London Daily

Focus on the big picture.
Thursday, Jul 10, 2025

Council tax levy could replace TV licence fee in future funding model

Council tax levy could replace TV licence fee in future funding model

Under the proposal all households would pay for the BBC through their local authority bill

The TV licence fee could be abolished and replaced with a new levy on council tax bills, according to a House of Lords committee that looked at the best way to fund the BBC in the future.

Under the proposal, all households would pay for the BBC through their local authority bill, with low-earning families paying less for the broadcaster’s services. This would end the traditional link to owning a television set and ensure that people who only use the BBC’s online or radio services also have to pay to use them.

“We see quite a lot of potential advantages to it,” said the Conservative peer Tina Stowell, who chairs the cross-party House of Lords communications and digital committee.

She said her committee was not definitively backing the council tax-based funding model but said it worked well in Germany. “We see this as a viable proposition that needs to be taken very seriously,” she said.

Nadine Dorries, the culture secretary, has indicated she believes the licence fee needs replacing and wants to see a new BBC funding model in place by the end of 2027. She is due to launch a public investigation into the topic, although this may be delayed by the collapse of Boris Johnson’s government.

Lady Stowell’s committee concluded that commercial replacements of the licence fee, such as moving to a Netflix-style paid subscription or an advertising-supported model, would not produce enough money to fund the BBC in anything resembling its current form. Niche public interest services would be likely to close and it would be technically challenging to put up a paywall around existing BBC television and radio channels.

Other ideas, such as providing the BBC with billions of pounds of public funding directly from the government, were rejected because of the potential impact on the independence of the broadcaster. Nevertheless, the committee urged the BBC and government to also look at a hybrid model – where high-end BBC drama is behind a paywall but news services are accessible to all.

The licence fee costs £159 a year and must be paid by every household in the UK that watches any live television channels or uses the BBC’s iPlayer service. Those who do not pay face the risk of a criminal prosecution, with women disproportionately likely to face legal proceedings for non-payment – possibly because they are more likely to be at home in the day when inspectors call.

In recent years many other European countries including Sweden and Switzerland have abolished their television licence fee and moved to different funding models for their national broadcasters – including direct grants from government or introducing new household taxes.

Stowell said the public needed to understand that ending the licence fee and switching to a new funding model did not have to mean the end of the BBC as we know it. “For a lot of people there’s a lot of emotion invested in this and a fear that it’s driven by a political motive,” she said. “I think we need to all get over that and say it’s not about that at all.”

The overall number of households paying the licence fee has entered a steady decline in recent years. The BBC’s licence fee income – £3.8bn a year – has also been hit hard by years of government-enforced freezes that have left the broadcaster having to make deep cuts.

Stowell urged the BBC not to wait until the last minute and hope for a new funding model to emerge. “We’re saying to the BBC that you have to prepare for transition,” she said. “The status quo is not an option.”

A BBC spokesperson said the broadcaster was “open-minded” about the future of the licence fee.


Possible models for replacing the licence fee – and the verdict of the House of Lords committee


Advertising-funded model: Would result in a “multibillion-pound reduction in income for the BBC” and would harm other commercial broadcasters such as ITV by taking away their advertising income.

Netflix-style subscription: Unlikely to produce enough money and technically challenging given the ongoing popularity of traditional television and radio channels. A paywall would cut off large chunks of the public from the BBC, undermining the idea of a national broadcaster.

A monthly BBC levy on broadband contracts: Dismissed as little improvement over the existing licence fee and hard to means test. Could put households off signing up to internet connections or other phone contracts.

A new ringfenced income tax to fund the BBC: Could be easily means tested but it would be “politically controversial” to add a new line to payslips for BBC funding.

A universal council tax levy: Given an approving write-up by the House of Lords committee. They say it would be hard to evade, could be means tested so less well-off people pay less, and would be relatively easy to collect the money.

Direct government funding of the BBC: Rejected as it “does not satisfy the principles of independence or legitimacy”.

