Licence fee frozen as BBC takes on World Service funding

A formal announcement is expected later today confirming that the BBC licence fee will be frozen for six years and that the BBC will take on the funding of the World Service as it shares in the pain of widespread public sector cuts.

The Government is expected to confirm that it will push £340m of costs onto the BBC as the corporation assumes the funding of the World Service – which is currently paid for by the Foreign Office – and Welsh language service S4C.

The Government has already revealed that £150m of BBC licence fee funding currently allocated to digital switch-over is to be spent on superfast broadband.

The licence fee will be frozen at the current level of £145.50 per household per year and the additional cost burden amounts to around a 16 per cent budget cut in real terms for the corporation. The BBC’s current licence fee income is £3.6bn.

The Guardian reported yesterday that the BBC was on the verge of assuming control of the World Service as a way to avoid being burdened with the half-a-billion-pounds-per-year cost of funding the free licence fees handed out to the over-75s. That cost will continue to be paid for by the Department of Work and Pensions.

The move comes as the Government prepares to unveil sweeping cuts to the public services as part of its Public Spending Review later today.

Prime Minister David Cameron first signalled to the BBC that it “must live within its means” and share in public sector cuts in March last year while his party was still in opposition. He also first raised the prospect that the licence fee could be frozen for a year and then be reviewed on a year by year basis. Those measures have been dwarfed by the moves expected to be announced later today.

The BBC taking full control of the World Service will give it clear editorial independence from the Government but will open it up to the wider cuts process that is expected to hit the BBC.

The National Union of Journalists warned yesterday that it feared that cuts of between 25-40 per cent of the World Service’s £277m annual budget were likely to lead to service closures and significant redundancies in the UK and across the globe.

The union said it feared the Macedonian, Serbian, Vietnamese and Moldovan language services may close entirely or be drastically cut while the Ukrainian and Russian services could be based solely in those countries with the Russian radio serviced closed by the end of the year.

Journalism jobs were expected to go from the BBC World Service newsroom in London, the union said, with further cuts and restructuring expected across the Turkish TV service, the Central Asian and Bengali services, the Spanish American service and the Arabic service.

The union also claimed that cuts have been proposed for the BBC Monitoring Service based in Caversham which could impact on 300-350 jobs in the UK and 150 jobs overseas.

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