TV licence fee increases to £169.50 a year

The BBC licence fee will rise by £10.50 to £169.50 a year, the Culture Secretary has confirmed as she announced a review into it.

The household payment, which funds much of the corporation's operations, had been frozen at £159 and was set to rise in line with inflation next year.

However, the expected 9% increase - which would have meant an increase of around £15 from April 2024 - has been reduced, the Government said.

Speaking in the Commons on Thursday, Lucy Frazer said the increase will instead be based on September's consumer prices index (CPI) rate of inflation which was 6.7%. This will mean an increase of £10.50 to £169.50 per year.

She also announced a review into the licence fee model, which will look at alternative funding and report next autumn.

Ms Frazer said:

"The review will look at how we can ensure the funding model is fair to the public, sustainable for the long term and supports the BBC's vital role in growing our creative industries."

The news comes after the veteran TV executive Dr Samir Shah was named on Wednesday as the Government's preferred candidate to become BBC chairman.

The BBC board said in a statement:

"We note that the Government has restored a link to inflation on the licence fee after two years of no increases during a time of high inflation.

"The BBC is focussed on providing great value, as well as programmes and services that audiences love. However, this outcome will still require further changes on top of the major savings that we are already delivering.

"Our content budgets are now impacted, which in turn will have a significant impact on the wider creative sector across the UK.

"We will confirm the consequences of this as we work through our budgets in the coming months."