By Todd Olive, former Editor in Chief
In a desperate attempt to distract from the unfolding chaos of ‘Partygate’, the Secretary of State for Digital, Culture, Media, and Sport announced on Twitter earlier this year that the current funding model of the largest public service broadcaster in the world would be retired in 2028 – bringing to a head complaints about the BBC’s standards of impartiality, the alleged biases of its staff, and its value for money. While the stunt failed to rob the raging scandal at the heart of Downing Street of its airtime as intended, the announcement has generated substantial commentary on both sides of the political spectrum regarding what its future might look like.
Accusations of partiality in the BBC are not new or niche – and nor are they limited to one part of the political spectrum. Most criticisms are traceable to the Falklands War of the 1980s, when reporting of the crisis drew the ire of the then-Conservative government of Margaret Thatcher; more recent flak has focussed on imbalance in representation given to the UK’s two main parties, and to competing perspectives on the 2016 ‘Brexit’ referendum. Some, most prominently environmentalist George Monbiot, have expressed growing concern at the Corporation’s continuing failure to report environmental crises – including global heating – as fact, rather than as a contested narrative pushed by activists. Performance tracking by Ofcom, the UK’s media regulator, found that barely half of all adults perceive the BBC’s news reporting as impartial – with strong views on the right or the left wing being an effective predictor of a critical perspective. Such criticisms have invariably led to calls for changes to the Corporation’s funding model – and, in related terms, called into question its very existence, both as a national cultural phenomenon and as a globally-respected public service broadcaster.
The BBC Today
John Cleese’s 1985 advert in support of the BBC licence fee, while now outdated in some areas, largely holds true today – though the BBC now puts it in slightly more understated language: its mission is to ‘inform, educate, and entertain’; it produces and broadcasts global and national news, with local and regional variants including dedicated channels for Scotland, Wales, and Northern Ireland; it develops and produces original drama, documentaries, comedy, and films, broadcasting and licensing these across the world – not to mention children’s television, educational resources, ten national radio stations, a substantial online offering including streaming on-demand, and events of national prominence like Children in Need and the Proms. Dan Walker, a presenter on the BBC’s morning news programme, puts it succinctly:
In short, the BBC claims a substantial role as a pillar of British culture and society – so does it deliver? Well, according to the 2021 Ipsos MORI poll, 81%, 80, and 77% of UK adults agreed that the BBC is effective at entertaining, informing, and educating people in the UK.
How is it funded?
It’s likely that you already know that if you want to watch live television or BBC iPlayer in the UK, you need a TV licence – a £159 annual fee per household, paid in return for legal access to all live television (whether broadcast by the BBC or not) and use of the BBC iPlayer streaming service. This comprises the vast majority of the BBC’s income (£3.75bn of £5.06bn in 2020-21), supplemented only by smaller commercial streams covering global news outputs and content licensing.
Under the current model, failure to pay the licence fee while using the services can land you a £1000 fine, a criminal record, or even time behind bars. Whether or not this should be considered a criminal offence has been a contentious issue for years, and is a common point in arguments for reform of the BBC’s funding model.
Together, income from the licence fee and commercial activities funds all of the BBC’s operating expenditures, from kids’ TV and the Proms to broadcasting equipment and technical infrastructure. More than a third of this expenditure is directly on television content, with further substantial components for the BBC’s radio/online offering, distribution costs (think technology and technical staff), operating licences, and programme development. The Figure below shows a full breakdown of this – the key takeaway being that the Corporation’s expenditures do not appear overly biassed to one area or another, given the inevitably-higher costs of producing content for television than for other mediums.
So why is it special?
In spite of apparent distrust of its reporting expressed by politically engaged Brits, one of the most common arguments for the BBC’s “special status” is the trust placed in it as a source of independent, and impartial, news and information – a critical component of functional democracy, where the need for governments to be held to account by independent media is acute. YouGov polling of British adults from February 2022 shows that the BBC is more trusted than politicians, including local politicians, the unions, pressure groups, journalists, the government, and even the Prime Minister (see below). Evidence shows that its audience is extensive and diverse within the UK, spanning all ages and political persuasions and comparing extremely favourably to similar public service media outlets in Europe, while the Corporation estimates its global weekly audience at more than four hundred million people – more than five percent of the world’s population.
Early in the Russian invasion of Ukraine, the BBC’s World Service rolled out shortwave radio broadcasts covering both all of Ukraine and parts of Russia, enabling civilian access to impartial reporting of the conflict and wider news in spite of communications blackouts – while in late 2019, in response to growing attempts to censor access to the BBC’s content by countries such as Iran, the BBC made its international news output available through the dark web.
