BBC fee gap tough to 'swallow'


LONDON -- BBC director general Mark Thomson said Thursday that the BBC faces a £2 billion ($3.9 billion) funding gap over the next six years under the long-awaited license fee settlement announced by culture secretary Tessa Jowell.

Speaking at a media conference hosted by Broadcast magazine, the director-general said the settlement was a "real disappointment," but said it was "too soon" to give details of where the pubcaster will have to make cutbacks.

The settlement, announced by Culture Secretary Tessa Jowell in the House of Commons, totals more than £20 billion ($39.4 billion) of guaranteed funding over the next six years.

But it severs the traditional relationship between the BBC's income and the annual rate of inflation, effectively amounting to a net cut in income.

The BBC license fee, currently £131.50 ($260), will rise by 3% for the next two years then by 2% for three years and by up to 2% the year after. The compulsory per-household fee will rise to £151.50 by 2012, compared to the £185 a year the BBC had been hoping for.

The figures, which were effectively leaked before the Christmas break, are nonetheless bad news for an organization that already has weathered a campaign of job cuts that saw one in five of the pubcaster's posts axed.

"The quantum of the settlement remains a real disappointment," Thompson told the conference. "Given our vision, which was endorsed by the government in a White Paper. We'd argued for a license fee that would grow modestly in real terms. Instead the government has opted for a settlement that is below the retail price index."

Thompson said the settlement will leave the BBC with "difficult choices" that could lead to further job losses.

"There remains a gap of £2 billion over the six years between what we thought we needed and what we expect. That is not a gap that any organization can easily swallow."

Thompson said that the BBC's governing body and executives will spend the next days and weeks examining the detail of the settlement

"Over the coming weeks, we will look at ways of closing the gap. This is not the right moment to say this is what we are going to do," Thompson said. "There is a limit to what we can do without damaging our output can't keep on cutting and still keep quality."

Jowell said the settlement will "allow the BBC to fulfill its obligations."

"Over the past three years, the public, industry and parliament have all contributed to a national debate about the BBC," she said.