BBC Agrees to Cut Spending and Freeze License Fee

Caving in to government demands that it cut costs in an era of drastic public-sector retrenchment, the British Broadcasting Corporation has agreed to freeze its license fee at the current rate for the next six years.

The decision represents a budget reduction in real terms of 16 percent for the corporation, which has been embroiled in tough financial negotiations with a Conservative-led coalition government that has accused it of profligacy and irresponsibility. Under the plan, the license fee -- the amount paid annually by all television owners in Britain, regardless of how much or little they use the BBC's services -- would remain frozen around $230 for six years. The license fee brings in more than $5 billion a year and provides the bulk of the corporation's budget. The agreement is to be announced today, when the government releases its plans to cut tens of billions of dollars from its budget to reduce the national deficit. Even as its income is cut, the BBC has agreed to take on about $530 million in new financial responsibilities annually. It is to use license-fee money to pay for the World Service, which costs $427 million a year and provides news and information to more than 200 million people in 32 languages. That money currently comes directly from the Foreign and Commonwealth Office budget.