Fee freeze deal 'secures strong future for BBC'

BBC director-general Mark Thompson called today's licence fee freeze a "realistic deal in exceptional circumstances".

Spending review in full

The 145.50 fee is being held at the same level for six years - the equivalent of a 16% saving in the BBC budget over the period.

It will also have to fund BBC World Service and BBC Monitor and part-fund the Welsh language channel S4C, saving the Treasury 340 million a year.

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BBC Trust chairman Sir Michael Lyons said it was a "tough settlement", and warned of "difficult choices".

But he added "It's also a settlement that delivers certainty and stability for the BBC."

Union leaders had already voiced fears of a fresh round of job cuts when it emerged that the freeze was on the cards yesterday.

Broadcasting workers' union Bectu accused the corporation of "throwing in the towel" by agreeing to the deal.

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There had been fears the Government would ask the corporation to meet the cost of free television licences for the over-75s at a cost of 575 million.

Mr Thompson said today: "This is a realistic deal in exceptional circumstances securing a strong independent BBC for the next six years.

"It means that efficiency and reform will continue to be key issues for us. But our focus remains providing distinctive, high quality programmes valued by the public. This deal will safeguard that until 2017."

Sir Michael said of the deal: "It reflects the centrality of the licence fee in securing and safeguarding public service broadcasting. We recognise the importance of securing such a settlement at such an unprecedented time.

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"There is no doubt that the settlement will present us with some difficult choices, but importantly, these choices will remain firmly in the hands of the BBC Trust and we will of course seek the views of licence fee payers.

The BBC has already been seeking considerable savings - trimming large salaries, bonuses and cutting the number of executives as it tries to cut back on overheads.

Earlier this year, it launched a strategic review which will see a huge cut in online content and will see the BBC Asian Network close. A bid to cut the 6 Music digital station was abandoned.

The corporation has also been locked in a divisive struggle with its own staff over a pensions row.

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Last week it was announced the deputy director-general was being made redundant as the corporation cuts costs. Mark Byford, who is paid a salary of 475,000, will leave next year and his post will be axed.

Marketing supremo Sharon Baylay is also being axed.

Sir Michael said the Trust believed the settlement was "in the best interests of licence fee payers".

"It brings with it new obligations for the BBC. But importantly they are all obligations that are relevant to the BBC's mission and purpose - to be a public service broadcaster of the highest quality that serves all audiences.

"In particular, the new arrangements will ensure that the World Service remains a vibrant, independent service that brings impartial news to people around the world, while strengthening the BBC's ability to bring international news to UK licence fee payers.

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"The settlement also seeks to secure the long term future of broadcasting in the Welsh language through the extension of a partnership with S4C.

"The BBC is not Government funded, but these are pressing times for the nation as a whole and we believe licence fee payers would expect us to see what contribution we can properly make.

"The extra responsibilities the BBC will now take on are consistent with this and will deliver benefits to licence fee payers across the UK."

Also announced in today's spending review was an agreement that the BBC would reduce its online spending.

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Chancellor George Osborne said the BBC would "make no further encroachments into local media markets, to protect local newspapers and independent local radio and TV".

And he said the BBC would contribute to the 530 million being spent on bringing super-fast broadband to North Yorkshire and other rural parts of our country over the next four years.

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