BBC funding model ‘not fit’ and ‘creaking’, chief executive of news says

The BBC funding model is “not fit for the public service mission of the future”, the broadcaster’s interim chief executive of news and current affairs has claimed as he discussed proposed cuts.

The corporation is primarily funded by the licence fee and Jonathan Munro said the model was “born in a different era”, adding the gap between its costs and income is growing every week.

It comes just weeks after news broke that the BBC is looking to slash 2,000 jobs as it tries to reduce costs by 10% over the next three years.

Speaking at the Voice Of The Listener And Viewer spring conference on Thursday, Mr Munro said the corporation is looking to save around £500 million, adding: “That is a significant portion of money to take out of our expenditure in a relatively short period of time.”

Mr Munro, who is also BBC News’ global director and director of the BBC World Service, said: “Why? Well, because there’s a very simple truth here which we need to address in order to solve it – the gap between our costs and our income is growing.

“It’s growing literally every week, every month. Our current funding model is not fit for the public service mission of the future. It was born in a different era.”

He referred to a statistic that 94% of adults in Britain use its services each month, but fewer than 80% of households pay the licence fee.

He added: “You can see in those two stats that gap – and it is widening, not shrinking.

“News of savings is hard. It’s hard for us, it’s hard for audiences, because everything we touch or try to change, or in some cases, close down, is somebody’s favourite piece of the BBC’s offer to them.

“So, it’s not easy to make these choices, but we’re working through plans and we said to our staff within news that we will be able to say more in June.”

Mr Munro told the conference that he cannot go into detail about what they are planning to do at this stage, but said he can talk about the “principles that are shoring up those decision-making processes”.

He said the BBC has to get money out of the way it is structured, wants to continue championing distinctive journalism and want to continue to drive for digital growth.

Speaking to the audience, he told the conference that the drive to digital is “accelerating”, adding: “We have to move our resources into that and those resources are diminishing not growing.”

He said the “idea” of the BBC is “universal reach”, adding that funding by advertising or subscription is “the opposite of universality”.

Mr Munro said that the model of the licence fee is “showing its age” and “creaking” due to the advance of technology which is making the enforcement of the licence fee “very difficult”.

He explained that the delivery of media products and content on streaming platforms does not always mean people need a licence fee to consume what is being offered.

A TV licence pays for BBC shows and services, and costs £180.

Earlier this month, Mr Munro informed staff at the corporation that “all areas of BBC News” will be affected by cuts.

In an email to staff seen by the Press Association, Mr Munro said: “I want to be clear – I expect that the scale of this change will mean that all areas of BBC News are affected in one way or another.

“We are working through the details of how we will achieve that saving and aim to share more in June. But it’s likely that any announcements then will be part, not all, of the changes we will need to make.”

He added that staff will be able to express interest in voluntary redundancy.