Andrew Scadding is Head of Corporate and Public Affairs at the BBC.
The debate which has been sparked about the current enforcement regime for the TV Licence by Andrew Bridgen MP’s amendment to the Deregulation Bill, is not unfamiliar, but does raise complex issues which we at the BBC think should be looked at in the round as part of our Charter review. Indeed, we are proposing a working group for precisely this purpose involving the BBC, the DCMS and the Ministry of Justice.
By going down this route, we think that any comparison of the existing system against others can be properly examined to judge the full effects. This is why legislative changes are usually subject to impact assessments. In the absence of a rigorous testing of this proposal, it could have some perverse effects – for example, a civil fixed penalty would need to be set at a sufficiently high level to deter evasion, and that could well end up hitting the less well off harder.
As the BBC cannot turn off services for those who do not pay the licence fee, it needs an effective payment enforcement system. We are therefore more vulnerable to payment-evasion than other broadcasters who can disconnect non-payers, or the utilities, who can install pre-payment meters. It is estimated that electricity pre-payment meters represent 16 per cent of all electricity accounts; for gas the figure is 14 per cent. It would seem most odd for Parliament to enact into law a measure that would lead to an increase in the number of evaders.
Licence Fee evasion has a criminal penalty and evasion is low at about 5.5 per cent – one of the lowest among public service broadcasters in Europe. There is a significant risk that a change to the penalty would lead to higher levels of evasion and higher collection costs, taking money away from programmes and partnerships.
Just by way of example, a doubling of licence fee evasion from today’s level of 5.5 per cent to 10 per cent would lead to additional lost income of £200 million per year.
There could be consequences for BBC content and services. In the last four years, the licence fee has had to additionally fund S4C, the World Service and the roll-out of broadband. The BBC has committed to making stringent efficiency savings and has done so openly and transparently, giving evidence before Parliamentary Committees no fewer than 16 times since the beginning of 2013. The reality is that we are now in a position where we cannot continue to do the same for less. Tough choices, such as the closure of BBC Three, have had to be made.
But to calculate purely in terms of impact on BBC content is to oversimplify. In 2011/12, the BBC generated a Gross Value Added of £8,323 million for the UK economy, equivalent to two pounds of economic value for every pound of the licence fee. We contribute to the creative economy by way of training and skills, exports of UK content, technological innovation and investment in independent production sector content, all enabled by licence fee investment.
The BBC reaches 96 per cent of the UK population each week, so it is simply not correct to claim that people are being forced to pay when they don’t consume our services. If evasion were to rise under a new system, the alternative to further reductions in services would be an increase in the licence fee for everyone else.
I know many MPs have concerns about the amount of court time taken up with licence fee cases. Whilst Licence Fee evasion cases do make up around 10 per cent of magistrate-court criminal cases, the vast majority are heard uncontested and in bulk, and average presentation time is only three minutes. They therefore account for a significantly smaller proportion of court time than their numbers might suggest – 0.3 per cent in the most recent data we have seen. Changes in the Criminal Justice and Courts Bill, currently before the Commons, will further improve the efficiency with which licence fee cases are heard.
Some readers of this site object to the Licence Fee in principle. That is a legitimate debate which is sure to come up during Charter review, even though it is not one shared by the majority of the British public – among the public support for the Licence Fee as the method of funding the BBC has risen significantly in the last ten years from 31 per cent to 53 per cent.
By all means let’s have a debate on these issues, but at the right time, with the right evidence and with proper consideration of the consequences.