The future of the BBC licence fee is in doubt as ministers contemplate the biggest shake-up of the corporation’s funding since it was founded in 1922.
Downing Street said last night that David Cameron plans to revive moves to decriminalise the non-payment of the £145.50 a year fee.
Other senior ministers believe the fee is increasingly outdated and could be pared back, with anything other than core BBC services paid for by subscription.
Senior industry figures also say a fundamental rethink is needed in a multi-channel age with many viewers using computers and mobile phones to watch via internet catch-up services.
The BBC has been shaken by Mr Cameron’s appointment of arch-Thatcherite John Whittingdale, who has suggested the licence fee is ‘worse than the poll tax’, as Culture Secretary.
Senior Tories are understood to have been appalled by the BBC’s aggressive stance when it and other broadcasters suggested the Prime Minister would be ‘empty chaired’ if he refused to take part in three leaders’ election debates on TV.
Last night Lord Hall, Director-General of the BBC, said he looked forward to ‘lively and robust debate about its future’ and the corporation should be ‘confident’.
Government sources insisted that suggestions Mr Cameron had ‘gone to war’ with the BBC by appointing Mr Whittingdale were ‘overblown’. But they said it cannot be right that 200,000 people a year end up in court accused of not buying a licence and facing criminal convictions.
Last year MPs backed plans to give the Government the power to decriminalise the non-payment of the licence fee – making it instead a civil penalty, which applies to unpaid utility bills. Another possibility is for new technology to be used to cut off BBC channels to non-payers, rather than making it a matter for the courts.
Earlier this year peers voted to block the move before 2017 after the BBC claimed decriminalisation could cost it up to £200million a year and warned that channels may have to be closed. Number Ten said the issue would now be reopened as part of the charter review process.
Several Cabinet ministers are understood to favour moving from a licence fee to a subscription model, with viewers buying a ‘bundle’ of BBC channels or even individual programmes. Subscriptions could replace some or all of the compulsory licence fee.
An alternative model, used in Germany, Denmark and Holland, would see a payment for the national broadcaster simply rolled into household taxes when, like other areas of public spending, it would face cuts in times of austerity.
Some senior Conservatives also believe the BBC should in future pick up the spiralling cost to taxpayers of providing free TV licences to the elderly, currently met by the Department for Work and Pensions.
The licence fee was frozen at £145.50 in a deal agreed between the BBC and the Government in October 2010 and will remain at that level until 2016, a 16 per cent cut in real terms. BBC bosses claim the future of services could be threatened by any future squeeze.
Conservative MP Philip Davies, a former member of the Commons media select committee, told the BBC’s Daily Politics programme: ‘I think the [BBC] Trust will be abolished. It will have to be replaced by some other governance arrangement.
‘I hope and suspect that John [Whittingdale’s] appointment will scupper any attempt that the BBC will have to try and increase the amount of the licence fee.’