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BBC chief ‘welcomes’ cut down licence fee increase

Tim Davie, director general of the BBC, has told MPs he is pleased with the new licence fee settlement, in which the government backtracked and cut the planned annual rise by a third.

Davie said he “welcomes” the six-year deal as it insulates the corporation from the ongoing volatility in the market and guarantees four years of budget increases, as rivals tackle a severe downturn.

“In the context of the broader market it is something we welcome because it allows us some certainty despite very significant challenges,” he told the Commons public accounts committee yesterday. “There is not a media organisation in the world, certainly a traditional so-called broadcast organisation, that doesn’t need to fundamentally look at its model and make sure [it is] in the right place.”

Two years ago the government and the BBC agreed a six-year deal, which froze the licence fee for two years with annual increases set to follow inflation from 2024 until March 2028.

However, in December the government altered the deal amid soaring inflation, opting to use September’s 6.7% rate, rather than the usual annual average, which at the time was 9%. This meant the £159 annual fee would rise by £10 instead of £15, a move which the BBC condemned a the time.

Since then, Channel 4 has announced it is to shed more than 200 roles in its biggest round of job cuts in more than 15 years, and the Channel 5 parent company, Paramount Global, has said it is to cut 800 employees, as the impact of the worst advertising downturn since 2008 leaves commercial broadcasters reeling.

The BBC is looking to find £500m in annual savings, with cost-cutting measures including moving a number of World Service TV and radio broadcast services online, merging the domestic and global news channels, and making cuts to its news service, including paring back the flagship Newsnight programme.

In January, the BBC announced the sale of its famous Elstree Studios complex, which includes the set of EastEnders, to the French insurance company Axa in a 25-year leaseback agreement.

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