The BBC will be forced to axe some of its programming after being left with a £285m gap in funding from its six-year licence fee settlement with ministers, its director general has warned.
Speaking on BBC Radio 4’s Today programme, Tim Davie said there was “no doubt” the deal would affect the broadcaster’s frontline output.
He argued in support of a continued publicly backed model for the organisation, in the face of recent suggestions from the Conservative government that the future of its funding was up for discussion.
The culture secretary, Nadine Dorries, confirmed on Monday that the BBC’s funding would be frozen for two years, remaining at £159 until April 2024, after which it would rise in line with inflation for four years. The announcement was made in a Sunday newspaper and on Twitter.
Revealing the settlement would leave a £285m gap in funding by 2027, Davie said: “We are disappointed, we would have like to have seen an inflation rise throughout the period. We’ve got four out of six years and on we go.
“I would say having certainty of income for six years – as you know the media market moving so fast – is very material to us.
“Our estimate is – and just to set this clearly for everyone – by the year end 2027, the licence fee income will be about £4.2bn based on our assumptions around inflation, obviously guessing games around inflation are obviously difficult. We know this settlement … gives a £285m gap at the end of the period.”
Davie warned the BBC was already “lean”, and while cuts were possible they would “affect our frontline output” – meaning losing programmes.
“Inevitably, if you don’t have £285m, you will get less services, and less programmes. I still think the BBC can offer extraordinary value for the £13 a month and we absolutely think we can do that,” he said.
When pressed further on the future of BBC Four, BBC Two and Radio 5 live, he added: “I think everything’s on the agenda.”
When making the formal announcement in the House of Commons, Dorries watered down her suggestion that the licence fee would be abolished from 2028, raising suspicions that the focus of her provocative intervention on Sunday was to distract from Boris Johnson’s woes.
Davie, who took up the role as director general in September 2020, said it was an “interesting way” to announce the real-terms cut and he had been of the understanding that negotiations were ongoing.
“Clearly the pressures on household incomes are material, the government was clear that was a key factor when they made the announcement and we understand that,” he said.
But Davie argued there should be a future for a publicly backed model of funding for the BBC and added that a subscription service – a model advocated by hard-right commentators – would not be the same.
“Once you’re trying to serve a subscription base, it is a completely different situation,” he said. “Because suddenly you are there to make profit and make a return to a specific audience.”
He added: “The debate is more centred around do we want a universal public service media organisation at the heart of our creative economy, which has served us incredibly well. If we want that we have to support a publicly backed and not a fully commercialised BBC.”