Recommendations & Conclusions
5 items
2
Conclusion
56th Report - BBC Accounts and Trust St…
Deferred
The BBC has not adopted opportunities to digitise the licence fee, resulting in missed opportunities for cost efficiency and more customer engagement. The cost of collecting the licence fee is rising, partly because of the BBC’s reliance on postal correspondence and its increasing cost. Around 40% of households still receive …
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The BBC has not adopted opportunities to digitise the licence fee, resulting in missed opportunities for cost efficiency and more customer engagement. The cost of collecting the licence fee is rising, partly because of the BBC’s reliance on postal correspondence and its increasing cost. Around 40% of households still receive a paper licence by default, yet the BBC has not set any target to increase take-up 2 of paperless licences. Enforcement also depends heavily on letters sent to households without a licence or declaring they do not need one, which adds to costs and is a less efficient way of engaging with customers. We are concerned that delays to Capita’s IT upgrade programme, intended to improve the website and customer experience, have further limited progress towards digital engagement. Although the BBC has now moved this contract to a “payment by milestone” basis, we note that the change was made late and that this approach has not been used more widely with the BBC’s contactors. The absence of meaningful incentives in the Capita contract, and in other contractual arrangements, may have contributed to slow progress in increasing digital delivery, improving customer engagement, increasing sales and reducing licence fee evasion. recommendation To achieve cost savings and improve customer engagement, the BBC should in its response to this report: • set a timeframe for moving to digital licences to further reduce reliance on costly paper licences and letters • set out its plans to capture and use customer email addresses to enhance digital engagement and streamline customer communications • outline the lessons learned from managing the Capita licence fee contract and how it will establish clear milestones and incentives in all areas of the business to increase income and reduce evasion.
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Government response AI summary
The BBC partially agreed, explaining its existing processes for Capita contract management and rejecting the use of incentives for income or evasion reduction as inappropriate. It did not commit to setting a timeframe for digital licences or outlining plans to capture customer email addresses.
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HM Treasury
7
Conclusion
56th Report - BBC Accounts and Trust St…
Deferred
Potential lost income for the BBC in 2024–25 is estimated to exceed £1.1 billion. Licence fee evasion increased to 12.52%, up from 12.04% in 2023–24, representing up to £550 million in lost revenue. The BBC did not set a target for evasion during this period. In addition, 3.6 million households …
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Potential lost income for the BBC in 2024–25 is estimated to exceed £1.1 billion. Licence fee evasion increased to 12.52%, up from 12.04% in 2023–24, representing up to £550 million in lost revenue. The BBC did not set a target for evasion during this period. In addition, 3.6 million households declared that they do not need a licence, which could equate to as much as £617 million in additional income in 2024–25 if converted to paying households. These declarations have continued to rise, and increased by 0.3 million (10.5%) compared with 2023–24.8 The BBC told us that it has been addressing licence fee evasion through various measures, including visits to unlicensed households and targeted communications. The BBC explained that it changed the reaffirmation period for “no licence needed” declarations from two years to one year, which drove an extra £13 million in revenue for 2024–25. In addition, it said that it improved its website journey and trained agents to ensure that people understand the wide range of licensable activities, such as watching a live overseas channel on YouTube, to prevent inadvertent “no licence needed” declarations.9 6 BBC Group Annual Report and Accounts 2024–25, p. 58, 59, 61 7 BBC Group Annual Report and Accounts 2024–25, p. 62, 64 8 Television Licence Fee Trust Statement for the Year Ending 31 March 2025, 15 July 2025, HC 1182, p. 26, 29 9 Qq 7, 9 7
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Government response AI summary
The government responded by discussing measures related to 'Britain’s illegal meat crisis,' biosecurity at the border, and animal vaccine development, entirely unrelated to the BBC or licence fee evasion.
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HM Treasury
8
Conclusion
56th Report - BBC Accounts and Trust St…
Deferred
The BBC increased enforcement of the licence fee system by carrying out nearly 2 million visits to unlicensed households in 2024–25, about 50% more than in 2023–24, driven by a rise in visiting officers (from 172 to 229) and visits per officer (from 7,660 to 8,670). However, this increase did …
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The BBC increased enforcement of the licence fee system by carrying out nearly 2 million visits to unlicensed households in 2024–25, about 50% more than in 2023–24, driven by a rise in visiting officers (from 172 to 229) and visits per officer (from 7,660 to 8,670). However, this increase did not lead to a proportional rise in households interviewed under caution or purchasing a licence. In addition, the number of people taken to courts for licence fee evasion has fallen by 17.3% year-on-year from December 2023 to December 2024, continuing a long-term decline since 2017.10 The BBC noted that it has become harder to get people to answer their doors compared to five years ago, which limits the enforcement effectiveness. It also said that it has moved towards a more marketing-led approach, including targeted communications and improving customer understanding of licensable activities to ensure that people stay licensed.11 In response to our question about how their enforcement is incentivised the BBC explained that it prioritised customer service over aggressive enforcement, ensuring that customers are treated fairly and that enforcement activities are proportionate.12
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Government response AI summary
The government responded by outlining strategies and actions related to animal vaccine availability and development, entirely unrelated to BBC licence fee enforcement.
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HM Treasury
9
Conclusion
56th Report - BBC Accounts and Trust St…
Deferred
We queried why digital audience engagement through the accounts necessary to use iPlayer cannot support more digital licence fee enforcement activities. The BBC told us that its household-address based licensing system does not match individual based BBC account data, so it cannot directly tie digital use to a licence holder.13 …
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We queried why digital audience engagement through the accounts necessary to use iPlayer cannot support more digital licence fee enforcement activities. The BBC told us that its household-address based licensing system does not match individual based BBC account data, so it cannot directly tie digital use to a licence holder.13 It explained that it chooses not to gate iPlayer or BBC News in the way a commercial provider would in order to preserve universality.14 It added that it currently operates in a hybrid broadcast-and-digital system, which shapes how usage and payment can be linked.15
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Government response AI summary
The government responded by outlining work related to a Sanitary and Phytosanitary (SPS) agreement with the EU and strengthening resilience to animal disease, entirely unrelated to BBC iPlayer or licence fee enforcement.
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HM Treasury
12
Conclusion
56th Report - BBC Accounts and Trust St…
Deferred
We asked the BBC why a large minority of households still received a paper licence and what the BBC was doing to accelerate the shift online. The BBC explained that physical licences were issued by default unless customers opted into an e-licence, that the BBC tried to promote, and that …
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We asked the BBC why a large minority of households still received a paper licence and what the BBC was doing to accelerate the shift online. The BBC explained that physical licences were issued by default unless customers opted into an e-licence, that the BBC tried to promote, and that many households did not provide email addresses and were not obliged to do so.21 We asked the BBC to explain its “very analogue” reliance on the letters and enforcement visits and why digital viewing information was not used more directly. The BBC pointed to gradual progress in digital engagement with its customers, noting that the share of customers with an e-licence rose by 3 percentage points to 60% in the last year.22 However, the BBC also told us there was no specific target to increase electronic issuance but accepted the “fair challenge” to go further.23
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Government response AI summary
The BBC will consider the regulatory aspects and practicalities of making an e-licence the default position and will give an update on this in the Licence Fee Trust Statement for 2025/26.
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HM Treasury