The World of Politics

POLICY BANK RECOMMENDATIONS

Make the BBC Mostly Subscription Funded

Policy Idea
At Charter Renewal (1st January 2028) move the BBC to a mostly subscription-funded basis, while retaining universal access where public value is strongest.

Debate to date has been oddly binary: retain the licence fee, or abolish it. This framing misses the real policy choice. The licence fee is not being preserved by inaction; it is being allowed to decay.

Charter renewal represents the last realistic opportunity to move from an increasingly fragile and outdated funding model to a deliberate, sustainable settlement.

Without serious reform the default outcome will be drift: a shrinking licence base, periodic freezes, political rows over enforcement and a gradual erosion of the BBC’s legitimacy.

Context: The BBC is already an Organisational and Financial Hybrid
In practice the BBC already operates as a hybrid organisation. Around 40% of its income now comes from non-licence fee sources, including production services, overseas subscriptions, content sales and advertising on international platforms.

This matters. The argument that subscription or advertising would fundamentally alter the BBC’s nature is undermined by the BBC’s existing mix of funding.

The BBC’s recent overspend is also structural, reflecting general inflation, rising production costs and a licence base that is no longer growing.

Principles for Reform
Any new settlement must be guided by clear principles:

• Universal access to news: BBC news should remain freely and universally available as a public good.
• Editorial independence: Funding reform must not increase day-to-day political leverage over editorial decisions.
• No criminalisation of consumption: Media consumption should not be policed through the criminal law.
• Financial sustainability: The BBC should be funded in a way that reflects actual usage and future audience behaviour.

Current Licence Fee Structural Weaknesses
The current licence fee model has three acute, but long-term, structural weaknesses:

• Regressive: a flat household charge unrelated to income or usage.
• Misaligned with consumption: tied to television ownership in a media environment dominated by on-demand and digital use.
• Politically indefensible enforcement: criminal penalties for non-payment increasingly sit outside public consent.

Proposed Policy Solution: Hybrid Model BBC
Move the BBC to a mostly subscription-funded model, while protecting universal provision where public value is highest.

Television

• Most TV content should become subscription-based, organised into clear packages (for example: sport, first-run entertainment, archive).
• One free-to-air TV channel should be retained, offering time-shifted programming, repeats and selected content, acting as both public service and gateway/trailer.

News

• BBC News on both TV and radio to remain free and universally available.
• News provision should be cross-subsidised from subscription revenues and digital advertising.

Radio

• All radio services should be free at point of use.
• Funding supplemented through advertising and optional, non-mandatory membership schemes with non-programming benefits (“Join Radio 3 for early access to Proms tickets and Masterclass from Benjamin Grosvenor/Alison Balsam/Leia Zhu.”)
• Reflects radio’s continued importance for older, rural and lower-income audiences.

Digital

• BBC websites, apps and other digital platforms should all carry advertising.
• Premium digital content should sit behind subscription (“paywall”) logins as appropriate.

Policy Anomaly: Over-75s Licences
The BBC currently absorbs the cost of free licences for over-75s in receipt of Pension Credit, at a cost of roughly £175m per year. This is a social policy decision funded through a broadcasting budget. If this provision continues, it should be funded transparently through general taxation, not the BBC’s operating income.

Implementation and Transition
This model would require a managed transition over a period of three to five years. Key elements would include:

• Mandatory user logins for subscription content.
• Geo-blocking for overseas access, building on existing BBC practices.
• A shift toward IP-based delivery for live television, potentially integrated with platforms such as Freely.
• Formal abolition of criminal penalties for non-payment of the licence fee.

Throughout the transition, editorial independence must be protected through governance arrangements insulated from short-term political pressure.

Risks and Objections
A subscription model may weaken shared cultural experience, particularly if content fragments excessively. Digital exclusion remains a concern in some communities. Advertising introduces commercial pressures that must be managed carefully. Transition costs would be real and politically sensitive. However, the risks of inaction are significantly greater: declining legitimacy, shrinking revenue and a BBC gradually hollowed out by drift rather than reshaped by choice.

Conclusion
The licence fee is not being preserved by delay and avoidance and as a result is gradually decaying.

Charter renewal in 2027 presents a choice: continue defending a funding model that no longer fits the media landscape, or acknowledge reality and design a settlement that protects what matters most about the BBC while making it financially and politically sustainable. Moving the BBC to a mostly subscription-funded model is not an attack on public service broadcasting. It is an attempt to ensure that it survives in recognisable form.

---

DCMS opened a public consultation process for the BBC’s charter renewal in December, 2025 and, in casy you prefer a longer form read, here is a copy of our formal submission. You can make your own submission via the DCMS online “Survey” process which they say should take 20-40minutes to complete at https://dcms.eu.qualtrics.com/jfe/form/SV_9EOcvcDvkNu8c9E.

However, if you, like TWOP, have a submission to make that does not fit in to the DCMS pre-ordained format you can e-mail this to bbccharterreview@dcms.gov.uk or post it to
BBC Charter Review Team, DCMS, 100 Parliament Street, LONDON, SW1A 2BQ. The deadline for submissions is 10th March 2026.

For those of a naturally contrary viewpoint, we wrote up the major reasons we could think of why the BBC should NOT move to a hybrid, mostly subscription model to save you the bother!

Sources and further reading
The BBC’s 2016 Royal Charter
John Woodhouse & Maria Lalic, House of Commons Library: BBC Charter Renewal: a reading list
The DCMS’s consultation and background, in Green Paper format, is available at
Britain’s Story: The Next Chapter – BBC Royal Charter Review, Green Paper and public consultation
The BBC asked Alex Farber, Media Correspondent at The Times to review the Charter Renewal process on its Media Show R4 programme on 17th December 2025 (from about minute 26:00)

---