October 19, 2010 / 6:10 PM / 7 years ago

BBC to face funding squeeze

LONDON (Reuters) - The fee levied from taxpayers to fund the BBC will be frozen for six years in an effort to restrain spending by the state broadcaster at a time when other parts of the public sector face swingeing cuts.

<p>A man talks on a mobile phone inside the BBC headquarters in London November 21, 2008. REUTERS/Andrew Winning</p>

Government sources confirmed on Tuesday reports aired by the BBC that the licence fee would be frozen at 145.50 pounds a year for every household with a television set.

The measure will be announced on Wednesday as part of a broad public spending review which will see some departments lose a quarter of their budgets as the government strives to slash its budget deficit from a record 11 percent of GDP.

The sources also confirmed that the BBC World Service, which until now had been funded separately from the rest of the corporation out of the foreign ministry’s budget, would now be funded from the licence fee.

The World Service broadcasts around the planet to an audience of millions in English and 31 other languages. It is one of the best known arms of the BBC around the world, particularly in developing countries.

Taking on the cost of the World Service and other BBC units that were previously funded separately, such as Welsh language TV station S4C, will mean the BBC will have to absorb additional costs of about 300 million pounds per year, the sources said.

The BBC reported on its website that the measures amounted to a 16 percent cut in its funding over the next six years.

The squeeze on BBC funding could prove popular after a series of revelations about the high pay of some BBC executives and presenters. Opinion polls show that a vast majority of Britons like the BBC in general, but many disapprove of some of the top pay packages.

Reporting by Estelle Shirbon; editing by Michael Roddy

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