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Saturday, 3 November 2018

BBC Explores Options to Reduce Cost of Over-75 TV Licences


As we have previously mentioned (see here, here and here), the BBC is actively seeking ways of reducing the cost of providing "free" TV licences to households with at least one occupant aged over 75.

The Government, in common with the people, recognises that the BBC pisses a fair amount of money against a wall, so under the terms of its recently-renewed Royal Charter the Corporation has been made more accountable over the state of its finances.

In short, savings and efficiencies have to be made and it is for the BBC to decide where to swing the sword. The "free" over-75 TV licence, which the BBC will be responsible for self-funding from 2020/21, represents the ideal target. By 2020/21 the annual cost of providing those licences will be around £750m, which is not an insignificant amount compared to the BBC's annual licence-fee take of around £3.6bn.

Three years ago, at no doubt considerable expense, the BBC commissioned Frontier Economics to produce a report exploring ways of reducing the cost of the over-75 TV licence. The report has just been published (read it in full here), hence the recent re-emergence of this story in the media.

Frontier has come up with four ideas for cost reduction:

1. Completely scrap the over-75 TV licence.
The report estimates that residual costs to shut down the concession would cost £72m - or 10% of the cost of continuing with it.

When the government introduced the free licence fee for over 75s in 2000, it was argued the benefits would (largely) go to poorer households. However, that argument has weakened with the improvement in living standards for the over-75s.

2. Replace the "free" over-75 TV licence with a 50% concession to eligible households.
A 50% concession is in line with the current concession offered to those with visual impairments.

It estimates the cost to the BBC would be around £400m in 2021/22, which is 56% of the cost of reinstating the current concession - the extra 6% is due to admin.

3. Increase the age threshold for eligibility.
According to Frontier, raising the age threshold for a "free" TV licence to 77 years would cost £645m per annum, which represents a saving of around 13%.

If the age threshold was raised to 80 years the cost would be £481m, which represents a saving of just over a third. Those aged over 80 are more likely to live alone, so such a move could help target the concession towards those most reliant on television for company.

4. Means-test eligibility.
Two possibilities were suggested: Either link the concession to those over-75s in receipt of pension credit; or link the concession to every pensioner in receipt of pension credit.

The first of those options would cost around £208m per annum (just over a quarter of the current cost); the second option would cost around £327m per annum (less than half the current cost).

Whichever option the BBC chooses, we can be entirely confident that it will be removing "free" TV licences from many of those households that currently benefit.

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1 comment:

Anonymous said...

The BBC are looking for victims to attack. They will be going after vulnerable 75 year olds - people who do not understand how the devious BBC works and those who may have mental health problems or who are not with it. They definitely will be targeted by these money stealing scumbags. The BBC is controlled by Machiavellian money stealers, who are happy to torture, abuse and destroy anyone to live a coke fuelled champagne lifestyle. Why should the elderly have to pay to be lied to by a corrupt organization that employs secret trannies and paedophiles? It's time for the BBC to run adverts or close down. Thanks for keeping us all updated. You do a brilliant job.