Recommendation 1

HM Government Rejected

The BBC disagrees with the Committee’s recommendation. The focus of the Licence Fee Unit at the BBC is to ensure that operations are efficient, appropriate and proportionate and in that the Unit is overseen by the BBC Board and reported on by the NAO. The Unit has a statutory duty to collect the Licence Fee under the law, and for this reason it does take action against evaders in support of the vast majority who pay. As noted by the NAO in section 1.4 of their report, ‘Licence fee sales are impacted by wider trends in customer behaviours that are not within the BBC's direct control’. This means there is a rising population consuming no licensable content, which under the current arrangements means they do not need a licence. While the BBC seeks to deliver value to all households through provision of engaging licensable content, there is no activity that TVL can carry out to require a licence from a household that does not legally require one. Currently there is no legal requirement compelling a household to register No Licence Needed (NLN) if they are not licensed. The NLN declaration made by some households can be a helpful mechanism, because it means correspondence can be paused for a period of time. This means that a higher number of genuine NLNs can improve efficiency of TVL operations. The total number of NLN and new NLN claims are reported and monitored, but there is no target set for the number of customers who choose to make this declaration or not. The NLN volume is affected by the TVL policy of cancelling them after a year if they are not renewed which can distort trends. In 2024-25, the overall number of premises (domestic and business) claiming ‘no licence needed’ was 3.64 million representing a 350k/10% increase. This was lower than the 16.2% increase the previous year. The slower increase year-on-year in NLN declarations can be attributed in part to a change in TVL policy - households are now required to reconfirm their NLN declarations after one year to ensure that there has not been a change in viewing at the premises. Previously, this was every two years, however research indicated that habits can change more regularly. The BBC therefore does not believe a target for NLNs would be appropriate. TVL focuses on Licences in Force and implicit in that is minimising evasion. Reducing evasion is a focus of TVL activity in a very challenging environment. The BBC carries out trend modelling to forecast changes in licensable consumption and trends in evasion. Evasion is driven by a number of factors that are not in the direct control of TVL, so an evasion target is not considered appropriate. The BBC’s activities on collection and enforcement focus on availability of service and fair and proportionate treatment of customers. of their report, ‘The BBC is taking steps to minimise collection costs, for example by issuing 60.2% of licences electronically as of March 2025 – an increase from 57.2% in 2023-24.’ 2.3 The BBC currently sends Licences by email where the customer has opted in to an e- licence and has been increasing this number through communications to customers. 2.4 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. 2.5 The sending of paper licences is a small proportion of overall mailings. If all were removed this would lead to a saving of £200k p.a. 2.6 Bankers’ Automated Clearing Services (BACS) regulations require letters to be sent to Direct Debit customers who have not signed up for digital communications when their payment plan changes. There are nearly 5million customers who are in this category who have not agreed to moving to digital communications. 2.7 The majority of letters sent are to unlicensed households and these mailings generate more in revenue than they cost to send, so more money can be spent on programmes and services. All mailings are managed in order to be sent at the lowest possible Royal Mail tariff. 2.8 Physical letters are required to correspond with unlicensed households where no contact details are held.