The BBC is facing 'significant' financial uncertainty due to changing viewing habits and a decline in licence fee income, according to a report by the National Audit Office (NAO). The spending watchdog highlighted that the broadcaster's share of younger audiences has been under pressure, posing a financial risk as people become less likely to pay the licence fee.
The NAO report found that BBC TV viewing has dropped by 30% over the past decade, with the average adult watching 56 minutes of broadcast BBC television per day in 2019, down from 80 minutes in 2010. Total income for the BBC in 2019-20 was £4.94bn, of which £3.52bn came from the licence fee—£310m less than in 2017-18.
The report also noted that the BBC's financial health had been 'unexpectedly weakened' by the impact of the coronavirus response. It recommended that the BBC produce a long-term financial plan as soon as possible, detailing further savings and how it will fund new strategic priorities.
In response, the BBC stated it had made significant savings and increased efficiencies while maintaining spending on content. It added that it had set out plans for urgent reforms focused on providing value for all audiences and welcomed the report's emphasis on stable funding as negotiations with the government over the licence fee begin.
The National Union of Journalists said the findings were unsurprising and called for a financially secure long-term deal to guarantee the BBC's future. The licence fee, currently £157.50 per year, is set to remain in place until at least 2027, when the BBC's Royal Charter ends.
