Source · Select Committees · Public Accounts Committee
Recommendation 11
11
Acknowledged
Licence fee collection costs increased significantly, driven by postal expenses.
Conclusion
In 2024–25, the BBC spent £166 million on collection of the licence fee, (equivalent to 4.3% of licence fee income), up from £143 million (4.0%) in 2023–24. It issued 60.2% of licences electronically, and around 40% paper licences.19 The BBC told us that postal costs were a significant component of collection expense and that minimising reliance on mail and moving more contact online was a key part of reducing the cost of collection. It also highlighted rising postal prices of 14.4% in the year, which added further pressure. In parallel, the BBC said the cost of collection included investment in a new over-75s (pension credit) system, that automatically checks entitlement with DWP and issues licences, improving customer experience by reducing processing from up to two weeks to around two minutes, and as a consequence the BBC expected to save money.20
Government Response 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.
Government Response
Acknowledged
HM Government
Acknowledged
2.2 As noted by the NAO in section 1.10 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.