The BBC has announced that it is scrapping universal free TV licences for the over 75s, in a move that signals a substantial shift in the way the corporation is managing its funding. The TV licence, which currently costs £154.50 a year per household, is the major way in which the BBC receives its public funding (I explained the process in more detail here last year). The free licences for the over 75s used to be met by the state, but in 2015 the Conservative government altered the arrangement so that from 2020 the BBC would have to find the money itself, or choose to end the subsidy.
The new arrangement will still involve free licences for some people — anyone who receives the pension tax credit (a state benefit for retired people on low incomes) will have their contribution covered by the BBC, the cost of which is estimated at £250 million. This is estimated to apply to about 900,000 households. It’s still a hefty sum for the BBC sum, although substantially less than continuing with the full subsidy.
This topic is something of a political hot potato in the UK, with some arguing that it was unfair that wealthy pensioners were getting a freebie will struggling young people had to pay, and others saying it’s only reasonable that the retired should get public media for free since they use it more. I’ll be looking at the numbers involved and what it might mean for BBC budgets in more detail in Thursday’s Insider.