BBC licence fee forecast to top £200 by 2031, OBR says
The forecast
The BBC licence fee is forecast to rise above £200 a year by 2031, even as millions of households stop paying it, according to new forecasts from the Office for Budget Responsibility (OBR).
The OBR projects the annual charge will increase from its current £180 to £202.60 by 2031 if it continues to rise with inflation. Over the same period, the number of households paying the fee is expected to fall by 2.7 million, to around 19 million.
A sharper decline than expected
The payer forecast is a significant downgrade on the OBR's previous outlook. In March, the forecaster expected around 21 million households to still be paying the licence fee in 2031. The BBC is currently losing about 500,000 licence-fee payers a year, with its leadership warning recently of a steeper than projected decline.
Licence-fee income has fallen by £1.3 billion in real terms over the past decade, as households increasingly favour streaming services over traditional broadcast television. The BBC says 94 per cent of households use its services each month, but only 80 per cent pay the fee.
What happens next for BBC funding
The forecasts land as the government reviews how the BBC should be funded when its current Royal Charter expires at the end of 2027. Ministers are expected to set out proposals in a white paper before Christmas, with options reported to include extending the fee to streaming services, a household levy, or allowing the BBC more commercial income.
New director general Matt Brittin is meanwhile overseeing plans to save £500 million, with reports suggesting up to 2,000 jobs could be affected. The fee itself is not yet set for the coming years — the £202.60 figure is a forecast based on inflation-linked rises, not an announced charge.
