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BBC cuts: government forced to publish licence fee deal letter BBC cuts: government forced to publish licence fee deal letter
(about 20 hours later)
The government was forced to publish the letter outlining details of the controversial shotgun licence fee deal with the BBC on Thursday in a move set to fuel concerns that the corporation may face further cuts in its funding.The government was forced to publish the letter outlining details of the controversial shotgun licence fee deal with the BBC on Thursday in a move set to fuel concerns that the corporation may face further cuts in its funding.
The letter from chancellor George Osborne and culture secretary John Whittingdale to BBC director general Tony Hall said the licence fee would rise in line with the consumer price index “subject to the conclusions of the charter review in relation to the purposes and scope of the BBC”.The letter from chancellor George Osborne and culture secretary John Whittingdale to BBC director general Tony Hall said the licence fee would rise in line with the consumer price index “subject to the conclusions of the charter review in relation to the purposes and scope of the BBC”.
It added that the corporation, which took on the £750m burden of funding free licence fees for the over-75s, had to demonstrate that it was undertaking efficiency savings “at least equivalent to those in other parts of the public sector”.It added that the corporation, which took on the £750m burden of funding free licence fees for the over-75s, had to demonstrate that it was undertaking efficiency savings “at least equivalent to those in other parts of the public sector”.
Related: George Osborne forces BBC to pay for over-75s' TV licencesRelated: George Osborne forces BBC to pay for over-75s' TV licences
The government’s letter, which was published on Thursday, along with the response from Hall, followed pressure to release the exchange from shadow culture secretary, Labour MP Chris Bryant. The government’s letter, which was published on Thursday, along with the response from Hall, followed pressure to release the exchange from the shadow culture secretary, Labour MP Chris Bryant.
“Finally, and only after we had to threaten the government with an FOI request, the public get to see the details of this deal to cut the BBC,” said Bryant.“Finally, and only after we had to threaten the government with an FOI request, the public get to see the details of this deal to cut the BBC,” said Bryant.
“As we feared it’s a bad deal built on dodgy foundations – the chancellor is clear that if the BBC changes in scope or purpose then the funding deal is off the table which could leave the BBC with another 10% cut.”“As we feared it’s a bad deal built on dodgy foundations – the chancellor is clear that if the BBC changes in scope or purpose then the funding deal is off the table which could leave the BBC with another 10% cut.”
Hall has suggested that BBC income would be flat or slightly up as a result of the deal. But other estimates have suggested a 12% cut in funding while the Office of Budget Responsibility has said it would be cut by 20%.Hall has suggested that BBC income would be flat or slightly up as a result of the deal. But other estimates have suggested a 12% cut in funding while the Office of Budget Responsibility has said it would be cut by 20%.
Bryant said: “We now have the evidence that this was a backroom deal forced on the BBC by the chancellor behind closed doors over one weekend, without any consultation with the public or competitors.Bryant said: “We now have the evidence that this was a backroom deal forced on the BBC by the chancellor behind closed doors over one weekend, without any consultation with the public or competitors.
“[Culture secretary] John Whittingdale criticised this type of bullying five months ago, calling it ‘wholly wrong’ - he should hang his head in shame that he’s let it happen on his watch.“[Culture secretary] John Whittingdale criticised this type of bullying five months ago, calling it ‘wholly wrong’ - he should hang his head in shame that he’s let it happen on his watch.
“We now need an immediate start to an open and transparent charter Review process so the future of the BBC can be secured.” “We now need an immediate start to an open and transparent charter review process so the future of the BBC can be secured.”
The letter from Osborne and Whittingdale was dated last Friday, 3 July.The letter from Osborne and Whittingdale was dated last Friday, 3 July.
Along with a number of measures to boost BBC funding, including the proposed CPI-linked licence fee and phasing out of its broadband rollout commitments, was a reduction in the grant paid by the BBC to the Welsh language service S4C which could be worth as much as £20m a year.Along with a number of measures to boost BBC funding, including the proposed CPI-linked licence fee and phasing out of its broadband rollout commitments, was a reduction in the grant paid by the BBC to the Welsh language service S4C which could be worth as much as £20m a year.
In his reply, dated 6 July, Hall said the charter review process “should examine how the licence fee is spent within a licence fee funding envelope that has now been set, subject to the terms set out in your letter”.In his reply, dated 6 July, Hall said the charter review process “should examine how the licence fee is spent within a licence fee funding envelope that has now been set, subject to the terms set out in your letter”.
He said the review should be done “rapidly in an open and consultative way” and said the corporation would now “set out a strategic plan so the BBC is ready to live within the new financial perimeters and deliver the further savings and changes to our services to succeed in the next charter”.He said the review should be done “rapidly in an open and consultative way” and said the corporation would now “set out a strategic plan so the BBC is ready to live within the new financial perimeters and deliver the further savings and changes to our services to succeed in the next charter”.