BBC is losing £1bn a year in potential licence fee revenue, say MPs

The BBC is now losing more than £1bn a year from households either evading the licence fee or deciding they do not need one, according to a cross-party group of MPs who warned the corporation is under “severe pressure”. Attempts to enforce payment of the licence fee are also stalling. The number of visits to unlicensed homes increased by 50% last year, but it did not translate into either higher sales or successful prosecutions. BBC executives have said they face the increasing problem of householders simply refusing to answer the door. The Commons public accounts committee said the BBC was not doing enough to enforce the collection of the licence fee, which it said was “unfair to the vast majority of households who do pay for a licence”. Its analysis of BBC accounts found that the licence fee evasion rate is now at 12.5%, costing it up to £550m. The number of households to state they have no need for a licence, because they do not consume BBC content, has risen from 2.4m in 2021 to 3.6m this year. That equates to a loss of up to £617m from potential fees. Despite making nearly 2m visits to unlicensed homes last year, prosecutions fell by 17% in 2024. Interactive The BBC is facing critical government talks over the future of the licence fee as it negotiates the renewal of its charter. It does so amid turmoil at the top of the corporation, after the resignation of its director general, Tim Davie. He resigned as a result of criticism about how an episode of Panorama edited a Donald Trump speech. Critics of the licence fee say it has become harder to justify as viewers increasingly consume digital platforms such as YouTube and TikTok, which are particularly popular with younger audiences. However, BBC executives see the licence fee, or something very similar, as the only way to ensure the corporation provides a “universal” service, with content for everyone. Geoffrey Clifton-Brown, the Conservative chair of the public accounts committee, said its report revealed “an organisation under severe pressure”. “Our report makes clear that the ground is shifting beneath the BBC’s feet – the traditional enforcement method of household visits is seeing fewer and fewer returns at a time of heightened competition for almost every aspect of the BBC’s activities,” he said. “Without a modernised approach focused more on online viewing, the broadcaster will see faith in the licence fee system ebb away.” A BBC spokesperson said: “The licence fee needs reform. We are actively exploring all options that can make our funding model fairer, more modern and more sustainable, but we’ve been clear that any reform must safeguard the BBC as a universal public broadcaster. “TV Licensing works hard to collect the licence fee and enforce the law efficiently, fairly and proportionately and we are audited on this each year. The National Audit Office reports that we continue to successfully deliver on these measures.”