BBC licence fee “not sustainable”, reaffirms UK government, considering “other options” to C4 sale

Line Of Duty

UK culture secretary Michelle Donelan has said that the BBC licence fee model is “impossible” to sustain but indicated that she is considering “other options” to Channel 4 privatisation.

Appearing before MPs on the Digital, Culture and Media Select Committee for the first time, Donelan, who replaced Nadine Dorries in the role in September, said that it was “undeniable that the licence fee is not a long-term sustainable model in its own right” due to declining viewing figures.

Donelan instead suggested that the government could explore a “mixed model where the licence fee is propped up by other sources of funding”.

Last month, Donelan said that she was “re-examining the business case” around the decision to sell Channel 4 and plans to scrap the BBC licence fee to ensure that the then newly formed UK government “still agrees with that decision – and that’s what I’m doing.” At the time, she said she would “base decisions on evidence, on listening and that’s what I will be doing over the coming weeks.”

Earlier this year, her predecessor Dorries froze the BBC licence fee at £159 until April 2024, claiming that the funding model for the Line Of Duty and Doctor Who broadcaster was outdated. Speaking to the committee, Donelan confirmed that she is continuing with the government review and appeared to share Dorries’ viewpoint on the annual charge.

“Unless you were increasing the licence fee to a great deal per household, which would further drive down subscribers, then I can’t see how you would get to the figures that are required without topping up that funding somehow with another initiative.

“So the answer cannot simply be to continue with the licence fee if we want to protect the BBC, which I think we should be,” said Donelan. “If we want to make the BBC sustainable, we need to be honest about that and work together to make sure that we safeguard it into the future.”

Addressing the plans to privatise Channel 4, which Donelan also inherited from Dorries, the culture secretary said that she is looking at “other options for providing long-term sustainability” for the commercial broadcaster.

The privatisation of Channel 4 has been in the works for more than a year after the Boris Johnson government laid out a formal consultation into its privatisation, arguing that “the evolving media landscape poses material challenges to Channel 4’s future success and sustainability under its current ownership model and remit.”

The It’s A Sin broadcaster’s CEO, Alex Mahon, confirmed the news in a note to staff in April, despite the broadcaster and the vast majority of the TV industry disagreeing with the plans, arguing they would hurt the domestic sector. Bankers had also started testing acquisitive interest among potential buyers, with Sky and Warner Bros. Discovery among those initially mooted.