Beyond news, other merits of the BBC are relatively typical of publicly-funded broadcasters more generally. Consider the expenditure graph above – could we expect children, for example, to pay taxes to access children’s television content? Given wider concerns regarding the state of national infrastructure in the UK, for example that of sewage disposal, could we expect universal access to television and radio to be maintained efficiently and consistently by a private service provider? What’s the added value of television content without advertising that fuels consumer culture, through which vulnerable people could be exposed to the promotion of gambling or alcohol?
In the view of these correspondents, the argument for the BBC’s status as a cultural institution – and the substantial contribution that it makes to sociocultural sustainability – is difficult to articulate with hard evidence. That presented above regarding the value of its news output is, in this correspondent’s view, convincing, but moving away from the hard statistics and towards evaluating the contribution of its dramas, comedies, documentaries, and suchlike, is far more normative. Last decade, the Corporation moved its headquarters from London to Salford, in Manchester, as part of widespread efforts to reflect regional issues and experiences in its content; its programmes are often reflected in the national psyché – Line of Duty, a serial drama about police corruption, was viewed by 15.24 million people within a week of its release, making it the most widely-viewed programme this century, and creating a unified national discourse that even drew commentary from the chief of the UK’s largest police force. Serial nature broadcaster David Attenborough has been funded and platformed by the BBC for decades – the BBC iPlayer lists no less than thirty documentaries and series available for streaming at the time of writing.
Panorama, a current affairs programme, Blue Peter, a children’s series, Match of the Day, a weekly programme of highlights from the English Football Premier League, Gardener’s World, a gardening programme, Doctor Who, a science fiction series, Comic Relief, an annual television fundraiser, and Eastenders, a daily soap opera, are all listedas some of the UK’s longest-running series, stretching as far back as the 1950’s – and all are BBC productions. It is not necessarily easy to argue that these could only have been made by a publicly-funded broadcaster like the BBC, but their prevalence and stature is well-reflective of the BBC’s place in Britain’s cultural scene – indeed, the titular character of the recent film release The Duke, set in the 1960’s North East, argues that the BBC’s output is a critical component of contemporary life, representing a lifeline for the elderly, the young, and those otherwise not able to access wider sociocultural engagement.
The BBC Tomorrow?
As the introduction to this article highlights, there exists a variety of positions that are dissatisfied in its current form. To understand the potential options for funding the BBC of tomorrow, it’s worth examining the fundamentals of these different perspectives.
The first domain of perspectives is, essentially, political. Shortly after the 2019 General Election, the Prime Minister’s office pulled government ministers from a BBC political radio programme, supposedly on the grounds of ‘anti-Conservative bias’ – and followed up by threatening to decriminalise non-payment of the BBC’s license fee, a move which would seem likely to introduce significant ‘free-riding’: if you don’t have to pay the fee for the service, why should you? This was generally interpreted as an attempt to bully the Corporation into giving the party an easier time, and contrasted substantially with the Prime Minister’s suggestions during the election campaign that the BBC should instead be funded through a subscription, in the same way as Netflix or Disney Plus. As we noted at the outset of this article, the timing of Nadine Dorries’ intervention in the debate in mid-January was a highly transparent effort to derail ongoing negative coverage of the Prime Minister by inflaming a hotly-contested political debate to distract attention – hardly an honest attempt at improving the “value for money” of a public service.
Other, more genuine, arguments regarding the nature of the BBC’s funding model nevertheless exist. As Kempton Bunton of The Duke would argue, many view the license fee essentially as a regressive tax – given that it is not altered according to the payee’s income, it represents a higher proportion of the income of the less well-off; others argue that they should not be required to pay for all of the BBC’s services when they only consume a small portion.
So what alternatives might there be? YouGov polling tracks opinions of three other options: a pay-per-channel subscription model, funding from advertising in commercial breaks, and funding from general taxation. Let’s address each of these.
Funding from general taxation would be the most similar option to the current model: transitioning the license fee from being a distinct item to, say, an additional percent in income tax – and essentially making the BBC part of the civil service. There are a number of problems with this option: it wouldn’t satisfy those objecting to paying for all of the BBC’s services despite not using them; it would substantially politicise questions regarding distribution and cuts in funding to the various BBC services (what Prime Minister would want to have to choose between funding children’s television or sports coverage, for example?); and it would compromise the independent nature of the BBC by introducing direct political oversight and authority over all of its operational functions and staffing – hardly a desirable set of outcomes, for politicians or for the public. No wonder, then, that polling rates it as the least-supported of the options on the table.
