The BBC has been blindsided by one the toughest funding settlements in the public sector, that will force cuts with implications for the broadcaster’s output, staffing and ambition.
Nadine Dorries, culture secretary, said the licence fee will be frozen for two years at £159, then rise in line with inflation until the end of 2027, making it one of the least generous financial packages for the corporation in decades.
The BBC had called for the levy to at least keep pace with inflation in protracted talks with the government. Instead, the terms will open an era of wrenching austerity for the public service broadcaster as it enters its centenary year and attempts to compete with deep-pocketed rivals such as Netflix and Disney, which are ramping up investment and fast encroaching on its turf.