A BBC Licence Fee frozen for six years will be required to fund BBC World Service radio, rural broadband and the Welsh language channel S4C, under proposals to be announced today by the coalition government. In all the BBC will have to find £340 million, out of its £3.6 billion revenues to fund the enterprises, equivalent to the running costs of all its non-core digital TV channels, BBC Three, BBC Four and the BBC News channel.
Culture secretary Jeremy Hunt had previously said negotiations on the licence fee, which will remain at an annual £145.50, would not begin until next summer. The frantic negotiations were undertaken against a background of austerity measures set to be announced today by the finance minister George Osbourne.
The £272 million a year international radio services were previously supported by a series of grants made by the Foreign Office, though the corporation would maintain editorial control. BBC World News is commercially funded, but the Arabic and Persian television services launched at the behest of government, fell under the World Service directorate.
Hints that the BBC might be asked to take on the funding of the rollout of broadband services were already being made after the Digital Britain report, taking advantage of an underspend in the BBC’s funding of the digital switchover programme. The annual cost is expected to be around £150 million per year.
The BBC will also take on the £100m per year funding of S4C, the Welsh language channel from the Department for Culture, Media and Sport. S4C was already facing funding cuts that had led to the resignation of its director of commissioning. In a statement, the S4C Authority and Executive said it would read and consider the full implications of the Secretary of State’s decision. Gaelic language television channel BBC Alba is already funded through the licence fee, though in Wales editorial independence would remain with S4C.
It had been mooted that the cost of funding the free licence fee for the over 75s would also pass to the BBC, but this is now expected to remain with the Department for Work and Pensions.