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BBC chair Samir Shah has said radical funding options such as subscriptions or advertising are incompatible with the UK national broadcaster’s remit as a public service.
“We are looking at different versions of a universal fee,” he told a House of Lord committee on Tuesday, adding that an advertising or “subscription model doesn’t work in terms of public service funding”.
He said the “principles are clear” that the BBC needed to be paid for by “the public at large”.
The BBC is facing tough negotiations with the UK government over its future, specifically on the next 10-year charter that begins in 2027.
Politicians and rival media executives have in the past floated ideas such as subscriptions and domestic advertising as alternatives to the licence fee, which currently funds the BBC, given rising numbers refusing to pay the £169.50 fixed charge for a colour set. In 2023, about 500,000 households cancelled their TV licences.
Labour culture secretary Lisa Nandy has told the Financial Times that she wants to see mutualisation as one of the options considered as part of the BBC’s charter renegotiations. This would give the public greater involvement in the BBC’s operations, she said.
Such a change would potentially give the broadcaster a structure more like a building society — where customers are also members of the institution and people chosen as direct representatives of licence-fee payers are making decisions.
Shah told peers on the communications and digital committee that he saw the sense of a potential move to mutualise the BBC, noting such a reform would shield the broadcaster further from government interference.
The BBC chair said any future funding deal in the new charter should help to “dial down” the relationship with the government, though he said the broadcaster still needed to be accountable.
He added that even the length of the 10-year charter renewal cycle should be reconsidered alongside making the chair an appointment by the board rather than the government.
BBC director-general Tim Davie, also appearing in front of the Lords committee, said the board was midway through its work on future funding options for the broadcaster.
He said the BBC has over the past decade had to strip about £1bn from its now-£6bn annual budget owing to squeezes on its licence fee income.
Davie and Shah both called on the government to arrange separate funding for the BBC World Service, which has had to ask for a short-term cash fix from ministers ahead of the charter renewal.
Davie also said that disgraced former newsreader Huw Edwards had not returned the hundreds of thousands of pounds he was paid despite having pleaded guilty for accessing indecent images of children.
He said a formal request had been made and discussions were under way to claw back the cash, with legal options likely to be “challenging”. Shah admitted that Edwards had “damaged the reputation” of the BBC.
