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4th October 2016

Should the BBC be funded by the tax payer?

With its recent changes and historical significance seemingly in conflict, is it time to rethink the BBC’s funding?

The Licence Fee is a tax paid by anyone who wants to receive television broadcasted in the UK, have access to BBC iPlayer, or listen to BBC radio. However, this raises the question of whether or not it is justifiable to have an essentially tax funded entertainment service.

Today, is it really necessary to have a publicly funded broadcasting corporation?  TV shows are often produced by private companies which sell the rights to the BBC. Strictly Come Dancing, for example, could very easily be broadcast by ITV. Is it, therefore, justifiable to charge TV users in the UK £145.50 a year for a service which may not fund the entertainment they watch or could be provided far more efficiently by a private company, at no financial cost to viewers other than the effects of an enticing commercial advert.

The cost of living in the UK is already high and it does not seem entirely right to burden the country further with this additional, quite regressive tax.

One of the most controversial problems with the public funding of a broadcasting service is its neutrality. The BBC was slated throughout the EU referendum for being in favour of remain. This fuelled mistrust around the debate and unfairly tarnished the remain sides arguments as being presented in a biased way. So, having a tax-funded BBC is not only unfair to those who pay the licence fee who do not see their views expressed, but also hinders the corporation’s freedom of expression and ability to produce what it wants.

Public ownership also constrains the BBC from acting in an effective and competitive way. The recent example of the Great British Bake Off shows the financial constraints on the BBC and demonstrates how it cannot be as effective a broadcaster as a privately owned one due to greater limits on funds.

In striving to be cost effective for the tax payer, the BBC subsequently offers a lower quality of service. In losing the Great British Bake Off deal, the roughly 11 million fans of the show can now watch it on channel 4 but still must pay the licence fee to fund the BBC. Surely the whole point of having a publicly funded BBC is that it provides entertainment for the people who fund it. But due to the very nature of its public finding, it falls short at providing the entertainment that the public desire.

A major flaw in the model of public financing of the BBC is that the revenue from the licence fee is capped at £145.50 where as commercial companies have no limit to the amount of advertising revenue they can raise, therefore the BBC suffers an automatic disadvantage in bidding for major shows. If the most popular shows are enticed to commercial channels by higher bids, what is the point in having the publicly funded BBC as it won’t be providing a popular and competitive service?

As a publicly funded organisation, the BBC is also subject to a high degree of scrutiny and transparency. Due to the 2016 Royal Charter, the BBC now has to publish the names of artists and talent who earn more that £150,000 a year, and whilst this may seem fair in order to maintain transparency, this could hinder the BBC’s performance and talent pool as stars may not want such information publicly known. No other commercial broadcasting corporations will have to release this information, so how can they create a fair market-based business when the BBC is forced to jump through more hoops than their competitors?

It seems clear then, that the public ownership of the BBC makes the corporation less competitive and less able to survive in the commercial market place. Either the BBC should be privatised, removing the budget constraints and transparency issues, or be allowed a certain level of anonymity in its practices.

Whatever the future model is, one thing seems to be clear: the licence fee and public ownership model do not seem to be working. The Chairman of the Committee for Culture, Media and Sport, John Whittindale said: “In the short term, there appears to be no realistic alternative to the licence fee, but that model is becoming harder and harder to justify and sustain.”

Again going back to the initial question of the justification of a publicly funded entertainment corporation, the Committee have said that due to the changing habits of audiences owing to new technology, “we do not see a long-term future for the licence fee in its current form.”

However, public opinion may be enough to prevent the end to funding the BBC. If we take the Great British Bake Off case, the level of public outcry—combined with the allegiance of three of its stars—shows a certain loyalty from viewers and employees alike. The BBC was founded in 1922 and is the world’s oldest national broadcasting organisation, carrying with it a great deal of nostalgia and a subsequent difficulty to justify removing its public funding.

Whilst it makes commercial sense to stop tax payer funding of the BBC, culturally it does not seem an option at this moment in time. Therefore, the BBC should remain funded by the tax payer. However, preferential treatment in bidding for shows would offer a way to counteract the economic disadvantages of being tax payer funded whilst retaining this historic institution in public hands.

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