Sir, David Cameron’s plan to review the funding of the BBC (report, Dec 15) is to be welcomed. If one had not grown accustomed to the BBC being funded by a tax on televisions, it would be unacceptable in a competitive market and a free society. It is as if anyone who wished to read The Times had to take out a year’s subscription to The Guardian.

The licence fee is no longer necessary: broadcasting services can be funded by subscriptions, pay-as-you-go charges or advertising. The scale of the sums involved makes the funding of the BBC one of the most serious distortions of competition in the UK. The state funding of the BBC results in inefficiency, waste and misallocation of resources.

The licence fee is affordable for most households, but this does not justify the distortion of competition that results from one broadcaster being funded at the expense of competing broadcasters, whose services can only be received by those who pay the licence fee. The annual licence fee is substantial in relation to both the one-off cost of television sets and the cost of competitive subscription services.

Jonathan D. C. Turner

London NW3

Sir, You report that Tory broadcasting policy may embrace “top slicing” of the BBC licence fee in order to fund public service content supply from other sources. You imply that this may be in conflict with proposals for funding public service content (and the BBC) after 2012, made by the Broadcasting Policy Group three years ago. In fact, these ideas are part of a continuum. After digital switchover, the BBC will have ample opportunity to tap into subscription revenues to fund its popular content, and we recommended that the BBC, like other broadcasters, should be able to apply to a central pool of money to fund public service content.

Our assumption, shared by Lord Burns, who chaired the Department for Culture, Media and Sport’s own advisory panel, was that the licence fee would not long survive switchover, that public service content would still need financing, and that a single contestable fund open to all bidders was the optimum solution in ensuring plurality of supply and transparency of provision.

Initially, we doubted the wisdom of transferring licence fee funds to other broadcasters in the short term, as we assumed the BBC would reduce its own public service supply in line with any increase from other sources. However, the BBC’s willingness to spend £600 million on the digital switchover has not, it seems, reduced its volume of public service content, so my group endorses the select committee’s conclusion that top slicing may be a sensible first step to protecting the key objective of preserving plurality of supply.

David Elstein

Chairman, Broadcasting Policy Group

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