Council tax levy could replace TV licencing fee

A report from the House of Lords looking at the best way to fund the BBC in the future has argued that a universal household levy linked to council tax bills could be a better option than the BBC's existing licence fee.

Without setting out a bold new plan for its future, the BBC faces 'stagnation and decline', the Lords Communications and Digital Committee has warned.

One option that has been included in the report is a universal household levy linked to council tax bills, the authors of the report argue that this would take greater account of people’s ability to pay.

The Conservative peer Tina Stowell, who chairs the cross-party House of Lords communications and digital committee said: “We see quite a lot of potential advantages to it,” continuing on to say that whilst the committee was not definitively backing the council tax model, it worked well in Germany.

Other options listed include reforming the existing licence fee to provide discounts for low-income households or a ring-fenced income tax.

Baroness Stowell of Beeston, chair of the Committee, said: "The real danger is if the BBC doesn’t seize this opportunity to reform and demonstrate why it’s of value to audiences in this new world of endless choice.

"That’s why the Committee concluded that, when it comes to what the BBC does, the status quo is not an option. There will be choices for the Government and Parliament to make when it comes to funding mechanisms. But these decisions must be informed by a bold vision of what the BBC exists for and what it will deliver."

The committee considered other options, but found that commercial replacements of the licence fee, like a Netflix-style subscription or advertising would not raise enough money to support the BBC in its current form. Another suggestion was to provide funding direct from the government, but this raised concerns about the impact on the independence of the BBC. A hybrid model is also being considered, where some services are behind a paywall, but others such as news are available for free.

Currently, the licence fee is £159 a year and must be paid by anyone in the UK that watches live television or uses BBC iPlayer.