Funding from advertising in commercial breaks is not typically considered as ‘the’ alternative to the current model – as implied above, that would be the subscription model that we’ll discuss in a moment. This option would put the BBC in line with Channel 4, which is publicly-owned but not publicly-funded, and which counts funding from advertising as its primary source of revenue. Setting aside more practical questions about whether the BBC’s vast output could be supported primarily by advertising revenue, and the potential implications for editorial independence, greenwashing, and the like – ‘BBC News, brought to you by BP’, anyone? – there exists a vast literature on the deleterious effects of advertising. From consequences for sexism and body image, poor nutritional understanding in children, and exacerbating gambling problems, all the way up to connections between advertising, consumer culture, and the Climate Crisis, advertising is a highly problematic medium: introducing it across the BBC’s vast media output represents the potential for a vast amplificatrion of the social and environmental problems that it already causes.
This brings us to the third alternative: the introduction of subscription fees, the ‘Netflix model’. While this option hasn’t been formally defined, it would seem reasonable to suggest that each individual BBC channel or service would become something to be individually funded – in the vast majority of cases, by private subscriptions. The implication, essentially, is that each individual output becomes subject to a competitive environment: each must provide something that enough people are prepared to pay for, or become defunct.
There are three problems that this model is seeking to address. One is the ‘value for money’ question – by exposing the various components of the BBC to a competitive environment, only the functions that can be produced sufficiently efficiently, and are in sufficient demand, continue to receive any funding. The second, related, issue is the complaint that households are obliged to ‘fork out’ for all of the BBC’s output, not just the elements that they consume. Finally, the third is the status of the licence fee as a regressive tax.
The third point is relatively easily evaluated: replacing the licence fee with individual subscriptions does not eliminate the regressive problem. A fixed fee is a fixed fee, whether it’s characterised as a licence to watch television or a subscription to do so: if the fee does not change according to the income of the payee, then it is by nature regressive. Arguments that suggest otherwise are at best misinformed, and at worst deliberately deceptive.
The remaining two issues are relatively closely related. As we have noted elsewhere, the effect of the licence fee contributing to all of the BBC’s activities – including network operation – is that services with broader appeal, or lesser cost, subsidise those with niche appeal or that are particularly costly. This is the same principle that underpins centralised government taxation and expenditure: those of working age, for example, bear much of the burden for pension and welfare payments, and services like the NHS and social care, which disproportionately benefit the unemployed, children, and the elderly, who in turn have already or will contribute in the future. Without further redistributive action by the government, the replacement of the licence fee with subscription models would penalise these minorities: parents, for example, would be forced to fork out fully for the cost of children’s television programmes. Would child benefits be upscaled to cover this cost? Somehow, this correspondent doubts it.
This would also represent a contradiction in principles: the government provides substantial funding for the arts, which evidence suggests is perceived as a benefit much more substantially by those with higher incomes, and which by nature is much less accessible than the BBC’s television, radio, and online outputs. If arts are to continue to be publicly grant funded, then why should private individuals be expected to fully bear their share of the cost for the latest episode of Eastenders – particularly when recognising the substantial public value inherent in the BBC.
Collateralisation of the BBC’s funding in the form of the licence fee also enables all areas of the BBC’s content output to benefit from content distribution through shared infrastructure and coordinated programming, leading to economies of scale – or in other words, substantially improving the value for money that the licence fee represents. If each individual output were required to fund its own infrastructure, the government would either be handing a substantial historically-state-derived competitive advantage to a loosely related set of formerly-aligned channels (which would also fly against the prevailing economic philosophies typically associated with Conservative right-wing politics) – or introducing totally unnecessary additional costs in the maintenance of a vast array of new parallel broadcasting and distribution systems.
Decoupling all of the BBC’s outputs and subjecting them to commercial pressures through the subscription model would likely also not deal with the challenge of perceived sociopolitical biases. As has been recognised by some in the right-wing press, without the requirement for impartial and independent output, it seems likely that most channels would seek to align the sociopolitical values of their content with those of their target audience – and while this wouldn’t necessarily benefit one political or cultural wing over another, the consequences for further social and political polarisation could be stark: consider the well-documented impacts of polarised partisan media outputs in the United States.
Finally, and perhaps most pertinently for frugal Conservative politicians, the subscription model would not free the state from any obligations in public broadcasting: consider the cost of revision and teaching materials for school students, currently provided for free on the BBC’s website.
So: where do we go from here?
These challenges are significant, and they largely derail the perceived potential benefits of moving away from the licence fee and into a subscription model. They do not, however, ameliorate some of the criticisms that have been levelled against the BBC and its funding, whether regarding its content or the regressive nature of the licence fee itself – and just because alternative funding models altogether would not address the problems they are perceived to take on, does not mean that the existing model cannot be tinkered with, or that the BBC doesn’t have work to do to live up to its potential in a changing, uncertain 21st Century.
However, whatever work the Corporation must do, in cooperation with the government on the day, must genuinely respect an inalienable fact: the BBC is a widely-respected social and cultural institution, relied upon across the world as well as at home. It is, in the view of this correspondent, an institution of which this country should be immensely proud – and it must not be allowed to fall victim to politicians of the day.