Labour ministers are considering plans to replace the current £180 TV licence fee with an £11 monthly internet charge. This proposal would require all households with an internet connection to contribute to BBC funding, regardless of whether they watch live television. The idea is part of a report by the Social Market Foundation (SMF), which has explored potential changes to BBC funding in the coming years.
The SMF report also suggests that the BBC could transition to a mutual society model, allowing members to hold BBC management accountable. Currently, 3.7 million households claim they do not need a licence because they do not watch live TV. In 2025, approximately 500,000 UK homes stopped paying the fee, leading to £500 million in cuts for the BBC.
The report warns that popular shows, including Sir David Attenborough's Planet Earth and The Traitors, could be at risk if funding reforms are not implemented. Over half of the 2,050 individuals surveyed by the SMF expressed concern that Strictly Come Dancing might be cancelled due to ongoing funding issues.
The SMF found that around 63% of BBC content could disappear if the licence fee is eliminated, with remaining content potentially moved to a streaming service or paywall. To address concerns about the impact on low-income families, the SMF proposed a social tariff discount. Another option under consideration is a smaller 'News and Culture Levy' of £2.30 added to monthly internet bills while retaining the licence fee.
Internet providers would be compensated for the costs associated with collecting these additional charges. The discussions around these changes will be central to the BBC's next Royal Charter, which will determine the broadcaster's funding and governance for the next decade.
BBC Director-General Matt Brittin has advocated for a mandatory household levy to replace the optional licence fee, citing a decline of over £1 billion in real terms in licence fee income over the past decade. He emphasized the need for a sustainable funding model, stating that the current licence fee model is outdated and inadequate.
Brittin has also proposed a 'streaming levy' that would extend the licence fee to include users of platforms like Netflix and YouTube. He suggested that MPs consider concessions for young people and low-income households regarding the fee. A spokesperson for the Department for Culture, Media and Sport stated that the BBC's funding model must be sustainable and fair, and that various options, including licence fee reform, are being examined in the Charter Review process. Decisions regarding BBC funding are expected to be outlined in an upcoming White Paper.