BBC faces 18% funding cut in Tory budget

DetailsRebecca Hawkes | 06 July 2015

The BBC could be forced to meet the cost of free television licences for the over-75s as part of 12 billion in welfare cuts to be announced in the UK Government's budget on Wednesday (8 July).

The 650 million budget slash represents almost a fifth of the BBC's 3.7 billion fee income, with 4.5 million licences expected to be paid for by the corporation at a cost of 145.50 each instead of the government's Department of Work and Pensions, reports The Sunday Times.

As a softener, the BBC will reportedly be able to charge for use of its iPlayer and other online catch-up services to recoup some of its lost income both from funding cuts and due to changing viewing habits as more people choose online video rather than live TV.

The news comes just days after the UK public service broadcaster announced it was to axe over 1,000 jobs following a funding shortfall of 150 million in 2016-17.

Chancellor George Osborne, speaking on the BBC's Andrew Marr political talk show on 5 July, also warned that the BBC should rein in the "imperial ambitions" of its popular website as it threatens to "completely crowd out national newspapers".

His comments come as the government prepares to negotiate on the renewal of the BBC's Royal Charter, with a green paper expected in coming weeks.

"The BBC is a publicly funded public institution. It does need to make savings as we get our house in order. We are in discussions with the BBC ... and I am absolutely sure that they can make a contribution," Osborne told Andrew Marr.

The BBC's current Royal Charter and Agreement came into force in 2006 and is due to expire in December 2016.