BBC faces formal review over ‘unsustainable’ licence fee model with ministers poised to intervene

MINISTERS are planning to launch a formal review into the BBC licence fee amid concerns the funding model is “unsustainable”.

The government probe is likely to be announced in autumn this year.

PA

Ministers are set to formally investigate alternatives to the BBC licence fee[/caption]

Officials will investigate alternatives to the controversial fee, including making it a subscription service or introducing advertising.

The probe is expected to take around one year.

It comes as the national broadcaster’s royal charter is due to expire in 2027.

A government source told The Times: “The evidence that there is a growing unwillingness to pay is shown by figures each year.

“The licence fee model is becoming unsustainable.”

The Beeb’s annual report, published last week, showed the number of Brits choosing to pay for the licence fee plummeted by 500,000 to 24.3 million.

The corporation blamed the figure on increasing competition in the TV market and the cost of living crisis.

Less households taking up the service led to a funding drop from £3.8bn to £3.74bn.

After being frozen for two years in April next year the licence fee is due to rise by £13 to £172.

Ministers could intervene before then to prevent the 8.2% hike, which is set in line with inflation.

One option being considered is to align the fear with monthly inflation figures.

This should see it shrink in the coming months as ministers expect inflation to slowly ease.