The Tories have been slammed over their handling of the 2015 negotiations with the BBC that ultimately led to the abolition of universal free TV licences for over-75s.
A new report published today by the Digital, Culture, Media and Sport (DCMS) committee accuses the government of seeking to “bounce” the BBC into accepting a deal that exposed it to “administering welfare benefits”.
It says the BBC has found itself in the ridiculous position of being the administrator of welfare benefits that should “only ever be implemented by the Government”.
However, the report also says that the BBC cannot be absolved of responsibility for their part in the “flawed” negotiations, and highlights the lack of transparency at senior levels of the corporation.
In particular, BBC Director-General Tony Hall is singled out for his poor handling of the negotiations, particularly in failing to seek the formal agreement of the Executive Board before recommending the deal to the BBC Trust.
The report concludes that the 2015 negotiations were “flawed” on both sides and criticises the decision to hold the meetings “behind closed doors”. It also highlights that licence fee payers were not given the opportunity of a consultation.
The cross-party group of MPs calls on the government and BBC to work together to find a way of restoring free TV licenses for all over 75s who don’t receive pension credit.
Committee Chair Damian Collins MP said: “This is an invidious position for the BBC to put itself in. It agreed to fund a pensioner benefit that it couldn’t afford and as a result, false reassurances were given to the over 75s that their free licence fees would be maintained.
“The BBC and the Government much reach an agreement to allow the funding of free licence fees for the over 75s to continue after 2020.
“The BBC finds itself here as the result of a deal done behind closed doors that allowed no transparency for licence fee payers.
“Detailed minutes which would have shone a light on the crucial decision making process are absent or incomplete which is a matter of great regret. We hope that the new Unitary Board will ensure more transparency on important decisions made by the BBC in the future.
“This issue has also exposed that if the current trends in inflation for TV production costs continue, the value of the licence fee will continue to diminish as a source of revenue for the BBC.
“The rapidly changing viewing habits of younger audiences, particularly those under the age of 34 who are moving away from broadcast TV to online and on demand channels, poses a further threat to BBC licence fee revenue in the future.
“We are seeing clear evidence that the funding model of the BBC will become unsustainable without substantial increases in commercial revenue from BBC Studios and new subscription on demand viewing services like Britbox.”
SNP Committee member Brendan O’Hara MP said: “It was downright shameful of the Tories to pass the responsibility of administering much-needed welfare benefits, such as free tv licenses, on to a public broadcaster, and this report rightly lays that bare.
“The report was also right to point out the complete lack of transparency surrounding the negotiations and that the BBC cannot be absolved of responsibility. I hope Lord Hall has learned his lesson – don’t do secretive back-stair deals with people you can’t trust.
“The way they handled – or mishandled – the 2015 funding negotiations by not consulting license fee payers and allowing false reassurances to be made to over 75s is further proof that this Tory government is uncaring and incompetent when it comes to looking after our older generation.
“The SNP warned of the danger of transferring this decision to the BBC.
“The UK government should now atone for their mistake and work with the BBC to find a funding formula to restore free tv licenses for the over 75 – we will not let them off the hook over this broken manifesto commitment.”