution of at least £8.1billion in 2009/10. This means that over £2 of economic value is generated by each £1 of the licence fee. We aim to continue to deliver an economic value of at least twice the value of the licence fee in the future, spreading its economic benefit across the UK. We will repeat this survey every two years and report publicly on our success in meeting this target. The next survey will be produced in autumn 2012. For previous reports visit the About the BBC website.
BBC Group
BBC World Service and BBC Monitoring
£277m
Grant-in-aid and Grant income
BBC World Service first broadcast to the world in 1932. The service, across radio, TV and online, is currently funded by the Foreign and Commonwealth Office.
This year 180 million people tuned into the World Service for impartial and independent news. Including the BBC commercial services, globally the BBC reached an audience 239 million.
BBC Monitoring is funded by the Cabinet Office. It is an open source news and information publisher, offering around the clock news, comment and reaction from the world's press, radio, TV and the internet. Reports are translated into English from more than 100 languages, from Afrikaans to Yoruba.
Looking ahead
As part of the Government's Comprehensive Spending Review it was agreed that funding for BBC Monitoring and BBC World Service would transfer to the licence fee from 1 April 2013 and 1 April 2014 respectively.
We have begun a six-year savings programme to meet the reduction in BBC World Service funding. With the approval of the Foreign Secretary, five language services have closed, and radio broadcasts of other services have ceased.
Commercial operations
£222m
Combined profit before interest and tax
BBC Worldwide is the BBC's main wholly owned commercial subsidiary, which works to maximise income from BBC programme rights and properties, to offset the licence fee.
BBC Studios and Post Production works with the BBC, other broadcasters – ITV, Channel 4, Channel 5 and Sky – as well as other media and independent production companies to create great content.
BBC World News offers 24-hour news, information and analysis in English across the globe. It is funded by subscription and advertising revenues.
Looking ahead
To ensure the BBC's commercial operations continue to support the licence fee in future years in addition to promoting the BBC and British creativity to international audiences, BBC Worldwide has been refreshing its company strategy.
It intends to invest more to increase its focus on fast-growing BBC-branded services, such as its wholly-owned and operated channels, around the world.
Licence fee funded services
£3,606m
Licence fee income
The BBC is established by Royal Charter and our UK public service broadcasting activities are funded by a licence fee paid by UK households. Last year, we provided the following to home audiences:
- Ten UK-wide TV services
- Nations and regions TV services across England, Scotland, Wales and Northern Ireland
- Ten UK-wide radio networks
- Two national radio services each in Scotland, Wales and Northern Ireland
- 40 local radio stations in England
- BBC Online
Looking ahead
In future, the licence fee will additionally have to pay for BBC World Service and BBC Monitoring, and for the BBC to establish a partnership fund for new local television services (as much as an initial ££25million in 2013, and £5million per annum in subsequent years), establish a new partnership model for Welsh language TV service S4C (contributing £76million each year in 2013 and 2014) and provide support for broadband roll-out.
We will reduce our current costs by £700million a year by 2017 to meet these new obligations.
This year the licence fee was £145.50. This is how it was spent:
Monthly charge per licence fee
Licence fee rates across Europe £ 2011/12
* Rate includes VAT
GBP 1 = EUR 1.20
Source: Broadcasting Fee Association. All licences run for a calendar year except the UK which runs from 1 April to 31 March. Euro exchange rate used as of 1 January 2012 (£1=€1.20). Cost is total per licence to domestic customer for TV and radio.
BBC spend in creative economy £m
Independent programmes transmitted
External programme facilities and resources
Acquired programmes transmitted
Artists, contributors and copyright
BBC performing groups
Investing in the best of British
The cumulative impact and spending power of over 20 million television licences can deliver more than content alone. As well as in-house staff, we are able to provide work for many freelance individuals and thousands of large and small businesses across the UK – delivering sustainable benefits to digital and creative industries as well as the wider British economy.
bbc.co.uk navigation
BBC links
BBC © 2013 The BBC is not responsible for the content of external sites. Read more.
This page is best viewed in an up-to-date web browser with style sheets (CSS) enabled. While you will be able to view the content of this page in your current browser, you will not be able to get the full visual experience. Please consider upgrading your browser software or enabling style sheets (CSS) if you are able to do so.