Recommendation 12

Following its January 2022 licence fee settlement with government, the BBC estimated that it would have a funding gap of £285 million a year by 2027–28, and that it needs to deliver £500 million of annual savings and reinvestment to achieve its digital- first ambitions. This funding gap was calculated on the basis of the licence fee being held flat in 2022–23 and 2023–24 with no links to inflation, followed by four years linked to inflation.20 The BBC told us that with inflation the funding gap had now risen from £285 million to nearly £400 million, on top of its funding having reduced in real-terms by 30% over the last 10 years.21