Clare Sumner: It is up to government to decide whether to fund over-75s TV licences
The BBC has made efficiencies where it can – now it is for government to decide whether to fund free TV licences for the over-75s. Clare Sumner, Director of BBC Policy, responds to Peter Heaton-Jones
We’re glad to hear that Peter Heaton-Jones considers the BBC to be the best broadcaster in the world and that he was proud to work here. Peter has been a strong supporter of the BBC in Parliament, but on this I’m afraid we can’t agree with him that ‘The BBC must reinstate free TV licences for over 75s’ (originally published in The House issue 1656 on 17 June 2019).
The reality is that it was the Government who decided to stop funding free TV licences from June 2020. Parliament – then under the law – gave the BBC the responsibility to consult, decide and fund what the future should be. As John Whittingdale said when he was culture secretary at the time of the agreement it was for the BBC to examine the options. That is exactly what we have done. We received over 190,000 responses to our public consultation – the biggest and most wide-ranging in our history – and we have published responses and analysis for all to see.
"The reality is that it was the Government who decided to stop funding free TV licences from June 2020"
Many respondents valued BBC programmes and services, with stakeholders raising concerns about the impact of cuts to BBC services. There was little public appetite for cutting any particular BBC service.
Copying the current scheme would cost £745m a year by 2021/22 and rise to over £1bn by the end of the next decade. £745m a year is equivalent to around one-fifth of the BBC’s spending on services. It would have meant profoundly damaging closures of major services that we know audiences – and older audiences in particular – love, use, and value every day, including BBC Two, BBC Four, the BBC News Channel, Radio 5 Live, the BBC Scotland channel and a number of local radio stations.
Over the last Charter period, the BBC made £1.6bn in annual savings, and 94% of the money we control goes on the programmes and services our audiences love. The BBC has been recognised in an independent report as being amongst the most efficient 25% regulated and non-profit organisations in the UK, and of course we always strive to constantly improve - this is not the record of an inefficient BBC.
As for the matter of pay, we have already reduced the number of senior managers by half as well as cut their pay bill by £38m since 2010. But if no senior manager were paid over £150,000, that would only save £5m. If we stopped employing every presenter currently earning over £150,000 that would save less than £20m. And it would mean people would no longer see many of their favourite presenters. Neither would go any way towards the £745m needed per year.
Ultimately, we have put fairness at the heart of our decision. Fairness to the poorest older pensioners by linking the free TV licence to over 75s who claim pension credit and fairness to all licence fee payers. It means everyone will continue to receive the best programmes and services that the BBC can provide. We announced the decision a year in advance to give people time to prepare. We are very conscious that we need to make this easy and accessible to all and have already started running an information campaign to raise the details of the new scheme and visibility of pension credit for those who may not already claim it.
As we also set out in the BBC’s decision document, we think the process for setting BBC funding needs to be radically changed – it needs to be much more transparent and should not be done behind closed doors with no public involvement.
Furthermore, the BBC Board’s view is that it is a matter for government whether, in the light of the BBC Board’s decision, government would now wish to pay the additional costs to ensure that all over 75s could continue to receive a free TV licence. Or the government could take back responsibility for the over-75s concession in its entirety and pay for it in full.
Clare Sumner is Director, BBC Policy.