The BBC is today launching a consultation on licence fees for older people.
Currently all households with people over 75 are entitled to a free TV licence. That Government-funded scheme - which is expected to cost £745m by 2021/22 - comes to an end in June 2020.
It is for the BBC to decide on any future scheme and to pay for it. We want to hear the views of the public about the future. The consultation will run from today for three months and the BBC’s board hopes to make a decision by the summer.
There are a range of options available:
The BBC could copy the scheme, but that could cost around a fifth of our budget - the equivalent to what we spend today on all of BBC Two, BBC Three, BBC Four, the BBC News Channel, CBBC and CBeebies. That would mean over 75s would not have to pay, as at present, but we think it would fundamentally change the BBC because of the scale of service cuts we would need to make.
Another option would be to restore the universal licence fee that existed in the past, meaning no concession. This would mean the BBC would not have to make significant cuts to BBC services, but would have an impact on those over 75s, particularly poorer pensioners, who currently do not pay.
Or the BBC could take neither of those choices and reform the scheme. There are different ways of doing this, including: - Discounting the cost of a licence fee for older people. This would reduce the impact of cuts to BBC services, but would mean everyone over 75 would pay something, for example 50%. - Raising the age from 75 to 80, which would reduce the financial impact on the BBC but keep free licences for the oldest households. - Introducing means-testing - so that older people in greater financial need wouldn’t pay, but those who could afford it would. This would also reduce the impact on BBC services, while protecting the most vulnerable.
Any choice would have its merits and its drawbacks. We are not backing any particular option over another today. We will ask the public what they think. We will look at the responses, and then make a decision taking into account all relevant considerations, including the implications of the decision: for the BBC in delivering its public service mission; for our audiences; for the older members of our society.
Tony Hall, BBC Director-General, says: “This is an important decision. We have set out a range of options - each has merits and consequences, with implications for the future of the BBC, and for everyone, including older people. We need to hear views to help the BBC make the best and fairest decision.”
David Clementi, BBC Chairman, says: “The Board wants to make an informed decision about the future. We want to hear from the public. We will listen to their views and balance all the options and arguments before making a decision. The Board does not underestimate the significance of the decision, its implications for the BBC and its audiences.”
Alongside this consultation document, we are also publishing an Equality Impact Assessment to help ensure that we understand the potential equality impacts of different options.
The BBC has commissioned two reports by Frontier Economics which have been published.
The BBC will inform the public about the consultation on our website and through our broadcast outlets.
This scheme offering free TV licences to the over 75s has been funded by the Government since it was introduced in 2000. Government funding ends in 2020.
Parliament passed the Digital Economy Act 2017 transferring responsibility to the BBC itself to decide what, if any, age-related concession should be in place for those aged 65 and older beyond June 2020.
If the BBC copied the existing scheme and replaced the Government’s funding for free TV licences for all those aged over 75, the cost would be £745 million a year by 2021/2022. By the end of the next decade the annual cost of the concession will have risen to over £1 billion, reflecting the fact that the UK population is ageing and the impact of inflation. The BBC does not have the power to raise the licence fee to cover those costs.