Government sets out plans to reform licence fee in BBC royal charter review

The UK Government will look at reforming the licence fee and consider more commercial revenue options for the BBC in plans outlined in its royal charter review.

It comes amid disruption at the BBC following resignations from top executives and a lawsuit from US president Donald Trump, who is seeking up to 10 billion US dollars (£7.5 billion) in damages in response to the editing of a speech he made before the 2021 attack on the Capitol that was featured in a Panorama episode.

The charter sets out the BBC’s public purpose and is the constitutional basis for the corporation, which is predominately funded through the licence fee, paid by UK TV-watching households.

The Culture Secretary has published a Green Paper, setting out potential reforms of the BBC, which “consults on a wide range of options being considered for the future of the BBC”, the Department for Culture, Media and Sport (DCMS) said.

The UK Government will look at whether licence-fee concessions should be updated, options for the BBC to generate more commercial revenues, and options for funding the World Service to support sustainable funding for minority-language broadcasting.

Lisa Nandy, who launched the once-in-a-decade review on Tuesday, said: “We want the BBC to continue to enrich people’s lives, tell Britain’s story and showcase our values and culture at home and overseas, long into the future.

“My aims for the charter review are clear. The BBC must remain fiercely independent, accountable and be able to command public trust. It must reflect the whole of the UK, remain an engine for economic growth and be funded in a way that is sustainable and fair for audiences.

“As a Government, we will ensure that this charter review is the catalyst that helps the BBC adapt to a rapidly changing media landscape and secures its role at the heart of national life.”

According to the DCMS, the charter review will focus on three objectives: the public’s trust, sustainable funding, and driving growth and opportunity.

The UK Government will consider strengthening the BBC’s independence, giving it new responsibilities to counter disinformation, and introducing specific duties around workplace conduct.

This includes “new responsibilities for the BBC board to ensure action is taken against workplace misconduct”, which comes months after an independent report into allegations of misconduct against former MasterChef presenter Gregg Wallace.

It also says it could update the BBC’s mission and public purposes statement to give accuracy equal importance alongside impartiality, citing a need to improve transparency of editorial decision-making, something which was questioned by Michael Prescott who wrote the leaked memo raising concerns about the Panorama episode featuring Mr Trump.

In terms of growth the UK Government could look at encouraging the BBC to invest more in research, development and collaborations, also placing a new obligation on the BBC to drive economic growth.

Outgoing BBC director-general Tim Davie said: “We welcome the publication of the Government’s Green Paper and the start of the public consultation on the future of the BBC.

“We urge everyone who cares about the success of the UK’s world-leading creative industries to have their say.

“At the BBC, we want change, so we can continue to deliver for the UK for generations to come.

“We want to secure a public service BBC that is independent, sustainably funded for the long term, and meets our audience’s needs.”

The BBC’s current charter, which runs for 10 years, ends in December 2027.

The annual licence fee faced years of scrutiny under the Conservative government, with it being frozen for two years at £159 before it was increased in April 2024 and once again in April 2025 by about £5 to £174.50, in line with inflation.

Culture Secretary Lisa Nandy has previously said she could be open to replacing the flat licence fee with a sliding payment scale.

The charter review has been informed by a poll, launched in March, the BBC called its “biggest-ever public engagement exercise”.

S4C’s Chief Executive Geraint Evans responded to the UK Government’s Green Paper on the BBC Charter Review, saying: “S4C welcomes the UK Government’s Green Paper on the BBC Charter Review and the commitment it makes to a sustainable future for S4C, based on the service’s independence and the provision of sufficient funding.

“Our vision for S4C is more than a TV channel; it is a digital-first service that enables collaboration across the creative sector and supports a thriving Welsh language and a thriving Wales.

“This review is crucial to laying strong foundations for S4C’s future, and we look forward to working closely with the Government and other partners to deliver that vision for the benefit of audiences and the creative sector across Wales.”