BBC director-general Tim Davie is understood to have warned staff about job cuts after revealing the licence fee freeze will result in a £285million gap in funding.
Tim Davie, 54, reportedly told employees that the licence fee settlement, which will see the fee frozen at £159 for two years, would require the BBC to rethink its operational structure.
Culture Secretary Nadine Dorries confirmed the licence fee would be frozen for two years, until 2024, after which it will rise in line with inflation for the following four years.
In an internal video conference, Mr Davie told staff that the headcount at the organisation would ‘probably’ get ‘slightly smaller, according to The Times.
He said: ‘I’m going to be blunt — we’d rather have slightly less people here, but properly funded and in the right place.’
Tim Davie (pictured) reportedly told employees the BBC licence fee settlement, which will see the fee frozen at £159 for two years, would require the BBC to rethink its operational structure
BBC Insiders believe that his comments were meant to warn about redundancies. However, staff members are described as being ‘upset and frustrated’.
According to reports, Mr Davie stated that employees should look out for more information in April when the new financial year starts and the settlement of the license fee is made.
It comes after Mr Davie refused to rule out scrapping BBC Four and warned ‘everything’s on the agenda’ after revealing the licence fee freeze will result in a £285million gap in funding for the corporation.
He said the income from the fee by 2027 will be about £4.2billion based on the corporation’s assumptions around inflation and admitted that the settlement ‘will affect our frontline output, there’s no doubt about that’.
Mr Davie was asked whether BBC Four would survive, and said: ‘I’m not going to make specific recommendations now, we are going to take stock, we’ve got the settlement – that gives us certainty now.
“We’ll make good decisions. All we need is to get through this year. It’s prudent to plan for our finances.
Nadine Dorries, Culture Secretary (pictured), confirmed that the license fee will be frozen for two more years until 2024. After which, it will increase in line with inflation over the next four years.
When Mr Davie was interviewed by Nick Robinson on BBC Radio 4, he said, “I believe everything’s on our agenda.”
He answered “Absolutely” when asked whether channels could go.
Mr Davie added: ‘People, clearly and rightly, are worried about what the £285million cut in terms of two years flat brings, but also, as an organisation, we need to reshape ourselves for a digital age. Media market changes are extremely rapid.
Davie claimed that while the corporation feels it is being listened to, given that the licensing fee was set up by politicians, “you are in the politics swirl” and expressed disappointment over the freeze. He added, “We would like to have seen inflation rise throughout this period.”
He told the Today programme: ‘Our estimate is, and just to set this clearly for everyone, by the year 2027, the licence fee income will be about £4.2billion based on our assumptions around inflation.
“Guessing games about inflation are clearly difficult. We estimate our settlement gives a £285million gap, but at the end of the period.’
As the BBC’s ‘utterly focussed on ensuring people get the best value for their licence fee,’ he said that the BBC has made progress “very well” when it comes to cutting costs.
Today, Mr Davie stated that there was no question about the fact that we first seek out those reductions which don’t adversely affect our production. This being said, there are now two reasons why I believe we were disappointed by this settlement.
The BBC has endured decades and decades worth of low-inflation funding demands, which has resulted in… being lean. The support staff at BBC is very lean. We have commercially-trained employees.
“I think that we can be assessed using any method and you will reach a point where you cannot make cut, which I believe is the case. However, this will have an impact on our frontline production, there’s no doubt.
Yesterday Ms Dorries stated to MPs that the BBC must address the issues surrounding impartiality, groupthink and the need for long-term funding.
While she said it was now time to ‘discuss with and debate new funding options for BBC’, she didn’t detail which alternative the Government preferred.
Warning of ‘inevitable’ cuts to programmes as a result of the licence fee freeze, Mr Davie said today: ‘Inevitably, if you don’t have £285million, you will get less services and less programmes. I still think the BBC can offer extraordinary value for the £13 a month. It’s possible.
According to him, the organization is now in a good place’ after an ‘excellent Christmas’. He also said that iPlayer has been a ‘brilliant business for the BBC’ in terms of number.
We’re not simply going to create linear services. He said that the company must restructure itself.
Davie declared that the BBC’s subscription model should be adopted.
He said that while the broadcaster might be transformed into an advertising operation, it wouldn’t do as well today.
Radio 4 interviewed Mr Davie, who stated, “We’ve built an extraordinary creative industry in the UK and have a universal broadcaster, that’s admired throughout the world,”
“That is because it serves British people and all British people… universality principle is the only issue here.
Also, he stated that it was possible for the publicly funded broadcaster to become even more subscription-based instead of completely subscription-based. This would make a big difference in its content.
According to The Times, Mr. Davie stated that staff would see a decrease in headcount during an internal videoconference. (file photo: BBC logo).
Davie stated that once you attempt to reach a subscriber base, you will have to create a commercial plan. I can attest to this because you suddenly find yourself doing things for profit, and returning to a certain audience.
He said that he did not agree with the argument that the licensing fee should be abolished. We must support a public-backed, not fully commercialized BBC if that is what we desire.
Davie said that bosses had been in final talks over funding for the BBC at the time the Government declared the freeze.
Radio 4 interviewed him: “We were at the last knockings to be fair. I believe we went through a lengthy process in which we presented the case for investing in the BBC.
“So, while this was not a short process as such by more than just a few days but it was certainly an interesting way to announce it, as Speaker of the House noted. We now know exactly what the settlement is.
He said that while the broadcaster is aware of the economic pressures household incomes are under, it still finds the news disappointing.
He said, “We are disappointed.” We would have loved to have witnessed inflation rise over the entire period. Four out of six years have passed, so we can go on. It is extremely important for us to be certain of our income for at least six years.
It was revealed that the licence fee plans will be in effect as of April 1, 2022. Later this year, the Government would’start to look at the overall governance of the BBC’ during the mid-term review.
According to the Department for Digital, Culture, Media and Sport, it will be looking to the future. Given the changes in broadcasting due to streaming and video-on-demand, the Government will “separately examine whether or not the BBC licence fee will continue to provide a sustainable funding source”.
Chancellor Rishi Sunak (pictured) is said to have hit out at the speed of the announcement about the £159 annual levy, which was revealed in the Mail on Sunday
But Rishi Sunak and other senior ministers are leading a revolt over the licence fee plans, despite Boris Johnson throwing his weight behind the move.
The Chancellor is said to have hit out at the speed of the announcement about the £159 annual levy, which was revealed in the Mail on Sunday.
The FT reports that he also feels uneasy at Nadine Dories, Culture Secretary, over a lack in consultation with ministers on a subject with financial consequences.
Ms. Dorries tweets at the weekend, stating that the fee settlement for 2027 will be the last.
She announced Monday that she would simply review the settlement and had reduced her language in a Commons announcement.
The Sun today said that Work and Pensions Secretary Therese Coffey also voiced her unhappiness at Cabinet yesterday over the way the announcement – which has pensions implications – was handled.
This was one of many right-wing populist measures that were announced under Operation Red Meat. It was rushed to help the PM in his anger at Partygate.
Johnson enthusiastically supported the elimination of the license fee by the decade’s end.
The Sun reported he told Cabinet: ‘we can’t expect people to keep paying a licence fee just because they own a TV.’