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Ministers will explore mutualising the BBC as part of a review of funding options for the UK national broadcaster ahead of licence fee talks expected to begin next year, culture secretary Lisa Nandy said.
During her campaign for the Labour leadership in 2020, Nandy called for the corporation to be mutualised in order to give direct ownership and control to licence-fee payers who fund its work.
Mutualisation is now one of the options Nandy wants to include when the government begins negotiating with the BBC over the next 10-year funding agreement, in what would be a transformational change in governance for the broadcaster.
“Mutualisation is something that various Conservative and Labour politicians have proposed over the years, and I think it’s worth exploring,” Nandy told the Financial Times.
“There is nothing off the table. I want us to think really creatively about the challenges that the BBC faces, the challenges we have as a nation, and how we go about future-proofing the BBC for the next few decades,” she added.
Nandy, who will oversee the negotiations, said she was a “supporter of the BBC, supporter of the licence fee and a supporter of the concept of public service broadcasting”.
But she added that if the charge — payable by all households that watch live TV — was kept, it needed public support, “and that means that people have to have more at stake in their own public service broadcaster”.
Mutualisation would in effect mean that payers of the licence fee, which rose by 6.6 per cent in April to £169.50 a year, would have a more direct stake in the BBC.
In a blog post in 2020, Nandy said: “The BBC should move to a model of being owned and directed by licence fee holders — who can help decide the trade-offs that the BBC must make to secure its future.”
While it is unclear how exactly mutualisation would work for the BBC, such a change would position the broadcaster closer to a building society — where customers are also members of the financial institution — with people chosen as direct representatives of licence-fee payers making decisions rather than the government and the culture secretary.
BBC executives hope that the Labour government will be more supportive of the aims of the national broadcaster, with the next funding agreement seen as especially crucial as it seeks to invest in digital infrastructure in a shift away from its mainly linear traditional TV and radio services.
The previous Conservative government capped funding for two years running to 2024 and later awarded the lowest level of licence fee increase running up to 2027, forcing the BBC to slash hundreds of millions of pounds from its budget and make job cuts.
BBC director-general Tim Davie and chair Samir Shah will be quizzed in parliament on the corporation’s future and its handling of the Huw Edwards scandal on Tuesday.
Their session before the House of Lords communications and digital committee will also tackle BBC future funding, in the context of a decline in the number of licence fee payers.
In 2023, about 500,000 households cancelled their licence fee, according to the BBC’s latest annual report, while roughly 23.9mn licence fees were in force at the end of the year.
Nandy also said she had paused a review of Arts Council England, the arms-length body, that was promised in Labour’s general election manifesto.
Instead, Nandy has launched a wider review of all arts and creative industries funding to identify areas of the UK that are missing out. She is concerned that too much of government arts funding is spent in parts of the country where there is already access to other funds.