Part-subscription: Retain some form of public funding for the BBC’s core news offering and other services, then put the the BBC’s entertainment and drama behind a paywall. The committee said this would bring “significant commercial risk with no guarantee of success” and could annoy the public if they lose their favourite shows.

Increased commercial and international income: Find some way to maintain funding for the domestic British output while increasingly revenue from overseas to meet the BBC’s funding gap. Would “avoid compromising universal access for domestic consumers”.

Newsletter

Related Articles

0:00
0:00
Close
Polish MEP: “Dear Leftists - China is laughing at you, Russia is laughing, India is laughing”
BRICS Expands Membership with Indonesia and Ten New Partner Countries
Weinstein Victim’s Lawyer Says MeToo Movement Still Strong
U.S. Enacts Sweeping Tax and Spending Legislation Amid Trade Policy Shifts
Football Mourns as Diogo Jota and Brother André Silva Laid to Rest in Portugal
Labour Expected to Withdraw Support for Special Needs Funding Model
Leaked Audio Reveals Tory Aide Defending DEI Record
Elon Musk Founds a Party Following a Poll on X: "You Wanted It – You Got It!"
London Stock Exchange Faces Historic Low in Initial Public Offerings
A new online platform has emerged in the United Kingdom, specifically targeting Muslim men seeking virgin brides
Trump Celebrates Independence Day with B-2 Flyover and Signs Controversial Legislation
Boris Johnson Urges Conservatives to Ignore Farage
SNP Ordered to Update Single-Sex Space Guidance Within Days
Starmer Set to Reject Calls for Wealth Taxes
Stolen Century-Old Rolls-Royce Recovered After Hotel Theft
Macron Presses Starmer to Recognise Palestinian State
Labour Delayed Palestine Action Ban Over Riot Concerns
Swinney’s Tax Comments ‘Offensive to Scots’, Say Tories
High Street Retailers to Enforce Bans on Serial Shoplifters
Music Banned by Henry VIII to Be Performed After 500 Years
Steve Coogan Says Working Class Is Being ‘Ethnically Cleansed’
Home Office Admits Uncertainty Over Visa Overstayer Numbers
JD Vance Questions Mandelson Over Reform Party’s Rising Popularity
Macron to Receive Windsor Carriage Ride in Royal Gesture
Labour Accused of ‘Hammering’ Scots During First Year in Power
BBC Head of Music Stood Down Amid Bob Vylan Controversy
Corbyn Eyes Hard-Left Challenge to Starmer’s Leadership
London Tube Trains Suspended After Major Fire Erupts Nearby
Richard Kemp: I Felt Safer in Israel Under Attack Than in the UK
Cyclist Says Police Cited Human Rights Act for Riding No-Handed
China’s Central Bank Consults European Peers on Low-Rate Strategies
AI Raises Alarms Over Long-Term Job Security
Saudi Arabia Maintains Ties with Iran Despite Israel Conflict
Musk Battles to Protect Tesla Amid Trump Policy Threats
Air France-KLM Acquires Majority Stake in Scandinavian Airlines
UK Educators Sound Alarm on Declining Child Literacy
Shein Fined €40 Million in France Over Misleading Discounts
Brazil’s Lula Visits Kirchner During Argentina House Arrest
Trump Scores Legislative Win as House Passes Tax Reform Bill
Keir Starmer Faces Criticism After Rocky First Year in Power
DJI Launches Heavy-Duty Coaxial Quadcopter with 80 kg Lift Capacity
U.S. Senate Approves Major Legislation Dubbed the 'Big Beautiful Bill'
Largest Healthcare Fraud Takedown in U.S. History Announced by DOJ
Poland Implements Border Checks Amid Growing Migration Tensions
Political Dispute Escalates Between Trump and Musk
Emirates Airline Expands Market Share with New $20 Million Campaign
Amazon Reaches Milestone with Deployment of One Millionth Robot
US Senate Votes to Remove AI Regulation Moratorium from Domestic Policy Bill
Yulia Putintseva Calls for Spectator Ejection at Wimbledon Over Safety Concerns
Jury Deliberations in Diddy Trial Yield Partial Verdict in Serious Criminal Charges
×