BBC faces financial uncertainty due to reliance on licence fee – report – The Guardian

BBC
National Audit Workplace likewise highlights risks of falling audience share and broadcaster being slow to change

The BBC faces an unpredictable future since it relies greatly on the licence cost as its audience share drops, Whitehalls spending guard dog has actually concluded.In a pointed warning, the National Audit Office said the corporation has actually postponed making challenging choices about future income streams, and is dipping into its reserves to cover the cost of totally free licences for viewers over 75 years old.Richard Sharps arrival at the BBC will entrench conservative influence|Tom MillsThe NAOs findings come amid criticism from senior Conservatives of the BBC and its reliance on the licence fee ahead of the BBCs charter renewal in December 2027. Richard Sharp, the corporations incoming chair, stated last month the fee “may deserve reassessing” as part of a review.
Responding to the findings, Meg Hillier, the chair of the Commons public accounts committee, stated the BBC has actually “shied away from making tough decisions for too long and has undervalued the cost of major tasks”.” It is much too contented about threats that might materialise as quickly as next year,” she said.The guard dogs report, launched today, examines the BBCs monetary strategy. It said the BBC had actually been “slow to alter” on concerns such as the fall in viewing by more youthful audiences, and still had no central strategy for tackling the issue.” Falling audience share postures a financial risk as people are less most likely to pay the licence charge if they do not view licensable material,” the NAO said.Examining the corporations financial resources, auditors discovered that the BBCs licence charge earnings fell by ₤ 310m between 2017-18 and 2019-20, to ₤ 3.52 bn.
The variety of under-75 households buying TELEVISION licences fell by 450,000, due to modifications in audience viewing practices and more homes receiving a free over-75 licence, the report said.In 2019-20, the BBC created income of ₤ 4.943 bn, of which ₤ 3.52 bn was public funding from the TV licence fee. The BBC started settlements with the government in November about the future financing it will receive from the fee.Auditors revealed concern at the corporations failure to examine its monetary future. They stated that although the BBC “thinks about that it delivers significant larger value to British and international society … it has actually not carried out a financial analysis of this in almost 10 years”. The corporations monetary health has likewise been suddenly damaged by the impact of Covid-19, such as a drop in marketing sales, the report said.
The amount of time an adult invested seeing broadcast BBC TELEVISION dropped by 30% from an average 80 minutes a day in 2010 to 56 minutes in 2019. BBC radio audience time has likewise declined amongst grownups, falling by 15% between 2013-14 and 2019-20, when national commercial radio stations have actually kept or increased their audience time.” Despite its purpose of being a universal broadcaster and still being the most-used media brand in the UK, the BBC has seen a noteworthy drop in audience viewing times.
Gareth Davies, the head of the NAO, stated: “The BBC faces substantial monetary obstacles as it embarks upon licence fee negotiations and its midterm charter review.” As decisions about the licence cost are made, the BBC requires to establish a clear monetary plan for the future, setting out where it will invest and how it will continue to make savings.
BBC insiders point out that executives have been taking a look at alternative funding models. In August, it was reported that Tim Davie, the director-general, took a look at whether the licence fee might ultimately be changed with a new special income tax, based on the Swedish model for funding civil service broadcasting.A BBC representative stated: “As the NAO has actually set out, we have made considerable cost savings and increased effectiveness, while preserving our spending on material, and continuing to be the UKs most-used media organisation.” We have set out prepare for immediate reforms concentrated on providing great value for all audiences and we will set out even more information on this in the coming months.” The report also worries the value of steady funding for the future, which we welcome as we begin settlements with federal government over the licence charge.”

Wed 20 Jan 2021 00.01 GMT

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Tom MillsThe NAOs findings come in the middle of criticism from senior Conservatives of the BBC and its reliance on the licence cost ahead of the BBCs charter renewal in December 2027.” Falling audience share poses a monetary risk as individuals are less likely to pay the licence cost if they do not see licensable content,” the NAO said.Examining the corporations finances, auditors discovered that the BBCs licence cost earnings fell by ₤ 310m in between 2017-18 and 2019-20, to ₤ 3.52 bn.
The number of under-75 homes buying TV licences fell by 450,000, due to changes in audience viewing practices and more families qualifying for a complimentary over-75 licence, the report said.In 2019-20, the BBC created income of ₤ 4.943 bn, of which ₤ 3.52 bn was public funding from the TV licence charge. Gareth Davies, the head of the NAO, said: “The BBC deals with substantial financial obstacles as it embarks upon licence charge settlements and its midterm charter evaluation. In August, it was reported that Tim Davie, the director-general, looked at whether the licence charge could ultimately be replaced with a brand-new unique earnings tax, based on the Swedish model for funding public service broadcasting.A BBC representative said: “As the NAO has actually set out, we have made substantial savings and increased effectiveness, while keeping our spending on material, and continuing to be the UKs most-used media organisation.

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