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The future of the BBC licence fee

Under the BBC’s Royal Charter (PDF) and Agreement (PDF), the BBC is funded through a licence fee. The current charter began on 1 January 2017 and runs to 31 December 2027.

The licence fee model was conceived at a time of linear viewing - watching programmes at the time of broadcast. Changes in viewing habits, such as a move to video-on-demand, and the growth of new technologies, has resulted in the model being challenged.

In a written ministerial statement of 29 November 2024, Lisa Nandy, the Secretary of State for Culture, Media and Sport, said the government was committed to upholding the licence fee until the end of the charter period. This was to ensure the BBC was on a “stable financial footing”. The Secretary of State also announced said that the previous government’s BBC funding model review would not be progressed. The government would instead consider the future of the BBC’s funding as part of the next charter review.

The government formally launched the charter review on 16 December 2025. The intention is to use the review to “futureproof” the BBC so that it can thrive in a “rapidly changing media landscape”. One of the review’s objectives, as set out in the terms of reference, is for a BBC “that is sustainably funded for decades to come to support its vital public service role”.

The government’s green paper (PDF), also published on 16 December 2025, sets out a range of options for the future funding of the BBC. These include:

• reforming the process for determining the cost of the licence fee
• reforming the licence fee
• exploring whether licence fee concessions should be updated
• exploring options for fairer collection and enforcement, supported by technology
• supporting the BBC to generate more commercial revenue

A public consultation on the green paper closed on 10 March 2026. The government is considering the responses and has said that it plans to set out policy decisions for the next royal charter in a white paper, expected to be published later this year.

The Culture, Media and Sport Committee is examining the charter review process. Oral and written evidence is available from the committee’s website.

Related Library briefing: BBC Charter Renewal: a reading list.